Whether it is through property acquisition, ongoing forest management, or property disposition, Prentiss & Carlisle has been helping timberland investors get the most out of their forests for nearly a century.
Timberland Is a Unique Asset Class
The benefits of timberland as an investment asset have been well documented:
- Historically high risk-adjusted returns, as measured by the NCREIF Timberland Index.
- Effective hedge against inflation.
- Low correlation with financial assets, therefore an attractive diversifier in an investment portfolio.
- Biological growth that is reasonably predictable and reliable.
- Management flexibility to increase growth through silviculture and management, the ability to time harvests to maximize revenue, etc.
Timberland can be an excellent investment, but it’s not guaranteed to be.
Without a seasoned investment adviser, it is actually quite easy to make a mistake, considering the nature of the industry:
- The investment timberland market is very thin. When deal flow is low and demand for the asset class is high, it takes discipline to wisely employ capital.
- There is no ticker tape with minute-by-minute timberland prices. Valuation in this market requires specialized knowledge and experience, and an ability to identify value in the absence of clear market metrics.
- Every property is unique. An adviser with decades of managing different types of properties can identify the value proposition for a given property and make sure that proposition matches the client investor’s appetite for risk, cash yield requirements, and willingness to deviate from a pure timber strategy.
- Timber inventory, growth, and yield data are probabilistic and can be developed by numerous methods. Without a deep understanding of these methods, timber data can assume an appearance of “truth” that is undeserved.
How Prentiss & Carlisle Can Help
Acquisition due diligence. P&C has provided due diligence services in the form of timber inventories, GIS analysis, valuation, pre-acquisition management planning, and coordination with non-forestry professionals. In evaluating a property, P&C brings to bear all of its expertise and experience in owning, managing, and marketing properties across multiple geographies.
Investment monitoring. Since a large part of a timberland’s return is based on the change in asset value, it makes sense to periodically develop an independent estimate of the property’s market value. P&C has valuation experience throughout eastern North America.
Management audit. The success of property management often depends heavily on the quality and effective deployment of forest information systems. An independent review of systems in place and periodic audit of data quality can help the investor make sure its timberland assets are being properly managed. P&C has expertise in sampling, GIS, database management, and field implementation of information systems.
Deal sourcing. Through its network of contacts and its management of 1.5 million acres, P&C becomes aware of possible acquisition opportunities which may not otherwise become known to our investor clients.
Buyer & Seller Representation. As a licensed real estate brokerage agency in Maine and Wisconsin, P&C is well-suited to offer buyer and seller representation for investors seeking to acquire or divest timber investment properties.
Excellent Returns Depend on Sound Forest Management
Once you’ve made the decision to acquire timberland, it’s time to put your plan into action—and P&C can help. Nearly a century of forestry experience allows us to actively manage each client’s forestland in ways that can be custom tailored to match specific investment objectives. Whether it’s cash flow needs, strategic outsales, easement, or carbon overlays, P&C can make your forest work for you.