ATLANTA (News release) -- CatchMark Timber Trust, Inc. announced a definitive agreement to sell 18,063 acres of prime Oregon timberlands - known as the Bandon property - for $100 million in cash, or approximately $5,536 per acre, to Roseburg Resources Co.
CatchMark purchased the property in August 2018 for $88.8 million, or $4,916 per acre, exclusive of transaction costs. The company expects to recognize a gain on the sale in excess of $20 million in the third quarter of 2021. As of June 17, 2021, CatchMark has harvested approximately 70% of its targeted 2021 volume for the Pacific Northwest and expects to reach approximately 75% to 80% of its target 2021 harvest volume for the region by transaction close. The sale is expected to close in the third quarter of 2021, subject to customary closing conditions.
CatchMark Chief Executive Officer Brian M. Davis said: "We're pleased with the outcome of this transaction, which generated strong interest from a wide group of investors. By selling this asset, we will be better positioned to reinvest in the growth of our core portfolio in the U.S. South where we have a robust operating platform and see the strongest opportunity for future growth."
Mr. Davis continued, "We have successfully capitalized on the current favorable market conditions for our Pacific Northwest property. The sale of our Bandon timberlands highlights our ability to execute accretive capital recycling transactions that allow us to continue to pursue our strategy of investing in prime timberlands in high-demand mill markets and managing operations to generate stable and predictable cash flow."
Roseburg's Senior Vice President of Resources Scott Folk commented, "Roseburg is very pleased to acquire another 18,063 acres of well-managed, highly productive and strategically located timberlands in coastal Oregon. The close proximity of these properties to our western manufacturing facilities will help ensure a long-term, sustainable supply of premium logs and wood fiber."
AFM Real Estate acted as CatchMark's broker for the transaction.