World Class Course Values

[Adam Clayman]

Can you put a price tag on a world class venue?

The scarcity alone (less than 50 worldwide) would seem to make the question moot since who in their right mind would sell one?

For discussion purposes, what number would you put on...

ANGC 100m?

Pine Valley 200m?

Cypress Point ?

What would be the highest priced?

My guess Cypress. 1 Billion?

TOC Priceless?

Throw in your own. Let's hear some numbers out of you all.

[John Kavanaugh]

Adam,

You are a little short on your price for ANGC considering you could get 100 million just for naming rights to the Masters and keep ownership of the course.  It would be quite easy, at least a few weeks ago, to sell one thousand equity memberships for 1 million each.  That is one billion dollars.

[Jim_Kennedy]

Adam,
I think Winged Foot would fetch Cypress prices.   

[Deucie Bies]

Are you talking about the value of keeping the golf club or using the land for something else?

[Chip Gaskins]

LACC would fetch a pretty penny in real estate value.

Seminole would as well.

Cypress has to be the highest though.  How many McMansions could you build around there (minus zoning restrictions)

Shinnecock and NGLA would fetch a lot.

Congressional.

The Ocean Course.

Anywhere there is scarce land to be had.

[Tom_Doak]

Chip:

The real estate at Pebble Beach has to be worth at least three times as much as Cypress Point, just based on frontage.  And half of Cypress' frontage is likely to fall into the sea at some point!

Adam:

I think you're nuts on this one, if you are talking about their value as a golf course.  Sebonack has to sell 200 memberships at an average of $500,000 to break even on their $100 million expenditure.  How many clubs are going to sell out their memberships at a price significantly higher than that?

John K: 

I agree Augusta's memberships could fetch $1 million or even $2 million, but you can't sell 1000 of them ... then there'd be no room for the members to play the course and they wouldn't be worth so much.

[TX Golf]

Tom,

I was going to say the same thing. The amount of ocean front property that could be sold at Pebble is much greater than at Cypress. Even those not directly on the Ocean would all have Ocean views.

This also might sound pretty crazy, but Lincoln Park in SF could fetch some big money. Property on the cliffs overlooking the Golden Gate. Not close to as much as these others, but Lincoln also isn't a world class golf course.

[Kalen Braley]

Tom,

I was going to say the same thing. The amount of ocean front property that could be sold at Pebble is much greater than at Cypress. Even those not directly on the Ocean would all have Ocean views.

This also might sound pretty crazy, but Lincoln Park in SF could fetch some big money. Property on the cliffs overlooking the Golden Gate. Not close to as much as these others, but Lincoln also isn't a world class golf course.

Robert,

I'd bet dollars to donuts this is what will eventually happen to Lincoln Park.  Whether it happens sooner or later, it almost inevitable IMO.  They have no interest in getting the place in good shape and combined with is super location, that piece of land has to be worth a massive amount of money, even in todays brutal real estate market.  Too much to let go.

On a side note, does anyone know what will become of the Presidio area?  Last I heard they were letting people rent places to live there for up to 5 years at a time or something crazy like that? 

[John Nixon]

Tom,

I was going to say the same thing. The amount of ocean front property that could be sold at Pebble is much greater than at Cypress. Even those not directly on the Ocean would all have Ocean views.

This also might sound pretty crazy, but Lincoln Park in SF could fetch some big money. Property on the cliffs overlooking the Golden Gate. Not close to as much as these others, but Lincoln also isn't a world class golf course.

Robert,

I'd bet dollars to donuts this is what will eventually happen to Lincoln Park.  Whether it happens sooner or later, it almost inevitable IMO.  They have no interest in getting the place in good shape and combined with is super location, that piece of land has to be worth a massive amount of money, even in todays brutal real estate market.  Too much to let go.

On a side note, does anyone know what will become of the Presidio area?  Last I heard they were letting people rent places to live there for up to 5 years at a time or something crazy like that? 

Hard-line enviromentalists in the Bay area would make any residential  development there a massive headache. It might be worth it to a developer, it might not. 

[John Moore II]

Well, I seem to remember Pebble Beach Resort being sold a few years ago to Clint Eastwood and others for $900 million. Granted that is 3 or 4 courses plus the hotels. But that may be a good benchmark number for elite courses.

[Jed Peters]

I hear you could pick up Kyle Phillips' Morgan Creek in Sacramento, CA for pretty cheap! Or hell, RTJII's Winchester just up the road, etc. etc.

[Tim Bert]

What courses would have the highest land value vs. equivalent charge per round of golf...

Low end fees charged category my nomination is Pacific Grove.

High end fees charged category my nomination is the Wynn course on the strip.

[Chip Gaskins]

Low end...Tilden Park overlooking Berkeley, CA....$18 walking sunset rate.

[Carl Nichols]

LACC would fetch a pretty penny in real estate value.

Seminole would as well.

Cypress has to be the highest though.  How many McMansions could you build around there (minus zoning restrictions)

Shinnecock and NGLA would fetch a lot.

Congressional.

The Ocean Course.

Anywhere there is scarce land to be had.

I think Bel Air would be worth more per acre than LACC, though it obviously has a lot less land. 

[Matt_Cohn]

Cypress has to be the highest though.  How many McMansions could you build around there (minus zoning restrictions)

Chip, I think in that part of the world, they build *actual* mansions!

[RJ_Daley]

I suppose that there are and will continue to be some folks to pay those big bucks for estate lots on the land of those world class venues.  But, as I think Tom D., is saying, once they are whacked out into lots, then the whole basic attraction is down to an ocean view with tons of regs and restrictions, etc.  Then, what happens to the uniqueness when it becomes another mansion or mcmansion district. 

To value them based on their actual or potential cost per round and cash flow of profit centers, could never realistically support the astronomical values some of you guys are throwing around.  And, IIRC the whole billion bucks for the Monterey Penn complex didn't work out for the first guy from Japan, and do we really know what the 'bailout' or resale price was to Uberoth and Eastwood and friends?  It sounds like paying those lofty prices will eventually be someone's wasted assets and loss when bubbles burst, as they always do.

Then we get into this whole thing about 'naming rights' and such.  What the heck are these corps buying in naming rights in terms of return on their investment for brand recognition etc?  Do people really buy more Pepsi, fly American or United Air more, chose Horizon or Verizon, go more often to Staples.  They sure don't seem to be saving mush at Wachovia.  How about the AIG National Golf Club (ANGC for short) They wouldn't even have to change the monogramed towels, just make Henry Paulson the new Hootie.

Isn't this why our country is in a financial mess?  All this talk about the conversion value of world class golf venues.... and let's pay those big bucks for them with some levereged theoretical value financial instruments...

Or, wait a couple years and buy one of these venues for 5 cents on a today's theoretical dollar...