Timberland Select Sales & Market Update | 2024

2024 YEAR IN REVIEW

LandVests Institutional Land Group had another remarkable year finishing 2024 with$1 Billion in saleson 445,000 acres in 15 states and 3 countries ($2,225 per acre). This compares with last years performance of $775 million on 279,000 acres across 20 states ($2,778 per acre). Over the past five years we have achieved $4 billion in gross sales on 2.1 million acres in 28 states and 3 countries ($1,860 per acre).

LandVest manages marketing projects across a broad continuum of property types and sizes. We are most widely known for our institutional and investment grade land offerings; however, we also offer regional and local solutions to owners of smaller woodlots with a mixture of timber, agriculture, recreation and rural development opportunities.LandVest remains the national leader in timberland marketing and brokerage.In addition to our marketing services, we manage more than 2.5 million acres of timberland and provide a full complement of services for timberland investors.

$1 billion in gross sale volume
445,000 acres
42 transactions
Averaging $26.6 million per transaction
$2,225/ac average sale price

MARKET UPDATE

The market for timberland has remained steady through 2024. Real asset portfolio allocations, and the latest flow of interest seeking natural capital placements and exposure to climate solution markets, have increased demand relative to available supply. Meanwhile, the finite nature of the asset (land), and historically long-term investment horizons, contribute to further constrain supply of acquisition opportunities, providing underlying scarcity that continues to underpin the market.These dynamics started shortly after the COVID-19 pandemic and remain intact today.

However, while we see strong interest in most of our institutional offerings across the country, retail and mid-market demand, which is more heavily influenced by higher interest rates, has diminished in recent quarters. Quality assets and realistic value expectations are important elements of liquidity in the mid-market.

In addition, land markets are influenced by housing demand, inflation, borrowing rates, alternative opportunities, currency, and regulatory/political considerations to varying degrees.

The U.S. housing market is between 4 million and 8 million units underbuilt and in 2024 this trend continued with flat and historically average volume. This is in large part due to elevated lending rates which dampen buyer and seller demand. This dynamic has the effect of tensioning forest product markets for years to come. As interest rates decrease, we expect housing starts to improve in response to market demand. However, while product pricing is currently below trend, sale prices of institutional grade timberland have increased or stayed level.

The housing market is strongly affected by interest rates. Interest rates for debt financing have been elevated over the past two years as the Federal Reserve has been managing sticky inflation. This has hampered buyer leverage opportunities in the institutional markets and has significantly constrained borrowing in our retail woodlot and rural land sale business.

During the second half of 2024 with the federal funds rate retreating slightly, many are expecting a trend of improving interest rates in 2025. However, persistent systemic inflation and widespread talk of tariffs from the incoming presidential administration may lead to new inflationary concerns and supply chain disruptions impacting market volatility. If this happens, we expect the easing to stall, resulting in continued elevated debt lending costs through 2025.

LOOKING AHEAD

As we proceed into and through 2025, we expect some level of market volatility in response to the outwardly disruptive new presidential administration settling in. We expect lending rates to creep down slowly or hold at current levels throughout the year. We expect a slowdown in natural capital and nature-based climate solutions fundraising, but steady to improved interest in real asset exposure.We expect housing will remain flat or slightly improve. We do not expect 2025 to be a blockbuster, but we do expect a moderate, steady marketplace in which both buyers and sellers find value.

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