Are top-draw architects a smart play for you?
By John Steinbreder
If you’re shopping for Golf real estate, be advised that you could be paying at least 50 per cent more than you should, depending on your needs. A report by the Golf Research Group has confirmed the obvious: Houses on golf courses built by “name” architects cost significantly more than those along courses built by lesser-known designers. If you’re shopping in communities that boast a course by Jack Nicklaus or Tom Fazio, the first question you should ask yourself is, “Why?”
You might have a very good reason. If you’re a scratch golfer and can handle the “championship” lengths that some PGA Tour pros-cum-golf course architects dish out, then you’re probably looking in the right place. Or if you entertain clients often and need a great lure to put them in your fold for the afternoon, it’s helpful to have the name Pete Dye in your hip pocket.
But be aware that the same kind of big-name lure is being used to draw you into the community as well. It’s up to you to decide if the top guns are worth the extra money – reflected in higher green and maintenance fees and pricier homes.
The report from the Golf Research Group, one of the few of its kind, puts real numbers to the differential between big name and lesser-known course architects’ real estate developments. Assuming an average of 300 lots per course, the organization found that the net present value of land along courses constructed by the top 33 golf course architects averaged $53 million, while those created by a lower echelon described as “other architects” combined for only $35 million. That means that if you prefer a name designer over one with less caché, it will cost you 50 per cent more to buy in.
These premiums are chiefly a result of what these architects now get for their time and expertise and what their creations cost to build and maintain. Jack Nicklaus, for example, receives an estimated $1.5 million for his “signature” courses, while Greg Norman, Arnold Palmer, Tom Fazio and Pete Dye command roughly $1 million per layout. (Compare these fees with a $100,000 fee that a lesser-known architect might charge.) There are usually extra construction expenses associated with those premier courses as well, and many times they are longer and more elaborately designed than those by non-name architects. A modest 18-hole track that measures 6,500 yards, for example, could cost anywhere from $2 million to $5 million to build, while a longer, more sumptuous layout – complete with artificial waterfalls, faux rocks and sodded fairways – could carry a $50 million price tag.
In addition, the amount of money it takes for you or your friends and family to play on those name courses is often higher as well. The Golf Research Group says that layouts created by “top architects” bring in an annual average of $16.5 million in guest green fees, membership dues and initiation fees, more than twice as much as those brought in by courses constructed by “other” designers.
And then, don’t forget, there are the costs of maintaining a premium layout – passed on to members in the form of assessments and increased dues, which are significantly higher than those for a more standard track. For golfers in communities where championship tees or other bells and whistles are rarely used, these fees could be superfluous.
Unlike golf communities in Palm Desert or Scottsdale that need the big names to attract prospective buyers, communities in more isolated regions, where the competition for the golf-community dollar is not as great, do not have that need. So it’s unlikely that buyers looking for homes in those areas will have to spend the extra money associated with premium architects or sacrifice much in terms of quality just because they are dealing with lesser-known designers. “There are plenty of terrific architects, but they just don’t have the name,” says David Southworth, president and chief executive officer of Willowbend Development Corp in Chestnut Hill, Massachusetts. “That’s too bad, because a lot of them are doing some very good things and it makes it tough for them to break into the high-profile category”.
Keep in mind that not all great golf courses were put together by name architects. The Old Course at St. Andrews in Scotland, for example, assumed its modern form under green keeper Allan Robertson and his successor “Old” Tom Morris, and a number of the best courses in the United States, such as Merion Golf Club and Oakmount Country Club, were laid out by golfers who had little or no design training. And even top architects now and then design a dud.
So which type of community is best for you?
Given the potentially heavy costs of buying into a development with a course designed by a name architect, the first thing prospective home owners should consider is all of the costs associated with the responsibility. Coming in a close second is deciding whether banging a ball up and down a testy Nicklaus course for eternity is appropriate. “Playability is so important,” says Rich Katz, vice president of marketing for Pinnacle Enterprises in Vienna, Virginia. “You don’t want to buy a house on an extremely challenging course built by a big-name architect if you are a high-handicapper looking for a somewhat benign track in an active adult community. It just won’t be a good match. You want something you can enjoy for as long as you live in that home”.
“In some ways it doesn’t matter who the architect is,” says Peter Liebowits, a Connecticut developer who has built several golf courses in the eastern US, including the recently opened Centennial Golf Club in Carmel, New York. “The important thing is the design itself. The biggest name in the world is not going to make a poorly designed or conceived course better, and a substandard course is not going to help the value of the homes built around it.”
Perhaps the most important bit of advice prospective buyers should remember is that golf courses are only one piece of the development puzzle. “A layout done by a great architect cannot sustain a badly conceived and managed community,” says Tony Green, a principal in Green Company, a Massachusetts real estate operation. “So you have to look at the whole package.” Is the development in the right location for you? Are you comfortable with the character of the membership? Are the lots arranged so that you have good views and plenty of space between homes? Do the house and condo floor plans make sense? What services is the community offering? Are there any plans for expansion? And are you sure you want to live on a golf course?
The magic of a name, it seems, can take you only so far.