Golf Trust of America Inc · 424B3 · On 11/5/97

Filed On 11/5/97   ·   SEC File 333-36847   ·   Accession Number 1047469-97-2764

Prospectus   ·   Rule 424(b)(3)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B3       Prospectus                                           268  1,571K 

Document Table of Contents

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                                                FILED PURSUANT TO RULE 424(B)(3)
                                                      REGISTRATION NO. 333-36847

[LOGO]

3,000,000 SHARES

COMMON STOCK

Golf Trust of America, Inc. (collectively with its affiliates, the      
"Company") is a self-administered real estate investment trust ("REIT") formed  
to capitalize upon consolidation opportunities in the ownership of upscale golf 
courses throughout the United States. The Company currently holds a             
participating interest in 19 golf courses (the "Golf Courses") located in       
Florida (5), South Carolina (4), Georgia (2), Virginia (2), Alabama, Kansas,    
Nebraska, North Carolina, Ohio and Texas.                                       

   The Company's goal is to increase Cash Available for Distribution per share
and to enhance stockholder value by becoming a leading owner of, and            
participating in increased revenue from, nationally or regionally recognized    
golf courses. The Company's principal business strategy is to acquire upscale   
golf courses and thereafter lease the golf courses to qualified third party     
operators, including affiliates of the sellers. The Company holds its           
participating interest in the Golf Courses through an operating partnership (the
"Operating Partnership"). As a result, the Company may acquire interests in golf
courses through the issuance of units of limited partnership interest ("OP      
Units") in the Operating Partnership, which generally can provide deferral of   
gain recognition for sellers of golf courses. The Company believes it has a     
distinct competitive advantage in the acquisition of upscale golf courses,      
including those that might not otherwise be available for purchase, because of  
(i) its utilization of a multiple independent lessee structure, (ii)            
management's substantial industry knowledge, experience and relationships within
the golf community, (iii) the Company's strategic alliances with prominent golf 
course operators and (iv) its ability to issue OP Units to golf course owners on
a tax-deferred basis.                                                           

All of the shares of common stock, par value $0.01 per share ("Common   
Stock"), offered hereby are being sold by the Company. The Common Stock is      
listed on the American Stock Exchange ("AMEX") under the symbol "GTA." On       
November 4, 1997, the last reported sale price of the Common Stock on the AMEX  
was $26.00 per share. See "Price Range of Common Stock and Distribution         
History."                                                                       

   SEE "RISK FACTORS" COMMENCING ON PAGE 22 FOR CERTAIN FACTORS RELEVANT TO AN
INVESTMENT IN THE COMMON STOCK, INCLUDING:                                      

- The Company's valuation of the Golf Courses and establishment of Lease
      Payments (as herein defined) and interest payments under the Participating
Mortgage (as herein defined) may reflect significant adjustments to 
 historical operations or estimates of future performance that, if not
warranted, may result in non-payment of Lease Payments under a      
  Participating Lease (as herein defined) or interest payments under the
Participating Mortgage. Such estimates of future performance were   
     particularly significant with respect to two recently-opened Golf Courses
and the Participating Mortgage.                                     

- Dependence on Lease Payments and payments under the Participating     
   Mortgage, which payments account for substantially all of the Company's
income.                                                             

  - The length of the Participating Leases, which, with extensions, may have
     terms of up to 40 years, which may affect adversely the Company's ability
to sell a Golf Course.                                              

   - The Company's inability to sell all or substantially all of the assets of
  the Operating Partnership or to cause a merger or consolidation of the
Operating Partnership without the consent of holders of 66.7% of the
limited partnership interests.                                      

- The Company's limited control over the day-to-day management and      
     operations of the Golf Courses due to the tax restrictions that prevent a
REIT from operating golf courses.                                   

  - Golf course operation risks in general, including competition, uninsured
     casualties, increases in operating costs, inclement weather, seasonality,
oversupply and general decreases in demand.                         

   - The Company's dependence on the skill, industry knowledge and established
 relationships of its key personnel, all of whom would be difficult to
replace.                                                            

    - Taxation of the Company as a regular corporation if it fails to qualify as
     a REIT for federal income tax purposes and the resulting decrease in Cash
Available for Distribution.                                         

  - Risks associated with providing construction financing for golf courses.
----------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES        
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE          
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO    
           THE CONTRARY IS A CRIMINAL OFFENSE.

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                                                  UNDERWRITING             
                                      PRICE TO   DISCOUNTS AND  PROCEEDS TO
                                       PUBLIC     COMMISSIONS   COMPANY (1)
                                                                           
Per Share..........................   $25.625        $1.35        $24.275  
Total (2).......................... $76,875,000    $4,050,000   $72,825,000

(1)  Before deducting expenses payable by the Company, estimated at $1,000,000. 

