By Chris Charnas*
Selling a Private Golf Course
Itís no secret that many private golf clubs are hurting for memberships. Whether itís because of cost, failing service or suffering upkeep, many private clubs are finding themselves in a position of struggling to stay open. The recession initially cut membership at these courses, which in turn affected the overall atmosphere which a private club strives for. Membership to an exclusive or even non-exclusive golf club is a luxury; a luxury that many avid golfers cannot afford right now. Many members are finding that they just donít have the discretionary income to allow for the value that membership to a private club can bring, and that realization turns them into former members.
According to a 2011 article in Golf Inc., ďStudies show that 40 percent of the nationís 4,415 private clubs have seen a membership decline, with initiation deposits down by 43 percent. An estimated 10 to 15 percent of clubs are in serious financial trouble.Ē Participation continues to drop and according to the National Golf Foundation (NGF), it has fallen by 14%, or 4.2 million golfers, since 2005. They also reported a 16% decrease in the number of golfers playing rounds due to the economy. This is lower than at any other point since the first quarter of 2008. Research by NGF additionally uncovered that there were 19 course openings in 2011 vs. nearly 400 in the year 2000. Data showed a closing of over 157 courses in 2011, 26 of which were private.
As an owner, you may find yourself in the awkward position of having to decide what action to take with your course. After many attempts to keep the greens green, it may be time to sell.
What do you do? Where do you turn?
Your first priority should be to find a trusted partner to assist you through the decision making process. Finding someone that has the knowledge, expertise and track record of selling courses will ensure a prosperous and successful transaction. Look for someone who specializes in this type of transaction, has a longstanding relationship with buyers and investors and has the ability to sell your course at the highest price in the shortest amount of time.
Know that your situation is not unique. This is a nationwide phenomenon that isnít going to end anytime soon. An over saturation of the market may be to blame. A change in how folks are choosing to spend their time may be another. Whatever the reason, the bottom line is that times are different now and courses that were once at the top of their game are finding that itís time to look down another path.
If you do decide to sell your course, all appropriate documents need to be brought into place after a commitment to buy is made. Here are the top 10 top ten items to have ready:
1. Last 3 years of financials
2. Last 3 years of membership by category, numbers, attrition
4. Phase 1 environmental
5. Copies of all leases
6. Maintenance equipment list
7. Copy of membership documents
8. Copies of any recorded documents that restrict the golf course (i.e The course has to stay private or the HOA gets preferred access)
9. Zoning of the property
10. Copy of any pertinent water agreement
Doing your due diligence by pulling this information together and making sure it is accurate can ease the process. Trust your partner and take comfort in the fact that you will be rewarded for your hard work. Solid preparation can lead to a more prosperous sale.
Originally posted by ChrisCharnas
on 06 Jul 2012.
All contributors: ChrisCharnas
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