Research

Research plays a crucial role in all phases of our investment process from acquisitions to dispositions.

In-house and collaborative research underlies nearly all of our investment decisions. We write and produce several research documents on a regular basis. These publications are used to educate potential investors, while keeping our current clients informed of topics that may be relevant to their portfolio.

All of our in-house research publications are now accessible to the public.

Timberland Investor Archive

2015 Q4, Hancock Timberland Investor: 2015 Timberland Investment Performance

U.S. private timberland investments in 2015 returned a total of 4.97 percent; income levels held near ten year average, while capital growth slipped to 2.25 percent. As in prior years, we devote our fourth quarter issue of the Hancock Timberland Investor to a review of investment performance of U.S. private timberland properties. The highest profile measure of timberland performance in the U.S. is the National Council of Real Estate Investment Fiduciaries (NCREIF) Timberland Property Index, which reports returns for institutional investments throughout the United States. At year-end 2015, 454 timberland properties were included in the NCREIF database. These properties contained over 13.3 million acres of timberland, with a combined market value of $24.2 billion. Seventy percent of the NCREIF Timberland Property Index value was located in the South, 22 percent in the Pacific Northwest, 5 percent in the Northeast, and the remaining 2 percent in the Lake States.

Timberland Investor Archive

2015 Q3, Hancock Timberland Investor: Expiration of Softwood Lumber Agreement

Since the 1840s, the U.S. has periodically imposed various taxes on the imports of Canadian softwood lumber. The latest version, the Softwood Lumber Agreement (SLA), signed and implemented in October 2006, imposed a 34% limit on Canadian softwood lumber imports as a share of total U.S. consumption by applying a variety of export taxes and quotas on individual Canadian provinces (exempting the Maritime provinces).

Timberland Investor Archive

2015 Q2, Hancock Timberland Investor: Measuring Timberland Fund Performance

Although most of our readers are quite familiar with the NCREIF Timberland Property Index, many may be less aware of NCREIF’s Timberland Fund and Separate Account Index (TFSAI), which reports the performance of pooled-fund and separate account timberland investment vehicles. While NCREIF’s Timberland Property Index has been published since 1994, the TFSAI is relatively new, with NCREIF beginning publication in 2013.

Timberland Investor Archive

2015 Q1, Hancock Timberland Investor: Changing Dynamics in Pacific Rim Softwood Sawlog Markets

Major changes in the currency exchange rates of key Pacific Rim log supply regions have impacted Pacific Rim softwood sawlog markets. Over the last year, the sharp devaluation in the currencies of Russia and the Ukraine has placed downward pressure on Pacific Rim sawlog export prices. These currency-induced changes to the cost structure of the Pacific Rim softwood sawlog market are already affecting the key suppliers and will be instrumental in defining market trends for the remainder of this decade.

Timberland Investor Archive

2014 Q4, Hancock Timberland Investor: Timberland Investment Performance

U.S. private timberland investments returned 10.5 percent in 2014, reflective of positive timberland investment fundamentals and solid prospects for future growth in U.S. sawtimber demand. As in prior years, we devote our fourth quarter issue of the Hancock Timberland Investor to a review of investment performance of U.S. private timberland properties. The highest profile measure of timberland performance in the U.S. is the NCREIF (National Council of Real Estate Investment Fiduciaries) Timberland Property Index, which reports returns for institutional investments throughout the United States.

Timberland Investor Archive

2014 Q3, Hancock Timberland Investor: Universe of Investable Timberland – 2014

Hancock Timber Resource Group (HTRG) periodically estimates the area and value of timberland that is potentially available for institutional investment. A quantified assessment of the value of global investable timberland provides both a benchmark to assess the scale of timberland assets relative to other asset classes, and a measure of the growth potential for the timberland asset class. Constructing a rigorous inventory of the global investable timberland universe provides a map of the geographic distribution of properties and values, and indicates the direction of future investment activity.

Timberland Investor Archive

2014 Q2, Hancock Timberland Investor: Timberland Returns in an Environment of Rising Interest Rates

In the wake of the last Global Financial Crisis (GFC), the Federal Reserve implemented the longest and most accommodating period of monetary policy in its history. Actions by the Federal Reserve included: holding the Fed Funds Rate (FFR) since December 2008 in a range between 0.00% and 0.25%; using the Term Asset Backed Securities Loan Facility (TALF), to lend up to $1 trillion to purchasers of asset backed securities between March 2009 and June 2010; and implementing a series of Quantitative Easing programs, whose purchases of securities have boosted the total assets on the Fed’s balance sheet from $865 million in August 2007 to $4.3 trillion in May 2014.

Timberland Investor Archive

2013 Q4, Hancock Timberland Investor: 2013 Timberland Performance

At 2013 year end, the NCREIF Timberland Property Index posted a total annual return of 9.7 percent. Stronger timber demand in the U.S. and China supported modest growth in timber income, while capital appreciation on timberland properties benefitted from upward adjustments in property appraisals. The principal driver of the stronger timberland returns achieved in 2013 was reductions in the discount rates used by appraisers in their property valuations, based on higher levels of confidence in the prospects for both wood products and timberland markets.

Timberland Investor Archive

2013 Q3, Hancock Timberland Investor: Historical Perspective on the Relationship between Timberland Returns and Inflation

Not since the 1970’s has the U.S. experienced sustained high inflation. For the past thirty years, the U.S. has enjoyed an extended period of moderate inflation, with the annual change in the Consumer Price Index (CPI) ranging from 6.2 percent in 1982 to a low of -0.3 percent in 2009. Following the Global Financial Crisis (GFC) in 2008, the threat of slipping into a period of deflation was a more pertinent concern than a resurgence of inflation.

Timberland Investor Archive

2013 Q1: Pacific Northwest Log Markets and the Changing Role in Chinese Demand

China’s growing appetite for log and lumber imports has changed the dynamics of timber markets in western Oregon, Washington, and British Columbia over the past few years. Rising volumes of log exports to China from the U.S. West Coast and lumber from BC has increased market tension, supporting higher timber prices. Yet, last year’s slowdown in China highlighted concerns about the sustainability of China’s recent growth trajectory and questions about its future needs for imported logs and lumber.

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