(2)  The Company has granted the Underwriters a 30-day option to purchase up to 
an additional 450,000 shares of Common Stock solely to cover            
   over-allotments, if any. See "Underwriting." If such option is exercised in
   full, the total Price to Public, Underwriting Discounts and Commissions and
Proceeds to Company will be $88,406,250, $4,657,500 and $83,748,750,    
respectively.                                                           
----------------------

    The Common Stock is offered by the Underwriters as stated herein, subject to
receipt and acceptance by them and subject to their right to reject any order in
whole or in part. It is expected that delivery of such shares will be made      
through the offices of BancAmerica Robertson Stephens, San Francisco, California
on or about November 10, 1997.                                                  
(On the inside front cover, there is a picture of the Island Golf Course in     
Tampa, Florida. There is also a color map of the United States showing the      
states where the Company's Golf Courses are located. These states are           
highlighted in green. There is also a breakout of each state with a numbered    
flag in the location of each Golf Course. There is a legend next to the map that
lists each Golf Course with its corresponding number).                          

BANCAMERICA ROBERTSON STEPHENS                                                  
A.G. EDWARDS & SONS, INC.                         
          RAYMOND JAMES & ASSOCIATES, INC.
                                                      WHEAT FIRST BUTCHER SINGER

The date of this Prospectus is November 4, 1997 

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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT     
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MAY OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH         
TRANSACTIONS MAY BE EFFECTED ON THE AMERICAN STOCK EXCHANGE, IN THE             
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZATION, IF COMMENCED, MAY BE  
DISCONTINUED AT ANY TIME.                                                       

CERTAIN INFORMATION CONTAINED IN THIS PROSPECTUS CONSTITUTES            
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND SECTION 21E OF THE EXCHANGE 
ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"), WHICH CAN BE IDENTIFIED BY THE USE
OF FORWARD-LOOKING TERMINOLOGY SUCH AS "MAY," "WILL," "ANTICIPATE," "ESTIMATE"  
OR "CONTINUE" OR THE NEGATIVES THEREOF OR VARIATIONS THEREON OR COMPARABLE      
TERMINOLOGY. THE SECTION ENTITLED "RISK FACTORS" HEREIN CONTAINS CAUTIONARY     
STATEMENTS IDENTIFYING IMPORTANT FACTORS, INCLUDING CERTAIN RISKS AND           
UNCERTAINTIES, WITH RESPECT TO SUCH FORWARD-LOOKING STATEMENTS THAT COULD CAUSE 
THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO DIFFER        
MATERIALLY FROM THOSE REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS.             

  NO DEALER, SALES REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS     
OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE,  
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN       
AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT          
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY          
SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES OR AN OFFER 
TO, OR SOLICITATION OF, ANY PERSON IN ANY JURISDICTION WHERE SUCH OFFER OR      
SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY 
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT 
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR 
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO   
THE DATE HEREOF.                                                                
------------------

TABLE OF CONTENTS 

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                                              PAGE   
                                              -----  
                                                     
PROSPECTUS SUMMARY.......................           1
  The Company............................           1
  Developments Since the Initial Public              
    Offering.............................           2
  Risk Factors...........................           4
  The Golf Industry......................           6
  The Golf Courses.......................           8
  Business Strategies and Objectives.....          11
  Formation and Structure................          14
  Distribution Policy....................          16
  Tax Status.............................          16
  The Offering...........................          16
  Summary Financial Data.................          17
RISK FACTORS.............................          22
  Use of Adjustments and Projections in              
    Establishing Lease Payments and                  
    Participating Mortgage Payments......          22
  Dependence on Payments Under the                   
    Participating Leases and the                     
    Participating Mortgage; Difficulty of            
    Finding Replacement Operators........          22
  Duration of Lease; No Right to                     
    Terminate Participating Leases on a              
    Sale.................................          23
  Need for Certain Consents from the                 
    Limited Partners.....................          23
  Lack of Control Over Day-to-Day                    
    Operations and Management of the Golf            
    Courses..............................          23
  The Participating Mortgage.............          23
  Golf Industry Risks....................          24
  Dependence Upon Key Personnel..........          25
  Real Estate Investment Trust and                   
    Partnership Qualification............          25
  Risks Relating to Construction                     
    Financing............................          26


                                              PAGE   
                                              -----  
                                                     
  Certain Golf Courses with Limited                  
    Operating History....................          26
  Limited Operating History..............          26
  Adverse Effect of Shares Available for             
    Future Issuance and Sale on Market               
    Price of Common Stock................          26
  Risks Related to the Company's Growth              
    Strategy.............................          27
  Risks of Leverage; No Limitations on               
    Indebtedness.........................          28
  Limits on Changes in Control...........          28
  Adverse Effect of Increase in Market               
    Interest Rates.......................          28
  Real Estate Investment Risks...........          28
  Conflicts of Interest..................          30
  Competition for Management Time of the             
    Operators............................          30
  Changes in Investment and Financing                
    Policies.............................          30
  Dependence on Acquisitions to Increase             
    Cash Available for Distribution......          30
  Distribution to Stockholders...........          31
  ERISA Risks............................          31
  Ownership Limit........................          32
  Anti-takeover Effect of Certain                    
    Provisions of Maryland Law and the               
    Company's Charter and Bylaws.........          32
THE COMPANY..............................          34
  The Operating Partnership..............          35
  Business Strategies and Objectives.....          36
  Acquisitions and Expansions............          36
  Internal Growth........................          38
USE OF PROCEEDS..........................          40

