Spokane, Washington, USA, 19 December 2006 --(BUSINESS WIRE)-- Potlatch Corporation (NYSE:PCH), a real estate investment trust (REIT), today announced its agreement to acquire approximately 76,000 acres of prime forestland in Wisconsin for USD 64.5 million from Tomahawk Timberlands, LLC, and Tomahawk Highlands, LLC. The transaction is expected to close in early 2007.

The forestland, located in the north-central part of the state, contains well-managed hardwoods and is made up of diverse age classes with significant amounts of mature timber. The vast majority of the land is concentrated in contiguous blocks less than five hours from Chicago and Minneapolis.

"The forestland, which consists of high-value mature timber, has been under excellent long-term forest management," said Vice President of Resource Management Brent Stinnett. "The land complements our existing holdings in Minnesota, has prime recreational values, and will help further establish our presence as a leading forestland holder in the Lake States region."

Potlatch owns 310,000 acres in Minnesota, a sawmill in Bemidji, and has been operating in the region for more than 40 years. The company also owns a sawmill in Gwinn, Michigan.

"This acquisition is a perfect example of the execution of our strategy," said Michael J. Covey, president and chief executive officer. "Our objective is to maximize shareholder value through identifying and acquiring land with strong timber values."

"We are focusing our growth in areas where we have experience and know the lay of the land," added Covey. "Additionally, this purchase should allow us to utilize a 1031 exchange and avoid built-in gains taxes on any sales of like-kind properties that may occur."

Potlatch is a REIT with 1.5 million acres of forestland in Arkansas, Idaho, Minnesota, and Oregon. Through its taxable REIT subsidiary the company also operates 13 manufacturing facilities that produce lumber and panel products and bleached pulp products, including paperboard and tissue. Potlatch, a verified forest practices leader, is committed to providing superior returns to stockholders through long-term stewardship of our resources.

Source: Potlatch Corporation