The Spark Has Ignited in the Market for Montana Ranches

The Spark Has Ignited in the Market for Montana Ranches

We have been touting the value stability of working cattle ranches for some time now.  While recreational land values have slipped slightly in Montana, working ranches seem to be holding their own.  It is still possible to earn a reasonable rate of return on investment in Montana Ranches.

Closer to home near Powder River County in the last 3 months, the Cinch Buckle Ranch has sold, the Crow Creek Ranch has a contract on it, and a contract has been executed on the Buck Hills Ranch near Volborg, MT.  These are working ranches and will continue to be in production.

A recent auction of 955 acres with a Forest Service lease of 163 animal units recently sold for $725,000.  The property had an older two story home and basic outbuildings such as grain bins, quonset, corral, barn and shop/machinery storage shed.  There was also a late model double wide mobile home with attached two car garage on the ranch.

Working cattle ranches are holding their value at $8,000 – $9500 per AU from what we see.  Various ranch amenities contribute to higher or lower values.

The Article Below Was Written By Monte Burke, Forbes

The market for western ranches in the U.S., long bogged down by the world economic slump, has recently caught fire again. In the last month, several high-end ranch properties were sold.

In Montana, near the town of Twin Bridges, the 34,000-acre Hamilton Ranch (also known as G Hanging Dash) was sold to Swift River Investments. The Bolton, Mass., firm is owned and run by the James family, whose most prominent member is the billionaire president and chief operating officer of the Blackstone Group, Hamilton “Tony” James.

The ranch is located at the confluence of four great trout rivers—the Ruby, the Big Hole, the Beaverhead and the Jefferson—and features four spring creeks. According to the Montana Standard, the James family intends to continue the cattle operation on the ranch. They are also reportedly avid fly fishermen. The James family did not return calls for comment.

The Hamilton Ranch had been owned by Alan Hamilton, a Montana-born Chicago real estate investor. Hamilton died in a plane wreck in 2007. The listing price: $32.5 million.

Also in Montana, billionaire Tom Siebel’s N Bar Ranch–located 100 miles north of Billings on the edge of the Snowy Mountains–was sold to Dan Wilks, the chief executive officer of Frac Tech Services, an oil-drilling equipment-maker located in Cisco, Texas.

N Bar features the trout-rich Flatwillow Creek and an abundance of game, including deer, antelope, turkey, pheasant, grouse and trophy elk. The listing price: $45 million.

The Saypo Ranch, located near Choteau, Montana, and bordering the Flathead National Forest, sold to an undisclosed buyer who is rumored to be a Wall Street executive. The 16,000-acre property, which features glacial lakes and Deep Creek and borders the Bob Marshall Wilderness, was listed for $24 million.

Ranch insiders say the recent hot market for trophy properties is driven by investors desire to find hard assets for their cash. These investors remain unsure about the direction of the stock market and the world economy. Large ranches represent an attractive alternative.

Unlike previous ranch booms, these deals, insiders say, are not outrageous. Most of the negotiations have been hard fought, which has kept prices for recreation-focused ranches below 2005 prices. 

Unlike recreation-focused ranches, pure agricultural ranches have recently been above their 2005 prices. In Iowa alone, agricultural ranches saw a 16% uptick in the average value per acre last year. Wexford Capital, a Greenwich, Conn., hedge fund, has recently been on a cattle ranch buying spree.

The reason for the increase in cattle ranch values? World demand for beef.

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