Investing In Hardwood Forests For Sale

The Concept

The prime determinant of forestland market value is timber value.

The value of hardwood timber grows significantly faster than the physical volume, and is optimized by professional management.

The Components

• Physical Growth - Trees in North Eastern USA grow at 2-3% per annum. The management techniques used channel this growth into more valuable tree species.
• Ingrowth - Trees are valued according to the end product. The sale value of a good quality tree increases dramatically with diameter, especially as it grows into the next product class.
• Price Growth

  • From Management:

    Management techniques are selective toward quality and species, optimizing ingrowth and unit price of favored trees

  • Historical Precedent:

    Hardwood lumber prices have consistently exceeded inflation for 200 years.

  • Shifting Global Markets:

    Due to dwindling tropical supplies, US hardwoods have gained prominence worldwide, and prices have soared.

The combined result of these components produces: Real Timber Value Growth of 7-9% Real Investment Returns of 5-7%

The Realty

The concept of hardwood investment has been verified through re-measurement, appraisals and actual market sales on some 100,000 acres of Fountain Forestry managed property with the following results:

• Physical growth of timber 2.5%
• Real timber value growth 8.1%
• Real IRR all properties 5.9%
• Real IRR large properties (+20,000 acres) 7.6%

Enhancements

• Personal Use: Fishing, Hunting, Skiing, The Great Outdoors
• Development: Planning permission is easily obtained in most cases
• Sustainable Resource: Naturally diverse and well suited to forest management practices.

The forests of northeastern USA are capable of producing some of the finest quality hardwood timber in the world. Naturally biodiverse and resilient, these forests are truly renewable and well suited to intensive use. As deforestation of tropical forests continues, and remaining public timber reserves are protected, properly managed and privately held timberland will be increasingly important in providing timber resources to the growing world population.