10/04/2023 | by Nicole Funari

Timberland REITs specialize in harvesting and selling timber for lumber products. Timberland REITs own more than 15 million acres of land in 20 different states in the U.S., primarily in the Southeast and the Pacific Northwest. Timber REITs contribute to potential climate solutions for the decarbonization of the real estate sector by providing wood-based construction materials that naturally absorb and store carbon as they grow, as a substitute for more carbon intensive materials like concrete and steel.

The lumber business is strongly tied to the housing market. After several years of low growth, housing starts surged in 2020 and 2021 as the housing market heated up. However, starts slowed in 2022 with increases in inflation and interest rates. Year to date for September 30, 2023, timber REIT returns are up 2.86%. With a shortage in housing in the U.S., homebuilding is likely to rebound as interest rates begin to fall.

  • 7%: The average 30-year fixed rate mortgage is more than 7% as of September 2023.
  • 29%: Since the start of the pandemic at the end of February 2020, timber REIT returns are up 29%.
  • 10%: Housing starts were up 12% in 2020 and 14% in 2021 before falling 11% in 2022.

Below is a list of Nareit member companies from the timberland sector.