NCREIF Timberland Index decreases in second quarter 2018

The National Council of Real Estate Investment Fiduciaries (NCREIF) has released second quarter 2018 results of the NCREIF Timberland Index. The index returned 0.48 percent for the quarter, down from 0.92 percent last quarter and 0.70 percent in the second quarter 2017. The EBITDDA return, at 0.75 percent, was lower than 0.87 percent last quarter but higher than 0.62 percent a year ago. Appreciation in the second quarter dropped by 0.27 percent.

The Total Timberland Index had a 3.57 percent trailing year return, with 1.41 percent as the 2018 year-to-date total return.

The Northwest led regional returns for both the second quarter and for the trailing year. The total quarterly return for the Northwest was 2.49 percent, fairly evenly split between appreciation and EBITDDA return. The South dragged the index in the second quarter, with a total quarterly return of -0.35 percent, driven by a negative appreciation return of -0.94 percent.

Timberland market value per acre, at $1,804 as of the second quarter, has slightly decreased from $1,824 over the past year. Within the regions, the Northwest region continues to climb higher with a 5.78 percent increase year-over-year in the market value per acre. Market value per acre for the South region continues to follow closely with the Total Timberland Index market value per acre.

The NCREIF Timberland Index consists of 453 investment-grade timber properties with a market value of $25.3 billion. This includes 307 properties in the South, 93 in the Northwest, 35 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.