After watching the hotel, office and housing markets slide into the dumps; one has to wonder if the trend among real estate investors isn’t just to head to the golf course.
Or so it seems. CRI Inc. of Rockville, one of the nation’s largest real estate investment firms, has organized a new full-service golf affiliate CRI Golf Inc. The unit will acquire, develop and manage golf courses around the country for itself and other institutional investment clients.
The Business of Golf has Grown
The news of the golf venture follows by a few weeks an almost similar move by CRI’s Maryland sister, Marriott Corp. The hotelier’s golf management service division signed a 10-year contract with Jack Nicklaus Golden Bear International to manage public access golf courses to be designed and built by the pro golfer himself.
“The business of golf has grown to play a central role in the investment services we are being asked to provide to clients around the world,” said William B. Dockser, chairman of CRI. “Through CRI Golf, we will be able to more fully serve investors seeking to acquire golf properties.”
Richard Kadish, executive vice president of CRI, said the interest has been coming from apartment building investors the firm has dealt with over its 16-year history.
“Our role, aside from the investment aspect, is to try to bring a rational economic approach into golf courses for our institutional clients.”
Golf courses are not new to either firm. Marriott Golf currently operates 12 of its facilities, has one under construction in Florida and manages free-standing facilities in Dallas and Portland, Maine.
CRI owns the highly regarded LaQuinta Hotel Golf & Tennis Resort in Palm Springs and owned land for hotel development at the PGA West golf course in Palm Springs.
Currently, CRI Golf is acquiring golf complexes in Orlando and San Diego and is considering clubs locally, as well as in Phoenix, Las Vegas, Tampa, San Francisco, Chicago and Atlanta.
A contract for the Orlando purchase was expected to be signed this week.
The affiliate is looking to acquire public-access courses or private clubs with investments ranging from $5 million to $50 million.
The biggest disadvantage to moving into golf course investment at this time, Kadish said, is that golf course owners have an unrealistic sense of what their courses are worth. They look at a Pebble Beach and see the “very very high numbers” it sold for and felt that theirs may be worth a lot more than numbers would dictate, Kadish said.
“The advantage is that more individuals, corporations, and institutions are looking at [golf courses] as a potential investment — and a safe-type investment,” he said.
Marriott/Golden Bear’s initial plans call for the possible development of approximately 15 free-standing public access golf courses. Preliminary sites under study include areas in Northern California, Baltimore, Washington, D.C., South Florida and Atlanta.
Marriott Golf will provide turn-key management services including maintenance, merchandising, food and beverage, and will direct marketing efforts.
In addition to structuring acquisitions, CRI Golf will oversee development and will operate a facility with its management team.