Four golf courses bouncing from the rough to the greenPosted on July 21, 2016
Real estate part of game plan to swing from receivership to recovery
Over the past seven years, four of B.C.’s most spectacular golf courses went deep into the rough, facing debt and receivership as golf memberships and real estate sales declined.
However, after years of declining numbers, Canadians are playing more golf, with an increase last year from 9% to 15% for golf courses in Western Canada, according to industry data.
“Although we haven’t yet returned to the peak years that preceded the recession, there are still more golfers than any other sport in Canada, and the positive 2015 trends imply that golf is likely to remain the No. 1 participation sport for many years to come,” said Jeff Calderwood, CEO of the National Golf Course Owners Association Canada.
Encouraging news from Kamloops’ Tobiano, Victoria’s Bear Mountain, Vernon’s The Rise and Merritt’s Sagebrush give evidence that golf courses are on a path to recovery, with real estate playing a contributing role.
Tobiano golf course near Kamloops suffered an epic fail three years ago after the developer, Mike Grenier of Pagebrook Inc., could not service its mounting debt after the financial crisis of 2008. The Business Development Bank of Canada seized the 18-hole course and it was put up for sale for $5.5 million.
The Thomas McBroom-designed course on Kamloops Lake has been consistently ranked among the country’s top public courses. It was rated the No.1 golf course in Canada last year by Golf Advisor Review.
John Preston, founder of Florida-based North American Development Group – which has $3.5 billion in commercial real estate assets – and partner, Alberta-based Henry Bereznicki, bought the golf course in 2014.
Tobiano’s golf course, which had been in continuous operation throughout, has apparently thrived under the new administration, headed by general manager Terry Smith.
The number of rounds played increased 40% in 2015 from a year earlier and is up about 10% this year, Smith said.
As for real estate, the biggest difference is in the prices. Tobiano real estate development, owned by a separate investment group, has residential lots available from $120,000 to $400,000 – about one-third of what they were previously. Two townhouse projects are also being developed, one of which is sold out.
Smith said the golf course owners are about to launch a 17-suite hotel-condo development, where investors will be able to purchase the strata units and place them in a vacation rental pool.
Ecoasis Group of Companies bought Bear Mountain Resort in 2013. The deal included Westin Bear Mountain Golf Resort and Spa, and two golf courses from owner Bear Mountain Land Holdings, a subsidiary of HSBC Bank Canada. The bank took over the site on in 2010 after it went into creditor protection and founder Len Barrie was removed as CEO of Bear Mountain Partnership. No sale price was released, but HSBC was owed $250 million.
Ecoasis is developing approximately 100 residential lots and a number of multi-family properties including executive-style townhomes.
The first phase was released in April, with lots ranging from 7,500 square feet to 12,000 square feet and lot pricing ranging from $260,000 to $380,000.
Bear Mountain, ranked among the top 50 courses in Canada by SCOREGolf, will also host two future Golf Canada championship events, beginning with the Pacific Links Championship, set for September 19-25 on Bear’s Mountain Course.
After it was forced into foreclosure by lenders 18 months ago, the Rise Golf Club perched 1,000 feet above Okanagan Lake, was sold through a court-ordered sale to the Renton family of the Okanagan. Listed for $2.2 million, the 144-acre course was sold for $1.75 million by NAI Commercial of Vancouver. The sale did not include the residential development surrounding the course.
Today, the Rise has risen Phoenix-like, with a new restaurant – Freddy’s, named after course designer and legendary PGA golfer Fred Couples – and clubhouse, and a rejigged course configuration. These investments have helped boost the number of players.
The real estate is also performing well, with one subdivision sold out. Current offerings include duplexes from $559,000 and detached villas, most with lake views, from $599,000.
The Sagebrush Golf & Sporting Club was ranked No. 10 among Canadian golf courses in 2014 by golf industry press. However, after losing millions of dollars, the original owners shuttered the course at the end of the 2014 season and put it up for sale.
Newmark Group, a real estate development and construction company with offices in Langley and Edmonton, bought Sagebrush in November 2015.
The new management has hired Scottsdale-based Troon Golf and its senior vice-president Jim McLaughlin as advisers.
Sabebrush’s green fees remain among the most expensive in B.C., with daily fees from $125 to $175, but that is a play-all-day formula. What Sagebrush really hopes to sell is real estate, but Newmark said it is concentrating first on improving the course.
Story by: Frank O’Brien