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September October 2019 Marina World

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The Magazine for the marina industry


SETTING THE STANDARDS OF EXCELLENCE Wherever the site, whatever the size we have the bespoke marina berthing and protection solution. The photograph shows a recent project at Conwy Marina, Wales. Let us design and build your next project. Banagher, Ireland (Head Office): +353 579153963 Lossiemouth, Scotland (Sales Office): +44 1343 813233 Southampton, England (Sales Office): +44 239 4002797 Email: Website:

PROFESSIONAL CONSULTANCY Jason Spalding Marina transactions in the USA - when to buy, when to sell by Jason Spalding As a marina broker, my general experience has been that real estate investors initially only understand that marinas do not fall directly within any of the traditional sectors of industrial, office, multi-family, or retail. They are open to learning more, but typically do not realise that, on a national scale, there are few other asset types that are subject to the specific local market preferences, variety of components and seasonal demands as those tied to the recreational boating and yachting world. In general, marinas are a niche asset class of real estate with an assortment of subsidiary classifications. The extent and potential mixture of components can be across the board and can include a combination of wet slips, enclosed drystacks, open racks, maintenance and refit facilities, upland storage yards, or winter storage buildings with real estate comprising fee-simple owned property, leased Above: In April 2017, CBRE brokered the sale of the Loggerhead Marina portfolio – 11 Florida marina facilities in ten cities – to Suntex Marina Investors. The transaction included 767 wet slips, 1,576 dry slips and commercial/retail units and restaurants. property, submerged land leases and/ or water right easements. Marina facilities can also offer a diversity of secondary revenue streams from boat/ yacht brokerage, boat clubs, charters, concierge services, fuelling services, restaurants, water craft and recreational rentals (jet ski, kayak, SUP), etc. As we are now 11 years beyond the last US recession, many new investors and private equity groups have already identified the marina sector as an alternative investment option. The attraction of marinas has mainly been due to high demand and low supply of traditional real estate properties, in addition to their associated compressed cap rates. Because of the 2016 US Department of Treasury Internal Revenue Service (IRS) regulations applicable to marine related properties, as well as the barriers to entry associated with developing new marinas, a number of investors, private equity groups and ownership/operating entities are actively attempting to consolidate the marina industry in the States and have done so with varying levels of success. When to buy A reasonable time for investors to buy a marina is after they have taken the time to narrow down their interests to a preferred geographical region and have fully vetted their expectations on return of investment. Upon such, they should engage a real estate consultant who specialises in the marina sector. It is essential to thoroughly evaluate the full historical financial statements, perform the proper amount of due diligence and gauge any potential value add/loss elements. This can only be accomplished by knowing the right questions to ask and why to ask them. Marina owners who have been in the business for the long term understand that any given marina facility can serve a variety of purposes. However, to be successful they need to meet the satisfaction of their customer base and strive to exceed it. When to sell For marina owners, there are several factors to take into consideration when wondering if it may be time to sell. The evaluation matrix should include their retirement plans, and pose questions on whether there is a pass through to a second generation, if any partnership discussions should be had, if the facility needs refitting or reconfiguring to accommodate today’s vessel sizes and if any substantial capital expenditures or repairs are required. The timing of where we are at in the current real estate cycle and the number of - September/October 2019 27

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