As golf real estate stabilizes, the hottest demand is coming from developers

Florida’s pristine golf courses went from amenities to liabilities in the depths of the Great Recession — but the market is headed back toward an upswing, between redevelopment and opportunistic operators.

“The market has finally stabilized in golf,” said Steven Ekovich, senior vice president and director of Marcus & Millichap’s national golf division.

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Ekovich, who’s based in Tampa, sells golf course real estate across the country. Data from Marcus & Millichap shows that in 2017, the majority of golf course transactions nationally were between $1 million and $3 million, with an influx of first-time buyers.

“The velocity seems to have slowed down, and that’s a product of all the [bank-owned] stuff having cleared the market for the most part,” said Matt Putnam, managing director of the leisure property group at Colliers International Tampa Bay. “Most folks that own golf courses have a more stable operation that’s performing on par with their expectations.”

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The patio at Gateway Golf & Country Club in Fort Meyers

Golf properties are hardly enjoying the kind of boom underway in other real estate sectors, where new construction is popping and prices are surging. But most of the distressed properties that plagued golf during and after the recession have changed hands. The numbers of rounds played year over year in 2017 remained about the same, according to Marcus & Millichap — good news for an industry where declines have been the norm.

“People selling today are selling for life reasons: ‘I want to retire,’ or there’s been partnerships break up,” Ekovich said. “There are some situations where the golf courses are looking at capital expenditures down the road and they know they can’t bill the members for it, so they sought another equity source.”

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The banquet room at Gateway Golf & Country Club in Fort Meyers

While there are buyers who want to acquire courses to improve operations and get them back in the green, the hottest demand comes from real estate developers, Ekovich said. He has a listing for a property in South Florida that’s worth $1.5 million as a golf course — and while he can’t reveal the price, he says it’s under contract to a real estate developer for at least 10 times that amount.

“The market for developers chasing golf courses for redevelopment is extraordinary,” Ekovich said.

One recent transaction in the Tampa Bay region serves as proof that the golf real estate market has turned a corner. The 139-acre Rolling Green Golf Club in Sarasota was sold to an investor in March for $8 million. The seller bought it out of foreclosure for $1.5 million in 2014, according to the Sarasota Herald-Tribune.

“It’s already been stabilized,” Putnam said.

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