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                                              PAGE   
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PRICE RANGE OF COMMON STOCK AND                      
 DISTRIBUTION HISTORY....................          40
CAPITALIZATION...........................          41
SELECTED FINANCIAL INFORMATION...........          42
MANAGEMENT'S DISCUSSION AND ANALYSIS OF              
 FINANCIAL CONDITION AND RESULTS OF                  
 OPERATIONS..............................          47
  Overview...............................          47
  The Golf Courses.......................          47
  Liquidity and Capital Resources of the             
    Company..............................          49
  The Legends Group Prior Owners.........          51
  Inflation..............................          53
  Seasonality............................          53
  Recent Accounting Pronouncements.......          53
  Changes in the Company's Certifying                
    Public Accountant....................          54
  Important Factors Related to Forward-              
    Looking Statements and Associated                
    Risks................................          54
THE GOLF INDUSTRY........................          55
  Demographics...........................          57
THE GOLF COURSES.........................          58
  Descriptions of the Golf Courses.......          60
  Resort Courses.........................          60
  High-End Daily Fee Courses.............          62
  Private Club Courses...................          63
  The Participating Leases...............          66
  The Participating Mortgage.............          71
  Competition............................          74
  Employees..............................          74
  Legal Proceedings......................          75
  Government Regulation..................          75
MANAGEMENT...............................          76
  Directors and Executive Officers.......          76
  Committees of the Board of Directors...          77
  Compensation of Directors..............          78
  Directors and Officers Insurance.......          78
  Indemnification........................          78
  Executive Compensation.................          79
  Stock-Based Compensation Plans.........          80
  Directors' Plan........................          80
  Stock Incentive Plans..................          81
  Deferred Compensation Plan.............          82
  Employment Agreements..................          82
  Covenants Not to Compete...............          83
LESSEES AND OPERATORS....................          84
POLICIES AND OBJECTIVES WITH RESPECT TO              
 CERTAIN ACTIVITIES......................          86
  Investment Objectives and Policies.....          86
  Dispositions...........................          86
  Financing..............................          86
  Working Capital Reserves...............          87
  Conflict of Interest Policies..........          87
  Other Policies.........................          88
THE FORMATION TRANSACTIONS...............          88
  Overview...............................          88
  Formation Transactions.................          89
  Benefits to Officers and Directors.....          90

                                              PAGE   
                                              -----  
                                                     
  Transfer Documents.....................          91
CERTAIN RELATIONSHIPS AND TRANSACTIONS...          92
  Relationships Among Officers and                   
    Directors............................          92
  Acquisition of Interests in Certain of             
    the Golf Courses.....................          92
  Repayment of Indebtedness..............          92
  Employment Agreements..................          92
  Option to Purchase and Right of First              
    Refusal..............................          92
PARTNERSHIP AGREEMENT....................          93
  Management.............................          93
  Transferability of OP Units............          93
  Pledge.................................          93
  Redemption Rights......................          94
  Capital Contribution...................          94
  Term...................................          95
  Tax Matters............................          95
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL             
 OWNERS AND MANAGEMENT...................          95
  Principal Stockholders of the Company &            
    Principal Partners in the Operating              
    Partnership..........................          95
CAPITAL STOCK............................          96
  General................................          96
  Corporate Governance...................          97
  Restrictions on Ownership..............          97
  Limitations on Changes in Control......          99
  Transfer Agent and Registrar...........          99
CERTAIN PROVISIONS OF MARYLAND LAW AND OF            
 THE COMPANY'S CHARTER AND BYLAWS........         100
  Maryland Business Combination Law......         100
  Limitation of Liability of Directors;              
    Indemnification Agreements...........         100
  Control Share Acquisitions.............         101
  Interested Director Transactions.......         102
  Amendments to the Charter and Bylaws...         102
SHARES AVAILABLE FOR FUTURE SALE.........         103
  Registration Rights....................         103
FEDERAL INCOME TAX CONSIDERATIONS........         104
  Taxation of the Company................         104
  Partnership Anti-Abuse Rule............         111
  Failure to Qualify.....................         112
  Taxation of Taxable Domestic                       
    Stockholders.........................         112
  Backup Withholding.....................         113
  Taxation of Tax-Exempt Stockholders....         113
  Taxation of Foreign Stockholders.......         114
  State and Local Taxes..................         115
  Tax Aspects of the Operating                       
    Partnership..........................         115
UNDERWRITING.............................         119
EXPERTS..................................         120
LEGAL MATTERS............................         121
ADDITIONAL INFORMATION...................         121
GLOSSARY.................................         122
FINANCIAL STATEMENTS.....................         F-1

