The Pellucid Perspective - August 2010 - (Page 8)

MONEY MATTERS Investors filling war chests for course buys By Jim Dunlap T he convergence of disappointing economic trends impacting the golf industry is attracting considerable interest from a number of investors, both within and outside the industry. A number of industry veterans are reportedly busy finalizing investment capital relationships in order to pounce when golf course prices tumble into the “buy” range. Former industry top executives like Peter Nanula and Joe Lenihan and current players like Joey Garon and Tom Powers, along with members of what used to be a vibrant golf lending community like M.J. Mastilir, are rounding up well-heeled capital partners seeking profitable parking spots for their money. They will encounter some competition from existing MORE CHANNELS THAN BASIC CABLE, BUT WITH THE SAME PROFIT POTENTIAL. Introducing Visage, the first mobile golf information system. See what one touch of our 10-inch screen can do for your operation. To learn more, visit visagegolf.com. Visage is a joint development from Club Car, Inc., and GPS Industries. entities such as ClubCorp, which recently purchased Country Club of the South in the Atlanta market and reportedly has several more acquisitions in the works in the Eastern region of the country. Peter Nanula, a former top executive with Arnold Palmer Golf, is indicative of those who feel that golf ’s appeal as an investment is improving, as long as the purchase price is right. Nanula has been involved in Southern California-based Concert Capital Partners, a private equity firm specializing in service businesses other than golf, since selling out of Palmer Golf in 2000. He said his new golf group, called Concert Golf Partners, has a $50 million equity fund for course buys, and has filed a Letter of Intent on its first course purchase and submitted offers on several others. Lenihan, a former American Golf and Pacific Golf Management executive, is also reportedly assembling financial backers for purchase of selected properties. Joey Garon, who formerly headed up Bonita Bay’s golf management division and started New Leaf Golf Course Management, is involved in club management on his own and in partnership with Bluegreen Golf division president Tom Powers under Bluegreen’s Peachtree Real Estate Advisory Services affiliate. Garon is also reportedly seeking investors for equity stakes in selected courses. Powers indicated that financing could come from a hedge fund, either through Bluegreen or an outside source. Mastilir, who heads up the Real Estate Capital subsidiary of Textron Financial, has assembled backers who are open to acquiring either existing golf course debt or purchasing all or a sliver equity share in appealing course properties. While ClubCorp is eagerly adding courses to its portfolio, the company’s owner, KSL Capital Partners, has bigger targets on its radar screen. They were bidders on the recent sale of Sea Island Resort that went to Avenue Capital Group and Oaktree Capital Management earlier this month and would certainly take a look at any available golf resort property along the lines of their properties at Barton Creek and La Costa. “Individual golf courses are not our cup of tea, maybe ClubCorp’s but not ours,” said Steve Siegel, KSL Capital Partners’ COO. “It needs to be a scale for us to be interested.” While Nanula said his group is seeking either private or daily fee facilities in major metropolitan markets with $3 million or more in annual gross revenue, Affeldt said that ClubCorp continues to believe in the viability of private clubs. He said the majority of their acquisition interest lies in high end daily fee courses that have potential for conversion to private clubs under the ClubCorp banner. Heritage Golf Group CEO Bob Husband, who said he recently turned down an offer to partner on a course buying spree from a major investor, said he feels that for someone who is already fully invested in the golf industry, the immediate future is still too hard to predict to add substantial new investment. On the other hand, he said, “For someone who’s not doing anything [in golf ] right now, I think this is a great time to get in.” As Husband indicated, time will tell, but that time may be coming soon. n AugusT 2010 8 The Pellucid PersPecTive http://www.visagegolf.com http://www.visagegolf.com

Table of Contents for the Digital Edition of The Pellucid Perspective - August 2010

The Pellucid Perspective - August 2010
Table of Contents
Why ANOTHER Golf Publication?
Why ‘Affordable Golf ’ Is In Retreat
July Weather, Many Markets Beat by the Heat
Funds Preparing for Course Buys
Price Is Right for Building
Chicago Market Profile
Free Lunch for Harding Park
Win, Lose or Draw?
Virtual Golf and Soccer Marketing

The Pellucid Perspective - August 2010