It’s Masters Week. Often referred to as a rite of spring, many in the colder climes consider Masters Week the beginning of the golf season. Whether it’s the azaleas in full bloom on TV, CBS’ hushed tone coverage of the always riveting competition or the sheer magnificence of Augusta National, the influence on golf from the Masters Tournament is undeniable and unmistakable.
Super-fast greens, pristine playing conditions and many of golf’s time-honored traditions have come from this very special event and place. As a real estate appraiser specializing in golf properties, it never fails that this week or next, after watching the tournament, someone asks me what Augusta National might be worth. Of course, there’s no way I can answer that without actually doing an appraisal, but after visiting yesterday as a patron for the Wednesday practice round, the unique elements of this very special place intrigued me not so much about what Augusta National is worth but what it really is.
In spending the day there yesterday, it seems as though Augusta National, over time has transformed its primary purpose from a club for the enjoyment of its members, which hosts a mega-event annually, to a venue for that event which is run by a very distinguished group of members who conduct the event.
My last visit to Augusta National was over 20 years ago. While there was certainly considerable infrastructure for the Masters then, the change that has occurred since is astonishing. The membership and leadership of Augusta National has committed to making the Masters the absolute #1 experience in sports for the patrons. Concessions are clean, food is of high quality, prices quite reasonable and the service exquisite. Conduct of the patrons is closely monitored to ensure that everyone is well-behaved. There are more greeters than I’ve ever seen before and along with the security personnel and the random roving green-jacketed member, they welcome you, help you find your way and make sure to wish you a good day – all with sincerity. I’ve been fortunate to have visited many nice places. Never have I seen this level of hospitality and service, and done so effectively and tastefully.
In recent years, the club has developed a Masters Only practice facility, which is large, in perfect condition and accessible to the players. They’ve built a corporate hospitality facility (Berckman’s Place) that rivals any upscale mixed use retail development you’d find in the most affluent areas of large cities. There are large, club operated restaurants serving a variety of fare, all of which are excellent and staffed by well-trained hospitality students from around the region. By published accounts, the media center is unrivaled anywhere. These multi-million dollar facilities are used just during the Masters Tournament, one week per year.
There are underground tunnels, modern retail and administration buildings and immaculate parking areas resulting from numerous land purchases through the years. There are teeing areas for key holes (#5 and #13) that have been moved back through the years, on adjacent lands purchased for the exclusive purpose of lengthening holes for the Masters Tournament at reportedly very high cost. Of course, there are scoreboards seemingly everywhere and the normal “ropes” that accompany any professional golf event. The club has also purchased numerous surrounding properties to enhance parking for the tournament.
I imagined how I might approach an appraisal assignment of Augusta National. The valuation of almost all clubs involves a significant component of non-realty or personal property value. This can come in the form of tangible property, such as equipment, furniture and inventory or intangible property like good will, branding and revenues from things like food and beverage and golf shop sales. The Masters is certainly a brand. Berckman’s Place, the media center and much of the other infrastructure that serve the Masters Tournament are most definitely real property components but most certainly wouldn’t exist without the Masters Tournament. There are even plans to create an interchange from I-20 leading right to the Augusta National property. All of this is presumably used for one week per year.
The unique quality that separates the Masters from other major championships is that it uses the same venue every year. Thus, one wonders what the Masters were to be like if (God Forbid) something should occur that would force either the cancellation of the event or a temporary, or even permanent relocation.
“As-is”, including the Masters Tournament there is no comparable to Augusta National. The club and the tournament are inexorably intertwined and any analysis of the club would warrant consideration of the event. However, if for instance the property were being evaluated for tax assessment purposes there would be a conundrum.
At Augusta National there are 128+/- buildings listed on the county assessment rolls, including Berckman’s, the media center, warehouses, television studios, cottages and offices and numerous accessory improvements, including underground tunnels and retaining walls that would all be considered real estate, but without the Masters Tournament likely wouldn’t exist. Would they contribute to the value of the real estate? Or, would they be a “superadequacy”, which is defined as: An excess in the capacity or quality of a structure or structural component; determined by market standards. Again, the question raised, before estimating value is, What is Augusta National – A Club or an Event Venue?
In the appraisal world, we’re guided to market value by a concept of “highest and best use”, defined as: “The most probable use of a property which is physically possible, appropriately justified, legally permissible, financially feasible, and which results in the highest value of the property being valued.” It would stand to reason that the highest and best use of Augusta National would be not as a private golf club, but rather as the venue for the Masters. What’s Augusta National worth? I’ll defer if and until I’d ever get the chance to appraise it, and then I wouldn’t be able to share my conclusions anyhow due to confidentiality. Regardless, it’s a special property and a special place and I hope you all enjoy watching this weekend.