GOLF COURSE VALUES - ARE THEY INCREASING?
Not long ago, our friends at Marcus & Millichap released a study saying that golf values were increasing, based on their analysis of golf course sales on a dollar volume basis. The study suggests an increase in values of 7.5% in 2015 over 2014.
While not disputing the facts of this study, we think a better metric is to consider overall capitalization rates (OAR) or Gross Income Multipliers (GIM).  Since golf properties are typically purchased for income investment, the buyer's persepctive is typically based on the rate of return he or she can expect.  The Society of Golf Appraisers (SGA) annually produces an investor survey which tracks these and other indices, assisting investors in making informed decisions.  
The adjacent graph shows the trend in cap rates, discount rates and mortgage interest rates for golf courses as surveyed by SGA and our experience at Golf Property Analysts for the past 7 years.  During that period, it is clear that cap rates have declined slightly indicating a lower perceived risk on the part of market participants based on data from both sales and market survey.  In the past 4 years the cap rate has declined about a half point, and in the past year a very slight decrease.  Thus, while we concur with the MM report suggesting increases in value, based on our chosen metrics, it may be a smaller increase than implied.
SGA Investor Survey
If You Build It, Will they Come?
In today’s ever competitive club environment an important consideration of many clubs is renovations, enhancements and upgrades to the club’s facilities.  In the 80’s and 90’s the golf industry in general and club industry in particular operated on the basis of “if you build it they will come.”   Now, as the environment has become more and more competitive and many clubs are either closing or selling to for-profit operators this has become a question: If you build it WILL they come? - Read more of my article in Board Room Magazine by clicking below:
Board Room Magazine
BLOG POST - CLUB POLITICS
During our current (now recently concluded), heated political season, also at the time many private clubs do their budgeting for next year, I thought it might be interesting to compare the politics of clubs with the politics we've been hearing about on the news every night.
Click below to read more.
BLOG POST - CLUB POLITICS
WE WROTE THE BOOK
NOW AVAILABLE
GPA president Larry Hirsh has recently authored "Golf Property Analysis and Valuation - A Modern Approach" published by the Appraisal Institute.
In the book, Hirsh shares 35+ years' experience appraising, advising, consulting and brokering golf and club property. Topics of focus include market analysis, site and facilities, maintenance, marketability and the various elements of valuation, including the application of the approaches to value.
The book is a must have resource for architects, attorneys, bankers, brokers, club leaders, consultants, courts, owners, managers, buyers and sellers of golf properties, as well as appraisers who take on golf property assignments.  The book (print) will sell for $60.00 ($50 for AI members) through the Appraisal Institute (www.appraisalinstitute.org/golf). Click the link below to order the print and pdf package for $85 ($70 AI members):
THE GPA PRACTICE TEE
GPA has recently been retained for the following assignments:
  • (VA) - Consultation with private club for planning
  • (FL) - Analysis of damages to Daily-Fee golf course in connection with pipeline easement
  • (FL) - Litigation Support Consutling Assignment in dispute over closed golf course
  • (OH) - Market Analysis and Appraisal for redeveloped daily-fee golf course
  • (SC & NC) - Appraisal for bank asset management of 3 property (5 course) portfolio

HIRSH TO SPEAK
GPA President, Larry Hirsh will be presenting at the following events:
  • Golfweek Architecture Summit - November 29, 2016, Pinehurst, NC
  • PGA Merchandise Show Education Program - "The Evolution of the Golf Course & Club Industry" - January 25, 2017, Orlando, FL
  • National Golf Course Owners Association (NGCOA) - What is your course worth, and why should you know? - February 9, 2017, Orlando, FL
  • New Jersey Institute for Continuing Legal Education (NJICLE) - Tax Assessments - March 8, 2017, Jamesburg, NJ
GPA will also be exhibiting at the Club Managers Association of America (CMAA) Club Business Expo, February 9-10 at the Orlando Orange County Convention Center.
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