Fore Golf Partners paid $3.45 million to acquire the Daytona Beach, Fla. property in 2019, and its total assessed value has been set at $1.49 million. But bidding started at $4 million and soared to $10.9 million before the auction was closed. “We had a tremendous amount of interest [and] we got good bids, but none met the reserve price,” said one of ForeGolf’s representatives. “For now, [ForeGolf] is perfectly content to continue in its role as owner.”
After paying $3.45 million to acquire the golf courses at LPGA International in Daytona Beach, Fla. two years ago, its owner held an online auction on April 21st that produced a high bid for three times that amount, The Daytona Beach (Fla.) News-Journal reported.
To the astonishment of locals, Virginia-based Fore Golf Partners rejected the $10.9 million bid because it was less than what it believes the 652-acre property is worth, The News-Journal reported.
The total assessed value of the LPGA International Golf Club property, including its golf courses, is $1.49 million, according to a description of the property posted on LoopNet.com in March by its listing agents, Cubba and Putnam, The News-Journalreported. reported. That assessed value does not include how much revenue the golf course business itself is generating, which has not been publicly disclosed, The News-Journal reported.
“We had a tremendous amount of interest. We got good bids, but none that met the reserve price,” Keith Cubba, a Las Vegas-based commercial realtor who is one of two agents with Colliers representing Fore Golf told The News-Journal. “For now, my client is perfectly content to continue in its role as owner.”
The other commercial realtor representing Fore Golf is Matt Putnam with the Colliers office in Tampa, Fla., The News-Journal reported.
The three-day online auction held on the website for Ten-X Commercial was originally scheduled to end at 1 p.m. Eastern time on the 21st, The News-Journal reported, but it wound up getting extended an additional 25 minutes as the golf course property kept getting higher and higher bids—sometimes multiple times within the same minute.
Bidding began at $4 million, The News-Journal reported.
Randy Dye, owner of the Daytona Dodge Chrysler Jeep Ram auto dealership next to LPGA International, did not take part in the online auction, but told The News-Journal, “I had a lot of people send me blow-by-blow accounts.”
Dye and Kevin Bowler, the owner of Daytona Beverages, were part of a local investor group that made an unsuccessful bid to buy the golf courses at LPGA International a few years ago, The News-Journal reported. Both men are members of the LPGA International Golf Club.
The fact that the website for Ten-X showed “Reserve not met” even at the highest bid was a telltale sign that Fore Golf might reject the offer, Dye told The News-Journal.
“This was not an absolute auction, meaning that it had to be sold to the high bidder,” Dye explained. “It was a reserve auction, which means the seller has the right to refuse any or all bids. I can’t comprehend it. I certainly would have taken it if I had made the conscious decision to sell it.
“The only plausible explanation to me is that it [the $10.9 million high bid] didn’t meet what the seller expected it to bring,” Dye added.
The description for the golf courses at LPGA International on the Ten-X auction website stated that Fore Golf invested $860,000 in improvements to the 652-acre property after acquiring it in 2019, The News-Journal reported.
The property includes two 18-hole Rees Jones and Arthur Hills signature golf courses, as well as an 8-acre, 3-hole practice course that includes short-game areas and a putting green, The News-Journal reported. It also has five buildings including the clubhouse, which offers a large meeting space as well as a restaurant, Malcolm’s Bar & Grill, that is open to the public. The golf club also includes a golf shop and a members-only fitness center and swimming pool.
The golf courses at LPGA International were built in 1994, The News-Journal reported. The property also serves as the headquarters for the Ladies Professional Golf Association and each years hosts the final stage of the LPGA Tour Qualifying School.
Fore Golf is known for buying golf course properties “that are not financially performing, turn them into performers and then sell them for a profit,” Dye told The News-Journal.
The golf courses at LPGA International “are a crown jewel in our community,” he added.
Nevertheless, like many public golf courses in the past 15 years, the LPGA International golf courses had been losing money or struggling to break even prior to its sale to Fore Golf, The News-Journal reported.
But that is no longer the case, said Cubba. “First and foremost, LPGA is an extremely profitable golf course,” he said. “On top of which, there is additional upside, post-COVID for wedding and banquet and outings revenue. LPGA would easily be considered top five to 10 percentile nationally in both current profitability and as a viable business moving forward.”
Cubba declined to offer specifics, however, in terms of how much revenue and net profit the courses have been generating, The News-Journal reported.
The online bidding war that broke out for the golf courses at LPGA International came at a time when the greater Daytona Beach area has seen other courses close, including the River Bend Golf Club in Ormond Beach that ceased operation at the start of this year, The News-Journal reported. The courses at the Tomoka Oaks and Indigo Lakes golf communities are also among those that have shut down in recent years.
“It just goes to show that the supply of golf courses is way down and the demand in terms of people wanting to play golf in that particular area is going up with all the new rooftops,” Carl Lentz IV, a former Daytona Beach City Commissioner who is now the managing partner of SVN Alliance Commercial Real Estate Advisors in Ormond Beach, told The News-Journal.
The LPGA area is the fastest-growing part of Volusia County, with well over a thousand new homes added in recent years, including the Jimmy Buffett-themed Latitude Margaritaville 55-and-older community and ICI Homes’ new Mosaic community, The News-Journal reported. Several new luxury apartment complexes have also opened with more under construction. In addition, the area has seen the opening of several shopping centers, and several more retail centers are planned.
That growth adds up to more potential golfers for the courses at LPGA International, according to Lentz.
“If they’re not going to sell for $10.9 million, it must mean they [Fore Golf] must see future value in the increased demand,” he said.
Cubba did not disclose the identities of the bidders in the online auction, but confirmed that all participants had to pre-register and were vetted in advance in terms of their financial viability, The News-Journal reported.
John Albright, the CEO of CTO Realty Growth Inc., the Daytona Beach company that sold the golf courses at LPGA International to Fore Golf two years ago, said “It’s great that they got such high bids and yet decided to pass on selling,” the News-Journalreported. “It’s good for them and good for the community.”
The high value that bidders placed on the golf courses at LPGA International is a reflection of how well the property is performing and not likely because bidders see it as a potential development site for new homes, Albright added.
“The land-use restrictions the city has placed on the golf courses would make it nearly impossible to turn it into homes, although it’s possible you can turn the practice facility into homes because they are not surrounded by existing homes,” he noted.
Cubba responded to Albright’s comments regarding the practice facility by noting “there is a licensing and access agreement with the LPGA,” the News-Journal reported, but declined to elaborate further.
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