An unmentioned risk of timberland investment.

Implications: The article describes the strong trend over the last ten years for wood products companies to sell off their timberlands - primarily to Timberland Investment Management Organizations (TIMO's).  The strong financial drivers of this trend are described - among which is the lower volatility of timberland values and returns relative to those of wood products manufacturing companies. 

Analysis: The greater stability of timberland values over wood products manufacturing is valid. However, the article (nor any other article I have seen on the TIMO phenomenon) does not mention a very real risk to timberland values.

Timberland investment value derives primarily from two sources:

1. The cash flow that can be obtained from selling the the timber growing on the land to wood products manufacturers.

2. Selling land that is suitable for development or other higher and better use (HBU lands).

HBU lands rarely make up a very high percentage of large timber holdings that were held for timber production - timber production lands are often located in rugged terrain, in remote locations & without needed infrastructure for development. 

The bulk of the value is in the land's ability to provide trees to harvest and sell to wood products facilities, and the majority of that value is in trees already on the land that are large enough for harvest.
 
It is not a given that wood products facilities will continue to be present within economic haul distance of the timberlands owned. Several areas of the country have lost so many of their wood products manufacturing facilities that there is no longer a viable market for the trees that grow there, Thus, unless there is a strong enough market for recreational land in those areas, the timberland values there are much reduced.