Golf sales continue to rise

Golf course values rose in 2016 for the third straight year, with average sales prices reaching 2009 levels, according to a report by Marcus & Millichap’s Leisure Investment Properties Group.

The average sale price reached $5 million, with the median at more than $2 million.

“While there are a number of variables, job growth, tighter labor market conditions, expanding payrolls, and a volatile stock market are all factors which are major contributors to elevating both golf’s operational performance and property values,” the report states. “These positive factors affect not only golf, but the entire U.S. real estate market, and led to the first increase in interest rates in nine years.”

The average price for course sales increased more than 7.5 percent between 2015 and 2014 – comparable to the 10 percent growth it experienced between 2014 and 2013. Median prices increased as well – up 7.33 percent over 2014 and more than 20 percent since 2012.

The report, written by Steve Ekovich, states that low-yields in the stock and bond markets in 2015 have caused strong interest in all types of commercial real estate, which is beginning to cascade down to non-core assets like golf.

“We have been predicting an end to golf’s distressed, REO product and a return to more cash-flowing assets over the last year and a half,” the report states.

Apartments, retail and office properties are trading in low single-digit cap rates, while golf courses are still trading in double digits.


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