“We’ve rounded the
corner and are on
our way up. There
is strong evidence
that the industry is
returning to health.”
STEVEN EKOVICH, FIRST VICE PRESIDENT,
properties. Brown Golf and Ron Jaworski
Golf: one apiece. Trump Golf: zilch.
The sluggish rate of sales helps to explain
why so few private equity groups have
made golf investments. Private equity firms
aren’t interested in a single $4.7 million
transaction. They want to buy a dozen $4.7
million properties. What’s more, they want
to cash out in three to five years, so they
must be certain that they’ll be able to find a
buyer when the time is right.
As things currently stand, golf doesn’t
offer them a sure-fire exit strategy.
“If you’re a big investor seeking to deploy
a lot of capital all at once, it’s hard to do it
in golf,” said Peter Nanula of Concert Golf.
What’s notable about golf transactions
these days, though, is how infrequently
lenders of any kind play a role. In 2016,
Marcus & Millichap brokered the sale of 24
mostly public properties, the vast majority
of them in all-cash deals. CBRE’s Golf &
Resort Group facilitated eight sales of high-end venues in 2016, and 10 in 2015, none
of which required any financing.
“Debt is a big problem right now,” said
CBRE’s Jeff Woolson, who has participated
in 147 golf transactions during the past 25
years. “You can get [financing], but it’s very
It’s especially hard to get financing to
purchase public courses, an area where
$4.7 million. At that price, ClubCorp probably could buy 25, or even 50 of them right
now. Through the first half of 2017, however, it bought just five, and in all of 2016 it
bought only three. Concert Golf Partners,
which has $150 million to spend, closed
on three during the first half of the year.
Escalante Golf got two. Since the beginning
of 2016, McConnell Golf has acquired two