The Pellucid Perspective - August 2022 - 10

COMINGS
& GOINGS
Private Club activity (mostly transactions) picks up
A
ctivities in July continued at a light pace as measured by
our monthly scan and compilation of publicly-reported
events with 16 activities dominated by the perennial favorite
type..transactions:
* Opens/Re-opens - 3 (the Lazarus, shadow-level
activities continue!)
* Closeds - 2
* Transactions (continuing golf operations including
For Sales) - 10
* Redevelopments (transactions not continuing as golf
operations) - 1
* Status change (Priv-Pub switch, downsize holes,
Priv->Muni ownership etc.) - 0
* On the bubble - 0
The table provides details and commentary for each activity.
For those not into detail (or the entertaining commentary),
below are our general observations on the patterns and trends.
The most interesting 1-month trend is we see 50% of transactions
this past month being Private facilities. For perspective,
Private facilities are ~25% of US supply and they've historically
been under-represented in the industry " churn " over
the past (both long and short-term) but, for some reason, this
month we saw them hit the radar in a big way including a couple
marquee names (Valhalla sold by the PGA, Las Colinas
resort complex and Country Club) changing hands. Looking
at the net Gain (Open/Re-open) vs. Loss (Closed) we saw
an even exchange of 3 " plants " (2 re-openings and one additional
short course to an existing facility) offset by 3 " plows "
(1 being redeveloped, the other 2 with uncertain futures but
not as golf courses). The underlying theme here is we're still
seeing only trace amounts of new-new supply being brought
to the market, despite the halo effect of COVID and relative
strength in Rounds & Revenue which we track monthly here.
That said, we are seeing early PR of " golf-centric real estate "
reawakening and we've been contacted by more than a few
development companies lately to dust off our market analysis
tools and evaluate both virgin new as well as potential redevelopment
sites for new supply surrounded by real estate (let's see
how the Fed hikes over the next 12 months alter that crystal
ball though...).
Analogous to Warren Buffett's investing advice of " If I can't
understand the business I won't invest in it " , is this month's curious
story about a suitor of 2 FL golf courses who's offering to
buy the courses contingent on multiple homeowners/residents'
conditions which weave a twisted tale that we dare say few
can follow. The net is they need 200 subdivision households
to purchase $35K/ea charter memberships and agreement to
contract with the acquirer's company, Golf Course Solutions,
for their yard maintenance as well. There are other " sweeteners "
tossed in which make it even more convoluted. Read the
Club & Resort Business article here for the " full monty " and
the hilarious quote by one local resident, " this is like listening
to a ridiculous timeshare schtick without the free room and
breakfast " which has an even funnier retort by one of the other
participants in the online chat where the comment surfaced.
You can't make this stuff up...
Beaver Hills Golf Course, Roanoke-Lynchburg VA,
Re-opened under local management.
10 The Pellucid PersPecTive
August 2022
WWW.FACEBOOK.COM/BEAVER-HILLS-GOLF-CLUB-110595313853401/
https://www.facebook.com/Beaver-Hills-Golf-Club-110595313853401/ http://WWW.FACEBOOK.COM/BEAVER-HILLS-GOLF-CLUB-110595313853401/
The Pellucid Perspective - August 2022

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