It is true that the numbers of golf rounds played in recent years is down. And every day, it seems, another golf course is put up for sale or plowed over to make way for more profitable condo developments. But if you are one of those who believe that rumors of the demise of golf are greatly exaggerated, there are ways to make the contrarian play and bet otherwise.
You can, for example, buy a home on a golf course and wait for renewed interest in the game to juice up the value of your home. Or you could invest in a private equity firm like KSL Capital Partners, which bought Club Corp's huge portfolio of courses last year, including the Homestead, Firestone and Barton Creek in Austin, TX. Or if you are more hands on (and have huge cojones), you could even buy your own golf course; many are for sale right now at prices that begin below $1 million and rise to many millions (check out one list at Coldwell Banker's national golf sales site).
But if you just want to make a fairly passive bet, and have a little patient capital to do it, then perhaps a "lifestyle" real estate investment trust (REIT) is a viable option.
The CNL Lifestyle Company is one such REIT that targets golf specifically and is counting on the tsunami of baby boomers to justify its investments. CNL, which is headquartered in Orlando, predicts that the 96 million people in the U.S. over the age of 50 in the year 2010 will spend a decent part of their $17 million in assets on tee times. It is hard to argue with the numbers or the logic; all that money is going to be chasing some leisure time activities, and there are just so many cruises one can take. And, according to the National Golf Foundation, for example, a 60-year old golfer spends three times as much time playing golf as a 30 year old. (CNL can only hope those 30 year olds play three times as much golf when they are 60.)
CNL, which owns 52 private and public golf courses, also invests in ski areas, marinas and shopping malls. Most of the REIT's golf properties are in the southwestern and western U.S., but they do own a few in Florida, Palmetto Hall Plantation on Hilton Head and the Sugarloaf Resort in Carrabassett, Maine, site of a Robert Trent Jones course that is one of the best and toughest I have ever played.
For a full list of CNL's properties, as well as their investment philosophy, check out the CNL web site.
[Note: I don't own any shares in CNL, nor am I recommending it as an investment.]
