Wells Timberland REIT, MeadWestvaco Reach Agreement on Sale of Forestlands in Georgia and Alabama

. August 7, 2007

Wells Timberland REIT, the first public, nontraded timberland fund, has reached an agreement to acquire approximately 228,000 acres of forestland in Georgia and Alabama, and long-term leaseholds on another 95,000 acres, from MeadWestvaco, the company announced today.

It’s the first property acquisition for Wells Timberland REIT. The purchase price is $400 million.

In January, MeadWestvaco announced its intention to auction more than 300,000 acres of forestland surrounding its Mahrt, Ala., paper mill. Wells, which in May announced the launch of its new Wells Timberland REIT, was selected from a number of bidders.

“This property is a great example of investment-quality timberland,” said Jess Jarratt, president of Wells Timberland Investment Management Organization. “It is well-managed, stocked with a wide diversity of timber, and it’s located in one of the most productive growing areas in the country. We will look to manage this property for the long term. That’s one of the nice things about timberland – the timber literally grows.”

Some 228,000 acres are owned by MeadWestvaco in Stewart, Marion, Quitman and Randolph counties in Georgia, and in Russell, Barbour and Chambers counties in Alabama. The sale also includes long-term leaseholds on roughly 95,000 acres owned by third parties.

The company’s business model seeks to generate revenue and income for the fund through the sale of timber-harvesting rights, as well as by leasing land-use rights. The two companies have agreed to a long-term fiber supply arrangement to support MeadWestvaco’s paperboard mill operations.

The land tracts include an estimated 13.5 million tons of merchantable timber, with significant amounts of sawtimber and pulpwood. Most of the timber is pine.

Wells Real Estate Funds is a national real estate investment company based in suburban Atlanta. Since its founding in 1984, Wells has invested more than $10 billion in real estate for more than 200,000 investors. Wells funds include REITs, mutual funds and other commercial real estate investment vehicles. For more information, see www.wellsref.com.

Category: Auction News

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