Page 12 - Georgia Forestry - Issue 3 - Summer 2020
P. 12
Low in“terest rates
and economic uncertainty will likely lead private owners and speculators to begin looking for acquisition opportunities.
Landowners ”
Owners that are highly reliant on cash flow—particularly REITs— could be challenged to maintain revenue and dividends. This may lead them to increase strategic land sales to meet quarterly earnings
requirements. As time goes on, low interest rates and economic uncertainty will likely lead private owners and speculators to begin looking for acquisition opportunities. Institutional owners (TIMOs and REITs) will be evaluating their positions to determine their ongoing participation in the sector. Some will see this event as a validation of the fundamental reasons to own timberland and either enter the timberland investment space or increase allocations. Others may decide to rebalance allocations or exit the sector altogether.
— DAVID FOIL, President, Forest Resource Consultants
Sawmills
I ndependent sawmill owners
have more flexibility than corporate-owned sawmills during
downturns or periods of economic uncertainty. During tough times, independents most often prioritize workforce integrity, protect their banking relationships, take strategic downtime for capital improvements, and maintain a long-term focus. During the same uncertain times corporate owners often prioritize quarterly metrics to satisfy Wall Street and industry analysts. We have already seen significant curtailment of previously committed capital expenditures. We anticipate potential for mergers and/or acquisitions within this sector.
— DAVID FOIL, President, Forest Resource Consultants
10 | GEORGIA FORESTRY
