ClubLink acquired eight 18-hole equivalent golf courses in Sun City Center, Fla., from WCI Communities for $8.7 million on Sept. 3. The acquisition represents the company’s first cluster of courses south of the Canadian border.
“It was a very fair deal for everyone involved,” said Steven Ekovich, vice president of Marcus & Millichap Real Estate Investment Services which facilitated the cash transaction. “ClubLink’s offer was not the highest, but had the highest propensity to close.”
Ekovich said there were several interested buyers from around the world for the portfolio, which was originally marketed for $13.725 million. WCI narrowed the list down to three and started negotiating in June. Ekovich said ClubLink best understood the complexities of the transaction.
“This community has had ongoing building for more than 50 years,” he said. “The complexity of the easements, surveys , encroachments, bylaws, community associations was just enormous.”
Ekovich said there were many challenges that kept the price lower — including one course that is currently closed, North Lakes Golf Club, and one that is losing around $1 million a year. The other courses sold include Club Renaissance (18 holes), Sandpiper Golf Course (27 holes), Scepter Golf Club (18 holes), and Falcon Watch Golf Club (27 holes). Two 18-hole executive-length courses are also included: Kings Point Golf Club and Caloosa Greens Golf Club. Club Renaissance is considered the crown jewel of the portfolio.
“We identified the Tampa area as one of our target markets in the U.S. and we are pleased to announce that the Sun City Center portfolio represents our first regional cluster in the United States,” said ClubLink President and CEO Rai Sahi. “This acquisition establishes a firm foothold in Florida for us, and we are actively pursuing other opportunities on both sides of the border.”
The courses, about 30 miles south of Tampa, are within easy reach of the Gulf of Mexico. Sun City Center offers a wide spectrum of amenities within its own full-service community.
“ClubLink was selected from the many suitors for our courses because of its outstanding reputation for customer service and effective club operations,” said Doug Schwartz, senior vice president, WCI Communities.
WCI had filed for Chapter 11 bankruptcy reorganization in August 2009. The Florida-based homebuilder cited declines in both pricing and sales of new homes and condominiums and dramatic increases in cancellations of purchase offers. The company, which had projects in approximately 40 communities, primarily in Florida, experienced $184.3 million in losses during the first half of 2008, and claimed aggregate indebtedness of $766.2 million. WCI recently emerged out of bankruptcy.
Sahi, chief executive of ClubLink, has experience in buying distressed assets. He acquired his stake in ClubLink in 2001 when Bob Simmonds, chief executive and Jim Hinckley, then with ClubCorp, sold him their 25 percent stake in ClubLink at a 80 percent discount, the Financial Post reported recentlky. He later purchased more stock to give him 70 percent control of the firm.
This acquisition brings ClubLink’s total portfolio to 46.5 18-hole equivalent golf courses, making it the 10th largest management company in the world.