What Florida Has Taught Me About The Golf Ecosystem - Walker Simas
Florida is home to over 1,350 golf establishments
Equivalent to 380 square miles of pure golf.
In total, golf takes up more than 1.5% of Florida’s usable acreage
Which is slightly larger than the city limits of Austin, Texas.
Florida is the heartbeat of development with 20+ new course developments in-process
Paul Storie, founder of Open Links Golf, has run the numbers in a much more comprehensive way than I can (or will) today. He acknowledged that Florida does NOT have the most dense golf in the country, ranking 5th behind Rhode Island, New Jersey, Massachusetts, and Connecticut. Florida does, however, have more golf courses (nearly 400 more) than the top four combined.
Working with many of these clubs in Florida, I spend a significant amount of time on satellite looking at golf properties. Looking at a few aerials doesn’t say much, but after looking at hundreds both in Florida and elsewhere, I’ve drawn some conclusions I’d like to share with you.
Real Estate
Not only has the median U.S. home price risen 10% since 2019, a series of studies found that home values on golf properties sold for 7-8% higher than those not built on golf courses. A quick look at Florida on Google Maps leads me to my first, and fairly obvious point. Golf is a vehicle for highly predictable real-estate.
Maintenance
There certainly is some politics and lane-switching in the world of maintenance. Because of the density of golf, particularly in large buckets like Jacksonville, West Palm Beach, The Villages, Naples, Miami, and Orlando - superintendents are continually moving throughout the state.
Maintenance practices are roughly double the frequency of a course in North Carolina, and nearly triple what takes place in the Northern States. And to make things even more complicated, even sites across the street from each other require different personalities, fleets, and schedules.
Because equipment lead times can extend upwards of two years between money down and receiving a shipment, superintendents have evolved (or not evolved) to more proactive ways. Parts are just the same. Supers now are starting to stock wear items in larger quantities than ever before to avoid the risk of having equipment down when they need it. To put a cherry on top, labor is hard to come by. The average crew size has shrunk, and superintendents are begging for an eager apprentice who wants skin in the game.
The Florida Golf Offering, and How It’s Changing
So how does all of this affect what the consumer sees and experiences out on the golf course? Well. it depends. The majority of Florida Golf Communities are gated, and since the pandemic in 2020, demand for housing in gated communities has risen dramatically. Developers are now focused on younger buyers in quantities they have never seen before. With that comes changes to the incentives and offerings in these communities.
This very point leads me to a larger prediction, in that the Florida golf market will be the most recession-proof state in the country. Because the supply chain, real estate market, and golf work together at such scale, as younger buyers continue moving to Florida golf will evolve to fit the younger generations' needs. If this is true, we could see meaningful change in new concepts tried here that wouldn’t work anywhere else.
For example, young people are unwilling, and largely unable to foot the bill of a 50k initiation fee. More likely, they don’t deem it a priority. Golf needs to be faster and more engaging for that kind of money to be spent. The one piece of leverage the developers have is proximity. Because there is so much land already dedicated to golf, there will likely be a quiet humming of renovations over the next 25 years should our economy stay intact (not a promise). This means more shot courses, more large scale putting greens, lit facilities, and driving ranges with new technology.
Golf’s Business Model
Largely everyone reading knows that a course like Sand Hills will dish out more serotonin than Orlando’s (& my guy Gary Player’s) Slammer & Squire. But beggars can’t be choosers, and if you’re an investor looking to buy into a 3-4 year development project, having revenue streams laid out in front of you prior to signing the dotted line makes these expensive projects much more palatable.
It is fair to say that if there were a 30% reduction in courses in Florida, the state would be worse off. Similarly, if (and when) many establishments fail to evolve, they are better used to meet other needs.
Regardless, we will see the surface area of golf expand here first. What once could only be 18 holes now can be so many things and still be called golf. Though it’s difficult to predict what that will look like for the profitability of clubs, companies, or organizations, those who evolve will have a chance to capture this new market.
Some, like Seminole, Mountain Lake, Isleworth, The Ritz Carltons, Longboat Key, and Timuquana, among others, will stay the same. Those like Winter Park, The Yards, and The Park at West Palm are already ahead of the game, leading the charge for positive change through community and new modern offerings. And the remaining hundreds have decisions to make that go well beyond the daily operation of a golf course- a job in and of itself.
Takeaways and Final Thoughts
Florida is the heartbeat of golf in this country. At times it resembles one giant human experiment, cramming millions of willing buyers into a circus of retail, leisure, and capital intensive V1’s.
Because golf takes up so much land, multiple industries have their hands in the cookie jar. If golf dies, it will not die here first. If things go downhill, many properties here will either be repurposed, or bulldozed for housing developments. On a case by case basis, either could be the right answer.
Golf in Florida is expensive to maintain, and the incentives for providing the conditions people want on traditional venues require investment to the teams who are responsible for those conditions. This includes pay for laborers on the maintenance staff, superintendents, mechanics, apprentices, PGA Pros, GM’s, food bev employees and managers, administration, and more.
The surface area of golf will expand here first as Florida becomes more youthful (this is happening now). New ideas will be tried here, and some of them will change the way we see, and pay for the game.
As always, thank you for reading (listening, and soon to be watching) at The Tie Podcast.
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Cheers,
WS
Sources:
Cloutier, M. M. “Focus; Golf-Course Housing Waning in Florida.” The New York Times, The New York Times, 29 Sept. 1991, www.nytimes.com/1991/09/29/realestate/focus-golfcourse-housing-waning-in-florida.html.
Lusk, Jason. “Golf Real Estate: Booming Markets Changing Club Life.” USA Today, Gannett Satellite Information Network, 15 Apr. 2021, golfweek.usatoday.com/2021/01/19/golf-course-real-estate-booming-markets-changing-club-life/.
Pompe, Jeffrey J., and James R. Rinehart. The Coastal Business Journal, digitalcommons.coastal.edu/cgi/viewcontent.cgi?article=1000&context=cbj. Accessed 23 Aug. 2023.