The market continues to be slow; one large deal and several smaller ones on the horizon – According to RISI, activity levels are still slow, with a high level of uncertainty in the market. However, with Project Dionysus expected to bring a valuation north of $400MM, and four smaller processes ongoing, more than $600MM of transactions could occur in the near term. Some contacts reported significant imbalances within pension fund investor portfolios given strict allocation frameworks and recent moves in the broader market, with some contacts noting that having “too much timber” is forcing owners to fast-track sales to move back in alignment. In contrast, other sources mentioned that significant allocation shortages are forcing fast-tracked, price-insensitive purchases. Some contacts noted a lack of hardwood dispositions, reflecting forest carbon and ESG trends that are viewed to be more hardwood than softwood related.

Hancock’s four-part Project Dionysus could fetch a valuation upwards of $400MM – According to RISI, a 163,000 acre property (80% owned outright, 20% leased) across eastern Texas, Alabama, and Georgia could fetch a valuation upwards of $400MM, with large portions potentially trading over $3,000/acre. The asset is said to hold “a pile” of sawtimber ready for harvest, making it “prime” for REITs. The four-part Project Dionysus asset includes: Crockett (~65,230 acres in east Texas which is said to be a lesser value of the set), Red Hill (~35,270 acres in Southern Alabama which is considered to be among the best), Augusta (~28,240 acres in coastal Georgia which is said to be the best), and McIntosh Lease (~34,465 acres in south Georgia which is “loaded with timber” and has eight years remaining). RISI also noted that this offering of mostly high-quality pine plantation acres in the South likely marks the third-largest sale of the year. The two round, four-part bid process will begin on August 19, with a “fast-track” final round due on October 31. RISI stated that one contact believed that Rayonier would be a likely bidder after falling short in other recent transaction processes.

Superior Pine purchased the Castle property from Molpus – According to RISI, Superior Pine Products Company acquired 58,000 acres of pine forestland in Alabama and Louisiana for ~$100MM (~$1,715/acre) from Molpus. According to the Magnolia Reporter, a local news outlet, Superior Pine sees potential opportunities for wetland mitigation banking projects, solar energy projects, as well as the development and sale of forest-based carbon offsets. The company noted that part of the motivation for the purchase was to geographically diversify its assets beyond southern Georgia and southern Alabama.

Potlatch acquired the small Falcon package – According to RISI, Potlatch purchased the 7,000 acre Falcon package in Arkansas from BTG for an estimated $2,100/acre. Of note, Potlatch management expect the CatchMark acquisition to close in Q3/22 (please click here for more information).

Hancock’s sale of Triptych closed at high prices – According to RISI, Hancock’s sale of its three-state, 86,100-acre plantation in the South sold for an estimated total of $158MM. Two parts (in southeastern Oklahoma and northeastern Texas totaling 71,000 acres) went to Greenwood for ~$115MM (~$1,620/acre), and the third part (17,000 acres in north-central Mississippi) sold to Potlatch for ~$2,560/acre or ~$44MM.