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Unlocking Value in Sustainable Forestry Investments

Rayonier's Unique Position in the North American Forest Industry

Rayonier distinguishes itself as the sole pure-play timberland REIT accessible on North American stock exchanges. The company’s extensive land portfolio encompasses approximately 2.0 million acres, strategically located predominantly in the southern United States. This region is recognized as a vital and thriving hub within the broader North American forest industry, providing a distinct competitive advantage for Rayonier.

Navigating Trade Policies: Tariffs and Market Dynamics

A significant factor influencing the timber market is the imposition of duties and tariffs on Canadian lumber and timber imports, currently totaling 45%. This protective measure is projected to escalate to 65% by January 1st if no policy adjustments occur. Such tariffs create a favorable environment for domestic timber producers like Rayonier by reducing foreign competition and potentially increasing demand for U.S.-sourced wood products.

Dual Advantage: Tariffs and Urbanization Trends

Rayonier is exceptionally well-positioned to leverage two powerful market forces. Firstly, the aforementioned tariff regime provides a robust shield against international competition, bolstering the profitability of its timber operations. Secondly, the continuous trend of urbanization around major metropolitan areas drives consistent demand for timber and land, further enhancing the value of Rayonier's assets. This dual advantage underscores the company's resilient business model.

The Strategic Benefits of the PotlatchDeltic Merger

The ongoing merger with PotlatchDeltic is viewed as a significant positive development for Rayonier. This integration is expected to result in an optimized capital structure, leading to improved financial flexibility and efficiency. Moreover, the combined entity will likely gain enhanced access to capital markets, facilitating future growth initiatives and reinforcing its leadership in the timberland sector.

Market Outlook and Growth Potential

Despite a recent slowdown in the U.S. housing market due to elevated mortgage rates and subdued consumer confidence, Rayonier's long-term prospects remain strong. The fundamental demand for wood products, driven by population growth and construction needs, continues to underpin the timber industry. Rayonier’s strategic land holdings, favorable trade policies, and an optimized capital structure post-merger, collectively suggest a compelling investment opportunity even amidst market fluctuations.