Golf’s $9 Billion Real Estate Market Is On The Upswing: See Where And Why

Red Ledges in the Rocky Mountains did $64 million in sales volume in 2017.

Golf is at the heart of Red Ledges in Heber City, Utah, with an 18-hole Jack Nicklaus-designed course and a 12-hole, par-3 Nicklaus Signature “golf park” in the private Rocky Mountain community about 25 minutes from Salt Lake City.

The community is coming off a record sales year in 2017, with 150 closings and about $64 million in sales volume. After it took close to nine years to get the first 100 homes built and sold at Red Ledges, there have now been approximately 550 sales the past few years and more than 100 more homes are in the construction or design process.

“The pace is kind of staggering,” says Bill Houghton, the VP of Real Estate for Red Ledges, which overall will be 1,100 to 1,200 units with 700 to 800 single-family homes and cottages.

“We’re getting a ton of people who are looking at Park City and just looking at a nice outdoor adventure area and buying into what we’ve got,” Houghton adds. “It’s great that people are buying into the vision that was put in place 10 or 11 years ago by our founders, and that our founders stayed the course and are starting to realize some of that benefit.”

The 12-hole, par-3 course at Red Ledges in Utah.

Red Ledges isn’t alone. The golf course real estate industry has been thriving in certain markets and locations, and the positive momentum has carried into 2018. While the growth is a reflection of the economy overall, it’s particularly encouraging for the golf industry.

The latest U.S. Golf Economy Report was released this week, showing that the game drove $84.1 billion in economic activity across the country in 2016. Included in that total was $9.34 billion in the golf real estate market, including $7.24 billion in new home construction.

By comparison, those numbers were $4.74 billion (golf real estate market) and $3.14 billion (new home construction in golf communities) the last time the Golf Economy Report was released in 2011 following the Great Recession and the financial crisis.

“In the last few years, it’s been a pretty good run of sales in the golf area, with folks wanting to have either views of, or frontage on, the golf course,” says Charlie Hill, the President and COO for DH Investments, developer of the Cordillera Ranch community outside San Antonio.

Cordillera Ranch, which is also home to a Nicklaus signature course in the Texas Hill Country, has topped $100 million in total real estate activity for three straight years. The 8,700-acre master-planned residential community also has six other resort-style clubs in addition to the golf club, offering a wealth of family and outdoor activities.

The par-3 16th at Cordillera Ranch is a memorable one.

“With the array of amenities, that’s one thing we were fortunate to be a little ahead of the curve on,” Hill adds. “When we started thinking about the idea of a private club with a golf course and other amenities, we knew that so many people come to the Hill Country because of the outdoor activities, like floating the Guadalupe River, riding horses, fishing, sporting clays or just being outdoors. So we didn’t just want to be a golf course.”

That’s where the Seven Clubs of Cordillera concept was born.

“We try to market to the buyer who isn’t just looking for a golf course because there are nice golf courses all over the world and a lot of these folks can afford to be anywhere,” says Hill. “We didn’t want these to be token offerings either; we went the extra mile on all those things.”

Fueled by a combination of a special location, unique offerings and/or desirable amenities, it’s a recipe that many other golf communities have followed successfully. Following are a few examples:

Kohanaiki – Kona, Hawaii

Kohanaiki was the first new community built on the Kona coast in a decade.

Kohanaiki is a spectacular private club community spread across 450 oceanfront acres on the Big Island of Hawaii. The property has 1 ½ miles of coastline, a Rees Jones-designed oceanfront course, a beach club and a wealth of outdoor adventure activities for families. With homes that range from $3 million to $22 million, Kohanaiki closed $131 million in sales last year and achieved the most transactions on the Kona-Kohala Coast in 2017. (www.kohanaiki.com)

Reynolds Lake Oconee – Greensboro, Georgia

The Great Waters Course at Reynolds Lake Oconee.

Halfway between Atlanta and Augusta sits Reynolds Lake Oconee, a sprawling resort community that’s home to a Ritz-Carlton as well as 2,500 condominiums, cottages and single-family homes. The property boasts 350 miles of shoreline as well as six golf courses — including two ranked among the Top 100 public or resort layouts in the nation – built by architects such as Tom Fazio, Jack Nicklaus, Rees Jones, Bob Cupp and Jim Engh. Last year, every single spec home that was built was bought and there are currently almost 100 homes under construction. (www.reynoldslakeoconee.com)

Boot Ranch – Fredericksburg, Texas

One of the custom homes at Boot Ranch in the Texas Hill Country.

