DAYTONA BEACH, Fla. — After paying $3.45 million to acquire the golf courses at LPGA International two years ago, its owner held an online auction on Wednesday that produced a high bid for three times that amount.
To the astonishment of locals, Virginia-based Fore Golf Partners rejected the $10.9 million bid because it was less than what it believes the 652-acre property is worth.
The total assessed value of the LPGA International Golf Club property including its golf courses is $1.49 million, according to a description of the property posted on LoopNet.com in March by its listing agents Cubba and Putnam. That assessed value does not include how much revenue the golf course business itself is generating, which has not been publicly disclosed.
“We had a tremendous amount of interest. We got good bids, but none that met the reserve price,” said Keith Cubba, a Las Vegas-based commercial Realtor who is one of two agents with Colliers representing Fore Golf. “For now, my client is perfectly content to continue in its role as owner.”
The other commercial Realtor representing Fore Golf is Matt Putnam with the Colliers office in Tampa.
The three-day online auction held on the website for Ten-X Commercial was originally scheduled to end at 1 p.m. ET on Wednesday, but wound up getting extended an additional 25 minutes as the golf course property kept getting higher and higher bids, sometimes multiple times within the same minute.
Bidding began at $4 million.
A screen shot of the Ten-X auction website shows a bid of $10.9 million for the golf course property at LPGA International in Daytona Beach on April 21, 2021. Virginia-based Fore Golf declined the bid. (Photo: Clayton Park/News-Journal)
Randy Dye, owner of the Daytona Dodge Chrysler Jeep Ram auto dealership next to LPGA International, did not take part in the online auction, but said, “I had a lot of people send me blow-by-blow accounts.”
Dye and Kevin Bowler, the owner of Daytona Beverages, were part of a local investor group that made an unsuccessful bid to buy the golf courses at LPGA International a few years ago. Both men are members of the LPGA International Golf Club.
Dye said the fact that the website for Ten-X showed “Reserve not met” even at the highest bid was a telltale sign that Fore Golf might reject the offer.
“This was not an absolute auction meaning that it had to be sold to the high bidder,” Dye said. “It was a reserve auction which means the seller has the right to refuse any or all bids. I can’t comprehend it. I certainly would have taken it if I had made the conscious decision to sell it.
“The only plausible explanation to me is that it (the $10.9 million high bid) didn’t meet what the seller expected it to bring,” said Dye.
The description for the golf courses at LPGA International on the Ten-X auction website stated that Fore Golf invested $860,000 in improvements to the 652-acre property after acquiring it in 2019.
‘A crown jewel in our community’
The property includes two 18-hole “Rees Jones and Arthur Hills signature golf courses,” as well as an 8-acre 3-hole practice course that includes short game areas and a putting green. It also has five buildings including the clubhouse which offers both a large meeting space as well as a restaurant that is open to the general public called Malcolm’s Bar & Grill. The golf club includes a golf shop and a members-only fitness center and swimming pool.
The golf courses at LPGA International were built in 1994. The property also serves as the headquarters for the Ladies Professional Golf Association and each years hosts the final stage of the LPGA Tour Qualifying School.
A golfer plays LPGA International in Daytona Beach on April 21, 2021.(Photo: Nigel Cook/Daytona News-Journal)
Dye said Fore Golf is known for buying golf course properties “that are not financially performing, turn them into performers and then sell them for a profit.”
The golf courses at LPGA International “are a crown jewel in our community,” he added.
Nevertheless, like many public golf courses in the past 15 years, the LPGA International golf courses had been losing money or struggling to break even prior to its sale to Fore Golf.
That is no longer the case, said Cubba.
“First and foremost, LPGA is an extremely profitable golf course. On top of which, there is additional upside, post-COVID for wedding and banquet and outings revenue. LPGA would easily be considered top five to 10 percentile nationally in both current profitability and as a viable business moving forward.”
He declined to offer specifics in terms of how much revenue and net profits the courses have been generating.
Demand on upswing as other courses close
The online bidding war that broke out for the golf courses at LPGA International comes at a time when the greater Daytona Beach area has seen other courses close, including the River Bend Golf Club in Ormond Beach that ceased operation at the start of this year. The courses at the Tomoka Oaks in Ormond Beach and Indigo Lakes golf communities in Daytona Beach are also among those that have shut down in recent years.
“It just goes to show that the supply of golf courses is way down and the demand in terms of people wanting to play golf in that particular area is going up with all the new rooftops,” said Carl Lentz IV, a former Daytona Beach City Commissioner who is now the managing partner of SVN Alliance Commercial Real Estate Advisors in Ormond Beach.
LPGA International is just west of Interstate 95, bordered by LPGA Boulevard on the north and west and West International Speedway Boulevard on the south. It is on the west side of a conservation area that separates it from North Tomoka Farms Road which is home to the Daytona International Auto Mall as well as several other businesses.
The LPGA area is the fastest-growing part of Volusia County, with well over a thousand new homes added in recent years, including the Jimmy Buffett-themed Latitude Margaritaville 55-and-older community and ICI Homes’ new Mosaic community. Several new luxury apartment complexes have also opened with more under construction.
In addition, the area has seen the opening of several shopping centers, including the Publix-anchored Latitude Landings complex and the Tanger Outlets and Tomoka Town Center malls. Several more retail centers are planned, including Tymber Creek Village, which is set to be built across from Latitude Landings.
That growth adds up to more potential golfers for the courses at LPGA International, according to Lentz.
“If they’re not going to sell for $10.9 million, it must mean they (Fore Golf) must see future value in the increased demand,” he said.
Cubba did not disclose the identities of the bidders in the online auction, but confirmed that all participants had to pre-register and were vetted in advance in terms of their financial viability.
John Albright is the CEO of CTO Realty Growth Inc., the Daytona Beach company that sold the golf courses at LPGA International to Fore Golf two years ago.
“It’s great that they got such high bids and yet decided to pass on selling,” Albright said. “It’s great. It’s good for them and good for the community.”
Albright said the high value that bidders placed on the golf courses at LPGA International is a reflection of how well the property is performing and not likely to be because bidders see it as a potential development site for new homes.
“The land-use restrictions the City has placed on the golf courses would make it nearly impossible to turn it into homes, although it’s possible you can turn the practice facility into homes because they are not surrounded by existing homes,” he said.
Cubba responded to Albright’s comments regarding the practice facility by stating, “there is a licensing and access agreement with the LPGA.” He declined to elaborate.