From an investment standpoint, golf courses are a much different beast than traditional real estate. Houses, apartments and commercial real estate can, of course, fluctuate in price and occupancy. Golf courses have the added challenges of greater maintenance needs and rely on revenue streams less quantifiable than a monthly rent check. Unseasonably rainy weather? Your ROI takes a hit.
The economy has also been unkind to the industry. Industry statistics show fewer people playing fewer rounds, a byproduct of recession-era belt tightening and the ongoing need to attract younger aficionados.
The courses, clubs and surrounding land are not always bought by one deep-pocketed entrepreneur. Many are sold to partnerships and private companies. Financing is often by such specialists as Textron Financial, and other Wall Street investment houses are increasingly among the players -- in both senses of the word.What's out there to buy? CB Richard Ellis' Golf & Resort Group has brokered $750 million golf course deals over the years, including master-planned golf communities and golf resorts, private country clubs, daily-fee golf courses and raw acreage for development. Among the available properties it represents:
- With an asking price of $4 million, the Cathedral Canyon Golf & Tennis Club in California's Coachella Valley, between Palm Springs and Rancho Mirage, the deal includes the long-term leasehold for the golf course as well as 10,000-square-foot clubhouse, maintenance and practice facilities and 10 hard-surface tennis courts.
- San Diego's Mt. Woodson Golf Club, with an asking price of $4.8 million, is along the base of a 2,884-foot mountain peak. The course was designed to take advantage of "unique elevation changes, numerous rock outcroppings and mature oak trees."
- Black Bull, "an award-winning, master-planned mountain golf community," is a 483-acre development planned for 378 custom and developer-built club homes. Trustees of the U.S. Bankruptcy Court directed CB Richard Ellis to solicit overbids to the $8.1 million "stalking horse offer" (a selling price reached by testing the market at auction).