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Wind in the Sails: Timberland Transaction Activity in 2021

Any way you slice it, 2020 was a slow year for large timberland transactions. Forisk’s tracking recorded approximately 1.6 million acres of completed large timberland transactions in 2020. Over the past decade, from 2010 through 2019, the median volume of completed transactions approached 2.5 million acres annually. Relative to this baseline, completed transactions in 2020 reached just two-thirds of normal levels, the lowest volume since 2010.

A big question now is, “What’s going to happen in 2021?” Unfortunately, my magic eight-ball is broken and in the shop. So, while we cannot know with certainty what will happen with timberland transactions this year, we can look to current trends to get a sense of where things may head. The good news: it appears we have the winds at our backs.

We felt the gales begin to blow early in 2020 with the large Weyerhaeuser-to-Southern Pine Plantations 630,000-acre deal in Montana.1 This was the largest single timberland transaction in terms of acreage since 2018. However, with the arrival of the pandemic, and companies facing an uncertain future choosing to pause large transactions, our sails slackened and we were deposited in the doldrums of timberland transaction activity in Q2 and Q3. Thankfully, the winds picked up in Q4 with several large transactions, the largest of 2020 being (from a monetary standpoint) the Weyerhaeuser and Hancock exchange of a cumulative 234,000 acres in Oregon for over $800 million.[1] Other notable transactions included Lyme timber’s acquisition of 92,000 acres from Seneca Resources, and The Conservation Fund’s acquisition of 72,000 acres from PotlatchDeltic.

This momentum carried into Q1 of 2021. The large Southern Pine Plantations sale with Green Diamond of 291,000 acres in Montana closed in January. Southern Pine Plantations also announced a further sale of 126,000 acres of Montana timberland to a private buyer.[2] Lastly, the recent Weyerhaeuser announcement with Soterra adds another 69,000 acres of transaction activity in the South that will likely close in Q2.[3]

Currently, there is no slack in the sails. That said, it remains to be seen what the remainder of 2021 will bring.  We stay hopeful that this Zephyr wind continues to blow, and the unfavorable winds of the pandemic remain trapped in their 2020 bag.[4]

For details on recent timberland transactions and mill investments, subscribe to the Forisk Market Bulletin

[1] Weyerhaeuser Company. (2021). 2020 Annual Report. http://investor.weyerhaeuser.com/

[2] https://flatheadbeacon.com/2021/02/08/texas-power-couple-acquires-125800-acres-of-timberland-west-of-kalispell/

[3] http://investor.weyerhaeuser.com/2021-02-25-Weyerhaeuser-to-Acquire-Timberlands-in-Southwest-Alabama

[4] https://www.greekmyths-interpretation.com/en/odyssey-aeolus-interpretation/

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