Will we ever see Golf Course Developments again?

[Jeff Schley]

It seemed from 1980's until 2008 almost every new housing development had a golf course around it. We have had the housing crisis and now covid affecting housing in general. From late 2020 until now we have a huge demand for housing, with historic low interest rates and prices skyrocketing with that. Here is the last 13 years housing starts chart.




With Covid we have seen record number of rounds of golf played with 2019 as a comparison.



However, I don't know of any new housing developments that have a golf course. That is interesting isn't it? Developers went from golf course development punch drunk to nil, despite housing demand and golf demand at record highs compared to the last several decades. Pretty telling that this overabundance of housing around golf courses had to market corrected in the years to come from 08 and apparently developers don't feel it has fully settled.

We have rose colored glasses with our affinity for golf, interested to see some thoughts on this from our diverse group of posters here. Is the era of golf course developments gone for good? Are some underway now with a longer capital plan needed to come to fruition? If it was a successful model in boom times, what is missing from the equation now as we are in a housing boom and golf boom?  I have my own thoughts as to why this is, but what do you think?

[Jeff Schley]

Also couldn't include this chart in my post for some reason.  The US population increase has been quite impressive as well.

In addition to the future growth we will see in our lifetimes (we hope we are around that long). This has to factor into developers projections for demand no?

[Tim Gavrich]

However, I don't know of any new housing developments that have a golf course. That is interesting isn't it?

In SW Florida alone, of late...


Lakewood National - Commander (2017)
Lakewood National - Piper (2019)
Babcock National (2020)
Esplanade at Azario (2020)
Ave Maria National (2021)


Two Arnold Palmer/Brandon Johnson originals, one by Chris Wilczynski, two by Gordon Lewis.


Over on this side of the state, a new Bobby Weed course called Stillwater in a 55+ community is opening later this fall. There's also a massive development underway in West Palm Beach called Avenir that is going to have a Nicklaus course, Panther National, next year or in '23.

[Tom_Doak]

This model has been dormant since 2018, but there are lots of old developers out there just waiting for a positive sign to get the band back together.


I've had three calls about development-attached golf courses in the last three months - two of them from Florida.  Luckily, I've also had some calls about courses where houses are not the first priority.


Adding:  also, as you may know, there are big golf development projects on tap in Saudi Arabia, and I've also had calls for such projects from Spain and South Korea.

[jeffwarne]

Actually one in The Hamptons as we speak...that's getting pretty close.

[Wayne_Kozun]

Cabot St Lucia is a real estate development that is under construction right now.  A bit different than a Florida or Arizona type of development but not too different.

[Bruce Katona]

Well, if the developers who prefer to build master planned larger communities (which have common amenities such as pools, recreation centers, golf courses, water related activities if on a lake, bay or ocean) can get the bank to loan money to build and construct a golf course; clubhouse of some sort; maintenance shop and capitalize the cart & maintenance equipment leases, then these projects will again be constructed.


The banks all know how to lend on land development & housing construction and how long it will take to be repaid based on home sales. A golf course business model presented to any lender will be scrubbed pretty thoroughly and if it makes good sense, I'm thinking the bank will lend $0.50 on the dollar for golf development - that leaves the other $0.50 to be funded by developer/sponsor equity, so the guys doing the project either have to have deep pockets or take in investor partners to fund the gap.

[Mark Kiely]

Sterling Grove in Surprise, AZ opened recently (Nicklaus Design) with plans for 2,200 homes around it, per my understanding.

[Jeff_Brauer]

I have a few contracts for golf/housing developments, but they have been silent for two years or so.


I think one problem is the national media discussion about golf being on the decline has been going for several years, even if play declined only 2-3%, but was not growing.  But, there have still been hundreds of course closures each year.  There have to be a few locales that really need that kind of project, but the bankers will have to dig deep, as Bruce alludes, to overcome the first negative impression of golf and housing. 


I think I have also read that developers have found that they can get a similar premium for any lot backing to open space, and just leaving open space, or perhaps adding a trail is a lot less expensive, making it a better investment overall.

[David Wuthrich]

Actually one in The Hamptons as we speak...that's getting pretty close.

Seriously Jeff, In the Hamptons???  Wow!!!

[Jeff Schley]

Actually one in The Hamptons as we speak...that's getting pretty close.

Seriously Jeff, In the Hamptons???  Wow!!!

Is this the Discovery Land development they have been trying to do for years?

[Steve_ Shaffer]

Re: Sterling Grove in Surprise, AZ


I live 10 minutes away from this new development by NYSE Toll Bros. It will be a private course but public play is welcome until membership is almost full. Approximately 100 memberships have been sold thus far. It's been mentioned here many times by others and myself. I will be playing there for the first time next Wednesday- summer times are much less than prime season. Troon is managing the club.  Here's a flyover of the course:


https://vimeo.com/showcase/8758458


https://www.sterlinggroveclub.com/golf


Yes, plans are for 2200 houses and a 10 year build out.


Wanna  buy a house?


https://www.tollbrothers.com/luxury-homes-for-sale/Arizona/Sterling-Grove/Sonoma-Collection/Quick-Move-In/254476

[Peter Sayegh]

Just curious and perhaps asinine questions. How many golf communities are/were planned with "only" nine hole or par three courses? Is a Brauer/Doak/Fazio/Hanse (choose your architect) nine or short course enough to lure home buyers?

[Tom Bacsanyi]

^^^^Or what about 9 hole regular length courses as the centerpiece for development? I think there's an opportunity to have a really wide 9 hole course (plus a nice practice facility and kids loop) with perhaps some bike/walking paths and other open space type stuff for non-golfers. I think when you are talking 18 holes, the holes themselves/setbacks/easments/wetland/desert sage hen habitats etc. burn through so much land that there isn't room for any other types of open space. So you get house/rough/fairway/rough/house over and over again.


