NCREIF Timberland Index Rises Slightly In 2011


The National Council of Real Estate Investment Fiduciaries (NCREIF) has released fourth quarter 2011 results of the NCREIF Timberland Index. The fourth quarter 2011 Timberland index reported a total return of 0.51%, comprised of 0.56% income and a (0.05%) capital appreciation return. This compares to a (0.35%) total return in the third quarter and (0.79%) in the fourth quarter 2010. For the year, Timberland returned 1.57%, a nice contrast to 2010 and 2009 when returns were (0.15%) and (4.75%), respectively.

Unfortunately, capital appreciation remained negative for the fifth time in six quarters. On the bright side, this was the smallest drop in value since the first quarter 2011 and the third best quarterly appreciation return in the past three years. Until the economy grows at a faster pace and the housing market improves, the timber returns will have difficulty showing strong positive results. The increase in multi‐family construction is helping the market and single family starts are up slightly, both those factors should help returns eventually.


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