Leisure Assets Valuation
The valuation of leisure assets in today’s market is much more complex than in the past. With financing available yet still tougher to obtain than more core product types and a growing sophisticated buyer pool as new capital begins to enter the space, values have become a moving target. Today’s investors base their underwriting on actual in-place cash flow of the operation, with each profit center’s contribution to NOI/EBITDA under intense scrutiny as they evaluate risk of the investment. This is contrary to the past, where investors and lenders would buy off on blue-sky projections.
Sources and Process
We use our extensive experience at the Leisure Investment Properties Group in valuing over $3.5 billion dollars of leisure assets. In addition, we use resources like the National Golf Foundation (NGF), the NGCOA, CoStar, interviews with investment property owners in the area, an extensive competitive survey, sales comparables, the tax assessor and other vendors to reflect a price level at which the market will execute. In order for us to drive value for an owner, we must be able to chart a course of future growth and arrive at a credible Pro Forma NOI / EBITDA that today’s investors will buy into – one that is not only realistic and achievable, but also too attractive to pass up.
Types of Valuations
In terms of golf courses, marinas, resorts and master planned community pricing, no one will pay a top-of-the-market price unless a broker can explain how a buyer can create an above-market return and can articulate a sound exit strategy. Anyone can sell an asset for you if you lower the price enough, but the Leisure Investment Properties Group uses proprietary marketing tools, packaging, presentation skills and underwriting capabilities to execute at the ideal level. Every buyer is looking to steal properties – they want the best deal of course. The job of the Leisure Investment Properties Group is to generate multiple offers in a competitive, auction-like environment that ultimately leads buyers to pay a price they are “willing to pay”, and not necessarily the price they “want to pay”. Our experience in over $3.5 billion dollars of transactions/valuations, our leisure property management credentials, experience running leisure assets, our 22,000+ investor database and marketing plan will all help serve this purpose.
We have three levels of valuations:
- A full 60-80 page valuation for sellers committed to sell
- A mini valuation for sellers evaluating their options
- A BOV letter valuation for those needing to know quickly what the asset is worth