The Rising Influence of Rising Affluence

[DewDiligence]

PCL should have been strictly a Timber Company. The normal goal of a REIT is to grow the assets, not deplete and distribute them.

That’s what PCL does with most of its acreage; however, some lots are worth more to a developer, due to their proximity to lakes, mountains, vistas, or other non-timber reasons.

If a developer wants to pay, say, $2,400 an acre for a lot that’s worth less than $2,400 for its timber, PCL increases shareholder value by selling the lot and pocketing the difference. PCL calls such lots “HBU,” which means higher and better use.