"A Fine Time for Timber" (WY)

There are a half-dozen ways to invest in timberland, the REIT's being one of them. Unfortunately for non-institutional investors there are no pure play portfolio investments and neither the ETF's (CUT; WOOD) nor the REIT's are perfect proxies for timber. POPE Resources is set up as a Master Limited Partnership with a higher correlation to timberland. A couple of London traded vehicles, Phaunos Timber and Cambium Global Timberland Limited also have higher correlation to timberland.

If you can do direct investments the Timberland Management Organizations (TIMO's) will get you even more correlation with Forestland Group (3.5 MM acres) Campbell Resources (3.1 MM acres)  and Hancock Timber Resources Group ( 6.5MM under management) being the largest.

From Barron's:

A recovery in housing could boost Weyerhaeuser's sales and earnings, and unlock the value of its high-quality timberland and real-estate assets. A REIT with rising payouts.

Money doesn't grow on trees, but a recovery in America's depressed housing market could produce lots of it for timber giant Weyerhaeuser .

Suddenly, signs of a nascent pickup in housing are everywhere, from rising building permits and housing starts to improved sentiment among builders. Add higher lumber prices to the list, along with a powerful liftoff in the shares of home builders such as Toll Brothers (ticker: TOL) and PulteGroup (PHM).

Weyerhaeuser's stock (WY) has been no slouch, either. It shot up 50% in the past year, to a 52-week high of $24.62, and the rally could be in the early innings. The shares, which topped $85 in 2007, look rich at 29 times next year's expected earnings of 85 cents a share, but the P/E ratio is misleading, as it is based on trough earnings.

Headquartered in Federal Way, Wash., Weyerhaeuser is best viewed as an asset play, and its assets are sorely undervalued. The company owns six million acres of timberland, including some of the best properties in the U.S., chiefly old-growth forests in the Pacific Northwest and the South. It also makes wood products and cellulose fibers—Weyerhaeuser is one of the biggest producers of absorbent pulp used in diapers and feminine-hygiene products—and operates a real-estate development company. Some analysts and investors calculate its net asset value at more than $30 a share, or about 30% above the current stock price....MORE

As I said in June's "Investing in Timber and Farmland":

I haven't heard that Harvard Management Company is back in the market for timberland.
Their sales, beginning in 2005 were pretty timely and as recently as May of this year they were still in liquidation mode....

I should have mentioned that even after the sales Harvard Management Company still has around 80% of their hard assets (which comprise 10% of the portfolio) in timberland.