The History of Timberland as an Investment
If you have your eyes set on timberland for sale in Florida, you may be interested to learn that timberland as a financial investment has only been around for about 30 years. During this time, major changes have occurred, including the introduction of different types of ownership classifications to the market.
So, while you may already own a piece of Florida timberland for sale, our land experts have put together a brief overview of the beginning of timberland investment and the individuals and businesses that have built it along the way.
The first major shift in timberland investment began in the early 1980s. At this time, there was very little competition, which meant, there was plenty of land available for those entering the market. The classification of timberland as a financial asset, resulted from large lending companies acquiring timber property because of loan foreclosures. At the time, timberland had expected returns of 8.0%, so these institutions, now in ownership of the timberland property, began promoting the land to investors as an opportunity to diversify their portfolio and turn a steady profit.
As investors learned the timberland market, new types timberland ownership emerged up until the early 2000s. There were the large lending companies previously mentioned, but then entered Timberland Investment Management Organizations (TIMO), Real Estate Investment Trusts & Master Limited Partnerships (REITS & MLP), Private Investors, and Arbitrage Investors.
Timberland Investment Management Organizations (TIMO)
Consists of private companies, who act as investment managers for wealthy individuals and institutions. This type of ownership uses timberland as an illiquid asset.
Real Estate Investment Trusts & Master Limited Partnerships (REIT & MLP)
These types of owners use timberland as a liquid asset by publicly trading shares on the stock market.
Private investors can be either an individual or privately held company, and either use timberland as a long-term investment by profiting from land resources or as a short-term investment by fragmenting the land into smaller pieces to sell to other investors.
These investors are generally short-term investors. They include individuals and businesses with access to large amounts of capital, often operate their own hedge funds or partnerships, and are very knowledgeable in stock market trading.
Investing in Florida timberland for sale is an exciting way for you to be among the pioneers who take advantage of the opportunities available with timberland investments. Financial institutions and private investors alike believe in the long term growth potential of timberland for sale in Florida, and have built our local industry to what it is today.