(EDITOR’S NOTE: Hancock Timber Resource Group Inc. was the seller for $80.7 million of the transaction, while the remaining $33.2 million was sold by an undisclosed entity in Southern Oregon).
POULSBO, WA, February 1, 2018 – Pope Resources (NASDAQ:POPE) reported that its private equity timber fund, ORM Timber Fund IV(REIT) Inc. (“Fund IV”), completed two acquisitions at the end of January 2018 totaling $113.9 million for 36,900 acres. Pope Resources (the “Partnership”) co-invests 15% of the capital in all acquisitions by Fund IV, so the Partnership’s portion of these recent acquisitions totals $17.0 million. These timberlands acquired by Fund IV include a significant proportion of currently merchantable timber which is expected to generate strong cash flows for Fund IV, and indirectly for the Partnership, in 2018 and beyond. Third-party fees resulting from managing these investments are expected to total $0.8 million per year.
These acquisitions include 20,000 acres located in southwest Oregon and 16,900 acres in western Washington. Both properties are great additions to the Partnership’s look-through timberland portfolio and represent the start of a well-diversified portfolio of timberland for Fund IV. Following these acquisitions, Fund IV will have remaining committed capital of $273 million for investment in Pacific Northwest timberlands, defined as Washington, Oregon, Idaho, Montana, and the mixed conifer region of northern California.
In general, the Partnership benefits from investments made by its timber funds in a number of different ways including the following: return on its co-investment in the form of operational cash distributions during a fund’s holding period and capital gains realized through potential asset appreciation upon fund liquidation; economies of scale realized through managing a larger portfolio of timberland; and finally, fees earned through management of the funds.
About Pope Resources
Pope Resources, a publicly traded limited partnership, and its subsidiaries Olympic Resource Management and Olympic Property Group, own or manage 245,000 acres of timberland and development property in Washington, Oregon, and California. These acres include three private equity timber funds that we manage, co-invest in, and consolidate in our financial statements and from which we earn management fees. These funds provide an efficient means of investing our own capital in Pacific Northwest timberland and earning fee revenue from managing the funds for third-party investors. The Partnership and its predecessor companies have owned and managed timberlands and development properties for over 160 years. Additional information on the company can be found at www.poperesources.com. The contents of our website are not incorporated into this release or into our filings with the Securities and Exchange Commission.