CHICAGO, IL, July 26, 2021 – The National Council of Real Estate Investment Fiduciaries (NCREIF) has released second quarter 2021 results of the NCREIF Timberland Index. The index returned 1.70% for the quarter, up from 0.76% last quarter and 0.08% in the second quarter of 2020. The EBITDDA return, at 0.79%, remained steady, down 9 basis points from the first quarter, while the appreciation return in the second quarter was up 103 basis points quarter-over-quarter, to 0.91%. The 1.70% second quarter return represents the strongest single quarter return for the total index since the fourth quarter of 2015.
The Total Timberland Index had a 3.10% rolling one-year return, comprised of a 3.05% EBITDDA and 0.05% appreciation return.
Timberland Quarterly Total Return Trends by Region
Returns for the quarter were positive across each region for the third consecutive quarter. The South and Lake States regions returned, respectively, 1.25% and 0.98% for the quarter, buoyed by EBITDDA returns of 0.70% and 0.83%. Returns for the Northwest and Northeast regions of 2.49% and 4.14% were driven by strong appreciation returns of 1.39% and 3.77%, respectively. The Northwest region also maintained robust EBITDDA returns at 1.09% for the quarter. Second quarter results reflect increased optimism over log markets and demand despite volatility in lumber prices, which rose to historical highs in May 2021 before a sharp drop.
Timberland Market Value per Acre in USD by Region
Timberland market value per acre was $1,746 for the second quarter, up 0.57% from its previous quarter mark. The South, Northwest, and Northeast regions ended the quarter with market values per acre of $1,793, $2,604, and $1,241, respectively, up 0.32%, 0.85%, and 3.92% from first quarter values. The Lake States region, meanwhile, saw a slight decline in market value per acre, with a second quarter result of $602, down 0.18% from the first quarter.
The NCREIF Timberland Index consists of 464 investment-grade timber properties with a market value of $22.8 billion. This includes 316 properties in the South, 91 in the Northwest, 38 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.