ATLANTA–Several institutional investors led by CatchMark Timber Trust, have partnered to acquire 1.1 million acres of East Texas timberland for $1.39 billion from an institutional owner being represented by Campbell Global. The JV partners buying the timberland include BTG Pactual Timberland Investment Group, Highland Capital Management, Medley Management and a major Canadian institutional investor.
The $1,264 per acre acquisition cost basis, before transaction costs, compares favorably to regional industry benchmarks and positions the joint venture to generate potential premium returns, the companies said.
The deal is expected to close within 45 to 60 days.
The transaction has been as a sale of the general and limited partnership interests of the entities that own the timberland assets. CoBank ACB will act as the agent for a lender syndicate and provide a $750 million financing facility, of which up to $650 million will be funded at closing.
The joint venture will assume existing saw-timber and pulpwood supply agreements with Georgia-Pacific and International Paper, which run through 2029 and 2027, respectively. International Paper has an option to extend its agreement until 2032.
The timberlands are located near top quartile mills and within approximately 100 miles of Austin, Dallas, and Houston, which are major home-building markets and which add to the deal's demand fundamentals, according to CatchMark.
CatchMark also notes that this acquisition is among the larger US timberland transactions that have occurred in the last decade. There was the 2007 sale of 1.55 million acres by Temple-Inland to the current owner of this timberland for $2.4 billion, the sale of TimberStar properties in 2008 for $1.9 billion, and the sale of 1.88 million acres by Forest Capital Partners in 2012 for an undisclosed price.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
