Golf courses draw interest from distressed asset players

Owners of Newcastle Investment (NCT) will want to read this NYT article on the latest hot distressed asset play: Golf courses. “It’s certainly a buyer’s market,” says Larry Hirsh of Golf Property Analysts. “There are a lot of distressed courses, financing is difficult and most buyers don’t have the ability to write a check.”

Imagine, says one industry player, Wells Fargo and Chase suddenly exiting the home mortgage market, and that's what it's like for golf course financing. This leaves opportunity for other investors, including Fortress Investment Group (FIG) which last year began financing a Dallas-based P-E firm looking into golf courses. Fortress' Co-Chairman Wes Edens is also the chairman at Newcastle which - following the spinoff of its seniors housing unit - will be nearly a pure-play golf course operator.

Comments (5)
  • James_B
    , contributor
    Comments (235) | Send Message
    An older man I once worked with when I was just starting my career asked me "do you know the best way to become a millionaire?" And I replied "no" and he said "either work really hard or start with a billion dollars and buy golf courses". I always thought that was a funny joke, but in all seriousness, golf courses are not a very profitable industry. I'm willing to bet the management over at NCT has a very well researched plan for the golf courses purchased.
    8 Jul 2014, 11:18 AM Reply Like
  • RoberHD05
    , contributor
    Comments (105) | Send Message
    James, one can only hope they know what they are doing. I got into NCT for the senior housing. See how well that worked out?
    8 Jul 2014, 12:14 PM Reply Like
  • James_B
    , contributor
    Comments (235) | Send Message
    I got into NCT before the Senior Housing. The CDOs appealed to me, I think they may have had one to three senior living properties when I initially invested in the Summer of 2012. NCT has been a solid investment for me over that time period, I have sold off NRZ and NEWM because I think the real value is in the CDOs and the Senior Housing... This golf course business came out of left field, but NCT has earned my trust to move forward with their "opportunistic" investments.
    8 Jul 2014, 12:56 PM Reply Like
  • gators
    , contributor
    Comments (979) | Send Message
    I think that NRZ was the crown jewel with it's portfolio of excess MSR's that is poised to do well when interest rates do go up. They pay a good dividend and have had a special dividend twice in the last year. I too sold off the NEWM and put it into NRZ.
    9 Jul 2014, 04:28 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (7201) | Send Message
    I look forward to profiting from (NCT). I have profited nicely from (NCT) since I bought it. (NEWM) also showed a profit. (NRZ) has been flat. (FIG) sees something in golf courses. Maybe that an aging population prefer golf.
    12 Jul 2014, 11:39 PM Reply Like
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