Timber REITs Tap Into Environmental Sustainability Trend

August 29, 2011

Given the current interest in environmental sustainability, timber production presents investors with a way to earn stable returns from real estate and tap into the emerging green markets of carbon credits and bioenergy, says Daniel S. Fulton, CEO & President of Weyerhaeuser Co. (WY).

“The biggest trend we’ve seen across the board at all of our businesses is increased interest in being green and sustainable,” Fulton said. “We manage the land to ensure clean water for both animals and humans, and provide extensive areas for wildlife habitat in our timberlands.”

Fulton says Weyerhaeuser is structured as a REIT and manages softwood timberlands. He says current demographic trends point to increased demand for building materials, with domestic producers having the upper hand, and the REIT structure gives shareholders more tax-friendly returns.

“The primary benefit of the timber REIT structure is that we enjoy tax savings on qualified timber income at the corporate level,” Fulton said. “Being an REIT puts us in a position where we are both more efficient on an operating basis, and positions us to grow our timberlands business.”