There has been a major shift in industrial forestland ownership in the United States since the 1970’s due to the disintegration of the forest products industry. The forest products industry, at one time, owned not just the trees, but also the manufacturing facilities, including pulp and saw mills. However, over the past 20 – 30 years these components have been separated into their own entity, and the timberland is no longer part of an entire system but rather an input into another system; namely the investment market, facilitated by Timberland Investment Management Organizations (TIMOs).
A TIMO is a management group that aids institutional investors in managing their timberland investments. A TIMO acts as a broker for institutional clients. The primary responsibility of TIMOs are to find, analyze and acquire investment properties that would best suit their clients. Once an investment property is chosen, the TIMO is given the responsibility of actively managing the timberland to achieve adequate returns for the investors.
Private held partnerships and other entities, managed by TIMOs, own the majority of the land and equity. The next major owner of timberland is the Real Estate Investment Trust (REITs), A REIT is a company that owns, and in most cases, operates income-producing real estate. REITs own many types of commercial real estate and timberlands. The REIT structure was designed to provide a real estate investment structure similar to the structure mutual funds provide for investment in stocks. REIT ownership continues to grow with organizations acquiring publicly traded lands.
Timberland holding is considered a very low risk asset, so it provides great benefit diversification, which drove many companies to invest in timberland. Another reason for the growth of timberland investment is that they are also a good barrier for unexpected inflation. Timberland is an asset in which the value rises with inflation rather than staying stagnant like many other types of investments.
TIMO’s and REIT’s do harvest forecasting and planning. Identifying the tract where the timber is to be cut, loggers, haulers and where the logs and/or byproducts will be delivered. Typically contracts define all the details regarding the rates for various products and costs associated with transportation.
LIMS provides the capability to pay a single private property owner, multiple property owners or it can treat it as a mutual fund which in essence is paying numerous property owners.
Reporting with TIMO’s and REIT’s is essential as they typically deal with massive amounts of data and the organizations are in many cases public companies. LIMS offers hundreds of reports and includes a report writer so you can design and develop literally any report you need. With options to query, sort and filter you can present the data in the format that best meets your companies needs. Reports can be scheduled to run on a specified timeframe and automatically delivered via email.
LIMS is also Sarbanes Oxley compliant and meets the needs of public companies. Keeping track of all information entered into the system along with any changes, dates and users including a complete historical archive of all data.
Contact 3LOG sales to learn more about our solution and how it is positively impacting TIMO’s and REIT’s.