The Super & The Sale

Unless you’ve been living under a rock these past 5 years, you’ve surely noticed that golf course sales are more common than in the 5 years previous. It’s not because everyone is clamoring to buy golf course properties necessarily. On the contrary, many of these properties are, to varying degrees, distressed, and sale of those properties is often the most practical way for owners to get out from under financial obligations they can no longer handle.

My business is golf property analysis, valuation and brokerage. We’re routinely brought into these situations at very early stages. Course value must be firmly established in order to set a fair price, of course, and because we’ve chaperoned more than $100 million in course sales over the years, we bring that experience to the table, whether we broker the sale or not.

In any case, the superintendent may or may not realize just how important his/her role becomes as these situations unfold. The capability and cooperation of the course super can add/subtract thousands of dollars to/from the sale price. The superintendent’s “performance” during this often wrenching process can also make the difference between a superintendent staying on with the new owner, or looking for a new job.

If an owner is thinking of selling, one of the first things we do here at Golf Property Analysts is provide him/her a checklist of prepatory tasks. I’ve detailed that below. Have a read through this checklist; you’ll see just how vital a role the superintendent can and should play:

1. Have a clean, easy to read financial statement with detail available for review.
2. 2Take care of all major repairs and maintenance items before marketing for sale.
3. 3.Compile a complete due diligence library with financial statements, licenses and permits, lease and maintenance agreements, plans and other relevant documents available.
4. 4.Work before sale to improve the bottom line by marketing, improving service and enhancing the property in any way possible.
5. 5.Plan to market the property for closing either around the 1st of the year or in the beginning of the new golf season, if possible.
6. 6.Make the property “show” well. Cart path repairs should be done and all golf course maintenance should be at as high a level as possible.
7. 7.Maintain a log of all required procedures so that a buyer knows things have been done regularly.
8. 8.Get contractor’s bids for any necessary repairs you can’t make so you can show the cost.
9. 9.Continue operations and maintenance as if you plan to own the property forever.
10. 10.Consult with an experienced professional on the market for your property and price it realistically.

I don’t know about you, but I see at least six items where the superintendent should be playing a major decision-making and/or enabling role. Let’s go through those six in more detail.

2) Take care of all major repairs and maintenance items before marketing for sale
This is at once obvious and elusive. Of course a property wants everything in ship-shape before a sale, but if poor revenue performance is a reason for the sale (and it often is these days), major repairs and maintenance items have probably been ignored or deferred. The course superintendent should gather all the pending renovation and maintenance-related capital expenditures in one place, cross-referenced by priority and cost. If there’s only so much money available prior to marketing for sale, help your owner make the most practical decision from an agronomic/financial perspective. Savvy supers keep these prioritized project checklists as a matter of course — this I would highly recommend. Even if your ownership isn’t pondering a sale, it’s always handy to have this sort of planning in place. (The next time fall rolls around and club has $50,000 to spend, you will have several options as to how the club can spend it wisely.)

3) Compile a complete due diligence library with financial statements, licenses and permits, lease and maintenance agreements, plans and other relevant documents available
I’ve bolded here the items relevant to the superintendent. Some supers do a spectacular job of compiling and keeping on hand all the documentation relevant to the course, its design, its agronomic history, its many vendor relationships, etc. Others aren’t as proactive — or they inherited a course operation where their predecessor was lax in this area. Do yourself a favor: Get this stuff in order. I’ve talked to dozens of superintendents about this. Without fail, this sort of thorough accounting of documentation always yields something of value to the maintenance operation, whether the sale happens or not.

6) Make the property “show” well.
Cart path repairs should be done and all golf course maintenance should be at as high a level as possible. This is pretty self-explanatory, and it’s related to item 2 above. It’s important to stay in touch with ownership about when prospective buyers are showing up. A little fertilizer jolt here, a round of concerted bunker-edging there… It can make a big difference in how the course “presents”. Of course, prospective buyers are just as liable to show up unannounced, so, to the extent possible, it’s wise to simply ratchet things up and keep them there indefinitely.

7) Maintain a log of all required procedures so that a buyer knows things have been done regularly
This applies to the clubhouse, the course and overall property operations. Many superintendents hew to a detailed maintenance plan that covers their care of the entire golf course (and property grounds, if that’s also within their charge). Update (or develop) that plan and make it presentable to your owners and prospective buyers. Be as detailed as you can, going as far back into the past as you can. A prospective buyer, one who knows what to look for, can read a maintenance plan, compare it with the current course conditions, and see the difference between neglect and issues beyond a superintendent’s control (weather, ownership skimping on fertilizer, etc.). This can make a big difference in how a prospective buyer views a course — and how a prospective buyer is disposed toward the job you’ve been doing. More on that below.

8) Get contractor’s bids for any necessary repairs you can’t make so you can show the cost
I put this in the checklist mainly for clubhouse-related repairs/renovations. Most superintendents understand that you can’t effectively price renovation work (see item 2) without bidding it, or at least consulting with a couple contractors.

9) Continue operations and maintenance as if you plan to own the property forever
There’s a selfish aspect to the diligent prosecution of all the duties I detail above, and superintendents should appreciate that fact, and own it, if they’re maintaining a course that might well be sold. In my experience, superintendents can give lessons to 99 percent of the population when it comes to pride in work. But there is added self-interest for a superintendent if a sale is pending.

Think about it: You’re a prospective golf property buyer and the superintendent not only has the course in great condition, he/she has all this documentation at the ready, prioritized by costs and need. The place looks and plays great... Do you think that improves your chances of ultimately being retained by the new owners? You bet it does.

Do you think the quality of your course and performance, under the duress of potential sale, won’t stand you in good stead when pursuing your next position? You bet it will.

About the author
Laurence A. Hirsh, CRE, MAI, SGA, FRICS is the president of Golf Property Analysts, a leading golf property appraisal consulting and brokerage firm based in Philadelphia (www.golfprop.com). He blogs at blog.golfprop.com. He's a frequent GCI contributor.