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Strategies & Market Trends : PCL: Plum Creek Timber Co. Inc -- Ignore unavailable to you. Want to Upgrade?

To: 249443 who wrote (6)	11/29/2001 7:45:49 PM
From: 249443	Read Replies (1) \| Respond to of 15

Plum Creek Timber Plans Expansion Into Development of Its Real Estate November 30, 2001 wsj.com By JIM CARLTON Staff Reporter of THE WALL STREET JOURNAL Plum Creek Timber Co. is planning a major expansion into real-estate development on its vast property holdings around the U.S. The logging company based in Seattle is set to announce Friday it is creating a new executive position to oversee development of its 7.8 million-acre land portfolio, the nation's second-largest private-property holdings after International Paper Co. Expected to be named executive vice president over real estate and strategic business development is Tom Lindquist, 41 years old. He formerly was an executive vice president at Trammell Crow Co., the Dallas developer. Rick Holley, president and chief executive of Plum Creek, said Mr. Lindquist would report directly to him as part of Plum Creek's drive to generate significant new profit and revenue by developing part of its timber holdings. Mr. Holley said the company owns property in 19 states, following its $4 billion acquisition earlier this year of Timber Co., a separate operating group of Georgia-Pacific Corp. Mr. Holley said at least 400,000 of those acres appear ideally suited for commercial or residential development, since they are either near big cities like Atlanta and Daytona Beach, Fla., or along lakes such as in Montana and Maine. Analysts praised the move, saying it builds on Plum Creek's existing practice of selling off timberlands for development or other purposes for more than it could get from logging. The company's timberlands are valued at roughly $1,000 an acre around the country, but could fetch as much as $10,000 an acre if sold for development or conservation purposes around a city like Atlanta, analysts said. Besides getting Plum Creek a higher return for its investment, analysts said the land-sale business helps cushion the company against the vicious business cycles which have pummeled other timber competitors. The company's existing land-sales business accounted for about $30 million of Plum Creek's $700 million in revenue in the last fiscal year. Plum Creek's revenue is now running at about $1.2 billion a year, following its recent acquisition. "The company has a lot of real estate and has realized over time there is a lot of value to those properties above and beyond timber," said Matt Berler, an analyst at Morgan Stanley in San Francisco. Rather than develop any land itself, Mr. Holley said Plum Creek likely would team up with a developer as part of a joint venture, or sell it to a developer.