Trends in Alabama Timber Investments Discussed at World Summit

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Timberland investments in Alabama are changing due to demographic trends, a forestry management executive said at a recent international timber investment forum in New York City.

Timberland investments in Alabama are changing due to demographic trends, a forestry management executive said at a recent international timber investment forum in New York City.

Jacob F. "Jake" Schutt, board chairman of Wilmon Timberlands, an Alabama-based forest management firm, discussed how demographic changes in southern Alabama are creating trends that affect how timber investments are viewed by investors and timberland managers.

Schutt was part of a November 13 panel discussion for the Timberland Investment World Summit, a semiannual event sponsored by the International Quality and Productivity Center.

Schutt's roundtable session examined the pros and cons of investing in timber -- considered an "alternative" asset -- from the investor's point of view. Schutt was joined on the panel by Amy Chen, Director of Investments for the Smithsonian Institution and Sandy LaBaugh of TIAA-CREF.

"We're seeing a steady influx of people who move to our area (southwestern Alabama) from the Gulf Coast and from northern states," said Schutt. "They are looking for rural lands for retirement, hunting and recreational uses. Along with the actual timber investment, these monetizable rights change the way a timberland investment is shaped. We're getting more creative in how we advise our clients on a timber deal since these 'non-timber' factors impact the pricing on the front end of the investment cycle."

Schutt also pointed out that his company, Wilmon Timberlands, based on the border of Monroe and Wilcox counties, does not encourage using leverage in timber investments. Since timber is often a 20 to 30 year investment, "we don't want to accelerate timber cuts in a timeframe where we don't think it's advantageous. Having to cut timber in an early stage of the growing cycle is the number one harm to long term return."

Alabama forestry is a $13.2 billion industry, according to the Alabama Forestry Association.

About Wilmon Timberlands

Wilmon Timberlands, LLC was founded in 1962 and has one of the longest forest management histories in the Southern United States. Located in Vredenburgh, Alabama, Wilmon Timberlands performs customized timber management services for high net-worth individuals, LLCs and trusts. The website is http://www.wilmontimberlands.com.

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GREG WOMBLE
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