Timber REITs: RYN and PCL Benefit from Rejection of Florida’s Amendment 4

16 11 2010

Earlier this month, Florida voters rejected a constitutional amendment that would have changed the state’s development approval process. “Amendment 4” – sponsored by the non-partisan Florida Hometown Democracy – would have required a voter referendum whenever a local government amended its comprehensive plan.  The amendment would have made the entitlement process in the state more complicated.

The rejection of the amendment favors Rayonier (RYN) and Plum Creek (PCL), which have HBU (“higher-and-better-use”) lands with development potential in the state.  This is especially true for Rayonier, which currently has three major projects in Florida. The company seeks entitlements for 24,000 acres in Nassau County and 6,300 acres in Palm Coast, Florida. Rayonier expects to complete the entitlement process for these lands in the next 2-3 years. In all, Rayonier has identified about 200,000 acres of HBU property in the I-95 coastal corridor between Savannah, Georgia and Dayton Beach, Florida.

Marginally, Plum Creek also benefits from the Amendment 4 rejection. The company owns about 590,000 acres in Florida. However, most of these acres are strategic timberlands and not HBU development properties. In all, Plum Creek has identified 150,000 acres nation-wide (of ~6.9 million acres owned) as having HBU development potential.

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