| Plum Creek Launches Timber JV with Institutional Investors | |
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In a significant development, Plum Creek Timber Co. Inc. PCL, the largest owner of private timberland in the U.S., announced that it has set up a joint venture (“JV”) with several institutional investors. This deal, allowing investors to co-invest in Plum Creek’s timberland portfolio, highlights the company’s strategic innovation. This helps the Seattle, WA-based firm to arrange alternative sources of capital in order to keep its growth momentum alive.
Per the deal, Silver Creek Capital Management (“Silver Creek”), a Seattle-based alternative investment boutique with a focus on private credit, hedge funds and real estate strategies, will be the managing member and independent fiduciary of the JV, known as Twin Creeks Timber, LLC. For the initial phase, institutional investors who have made commitments include the Washington State Investment Board, the Oregon Public Employees Retirement Fund, and the Alaska Permanent Fund Corporation. Operations are scheduled to start in Jan 2016.
The JV aims to expand the portfolio to around $1 billion over time, through opportunistic and selective acquisition of timberland from third parties. In total, institutional investors will own 75% of the JV’s common equity, while Plum Creek will own 25%. Further, in a cash deal slated to close in Jan 2016, Plum Creek will sell timberland worth $420 million to Twin Creeks.
We believe the setting up of Twin Creeks will be accretive to Plum Creek, going forward. The company will be entitled to a share from Twin Creeks’ operating income, distributions and management fees. The company will likely utilize the proceeds from the timberland disposition to repay debt and buy back shares.
Plum Creek currently has a Zacks Rank #3 (Hold).
Investors interested in the REIT industry may consider stocks like CoreSite Realty Corporation COR, Iron Mountain Incorporated IRM and Ashford Hospitality Prime, Inc. AHP. All three stocks sport a Zacks Rank #1 (Strong Buy).
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PLUM CREEK TIM REIT is a exploration company. PLUM CREEK TIM REIT is listed in United States of America. Its market capitalisation is US$ 3 065.9 billions as of today (€ 2 653.6 billions). Its stock quote reached its lowest recent point on October 25, 2018 at US$ 1 049.25, and its highest recent level on October 06, 2021 at US$ 1 494.97. PLUM CREEK TIM REIT has 2 050 830 080 shares outstanding. |