Golf Inc - April 2008 - (Page 40)

properties, with gross annual revenues ranging from just under $2 million to $9 million, at cap rates from zero to 12.7 percent. Purchase prices paid by Korean buyers in those transactions ranged from the $3.2 million paid by the Inyo Lieuw syndicate for Woods Valley Golf Club in Escondido last November to the $26 million one buyer paid for the private Old Ranch Country Club in Seal Beach, Calif., in June 2006. What comes next? With Korean investor interest showing no immediate signs of declining, the question becomes: What do these new owners have in mind for their properties? Early returns indicate that sound business practices, a genuine reverence for the game and its facilities, and a desire to grow the game’s popularity and use it as a positive educational tool among the Korean community are all part of the answer. On the ledger side of the operation, the formula is not unique: cut unnecessary expenses and increase revenues. The emphasis, however, is on the latter, so members and customers of Koreanpurchased courses probably need not worry that their courses will merely be milked for every dollar while the property decays. “There are many different ways to bring in more revenue,” Kang said. “It’s typically just golf, but Korean-American owners try to have more business like catering and corporate events to bring more people to their golf course. They are more rounded in terms of business.” “They have a lot of pride of ownership,” Arimitsu said. “They’re very much handson, and I think they’re good for the golf industry.” Kang cites Korean businessman Choon Man Lee, who purchased the PGA of Southern California Golf Club in Beaumont, Calif., last December for $16 million, as an example. “All these buyers look at it on a personal level,” Kang said. “Mr. Lee takes two to three hours every day to go and visit every hole. It’s like a baby to him. If you just buy a golf course as a business and look at financial statements only, I don’t think that will work. It’s not only sport, it’s not only business, it’s their life, and that’s the difference. Have you heard of a Koreanowned golf course filing bankruptcy? You have not, because they are dedicated.” Some Korean owners also plan to employ their new properties as an evangelical tool for promoting the personal and professional development of Korean golfers. Part of Lee’s long-range business plan at the PGA of Southern California course is a school to Giants Ridge® Golf & Ski Resort in northeastern Minnesota is seeking interested developers for its newly released master plan, which envisions commercial, recreational, residential, condominium, fractional ownership and lodging development. Existing amenities: Two championship 18-hole golf courses, ski area with 35 mountain runs, 60km cross country ski trails, two lakes, mountain base and lakeside lodging, single family housing. Minnesota Northwoods Land Development Opportunities 800-765-5043 ext. 344 www.giantsridge.com jim.plummer@state.mn.us BIWABIK, MINNESOTA 40 Golf Inc. April 2008 http://www.giantsridge.com http://www.giantsridge.com http://www.troongolf.com

Table of Contents Feed for the Digital Edition of Golf Inc - April 2008

Golf Inc - April 2008 Contents Editors Column Birney Takes NGCOA Helm Construction Costs on the Rise KemperSports Adds 14 Courses Americas: Fazio Designs St. Kitts Layout Europe/Africa: Seaside Resort Planned in Egypt Asia/Australis: Faldo Opens New Chinese Course High-Tech Tools: New Technologies that can Help Operators There's No Economic Slump at Still-Popular Reynolds Plantation Tim Moraghan Wants to Make Golf Fun Again Why a $1.5 Billion Resort has Made Environmental Protection a Top Priority Most Admired Operators Marketing Experts Make Their Pitch for Golf Courses From Korea, with Cash Last Word

Golf Inc - April 2008

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