The Pellucid Perspective - July 2021 - 10

COMINGS
& GOINGS
Closings re-emerge after June absence
P
redictably, activity during the heart of the season is relatively
light with our scorecard logging 17 activities reported
in the public domain that we monitor. Transactions/For
Sales again top the leader board of activities with 9
of our 17 activities followed by the return of closures with 3.
Rounding out the tally are 3 " special situations " , 1 redevelopment
and 1 new 9 (Learning & Practice) coming online at the
PGA National Resort & Spa. There are two interesting situations
worthy of a couple words each.
In the midst of heat domes, droughts, water shortages etc. the
Kane County Water Conservancy (KCWC, Utah) announced
and pursues building an 18 hole destination course in a remote
(Pop. 5,000) town in pursuit of tourism, commuter and recreational
dollars and diversity. Opponents of this apparently illtimed
(and potentially ill-conceived) initiative point out that
nowhere in the KCWC establishing document does it make
reference to an objective of " producing recreation " which is the
foundation of the association's push into golf. While the debate
rages, KCWC has put down a $10K option to buy 74 acres of
additional land needed and approved a $75K expense for archiGolf's
landscape changes
Event
Course
Open/Re-open
PGA National
Resort & Spa
DMA
West Palm
Beach-Fort
Pierce FL
River Bend Golf
Club
Haystack Mountain
Golf Course
Closed
Pebble Creek
Golf Club
Tampa-St.Petersburg
(Sarasota)
FL
Pub/18
Orlando-Daytona
Beach-Melbourne
FL
Denver CO
tect David McKay Lidd (Bandon Dunes original course architect)
to begin prelim designs. This could get interesting...
The second event of interest is a Leisure Investment Properties
Group confidential listing of a portfolio of 5 Midwestern
golf courses for $18M which represents a 14.7% Cap Rate (on
trailing 12 months, which are elevated due to COVID) and a
6.8x multiple of EBITDA. That's also a 1.5 Gross Revenue
Multiplier (again, that's an elevated Multiplier vs. recent history
in the absolute as well as off an elevated trailing 12 months
base). Doing some quick math on the rounds performance, it
appears the portfolio is up ~12% vs. their 2-year baseline which
is healthy but, at best, parity to the general public golf market
for the past 12 months (wouldn't it be handy to have 7-dimensional
KPI benchmarks for some semblance of the combined
" local geography " ? GMRC represents that future world for
both buyers and sellers). In a nutshell, this will be a good and
interesting test as to whether the current industry prosperity
can be leveraged into significantly higher valuations or if the
richer multiples of this offer go begging in the buyer's marketplace.
Stay tuned...
Type/Holes Summary
Priv/9
New 9-hole, Par 3 addition- (The Staple Course),
Andy Staples-designed, figure 8 layout, part of
reconfig of overall resort golf property/portfolio,
opened 7/1 for resort guest/member play
Pub/18
Despite COVID surge, husband-wife team hit with
reversal of tax treatment by Volusia County due
to for-profit operation on leased City Land. So...
they've closed up shop (and owe $230K in back
taxes)
L&P/9
Family ownership of 50+ yrs comes to a close in
Fall '21. Heir child owner says was " infeasible
to continue " the 9 hole facility on Rockies front
range. $6M for 112 acres and unprofitable course
seems like a smart exit strategy
Bill Place of Ace Golf bails on property after
failing to get brownfield designation for soil
remediation. Placing up for sale to potential
developer who can offset ~$1M cleanup and
doesn't have $1.1M of CapEx facing the golf
course
La Cantera Golf
Club
Transacted/
For Sale
San Antonio
Northeastern 18 Denver CO
Pub/36 Sold to Ohana Partners by USAA Real Estate
group; as a USAA member I'm glad to see them
divest and focus on insurance and financial svcs
vs. resorts
Pub/18
Former Sterling CC, then Northeastern 18 gets
new owner and (3rd) new name, new owner is
Sterling Golf LLC (blast from the past?), terms not
disclosed
10 The Pellucid PersPecTive
July 2021
The Pellucid Perspective - July 2021

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