2022 Was a Record Year
LandVest’s Timberland Marketing group, with over $1.4 billion in closed transactions, had a record year. The year witnessed growing demand for forestland investments across all US regions, continuing the trend observed over the past two years. This demand was coupled with a limited supply of available investment opportunities. A variety of factors, including inflation, rising interest rates, climate action initiatives, demand for forest products, and geopolitical uncertainty, all played a role in shaping markets. At times like these, investors often gravitate towards real, tangible assets in search of security and wealth preservation. Large-scale, investment-grade forestland remains in high demand across all regions of the US while retail markets for smaller tracts have been softening over the past few months in response to rising interest rates
A Market Driven by Climate Strategies, Construction Demands, and Inflation Protection
Corporate responsibility initiatives and regulatory compliance, resulting in climate action and net-zero commitments are contributing factors driving the market. Many forestland properties provide opportunities to monetize climate solutions, a tool used by a growing number of organizations to underwrite internal or external climate strategies. Forest products markets have been volatile over the past two years. Demand, supply chain disruptions, inflation, and energy costs all contributed to this volatility. Going forward into 2023, we see demand for forest products softening year over year as construction wanes amid rising interest rates. While this will moderate volatility, we do anticipate normal seasonal fluctuation in pricing. Longer term, we continue to believe the housing market is fundamentally underbuilt, providing underlying tension to the market for the foreseeable future.
A Strong Seller’s Market in 2023
As we flip the calendar, we are preparing for continued but moderating inflation, modest relief in energy prices, continued geopolitical conflict, and growing interest in climate solutions. Among this backdrop, we expect a positive business environment for 2023 with increasing capital flowing to forestland. On the supply side, we expect that the strong pricing demonstrated in 2022 coupled with weakness in equity markets will lead to some level of portfolio rebalancing among institutional investors. Supply is likely to remain constrained early in 2023, but we expect to see some movement towards equilibrium later in the year if inflation seems to settle.
Considering the inflow of capital into the asset as an alternative hedging strategy and with few new opportunities on deck for early 2023, it remains a strong sellers’ market in all geographies of the country. LandVest would be happy to speak with any landowners looking to take advantage of the strong market conditions.
Contact us for today’s opportunities
Contact one of the following representatives to tell us more about your unique property. Those groups assisted by professional, transparent, thoughtful, well-executed marketing with a strong international reach are best positioned to achieve superior results.
LandVest is the largest broker of institutional timberland in the US. We service every aspect of marketing, brokerage, management, and consulting services to owners and timber assets. Our brokers manage a wide variety of listings, ranging in scope from small private holdings with a diversity of values to large-scale investment trades with timber as the central focus, covering every timber investment region of the US. LandVest manages over 2.3 million acres of land across America and employs over 60 full time foresters, appraisers, GIS technicians, surveyors, and timberland-specific brokers. Our presence in the marketplace allows us to provide deep exposure to key market segments, as well as the local intelligence to provide hands-on, ground-level marketing.