What is there to say when you hear of anything being bought by private equity (PE) but, "Please, not again. When will it stop?". Maybe we just hear the bad stories about PE buying an asset, scalping it, and selling it off for parts once it's maximized a relatively short-term return on investment. Now, we're facing a tough question: will Willow Springs International Raceway be another one of those bad stories?
As reported by The Drive, a Boston-based investment firm, that specializes in commercial real estate, confirmed that it's in the closing stages of purchasing the track, including all the 600 acres that are included in the. So, once the deal goes through, the iconic Big Willow and Streets, along with the five other tracks on the property will be under the ownership of the real estate investment firm.
A statement from the firm reads, "While CrossHarbor Capital can not provide details on acquisitions before they are complete, we can confirm that a deal is pending and the team is excited to preserve the legacy and enthusiast access to one of America’s most iconic racing facilities while also setting up the property for growth and success in the future. More details will be released soon,”
That's a pretty promising statement. Although, experience tends to contradict that statement.
According to the firm's website, it operates on "thorough analysis, not whimsical prediction," and it has a "singular focus is preserving capital while maximizing returns and minimizing risk.”—that's how you build a property portfolio worth more than $10 billion, I suppose.
It's tough to see how this philosophy will work with Willow's famously low prices, to say the least. But what could the best-case scenario be for Willow Springs International Raceway?
Do you think all seven tracks will survive and keep regular opening hours? No, I would highly doubt it. But, Big Willow, which you can currently rent for an entire day for less than $5,000, could be safe, along with Streets. Although, I'd imagine the famously low track fees and general cost of having a day there will go way up. The plan is likely to build luxury properties somewhere on the plot, but if a hotel came along with that it wouldn't be the worst thing in the world as accommodation close to the tracks is relatively scarce.
But what's the worst-case scenario?
Well, RIP Willow Springs International Raceway. Say hello to condos, spas, gyms, country clubs, and maybe something to commemorate where one of the most iconic raceways in the West used to be. Now, maybe this is the last bit of optimism I have left for PE, but I have some hope for the raceway's future—Not that it'll be good, just that it might not completely die.
There's a lot of relatively cheap land that's closer to Los Angeles than Willow, so buying the raceway just to demolish it seems like it's not in the firm's best financial interest, and that's all that matters to PE. So, could we be saying goodbye to the lesser-used tracks in favor of trackside condos and amenities? Maybe. Unfortunately, I have to say hopefully, even though it's the last thing I'd like to see.
Maybe the firm will milk every penny out of the remaining tracks before eventually demolishing them, too. God, I hate how PE makes me see humanity.
