7/10/2019 | By Nareit Staff
Jerry Barag, president and CEO of CatchMark Timber Trust, Inc. (NYSE: CTT), joined Nareit in New York for a video interview at REITweek: 2019 Investor Conference.
In discussing how CatchMark adjusts its strategy as the price of lumber rises or falls, Barag said that “interestingly, timber prices and lumber prices are not really well correlated.” Lumber prices are typically volatile, but that doesn’t affect the steady demand for timber, he said.
“Weak lumber prices can have long-term impacts on timber prices, but the dynamics of the manufacturing process and the raw materials are different from a capital standpoint,” Barag said, noting that there is very little capital involved in renewing or investing in timberlands.
Barag said that reforestation is the most important conscientious forest management practice to which timberland REITs should subscribe.
“People should encourage healthy timberland and lumber markets because it’s an incentive for landowners to commit the capital to that reforestation,” he said.
Turning to this year’s hurricane season, Barag said that CatchMark doesn’t own timberlands within 15 miles of the Gulf Coast or Atlantic Coast in order to protect its trees from wind or flood damage.