Latest distressed property type investors are increasingly eyeing: golf courses
Investors are betting on golf courses as they predict a significant decline in the number of golf courses nationwide, due to a number of factors, Bloomberg News reported.
The median price for a golf course was down to $3 million in the third quarter of 2011, from $4.6 million in 2006, according to numbers from national commercial brokerage Marcus & Millichap. The result is that investors, including Donald Trump himself, whose Trump Golf company has plans for courses from Scotland to the Bronx, are snapping up the properties, Bloomberg said.
The reason for the decline in prices was partially due to a lack of financing for commercial real estate after the financial crisis, but golf courses in particular felt the tough times more acutely due to a glut that was the result of a building boom in the wake of Tiger Woods’ popularity in the late 1990s.
“Lack of financing is really causing a discount to value and investors are taking advantage,” said Steven Ekovich, a director at Marcus & Millichap’s National Golf & Resort Properties Group.
“They built too many courses during the ‘Tiger boom’ and now they’re closing and disappearing,” said Trump, who just last month entered an agreement to buy the Doral Golf Resort & Spa in Miami for $150 million. [Bloomberg News]