Meditrust has rich appetite for golf links

Meditrust, the largest health-care REIT in the United States, is hitting the links in a big way. It plans to spend up to $2 billion buying 150 golf courses this year and next.

"We expect to be one of the three leading companies in golf," said Abraham Gosman, CEO of the Needham Heights, Mass.-based company.

Meditrust has spent $600 million this year acquiring 49 golf courses, including a $241 million deal to acquire Del Mar, Calif.-based Cobblestone Holdings Inc. and its 31 courses.

Meditrust will spend an additional $400 million this year and $1 billion in 1999, Gosman said.

In addition to its health-care holdings, Meditrust owns Santa Anita racetrack. But golf is the only sports business in which Gosman sees profitable expansion opportunities.

"We think it's a growth business that is fairly countercyclical to the economy," he said. "When the economy suffers a hit, people don't take long trips, but they play golf where they are."

Meditrust's plunge into the golf business may be the biggest move ever by a company with that kind of Wall Street muscle, said Craig Silvers, analyst with Sutro & Co.

Two other publicly traded companies, Charleston, S.C.-based Golf Trust of America and Santa Monica, Calif.-based National Golf, also own golf courses, but those firms are smaller than Meditrust, Silvers said. Golf Trust owns 34 courses and has a market capitalization of $258 million, while National Golf, with 123 courses, has a market capitalization of $365 million.

Meditrust has a $3 billion market cap, but more importantly, Gosman has proved he can grow the company profitably, Silvers said. "If he can start showing good numbers out of his golf franchise, I think Wall Street will give him more money," Silvers said.

Meditrust's golf business may carry the Cobblestone name or the name of another golf company yet to be acquired.