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March, 2018 - In this issue
  • GIS 2018
  • Are All Golf Courses Alike?
  • Bunker Renovations
  • GPA Golf Course Acquisition Opportunities
  • The GPA Practice Tee

GIS - 2018 

Just back from San Antonio and the 2018 Golf Industry Show (GIS), I offer the following observations. Just like the golf equipment segment of the business, technology is all over the golf course world.  Among the highlights were:
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Are All Golf Courses Alike?
New York State courts have adopted a unique method for the valuation of private clubs (PR). In tax certiorari (tax assessment appeal) cases a method called the “market rent” approach is used which conceptually isolates the real property value by using rental comparables to estimate market rent for the subject property which can be capitalized into a value of the real property.

Since comparable lease market data is limited for private clubs, the methodology has used rents from municipal (MU) and daily-fee (DF) courses to estimate the percentage of revenue attributable to rent, which is then applied to private clubs under the hypothetical assumption that they are Daily-fee golf facilities. Not only is the mode of operation (business model) significantly different but so are the physical characteristics of the real property.  Private clubs, in this instance,  are analyzed on the basis of rounds and fees, as opposed to members and dues.

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Bunker Renovation 

Just back from GIS 2018, which I determined might be a good place to expand my understanding of the cost, potential savings and necessity for renovations of the primary components of a golf course.

The primary components of a golf course that wear out over time generally include greens, tees, bunkers and irrigation systems. All have varying periods of useful life. As appraisers, we often encounter situations where these components are in various levels of disrepair. Because of the general lack of understanding of their useful lives, not only are the levels of repair or replacement required different, but their impact on value is challenging to assess.

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