PORTLAND, OR, July 24, 2019 – The National Council of Real Estate Investment Fiduciaries (NCREIF) has released second quarter 2019 results of the NCREIF Timberland Index. The index returned 1.04% for the quarter, up from 0.11% last quarter and 0.48% in the second quarter 2018. The EBITDDA return, at 0.64%, decreased by 7 basis points from last quarter and decreased 11 basis points from a year ago. Appreciation in the second quarter was reported at 0.40%.
The Total Timberland Index had a 2.95% for the rolling one year return, attributed all to EBITDDA return.
Timberland Quarterly Total Return Trends by Region
The South region saw significant improvement in performance during the second quarter of 2019. The South region reported a 0.47% capital return, the highest capital return by the region since the second quarter of 2016 (0.50%). The Northeast region was the only region that did not produce a positive total return for the quarter. The primary driver for the negative return was due to low EBITDDA returns, at 0.25%, and negative capital returns of 0.49%. The Northwest region bounced back after a lower performing quarter due to positive capital returns of 0.95%.
Timberland Market Value per Acre in USD by Region
Timberland market value per acre, at $1,859 as of the second quarter, remaining constant quarter-over-quarter. The year-over-year change in timberland market value saw a 3.00% increase from $1,804 over the past year. Within the regions, the Northeast saw a decrease in value quarter-over-quarter at 1.98%. The Northwest region experienced the largest increase in value quarter-over-quarter at 0.65%.
The NCREIF Timberland Index consists of 446 investment-grade timber properties with a market value of $23.9 billion. This includes 301 properties in the South, 90 in the Northwest, 37 in the Northeast, and 17 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.