Is Donald Trump overstating the value of his golf courses?
Golf Biz

Is Donald Trump overstating the value of his golf courses?

Donald Trump claims he is worth close to $10 billion. However, the presidential candidate may be overvaluing the value of his non-liquid assets, like his 16 golf courses.

In a financial disclosure filing required of all presidential candidates, Trump declared his golf holdings to be worth anywhere from $550 million to more than $675 million, according to CNBC. Of the 16 properties Trump's golf business owns, Trump values 10 of them worth at least $50 million, another between $25 million and $50 million and four others in the range of $5 million to $25 million.

However, that valuation flies in the face of a the golf-industry standard, which values properties at anywhere from 1 to 1.5 times their annual revenue. Trump claims his holdings, excluding the Doral resort near Miami, pull in $160 in combined annual revenue, meaning his 15 golf holdings excluding Doral should be worth anywhere from $160 million to $240 million. That creates a discrepancy of $390 million to $435 million.

Trump, who did not comment on the CNBC piece, believes that the millions he pours into capital improvements at his properties raises their value, like home improvement would to a residential property. That's typically not the case in the industry, where improvements are aimed at improving overall traffic or membership, but not necessarily to increase the value of the property.

What is more likely, however, is that Trump is attaching a valuation on the properties that he believes is equal to their value to a real-estate developer if they bought the property and could have it zoned for their desired construction. Most golf course owners, however, realize that contingency makes it impossible to use that value as the true book value of the property.

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