BIRMINGHAM, AL, April 24, 2020 – The National Council of Real Estate Investment Fiduciaries (NCREIF) has released first quarter 2020 results of the NCREIF Timberland Index. The index returned 0.11% for the quarter, up from -0.04% last quarter and equal to the return from the first quarter of 2019. The EBITDDA return, at 0.67%, increased by 3 basis points from last quarter and decreased by 4 basis points from a year ago. Appreciation return in the first quarter was reported at -0.56%.
The Total Timberland Index had a 1.30% rolling one year return, with a 2.64% EBITDDA and -1.32% appreciation return.
Timberland Quarterly Total Return Trends by Region
The Northeast and Lake States regions saw lower returns than the prior quarter. The total return for the Northeast was -4.17% due principally to an appreciation return of ‑4.44%. The Lake States region returned 0.49% for the quarter after a strong fourth quarter return of 4.20%. The Northwest region reported a negative total return for the third consecutive quarterly period, -0.91%, though the quarter’s return was 1.55% higher than its prior quarter mark. The South continued its track of steady quarterly results with a first quarter total return of 0.77%, comprised mostly of EBITDDA returns (0.70%)
Timberland Market Value per Acre in USD by Region
Timberland market value per acre, at $1,865 as of the first quarter, saw a 0.35% increase from $1,859 over the past year. Within the regions, the South saw the only quarter-over-quarter increase, with market value up 0.17% to $1,813 per acre, just $1 off the historical high in Q1 2019. The Northeast had a year-over-year increase in market value per acre of 12.63% despite a -4.40% decline for the quarter. The Lake States and Northwest regions both posted quarterly declines in market value per acre of -0.89% and -1.56%, respectively.
The NCREIF Timberland Index consists of 451 investment-grade timber properties with a market value of $23.4 billion. This includes 309 properties in the South, 89 in the Northwest, 34 in the Northeast, and 18 in the Lake States. This data enhances the ability of institutional investors to evaluate the risk and performance of timberland investments across the United States.