Timber giant has sold more than 26,000 acres in Montana in the last six months, renews commitment to free public land access
Weyerhaeuser's real estate portfolio remains in flux in Montana, where the Seattle-based timber giant is the state's largest private landowner and has closed and sold several properties in the past year.
Since moving into Montana in early 2016 and absorbing 880,000 acres of land formerly owned by Plum Creek, Weyerhaeuser has sold more than 26,400 acres in Northwest Montana, according to an analysis of land ownership data.
Tom Ray, the Montana resource team leader for Weyerhaeuser, confirmed the amount of acreage that has been sold but did not comment further on the individual sales or buyers. He said the transactions were scattered across Northwest Montana. He noted that the acreage sold in the last year represented a small percentage of the company's Montana portfolio, only roughly 3 percent.
"How we approach our timberlands, we regularly review our portfolio in all regions and look at tracts we can sell for premium value," Ray said. "It's a critical part of our business strategy."
Weyerhaeuser's business strategy revolves around a common corporate model, and CEO Doyle Simons recently explained the company's "investment thesis" at a real estate investment trust (REIT) forum in New York City on June 6. Weyerhaeuser is the nation's largest private timberland owner with 13 million acres, and according to a copy of the presentation published online, its business strategy is devoted to creating the "most value from every acre."
"Basically they want to maximize the value or return from each acre or parcel they own," said Todd Morgan, director of forest industry research at the University of Montana Bureau of Business and Economic Research. "In some cases, they can do this by selling the land to another willing party."
"My impression is that the state of Montana and the federal government are probably not in the market to buy more land right now," he added. "So I'm guessing most sales will be to other timber/wood product companies, developers, and/or possibly nonprofits."
Weyerhaeuser has finalized a conservation deal with The Trust for Public Land and the state of Montana to conserve more than 13,300 acres roughly nine miles northwest of Whitefish. The deal, which is years in the making dating back to the Plum Creek era, would protect fish and wildlife habitat and provide continued public access for outdoor recreation adjacent to Haskill Basin, another area that has recently received conservation protection.
"It's a unique landscape up there," Ray said. "It's home to grizzlies, wolves, lynx. Ecologically, it really is a special place."
"As far as the sale," he continued, "it will create value for the company and the community going forward. It's the right thing to do."
Ray said the sales cost was confidential and expects it to close Sept. 30. He said Weyerhaeuser does not have any other conservation sales planned at this time in Northwest Montana.
Weyerhaeuser also recently agreed to extend free public access on many of its lands across the state by renewing a longstanding contract with Montana Fish, Wildlife and Parks through the state's block management program. The agreement, which was voluntarily renewed by Plum Creek for decades, allows hunters and other recreationists to access the private land in exchange for state game wardens patrolling the property. Of those lands, the block management agreement allows public access on roughly 700,000 Weyerhaeuser acres in this corner of the state and more than 50,000 acres near Missoula through May 2018.
"We've made no changes to the open-lands policy - everything is exactly the same as it was and has been in the past," Ray said. "In the long history of working with FWP, we've always done one-year block management agreements. That allows us to talk about the pluses and minuses year to year, and if there are areas we need more patrol, we can write it into the agreement."
Two weeks ago, the company listed for sale two shuttered facilities in Columbia Falls, the former Cedar Palace administrative office and the former sawmill. The sites are listed through commercial real estate firm Kidder Mathews.
The 35,000-square-foot office building, at 500 12th Ave. W., is listed for $2.6 million and includes 24 acres of surrounding open land and an adjacent 1,736-square-foot data center building. The main office, known as the Cedar Palace, was built in 1982 and was Plum Creek's former headquarters before the company merged with Weyerhaeuser in early 2016. The office closed in December 2016, and roughly 100 employees were laid off as part of Weyerhaeuser's local downsizing.
The former lumber mill is also listed for sale. The listing includes two sites totaling 37 acres and 294,000 square feet of buildings. The site is listed on the market without a price and will be sold through a managed bid process after a future call for offers.
"We think it's the best way to create value for the investors by going through this process," Ray said.
Weyerhaeuser closed its lumber mill and plywood mill in Columbia Falls last August and laid off 72 employees. The plywood mill property, adjacent to the MDF plant, is not for sale.
Weyerhaeuser's medium-density fiberboard plant in Columbia Falls and its two mills in Evergreen continue to operate.
Ray said the Evergreen mills are running with two shifts and the MDF plant is running three shifts.
"Both are running very well," Ray said. "Generally the markets are very good this year."