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an attractive investment for a timber products company2 or a
pension fund. The Timber Property was a large, contiguous,
privately owned timberland parcel, located within an extremely
competitive timber market.3 Large portions of timberland in the
area were owned either by timber products companies for their own
use or by the U.S. Forest Service. The U.S. Forest Service had
provided a constant supply of timber products to the timber
industry nationwide but had recently begun to reduce sales of
timber from public lands in response to environmental concerns,
which had the effect of increasing prices and demand for
privately owned timber and timberland. Privately owned
timberland is generally held in small parcels; the average-sized
privately owned parcel is 80 acres.
The contiguous nature of the Timber Property offered a
number of advantages in protecting and managing the timber that
would appeal to a timber products company or pension fund buyer.
In comparison to noncontiguous holdings, a contiguous parcel like
the Timber Property had smaller borders and required less travel
time to inspect the property, allowing greater control over the
property, including the control of theft, wildfire, insects, and
poachers. As a contiguous parcel, no portion of the Timber
2 As used herein, “timber products company” refers to an
operating company that is in the business of manufacturing
lumber, paper, and other products made from timber. Johnco, in
contrast, was a holding company and was not in the business of
producing timber products.
3 The Timber Property was within a 50-mile radius of several
corporate sawmills, plywood plants, and pulp and paper mills.
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Last modified: May 25, 2011