I’ve written much about selling golf course properties in this space. We’ve compared them to alternative investments, addressed how to prepare a golf property for sale, marketing strategies and due diligence issues, among others that can be found HERE. This post is specifically aimed at those owners considering selling, but who may be waiting for the “top of the market”.
Selling a golf property takes time. In our brokerage practice, we’ve sold properties recently that were off the market in less than a week and closed in 4 months or less. That’s fast! We’ve had multiple bidders and exceeded asking prices. Recent times have been good times to market golf course properties for sale. This is all despite a period of increasing interest rates that has suppressed values on many alternative real estate investments.
While golf courses will always have a certain “sex appeal” to those of us enamored with the game, there is no ignoring (not so distant) history that had golf property values declining and courses closing while other properties were appreciating rapidly.
What does all this mean for the owner seeking an exit strategy?
While we all want to buy low and sell high, I’m reminded of my client some years ago during the late 90’s golf boom who wanted $8 million for his course when it was worth $6 million, $6 million when it was worth $4 million and ultimately turned the keys over to the bank for <$2.5million a few years later. The moral of the story is that if you’re ready to sell, your course is stable and cash flowing, waiting for better times may backfire.
There are buyers in the market from other segments (apartments, retail, office, etc.) looking at golf properties as they are now perceived to have less risk, yet returns have remained fairly constant with cap rates in the 10%-12% range in most cases. That’s desirable in an environment where some property types not doing so well (office, retail, etc.) still offer lower returns. None of us know how long this market dynamic will last.
If you’re thinking about selling, let us see if we can help. We’ve successfully helped others and can structure an advisory, consulting or broker representation role in a variety of ways to assist in achieving your goals and objectives. Reach out at Larry@golfprop.com.