Boot Ranch is another private club and family retreat in the heart of Texas Hill Country, located less than an hour from Austin. Defined by a mix of luxury and recreation, Boot Ranch has a Hal Sutton-designed golf course, a 34-acre practice area and an executive par-3 course. The property also sold 64 properties valued at $41 million last year, a 23 percent increase over the previous year. The first quarter of 2018 showed similar momentum, with 21 sales, a 30 percent increase from the same time a year ago. (www.bootranch.com)

Clear Creek Tahoe – Clear Creek Nevada

A Coore-Crenshaw design is at the heart of Clear Creek Tahoe.

Ten miles from Lake Tahoe and 19 miles from both the Incline Village and Heavenly ski resorts is the private community of Clear Creek Tahoe. The design team of Ben Crenshaw and Bill Coore took a light hand in routing the golf course across beautiful rolling terrain – over hills and through the towering pines of the Sierras. There were a total of 52 sales last year, with an average price of almost $400,000. (www.clearcreektahoe.com)

Magnolia Green – Moseley, Virginia

Magnolia Green is the best-selling community in the Richmond area.

Magnolia Green is central Virginia’s premier multi-generational, active lifestyle residential community, located about 20 miles southwest of downtown Richmond. The community had a record 204 home sales in 2017, with an average sales price of more than $450,000. The 18 percent year-over-year increase came after Magnolia Green invested $10.5 million in resort-style amenities, including a 10-acre aquatic center with four pools and a new clubhouse for the golf course built by Nicklaus Design’s Chris Cochran. (www.magnoliagreen.com)

Timbers Kauai – Kauai, Hawaii

The Nicklaus Signature Ocean course has the longest stretch of oceanfront holes in Hawaii.

Timbers Kauai is a luxury oceanfront residential community that features the Jack Nicklaus-designed Ocean course with features the longest stretch of oceanfront holes in all of Hawaii. As the property gears up for its official opening on June 1, it is already at $50 million in pre-sales and continues to build momentum. (www.timberskauai.com)

Santa Lucia Preserve – Carmel, California

The Tom Fazio Course at the Santa Lucia Preserve feels utterly removed from other courses on the Monterey Peninsula.

Tucked into the Santa Lucia Mountains just east of Carmel, up a long, winding road and behind multiple gates, is a weekend escape with a fantastic Tom Fazio design that’s proven popular with golf course raters as well as buyers from the San Francisco Bay area. There are fewer than 300 home sites spread across 2,000 acres at the Santa Lucia Preserve, with another 18,000 surrounding acres protected in perpetuity by the Santa Lucia Conservancy. There have been 123 finished custom homes, with 11 currently for sale, another 11 in design review and 10 homes under construction. (www.santaluciapreserve.com)

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Redevelopment Opportunities in Salt Lake City

The Redevelopment Agency of Salt Lake City, or RDA, is putting forth two large pieces of land at-the-ready for redevelopment.

These properties are at 255 South State Street and 500 W. North Temple Street, which is the former property of the Overniter Motel.

Amanda Holty from the RDA and Annie Davis of the city’s Department of Economic Development joined us to talk about these properties and what they mean to the capital city’s economic vitality.

The RDA is currently accepting submissions from experienced developers who are interested in partnering up to design and construct mixed-use, mixed-income projects on these sites.

The redevelopment of these sites would provide ground-floor retail space and upper-level housing.

The City is committed to building housing for people of all income levels, so the RDA is requesting that the residential components of these developments include a minimum number of affordable units.

Both sites are also located directly adjacent to TRAX transit lines.

Submissions of qualifications for development of the State Street property are due on Monday, April 23, and submissions for the North Temple property are due May 30th.

For more information, visit www.slcrda.com/development-opportunities.

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Man robbed at knifepoint in downtown Salt Lake City

Photo: Gephardt Daily

SALT LAKE CITY, Utah, April 12, 2018 (Gephardt Daily) — Police are searching for a suspect after a man was robbed at knifepoint in Salt Lake City early Wednesday morning.

The incident happened in the area of 309 E. 400 South just after 6:20 a.m., the Salt Lake City Police Department said in a news release.

“The victim was approached by the suspect as he exited the 7-Eleven,” the news release said. “The suspect produced a knife and demanded the victim’s bike, but the victim refused. After a short struggle, the suspect took the victim’s wallet and fled.”

The suspect then ran into the Mountain Courtyard Apartments, located at 350 S. 400 East.

