These are our most famous numbers – they put a hard number of what a golf architect is worth and ranks the top names by value. The numbers are widely used by banks and developers when selecting an Architect. The numbers show the effect of an architect’s name on real estate prices and rate of sale.
The major message coming out of the table below is that it is well worth using an architect. The architect’s fee, whatever it may be, shrinks into insignificance when compared with the uplift in pricing and rates of sale that their projects achieve.
Given the obvious value of using an architect it is astonishing that 41% of golf developments continue to use no architect. These developers either design the course themselves or use a local pro. The phrase is heard again and again, “I’ve played golf for twenty years, I can design the course myself”.
The leading 41 architects shown on the next page account for 30% of the development that has taken place. The two tables that follow measure the commercial performance of projects designed by these architects. This analysis presents average performance figures for all the projects by a specific architect. For example, Arthur Hills opened 59 projects in the period, the average initiation fee across his 59 projects was $18,000.
Financial Modelling Assesses the Value of Each Architect
The previous tables provide a number of separate statistics that measure the performance of architects’ projects. This research developed a net present value (NPV) model to draw all the various statistics into a single measure to value the projects. This model enables one to compare the value of the Nicklaus name versus Fazio or any other architect.
The NPV calculates the present value of the future income streams that flow from the golf development. The three key income streams are initiation fees, member dues, and green fees. The rate of sale of memberships is also taken into account as the sales curve has a significant effect on the NPV.
The golf NPV model provides a single measure for the value flowing from the golf course. Table A shows the golf NPV to average $7.9 million for developments that don’t use architects, $17.5 million for developments with architects and $28.9 million for projects designed by the top 41 names. The statistics speak convincingly as to the value of an architect.
Table B gives a league table of architect values, showing changes since our previous research back in 1997. It shows that Nicklaus Design held onto their No. 1 spot, with nearly all architects increasing their overall value, if not their position. Four new entrants have appeared this time around – these architects did not have the 10 projects required for statistical analysis in 1997.