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2021 May June Marina World

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The magazine for the marina industry


PROPERTY & INVESTMENT Julie Fisher Berry An asset class with an upward trend The sale and purchase of marinas has become an increasingly vibrant part of the real estate scene in the USA. Julie Fisher Berry tells us why. Marinas have a new identity. Ten years ago, I was calling banks and begging them to consider lending to marinas, but funds were not in place. There is a very different outlook today. When I was representing Lauderdale Marine Center (LMC), the largest boatyard marina in the USA, prospective buyers worked to combine equity and financing to purchase the sprawling boatyard on the New River in Fort Lauderdale, Florida, that is now considered a trophy asset. LMC catered to yachts of 120-180ft (37-55m), with celebrities and high wealth individuals as clients. Every fund I approached did not know which asset class could carry LMC but, after numerous calls to The Carlyle Group, they finally received management of a discretionary fund in which they could place the asset. This started a trend. Marinas in the USA have typically been owned by families. As larger groups, such as The Carlyle Group, Suntex Marinas and Safe Harbor Above: The sale of Lauderdale Marine Center, the largest boatyard marina in the USA, started a trend for buying marinas as a new asset class. Right: As a well-serviced oceanfront property, Caloosa Cove Marina and Resort was a targeted acquisition. pursued the purchase of marinas, they became more popular as an investment. Private investors, small investment groups, family offices, equity funds and large marina investment groups are all now seeking marinas to add to their portfolio. Over the past five years, family ownership of marina properties has declined due to offers from the larger groups. Many families who do not have the funds to maintain their property or reconstruct slips or seawalls, fall prey to a sale while others have realised the value and are now finding a way to upgrade their facilities and be competitive. It is good for the industry to have mixed marina ownership. A great example of family ownership is Bradford Marine - previously the largest in the US - which, along with Billfish Marina, Pipewelders Marine and Bradford Shipyard in Freeport Bahamas, was purchased by John and Michael Kelly. This is the kind of family office type acquisition portfolio in which older boatyard marinas have been purchased and millions have been invested to make them commensurate with the demands of the superyacht industry. The operators have personal contact with the yacht owners and crew and that is very important to our industry. Why have marinas become so popular? One reason is the barrier to entry. As marina properties are being purchased for redevelopment to condominiums or hotels, marina slips and boatyards may become an 32 – May/June 2021

PROPERTY & INVESTMENT Considering the pandemic restrictions, the 2021 Palm Beach International Boat Show was highly attended, underscoring the current boom in boating interest. endangered species. As this happens, it drives rates upward. Added to this is the upward trending interest in boating, which soared with the pandemic. The surge in boat sales has created a low inventory and many lines of boats have more than a year waiting time for production. The result? More boats, fewer slips, and less availability in the boatyards. Supply and Demand. This has driven the interest in marinas as desirable assets for investment portfolios. In my professional position, and as a board member of the Marine Industries Association of South Florida, owners of the Fort Lauderdale International Boat Show (FLIBS), and international yachting organisations, I have a pulse on the activity. The Fort Lauderdale International Boat Show and the Palm Beach International Boat Show were highly attended, considering the pandemic circumstances. There is hope that the Monaco Yacht Show will take place. The demand for yachting is off the charts internationally. Marine Billfish Marina, facing Fort Lauderdale’s city centre, was one of several marinas purchased for a family portfolio. industry trends show continued strength, indicating that there will not be a downturn in either boating interest or marina acquisitions. Marina values may reach a peak but they will always be a stable investment as most vacant waterfront property will not allow for future marina development. The newest challenge for marina owners is how to accommodate boats and yachts that are rapidly increasing in size. During the past eight years, our team at CBRE Marina Group has been involved in close to US billion in marina and boatyard sales. The interest has been, and continues to be, wide-ranging. We have experienced increased interest in boatyards, such as Lauderdale Marine Center and Bradford Marine, both sold by our group, due to the substantial profit margins and stable income during economic swings. Marinas near inlets and on the ocean with restaurants and amenities, such as Caloosa Cove Marina and Resort, an oceanfront property with over 100 slips, have been targeted acquisitions. Megayacht marinas with deep water access, such as Rybovich Yachting Center, are rare and highly coveted assets. We are also representing one of the largest drystack marinas in the state of Florida - also a very desirable asset, especially as it can accommodate 40-55ft (12-17m) boats with towers. Our team has been involved in these transactions and many more. Due to ongoing demand and confidentiality, most of our transactions occur without going to market. In summary, boating and marina acquisitions are growing in popularity and the ownership entities are mixed, which keeps a healthy balance for the industry. We have been working with international clients, as well. Representation in acquisitions and dispositions provides for a secure transaction and true market value. At CBRE Marina Group, we have a positive outlook and predict a trend upwards, not only in the United States, but also internationally. Julie Fisher Berry is senior vice president of CBRE Capital Markets Marina Investment Properties E: – May/June 2021 33

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