The suspect was described by the victim as Caucasian, in his 30s, 5 feet 7 inches tall, balding and wearing a tan jacket. Officers checked the apartment complex, but the suspect was not located.

To share information about the incident with the SLCPD, please call 801-799-3000. To remain anonymous, text crime tips to 274637. Start the text with the keyword TIPSLCPD (which routes it to SLCPD), then a space, followed by the relevant information or photos. Reference: crimetip. The reference number in this case is 18-62476.

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Wasatch Front commercial real-estate sales still going strong after record $2.2 billion year in 2017

(Steve Griffin | Salt Lake Tribune file photo) The November opening of a new headquarters building by Salt Lake City-based Alsco, short for American Linen Supply Co., was part of a record-setting year for the Wasatch Front’s commercial real-estate sector.

Coming off a record year in “the second longest expansionary period in U.S. history,” the Wasatch Front commercial real-estate market is showing “no signs of slowing down.”

That’s the view of CBRE, a Los Angeles-based Fortune 500 commercial real-estate services and investment firm that has an office in Salt Lake City, in releasing an annual report that showed investment sales along the Wasatch Front in 2017 reached a record $2.2 billion.

“Development and demand levels across all market segments remain elevated,” said Lloyd Allen, managing director of CBRE’s Salt Lake City office, adding, “2017 was a great year. With continued momentum, 2018 has potential to be a very good year as well.

“The heightened level of commercial activity in late 2017 carries a momentum that crosses over into 2018,” he said. “Salt Lake will retain a position of strength relative to markets nationwide.”

Institutional funds and money coming in from out of state helped fuel this commercial sales growth, up from $1.9 billion in 2016. In 2010, just after the depths of the Great Recession, annual sales had amounted to just $300 million.

Utah’s surging population — third in the nation last year at 1.9 percent — also figured prominently in lifting sales of multifamily housing projects to their highest level ever, almost $1.1 billion. The other $1.1 billion of growth occurred in the industrial, office and retail markets, Allen said.

“The industrial market continued to defy cyclical considerations and posted another record year for construction,” he said, particularly in sales of properties for large distribution and logistics companies. “The number of new leases signed for over 100,000 square feet nearly tripled the historical average. Vacancy continued to decrease and market demand is not likely to soften soon.”

The downtown Salt Lake City office market has been more susceptible to a cyclical slowdown in response to earlier building, with the CBRE report describing last year’s sales volumes as “subdued.”

“Demand remained strong for quality product,” Allen hedged, while noting that “construction continued to boom in the suburbs. The near-term outlook is positive with a strong construction pipeline set to drive activity in both the suburban and downtown areas throughout 2018.”

Of the three commercial markets, retail has been the spottiest. Allen cited the demise of several large retailers, Toys R Us among them, as reflections of the ongoing evolution of retail sales in the age of online shopping.

But he added optimistically that “retailers and landlords are adapting and [retail sales] activity improved dramatically in the second half of the year. Population growth has been a primary driver, resulting in significant construction in the [valley’s] southwest quadrant.”

Utah’s economy also is vulnerable to disruptions from disputes over trade and immigration policy, Allen said on a day when China prepared to retaliate for President Donald Trump’s imposition of tariffs on 1,300 Chinese products. U.S. immigration issues remain far from being resolved.

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Strong Economy Lifts Real Estate in Salt Lake City

Salt Lake City rent evolution, click to enlarge

Salt Lake City continues to be one of the best-performing metros in the country. Due to robust employment and solid demographics, Utah’s largest city is generating demand across all asset classes.

With convenient connectivity and a strong multifamily market, the metro remains appealing to major employers. Job gains are steady, as more than 35,000 positions were added year-over-year through November. Employment is boosted by the myriad new projects underway across the Beehive State. The first redevelopment phase of Salt Lake City International Airport is in the works, with completion scheduled for 2020. WI Commercial Properties’ $200 million mixed-use development is turning land along Interstate 15 into a major tech hub. Meanwhile, the University of Utah has a $50 million Rehabilitation Hospital underway. At the same time, the metro’s economy is growing at such a fast pace that some employers struggle to find highly skilled workers. This rapid growth has raised some concerns regarding labor supply, education and poor air quality.

Salt Lake City’s multifamily market is thriving. The transaction volume hit $421 million last year, while the metro has more than 8,000 units under construction, with most new developments geared toward high-income residents. Yardi Matrix expects rents to increase by 4.9 percent in 2018.

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