Monetizing the Bare-Land Component of Timberland: Assessme

Timberland owners have used a number of approaches for monetizing the barelan component of their timberland without losing the right to grow and harvest timber, including, among others: selling a working-forest conservation easement, selling recreational rights, and selling the surface while retaining cutting rights. In this paper, I will address the latter approach, with an emphasis on the opportunities and challenges associated with alternative structural elements adopted in the arrangement. Institutional investors are accustomed to having vari contracting alternatives to modify the attributes of their portfolio assets. Monetizing the bareland component of timberland provides these investors with the opportunity to modify such attributes as the timber-to-land value ratio, capital at risk, and investment duration. Some of the structural elements to be assessed will be: retaining term versus perpetual cutting rights, the presence versus absence of a periodic paym 1 The Forestland Group, LLC; Chapel Hill, North Carolina; 919 929-2497 (tel); [email protected] 48