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PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED 
INFORMATION AND FINANCIAL INFORMATION AND STATEMENTS, AND THE NOTES THERETO,    
APPEARING ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE INDICATED, ALL         
CALCULATIONS AND INFORMATION CONTAINED IN THIS PROSPECTUS ASSUME THAT THE       
UNDERWRITERS' OVER-ALLOTMENT OPTION WILL NOT BE EXERCISED. UNLESS THE CONTEXT   
OTHERWISE REQUIRES, THE TERM "COMPANY" INCLUDES GOLF TRUST OF AMERICA, INC.     
("GTA"), GTA GP, INC. ("GTA GP"), GTA LP, INC. ("GTA LP"), EACH OF WHICH IS A   
WHOLLY-OWNED SUBSIDIARY OF GOLF TRUST OF AMERICA, INC., AND GOLF TRUST OF       
AMERICA, L.P., A DELAWARE LIMITED PARTNERSHIP (THE "OPERATING PARTNERSHIP").    
AFTER GIVING EFFECT TO THIS OFFERING (THIS "OFFERING"), THE COMPANY WILL OWN A  
60.8% INTEREST IN THE OPERATING PARTNERSHIP. ALL REFERENCES TO THE COMPANY AS A 
REIT ASSUME THAT THE COMPANY WILL QUALIFY AS A REAL ESTATE INVESTMENT TRUST     
("REIT") BEGINNING WITH THE TAX YEAR ENDING DECEMBER 31, 1997. SEE "GLOSSARY"   
FOR THE DEFINITIONS OF CERTAIN ADDITIONAL CAPITALIZED TERMS USED IN THIS        
PROSPECTUS.                                                                     

THE COMPANY 

    Golf Trust of America, Inc. is a self-administered REIT formed to capitalize
upon consolidation opportunities in the ownership of upscale golf courses       
throughout the United States. The Company currently holds a participating       
interest in 19 golf courses (the "Golf Courses"), 15 of which are owned and four
of which serve as collateral for a 30-year participating mortgage loan made by  
the Company to the owner of the Innisbrook Resort (the "Participating           
Mortgage"). The Golf Courses are located in Florida (5) South Carolina (4),     
Georgia (2), Virginia (2), Alabama, Kansas, Nebraska, North Carolina, Ohio and  
Texas.                                                                          

    The Company's goal is to increase Cash Available for Distribution (as herein
defined) per share and to enhance stockholder value by becoming a leading owner 
of, and participating in increased revenue from, nationally or regionally       
recognized golf courses. The Company's principal business strategy is to acquire
upscale golf courses and thereafter lease the golf courses to qualified third   
party operators, including affiliates of the sellers. The Company may acquire   
golf courses through the issuance of units of limited partnership interest in   
the Operating Partnership ("OP Units"), which are redeemable for cash or, at the
Company's option, shares of Common Stock on a one-for-one basis. When the       
Company acquires a golf course in exchange for OP Units, the golf course seller 
generally may defer tax recognition until such seller elects to cause the OP    
Units to be redeemed.                                                           

The Company believes it has a distinct competitive advantage in the     
acquisition of upscale golf courses, including those that might not otherwise be
available for purchase, because of (i) its utilization of the multiple          
independent lessee structure, (ii) management's substantial industry knowledge, 
experience and relationships within the golf community, (iii) the Company's     
strategic alliances with prominent golf course operators and (iv) its ability to
issue OP Units to golf course owners on a tax-deferred basis. The Company is one
of only two publicly-traded REITs in the United States focused on owning and    
acquiring golf courses.                                                         

In February 1997, the Company raised net proceeds of approximately $73.0
million in its initial public offering (the "IPO") and acquired 10 Golf Courses 
(the "Initial Courses") from their prior owners (together with the prior owners 
of the Golf Courses acquired since the IPO, the "Prior Owners"). Each of the    
Initial Courses was leased back to an affiliate of its Prior Owner as described 
below. The Company believes the continuity of management provided by these      
experienced operators facilitates the Company's growth and profitability. Since 
the IPO, the Company has acquired an interest in an additional nine Golf        
Courses. See "Developments Since the Initial Public Offering."                  

    The Golf Courses are leased to multiple independent third party lessees (the
"Lessees") pursuant to leases ("Participating Leases") which provide for        
payments ("Lease Payments") of fixed base rent ("Base Rent") and participating  
rent ("Participating Rent") based on growth in revenue at the Golf Courses. The 
interest payment under the Participating Mortgage is structured similarly to the
rent payments under the Participating Leases to provide the Company with base   
interest payments and additional interest payments based on growth in revenue at
the Innisbrook Resort. See "The Participating Mortgage." Neither the Company nor
its executive officers                                                          

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owns any interest in, or participates in the management of, the Lessees or the  
Innisbrook Resort Owner (as herein defined).                                    

    The Company believes the Initial Courses and its investments in Golf Courses
since the IPO are consistent with its goal of becoming a leading owner of, and  
participating in increased revenue from, nationally or regionally recognized    
upscale golf courses. Five of the Golf Courses were ranked among the Top Ten New
Courses by either GOLF DIGEST or GOLF MAGAZINE in the year the Golf Course      
opened, including Stonehouse Golf Club and Royal New Kent, each of which was    
named the "Best New Upscale Course" by GOLF DIGEST in 1996 and 1997,            
respectively, and Oyster Bay, which was named Best New Resort Course in the     
United States in 1983 by GOLF DIGEST. The Copperhead Course at the Innisbrook   
Resort was ranked 43rd in the 1996 survey by GOLF MAGAZINE of the "Top 100      
Courses You Can Play" and the Island Course at the Innisbrook Resort was ranked 
as one of the "Top 75 Resort Courses" by GOLF DIGEST in 1992. Heritage Golf Club
was ranked in the Top 50 Public Golf Courses by GOLF DIGEST in 1992. See "The   
Golf Courses." The Company believes that the quality of the Golf Courses is     
further reflected in the average green fees at the Golf Courses, which          
significantly exceed national industry averages.                                

