Plantation Services 2009 Market Report



Albany, Georgia - MARKET REPORT 2009

Plantation Services specializes in the sale and management of farms, plantations and timberland. This report will deal with market trends in the plantation belts of South Carolina, Georgia and north Florida. PLANTATIONS

Sales handled by Plantation Services during 2008 and early 2009 indicate plantations have held their values relatively well in spite of the present recession. Values of the finest properties are off about 10-20% following several years of gains. There is usually a limited supply of plantations offered for sale, and they are typically purchased by people who are motivated by noneconomic reasons such as recreation and conservation. Usually, they are purchased for cash so the present credit crisis does not have a direct effect on plantation sales.

In recent months transaction activity has slowed with far fewer prospective buyers in the marketplace. We expect this ‘flatness’ to continue in the near term. Meanwhile, we are in a market where proper pricing of properties being offered for sale is extremely important. Timberlands

For purposes of this report timberland is defined as “rural tracts where the highest and best use of the land is for the production of timber. It excludes woodland tracts that are located in or closer to paths of development, or land that could be easily converted for recreation, farming, or another higher and better use”. Our 2007 Market Report noted that a “softening of timberland values” was occurring. This trend continued through 2008 and early 2009. Timber prices have been negatively affected by the slowdown in the building industry, and there has been a reduction in the number of buyers looking for recreational real estate. With a substantial amount of timberland being offered for sale by large timber companies, we expect values of ‘pure’ timberland tracts to remain soft until the general economy improves and there is a reduction in the overhanging supply.

However, we believe that during this time, prudent purchases of southeastern woodland tracts, especially those with potential for future development and recreation, will do well.

Farms Commercial agriculture is generally faring better than other businesses. Most farmers are not heavily leveraged and have positive profit margins so there is limited pressure to sell. In recent years there has been a low turnover of large agricultural operations in Georgia and South Carolina, with almost no turnover in 2008. A few smaller and mostly mixed-use farms for horses, hunting, and other recreational activities continue to sell at prices that have been little changed in the last two years. These sales include farms located in the paths of development and country estates. Land Market: Summary

The present market environment is affecting all types of real estate, but some more so than others. Rural real estate has performed better than many other asset classes. The higher quality properties, as usual, are performing the best. While many buyers are taking a wait-and-see attitude others are confidently optimistic and striking deals. Some are buying for diversification purposes and others for an inflation hedge. Some simply feel the timing is right for them. Most buyers are being selective and taking time to feel sure they are paying fair market value so proper pricing of offerings is very important. Properties that are overpriced in this market are getting little attention.

Sellers should obtain professional help before pricing and marketing their property. The transaction slowdown has caused difficulty for many appraisers in finding recent comparables for valuation purposes. Getting good advice about the value of your property and market trends in your area is more critical than ever.

‘The very best real estate always performs the best’ seems to be true in all types of markets. Following is a general approximation of what we feel has been occurring with rural real estate values in our areas of operation.

Percentage decline of the value of rural land types since 2007 as of early 2009 Land Quality %Value Decline

Best 10-20%

Above average 15-25

Average 20-30

Below average (Too few sales for comps)

Where is the market going from here?

We have never been in an economy like this one, so no one really knows. For the near term our guess is probably sideways. Longer term we believe prudent investments in quality rural property in South Carolina, Georgia, and northern Florida will be rewarding.

"Land is the only thing in the world that amounts to anything, for it's the only thing in this world that lasts. It's the only thing worth working for, worth fighting for..." – Margaret Mitchell

Plantation Services, Inc.

Albany, Georgia 229.888.2500

Charleston, South Carolina 843.958.0222