[Mike Nuzzo]

 

It isn't really, but what would be it's selling price if you owned it or wanted to purchase the old gal.  What is it worth?

Someone told me a story of a developer who sold part of his course for an very high amount to make way for additional homes.  I said I would never do that, assuming it were my own course and I had part in the design.  He thought I was crazy, when you could go build two more.  

I didn't ask him what if it were the old course, would he then?

[Bill Gayne]

The present value of expected cash flows over the next 800 years adjusted for a longer season due to global warming less the cost of the huge seawall to protect the course from the global warming. Maybe Malcolm Glazer can finance the deal.

[Lou_Duran]

Mike,

After considerable analysis, I've determined a price pont under two different types of acquisitions.

#1- If acquiring just the assets of TOC and removing all Trust restrictions, the price is 14,165,050 pounds.

#2- Acquiring the Trust itself with all assets and liabilities, the price is 14.165 pounds.

[Brent Hutto]

Lou,

So what's the 14-million pound liability?

[Mike Hendren]

From an economic perspective only:

Adios R & A (Mr. Huntley is given a lifetime membership) and locals (FBD gets a lifetime membership also).  Let's say 45,000 rounds / year at $225 for gross revenue of $10,125,000.   Annual maintenance cost of $750,000 nets $9,375,000.  Fortunately, no food and beverage, clubhouse, amenities, etc.  I'll live with a 6% cash on cash return.  Reckon I can afford to pay $156,250,000.  I'm a little short.  Maybe Cirba can call The Donald.

[Bill Gayne]

That's still less than $2 million per acre. For the same price you could have A-Rod play shortstop for about 7 years!!!

[Mike Hendren]

Sorry Shivas but I would deed restrict the property to preclude any bunkers from being constructed on the 1st / 18th fairway.

[Lou_Duran]

BH,

Actually, it would bring me to TE Paul's level of postings to list them all.  You can start with the caddie shack, local issues, prime, high-end travel and go from there.

It would be enlightning to have a thorough review of all Trust operations.  I am not suggesting anything illegal, just that there appears to be so many different constituencies that they have to pay attention to, running the single-most important and holy place of golf must be daunting.

Banker Hendren,

I am looking at a golf project in my neck of the woods.  Using your formula, surely you'll make me a $5MM loan on a project that you can similarly pencil out to $50MM.  I'll even give you a point back directly in cash for origination, and my personal assurances in lieu of recourse.

[Kirk Gill]

How much would Reese Jones charge for the restoration/redesign?

[Mike Nuzzo]

.....

"$820 million purchase of the Pebble Beach Company, including the famed U.S. Open venue, three other golf courses and two luxury hotels."

Is it worth more than Pebble?

[Mike Hendren]

Banker Hendren,

I am looking at a golf project in my neck of the woods.  Using your formula, surely you'll make me a $5MM loan on a project that you can similarly pencil out to $50MM.  I'll even give you a point back directly in cash for origination, and my personal assurances in lieu of recourse.

Lou, you Texans must definitely know the true definition of a guarantor -  "A fool with pen in hand."

I'll exercise my unlimited decline authority and pass on your deal.  Remember I do not finance golf courses, only income-PRODUCING properties.

Mike

[Lou_Duran]

But Mike, I can pro-forma any level of INCOME your senior credit review committee could require.  I am only asking of a 10% L-T-V commitment, and I'll give you guys 10% profit  participation on the backside.  Looks like a win-win for all involved.  You have what, less than five years to retirement?  Me too.

[Tom_Doak]

Mike N:  The $800 million for Pebble Beach Company included a fair amount of real estate.  I don't know what part of that would be considered the price of Pebble Beach Golf Links, but probably somewhere between 10 and 25 percent of the total.

Interestingly, though, consider what an EXACT replica of The Old Course would be worth ... probably not very much more than any other golf course.  

[Mike Nuzzo]

Tom,
I think an exact duplicate would be worth somewhat more, not the likes of a replica course like the Tribute in Dallas.
I guess I would consider the value of an upper echelon course to be significantly higher than an average one.
At least some sort of premium.

What do you think the old course is worth?

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