Timberland Ownership and Management in North America: 2016 Update

What is the “investable universe” of timberlands in the United States? According to analysis by Forisk in 2015, “investable” timberlands, or privately owned acres managed to maximize wood volume and cash flows, comprise ~11% of all U.S. forests. This definition of “investable” prioritizes three attributes: (1) private ownership; (2) qualified ‘timberlands’ (that meet the U.S. Forest Service definition of sufficiently productive forests); and (3) access to a diverse set of wood-using mills (markets for wood).

While the 87 million acres of “investable” timberlands account for less than 4% of the total U.S. land area, they represent over 24% of all private timberlands. This speaks to the concentration of ownership in the United States, with a relatively short list of organizations specializing in owning and managing productive timberlands. This differs from Canada, where only 7% of all forest area is privately owned, and only a fraction of this would qualify as investable timberlands for institutional investors and timber REITs such as Weyerhaeuser, Rayonier, Potlatch, and CatchMark.

Breaking Down Industrial Timberland Ownership

North American forest assets have been the focus of Forisk’s timberland ownership and transaction research since 2010, with large Canadian forest owners added to this program in 2013. Currently, the list includes over 300 private organizations in the United States and Canada that each own or manage 10,000 timberland acres or more. These include private individuals, corporations and institutions that own or manage over 100 million acres of private timberlands. Of the 104.5 million timberland acres captured here, 97.7 million (94%) acres are with 121 organizations that own or manage 100,000 acres or more each. The figure below breaks down the 100,000+ acre owners by type.

Largest Timberland Owners and Managers in the U.S.

The table below lists the 2016 top 10 U.S. timberland owners by acres. Overall, the Weyerhaeuser/Plum Creek merger drove the changes, with Plum Creek dropping off and Yakama Forest Products joining the list at number 10. These 10 owners of U.S. timberland have 24.0 million acres; timber REITs account for 70% of this total. This does not include the approximately 3.0 million acres directly and indirectly controlled by the two largest non-profit conservation owners.

When looking separately at timberland managers, timberland investment management organizations (TIMOs), who manage timber assets on behalf of institutional investors and large private investors, hold seven of the top ten slots; these seven TIMOs manage 17.6 million acres, or 69% of the 25.6 million acres managed by the top 10 firms. Three forestry consulting and management firms, including the largest organization on this list (American Forest Management), account for the balance. Of these firms, F&W Forestry Services climbed the U.S. list after its recent acquisition of Fountains Forestry as part of a larger deal with UK-based OCS Group.