DEVELOPMENTS SINCE THE INITIAL PUBLIC OFFERING

GOLF COURSE INVESTMENTS                                                         

Since its acquisition of the ten Initial Courses in February 1997, the  
Company has acquired interests in the following nine Golf Courses for total     
consideration of approximately $100 million.                                    

TIBURON GOLF CLUB.  On August 18, 1997, the Company acquired the 27-hole
Tiburon Golf Club ("Tiburon"), an upscale semi-private golf course in Omaha,    
Nebraska, for an aggregate price of $6.0 million, including the issuance of     
21,429 shares of Common Stock (valued at approximately $600,000 on such date).  
Players can choose to play any two of the three nine-hole layouts at Tiburon for
a total of three distinct 18-hole combinations. The courses at Tiburon are      
characterized by rolling fairways with mounds, berms and greenside bunkers.     
Tiburon is leased to an affiliate of Granite Golf Group, Inc., (together with   
its affiliates, "Granite Golf"). Granite Golf currently manages over 30 golf    
courses throughout the United States.                                           

RAINTREE COUNTRY CLUB.  On September 2, 1997, the Company acquired the  
Raintree Country Club ("Raintree"), located near Akron, Ohio, for an aggregate  
price of $4.6 million, including the issuance of 121,529 OP Units (valued at    
approximately $3.4 million based on the price of the Common Stock on such date).
This high-end daily fee golf course is located in a wooded area and has many    
narrow fairways demanding precision shots. Raintree is leased to its Prior      
Owner, who has continuously managed the course since its construction in 1991.  

 EAGLE WATCH GOLF CLUB.  On September 30, 1997, the Company acquired Eagle
Watch Golf Club ("Eagle Watch"), located in Atlanta, Georgia, for an aggregate  
price of $6.4 million, including the issuance of 70,158 OP Units (valued at     
approximately $1.9 million based on the price of the Common Stock on such date).
Eagle Watch is an 18-hole course designed by Arnold Palmer on rolling hills with
tree-lined fairways and numerous lakes and ponds. The Prior Owner of Eagle Watch
is an affiliate of the Prior Owner of Olde Atlanta Golf Club, a course that was 
acquired by the Company at the IPO. Eagle Watch is leased to an affiliate of the
Lessee of Olde Atlanta Golf Club.                                               

 LOST OAKS GOLF COURSE.  On October 3, 1997, the Company acquired the Lost
Oaks Golf Course ("Lost Oaks"), in Tampa, Florida located near the Innisbrook   
Resort, for approximately $5.9 million, including closing costs. Lost Oaks is   
leased to an affiliate of Starwood Capital Group, LLC (together with its        
affiliates, "Starwood"). The Company has agreed to fund certain improvements at 
Lost Oaks in an amount not to exceed $1.25 million in exchange for an increased 
Lease Payment.                                                                  

   CLUB OF THE COUNTRY.  On October 17, 1997, the Company acquired Club of the
Country, a private country club located near Kansas City, Kansas, for an        
aggregate price of approximately $3.1 million, including the                    

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issuance of approximately 19,231 OP Units (valued at approximately $500,000     
based on the price of the Common Stock on such date). Club of the Country, noted
for its outstanding greens and playability, combines the serenity of a wooded   
countryside, meandering creeks and rolling hills with the challenge of 18 holes 
of championship golf. Club of the Country is leased to an affiliate of the Prior
Owner and managed by an affiliate of Granite Golf.                              

  INNISBROOK RESORT.  On June 20, 1997, the Company entered into and made an
initial advance of $69.975 million under the $78.975 million Participating      
Mortgage to Golf Host Resorts, Inc. (the "Innisbrook Resort Owner"), an         
affiliate of Starwood. The loan is secured by a first lien on the Innisbrook    
Resort, located near Tampa, Florida, and all other assets of the Innisbrook     
Resort Owner. The Innisbrook Resort is a destination golf resort with 63 holes  
(plus an additional nine holes currently under construction) and was named by   
ESQUIRE as one of the top 10 resorts in North America. The four Golf Courses at 
the Innisbrook Resort are operated by Troon Management Company, LLC ("Troon     
Golf"), an affiliate of Starwood. The Innisbrook Resort also features one of the
largest hotel and conference facilities in Florida, which facilities are        
operated by Westin Hotels & Resorts Company ("Westin") pursuant to a long-term  
management agreement. Westin has agreed to pay up to $2.5 million per year to   
the Innisbrook Resort Owner to supplement results of operations with respect to 
the operations at the Innisbrook Resort for up to five years (the "Westin       
Guaranty"). The Innisbrook Resort Owner used a portion of the proceeds of the   
Participating Mortgage to acquire from the Company 274,039 newly issued OP Units
and 159,326 newly issued shares of Common Stock, representing an ownership      
interest in the Company of approximately 5.1% (3.7% after giving effect to this 
Offering).                                                                      

THIRD QUARTER RESULTS                                                           

 For the quarter ended September 30, 1997, the Company's total revenue was
$6.1 million, net income was $1.6 million and net income per share was $0.39.   
For the period from February 12, 1997 (inception of operations) through         
September 30, 1997, the Company's total revenue was $12.1 million, net income   
was $3.6 million and net income per share was $0.84.                            

