In the golf real estate realm, developers build courses to sell houses. They hire big-name designers like Jack Nicklaus, Coore and Crenshaw or Robert Trent Jones Jr. to lend star power to create an impressive 18 holes, confident the chance to play such a layout every day will draw buyers willing to pay millions for a second home or vacation escape.
That arms race of tee boxes and greens slowed prior to the Covid-19 pandemic with golf’s popularity declining. The game saw 5% fewer rounds played in 2018 compared to 2017,according to the National Golf Foundation. More concerning, the foundation reported almost 200 golf courses closed in 2018, with only 12 opening.
Then, as 2019 stumbled into 2020 in a haze of shutdowns and social distancing, golf took flight again. Fresh air and expansive fairways meant the sport perfectly defied Covid restrictions. Meanwhile, well-heeled home shoppers accelerated their purchase plans in exclusive communities to escape urban crowds. Savvy real estate companies hustled into the golf space to cash in on the rush.
Now, the worst of Covid is presumably over, with mandatory masking and shuttered recreation options already a distant memory. Home builders and sellers who boosted their business on golf’s boom now have to wonder if the game and all the business it entails will slide back to 2018 or 2019 numbers.
Driving for New Amenities
An informal survey of some of the most prominent golf communities across the U.S. indicates a key strategy for such venues is building in safeguards such as diversified amenities and other athletic activities to weather any possible downturns.
Desert Mountain in Scottsdale, Arizona, holds more than 1,900 homes and some 5,000 residents. Its seven golf courses, including six designed by Jack Nicklaus, are a prime attraction—but they’re not the only draw for home buyers. Homes at Desert Mountain range from $1 million to $2 million.
According to Damon DiOrio, CEO of Desert Mountain Club, real estate can fluctuate in the Scottsdale market just like anywhere else based on the overall economy and other factors.
“To prepare for that possibility, Desert Mountain takes a long-range approach to its Platinum Club identity as a private golf community by continuously improving and adding to our club amenities,” DiOrio said. “To avoid growing stale, we focus on the next ‘summit’ of member wants and needs.”
The community has redesigned its Renegade golf course and clubhouse and restored Cochise layout, DiOrio said.
“In addition, the club expanded its pickleball complex due to the explosive popularity of that sport,” he added.
Ben Cowan-Dewar is CEO and co-founder of the international Cabot golf brand. Recently adding Florida’s Cabot Citrus Farms and a spectacular new course at Cabot St. Lucia to previous destinations in Nova Scotia, British Columbia and Scotland, his brand relies on carefully chosen locations to attract buyers regardless of golf interest.
“Within The Cabot Collection, we prioritize choosing inspiring settings that will stand the test of time,” Cowan-Dewar said . “Creating beautiful real estate, accommodations and a variety of amenities complement the courses and round out our resorts as immersive destinations that blend seamlessly into the locations in which they’re based.”
He adds this strategy helped Cabot develop its loyal members and guests. Unlike some golf communities that restrict ownership rules, Cabot sells homes for purchase or the Cabot-managed rental pool to stabilize revenue and keep their occupancy healthy.
Staying Ahead of the Game
Down in Palm Beach Gardens, Florida, Panther National is a new community built around the first golf course designed by a partnership between Nicklaus and PGA Tour star Justin Thomas. CEO Frank Weed said their location in a perpetually steady Florida luxury market protects them from severe market fluctuations when selling their signature and custom estates. Prices for the properties were not available.
“We operate within a unique marketing landscape in Palm Beach County,” Weed said. “It’s essential not to overlook that context when evaluating golf here. While there’s an extraordinary abundance of courses, we stand out as the first golf community established in more than 20 years.”
Panther National offers a limited number of golf memberships and currently has a waiting list. Even with that luxury, Weed makes certain amenities stay cutting edge.
“We expect Panther National to remain stable without any fluctuations,” he added. “Nevertheless, high-quality communities like ours typically invest in regular enhancements for their golf courses and facilities.”
Tributary is a golf community set in the rugged surrounds of Idaho’s Teton Valley. Like Weed at Panther National, Jeff Heilbrun, Tributary’s director of real estate, believes his development’s location is a buffer against any sales dip due to a decline in golf’s popularity.
“We are not seeing a market correction at Tributary,” Heilbrun said. “Since our location has been relatively unknown, the word is starting to spread that our development and location answer many questions asked by those wanting an authentic Western experience.”
Heilbrun agrees with the growing sentiment that other activities are a plus for a golf property, not a detraction. The Tributary team works hard to have amenities both on and off-property for all members of the family.
“We would be more concerned if golf was our only amenity, as not all family members play the game,” he added. “With fly fishing, hiking, skiing, snowmobiling, cross-country skiing and wellness facilities, we think we are well-positioned for growth regardless of the fickle nature of the golf market.”
Adjusting to Fluctuating Interest in the Sport
Unlike some of the executives piloting through the post-pandemic golf world, Todd Michaelsen, director of golf at Kukui’ula on the Hawaiian Island of Kauai, sees a market correction taking place in golf currently on the equipment and travel side.
“I feel like the sales of golf products is slowing down now that many new players are two years into the game and have the hard goods needed to play,” Michaelsen said. “Coming out of Covid, there was such a challenge with the supply chain that companies are now caught up and seeing sales slow down.”
Still, Michaelsen reports golf play at Kukui’ula remains steady with golf membership increasing over the last four years. To keep that going, his team stays diligent with programs catering to new golfers.
“We continue to do our best to grow the game through creative and fun opportunities in golf,” he said. “The focus has been on making golf more accessible to women, children and those who normally don’t want to make a five-hour commitment to playing a round. We’ve been trying to push these types of initiatives for over a decade now, but Covid fast tracked these programs for families.”
Across the Pacific along the Kona Coast on the Big Island, the small, very private and elite enclave of Kohanaiki surrounds a single Trent Jones–designed course. Kohanaiki President and CEO David Reese acknowledges the phases of boom and bust, but reports interest in the game remains strong for his operation. Still, he insists it’s important for even a golf community to realize not all residents care about the game.
“Golf is certainly a huge value and draw for our members with many playing golf daily,” he said. “We also understand that golf isn’t for every one of our members. We made a conscious effort when designing our clubhouse and overall community offerings to include diversity in amenities and programming that is centered around our community members.”
Reese says the community’s programming is predominantly Hawaii-centric, relying on their cultural adviser, Uncle Reggie Lee, for regular story sessions about the history of the islands.
This article originally appeared on Mansion Global.
