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Jax Daily Record Thursday, Feb. 15, 201805:23 AM EST

Hedge fund buys more land in St. Johns

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Rayonier has sold total of 11,000 acres for $39.8 million.

The New York-based hedge fund sponsor that bought about 7,000 acres from Rayonier Inc. last week was expanding its St. Johns County land portfolio because it also acquired about 4,000 acres from the Yulee-based company in December.

The 11,000 acres sold are classified as timberland. All is in southern St. Johns County. 

The company paid more than $39.8 million for the property, which works out to about $3,622 an acre.

Alejandro Barbero, Rayonier director of strategic development and communications, said Wednesday the land was around Pedro Menendez High School.

The December sale was land in St. Augustine and Hastings, according to property records. First Coast Land and Timber LLC. paid $14.6 million on Dec. 1 for about 4,000 acres in southern St. Johns County.

The land is between Interstate 95 and U.S. 1, southwest of St. Augustine. It is south of County Road 207 and north of Florida 206.

First Coast Land and Timber bought the land from Raydient LLC, Rayonier Forest Resources L.P. and Rayonier Atlantic Timber Co.

On Feb. 7, Rayonier, through Rayonier Atlantic Timber Co. and Rayonier Forest Resources L.P., sold up to 7,000 acres to First Coast Land and Timber LLC for $25.24 million. 

That property is between I-95 and U.S. 1 from St. Augustine to Hastings.

Two more LLCs registered Jan. 22 – First Coast Land and Timber GS 1 LLC and First Coast Land and Timber GS 2 LLC – bought small pieces of land Feb. 7 for almost $183,000.

Asked whether First Coast Land and Timber wanted to buy more land from Rayonier, Barbero said “we only comment on closed transactions.”

Both acquisitions were unsolicited, he said.

First Coast Land and Timber LLC was registered with the state in November. Its New York City address is the same as Ruane, Cunniff & Goldfarb Inc., a privately owned hedge fund sponsor.

It manages Sequoia Fund Inc., an open-ended equity mutual fund begun by the firm.

Barbero said Monday that Rayonier is a timber REIT and continuously evaluates its portfolio.

“Sometimes we receive unsolicited offers. When it makes sense, we execute on transactions,” he said.

He declined to comment on the buyer’s identity or plans for the property.

A St. Johns County spokeswoman had no comment.

While Rayonier and Ruane, Cunniff  & Goldfarb have not commented about why the land was of interest, it’s no secret that St. Johns is one of the region’s fastest-growing counties.

Thousands of acres are under development in the northern part of the county for housing and for retail and commercial uses, such as Durbin Park.

A patient, long-term investor might want to buy timberland at a relatively low cost now and hold onto it until demand grows for housing and commercial development in future years. It then could sell it for more.

Sequoiafund.com says the fund was launched in 1970 by Bill Ruane and Rick Cunniff and that it remains a concentrated, long-only equity fund that invests primarily in domestic mid- and large-capitalization companies.

Ruane, Cuniff & Goldfarb says on ruanecunniff.com that it is a registered investment adviser best known for managing Sequoia Fund. It also runs separately managed accounts using the same strategy.

Rayonier is an international real estate investment trust with about 2.6 million acres in the United States and New Zealand. Its U.S. land holdings include about 1.8 million acres in the South.

Rayonier says in its corporate profile that its growth “is boosted by an excellent portfolio of properties suited for higher and better uses in the fast-growing US Southeast region, primarily in the coastal corridor between Northeast Florida and Southeast Georgia along Interstate Highway 95.”

Its real estate operation develops strategies to transition timberland “for higher and better uses” while its forest resources operation sells timber to markets that include pulp, paper, building products and energy production.

In September, Rayonier sold 1,311 acres at its Crawford Diamond Industrial Park in Nassau County to Florida Power & Light Co. for $13.1 million.

The utility has not said what it intends to do with the property. Rayonier retains almost 500 acres there.

Rayonier also is developing the 2,900-acre Wildlight mixed-use development at northeast I-95 and Florida A1A in Yulee.

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