Last month Plum Creek Timber (UNKNOWN:PCL.DL) announced a billion-dollar deal with MeadWestvaco (NYSE:WRK). The deal included acquisition of 501,000 acres of industrial timberlands, wind and mineral assets, and an interest in 109,000 acres of high-value rural and development quality lands.

The most interesting aspect of the deal isn't the timberlands, but the real estate joint venture Plum Creek is setting up with MeadWestvaco. That venture will pursue the entitlement and development of 109,000 acres in the growing real estate market of Charleston, S.C. It's a real estate market that doesn't get the credit it deserves.

I know this firsthand because I live in Charleston. Not only that, but my wife and I are trying to buy a house here. There is just one problem: so is everyone else.

Not only has the city been named the Top U.S. City by Conde Nast Traveler for three straight years, but increasingly people who visit Charleston end up moving here. We did.

Forbes ranks Charleston 61st among the best places for business and careers, while the city is 28th in job growth. Overall, unemployment is below the national average at 6.5%, while jobs are growing by 3% annually. The greater metro area now has nearly 700,000 residents, which grew by 7,780 last year.

The problem is finding a place to put everyone. While housing is affordable, home prices are rising. That's pushing homebuyers further out of the city. There is just one way to go, and that's right into the sweet spot of the development lands that Plum Creek Timber is picking up.

Take a look at the following slide from Plum Creek's recent investor presentation.

Source: Plum Creek Timber

This first slide shows the near-term development opportunity where Plum Creek is taking a 5% interest in residential, commercial, and industrial properties that are actively being developed in the Charleston market. The location of these properties is vitally important as these are locations west of the city, which is the direction most of the current development is heading.

This second slide shows the second joint venture, which has Plum Creek taking a 50% interest in land where it will join MeadWestvaco to pursue entitlements on high-value residential and commercial properties.

Source: Plum Creek Timber

Most of these lands are more to the south of the city, which is the direction that future development appears to be heading next. With the Atlantic Ocean to the east and National Forest lands to the north, there aren't a great deal of places for future development to move.

Most of the major homebuilders that I have visited as part of my own homebuying experience, such as PulteGroup (NYSE:PHM) and Ryland Homes (UNKNOWN:RYL.DL), are developing on the outer edges of the city. The only place for builders to go is to keep moving further out, which puts the MeadWestvaco/Plum Creek venture in the perfect position to benefit from this sprawl.

This is a long-term play in a very attractive real estate market with exceptional long-term fundamentals. While it won't pay immediate dividends, it is a move that over the long term will pay major dividends as Plum Creek benefits from controlling a lot of the land in the only direction that Charleston can actually grow.