Golf Services - Mixed Use Golf Resort Development - Making a Case for HVS

Darius Hatami
Managing Director
Phone: +1 303 443-3933 ext. 299
Email: DHatami@HVS.com

There is no doubt that the development of a mixed-use golf resort development is a complex process, requiring significant resources, a wide spectrum of expertise and the ability to direct and integrate the pieces. The fact that there are likely three, five, or possibly many more land uses and distinct businesses that must interact in order to make a project a success, dictates the need for an array of experts to assist in understanding and guiding the market financial potentials and priorities of each land use, and to guide the financial planning of the project from initial business planning to project funding, and to the ultimate exit strategy from the project.

Not so long ago, golf courses were an independent economic driver, and had the potential to generate significant profits as stand alone ventures. While there are still opportunities for select golf courses and golf clubs to play this role, the vast majority have become loss leaders for the surrounding resorts or developments. It appears more recently, that lodging operations are moving in a similar direction. While the financial prospects for hotels and resorts remain far superior to golf courses and golf clubs, the capital costs involved in the development often make it difficult for the hotel to pencil. The new economic driver is clearly real estate related development, and varied forms of shared ownership. Almost all new projects mixed use resort projects have a residential component of some type. Ultimately, the success of the mixed use project is dependant on the interaction of thses varied land uses, understanding the financial capabilities of each of the economic units, and the role of each asset within the perspective of greater project.

The nature of the HVS consulting offices makes it a unique partner in the formulation of a strategic financial plan for the mixed use resort, or mixed use golf resort. Because of HVS's wide range of expertise within multiple disciplines, its ability to assist in the strategic alliances with a variety of potential hotel brands, hotel and golf operators, golf course architects, its ability to serve as a consultant not just in the early aspects of the economic and financial planning of the development, but also as an appraiser through the underwriting and financing of the development, HVS is a unique partner. HVS offers expertise in a wide variety of land uses including whole and shared owenership, hospitality, golf, and golf clubs, casinos, restaurants, convention centers and a host of accompanying amenities and land uses. Id addition, HVS has the ability to offer financing and act as a potential broker for the disposition of the assets at completion of the development. This breadth of experience and long term outlook helps to evaluate the project from a wholistic view, with similar anaylsis and methodologies that few other firms can match.

The role of disciplines within an HVS integrated project

Hotel and Resort - HVS literally wrote the book on valuation and market study for hotels, and has a wide variety of complementary services including services related to the facilitation of hotel development, evaluation of branding partners, facilitation of hotel development financing. The role of the HVS hotel consultant in a mixed use project is to determine the optimal size of the hotel or hotels, determine the market niche for the hotel, determine the financial potentials of the hotel. As the project moves forward HVS has the expertise to assist the developer in evaluating branding prtners, financial partners and other alliances that will facilitate the strategic objectives of the project.

Shared Ownership - There is an ever increasing array of possibilities in relation to shared ownership, and HVS has expertise in defining all aspects of shared ownership, from time share, to condo hotels and private residence clubs. The role of the Shared ownership consultant will be to help determine whether the various aspects are indeed financially feasible, assist in determining the optimal shared ownership structure, the mix of shared ownership unit types, the phasing of development and the projections of the financial for any of these units.

Golf and Club - HVS has performed golf related development assignments throughout the world, and HVS Golf Services has the ability to assist the developer in evaluating the feasibility, determining an operating model for the golf component, an understanding as to how to integrate the golf course or club, shared ownership components, whole ownership real estate and any additional surrounding land uses so as to maximize the benefits to the project. With this understanding, HVS can help the developer understand the need to brand the golf course, assist in the selection of a golf course architect, and assist in selection of a golf course management company.

Whole Ownership Real Estate - HVS has expertise in the evaluation of the real estate component of mixed use development throughout at projects throughout the world, and HVS Golf Service has built fundamental demand models for assessing the demand for residential, seasonal and second home demand. These services will assist in determining the market niche and sizing for the development, determining the overall timing for the project, determining the mix of whole ownership residential land uses, assisting in the phasing of the development and working with the land planner to assure that the maximization of value for the project.

Gaming - The inclusion of a gaming component in mixed use resort developments is becoming commonplace around the world, and the HVS gaming has worked with the major casino entities throughout the world. The HVS gaming consultant would help understand the nature of the gaming component, whether it will serve as an amenity or a primary economic driver, and help to program the size and extent of the operation.

Convention Services - although not a common facet of a mixed use development, HVS has the expertiese and capability to determine the feasibility of a convention component, help to size the component, and to facilitate its market.

Having HVS serve as the financial consultant for the project should forward the objectives of the development in several ways' These include;

• Limits the need to hire a vast array of financial consultants
• Limits the resources required to assimilate the findings from different consultants with differing methodologies
• Limits the need for additional searches for financial consultants as the project moves forward
• Provides an understanding maximizing the development potentials and provides a road map towards project fruition.
• Provides an understanding as to the priorities within the varying land uses and the role of each in the success of the development
• Provides an integrated financial model that will assit in attracting equity, debt and strategic partners to the project.

HVS has the unique experience and expertise to provide comprehensive analysis of not just one component of the project, but also the fundamentals of the larger resort, community or operation, as well as the interrelationship between golf and other amenities within the mixed use resort. Through the integration of the core hospitality services of HVS, our firm can offer comprehensive analysis that is unmatched in the industry.

Click here to view the experience with mixed use golf-related assignments.