Forestland investment has surged in the past few decades as a result of land ownership change in the forestry industry. Timberland investment and management organizations and real estate investment trusts have bought up land and resources that were divested by vertically integrated forest products companies. This book provides a seminal coverage of this seismic shift in the industry, exploring the philosophy, driving factors, valuation, theory, research, implementation, practice, and effects of forestland investment. Across 15 chapters the book reviews the history of forestland investment; discusses the optimal forest rotation; explains timberland appraisal; examines the return drivers of forestland; analyzes timberland index construction methods and results; prices timberland assets; reviews financial and real options; investigates real option values in forestland management; evaluates timber harvest contracts; examines new opportunities in the emerging woody bioenergy market; and eventually offers prospects on forestland investment in the future. It also discusses how forest carbon can be used as a nature-based climate solution. This book is essential reading for forestry business students and scholars, as well as practitioners and policymakers in the industry.

Forestland investment has surged in the past few decades as a result of land ownership change in the forestry industry. Timberland investment and management organizations and real estate investment trusts have bought up land and resources that were divested by vertically integrated forest products companies. This book provides a seminal coverage of this seismic shift in the industry, exploring the philosophy, driving factors, valuation, theory, research, implementation, practice, and effects of forestland investment. Across 15 chapters the book reviews the history of forestland investment; discusses the optimal forest rotation; explains timberland appraisal; examines the return drivers of forestland; analyzes timberland index construction methods and results; prices timberland assets; reviews financial and real options; investigates real option values in forestland management; evaluates timber harvest contracts; examines new opportunities in the emerging woody bioenergy market; and eventually offers prospects on forestland investment in the future. It also discusses how forest carbon can be used as a nature-based climate solution. This book is essential reading for forestry business students and scholars, as well as practitioners and policymakers in the industry.

Timberland ownership in the United States has changed dramatically in the past several decades. Integrated forest products firms have been divesting their timberlands, whereas timberland investment management organizations (TIMOs) have been active acquirers. Timberland return has three drivers, the biological growth, timber price, and land price. Biological growth can be consistently estimated, land price is correlated with inflation, while timber price remains most unpredictable. The first part of this book models and forecasts timber prices in 12 southern timber regions via different time series models. The second part examines the financial performance of private- and public-equity timberland investments in the US using both parametric and nonparametric asset ricing approaches. The last part investigates the option values of investment, mothballing, reactivation, and abandonment in a hypothetical southern pine plantation using the contingent claims approach. The results can help investors better understand commercial timberland assets in the US.