Four years after the coronavirus pandemic sparked a rejuvenation in the golf industry, the 2024 golf season is shaping up to be another strong business year for course owners nationwide. And based on two golf properties that sold within days of each other last December, courses of all types continue to be in high demand from an investment perspective.
Indeed, whether it’s well-known private clubs or modest public courses, institutional capital and/or high-net worth individuals are sizing up all facets of the golf course market as not only solid places to park capital in the coming year – but more importantly, an asset class with the promise of producing even greater future returns.
Case in point were the following two property transactions that closed in mid-December: The Club at Pasadera, an acclaimed private club in California’s pricey Monterey Peninsula, and Kings Ridge Golf Club, a popular 36-hole public layout in an age-restricted community just outside Orlando.
Pasadera, which features the only Jack Nicklaus Signature course in the prestigious Monterey Peninsula and a striking 38,000-square-foot California Hacienda-style clubhouse, was acquired by fast-growing boutique private club owner/operator Concert Golf Partners for a reported $9.75 million. The price was a fraction of the reported $42 million it took to develop the 565-acre, 250-home private club community and amenities when it opened 24 years ago.
On the other side of the country in Orlando’s booming bedroom community of Clermont, Kings Ridge Golf Club is the polar opposite from a golf facility perspective, featuring an 18-hole championship layout, additional 18-hole executive course and 1,500-square-foot pro shop/snack bar. Nevertheless, former owner and esteemed teaching professional Kenny Nairn, had “lots of interest” before settling on an undisclosed buyer out of Canada with the help of Leisure Investment Properties Group, the Tampa-based brokerage firm that represented the buyers and sellers.
Nairn, a Scottish PGA Professional and member of the PGA of Great Britain & Ireland and European Golf Teachers Federation, would not disclose the sale price but said Kings Ridge traded for a “premium” and his buyers already own six other courses in Canada and other non-U.S. locations. Basically, the international buyers wanted to take advantage of the relatively weaker U.S. dollar, according to Nairn, not to mention a golf facility doing close to 78,000 annual rounds in a sold-out development of 2,088 homes situated in the heart of one of Orlando’s fastest-growing metro markets.
To be sure, one of the main reasons Nairn reluctantly sold Kings Ridge was because his partner, longtime certified golf course superintendent, Larry Snyder, recently retired. But in the end, the premium Nairn realized on the sale ended up being too good to turn down anyways.
“When I ran the numbers, and when I say I ran the numbers, it’s what could I sell it for relative to what we bought it for, relative to what it’s producing,” adds Nairn, who still owns Eagle Creek Golf Club, a high-end daily-fee facility on the opposite side of Orlando in growing Lake Nona. “Then, when I did even more research on values and used the same broker again (from a previous Orlando-area course sale in September 2021), we reached a premium price. And it was one of those where you say, ‘ok, you know what, I doubt I could ever sell it for this (price) within the next five years,’ so boom, there you go.”
Concert Golf Partners was founded by Peter Nanula in 2011 after a successful career of starting and running Arnold Palmer Golf Management in the 1990s. For Nanula, who has both personal and corporate connections in California, buying Pasadera was a no-brainer. Besides representing their first club in California, Pasadera is a trophy-type property to say the least.
Perhaps Pasadera member and noted sports broadcaster Jim Nantz describes it best when he said, “The Club at Pasadera is one of the underrated gems of California golf. The club and course are absolutely spectacular.”
For Concert Golf, one of the fastest-growing course owner/operators in the business, the Pasadera acquisition was on the heels of Concert picking up a pair of top Houston-area clubs, Northgate Country Club and Walden on Lake Conroe Golf Club, back in November from private club industry veteran Dan McIntyre. The trio of late 2023 transactions give Concert Golf 33 properties nationwide, tripling the size of the company’s assets since Nanula formed the company with co-founder/chief operating officer Susan Dunnavant, who is based at the company’s headquarters outside Orlando in Lake Mary.
After amassing $250 million of “patient, long-term equity capital to invest in private clubs,” most of which are formerly developer-owned and/or member-owned clubs in need of a well-funded partner to help preserve the club’s future sustainability, expect more acquisitions to come from Concert Golf in the near term. Not to mention a growing number of other well-capitalized buyers seeking alpha in America’s hot-new asset class: golf.
Nairn doesn’t know how much longer this seller’s market would last other than saying, “The way I would answer that is, you would be foolish if you wouldn’t look at something right now and sell when the market and money is like this. … Capital venture companies are still needing to spend money and because of the way golf is. … both traditional and alternative golf facilities like Topgolf and Drive Shack, golf is booming. So capital venture companies are wanting to get into it and they’re mandated to get involved with golf because the return on their money is good.”