Forestland Investment Valuation and Analysis

Forestland investment has surged in the past few decades as a result of land ownership change in the forestry industry. Timberland investment and management organizations and real estate investment trusts have bought up land and resources that were divested by vertically integrated forest products companies. This book provides a seminal coverage of this seismic shift in the industry, exploring the philosophy, driving factors, valuation, theory, research, implementation, practice, and effects of forestland investment. Across 15 chapters the book reviews the history of forestland investment; discusses the optimal forest rotation; explains timberland appraisal; examines the return drivers of forestland; analyzes timberland index construction methods and results; prices timberland assets; reviews financial and real options; investigates real option values in forestland management; evaluates timber harvest contracts; examines new opportunities in the emerging woody bioenergy market; and eventually offers prospects on forestland investment in the future. It also discusses how forest carbon can be used as a nature-based climate solution. This book is essential reading for forestry business students and scholars, as well as practitioners and policymakers in the industry.

1. Introduction to Forestland Investment 2. Optimal Forest Rotation 3. Timberland Appraisals 4. Return Drivers of Timberland Investment 5. Property and Income Tax of Timberland 6. Portfolio Theory and Asset Pricing Models 7. Timberland Index Construction Methods and Result 8. Financial Analysis of Timberland 9. Financial and Real Options 10. Managerial Options in Timberland Investment 11. Valuing Timber Harvest Contracts 12. Benefit and Cost Analysis of Forest Carbon 13. Emerging Woody Biomass Markets 14. Case Study: Weyerhaeuser & Plum Creek Merger 15. Concluding Remarks

Bin Mei is Professor of the Practice in Natural Resource Finance at Duke University, Durham, NC, where he teaches and conducts research in the area of natural resource investment and nature-based climate solutions. Prior to that, he was Hargreaves Professor of Forest Finance at the University of Georgia, Athens, GA. He is editor of the Journal of Forest Business Research and associate editor of the Canadian Journal of Forest Research. Michael L. Clutter was Chief Analytics Officer at F&W Forestry, Albany, GA. In addition to his many years of experience in the forestry industry, Michael used to be the Dean and Hargreaves Distinguished Professor of Forest Finance at the University of Georgia’s Warnell School of Forestry and Natural Resources. He passed away unexpectedly on December 24, 2022.