At Molpus, we understand that a critical component of our clients meeting their investment goals is understanding a client’s investment objectives and then working to identify candidate properties that we believe will meet those investment objectives. Over the course of a calendar year, Molpus receives hundreds of timberland acquisition opportunities and evaluates them before actually making a recommendation on a select property to a client. Many of those opportunities are not recommended to a client, and we simply advise them to invest another day.
Typically, for the more worthy candidate properties, the evaluation and timberland acquisition process of a client property is as follows:
We are able to utilize our extensive networks in the regions, within the industry and with technology to discover timberland properties for possible evaluation. During the evaluation process, we look over numerous and varied factors including, but not limited to, the following: (1) Timber ages and volumes; (2) Current timber pricing trends for the region; (3) Acreage verification; (4) Other, value-added income potential; (5) Higher and better use potential; and (6) Market analysis specific to the property (i.e., number of mills and volumes used, quality of local markets, etc.). We also conduct site visit(s) to the property to verify the seller’s data, determine site productivity and timber quality, interview current personnel connected with the property, and analyze the management history on the property.
Throughout the evaluation process, we will take the information gathered and input it into our proprietary model, which we have developed and refined over the past decade. We will review the model assumptions, inputs and results with our clients to determine whether it is viable to proceed with a candidate property and, if so, at what pricing levels.
If a candidate property has been approved by our timberland acquisition team and approved by our client, we facilitate and oversee the negotiation of a purchase agreement, proceed with pre-closing due diligence—such as engaging outside counsel for contract and title review, engaging a third-party environmental company to perform a Phase I environmental site assessment and the engaging of a third-party timber inventory verification—and monitor the transaction until closing.
Once a candidate property has been acquired, Molpus handles the day-to-day management of the property. Learn more about the timberland management process.