Selling a golf community is not about golf

What it takes to drive sales in a real estate recession

By Inman News Feed
Add Comment Add Comment | Comments: 0 | Posted Jul. 13, 2012

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This has been the key issue: too many new golf course communities too late to the game.

"If you had everything (infrastructure, amenities, etc.) in before the recession began, you were probably sold out by 2007 depending on the size of project, so you made it out OK," said Rowland Bates, executive vice president of Southworth. "If you were permitting through 2006 and started infrastructure development in 2008, got into the ground in 2009, you were dead."

He explained that "golf communities are front-ended projects, and the amount of infrastructure and development -- golf courses, club houses, utilities, etc. -- that goes into these things is quite massive. If you don't have ongoing sales, then these projects go sideways fairly quickly."

Southworth was formed in 2005 and began picking up properties starting the following year. Today, it has five golf course communities: Creighton Farms, Va.; Machrihanish Dunes, Scotland; Meredith Bay, N.H.; PGA Village – The Bahamas; and Renaissance, Mass.

Southworth is in the market for more properties.

"We have been evaluating golf course communities for the last several years," Bates said. "We can buy them for much less than replacement costs. Many have infrastructure on the ground with lots ready to sell. We can monetize quickly."

So what does it take to make these troubled properties work?

Bates was quite frank. "It takes capital," he said. "You have to have deep enough pockets to weather the slow absorption of sales as well as creating the golf facilities."

Operationally, golf communities are a different breed, he said. "This is a very specialized, almost hospitality-oriented business. The whole positioning is unique. We market lifestyle as well as the product. Anyone can build a house anywhere. You want to them to build in your specific community."

Klemish would agree.

"To be successful selling a golf community, you don't sell golf. You sell the dreams, the legacy, the lifestyle and connecting with family," Klemish said.

By the way, a couple of hints from the pros: The worst lot to own is about 200 yards to the right side of the fairway because most players are righty and tend to slice the ball; the best lot is behind a green with water between the house and green because almost no one hits it over the green, approaches are mostly short, but if they do hit an errant ball, there is water and the crummy player can't walk into your yard to pick up the ball.

Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "Growing Up Levittown: In a Time of Conformity, Controversy and Cultural Crisis," is now available for sale on

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