Rayonier Sells 1,940 Acres Near Jacksonville, Florida, to LandMar With Option to Share in Development Proceeds

December 6, 2006

JACKSONVILLE, Fla.--(BUSINESS WIRE)--Dec. 6, 2006--Rayonier (NYSE:RYN) said today it has completed the sale of approximately 1,940 acres of development property south of Jacksonville to LandMar, a premier Southeast U.S. land developer and home builder, for $27.5 million. The agreement includes a provision that provides Rayonier with the option to convert the transaction to a "participation" arrangement and share in proceeds as the property is developed.

Rayonier received and recorded $10 million in revenue at closing and, under the terms of the agreement, has the option to receive the remaining $17.5 million when the property is entitled, or, at that time, to convert the balance to a "participation" arrangement and share in the gross revenue from sales of home lots. The after-tax impact of the transaction in the fourth quarter is $5.9 million, or 8 cents per share.

"This transaction reflects our strategy to maximize per acre returns of our high-value real estate properties by partnering with companies that have extensive entitlement and development expertise," said Charles Margiotta, President of TerraPointe, Rayonier's real estate development subsidiary. "We are particularly pleased to be working with LandMar due to its reputation for creating high-quality, financially successful developments. Not only is Rayonier guaranteed $27.5 million ($14,160/acre), but we have the potential, through the 'participation' option, to receive considerably greater value as the property is developed."

The property is located in St. Johns County between the St. Johns River and Interstate 95 and is adjacent to the Julington Creek and South Hampton residential developments. LandMar has not announced plans or timing for development of the property.

About Rayonier

Rayonier is a leading international forest products company with three core businesses: Timber, Real Estate and Performance Fibers. It owns, leases or manages 2.7 million acres of timber and land in the U.S., New Zealand and Australia. The company's holdings include approximately 200,000 acres with residential and commercial development potential along the fast-growing Interstate 95 corridor between Savannah, Georgia, and Daytona Beach, Florida. Its Performance Fibers business is the world's leading producer of high-value specialty cellulose fibers. Approximately 40 percent of the company's sales are outside the U.S. to customers in more than 50 countries.

About LandMar

LandMar has been a leading community developer since 1987, creating some of Florida's best communities. Today, LandMar features a wide array of residential, commercial and mixed-use offerings throughout Florida and Georgia. LandMar communities offer homesites, homes and condominiums in a wide range of prices and feature a wealth of amenities including signature courses by legendary players , , , Mark McCumber, Pete Dye, Davis Love III, Ben Crenshaw and Bill Coore. The company's vision is inspired by three primary building blocks: Creating unparalleled master planned communities and condominiums, offering premier club and amenity management with its affiliated company Hampton Golf, and supporting the efforts of its charitable organization, The Monique Burr Foundation for Children. For more information on LandMar, visit www.landmargroup.com.

Except for historical information, the statements made in this press release are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities law. These forward-looking statements, which include statements regarding anticipated earnings, revenues, volumes, pricing, costs and other statements relating to Rayonier's financial and operational performance, in some cases are identified by the use of words such as "may," "will," "should," "expect," "estimate," "believe," "anticipate" and other similar language. The following important factors, among others, could cause actual results to differ materially from those expressed in the forward- looking statements contained in this release: fluctuations in demand for, or supply of, real estate, entitled properties and housing in the Northeast Florida market; unexpected delays in the entry into or closing of real estate sale transactions; changes in law, policy or political environment that might condition, limit or restrict the development of real estate; and implementation or revision of governmental policies and regulations affecting the environment, endangered species, timber harvesting, import and export controls or taxes, including changes in tax laws that could reduce the benefits associated with REIT status. For additional factors that could impact future results, please see the company's most recent Form 10-K on file with the Securities and Exchange Commission. Rayonier assumes no obligation to update these statements except as may be required by law.

CONTACT: Rayonier, Jacksonville Media Contact: Jay Fredericksen, 904-357-9106 or Investor Contact: Parag Bhansali, 904-357-9155

SOURCE: Rayonier