Announcing Sale of Grenelefe Golf and Tennis Resort

The National Golf and Resort Properties Group of Marcus & Millichap is pleased to announce the exclusive listing of Grenelefe Golf and Tennis Resort in Haines City, FL. Sean Glickman, an associate of Marcus & Millichap’s Orlando office, along with Steven Ekovich and Christopher Karamitsos, co-founders of the firm’s National Golf and Resort Properties Group, will combine forces to market the property. Grenelefe Resort has been brought to the market unpriced and is available for acquisition by market bid.

Grenelefe was a world renowned golf and tennis resort in the 1980’s and 1990’s but, of late, has suffered a series of misfortunes, leaving behind a legacy and with it, a great opportunity for redevelopment. Current ownership acquired the property to convert into a timeshare concept. In 2004, the parts of the resort suffered damage from Hurricane Charley including the conference center, tennis center and guest registration area. Much of this damage has yet to be repaired.

The offering includes 1,273 total acres, three golf courses (one of which is currently closed), 432 rentable/saleable condo units of varying size, a marina tract, a utility plant and 277 developable acres. In addition, this property may qualify for tax benefits associated with a conservation easement that has yet to be filed. Realistically, a savvy investor could market and sell the remaining 432 condo units individually, file for the easement and ultimately recover their entire initial outlay and own the remaining infrastructure free and clear.

This property was just listed on 12/11/2009 and has already spurred a significant amount of interest. There are severable viable concepts to redevelop the property and put Grenelefe back on the map. To view a full offering memorandum for this golf course and other golf courses for sale, please visit www.nationalgolfgroup.com

Steve Ekovich Comments on Golf INC Article

Golf's Pricing Problem
From Golf INC's Blog
November 5, 2009

"Golfers are playing about as many rounds in 2009 as they did in 2008. In fact, for the first three quarters of the year (January to September), rounds actually are about 0.5 percent higher this year than last, according to Golf Datatech’s National Rounds Played Report.

So why are so many course operators in default on their loans, filing for bankruptcy or just plain struggling to survive? Clearly, flat rounds numbers are not translating into flat revenue performance. The PGA of America’s PerformanceTrak statistics reflect that: Total median revenue per facility for the first nine months shows a drop of 5.1 percent. (Median means there are an equal number of courses with revenue below and above that total.)

A recent survey by the National Golf Foundation offers some clues as to what’s happening. The NGF quizzed 300 golfers about how they’re managing their cost per round given the current economic situation and came up with some conclusions that might help operators understand what’s going on with their customers.

Golfers are employing a variety of strategies to cut their costs: 61 percent are playing during off-peak days and times and 58 percent are playing less expensive courses, the NGF found. And 53 percent have cut food and beverage spending. They’re also walking more instead of paying for golf carts, buying less expensive equipment, tipping less and buying used instead of new golf balls.

We’d like to know if you’re seeing those same trends at your courses. How have playing patterns of your golfers changed over the past year? And how have you adjusted your operations to adapt to those shifting golfing patterns? Have you revamped your rate structure? Or provided added-value incentives for golfers? We would like to hear what you think about these critical issues."

Steven Ekovich Comments:

We are valuing golf courses all over the US and are seeing operating statements from those courses which are producing some trends. The single public golf course owner and equity clubs seem to be the hardest hit. Even though rounds are the same or slightly down, revenues for the single course owners are off 8-15% depending on region. The private equity clubs are off even more, as much as 15-20%. EBITDAs are also off, but for those same golf course owners, EBITDA is off more than revenues. However, this is not as true for the multi-course owners. We talked to a lender that has 60 + courses in their portfolio, with a small number of owners controlling those courses. The collective revenue is off approximately 5 %, yet EBITDA is up approximately 6%. The increase in EBITDA is coming from the economies of scale multiple golf course owners have and their ability to cut costs along with a little help from lower interest rates. The question is, if revenue drops further and most courses have cut as much as they can, where can operators find more expenses to cut? The answer is, they can’t.

One more trend we've noticed is that, the Northeast and Midwest course owners seem to be holding their revenue much better than some of the southern states like Florida, and Arizona.
We are seeing some bright spots in the market. There are exceptional operators and managers that are beating the market. We have a client who hired a GM that has moved the EBITDA for 2009 YTD, $250,000 higher by paying attention to the details, getting his staff to buy into his new initiatives, redesigning their marketing and increasing customer service. In another case, we looked at 6 courses from a national owner with EBITDAs from $250,000-$3,000,000 and their EBITDAs are about even with last year. So there are courses cash flowing nicely, bucking the trends and on solid footing without slashing green fees, cart fees etc. It can be done.

Steven Ekovich is the VP, Director of the National Golf Group, at Marcus & Millichap. We have golf courses for sale nationally, help lenders value their golf course REO, sub and non performing assets as well as help owners find solutions to their financing and strategic ownership needs.