BIRMINGHAM, AL, October 26, 2020 – The National Council of Real Estate Investment Fiduciaries (NCREIF) has released third quarter 2020 results of the NCREIF Timberland Index. The index returned 0.04% for the quarter, down slightly from 0.08% last quarter and down from 0.18% in the third quarter of 2019. The EBITDDA return, at 0.58%, increased by 11 basis points from last quarter and decreased by 9 basis points from a year ago. Appreciation return in the first quarter was reported at -0.54%.
The Total Timberland Index had a 0.19% rolling one-year return, with a 2.38% EBITDDA and -2.15% appreciation return.
Timberland Quarterly Total Return Trends by Region
Returns for each region were once again relatively flat for the quarter. The South and Lake States regions returned, respectively, 0.09% and 0.94% for the quarter, driven primarily by EBITDDA returns of 0.60% and 0.67%. The Northeast and Northwest regions saw slight improvements in quarter over quarter returns, from -0.60% and -0.52%, respectively, in the second quarter of 2020 to -0.49% and -0.18%, respectively, in the third quarter of 2020. Third quarter appreciation returns were somewhat weak across the regions, ranging from ‑0.86% (Northeast) to 0.28% (Lake States) due in large part to continued market uncertainty from the COVID-19 pandemic.
Timberland Market Value per Acre in USD by Region
Timberland market value per acre was $1,761 for the third quarter, down slightly from $1,769 in the previous quarter. The South and Northwest regions saw a quarter-over-quarter decline in market value per acre, with third quarter values at $1,796 and $2,694, respectively, representing moderate declines of ‑0.50% and -0.61%. The Lake States and Northeast region market values per acre both increased quarter-over-quarter to $626 and $1,184, respectively, representing improvements of 0.07% and 0.99% over their prior quarter marks. The increase in the Northeast region is due in part to the addition of three new properties to the index, bringing the total for the region to 37.
The NCREIF Timberland Index consists of 464 investment-grade timber properties with a market value of $23.3 billion. This includes 317 properties in the South, 89 in the Northwest, 37 in the Northeast, and 19 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.