Does anyone have experience with golf course acquisitions?
August 12, 2020
by a searcher in Naples, FL, USA
I have been looking at the golfing industry and golf courses in particular. I have determined that the important aspects are (1) irrigation system condition/age, (2) fairways/greens condition/age and (3) water sources. Of course operations, rounds per day and other business metrics are also important but I am most interested in understanding how to assess the fairways and greens. Does anyone have any experience in this space and things to look out for overall?
from University of Pennsylvania in Chicago, IL, USA
I think if the plan is to acquire a single course, the macro stuff probably doesn't matter. But if you plan on acquiring more than 1, then stuff like aging population and young folks not playing the sport are a problem.
Top Golf provides the sport in a different format - that perhaps addresses some of these participation issues. COVID is crushing entertainment stuff like this, but that might be an opportunity. If Top Golf doesn't own their own real estate, perhaps you could try to buy the real estate and lease to them. Anyway, I am a contrarian at heart, so trends aren't everything. Good luck to you!
from University of Southern California in 1 World Way, Los Angeles, CA 90045, USA
1) there are not many comps in the space especially when it comes to recapitalizing the asset - friend works in commercial real estate and had a heck of a time find a cap rate for a golf course [7+ cap from what he found]
2) Be cautious about the differentiation between equity and non-equity membership mix - the equity side of things is oftentimes where you will need to go for major upgrades (could be good or bad)
3) The fairways & green maintenance is going to be very much based on the location of the course - there is a whole lot more to be done before winter anywhere that isn't sunny
4) Many golf courses make very little (if any) money and are a long term real estate play