The Pellucid Perspective - March 2023 - 10

COMINGS
& GOINGS
Another " Skinny " Month of only 6 Transactions
I
n what's perhaps a positive trend for golf, we continue to
see only a light trickle of transactions from our sources and
in the public domain and course closures have become increasingly
rare over the past 6 months. As a new season gears
up here in the northern climes historically that takes most
transactions out of play until Q3 as the operators at this point
have " cast their lot " to operate their facilities for the upcoming
season and reassess in the Fall. With the COVIdend still
showing legs and only modest declines from peak COVID
golf, it seems to be a smart economic bet to keep riding this
horse another season for those on the bubble. We suspect that
the higher interest rate environment is also likely a contributor
on the buyer side. Here's the February scorecard:
* Opens/Re-opens - 0
* Closeds - 0 (now 7th month in a row, that's got to be
some kind of recent-history record)
* Transactions (continuing golf operations including
For Sales) - 6
* Redevelopments (transactions not continuing as golf
operations) - 0
* Reconfigurations (Priv-Pub switch, downsize holes,
Priv->Muni ownership etc.) - 0
* 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.
Most all of the transactions this month fall into our standard
types of local owners retiring, municipalities buying golf as a
" green space protection plan " (many though paying a premium it
would appear to the going rates of 1-1.25x Gross Income Multiplier
in private buyer sales) etc. We didn't see any management
company or golf investor groups participation this month but
the volume was so thin that's probably not an anomaly.
Two stories of interest not noted in the scorecard this
month are the re-emergence of GreatLife, with what appears
to be an evolved business model, and a battle down in Dallas
over a state park that's likely headed to become a gated real
Golf's landscape changes
Course
Event
Open/Re-open
Closed
Transacted/For
Sale/Auction
Rio Pinar Golf
Club
Orlando-Daytona
Beach-Melbourne
FL
Pub/18
Sold to private investors fm Germany, one a
professional golf instructor, last sold in '17 for
$2M, price undisclosed
DMA
estate community with a signature designer golf course. On
GreatLife, in their first act in golf they were buying primarily
distressed 9 hole facilities in the Midwest, bolting on a fitness
center and selling the " bundle " for a very low single membership
fee, all-you-can-eat. After selling off some number of
those interests in more recent years, it appears they've adjusted
their business model to a mix of management contracts and a
select number of ownership positions which is not dissimilar
to the repositioning that many of the major management
companies did in the last decade (get out of ownership, be
exclusively profit-from-operations driven vs. the real estate
appreciation play as well). The most recent GreatLife move
reflects this as they're doing an operate-to-buy arrangement
with Sapona Golf Swim & Tennis Club in Lexington NC.
According to Club & Resort Business, GreatLife CEO John
Brown said his company and the members decided to initially
just manage the course as a " sort of dry run " toward ownership
(purchasing the club from the members who bought it 4 years
ago from a private entity).
The other story-of-interest unfolding in Dallas is Fairfield
Lake State Park which sits, unusually, on leased land owned
by Vistra Energy which has allowed the state to operate it as
a park at no fee for the past 50 years. Vistra had approached
Texas Parks and Wildlife several years ago expressing an interest
to sell the property to the state but the money didn't
exist in the budget and an acceptable settlement couldn't be
reached. Barring that, Vistra is now in late-stage talks with a
Dallas developer offering a $110M purchase price with plans
to develop an exclusive gated community and high-end golf
course. To make matters more interesting, since the Vistra/
TP&W talks ended, a new sales tax amendment has passed
which will provide significant funding to TP&W which now
could make the math and their offer more interesting (likely
not $110M though). It will be interesting to see how this
one plays out, I give it 50/50 odds to be developed and likely
TP&W comes back with a much higher (but not developer
money) offer with the public outcry tipping the scales to take
the lower, better political/environmental optics deal and keep
the park. Any takers on the bet?
Type/Holes Summary
10 The Pellucid PersPecTive
March 2023
The Pellucid Perspective - March 2023

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