Timber REITs, otherwise known as Timberland REITs, own and operate land that is used for the production and harvesting of timber. They make most of their money by selling raw timber, wood-based products, or refined wood.
It may come as a surprise that timber is a highly cyclical industry. Timber REITs are highly sensitive to changes in the economy. Additionally, timber REITs do not have much guaranteed income like most other REITs. The income earned by timber REITs is based on market prices and industry demand. Most of the demand is correlated with the housing industry, which is known for being cyclical.
Timber REITs have not been significantly impacted by the coronavirus pandemic in one way or another. Rather, timber REITs have performed steadily and have not produced significant negative or positive returns.
Timber is a small sector, with only four publicly traded timber REITs. The four timber REITs are CatchMark Timber Trust, Inc. (NYSE: CTT), Weyerhaeuser Company (NYSE: WY), PotlatchDeltic Corporation (NASDAQ: PCH) and Rayonier Inc. (NYSE: RYN).