Temple-Inland, the largest single private land holder in the South, is shopping 160,000 acres within a 50-mile radius of Atlanta. "We're keeping a low profile, but we're ready to start dickering," says Craig Knight, who heads Lumberman's Investment Corp., Temple-Inland's real estate development division in Texas.
The land, which is not contiguous but is held in 350 to 400 parcels ranging in size from 40 to some 6,000 acres, is located in 30 or so counties in all but Atlanta's southeast quadrant. The Georgia city has been one of the hottest housing markets in the country for the past half-dozen years. Last year alone, more than 66,000 units were started in the region, according to the NAHB. And this year, NAHB projects nearly 64,000 starts for the area.
The 160,000 acres is only a small portion of the 2.1 million the big Texas-based forest products company owns in Texas, Louisiana, Alabama, and Georgia. The ground was assembled "years ago" to feed the firm's paper mill in Rome on the northwest side of the city. It is still being managed as forest, but it no longer serves its original purpose.
"The land is in various stages of the growth cycle; some is mature, some has just been replanted," says Robert Young, president of Temple-Inland Land and Timber in Atlanta, which will be marketing the parcels. "But by and large, it's so close to the city that it is no longer prime forest land."
Temple-Inland's plan is to "use our expertise to accelerate the value of the land" and work with a handful of major developers and builders to put up housing. Though the company says it has "no real time frame" to accomplish its goal, the process could take anywhere from 10 to 40 years.
"We will do some joint venturing, some partnerships, and some outright sales," says Knight, who also is a vice president of the Land and Timber subsidiary. "The building community knows of our presence and our land base. We're starting to develop a list of builders who would like to work with us."
For the past decade, according to Gopal Aluwaliah, director of research at the NAHB, Atlanta has averaged more housing starts than any other metropolitan area, outperforming other strong markets such as Phoenix, Chicago, Washington, Dallas, and Las Vegas. Nationally, it ranks sixth in terms of population growth, seventh in household employment, and eighth in payroll employment, according to NAHB statistics. But in terms of average price, it still represents a relative bargain at 58th among all metro regions.
Historically, according to Young, Atlanta's housing industry has been dominated by small, local firms. Sometimes they form alliances to buy land, develop it, and split the lots between them. But normally they build smaller projects, usually on well and septic, especially as they move out and away from the city.
Large home builders tend to shy away from property that's not on central sewer and water. But Temple-Inland's plans call for adding that vital piece of infrastructure. "It's so important to have sewer," says Young. "That's what really attracts home builders and that's what we're looking to do."
The company hopes to attract home buyers to the properties by helping the various localities identify and acquire valuable school sites. Already this year, it has sold a 109-acre parcel in Carroll County along Interstate 20 on the west side of the city for a new high school and a 305-acre tract in Gilmer County to the north for a campus that will include high, middle, and elementary schools.
"Our thinking is this is a way to help these communities and enhance our value at the same time. People will come to places where there are good schools," says Knight.
Overall, with its extensive land holdings and deep pockets, Temple-Inland believes it has the power to deliver a superior product. "A lot of small players are interested in an immediate profit, but we have a little more latitude to come up with a plan that's acceptable," says Knight.
"We have the ability to be conceptual. We can do a master plan, submit it to the city, resolve sewer and water issues, and make sure the plan fits with the comprehensive plan. And we have the flexibility to do a lot of trade-offs. Land owners with smaller parcels are far more constrained in what kind of trades they can make."
Several of the parcels on the market are located in what already are active home building areas. They can be found in Cherokee, Pickens, and Dawson counties to the north, Jackson to the northeast, and Coweta in the southwest, about 20 miles down Interstate 85 from Atlanta's busy Hartsfield International Airport.
Temple-Inland already is "in conversation" with several undisclosed builders and developers in what Young calls a fact-finding mission. "We want to see what the market is interested in and what kind of product it wants to build," he says.
What builders will find is "an incredibly good partner," says Bruce Smith, president of the land division at Cousins Properties, an Atlanta-based commercial and residential developer that entered into a 15-year partnership called Temco with Temple Inland in 1991 to develop 13,000 acres scattered throughout Paulding County west of the city.
To date, the real estate investment trust has developed two major properties in joint ventures with Temple -- the 2,000-acre Seven Hills and the 1,300-acre Bentwater -- and is in the process of developing a third master planned community, the 1,150-acre Georgian.
"We've got nothing but nice things to say" about its joint-venture partner, says Smith. "We've sold some land, done some joint ventures with other home builders, and we're down to about 7,500 acres. It's been the nicest relationship that I've ever been part of, and I've been doing this a long time."
Learn more about markets featured in this article: Atlanta, GA.