[cary lichtenstein]

Is it possible there willl be upwards of 10% course closings in 2009 in order to shed debt and then either buy back either thru auction, private negotiation with the bank or one of our new government entities dealing with foreclosure.

I would think there may be opportunities out there to buy on the very cheap

[Steve Lapper]

Sure. The likelihood of club closings looms large.

Using bankruptcy and foreclosure as a proactive strategies to re-acquire club assets remains very, very tricky and not a recommended strategy for existing owners or members. Few courts would look favorably on such a tactic unless values are fair and restructuring was honestly attempted. Remember that clubs emerging from bankruptcy will find little ability to secure credit or trade from vendors without 100% cash terms, quite onerous for most seasonal businesses. Without favorable terms or credit, making a go would be tough.

Clubs, their land and assets will indeed become relatively cheap, especially in overbuilt, weak RE markets and resort communities. Prices will reflect hefty discounts, but may still not support operational viability. Land banking is one option, but RE markets are expected to remain tough and returns could be out as far as 5-15yrs. Again, not a great IRR generator.

So Cary, your question begets another: what is "cheap?"

Alternative land use (housing, retail or other development) will set a floor, but little else. Zoning and reclamation issues, and lack of end-use demand will negate any strong IRR profiles.

[Mike Sweeney]

So Cary, your question begets another: what is "cheap?"

Alternative land use (housing, retail or other development) will set a floor, but little else. Zoning and relamation issues, and lack of end-use demand will negate any strong IRR profiles.

I just saw the balance sheet of a old historic club that is looking for members. They have no debt and lots and lots of cash. I would not want to buy with debt next door and compete with them.

[Steve Lapper]

Mike,

  You are so absolutely correct. Competition concerns here will provide for lots of "buried" clubs, ones that cease operations and sit around waiting for future uses.

[SL_Solow]

This is not an advertisement.  I spend the better part of my working time representing parties in large bankruptcies.  Indeed, some of the information exchanged as "fact" on this site about cases in which I represent substantial parties has extremely inaccurate but privilege issues have kept me from responding.

Suffice it to say that courses will be available at prices determined by the distressed market assuming that buyers are either cash rich or able to obtain financing.  As noted, only time will tell whether the price was "cheap".  However, if the property is attractive, the process can be convoluted, time consuming and expensive.

[cary lichtenstein]

When I lived in Chicago, I took some lessons from a guy named Hank Haney, now "Tigers Guy", formerly "Cary's Guy".

He moved to Plano, Texas and I used to fly down there a couple times a year, stay at his house, and take lessons with him. Mark O'Meara would join us and at nite, we'd chip wiffle balls off the carpet.

Anyway, my senility prevents me from remembering the name of the club he was at, but they had 2 courses, a Dye and Hills, and the property was financied by a Savings and Loan Bank, so they got it back and I remember Hank telling me that the RTC (Resolution Trust) sold it to new owners for 9 cents on the dollar.

I would think the 2nd owners made a ton of money. In Jupiter, Fl, Toll Bros ownes a development with a Greg Norman course, Jupier Country Club, 18 holes and about 10 houses and room for another 600+. I would think this might become a great opportunity for someone perhaps down the down.

[Steve Lapper]

When I lived in Chicago, I took some lessons from a guy named Hank Haney, now "Tigers Guy", formerly "Cary's Guy".

He moved to Plano, Texas and I used to fly down there a couple times a year, stay at his house, and take lessons with him. Mark O'Meara would join us and at nite, we'd chip wiffle balls off the carpet.

Anyway, my senility prevents me from remembering the name of the club he was at, but they had 2 courses, a Dye and Hills, and the property was financied by a Savings and Loan Bank, so they got it back and I remember Hank telling me that the RTC (Resolution Trust) sold it to new owners for 9 cents on the dollar.


Cary:

   You'd be better off focusing on courses owned by Centex, WCI, Beazer, or Hovnanian, or Pulte. They are the weak sisters of the publicly-traded homebuilders and as such, more likely to eventually yield a opportunistic buy for someone. Toll is relatively cash-rich and without the onerous and costly land banks that are financed on piles of debt. My guess is that wouldn't sell for less than 75 cents on the dollar, IMHO.

I would think the 2nd owners made a ton of money. In Jupiter, Fl, Toll Bros ownes a development with a Greg Norman course, Jupier Country Club, 18 holes and about 10 houses and room for another 600+. I would think this might become a great opportunity for someone perhaps down the down.

[Steve_ Shaffer]

I recently visited Toll Bros Jupiter CC but didn't play the course. There are about 20 houses occupied. The project has been open for almost 2 years.Toll is in this for the long run. The new Spa & Fitness Center is under construction and will open soon. They are admitting their mistake in trying to build 3 level townhouses(with an elevator) in one section and will be coming out with a new 4plex product featuring one floor units geared for winter visitors or those who don't want a 3000sf+ house to maintain. In the meantime. the golf club is operating out of a trailer and selling annual memberships and generating some cash flow.

www.jupitercountryclub.com

Anyone play the course?

[cary lichtenstein]

Everyone I know wo has played it likes it, none are GCA but all are low handicaps. Me, I don't play golf anymore

[Bill Gayne]

A recent Golf Digest top ten new course looking for a new owner.

 http://www.bizbuysell.com/cgi-bin/addetail?p=0&n=3&s=VA&county=&pfrom=&pto=&sf=&ss=1&tab=eb&q=440733

[Ed Oden]

Anyway, my senility prevents me from remembering the name of the club he was at, but they had 2 courses, a Dye and Hills, and the property was financied by a Savings and Loan Bank, so they got it back and I remember Hank telling me that the RTC (Resolution Trust) sold it to new owners for 9 cents on the dollar.

FYI - Stonebridge Ranch.  I think Club Corp bought it.

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