Drive Shack Nets $83M in Golf Course Sales
The company announced earlier this year its plan to sell all 26 of its American Golf-owned properties and expects to generate nearly $175 million in capital from the sales.
NEW YORK CITY—Locally-based Drive Shack Inc., which is in the midst of transforming its operations into solely a golf entertainment and leisure company by selling off its owned golf course properties, took a “massive step” in implementing its disposition strategy with the sale of 11 of its golf properties in California, Oregon, Idaho and Georgia.
The publicly-traded company netted approximately $82.5 million in the sale of its courses owned and operated by American Golf subsidiaries. The courses sold include: Canyon Oaks Country Club in Chico, CA; El Camino Country Club in Oceanside, CA; Monterey Country Club in Palm Desert, CA; Oakhurst Country Club in Clayton, CA; Oregon Golf Club in West Linn, OR; Palm Valley Country Club in Palm Desert, CA; Plantation Country Club in Garden City, ID; Seascape Golf Club in Aptos, CA; Sunset Hills Country Club in Thousand Oaks, CA; The Trophy Club of Apalachee in Dacula, GA and the Wood Ranch Golf Club in Simi Valley, CA.
The net proceeds from the sales were used, together with cash on hand, to prepay $102 million in outstanding debt.
The company announced earlier this year its plan to sell all 26 of its American Golf-owned properties and expects to generate nearly $175 million in capital from the sales. Thus far, a total of 12 courses have been sold. American Golf will continue to operate its leased and managed properties and grow the portfolio through the addition of new management agreements.
Drive Shack did not divulge the buyers of the 11 golf courses traded, although it did state that subsidiary American Golf will remain the management company for each of the golf properties sold, with the exceptions of the Apalachee, Oakhurst and Seascape courses.
“This is a massive step forward in our strategy to monetize the portfolio of owned courses” says Ken May, CEO of Drive Shack. “We continue to move in the right direction with American Golf, focusing on optimizing and growing our leased and managed courses.”
May joined Drive Shack last month as president and CEO, along with David Hammarley, who took on the role of chief financial officer. May is the former CEO of golf entertainment company Topgolf. During his four years at Topgolf, he oversaw 24 openings and a quadrupling of the company’s workforce.
In November, Drive Shack announced plans to open a new golf entertainment and recreation complex in New York City, after the New York City Department of Parks and Recreation awarded the company a site at Randall’s Island Park. Drive Shack will completely rebuild and replace the existing golf driving range with a year-round golf-centric recreation facility. The current Randall’s Island Park driving range is undergoing improvements and will reopen in April 2019 under Drive Shack’s subsidiary, American Golf. Operations will continue under American Golf’s supervision until breaking ground on the three-story venue.
The new 18-acre facility will offer 96 climate-controlled hitting bays each holding up to six guests. Drive Shack says it plans to break ground on the new facility at Randall’s Island in 2020.
Drive Shack also announced last month that it recorded a loss of $15 million in the third quarter, or $0.23 per share, for the three months ended September 30, 2018, compared to a loss of $2 million, or $0.03 per share, in the corresponding period of the prior year.
Drive Shack opened its first venue in Orlando in April and has several locations opening in 2019 including Raleigh, NC; Richmond, VA and West Palm Beach, FL.