The Pellucid Perspective - August 2024 - 10

COMINGS
& GOINGS
Trades Continue to Trump Plants & Plows
J
uly activity continued the subdued but sustained pace and
shape seen through the first 7 months of the '24 season with
10 covered this month. Once again, standard disclaimer is
that we don't have complete knowledge or perfect visibility so
there's likely still meaningful activity out there flying below our
radar for this column. Per the current trend, nearly everything is
transactional (sold or for-sale) vs. openings and closings which
suggests that the industry is being cautious this time around to
avoid the build-a-course-day irrational exuberance that accompanied
our last growth cycle in golfers and rounds. Here's the
month's scorecard:
* Opens/Re-opens - 0 (an increasing number of " coming
soon " announcements though)
* Closeds - 0
* Transactions (continuing golf operations including For
Sales & Auctions) - 9
* Redevelopments (transactions not continuing as golf
operations) - 0
* Other (name change, Priv-Pub switch, downsize holes,
Priv->Muni ownership etc.) - 1
The table provides details and commentary for each activity.
For those not into detail (or our entertaining commentary),
we continue to expect that the continuing COVID " lift " would
increase and improve liquidity in the industry by making golf
courses more desirable and improving valuations for those wanting
to exit the industry (retirements, end of targeted holding period
etc.) but it appears that things are so good that prior sellers
are choosing to " ride the wave " a little longer. That said, we're still
seeing some number of challenged properties (several re-listings
this month, most with a >10% discount from initial list) which
are struggling to find a buyer/consensus value point even in this
favorable market for golf operations. Current transactions apGolf's
landscape changes
Course
Event
Open/Re-open
Closed
Trenton Golf
Club
Transacted/For
Sale/Auction
Chattanooga TN PUB/18
LIPG listing, existing GC & 700+ residential lots
for sales/development according to listing
Riverby Hills
Golf Club
Toledo OH
PUB/18
Back-on-market by LIPG @ $3.3M, grossing just
over $1M/EBITDA $0.5M (GIM 2.9/6.3x EBITDA?),
joint listing with Eagle's Landing also in Toledo
CBSA (one or both)
DMA
pear to favor the major and mid-size metro markets but, with
Pellucid's recently compiled and published Market Strength
ranking of all 207 Core Business Statistical Areas (CBSAs), we
know that there are 3rd and 4th-tier markets (by size) out there
that have favorable profiles for golf and would be good investment
values if properties come on the market.
We're also seeing an interesting development on what we'll
call the Alt-Golf front (vs. what we'll call Traditional, or the green
grass golf experience). While pure Alt-Golf continues to expand
and grow (i.e. Five Iron recent announcement of their Kirkland,
WA opening in Sep. and their franchising program for more
rapid expansion), we're also seeing accelerated growth in progressive
facility owner/operators incorporating Alt-Golf (simulators,
digital ranges etc.) into their operations. One of our longtime
golf course clients has made a major investment in turning their
driving range into a complete experience, season-round practice
and socializing space and the early results are very favorable (exceeding
expectations and budgets). The Barn at Boise CC is the
most recent example of a green grass facility making a significant
investment in Alt-Golf on-premise; in their case, they actually
reduced the footprint of the 18-hole golf course and eliminated
the traditional driving range to make room for this new dimension
of practice and entertainment for their and their members'
benefit (oh, and year-round functionality too).
Jim K. recently attended NGCOA's Multi-Course Operators
Retreat in Monterey and there was discussion regarding
whether Alt-Golf is accretive or dilutive to Traditional-Golf and
it seemed the general consensus was that the concept was appealing
to golfers but pure Alt-Golf isn't driving golfers to your
properties so... " if you can't beat 'em, join 'em " . This increasing
trend of bringing Alt-Golf to our existing facilities is a way to
both lean into the trend as well as insulate your facility from being
cannibalized by these other formats as they grow. Word to
the wise...
Type/Holes Summary
10 The Pellucid PersPecTive
August 2024
The Pellucid Perspective - August 2024

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