LETTERS OF INTENT                                                               

  The Company has entered into three letters of intent to acquire a total of
four golf courses for purchase prices totalling $25 million. In addition, the   
Company has recently submitted non-binding offers to acquire additional golf    
courses and is in various stages of discussions to acquire additional golf      
courses. The Company is in various stages of negotiation and due diligence      
review for each of these golf courses. Completion of these transactions is      
subject to negotiation and execution of definitive purchase and sale agreements,
satisfactory completion of the Company's due diligence review and certain other 
customary closing conditions. No assurances can be given that the Company will  
continue to pursue or complete the acquisition of any of these golf courses.    

LINE OF CREDIT                                                                  

On June 20, 1997, the Company closed a two-year, $100 million secured   
revolving credit facility (the "Line of Credit") with a group of four commercial
banks led by NationsBank, N.A. On September 24, 1997, the Company negotiated a  
reduction in the interest rate from LIBOR plus 2.0% to LIBOR plus 1.75%.        
Additionally, the Company has received a commitment to increase the Line of     
Credit, upon completion of this Offering, to $125 million and to convert it to  
an unsecured facility.                                                          

The Company drew upon the Line of Credit to fund a portion of the       
Participating Mortgage as well as to fund the acquisitions of Tiburon, Raintree,
Eagle Watch, Lost Oaks and Club of the Country. The Company intends to draw upon
the Line of Credit, or any successor line of credit, to fund any future         
acquisitions of additional golf courses. There can be no assurance, however,    
that the Company will close any future acquisitions or that the Company will    
continue to have access to sufficient debt and equity financing to allow it     
successfully to pursue its acquisition strategy.                                

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STRATEGIC AFFILIATIONS                                                          

  AFFILIATION WITH STARWOOD.  Starwood, through its affiliates, operates the
Golf Courses at the Innisbrook Resort and leases Lost Oaks. In addition, the    
golf and conference facilities of the Innisbrook Resort are owned by an         
affiliate of Starwood and the hotel and conference facilities are managed by    
Westin, an affiliate of Starwood. The Company believes Starwood, through its    
affiliates, is one of the United States' leading golf course management,        
development and consulting companies. Troon Golf has the exclusive right to     
operate golf courses at hotels owned by Westin. The Company believes that its   
existing relationship with Starwood, Westin and Troon Golf will provide the     
Company with additional acquisition opportunities throughout the United States. 

AFFILIATION WITH GRANITE GOLF.  The Lessee of Tiburon is an affiliate of
Granite Golf and an affiliate of Granite Golf manages Club of the Country.      
Granite Golf and its affiliates currently manage over 30 golf courses throughout
the United States. Granite Golf identified the acquisition opportunity at       
Tiburon. The Company believes its affiliation with Granite Golf will provide the
Company with additional acquisition opportunities.                              

RISK FACTORS

INVESTORS SHOULD CONSIDER CAREFULLY THE MATTERS DISCUSSED UNDER "RISK   
FACTORS" PRIOR TO MAKING AN INVESTMENT DECISION REGARDING THE COMMON STOCK      
OFFERED HEREBY. SUCH RISKS INCLUDE:                                             

   - The Company generally values golf courses, and establishes Lease Payments
and Participating Mortgage Payments based on selected adjustments to
     historical operating results or estimates of future performance which the
 Company believes are appropriate. These adjustments include projected
increases in revenues from golf course operations and elimination of
      certain operating expenses. If such adjustments are not appropriate, or if
   estimates of future performance are not met, a Lessee or the Innisbrook
Resort Owner may not be able to make its scheduled payments to the  
      Company. Failure of a Lessee or the Innisbrook Resort Owner to make such a
    payment may result in a default under a Participating Lease or under the
    Participating Mortgage. This would have a material adverse effect on the
  Company. Estimates of future performance were particularly significant
   with respect to two recently-opened Virginia courses and the Innisbrook
Resort. In addition, although the Westin Guaranty is designed to    
  supplement results of operations at the Innisbrook Resort, it is for a
limited period and limited amount and may be insufficient to ensure 
     receipt by the Company of base interest under the Participating Mortgage.

- Dependence on Lease Payments and payments under the Participating     
   Mortgage, which payments account for substantially all of the Company's
income.                                                             

- The Participating Leases, with extensions, may have terms of up to 40 
    years, which could adversely affect the Company's ability to sell a Golf
Course.                                                             

- Even though the Company's wholly-owned subsidiary, GTA GP, is the sole
  general partner of the Operating Partnership, the Company alone cannot
     cause the Operating Partnership to merge or consolidate or to sell all or
      substantially all of its assets under the Partnership Agreement (as herein
defined). Such extraordinary transactions require the consent of the
  holders of at least 66.7% of the OP Units and, upon completion of this
Offering, the Company will hold only 60.8% of such interests.       

