Chi­nese buy­ing US golf cour­ses

China Daily (Canada) - - ACROSSAMERICA - By ADELINA ZHANG in New York For China Daily

With China’s real es­tate mar­ket de­clin­ing, Chi­nese in­vestors look­ing to di­ver­sify abroad have found that sand and grass may be a bright spot. They’re buy­ing US “links’’ — golf cour­ses.

“You can get a re­turn on your money from 8 to 15 per­cent,” Jeff Wool­son, man­ag­ing Di­rec­tor at the CBRE Golf and Re­sort Prop­er­ties in Carls­bad, Cal­i­for­nia, told China Daily in an in­ter­view. “They have the po­ten­tial for larger re­turns be­cause you can buy a property that is not mak­ing money and you can turn it around to make money.”

Wool­son said that in the past four years he has been in­volved in two or three golf­course pur­chases by Chi­nese in­vestors.

Chris Karamit­sos, se­nior in­vest­ment ad­viser of Na­tional

You‘

can get a re­turn on your money from 8 to 15 per­cent. They have the po­ten­tial for larger re­turns be­cause you can buy a property that is not mak­ing money and you can turn it around to make money.” JEFF WOOL­SON MAN­AG­ING DI­REC­TOR AT THE CBRE GOLF AND RE­SORT PROP­ER­TIES IN CARLS­BAD, CAL­I­FOR­NIA

Golf and Re­sort Prop­er­ties Group in Tampa, Florida, told China Daily that of 20 golf­course sales by his com­pany in the past 18 months, one was by a Chi­nese in­vestor and Chi­nese in­vestors showed in­ter­est in nine oth­ers.

“When you com­pare prod­uct types, for in­stance apart­ment com­plexes and sin­gle­tenant build­ings, there is a greater chance for cap­i­tal ap­pre­ci­a­tion in golf cour­ses,” he said.

“The golf course trad­ing rates are much higher than some of the core as­sets,’’ said Karamit­sos. “That’s a very at­trac­tive as­pect for in­vestors, es­pe­cially those who nor­mally in­vest in core as­sets. They are see­ing an op­por­tu­nity to get a bet­ter re­turn on profit in a five-year pe­riod or so.”

Karamit­sos and Wool­son said they hadn’t seen Chi­nese in­vestors in­ter­ested in golf cour­ses un­til about three years ago.

“Now we have Chi­nese in­vestors look­ing at more than 50 per­cent of the cour­ses that we bring to mar­ket,” Karamit­sos said. “The Chi­nese in­vestors seem to grav­i­tate to­ward de­vel­op­ment op­por­tu­ni­ties — golf and re­sort de­vel­op­ments.”

The Na­tional Golf and Re­sort Prop­er­ties group sold the Sun­set Beach, North Carolina, Sea Trail Golf Re­sort, which had three golf cour­ses as­so­ci­ated with the trans­ac­tion, to a win­ning bid of $8.5 mil­lion from a Chi­nese in­vestor in June 2013.

Pa­cific Links In­ter­na­tional, founded in 2009, whose own­er­chair­man is na­tive Chi­nese, owns and op­er­ates 10 golf cour­ses in the US and one in Tian­jin, China. In Fe­bru­ary, it pur­chased Dragon Ridge Coun­try Club in Hen­der­son, Ne­vada, for $11 mil­lion.

Karamit­sos said an­other rea­son why in­vestors may be in­ter­ested in the US golf mar­ket is that there is more sta­bi­liza­tion than in the past.

“We are see­ing about 150 cour­ses per year clos­ing, more than they are open­ing for the first time,” he said. “The golf in­dus­try got so over built in the 1990s. We were started to see sup­ply ex­ceed­ing de­mand. Now with the trend of golf cour­ses clos­ing and get­ting back to a more man­age­able in­ven­tory.”

Ran­cho Duarte Golf Course was pur­chased for $3.3 mil­lion by an all-Chi­nese part­ner­ship in April 2013 for im­mi­gra­tion rea­sons, said gen­eral man­ager Alex Quin­tana.

Karamit­sos said he had a golf and de­vel­op­ment deal in Florida that in­volved EB-5, but that deal did not close. The EB-5 visa pro­gram pro­vides green cards to for­eign­ers who in­vest in the US.

“I’ve seen that has been a fac­tor in some cases where there is a de­vel­op­ment op­por­tu­nity,” he said. “We’ve seen people look at projects on what we can do with an EB-5 pro­gram. That is cer­tainly some­thing that they take into con­sid­er­a­tion. Con­tact the writer at read­ers@ chi­nadai­lyusa.com

PRO­VIDED TO CHINA DAILY

Dove Canyon Golf Club in Los Angeles was pur­chased in 2013 by Pa­cific Links In­ter­na­tional, a com­pany which also owns nine other golf cour­ses in the US. Pa­cific Links was ac­quired by a Chi­nese in­vestor in 2009.

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