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  • Writer's pictureAlex Pettee, CFA

Timber REITs: Can't Ignore This Growth Sector

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  • Timber REITs are the newest addition to our coverage universe. Timber REITs own 20 million acres of timberlands, more land than the five smallest states in the US combined.

  • Timber REITs are the link connecting the commercial real estate sector to the residential homebuilding sector. Residential construction is responsible for roughly half of wood product consumption in the US.

  • Last year’s slowdown in the single family housing market took its toll on lumber prices and Timber REITs, which were the worst-performing real estate sector of 2018.

  • Lumber prices peaked in May 2018 on supply shortages in the Pacific Northwest and the ongoing softwood lumber dispute with Canada. Prices have plunged 40% since last Spring.

  • Long-term fundamentals look strong for the timber REIT and broader housing sectors, powered by demographic trends that suggest a revival of the suburbs and single family housing in the 2020s.

If you enjoyed this report, be sure to "Follow" our page to stay up-to-date on the latest developments in the housing and commercial real estate sectors. For an in-depth analysis of all real estate sectors, be sure to check out all of our quarterly reports: Homebuilders, Apartments, Student Housing, Single Family Rentals, Manufactured Housing, Cell Towers, Healthcare, Industrial, Data Center, Malls, Net Lease, Apartments, Shopping Centers, Hotels, Office, Storage, Timber, and Real Estate Crowdfunding.

Disclosure: An investor cannot invest directly in an index and index performance does not reflect the deduction of any fees, expenses or taxes. The information presented does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. We consider the information in this presentation to be accurate, but we do not represent that it is complete. It should not be relied upon as the sole source of suitability for investment. Please consult with your investment, tax or legal adviser regarding your individual circumstances before investing. Visit our website for a complete definition of all indexes cited in this report. Investing involves risk and loss of principal is possible.

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