   - The REIT provisions of the Internal Revenue Code of 1986, as amended (the
      "Tax Code"), prevent the Company from operating Golf Courses. As a result,
    the Company must continue to find qualified independent lessees to lease
  and operate its courses, and the Company may not exercise control over
such lessees' day-to-day management and operational decisions.      

- The Golf Courses are subject to risks affecting golf course operations
generally, including competition, uninsured casualties, increases in
   operating costs, inclement weather, seasonality, oversupply and general
  decreases in demand, all of which could affect adversely a Golf Course
operator's ability to make its scheduled payments to the Company.   

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- The Company depends upon the skill, industry knowledge and established
   relationships of its key personnel, including W. Bradley Blair, II, the
Company's Chief Executive Officer and President, David J. Dick, its 
    Executive Vice President, and Scott D. Peters, its Senior Vice President
and Chief Financial Officer. The loss of such officers' services may
affect adversely the Company's business results.                    

   - The Company will be taxed as a regular corporation if it fails to qualify
    as a REIT for federal income tax purposes, and the Operating Partnership
    will be treated as an association taxable as a regular corporation if it
fails to qualify as a partnership, both of which would result in a  
reduction in Cash Available for Distribution.                       

 - The Company from time to time acquires newly developed golf courses and
   provides construction financing for expanding golf courses. In light of
    the limited operating history at such acquisitions and expansions, there
is a risk that they will not perform at levels commensurate with the
 Company's expectations, which may affect adversely Cash Available for
Distribution per share.                                             

- In light of the Company's limited operating history and management's  
limited experience operating a public company, operating a REIT and 
     working together as a team, the Company may lack the experience necessary
to implement its growth strategy.                                   

   - Beginning in February 1998, 2,310,157 OP Units will become redeemable, at
     the option of their holders, for cash or, at the election of the Company,
      shares of Common Stock on a one-for-one basis. Such redemption could cause
      a substantial increase in the number of shares of Common Stock outstanding
(of up to 32.3% after giving effect to this Offering). The increased
    number of outstanding shares, or the perception of such possibility, may
cause the market price of the Common Stock to decline.              

  - The Company competes with other well-established owners and operators to
acquire a limited number of golf courses available for purchase.    

  - Five of the Golf Courses are located in the Myrtle Beach, South Carolina
   vicinity and five of the Golf Courses are located in the Tampa, Florida
      area. Such geographic concentration leaves the Company vulnerable to local
market shifts and natural disasters, either of which could affect   
     adversely a Golf Course operator's ability to make its scheduled payments
to the Company.                                                     

- A substantial number of golf courses were opened in recent years, are 
currently under development or are planned for development. Such new
    supply may increase competition for golfers in the Company's markets and
   may affect adversely the number of rounds played at the Golf Courses. A
      decrease in the number of rounds played may affect adversely a Golf Course
operator's ability to make its scheduled payments to the Company.   

 - Stockholders face the risks normally associated with a company's use of
  debt financing and the fact that there is no charter limitation on the
amount of debt the Company may incur.                               

    - The Company's Charter and Bylaws contain certain restrictions, including a
limit on the extent of any one person's ownership of the outstanding
  Common Stock, intended to ensure the Company's compliance with certain
      requirements related to its qualification as a REIT. Such restrictions may
  inhibit a change in control of the Company even where such a change in
control might be beneficial to the Company's stockholders.          

- Increases in the market rate of interest and other factors may affect 
adversely the trading price of the Common Stock.                    

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THE GOLF INDUSTRY 

 UNLESS OTHERWISE NOTED, REFERENCES HEREIN TO NATIONAL INDUSTRY STATISTICS
AND AVERAGES ARE BASED ON REPORTS OF THE NATIONAL GOLF FOUNDATION ("NGF"), AN   
INDUSTRY TRADE ASSOCIATION NOT AFFILIATED WITH THE COMPANY.                     

    The Company believes the United States golf industry is entering a period of
significant growth. This belief is based, in part, on the fact that people over 
the age of 50 play more golf than younger people, and the expectation that over 
the next several years the number of people age 50 and older will increase      
significantly as the "baby boomers" age. See "The Golf Industry --              
Demographics." The Company expects that the aging population will contribute to 
an increase in the number of rounds played and Gross Golf Revenues (as herein   
defined) at the Golf Courses and any golf courses subsequently acquired by the  
Company.                                                                        

  Golf course ownership in the United States is highly fragmented. There are
approximately 15,700 golf courses (approximately 12,900 eighteen-hole           
equivalents) in the United States that the Company believes are owned by        
approximately 13,000 different entities. The Company believes there are         
relatively few owners of more than one course. The Company believes that the 15 
largest golf course owners in the United States collectively own fewer than 5%  
of the total number of golf courses and that fewer than 10 golf course owners   
own more than 10 golf courses. The Company believes that this fragmented        
ownership provides it with an excellent opportunity for consolidation of the    
ownership of upscale golf courses.                                              

