Repositioning of Golf Courses

Not too long ago many residential developments in Florida featured golf courses as an incentive for new home and lot sales. However, today in 2017, these once flourishing fairways, greens, and clubhouses are being decommissioned leaving communities with overgrown, vacant land.

 

Supply and Demand

Why you may ask?  The answer is really very simple: Over Supply and Less Demand.  Unlike the golf boom of the 1960's and 1970's, the courses built during 1990's did not have a corresponding growth in the middle class with sufficient income and time. These courses were built purely on speculation, believing that retiring baby boomers would dramatically increase the demand for golf.  Unfortunately this projected demand never materialized. Unlike older generations, many baby boomers viewed golf as an old person’s game, favoring more active recreation such as boating, jogging, etc.

 

Studies have shown that increasingly longer working hours have reduced leisure time to an average of 2.5 hours per day which translate into less time for a complete 18 hole round of golf. According to the National Golf Federation, the average number of rounds of golf played per course, per year, dropped 20%over the past two decades. While new courses continue to be built, the number of closures has outnumbered the number of openings each year since 2007.

 

In 1988, National Golf Foundation issued a challenge to developers: “Build a Course a Day for 10 years.” The challenge was meant to supply enough golf to meet the projected demand of Baby Boomer golfers. The number of courses increased dramatically, but demand did not increase. Consequently, too much supply and not enough demand.  In many communities, developers spent large sums on golf facilities as a tool to sell their homes, and at the same time had provisions in the deeds that stated once more than 50% of the dwellings had been sold, the on-going operational expenses for the golf courses would revert o the homeowners who had neither the funds nor the expertise to run a profitable golf facility.

 

Golf demand peaked in 2001, and has steadily since declined. The demand for golf memberships in master-planned communities has declined by more 50%. For many courses, owners cannot operate profitably under any business plan. As such, golf course owners may want to consider the alternative of redevelopment for other, more profitable uses.

 

Redevelopment Alternatives

  • Hotel Resort
  • Organic Farms
  • Franchise Hotel
  • Agricultural Use
  • Wellness Center
  • Community Park
  • Religious Retreat
  • Conference Center
  • Equestrian Facility
  • Donation to 501(c)(3) Organization
  • Charitable Contribution 26 U.S. Code § 170
  • Single-Family / Multi-Family Residential Development
  • Mixed-Use Development/ Residential / Commercial / Retail
  • Conservation Easement with Residential / Mixed-Use Development

 

At Prime Sites USA, we have decades of experience and industry knowledge to help golf course owners, sellers and buyers explore, evaluate and implement the redevelopment strategies that align with their needs and challenges.  Contact us for further details