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Conversations with the smartest people in the golf business to get the inside stories and strategies driving the business of golf forward. Hosted by former PGA Tour player Roberto Castro.
The Course Record Show - David Southworth on Luxury Golf Real Estate and Community Development
Subheading:
A conversation on market trends, timeless development principles, and the future of luxury golf communities.
Meta description:
David Southworth discusses luxury golf real estate, community development, market trends, and what today’s buyers value most.
[00:00:00] Speaker:
I'm Roberto Castro, and this is The Course Record Show - the trends, technology and strategy driving the business of golf.
[00:00:13] Roberto:
David Southworth joins me for a Quick Nine. With over 30 years of experience, he's established a long and successful career focused on developing luxury golf communities from Cape Cod to Scotland, The Bahamas, to his current transformative work at Balsam Mountain Preserve in Western North Carolina.
David, thanks a lot for joining me.
[00:00:33] David:
My pleasure. Good to be here.
[00:00:34] Roberto:
So as we sit here in 2026, how would you describe the health of the luxury golf real estate market?
[00:00:42] David:
I think the health of the market is great, and I say that for the simple reason that it's been steady.
It's for the right reasons. There's no boom that's making it happen. It's really just a perfect storm of some of the population coming of age, the end of the baby boomers.
Combined with that, I think supply and demand is in our favour in the sense that a lot of inventory was sold and taken up during the COVID time period.
So we're all back to good fundamentals in economics as it relates to supply and demand.
[00:01:28] Roberto:
Interesting. So you mentioned COVID. Over the last five years, the golf industry has boomed.
But when you look at real estate, interest rates and construction costs are two factors that have affected the entire real estate market.
Which of those has been most impactful? And how have those two affected your corner of the market, those luxury golf-focused standalone real estate communities?
[00:01:51] David:
Yeah, we've been fortunate.
What we're doing in these communities, and specifically with Balsam Mountain, these are second and third homes, ranging from two and a half to six million dollars.
Typically there are some that are more, of course.
So it is not a market that's reliant on financing.
Actually, there's no tax advantage to putting mortgages in place and things like that.
So honestly, we rarely see financing coming into these purchases.
[00:02:29] Roberto:
Interesting. So you mentioned Balsam Mountain. You have adopted a strategy of kind of going all in on one community at a time.
Tell me a little bit more about this one in Western North Carolina.
[00:02:42] David:
Well, Balsam is a community that I was aware of from its inception, really.
The reason for that is we were doing one of our developments at the time, Star Pass out in Tucson, Arizona, and we were adding nine holes of Arnold Palmer Golf to that community.
So we would interact with the Palmer Golf guys, and they were working on this project, Balsam Mountain.
To hear the stories back then of this crazy project up in the mountains, lifting equipment around with cranes to start cutting fairways, it was just a fascinating story.
So I was aware of the community from that time on and read everything that I would see about it.
I know that Balsam started off gangbusters, sold a lot of lots for a lot of money in its first five or six years, and then the recession came along.
The developers of Balsam in the beginning were very, very good developers.
They had a great vision, a good plan, and they just got caught up in the recession like a lot of people did.
But what happened from that point, it seemed like everything that could go wrong at Balsam did for about seven years.
They had multiple owners and some false starts and broken promises and things like that.
Then, actually, a resident of the community bought Balsam in 2016 and he poured his heart and wallet into the property.
He renovated what was there, added a lot of new facilities and, just as importantly, bought back a lot of unbuilt inventory.
In the end, that's what made the community of interest to someone like me.
There was an opportunity to come in, do a little bit more on the amenity side, tune a few things up, and there was a lot of inventory to develop and deal with.
So it made sense, and we were able to put a deal together that closed in late 2022.
[00:05:12] Roberto:
Okay, so as it exists today, you own and are developing the real estate side. Does that gentleman still own the club and the amenities, or is it all one?
[00:05:22] David:
Yeah. He sold the club to the members.
[00:05:25] Roberto:
Okay.
[00:05:26] David:
So the members own the club.
We own a couple of amenities. They own the majority of the amenities.
Actually, Balsam is a great case study in working together.
There's a very active and stable community association there.
There's a trust that looks after the 3,300 acres in trust.
There's a club and ourselves, so it's really quite nice to see.
They're great groups to work with.
[00:05:58] Roberto:
That's awesome.
[00:05:59] David:
Yeah.
[00:05:59] Roberto:
When you look back, whether it's Cape Cod or Scotland or The Bahamas - Abaco is a stunning place, by the way, I've been there - what are the core development principles that have proven timeless?
What is it that has made you successful?
[00:06:23] David:
When we started the company back in 1991, it was myself and Paul Fireman.
Paul was at Reebok International.
One of the things I learned from him was that I was so focused on dollars and cents and building something for this and that.
He really instilled in me over time the importance of building what people want and reaching into their imaginations, fantasies and desires.
It took a while to really convince myself of that, but it's been a guiding principle of what we do for a long time.
If customers come in and they're looking to spend three million on a second or third home, they can probably afford four or five million.