The Company believes the current fragmentation of golf course ownership 
resulted from a variety of factors, including a scarcity of capital, the        
entrepreneurial nature of many golf course owners and operators and their       
associated pride of ownership. The Company believes that the economies of scale 
in owning and operating multiple golf courses, the growing significance of      
professional financial management in the operation of golf courses and the      
desire for liquidity by golf course owners could lead to consolidation of golf  
course ownership. In particular, the Company believes golf course owners will be
attracted to the Company's multiple independent lessee structure, which permits 
the Company to acquire a course and then lease it back to an affiliate of the   
seller. Such structure satisfies the owner's desire to remain involved in the   
day-to-day operation of his course, while also satisfying his desire to obtain  
liquidity. The Company further believes its ability to issue OP Units in        
exchange for a golf course will attract potential sellers, who generally can    
defer recognition of taxable gain on the exchange until they exercise their     
right to cause the Company to redeem the OP Units for cash (or Common Stock, at 
the Company's option) (their "Redemption Right"). By offering golf course owners
the tax planning benefit of OP Units and the economic benefit of participating  
in the independent lessee structure, including resulting economies of scale in  
operating golf courses, the Company believes it is able to acquire desirable    
upscale courses that may not otherwise be available for purchase. See "The      
Company -- Business Strategies and Objectives -- Acquisitions and Expansions."  

Largely in response to the popularity of golf, the construction of golf 
courses in the United States has increased significantly in recent years. New   
golf course openings from the mid-1970's through 1987 averaged approximately 150
golf courses per year. For the period 1987 through 1996 an average of 279 new   
golf courses were opened each year, with a high of 336 new golf course openings 
in 1995.                                                                        

The emergence and popularity of younger professional golfers, including 
Tiger Woods, Justin Leonard, Phil Mickelson and Karrie Webb, have increased     
awareness and interest in golf. According to industry statistics, 19.4 million  
homes watched the final round of the four major golf championships in 1996. In  
1997, television viewership of the final four rounds of the four major golf     
championships increased 56 percent to 30.3 million. The Company believes this   
resurgent interest will result in increasing golf participation, including      
increasing participation by women and younger golfers.                          

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The golf industry generated approximately $15 billion in revenues in the
United States in 1996. The Company believes the game of golf has exhibited      
strong growth in popularity in the past 16 years as illustrated below:          

                                                        · Enlarge/Download Table

                                                                                 1980  1996  % CHANGE
                                                                                 ----  ----  --------
                                                                                 (MILLIONS)          
                                                                                                     
Number of golfers............................................................... 15.0  24.7    65%   
Rounds played...................................................................  358   477    33%   

DEMOGRAPHICS.  Additionally, the Company believes the game of golf will 
benefit from favorable demographic trends. The United States Census Bureau      
estimates that the population age 50 and over will increase by 39% between 1996 
and 2010, from 69.3 million to 96.3 million. The average number of rounds played
per golfer on an annual basis increases significantly as the golfer ages.       
Golfers in their 50's play nearly twice as many rounds annually as golfers in   
their 30's, and golfers age 65 and older generally play three times as many     
rounds annually as golfers in their 30's. The Company believes that the number  
of golfers as well as the total number of rounds played will increase           
significantly as the average age of the population continues to increase. The   
Company believes that "baby boomers," the oldest of whom are now in their early 
50's, will contribute to the growth in total rounds played due to growing wealth
and leisure time as well as the suitability of golf as a sport for an aging     
population. Since 1991, the number of senior golfers (golfers age 50 and over)  
has grown 16%, or by nearly 1 million golfers. See "The Golf Industry --        
Demographics."                                                                  

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THE GOLF COURSES

   The Company believes that its acquisition of the 10 Initial Courses and its
acquisitions since the IPO are consistent with its goal of becoming a leading   
owner of, and participating in increased revenue from, nationally or regionally 
recognized golf courses. The Company's Golf Courses consist of 19 upscale       
courses located in the mid-Atlantic, southeastern, midwestern and southwestern  
United States. Five of the Golf Courses were ranked among the Top Ten New       
Courses by either GOLF DIGEST or GOLF MAGAZINE in the year opened, including    
Stonehouse Golf Club and Royal New Kent, each of which was named the Best New   
Upscale Course by GOLF DIGEST in 1996 and 1997, respectively, and Oyster Bay,   
which was named Best New Resort Course in the United States in 1983 by GOLF     
DIGEST. The Copperhead Course at the Innisbrook Resort was ranked 43rd in the   
1996 survey by GOLF MAGAZINE of the "Top 100 Courses You Can Play" and the      
Island Course at the Innisbrook Resort was rated by GOLF DIGEST as one of the   
"Top 75 Resort Courses" in 1992. Heritage Golf Club was ranked in the Top 50    
Public Golf Courses by GOLF DIGEST in 1992.                                     

  The Golf Courses include 17 upscale Daily Fee courses (including 10 Resort
Courses) and two private clubs. "Daily Fee" courses are open to the public and  
generate revenues principally through green fees, golf cart rentals, food and   
beverage operations, merchandise sales and driving range charges. "