Golf courses for sale (on the cheap)?

[Chris Pearson]

It's no secret that golf is declining in popularity in America, and it's also no secret that country clubs are pulling out all the stops to deal with aging member bases.

One consequence of these phenomena is that more and more golf courses are being sold and/or abandoned. As a result, some courses are now affordable for the semi well-heeled, instead of being available only to those in Louboutins

Take, for example, Justin Timberlake's failed venture with Mirimichi in Memphis, which was recently sold for the decidedly pedestrian sum of $500,000 USD:

http://www.golfchannel.com/news/golf-central-blog/timberlake-sells-mirimichi-course-500k/

Granted, running a golf course is no easy (or cheap) task, but the sub million dollar price tag certainly represents an opportunity that didn't exist 15 years ago.

Given this, do you know of any courses for sale on interesting land (specifically in the US)?

I like the idea of improving layouts on existing parkland courses, especially in an age where every new course seems to be routed through a cookie-cutter residential development (maximum ugh). I REALLY like this idea when the price tag is at a nadir, as the case seems to be right now in the US.

[Adrian_Stiff]

I don't know the American market but regardless of that, most courses that you are going to buy cheap have a reason. $500,000 is less than a top architect would charge for a design alone. Construction costs and the water infrastructure are likely to be more if the course is not to your liking. In the UK there is a base figure for the land value and on a full 18 certainly in England would probably stop it dropping through the $1,500,000 barrier.

It is the fact that it is very hard to make money running golf courses at the moment that buying them is more a labour of love.

There was an interesting email circulated today that eluded to the stupidity of clubs signing up for GolfNow.com wonderful offer of a free tee times system for just two tee times per day. As soon as it came out I thought nobody would be that stupid to sign up but plenty did, even sadder is the courses that are so loved on here must be in such a terrible financial state that they fell for it...Painswick, Pennard, Cavendish, West Cornwall, Kington. Great for the consumer that you can play some of these courses for £10 but they have just had their product trashed...If any clubs have been stupid, get off it as soon as you can.

Probably every club has lost 5 or 10% of its membership to ponce schemes and you won't get them back until the back door of cheap golf gets firmly shut.....will or can that happen? Probably not because competition in the golf business is cut throat now.

It actually needs some to close. The amount of Northern clubs that have subscribed to GolfNow is very worrying for ALL clubs, the fall out gets felt by everyone.

If the golf course is in a good location it is doubtful it will be cheap. If you want it for your own it's fine but you still got to maintain it. Every situation is different though.

[Sam Morrow]

The one you played yesterday isn't for sale.

[John Kavanaugh]

The reason no one cares about access whoring any longer is because the roles have been reversed. If you want to remain happy in the relationship you have with your course don't ask questions if you can't handle the answers.

[Jeff_Brauer]

There are some indications that the market hit bottom and is firming up a bit. I have been in on three attempts to buy courses (two of them were my designs) and we couldn't get the buyers down to the $500K territory, which is about what my groups could afford.......

It is funny though.  The old one year revenue or three year profit formula should hold, although it has to be one year revenues, because there are no profits.......but lots of folks seem to shoot for the moon, maybe because they have too much invested.  My take is one year revenues, less the major upgrades required (AC units, irrigation, etc.)  But, others willing to pay much more.

But, gone are the days when the REITs pay more than a course is worth, and sadly, gone are the days when it is cheaper to build a new one over buying an existing one.

[Paul Gray]

Specific to the UK, Adrian makes some very good points about land value. Long term under supply of housing has meant that any old bit of land can ccommand a hefty sum, thus a barrier to the golf market exists. What was once a London only problem is now a nationwide concern. So land value stays high and golfers, not exactly short on £10 offers from a golf market set up with the boom times in mind,  can simply shop around and keep prices down. Something obviously has to give.

[David_Tepper]

Here is a listing of some U.S. courses currently for sale:

http://www.golfcoursesforsale.com/

[Buck Wolter]

It's no secret that golf is declining in popularity in America, and it's also no secret that country clubs are pulling out all the stops to deal with aging member bases.

One consequence of these phenomena are that more and more golf courses are being sold and/or abandoned. As a result, some courses are now affordable for the semi well-heeled, instead of being available only to those in Louboutins

Take, for example, Justin Timberlake's failed venture with Mirimichi in Memphis, which was recently sold for the decidedly pedestrian sum of $500,000 USD:

http://www.golfchannel.com/news/golf-central-blog/timberlake-sells-mirimichi-course-500k/

Sounds like there may be more to the story:

http://network.yardbarker.com/entertainment/article_external/why_did_justin_timberlake_sell_mirimichi_for_just_500000/17669108?linksrc=story_article_yb_original_head_17669108

[SL_Solow]

David;  The list only includes those that are willing to advertise.  It would surprise many of us to learn how many facilities, public and private, are willing to enter into discussions about possible sales.  the large institutional buyers are involved in discussions of this nature every day.