The point is they might see something for three million that fits their criteria, but then see another property that really turns them on.
It could be the style of the home or the creek running right by it.
The point is that it's so much easier to sell people in this market what they want versus what they started out looking for.
[00:08:20] Roberto:
When you talk about what the modern buyer wants from their community, what's exciting your customers today and how has that changed since the early nineties?
Is it still anchored around golf or is it the whole community?
[00:08:39] David:
I really think it's all of the above.
The industry over the last 30 to 35 years has evolved more into these all-encompassing situations versus just golf and a clubhouse.
If you line up ten different owners or members in these communities, you'll probably get ten different answers.
To some it's the people and the social aspects.
To some it's the championship golf.
To others it's the dining, the fitness, the location.
It's how their kids feel.
It just goes on and on.
It's really no different than having half a dozen restaurants that you really enjoy for all sorts of reasons - the ambience, the vibe, the food, the ease of parking.
You get a feeling, and it's that way in our communities.
[00:09:52] Roberto:
That's very cool.
A little bit more tactical - labour.
What's more challenging, the remote location of some of these properties or the seasonality?
How does that play out?
[00:10:26] David:
I really believe that there's good people everywhere.
Whether we're in densely populated areas or hardly populated areas, there's good people to be found.
If we can create a place worth working at, we'll get them.
People talk about good service, but I actually think that's missing the mark a little bit.
To me, if you find people who believe in caring, and if you talk about caring and maybe teach it a little bit, everything else will happen.
They'll provide good service if they care.
They might miss the mark on something, but if they care, they'll make up for it.
In many ways, someone who cares provides a much better experience than someone who simply gives good service.
[00:11:31] Roberto:
That's so fascinating because when I made the jump from playing professional golf into the business world, I realised the fundamental challenge of business is getting other people who don't own the business to care about your business.
[00:12:17] David:
It is, you're right.
I feel so blessed in life that my life turned out like it did.
I grew up in a very humble situation and worked every odd job you can think of.
I've seen all sides of life because of that.
If you take that experience and understand that everyone has to go to work and earn a living, and if I can make sure they work in an environment centred around respect and dignity, then most people respond very well to that.
Not everyone can make a hundred thousand dollars a year, but everyone has to go home and contribute to their family or be a good partner or spouse.
If you can send them home fulfilled inside, that's much better than sending someone home broken.
There's really no room in my life for people who don't treat people with respect.
Obviously there's no room in our business for people who act like that.
[00:13:36] Roberto:
I love that sentiment.
David, what are you excited about next?
[00:13:54] David:
There's always another project waiting.
I don't know what that is at the moment.
We're not on the hunt right now.
There's still a few more things we'd like to do with Balsam to really get that into a strong position.
Once we achieve that goal, then we'll start to look around and keep going.
I love what I do.
I have no intention of ever slowing down.
Over the last 35 years, our history has been a property every three or four years.
We never started with the intention of being a big company.
It just kind of happened by doing what made sense.
So we're trying to follow that guide.
When Paul and I started the company in 1991, at one point he said we should put a five-year plan together.
We both thought about it and then met.
There was really no way to plan out what we did because it was so reliant on the economy and so many factors that we couldn't control.
Our takeaway was: let's continue to do what makes sense.
That became our plan.
Very unscientific, and I'm sure we would've got an F if we were in business school, but we never had a bankruptcy, never had anything go dark.
We had many, many years of success.
I think that kept us out of trouble.
[00:16:08] Roberto:
I love that.
It doesn't make for a fancy slide deck, but it does work in real life.
[00:16:25] David:
It does.
It keeps you out of trouble.
I see companies that are dead set on growth by a certain day or this or that.
It's just a sucker's bet.
[00:16:38] Roberto:
I've spent a lot of time at Rio Mar in Puerto Rico.
We played a college tournament there every year.
[00:16:50] David:
Yeah. The golf course next door at Cocoa Beach, we built that.
Used to own a piece of it.
When Paul and I split the company up when he retired, I kept the interest in Cocoa Beach.
Then the Trump Organisation came in and bought it.
That's when it became a Trump property.
But we're still very proud of Cocoa Beach.
We worked with Tom Kite in putting that one together.
I remember the college tournament - that was a great event.
[00:17:21] Roberto:
It was always in early February and every team was just burnt to a crisp.
Especially if they were coming from up north.
My funny story from Rio Mar is we played poorly the first round one year and our coach pulled us aside and pointed at the University of Michigan.
It was 5 February and he said, "Those guys haven't been outside yet this year and they beat you today."
It was such a beatdown.
But I think we got them in the end.
That's a great community.
David, I would love to hear so many more stories about your various developments all over the world.
Congratulations on the success.
I'd love to see Balsam Mountain.
It's about four hours from my house, so maybe I'll sneak up and meet you for some golf one day.
But I appreciate you joining The Course Record Show.
Really great conversation.
[00:18:10] David:
My pleasure.
You're welcome to Balsam any time, and I enjoyed the show.
[00:18:14] Roberto:
Awesome.
Thanks to Holderness & Bourne for supporting The Course Record Show.
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Give them a shot.