The Pellucid Perspective - February 2023 - 10

COMINGS
& GOINGS
Transactions Continue to Lead in Volume & Variety
T
ransactions continue to dominate the trickle of activities
in what is usually the fairly active period during
the northern off-season (relatively few owner/operators
make changes mid-season; they're either " in or out " once grass
starts growing). This either means that most current owners
want to continue to ride the COVID wave or the historical
disconnect between buyers and sellers is limiting activity.
Here's the January scorecard:
* Opens/Re-opens - 0
* Closeds - 0 (now 6th month in a row, but there have
been several 9-hole reductions)
* Transactions (continuing golf operations including
For Sales) - 7
* Redevelopments (transactions not continuing as golf
operations) - 0
* Reconfigurations (Priv-Pub switch, downsize holes,
Priv->Muni ownership etc.) - 2
* Other - 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.
This month features two illustrations of larger investors
" leaning in " and " cashing out " of golf in the current continuing
cycle of COVID-aided prosperity. On the leaning in side is
KemperSports (full disclosure, Kemper is a current and longtime
Perspective sponsor) which purchased the Streamsong
resort lock, stock and barrel from the initial developer Mosaic
(mining company, owner of the remote land upon which this
Golf's landscape changes
Course
Event
Open/Re-open
Closed
River North CC
[Healy Point
Country Club]
Transacted/For
Sale/Auction
Watertown Golf
Club
Watertown NY Pub/18
Macon GA
Priv/18
Returns to original Adams family (just one " d " ,
not the TV monster clan) ownership as grandson
purchases with 2 partners; renaming back to
original name
The final chapter(?) in this saga where local
resident requested restraining order for City
purchase on basis they were " overpaying " at
$3.4M price tag. City Council says they're paying
to protect greenspace and if residents don't like
the decision, vote in new City Council. Judge
agrees and City will get the oppty to spend their
money absent an appraisal or any market analysis
(see article on that topic, this issue)
destination was built during the challenging years for golf) for
$160M. On the cashing out side, C-Bons International has
suggested they're going to use the current industry prosperity
to liquidate their 20 US golf course portfolio in multiple, strategic
sales with their 2 San Antonio TX properties as the initial
foray. Given the current golf macro trends, and if they're
priced reasonably and intelligently packaged, they should have
little difficulty exiting this investment with a tidy profit from
market timing.
The other story we want to highlight is the NY State Supreme
Court's ruling on the proposed restraining order blocking
the sale of Watertown GC by the City from a private
owner for $3.4M (for 18 holes, that's pretty expensive dirt). A
citizen had asked for an injunction on the basis that the City
was overpaying (they proposed a number higher than initially
asked by the seller?), there was no appraisal conducted and
other potential red flags. In what we feel was a good example
of judiciary restraint, the judge ruled that if the City Council
members voted in majority to make the purchase and potentially
" waste money " , that was within their power as elected
officials acting in their capacity and the current recourse was
to vote them out of office next election. Next case??? We
do find it curious however that no appraisal or independent
evaluation was done as part of due diligence nor anything as
simple or economical as a market analysis conducted. As outlined
in Jim's article in this issue, this is more the norm than
the exception in the current golf industry. Perhaps someday
that will change and buyers and sellers will use more quantitative
metrics in the process and make golf transactions less " art "
and more " science. "
DMA
Type/Holes Summary
10 The Pellucid PersPecTive
February 2023
The Pellucid Perspective - February 2023

Table of Contents for the Digital Edition of The Pellucid Perspective - February 2023
