Japanese investors causing golf course boom in the Sun Belt


All it takes is land, sand, water, a few little flags and some holes. And, of course, impeccably groomed grass.

There is a golf course boom in the Sun Belt. It is fueled in large part by Japanese investors who have fallen in love with the sport and who often are paying the asking price for ritzy golf resorts.

Already Japanese investors own more than 25 golf courses in California and a similar number in Hawaii, as well as nearly 100 others in the United States. In fact, selling golf courses to the Japanese has become such a hot business that it has spawned its own newsletter, the Japan Golf Investment Report.

Three factors explain the Japanese investors' interest:

Business people have embraced golf, finding it calmer than many Western pursuits.

Japan consists of a population half that of the United States crammed into a land area the size of California. This makes wide open spaces particularly attractive to Japanese investors, all the more so when they are located in or near urban areas.

A Japanese golf course that charges a player $100 to play a round is considered inexpensive. The Japanese have lots of dollars. American golf courses seem a bargain by comparison.

"The cold war is over and Japan won." The expert on Japan, Chalmers Johnson, is quoted by David Halberstam, who explains that under the umbrella of U.S. military protection, Japan has been able to turn its resources more fully to establishing an economic advantage. American dollars have paid for Japanese defense. Japan has spent the money it would have spent on DTC defense on an unbeatable industrial capacity instead.

Another and more important fundamental difference between American business and that of Japan is: American corporations looking ahead five years are considered farsighted. The Japanese, meanwhile, regularly put together business plans that anticipate activities decades away.

Buying golf courses at high prices, then, makes sound business sense to the Japanese investor. The property will always be useful as a golf course, it is reasoned. Because of the prime location of most golf courses, the real estate value is likely to appreciate. In part because of the Japanese interest, more of them are being built.

Not long ago, golfing required that you be a member -- or have a friend who is a member -- of a country club. Or you could wait in line at a municipal course, where you could, typically, tee off inexpensively to play on mediocre terrain.

Developers got the idea of building housing developments with a golf course at their center. Golf lovers would then buy the homes. Such developments achieved varying degrees of success.

Now, there is a move toward another kind of course. It has the amenities of a country club, but you don't have to pay a high initiation fee, nor do you have to endure scrutiny by a membership committee. All you have to do is show up, with money.

These premium public courses are typically designed by Jack Nicklaus or some other noted golf course designer. On-site facilities include a pro shop, a restaurant and, invariably, a "19th hole," where golfers can replay their game over a few drinks. They differ from golf resorts, which are often corporate convention centers with a golf course attached. The new breed of golfing facility is aimed at making championship courses available to any golfer.

Charges are, surprisingly, not astronomical. A golfing enthusiast can expect to pay from two to three times the daily fee charged at a municipal course -- but well under $100, including a cart. Developers of these courses hope that users will think of them as country clubs and will spend additional money at the other on-site businesses. Like country clubs, some include tennis courts and swimming pools, in hope that a golf outing will become a family affair, including dinner at the restaurant.

This new kind of course is on the cutting edge of golfing development, based on the idea that the baby boomers, now relatively affluent, are getting a little older. The game of golf, which provides exercise without breathtaking exertion, is seen as a sport that the boomers are rapidly embracing.

And should business be less than expected, the course can always be sold to the Japanese.

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