All options are on the table. As portfolio managers, that sometimes means selling assets opportunistically at what we think are very attractive premiums. And we do engage in those types of discussions from time to time. So we’ll see how things play out. But yes, we would look at selling timberland, core timberland in fact, if it was at a really attractive price to fund even more repurchases. So we’ll see.
Mark Weintraub : And just — and is it true to say that there — if there’s no development activity on the lands, et cetera, there’s no tax leakage if you do that?
Eric Cremers: Can you ask that question again?
Mark Weintraub : If you — when selling core timberlands, if there’s been no development activity or anything of that nature on those lands, is there no tax leakage as well? Obviously, one of the big issues for companies selling assets is there’s often big tax bills against that sale. But is it true in the case of timber REITs that there wouldn’t be?
Eric Cremers: No. I mean these type of sales would be REIT that’s REIT income. So yes, there isn’t any tax arbitrate.
Operator: [Operator Instructions] Your next question comes from the line of Paul Quinn of RBC Capital Markets.
Paul Quinn : Just on your Natural Climate Solutions opportunities. It sounds like you’re making decent progress on the first one, that 50,000 acres in the South. What else have you got in the hopper? And what’s the time line of those?
Eric Cremers: Well, on the carbon credit front, specifically, Mark, are you talking about broader NCS opportunities? Or excuse me, Paul.
Paul Quinn : Yes, just on the carbon credit, yes, and it is, Paul.
Eric Cremers: Yes. So we are making really good progress on our first deal, and we’re learning a lot from that transaction. We’ve got more acres that we are looking at that we might potentially put into a carbon play. But we’re going to — before we execute on those, we’re going to see how the first one comes out because it’s a relatively sizable transaction, 50,000 acres.
Paul Quinn : Okay. And then just moving on to, I guess, Wood Products. Just looking at softwood lumber duties right now, sort of down to the 8% mark, don’t seem to be changing sort of the amount of wood that flows from Canada in the U.S. and it looks like that duty rate is going to stay the same in ’24. What do you — what’s your take on that file going forward? Do you see a solution? And what’s the path to getting that solution and just your thoughts on softwood lumber.
Eric Cremers: Yes. I think the conversations have been incredibly quiet I don’t know what it’s going to take to get to an agreement. I don’t know that there are even any discussions taking place at this point. I think when lumber prices drop, I think I start to hear chatter that some of the Canadian producers are willing to engage to try to find a solution. But then as lumber prices come back up, those conversations seem to come to a halt. This thing has been ongoing for many, many years, and I don’t see an end to it anytime soon.
Paul Quinn : Okay. And then just moving on to just real estate, and I know you haven’t come out with your ‘24 guidance yet, but just at a high level, I mean, just for the comments you’ve made about strength in the market on single-family and just wondering what your expectation for 24 on Chenal Valley lot sales, should that be flat or down or up next year?
A –Wayne Wasechek: Yes, Paul, this is Wayne. Yes, I think we’re – it’s still a little bit early. We’ll put out our ‘24 outlook here, Q1 next year. I think – but like we said earlier, it’s pretty in the early innings of what we’re seeing on the market and our take-up rates. So we’ll get more insight into that over the next couple of months. And have a better sense of where ‘24 will come out. But we still think there is – we still think there’s pretty good take up. Like I said earlier, instead of these regional builders doing 10 homes a year, maybe they do 8 or 9. So it’s not – we don’t think it’s going to just drop off. It’s just a slight – maybe a slight reduction or a little softness there.
And I would also say that from a pricing standpoint, we have good pricing power we’ve increased our lot prices 5% to 10% since last year, and we’re holding those and still moving at those prices. So we continue to see solid pricing. It’s just what is the regional builders, how much do they want to take on. And we’ll see what happens over the next couple of months.
Operator: Your next question comes from — is a follow-up question from the line of Ketan Mamtora of BMO Capital Markets.
Ketan Mamtora : Just coming back to the real estate question that Paul was asking. This is not a 2024 question, but with this — the stratification done on the CatchMark lands, how should we think about sort of just normalized rural land sales on an ongoing basis? What’s the right number now?
Eric Cremers: Yes. I mean from a from an acreage standpoint, we’ve looked at — we kind of target around 1% of our portfolio. This year, we’re around 18,000 acres, so kind of slightly below that 1% threshold. But kind of over time, that’s the target we look at from a real estate standpoint on the rural side. Pricing, yes, it’s real estate sales can be very lumpy and it depends on the size of the tracks that you’re selling and the end use from recreational to conservation so that can really vary quarter-to-quarter, period-to-period and year-to-year. So I think, yes, that’s when we look at an outlook, we’re looking at that 1% kind of portfolio.
Operator: At this time, I’m showing there are no further questions. I’ll now turn the call back over to Wayne Wasechek.
Wayne Wasechek : Thanks for your questions and your interest in PotlatchDeltic. That concludes our call.
Operator: This concludes today’s conference call. Thank you for joining. You may now disconnect your lines.
