Coldwell Banker Commercial Benchmark

ACREAGE for TIMBER

12/11/17

HENRY ROGERS, CCIM, ALC

COLDWELL BANKER COMMERIAL BENCHMARK

When a person hears “Acreage”, it brings up different visions to different people.  As a boy, I spent every summer at Grandma’s 450 acre farm in Tennessee chopping cotton, slopping the hogs, milking 100 cows by hand, baling hay and taking eggs from the hen house to the kitchen.

To many families, acreage is a small plot with a mobile home, a fence, a garden and a few trees.  Farmers think of how many boxes or bushels per acre it will produce. Real estate developers envision retention ponds, curved lines of utility trenches, asphalt streets and concrete sidewalks leading to a spec house with a for sale sign.  Ranchers wonder how many cow/calf units can feed off the land.  Rare plants, wading white herons and roaming wild cats are considered by conservationists.  White tail deer, turkeys and quail are in the sights of all hunters in the woods.

In Florida, the owners of much of the acreage are interested in trees in long rows spaced six feet apart, known as pine plantations. Of the 34,652,841 acres in Florida, about 17,100,000 acres, almost half of the land in Florida, are in pine trees for production of timber.  More than 78,000 jobs are supported by timber.  About 11 million acres are privately owned and six million are government owned.  In the past 25 years, the private owners have reduced their holdings two million acres and the government owned has increased three million.  Some of the acreage on tax rolls is timberland at a small number, while suitable for much more intensive use, such as retail stores, subdivisions, or cropland.  Throughout Florida, you can find scattered land parcels in densely populated areas with cultivated pine trees and taxes of less than $5 per acre per year.  Brest, Hodges, Skinner, Davis and ICI Villages are some of the names with timber assessments that are development land in northeast Florida.

Sale prices of timberland, including the trees on site, if any, in eight verified sales in Florida in 2016 ranged from $703 to $2,448 per acre, according to Saunders Real Estate.  Those sales indicated values of bare land from $619 to $1,979 per acre. The highest price number was in Clay County where most owners think their land will eventually be subdivisions and shopping centers. The largest Florida sale was 29,265 acres in Hamilton County for $42,878,383, or $1,465 per acre.  In 2015, the largest sale was 562,738 acres mostly in Taylor County for more than $700 million, or a reported $1,265 per acre.  In August 2017, this office brokered 189 acres of timberland with low assessed value in Oakleaf Plantation area of Clay County for $5,100,000, or $27,000 per acre.  It will have 505 homes built on it eventually.

Factors that influence the value for growing trees includes the site index, which indicates the growth potential of the soils, aspect and slope.  In a 25 year cycle, a minimum index of 60 will yield only about 2/3 of a 70 index, and the rare 90 will yield much more.   Site preparation, survival rate, proximity to market, number of potential buyers, condition of interior logging roads, tree species, genetic quality of trees, wetlands quantity, and taxes per acre are other factors.  Quality of adjacent neighbors can influence higher or lower values, depending on the maintenance of their trees.  The Florida Forest Service was established 80 years ago and manages 1.1 million acres that generate $7.5 million from managed state forests.

In 2016, most Florida ranch and hunting land sold for between $2,000 and $5,000 per acre with sizes of 700 to 6,000 acres, some with improvements and some without. Crop land sold with a wide range of prices depending on location. In Dade County’s Homestead vicinity, typical sales for fruit groves were 40 to 60 acres with prices from $21,000 to $38,000 per acre. In Palm Beach County, the common crop is sugar cane with prices from $9,000 to $11,000 per acre.

Conservation easements are established providing for a wide range of purposes, most commonly for protection of wild life and greenery.  A little over 30,000 acres of easements were bought by federal, state and local governments for $61,800,000 in 2016.  Some farmers and timber owners of land close to cities have put easements in place that prohibit development, but allow agricultural uses, either permanently or for a time, to reduce taxes and provide for heirs to continue the existing business. Those easements permit whatever the owner wants, sometimes with oddities, such as no hunting by Mr. Jones is permitted on the back 160 acres.

“Under All Is The Land” was a well known book in real estate circles fifty years ago.  Its philosophy is still fulfilling for those of us who deal in land every day.  I invite your conversation about the benefits and dangers in buying, owning, or selling what is under you.  Please call me, Henry Rogers, at 904-421-8537 direct, or 904-614-4828 cell.