Sales up 12% in 2009, expected to continue rise

The number of golf courses that changed ownership in 2009 increased by 12 percent, and the numbers are expected to rise even more in 2010, according the National Golf Foundation.

NGF tracks sales by asking golf facilities, during its annual information update telephone call, whether ownership had changed over the past 12 months.  It reported 160 sales in 2009, up from 142 in 2008, and 109 in 2007.

While the actual number of transactions is likely higher, “these numbers are probably very well correlated with actual transactions”. Said Joseph Beditz, president and CEO of NGF.

“We believe that the number of transactions might increase in the future for a few reasons,” Beditz said. “As interest rates rise and current loans are "re-set", an increasing number of owners will find it difficult to remain current on their loans. Second, owners who are currently covering operating deficits will be unwilling to do so forever.”

Beditz predicts that rounds and revenue will stay flat in 2010, and this will lead more operators to throw in the towel and either sell or close operations. He said sales could double in the future, especially if financing opens up for would-be buyers.

There were 140 closures in 2009.

“We believe that the number of closures is currently suppressed because would be commercial and residential developers, who would normally be buying financially troubled facilities in order to use the land for other purposes, are currently sidelined due to the current high inventory of residential and commercial property.” Beditz said. “Redevelopment is also held back right now due to difficulties in arranging financing for new development.”

Beditz said the number of closures and sales is still only 2 percent of all golf facilities.

 

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