This post includes excerpts from the Q4 2026 Forisk Research Quarterly (FRQ), which includes forest industry analysis and timber price forecasts for North America. To learn more or to subscribe to the FRQ, please contact Nick DiLuzio (ndiluzio@forisk.com).

Everything has tradeoffs. Do cash yields or total returns matter more for our investment portfolio? What is the appropriate balance of risk versus return, cost versus control, security versus flexibility across a range objectives, whether related to finance, trade, or policy? In our work as analysts and researchers, we work to provide context and comparisons to help clients decide when to act quickly and make changes versus when to hold tight and take the long view.

Timberland Values and Interest Rates

Last month, Forisk’s Matt Camp, in a blog post about timberland investments, asked, “how do timberland investment returns stack up against 10-year U.S. Treasuries, the classic “risk-free” benchmark?” Over the past several decades, timberland’s cash yield, as measured by EBITDDA from the NCREIF Timberland Index, tracked or modestly beat Treasury yields.

Ideally, timberlands package bond-like (or better) income streams with diversification and inflation-hedging benefits for investor portfolios.  However, Treasuries conspicuously out-income timberlands in key periods, following the recessions of 2000-2001, 2007-2008, and recently. In 2025, timberland produced an EBITDDA of 1.65% while Treasury yields averaged 4.29%, generating the widest delta in the history of the NCREIF index.

However, cash returns tell half (at best) of the timberland story. Total timberland returns from NCREIF, which combine the annual EBITDDA with asset appreciation, exceeded 10% six times in the past 25 years. Most recently, this occurred in 2022, when NCREIF reported total timberland returns of 12.9%. In addition, the Index reported negative total returns three times over the same timeframe, in 2001, 2009 and 2010. The results remind how timberland, while steadily generating modest cash yields from operations every year, can, at times, generate robust total returns and periodic valuation resets.

Conclusion

Within investment portfolios, timberland assets serve a particular role. Therefore, it helps to remember that timber exists in the real world – it’s a real asset – and it remains subject to broader forces and cycles. Looking forward, as we navigate changes in macro markets and revisit historic patterns, timberlands may also offer attractive buying opportunities.