[Ryan Hillenbrand]

I posted this a few weeks ago but Normandie Golf Club, built in 1901 and the oldest public course west of the Mississippi, is for sale. The likely buyer is University of Missouri and remains to be seen if it will stay a golf course.

Amazing how universities always seem to have money. In the Miramichi story it mentioned another potential buyer was U. of Memphis.

[David_Tepper]

"David;  The list only includes those that are willing to advertise.  It would surprise many of us to learn how many facilities, public and private, are willing to enter into discussions about possible sales.  the large institutional buyers are involved in discussions of this nature every day."

SL Solow -

I am sure you are right about that. None the less, a listing like I have linked does give one a general sense of where "the market" for golf courses is these days, with the obvious caveat that no two golf course properties are alike.

DT

[Mike_Young]

There are still deals under $500,000 out there to be had but the only people that need to own them are people that actually know how to run one.  This is a tremendous market for older golf pros or supts who are tired of the private scene etc....but I've seen two or three guys go in and buy one while taking the advice of a golf pro or supt who wanted a job and they found out quickly that did not work.  It needs to be a hands on deal...there are some good ones out there...

[Steve_ Shaffer]

Someone is buying big time....

http://www.bizjournals.com/phoenix/news/2014/10/20/9-phoenix-area-golf-courses-sold-as-part-of-307m.html?ana=e_du_pub&s=article_du&ed=2014-10-20&u=dvc2cH65HO1HvvP/sQykDQ0f5ce2e3&t=1413998367

[Chris Pearson]

Sounds like there may be more to the story:

http://network.yardbarker.com/entertainment/article_external/why_did_justin_timberlake_sell_mirimichi_for_just_500000/17669108?linksrc=story_article_yb_original_head_17669108

Interesting, and it makes sense that some sort of in-kind consideration was a part of this deal. The question is, what sort of consideration would a guy like JT give 2 shits about?

[Michael Blake]

Received an e-mail few months ago from Golf Property Analysts that Heritage Creek (Bucks County, PA) was for sale.  $300K.

[Philip Caccamise]

Mill Creek (Rochester, NY) sold for $1.5 million on Saturday at auction. Good course on good property but a very competitive market.

[noonan]

Most of the courses could not turn a profit if you could take them over for free.

[Brian Hilko]

I always thought if someone bought big run in the south suburbs of Chicago they could turn it into something special. Unfortunately I do not think the return would be worth it. Too much competition and a shrinking golf market would make this a risky investment.

[Ken Fry]

I always thought if someone bought big run in the south suburbs of Chicago they could turn it into something special. Unfortunately I do not think the return would be worth it. Too much competition and a shrinking golf market would make this a risky investment.

Brian,

And there in lies the problem for almost any course.  It use to be even if the course didn't generate much revenue it would at least build equity.  Buy a course for $xxx, work your butt off operating morning to night, try to pay off as much of the debt as possible, sell the course for $xxx and the excess would represent retirement.  Even that simple equation won't work if the original $xxx will probably be more than the future $xxx.

Ken

[Brian Hilko]

Ken,

I agree. At one point in my career I thought I would try to own my own facility. This is no longer an option unless I win the lottery! In today's golf market I think the only opportunity for the average club pro is driving ranges or indoor golf facilities. Then its all about location, location, location. Still, nothing is a sure bet anymore.

[Adrian_Stiff]

First thing is you need a lot of experience in knowing how to run golf clubs and make a profit. Quite often it is almost anti the GCA likes and ways. Keeping costs to the bone is essential, low staffing, fair pricing, good product and great location.

[Jon Wiggett]

First thing is you need a lot of experience in knowing how to run golf clubs and make a profit. Quite often it is almost anti the GCA likes and ways. Keeping costs to the bone is essential, low staffing, fair pricing, good product and great location.

Adrian is spot here IMO. Keep the costs low.

Jon

[Chris Clouser]

West Chase in Brownsburg, IN is a Ron Kern design that is going up for auction I believe in the next couple of weeks.  The course has some nice holes on the back nine, but it is surrounded by some housing on one end and has a little bit of a tight feeling around it.  The front nine is ultra flat.  Does have a cool farm silo on the site though.  Played there a couple of times when I was doing my research on the Indiana golf book.  The 12th hole, in particular, I liked a lot and was something I was considering to include if I did a section on other holes to see across the state.

[BCowan]

First thing is you need a lot of experience in knowing how to run golf clubs and make a profit. Quite often it is almost anti the GCA likes and ways. Keeping costs to the bone is essential, low staffing, fair pricing, good product and great location.

+2

[Ryan Coles]

Not that I would, but if was opening a course, I'd seriously consider having no members. Or at least no unlimited play for a set fee.

How many Clubs struggling to balance the books with their hands tied by members, wanting exclusivity for poundland prices? Only people I can see buying courses are large multi club companies, or the super rich looking for a small diverse investment. Otherwise golf club ownership is kind of like professional golf: just a license to spend money and go broke.