Timberland REITS are inexpensive, IMHO. Take Weyerhaeuser (WY), just as an example. Weyerhaeuser owns 11 million acres of timberland, and their enterprise value is $28.4B, or $2600 per acre. In April Weyerhaeuser paid $3300 per acre for timberland in North Carolina and South Carolina. WY stock has been tracking the S&P 500, and is down 18% since early May. I’d like to see some wealthy, environmentally conscious person buy a controlling interest in a large, timber REIT. He or she could make a good return on investment and also ensure that the timber REIT is managed well environmentally, something that’s not always the case.
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$2600 per acre. In April Weyerhaeuser paid $3300 per acre for timberland
$2600 per acre is lot. Also, depending on the land, type of forest, maturity price varies. For ex: NorthWest Saw Timber has much higher prices than southern pine stock.
WY, price strength is not actually due to its Timber, but because of their wood products division (lumber, boards) you see the price strength. Separately, there are tons of private timberland holding companies administered similar to REIT’s for endowments, ESG funds, pension funds, etc.
I have much more detailed notes on WY on REIT board all the way from 2020.
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Just to give you how strong 2021 results were, wood product had $3.5 B EBITDA on 2021, on average year they may do $1B, give or take couple of 100 millions. With supply chain easing wood products EBITDA will come down. Expect overall sales to be down $2.5 to $3 B and EBS to be down from $3 to $1.