I know the NineGrand development was sorta based on this idea, wondering if Don Mahaffey will chime in on how it's going?

[Steve_ Shaffer]

Nine hole residential golf communities are few and far between. I recently spent a week in Sedona, AZ in a rental house  in https://www.canyonmesacountryclub.com/  It was developed in the 1980s. The pro shop is very modest.


The course is 1par4 and 8par3s. The housing is very good. The amenities are a pool and tennis/pickleball courts. No fitness center.


There are no houses for sale now. Many houses are listed on VRBO.


I doubt that a developer would be interested in building one now.   Land is too valuable and not enough golf course lots for housing.

[Greg Clark]

Driftwood Golf and Ranch Club is a Discovery Land project near Austin.  There is a Fazio course that last I heard could open this fall.
https://www.driftwoodgolfclub.com/

[Cal Seifert]

Actually one in The Hamptons as we speak...that's getting pretty close.

Seriously Jeff, In the Hamptons???  Wow!!!

Is this the Discovery Land development they have been trying to do for years?

I believe so. Located in East Quogue.  Haven't heard much since its been approved.

[John Emerson]

Short answer: I hope to hell not

[mike_beene]

Golf and Ranch Club is a combination I have not seen before . Sounds like snake heaven.

[Steve_ Shaffer]

Supplementing my previous post on Sterling Grove, I played there for the first time. I was impressed with the course and amenities. If you like challenging greens, you'll  like SG. The course is very generous from the tees even though many fairway bunkers are present. The course was in very good condition and the greens were fast.


Since this thread is about a residential golf community, I will state the construction of housing and amenities is moving along at a fast pace. Since opening more than a year ago, here are some numbers as of a month ago :

380 houses sold. More than 120 have been completed. Prices start from the upper $400,000s to mid-$800,000s.

4  new sections will be starting soon creating at least 250 more houses. Also, attached villas near the club house will be ready next summer.

[Jeff_Brauer]

^^^^Or what about 9 hole regular length courses as the centerpiece for development? I think there's an opportunity to have a really wide 9 hole course (plus a nice practice facility and kids loop) with perhaps some bike/walking paths and other open space type stuff for non-golfers. I think when you are talking 18 holes, the holes themselves/setbacks/easments/wetland/desert sage hen habitats etc. burn through so much land that there isn't room for any other types of open space. So you get house/rough/fairway/rough/house over and over again.


I know the NineGrand development was sorta based on this idea, wondering if Don Mahaffey will chime in on how it's going?

Tom,


By chance, I saw a list of Chicago's best nine hole courses in my news feed.  A few have been in housing developments for a long time and seem to still be successful.  The ones I was familiar with had been built as part of a broader "lifestyle" community where residents were to be attracted to a wide variety of activities, and golf was only one of them.


I doubt it works too many places, but it's a big country, and there are certainly specific places where it still might work very well, especially, given how many complaints about how much time golf takes to play.  It seems fewer folks are as constrained by golf tradition as they used to be, i.e., 18 holes, etc., so some developers might take advantage of that.

[Tom Bacsanyi]

I checked out that list, I assume it was this one:


https://www.chicagogolfreport.com/chicagos-top-10-nine-hole-courses/


When I lived in Chicago I played Waveland (Marovitz) only a couple times while basically living within walking distance of it. I wore out the Diversey driving range, and played most of my rounds at Jackson Park. Jackson always seemed to be in way better shape and I was in the mindset at the time that only 18 holes is "real golf", since reformed. As for Marovitz, if proximity to Lake Michigan and location convenience is 99% of the grade it's an A+. The rest of it is a D-.


I won't even suggest that it be renovated (which could possibly make it one of the best nines in the country) as cash-strapped and bureaucratic as Chicago is, the idea is a non-starter.

[Steve_ Shaffer]

Golf Real Estate Roars Back as Vacation Homes Boom in Pandemic
As interest in vacation homes skyrockets, buyers are rethinking life on the greens.

But like so much of life since the pandemic, everything around the game has changed: A new spate of beginners has taken it up—the National Golf Foundation estimates that a record 3 million people in 2020 tried golf for the first time. Existing fans have been playing more rounds, too, while sheltering in place and working remotely.
That rebound has extended to real estate as interest in vacation homes of all kinds has skyrocketed. “Demand for private golf club community amenities and real estate is at all-time highs,” says Jason Becker, co-founder and chief executive officer of Golf Life Navigators, which matches homebuyers with golf course communities.
Dan O’Callaghan, director of sales for Discovery Land Co., estimates that the residential-community developer was doing $60 million in sales annually at its Silo Ridge property before Covid-19, but that number jumped to $130 million after. “In general, our numbers doubled during the pandemic,” he says. Following a trend across the country and internationally, buyers in search of turnkey homes and cushy services discovered its development 90 minutes from Manhattan in New York’s Hudson Valley. “If they’d had more homes that were completed,” O’Callaghan says, “we could have sold more.”
Developer Ben Cowan-Dewar reports that the properties in his latest project, Cabot St. Lucia in the Caribbean, also sold well ahead of schedule. “The demand exceeded our wildest expectations” he says. “Product releases that we expected to take months sold in days.”
Read more:
https://www.bloomberg.com/news/articles/2021-09-15/golf-real-estate-gets-a-shot-in-the-arm-thanks-to-the-pandemic?utm_id=37789&sfmc_id=2572953