Development and performance of timber REITs in the United States: a review and some prospects

Abstract

Timber real estate investment trusts (REITs) are companies that own and manage timberland and generate revenue by harvesting and selling timber or other forest-related products. Due to their popularity with investors, timber REITs in the United States have attracted growing research interest in the recent decades. This necessitates a review of existing knowledge on the evolution of timber REITs and their financial performance over the years. In this review, we summarize the history and development of timber REITs, discuss the tax policies applicable to timber REIT growth and their implications. We also review past studies that focused on the financial performance of timber REITs and synthesize the methodologies used in those studies. At the end, we posit the possibility of consolidation waves in the timber industry and identify some opportunities for future research. This review can shed some new light on the evolution of public timber REITs and their financial performance.