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paths. Fortress, acting through an affiliate
now known as Drive Shack Inc., hired him as
American Golf’s CEO.
Hinckley dismisses concerns about potential conflicts of interest. Palmer’s properties, he
noted, are primarily in Texas, Florida and the
Carolinas, while two-thirds of American Golf’s
sites are in California. In the few states where
both companies are present, they operate in different cities or with different properties.
“The companies have virtually no crossover,”
he says. “There’s really no competitive issue.”
After a decade of robust growth, Century Golf
hasn’t made a purchase for nearly two years.
The reason, Hinckley explained, is partly
because he’s been focused on American Golf
and partly because of health issues. In January
2016, he got a new pair of lungs. He was hospitalized for 17 days and didn’t return to work
“I’ve made a full recovery,” he said. “I’m
breathing like a 20-year-old. I’m even enjoying
playing golf again.”
But Century Golf remains on the sidelines
for another reason as well: Hinckley thinks golf
properties are over-priced.
“I have a high regard for the cost of capital,” he
said. “We aren’t going to get into bidding wars.
I don’t want to buy just for the sake of buying.”
Of course, many financiers are also on the
sidelines. They’re chasing profits, after all, and
maybe it’s become easier to find those profits in
warehouses or shopping malls.
“Real estate investment is cyclical,” Nanula
said. “You’re always going to have different
sources of capital — conventional lenders,
private-equity firms, long-term investors. The
money flows in, and the money flows out. Right
now, there isn’t much money coming into golf.
The tide has washed away.”
Interruptions in the flow of capital are among
the perils golf faces when it aligns itself with
short-term investors. Course owners are gen-
erally optimistic nowadays, but the U.S. golf
population continues to shrink, the number of
rounds played hasn’t significantly increased in
years and many markets are still over-supplied.
No matter how sound their business practices
may be, operators whose primary goal is to
maximize returns may not always be able to
deliver on their promises.
“Ownership is a hard business,” said the man-
agement company CEO, who requested ano-
nymity. “To keep Wall Street happy, you have to
keep buying and buying, which is hard to do in
golf. It’s hard to meet some expectations about
Nevertheless, Hinckley believes golf can con-
tinue to deliver value to investors with realistic
expectations. He may not be able to pinpoint
the source of the next flow, but there’s no ques-
tion about his desire to ride it.
Robert J. Vasilak is a long-time golf journalist
and a contributing editor at Golf Inc. He blogs at
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