One of the single largest land deals in South Carolina history has been finalized, a nearly $1.1 billion transaction that brings a new financial backer to the Nexton and East Edisto real estate developments.
MeadWestvaco Corp. said it has completed the $934 million sale of 501,000 acres of U.S. forestlands, including about 200,000 acres in the Palmetto State. The rest of the properties are in Alabama, Georgia, Virginia and West Virginia.
The buyer was Plum Creek Timber Co. Inc. The $1,864-per-acre acquisition closed Friday, about two months after it was announced.
At the same time, the Seattle-based company has become a partner in MeadWestvaco's locally based real estate development arm.
That piece of the deal totaled $152 million and involves 109,000 acres in the Charleston region.
Of that, Plum Creek paid $12.5 million for a 5 percent stake in MeadWestvaco's active local real estate deals, including the 4,500-acre Nexton mixed-use community that's starting to take shape near Summerville.
The rest of the money is going toward long-term developments, namely the large-scale East Edisto project that MeadWestvaco has been planning for several years. Plum Creek bought a 50 percent interest in that separate joint venture.
MeadWestvaco Community Development and Land Management will be calling the shots for the two new partnerships, said Ken Seeger, president of the Summerville-based division.
"All we've really done is bring about $150 million in outside investment capital into the business," Seeger said Monday. "It's to make sure we have enough capital to perform the development we're planning over the next five to seven years, when we plan to invest $400 million in our business."
Plum Creek isn't a builder - it's mainly a buyer and seller of land - but it determined that taking a small stake in the Nexton joint venture will pay off.
"The more we looked at it, the more attractive it got," said Rick Holley, chief executive officer. "Charleston is one of the fastest-growing middle markets in the country today."
The 72,000-acre East Edisto deal, on the other hand, will involve numerous land sales to outside developers once MeadWestvaco obtains the various approvals, he said.
"It's really our bread and butter," Holley said Monday.
MeadWestvaco announced this year it was seeking a financial partner to help it "unlock the value" of its real estate division. The Richmond, Va.-based company has been shifting away from making paper and into higher-end packaging and chemicals. As a result, it no longer needs as much timberland to grow trees to feed its mills.
Contact John McDermott at 937-5572