I am always interested in articles written about asset diversification. I have read multiple sources over the years that state timber lands provide a safe 8% return in terms of growth in value per year. Unfortunately, the math behind the 8% is never provided. 8% of what, the cost per acre which is a moving variable. I simply divide 100% by the 25 year life span of a pine tree and come up with 4% per year. According to my google searches, Hoffman generates 2.0mm in income per year. Insert Picard face palm. That is $25 a year per acre for a whopping $625 over 25 years or just 20.8% of what it should generate over 25 years. $625/$3000. Job well done. (sarcasm)
I don’t think educational goals and profit maximization goals associated with the largest forest owned by a university in the world are mutually exclusive. I just expect better results from my alma mater and from our College of Agriculture & Life Sciences, College of Natural Resources, College of Sciences and from Poole College of Management. The State of North Carolina has a goal to increase publicly held forests by 1,000,000 acres before they are all gone. Why are we selling to an out of state pig farmer/developer? Why can’t our state purchase the property? Oh, that’s right, they are too busy pissing our tax dollars away on money losers.
Gowolves, as an accountant, I agree that there is a number where it makes financial sense for the university to sell the property if they simply do not want to manage 79,000 acres of forest and insist on selling and if they have other educational properties. I would rather it remain available to the citizens of North Carolina. I hope they get a better return on the 150mm but I won’t hold my breath. Bill mentioned dumbA%% deer hunters of which I am one. Hofmann is divided into several hunt clubs. 79,000 acres should be generating a decent amount of hunting lease fees but it probably is just another area of financial mismanagement.
