Over the past year, as a tight market for premier golf properties has become tighter, something remarkable has occurred in golf-related real estate: One small owner/operator has acquired more private lifestyle clubs than all of its bigger, better-known rivals combined.

Heritage Golf Group has more than doubled in size since early 2020, when its six-course portfolio was purchased by KSL Capital Partners and Mark Burnett was appointed as its chief executive. Under Burnett’s leadership, Heritage has purchased or leased seven properties, five of them lifestyle venues, the fastest-growing and most coveted niche in today’s club universe. Since the turn of the century, a half-dozen or more experienced, well-capitalized buyers have been on the prowl for such clubs, largely because they offer more profit potential than other golf properties that come up for sale.

Heritage’s recent acquisitions are full-service, member-owned clubs in densely populated areas – three in metropolitan New York City, two in the Chicago-Milwaukee corridor, including Boulder Ridge Country Club in Lake of the Hills, Ill. – that began to experience financial stress, if not distress, prior to the pandemic. Like others who vie for such properties, Burnett believes he can attract new members – and, in the process, orchestrate a turnaround – by making substantive capital improvements, employing the tools of professional management and, perhaps most importantly, enriching club experiences with a wealth of desirable amenities and family-friendly programming.

“We’re being aggressive,” Burnett said. “You have to work hard, but if you have a good reputation and a good capital partner, there are opportunities.”

Heritage is, however, an outlier. These days, the brand-name companies that have historically been the golf industry’s most aggressive buyers are mostly on the sidelines.

ClubCorp, the world’s biggest and best-capitalized owner/operator, hasn’t made any acquisitions since 2019, when it bought eight lifestyle clubs, seven of them in one package from Toll Brothers.

Arcis Golf, now supported by two private-equity firms, has similarly been a bystander since 2019, when it bought five lifestyle clubs in Texas from Dominion Golf Group.

Concert Golf Partners, which added $100 million to its reserves in 2019, has since closed on just two properties, The Ranch Country Club in Denver and Country Club of Roswell in suburban Atlanta, both in 2020.

Likewise, McConnell Golf bought two lifestyle properties in 2020, Porters Neck Country Club in North Carolina and Waters Edge Country Club in Virginia.

In fact, only one of Heritage’s main competitors has made an acquisition so far in 2021. Escalante Golf wrote a check for nearly $10 million to buy The International, in greater Boston, out of bankruptcy protection.

Generally speaking, buyers attribute this drought to the pandemic-triggered uptick in golf participation and a widespread search for safe social environments. Membership rolls have spiked, and clubs that had been on a financial precipice are operating stress-free for the first time in years. At least for now, they believe they can continue to self-manage.

As a result, there’s lots of demand for limited supply. It’s the classic definition of a seller’s market.

“Covid has created a boom for the golf business – an absolute boom,” said Peter Nanula, Concert’s chairman. “We have virtually unlimited financial capacity and we’re eager to buy, but right now a lot of clubs don’t feel a need for outside help.”

The clubs’ revitalized cash flows have sparked disagreements over pricing. Should buyers and sellers value properties based on financial performances in 2020 and 2021, which figure to be among the best in recent history, or on performance from previous years, when many clubs were barely scraping by?

What’s more, sales prices aren’t the only factor in the equation. It costs millions of dollars to bring an antiquated, neglected club up to modern standards and provide the emotional gratification that today’s club members seek. When buyers gauge the total cost of an investment against the estimated returns, the numbers don’t always add up.

“Pricing isn’t as rational as it should be,” said David Pillsbury, ClubCorp’s CEO. “Companies are over-paying for assets.”

Despite the sluggish market, the pursuit of lifestyle clubs doesn’t figure to slack off anytime soon. From a buyer’s perspective, lifestyle clubs exist in a commercial sweet spot between America’s most exclusive, budget-oblivious clubs, which are never for sale, and low-income, low-membership clubs, which can’t generate enough income to deliver a meaningful return on investment. Lifestyle clubs typically earn $4 million or more in annual revenues, an amount that Heritage and its competitors aim to increase by upgrading golf courses and tennis complexes, modernizing pools and culinary operations, offering enhanced fitness and wellness programs, and creating social calendars that give every member of a household something to do virtually every day of the year.

The payoff can be considerable. Last year ClubCorp raised the initiation fee at TPC Craig Ranch, a club in suburban Dallas that it purchased in 2019, from a refundable $15,000 to a non-refundable $52,500. The initiation fee at Las Colinas Country Club, another Dallas-area venue, has gone from $3,500 to $30,000.

And no, the increases haven’t prompted a membership drain.

“We’re driving returns and improving the clubs’ positions in their markets,” said Tom Bennison, ClubCorp’s chief development officer. “The demand is still outstanding because we’re making investments in the product and improving the customer experience.”

The market for lifestyle clubs will eventually loosen up, but Jeff Woolson, managing director of CBRE’s Golf & Resort Group, doesn’t expect it to happen over the near term.

“Today, sellers are hoping to get big multiples but buyers are hesitant because they think the business will decline in 2022,” said Woolson, who facilitated KSL’s purchase of Heritage. “The question is what’s going to happen next year? Nobody knows for sure.”

Burnett isn’t making any forecasts.

“We’ve had a good spurt lately, and it’ll be hard to keep up the pace, but we’ll continue to be active,” he said. “If we find opportunities that can create value both for ourselves and a club, we’ll take them.”

Heritage’s competitors are also playing things by ear. Nanula said he’s “having conversations” with a club in the Midwest and hopes to “have news very shortly,” but he’s frustrated because club presidents don’t always return his calls. Blake Walker, CEO of Arcis Golf, recently predicted that his company, currently the owner of 59 public and private properties, will double in size by 2025. Unless he’s got his eye on a competitor’s portfolio, he may need to adjust his timeline.

Pillsbury is the only buyer who suggests that some lifestyle properties might become available sooner rather than later.

“Golf operations clearly out-performed expectations last year, but the event business at many clubs was decimated,” he said. “Events are a substantial part of a club’s cash flow, and a year’s worth of them can’t easily be replaced. This is a quiet, slow killer that could have a lingering, cascading impact on some clubs.”

So, like the other dealmakers, Pillsbury is patiently waiting for financial pressures to make a comeback. “Stress,” he acknowledged, “creates opportunities for us.”

Robert J. Vasilak, one of Golf Inc.’s contributing editors, blogs at @RJVasilakGolf.com.