The Pellucid Perspective - March 2021 - 7

changes, like golf, for a significant number of Americans?). As we
quantified in the SoI and my last-month article laid out, if we can
keep at least half of the '21 rounds gain, that demand level would
(at the national level in summary) be enough to keep us above
equilibrium for the current supply level. This still doesn't eradicate the issue of imbalances by geography (i.e. overbuilt markets)
or supply type (i.e. too much Public-Premium golf ) but it would
mean the national balance goalposts would stop moving on us
each year. While we don't know what '21 will bring, the headline
for '20 on closures is " they slowed materially, don't know if it's all
COVID-induced or a trend hidden beneath the COVID blip. "
Let's take a look next at straight-up Sales (new buyers intending
to continue golf operations).
I'll open this section with the standard Pellucid/analyst disclaimer that our monthly collection of information on Sales, Redevelopments and Change-of-Control events is limited to the
public domain and isn't necessarily complete or representative of
the total universe. That said, given that there's no other source for
any type of information on these distinctions in the transactional
market, we're the 50%-accurate analysis vs. the current random
anecdotal information you currently get either through the web,
general/golf media or personal observation. In other words, we
like our odds of being directionally more sound than your current knowledge (ha, ha). Looking at the tracked activities for
the period Sep '20-Feb '21, we see 23 of 51 total Transaction/

For Sale events reported as continuing golf operations situations
or 45%. That tells us two things: Transactions that don't reduce
the supply inventory are in the minority (<50%, this is actually a
good sign in Pellucid's evaluation, we're not prolonging the correction agony or making it difficult for the responsible operators to survive without new, advantaged cost-basis competitors)
and golf is not a " toxic asset " as a reasonable number of sales are
for new owners, new capital and the buy/sell expectations aren't
completely out-of-whack. In Pellucid's eyes, we've further broken down these continuing golf operations transactions into 2
sub-groups:
*

rivate party involvement (17 events, 33% of total) P
Private owner to private buyer, more subject to financial
benchmarks/reality; new owners believe they can operate
more efficiently and/or have a lower cost base to cover
than seller
Municipal involvement (6 events, 12% of total) - municipality as buyer or seller, generally has a different
motivation and financial structure/support

The private transactions fall into 3 primary categories during
this 6-month period I'm using to illustrate trends:
*

Existing (small-to-midsize) portfolio course owners

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The Pellucid Perspective - March 2021

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