“There are a lot of courses for sale, but most
of them are financial losers.”
On Wall Street, golf is sometimes
described as a “fragmented” industry,
meaning it consists of many pieces that
don’t add up to much. Some multicourse
owners are trying to consolidate the pieces
— to make golf look more like the grocery
and fast-food industries — but they’ve dis-
covered that amalgamation is a tough, slow
Last year, the golf courses that Marcus
& Millichap tracked sold for an average of
Long after most U.S. industries have begun
to enjoy a recovery from the Great Recession, the real estate side of the American
golf business remains trapped in a quandary.
The pace of golf course sales illustrates
the problem. Last year, according to Marcus
& Millichap’s Leisure Investment Properties Group, 123 properties valued between
$1 million and $10 million changed hands.
The number is close to the norm. During
the past decade — that is, since 2007, the
onset of the Great Recession — an average of 130 U.S. golf properties in this price
range have sold annually.
This year, the number of such transac-
tions is likely to fall. Sales for the first six
months of 2017 were very slow, said Mar-
cus & Millichap’s Steven Ekovich, who sus-
pects “the whole year will be tough from a
So why are so few of our nation’s 15,014
golf properties selling?
Ekovich and other industry observ-
ers point to three interconnected factors:
Buyers have disengaged, credit is tight and
attractive properties are fewer and far-
ther between. The lack of demand slows
the appreciation of golf properties, which
makes owners reluctant to sell. The lack of
volume makes golf less appealing to private
equity groups and other investors, which
restricts the supply of capital.
The upshot: It’s become difficult for sellers to find buyers. If that were not true, golf
courses wouldn’t be selling for less than
what it costs to build them.
“The golf industry is extremely challenged,” said John M. Brown, chief operating officer of Brown Golf Management.
A limited number of finance options for golf course owners and potential
buyers has led to a slowdown in sales. By RoBeRt J. Vasilak
“the golf industry is
there are a lot of
courses for sale, but
most of them
are financial losers.”
JOHN M. BROWN, CHIEF OPERATING
OFFICER OF BROWN GOLF MANAGEMENT
Golf’s finance problem