By Scott Kauffman, Golf & Resort Real Estate News Network, April 3, 2017
For the 11th year in a row, the golf industry experienced more course closures than openings, with the equivalent of 211.5 18-hole facilities permanently closing in 2016, according to recently released data from the National Golf Foundation.
That puts the total number of U.S. golf facilities at 15,014, comprising 14,117.5 open and operating 18-hole equivalents. The totals amount to a 1.2 percent contraction in supply from 2015, and a 5.9 percent overall reduction since the trend started in ’06.
Meanwhile, while the industry continues to experience this annual attrition in supply, the number of big-name golf course buyers have also dwindled over the past decade. Indeed, where at one time there was a dozen or so large private equity groups or major players chasing deals and rolling up golf course portfolios, that number can now be counted on one hand.
Of course, some of the most notable big-name buyers still left in the business are Peter Nanula’s Concert Golf Partners, Escalante Golf, Arcis (Golf) Equity Partners, ClubCorp and Jim Hinckley’s Century Golf Partners. Interestingly, the latter four groups are all Texas-based.
But outside of these aforementioned buyers, who’s really actively seeking golf course acquisitions these days? Based on conversations with various leading brokers such as Jeff Woolson, Steve Ekovich, Ken Arimitsu, Hilda Allen, Ken Arimitsu, Larry Hirsh and John Knudson, the buyer profile today is comprised of the following categories:
* Existing golf operators like Dennis Lee’s Florida-based Sunden group who might buy a “strategic” new course every once in a while, according to Woolson, or longtime golf legends like Shelby Futch who jumped back into the acquisition limelight after being away for years when he purchased Royal Links in Las Vegas from Woolson.
* Wealthy individuals or business owners getting into the golf business as a byproduct of diversification, ego or perhaps passion for the game.
* Non-golf real estate investors who see the asset class as an opportunity to “create some upside in the golf space or chase yield,” according to Ekovich.
* Real estate developers or homebuilders who are buying golf properties to either transition into homes or using golf amenities as a means to further market and build out the master-plan.
Perhaps one of the most notable golf course buyers still actively chasing yields is ClubCorp, the nly remaining publicly traded course company and the largest owner worldwide with 153 facilities or 201 18-hole equivalents,
ClubCorp's recently acquired Norbeck Country Club in Rockville, Md., in March, marking the third acquisition of the year for the Dallas-based group.
Prior to picking up Norbeck, a fully amenitized country club just north of Washington, D.C., ClubCorp announced the acquisition of two other clubs in February: Eagle's Nest Country Club in Phoenix, Md., and North Hills Country Club in Glenside, Pa. In addition to the 153 owned facilities, ClubCorp also has nine golf courses under management, with Country Club of Columbus in Columbus, Ga., being the most recent addition last year.
To be sure, ClubCorp has been the most active buyer of anybody in recent years, with the largest deal being the $260 million Sept. 2014 takeover of Sequoia Golf and its 50-course portfolio (30 owned; 20 leased or managed). Separately, the company added 26 other golf and country clubs from 2010-16 at an average price of $5.31 million or $138 million overall, according to the company’s public records.