The Economics Of Golf Courses

April 12, 2014 in Daily Bulletin

Nadja Brandt and Michael Buteau wrote about the recovering market for golf courses:

  • In 2012 the market for golf courses hit a low with the average course selling for $2.7 million.
  • This year the average price has risen 57% with the average golf course selling for $4.25 million. This includes one property that was sold for $75 million.
  • All in all though the market is still below its pre-recession peak of $7.33 million.
  • The price has been driven up by a decrease in supply – in 2013 about 144 more courses closed than had opened.
  • There was an over-supply of golf courses because people were purchasing them as if they were houses – and were buying them for their potential future values.
  • These days they are treated as businesses and valuations depend on metrics such as membership numbers, operations, and net profits.

Read more about the golf course industry, how banks are changing how they evaluate golf course acquisitions, and how Donald Trump’s golf courses have fared over here.

Source: Bloomberg