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Golf 2021 - Time to Sell?

November 18, 2021

Golf in 2021 is still hot. Rounds are up, greens fees have increased, memberships are full, equipment is selling faster than ever before. People are starting to travel again and vacation hot spots like Florida and Arizona are looking forward to one of the best seasons in memory. In other forms of real estate, specifically multi family and industrial, cap rates are at all time lows and buyers are scrambling to deploy capital. The stock market continues to set records and investors are looking at all types of real estate to deploy earnings. Land prices near interstates and close to major metropolitan areas continue to rise as developers look for large land sites to convert to new warehouses or apartment buildings. Overall there is more wealth in the United States than at any time in our history.

What does that mean if you own a golf course? Is now a good time to sell?

After a two year binge of increased rounds and revenues golf course owners are beginning to adjust to a new financial model where their course is more profitable than it has been since the early 2000’s. Buyers of golf courses are going to have to reset their pricing matrix as well. The days of low balling owners and waiting them out may well be over. New buyers are starting to enter the golf course market flush with cash and looking at the returns on golf courses in comparison to other real estate and deciding that golf looks much better than it did 48 months ago. For long time golf course buyers/investors who were used to low multiples and limited competition they are going to have to adjust to a new reality in 2022, where they are not the only game in town. They are going to have to compete aggressively to buy a course they could have bought for pennies on the dollar in 2019. In some ways golf had been a hobby purchase for investors, now based on current economics it could be a profitable hobby.

Currently the golf course sales inventory is low but we are starting to see more buyers enter the market looking for higher quality golf course assets to purchase. So in short, yes it appears that now is a good time to sell your golf course.

For more information on what your course be worth, and to discuss the services of Links Capital Advisors, contact Links Capital Advisors or call Chris Charnas at 312-543-7192.

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