The pandemic-driven surge in demand for e-commerce has attracted warehouse developers to an unlikely business prospect: turning old golf courses into distribution centers.
Since the mid-2000s, golf has been suffering from fewer players and more course closures. The pandemic has giving the sport a boost because it offers both outdoor entertainment and social distancing. But as other leisure activities resume, many expect the sport’s headwinds to pick up again.
That’s caught the attention of investors seeking to cash in on the warehouse boom. In New York, Tennessee, Pennsylvania and other states,warehouses are rising on parcels of land formerly occupied by golf courses. And among the tenants developers have drawn to these sites are Amazon and UPS.
Online shopping during the pandemic has made warehouses one of the hottest corners of commercial real estate. The industrial market had its strongest year on record in 2020, and big money managers like Blackstone, Cerberus and KKR have all snapped up logistics centers since last March.
“Finally our asset class is the most popular in the world,” says Jack Fraker, head of industrial investments for CBRE.
Still, converting a golf course to a warehouse is no chip shot. Developers often have to contend with the rezoning process and the ire of nearby residents who oppose the increased traffic and noise.
But it can be tough for local leaders to say no when Amazon offers millions in investment and hundreds of jobs. In May, Onondaga County in New York announced the e-commerce giant would build a $350 million, 3.8-million-square-foot distribution center on land formerly occupied by a golf course in the town of Clay.
“With golf you’re just limited to the income of the ongoing business concern,” says Keith Cubba, national director of Colliers’ Golf Course Advisory Services. “There’s going to be a much higher yield on 200 acres of residential or commercial.”