Biological Growth Element Reduces Risk

Biological tree growth, which is unaffected by the economy and invariable positive, is a unique feature that sets timberland apart from other asset classes.

Biological growth has a compounding effect in both volume and value. First, biological growth provides increasing total volume of wood. Trees, on average, can be expected to grow in volume approximately 2-8% per year, depending on location. Secondly, as diameter increases, the trees become disproportionately more valuable, with large diameter trees being disproportionately more valuable than smaller ones.

Biological Yield Curve

Growth Sectors PreMerch Pulpwood Chip-N-Saw Sawtimber Prime
Age (years) 0-10 11-15 16-22 23+ 23+
Growth Rate 12%+ 8-12%+ 6-9%+ 3-6%+ 3-4%+
Income Yield N/A Moderate Moderate High High
Products None Paper, Particle Board, Wafer Board, Diaper Fill, Chemicals Dimensional Lumber:
1x4s, 2x4s, 4x4s, etc.
Pulpwood Products
Dimensional Lumber:
2x6s, 2x8s, 2x10s, 2x12s, etc.
Plywood Product
Telephone Poles, Wide Boards
Minerals Oil, Gas, Brine, Coal, Sand, Iron Ore, etc
Other Hunting and Recreational Leases, Pine Straw, Maple Sugar, etc.