The Pellucid Perspective - October 2022 - 12

COMINGS
& GOINGS
Activity Picks Up as Northern Season Closes
A
ctivities returned to more normal levels in September
based on the public domain sources which we regularly
monitor (and trust for accuracy). Transactions
continue to dominate (good news for the brokers and folks
who've struggled through the past 10-15 years of stagnation)
and we're starting to see the " spigot " open for new courses. Of
particular note, for the 2nd straight month we have not one
Closing to report this month:
* Opens/Re-opens - 2 (both " new dirt " events)
* Closeds - 0
* Transactions (continuing golf operations including
For Sales) - 15
* Redevelopments (transactions not continuing as golf
operations) - 0
* Conversions (Priv-Pub switch, downsize holes,
Priv->Muni ownership etc.) - 2
* 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.
On a macro trend basis, we see a couple things playing out
in this next cycle of golf industry activity. We see management
companies wading back into the stream of owning vs. just operating
golf courses. Given the " new economics " , they're just
being smart in trying to play the market of being an operator
when there's little upside in profits or real estate appreciation
Golf's landscape changes
Course
Event
Lost Rail GC
Open/Re-open
DMA
N/A
The Chalkmine Aiken, SC
and being an owner when those upsides exist. Kemper and
Invited are among the management companies this month acquiring
properties. We also saw an unusual amount of Private
Clubs on this month's scorecard vs. the normal pattern of the
vast majority of movement happening in Public golf. We're
also seeing awakenings in the real estate developers to tiptoe
back into the golf-centric development model in select locations.
True to that form, two of the transactions this month
are developers exiting built-out developments. We'll see if the
buyers are smarter this time around in the locations and valuations
they choose vs. last round where the developers were able
to find " stupid buyers " for their exits which were 2-3 years later
distressed courses.
The other interesting announcement recently was the
merger of multi-course operator GreatLife Golf and management
company/software provider Brown Golf. It will be interesting
to see how this plays out. In its heyday, GreatLife
was the media darling of the operations industry expanding
rapidly and applying its model of bargain-basement priced
golf (usually 9-hole layouts) combined with a fitness center
for little money monthly, no long-term commitments. Like
other models, they had early success and bought a lot of properties
in a short time but, over time, the economic realities of
golf's high fixed cost footprint (even 9-hole courses) just don't
work well on the $25/month member revenue model. We'll
see if this downsizing coupled with the Brown Golf tie-up
helps them stabilize the business model and perhaps is a path
to future growth.
Type/Holes Summary
Priv/18
Priv/9
Architect & co-Founder Scott Hoffman unveils,
members-guests only for this (rare) new course
from " new dirt "
9-hole course created by 3 locals on existing
property, not open to public, donors can play and
being used by First Tee and USC-Aiken " home
base " primarily
Closed
The Golf Club at
Turner Hill
Transacted/
Under Contract/
For Sale
Willow Creek
Golf & Country
Club
Arrowhead
Country Club
Boston MA
(Manchester NH)
Eureka CA
Priv/18
Pub/9
Los Angeles CA Priv/18
Members David Masse, David Blunden and Eijk
Van Otterloo purchased, commit to initial $2.5M
in cap. Improvement en route to $6M
Purchased by Yurok tribe to revamp 9-hole course
and surrounding land into mobile home spaces,
RV Park and 2 houses
Purchased by Fariel & Mike Winn, " we bought
a property that was in shambles " , used to be a
private club/destination of the stars but now just
55 members and open to public; trying to reshape
as " Cheers " destination for locals & visitors
12 The Pellucid PersPecTive
OctOber 2022
The Pellucid Perspective - October 2022

Table of Contents for the Digital Edition of The Pellucid Perspective - October 2022
