Institutional investors are buying US timberland at a pace of one million acres per year, seeking long-term returns from an asset class that grows naturally, but current supply exceeds demand and prices are flat.
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01Summary
- 01Bank of America reports institutions have been buying timberland at one million acres per year for three consecutive years, a streak expected to continue.
- 02Timberland's total return was 0.95% in Q2 2026, with 0.34% income and 0.61% appreciation, according to the NCREIF Timberland Property Index.
- 03Pine pulpwood stumpage prices in South Carolina fell 33% year-over-year to $3.79 per ton in Q3 2026, while hardwood sawtimber prices rose 40% to $22.52.
- 04Pat Dorn, a timberland owner and former chairman of the South Carolina Forestry Association, says timber is a low-return investment and has curtailed his holdings.
- 05Timberland managers buy for pension funds and endowments that can wait decades for returns, and demand for wood pellets in bioenergy is increasing.
02Why it matters
This matters because timberland offers a hedge against economic uncertainty, but individual investors face illiquidity, management costs, and flat prices in the short term; returns may hinge more on land value near growing areas than on timber itself.
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