1. North Carolina Department of Revenue ADVANCED PERSONAL PROPERTY SEMINAR Joseph S. Koury Convention Center Sheraton Greensboro Hotel at Four Seasons Mall Greensboro, North Carolina September 15, 2011

2. 2:30 pm – 3:20 pm Andy Hinds, MAI, SGA ® * Hotel and Club Associates, Inc. ahinds@hotelandclub.com 336-379-1400 * Member of the Appraisal Institute, Society of Golf Appraisers Trends in Golf Course Valuation

3. I. Cost Approach

4. II. Income Approach 1.Uniform System of Financial Reporting for Clubs 1 An example of the Uniform System of Financial Reporting for Clubs for a hypothetical public golf facility is shown next. 1. Uniform System of Financial Reporting for Clubs, Sixth Revised edition Club Managers Association of America, Inc. www.cmaa.org www.cmaa.org

5. Hypothetical Example of Application of the Uniform System on a Public Golf Facility $% of$ Per AmountTotalRound REVENUES: Public Greens Fees & Annual Fees$600,00050.0%$20.00 Golf Cart Fees$240,00020.0%$8.00 Range Fees$30,0002.5%$1.00 Food & Beverage Sales$180,00015.0%$6.00 Pro Shop Sales$120,00010.0%$4.00 Other$30,0002.5%$1.00 Total Revenue:$1,200,000100.0%$40.00

6. DEPARTMENTAL COSTS & EXPENSES: Golf Course Maintenance$300,00050.0%$10.00 Golf Carts$60,00025.0%$2.00 Range$20,00066.7%$0.67 Food & Beverage Costs & Expenses$144,00080.0%$4.80 Pro Shop Costs & Expenses$150,000125.0%$5.00 Other$26,00086.7%$0.87 Total Departmental Costs & Expenses:$700,00058.3%$23.33

7. UNDISTRIBUTED EXPENSES: Administrative & General$120,00010.0%$4.00 Management Fees$40,0003.3%$1.33 Marketing & Entertainment$20,0001.7%$0.67 Professional Fees$6,0000.5%$0.20 Utilities$30,0002.5%$1.00 Clubhouse Repairs & Maintenance$20,0001.7%$0.67 Total Undistributed Expenses:$236,00019.7%$7.87 REVENUE BEFORE FIXED CHARGES:$264,00022.0%$8.80

8. FIXED CHARGES: Real & Personal Property Taxes$30,0002.5%$1.00 Property Insurance$18,0001.5%$0.60 Reserves for Replacement$24,0002.0%$0.80 Total Fixed Charges:$72,0006.0%$2.40 TOTAL COSTS & EXPENSES:$1,008,00084.0%$33.60 NET OPERATING REVENUE:$192,00016.0%$6.40

9. Recap of Uniform System Example

10. 2.Capitalization Sources of overall golf capitalization rates:  Actual Golf Sales from: buyers & sellers, brokers, appraisers  Society of Golf Appraisers www.golfappraisers.orgwww.golfappraisers.org  Realty Rates www.realtyrates.comwww.realtyrates.com

11. III.Sales Comparison Approach 1. Sources of Data a)Public Records b)Articles c)Appraisers and Brokers  CB Richard Ellis www.cbre.comwww.cbre.com  Hilda Allen www.hilda-allen.comwww.hilda-allen.com  Marcus & Millichap www.marcusmillichap.comwww.marcusmillichap.com  Hodges Ward Elliott www.hwehotels.comwww.hwehotels.com  Coldwell Banker Commercial www.kbgolfcoursesales.comwww.kbgolfcoursesales.com d)Golf Pros, Managers and Owners e)Publications  Golf Inc. www.golfincmagazine.comwww.golfincmagazine.com  Golf Business Magazine www.golfbusiness.comwww.golfbusiness.com

12. 2.Units of Comparison a)GRM – Gross Revenue Multiplier or NIM – Net Income Multiplier b)Price per Hole c)Price Per Round, Price Per Acre or Price Per Member