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.
