It wasn’t that long ago that it was tough to get anyone interested in acquiring any golf or club property. Now there’s a fast-emerging seller’s market, and it doesn’t matter if your club’s doing well or sucking wind.
Want to know how much things have changed for our industry? It wasn’t that long ago that it was tough to get anyone interested in acquiring any golf or club property. Now there’s a fast-emerging seller’s market, and it doesn’t matter if your club’s doing well or sucking wind.
We’ve carried several news stories recently about developers and municipalities looking at club and course properties—usually ones that are on life support or have already had a sheet pulled over them—for everything from medical offices to senior-living facilities to sports fields and nature preserves. But nothing is as hot right now, Bloomberg Businessweek recently reported, as the warehouse boom—and the companies and operations that need warehouse space are positively drooling over how many club properties, including thriving ones, offer great fits for what they need.
The surge in online shopping has developers looking for acreage, Bloomberg Businessweek reported, and that’s spurred a flurry of conversions of land formerly occupied by golf courses and other club facilities.
Amazon.com Inc. is building a $350 million, 3.8 million-sq. ft. distribution center in Clay, N.Y. on 111 acres formerly occupied by the Liverpool Public Golf and Country Club, which closed in March 2020 after 72 years in business. Amazon has also unveiled plans to build a fulfillment center on a portion of a former course in Alcoa, Tenn., Bloomberg Businessweek reported.
In Philadelphia, United Parcel Service Inc. plans to build a 1 million-sq. ft. warehouse and distribution center on land that was most recently a golf course, Bloomberg Businessweek reported, and the defunct Broadmoor Golf Course in Portland, Ore., which was built in the 1930s and also closed last year, will be the site of a 345,000-sq. ft. industrial building that Prologis Inc. plans to erect.
“[When a property is devoted to golf or club activities], you’re just limited to the income of the ongoing business concern,” Keith Cubba, National Director of Colliers’ Golf Course Advisory Services, told Bloomberg Businessweek. “There’s going to be a much higher yield on 200 acres of residential or commercial.”
That doesn’t mean conversion is always easy, Bloomberg Businessweek noted. Golf courses are often zoned as commercial, recreational, or open space—designations that can present challenges for industrial developers. Local opposition can also be an issue, with community leaders and nearby residents objecting to the increased noise and vehicle traffic that come with a new warehouse. Those issues came to light most recently with the report that a community group in suburban Chicago is fighting a plan to have 127 acres of the 120-year-old Calumet Country Club, which has a Donald Ross-designed golf course, become the home of a new 800,000-sq. ft. distribution center.
But even with these potential hurdles, developers are taking their chances, Bloomberg Businessweek reported. Online shopping—and the warehouses that support it—has only continued to surge during the pandemic, while other areas of the commercial real estate market now have a particularly bleak future, after a year of companies seeing they can still function pretty well with everyone working from home. Companies like KKR, Blackstone Group, and Cerberus are now among the big investors pouring money into logistics acquisitions.
The most notable part of the Bloomberg Businessweek report, though, was Cubba’s comment that even popular club and golf properties can attract conversion interest, because they show that the surrounding area has strong economic potential. If there are people able to pay membership fees, the thinking goes, it’s likely there are also plenty of businesses and affluent consumers nearby.
“When a course is doing well and has the population to support it and is in a good location with great demographics, there’s higher demand for other uses,” Cubba said. “Right now it’s not a bad time to be in my business.”