| Golf Trust of America Inc. Acquires 18-Hole Golf Course Near Detroit, Michigan
CHARLESTON, SC, December 15, 1998 -- Golf Trust of America, Inc. (AMEX:GTA), a self-administered real estate investment trust, today reported that the Company had closed its acquisition of Brentwood Golf and Country Club, an 18-hole upscale, public golf facility located in the suburban area of Detroit, Michigan.
The purchase price of $7.0 million includes the issuance of operating units in Golf Trust of America, LP. GTA also has an option to purchase Beacon Hill Golf Course, located across the street from Brentwood Golf and Country Club, for $2.5 million, the cost of construction of the facility. Beacon Hill Golf Course is owned by the same group that developed Brentwood Golf and Country Club, and is scheduled to open in the summer of 1999.
The course will be leased to an affiliate of the prior owner and Total Golf, Inc. Total Golf, Inc. is run by Jim Dewling, the operator at Mystic Creek Golf Course, another GTA facility. The initial term of the lease will be 10 years with four 5-year extensions. The lease is structured to permit GTA to participate in increased golf, merchandise, and food and beverage revenues at the facility.
Commenting on the acquisition, W. Bradley Blair, II, President and Chief Executive Officer of Golf Trust of America, Inc. said, " We are very pleased with this acquisition, which continues to enhance our cluster approach in major metropolitan areas. The acquisition of this upscale facility, along with Mystic Creek Golf Course, another GTA facility, further strengthens our position in the Detroit suburban market."
The Company funded the acquisition with an advance from the $100 million bridge facility provided by NationsBank and Bank of America. For the year, the Company has acquired 20.5 (18-hole equivalent) golf courses for approximately $215 million. Since its Initial Public Offering in February 1997, the Company has acquired interests in 33 golf courses for approximately $343 million.
Golf Trust of America, Inc., with headquarters in Charleston, South Carolina, is a self-administered REIT formed to capitalize on the consolidation opportunities in the ownership of golf courses in the United States. The Company's business strategy is to acquire high quality golf courses and lease them to qualified third party operators, including affiliates of the sellers. The Company currently has interests in 43.5 eighteen-hole equivalent courses throughout the United States including the following states: Alabama, California, Florida, Georgia, Illinois, Kansas, Kentucky, Michigan, Missouri, Nebraska, New Mexico, North Carolina, Ohio, South Carolina, Texas and Virginia.
Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the federal securities laws. Actual results and the timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors including general economic conditions, competition for golf course acquisitions, the availability of equity and debt financing, interest rates and other risk factors as outlined in the Company's SEC reports, including the prospectus dated November 4, 1997 and the annual report on Form 10-K dated March 31, 1998.
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