THE MEDIA VOICE OF THE GLOBAL MARINA INDUSTRY

Trading covetable assets

Buying and selling marinas has become a highly lucrative niche in the global property/real estate market. What are the trends? Who are the buyers? How do you prepare for sale? Marina World spoke to key professionals at leading property companies CBRE (Julie Fisher Berry/JFB), Simply Marinas (Michelle Ash/MA), Current Capital Real Estate Group (Calum Winsor/CW) and partners Investors Realty Services, Inc (Christian Johannsen/CJ) primarily with regard to the market in Florida.

Q: Can you give an outline of the scope of transactions you’ve covered over the past two years?
JFB: The CBRE Marina Group is recognised as the primary source of signature marine property transactions. The group specialises solely in premier marinas and superyacht facilities, having executed over US$2.5 billion in recent marina and shipyard transactions including notable facilities such as Lauderdale Marine Center and Rybovich Yachting Center. CBRE is the largest commercial real estate firm in the world. Its global platform positions The CBRE Marina Group for US and international transactions alike.

Recently sold by CBRE, Faro Blanco in Marathon, Florida Keys, is a trophy marina with an iconic historic lighthouse, plentiful amenities, and mooring for vessels up to 140ft (43m).

Recently sold by CBRE, Faro Blanco in Marathon, Florida Keys, is a trophy marina with an iconic historic lighthouse, plentiful amenities, and mooring for vessels up to 140ft (43m).

CBRE Marina Group has transacted approximately US$300 million in recent superyacht marina and refit facility transactions. Although we are currently representing owners throughout the US and abroad, our recent primary sales occurred in South Florida. One of our signature transactions included the sale of The Perry Hotel and Stock Island Marina in Key West, Florida. This asset traded well in to nine figures, however the actual price is confidential.
Another premier transaction was the sale of Lighthouse Point Marina, which is located in the greater Fort Lauderdale area, just inside the Hillsboro Inlet. This was a highly sought after asset due to its location and immediate access to the Intracoastal and the ocean. It is a haven for high end sportfishing yacht owners who want to be out on the ocean within minutes. It is difficult to find a marina in the South Florida market, especially in Fort Lauderdale. The value allocation for just the marinas in these multi-asset properties typically trade at US$300,000 or more per slip. This value is based on a trophy location which has been maintained, has little to no deferred maintenance, and provides on-site amenities.
[p2]CBRE Marina Group also represents the long-term leasing of Sunrise Harbor Marina, a superyacht marina located in the heart of Fort Lauderdale. Long term marina leases are another desirable acquisition. Situated near the Fort Lauderdale International Boat Show, this marina has the attributes that attract the most discerning marina operators and owners in the industry.
MA: We have been fortunate to have relationships with new and repeat marina sellers that culminated in over US$380 million in marina sales over the last two years across all regions of the US. An example of repeat clients is the sale of a portfolio consisting of six marinas that we represented. We worked with the seller initially as a buyer.
CW: We have sold marinas and boatyards from the Florida Keys all the way up through to New York. The deal size on closed transactions varies from somewhere between US$7 to 25 million. However, that being said, we have worked on and continue to work on deals that are US$4 to 7 million and much larger marinas in the US$100 million range.
[p3]Q: During this two year timeframe, has there been increased interest and what types of marinas are most sought after?
CW: Over the last several years we have seen an increasing demand for marinas, and I think this was inevitably a result of COVID and people wanting to get away from people and crowds (where else but on your boat at sea). We already know boat sales are way up as a result and given Florida’s all year-round boat market it has been a real destination for all, or at least on their radars, and given that these boating markets were only shortly impacted from lockdown restrictions they performed well given the circumstances.
There is also a decreasing supply of marinas due to the ever-growing waterfront luxury real estate and condo markets. There have been many instances of waterfront marina/boatyard operations that turn into some new high rise development to maximise the land use and gentrification. Private Equity and REITs were never on the radar for the marina industry, I think because marina assets can be quite complex real estate asset classes compared to your typical cookie cutter multi-family, industrial or retail properties. I think when SUN Communities purchased Safe Harbor Marinas in 2020 for US$2.11 billion that brought a whole new set of eyes to the table and interest from all over the world, because who wouldn’t want to own waterfront real estate in a thriving market and asset class?
[p4]There is an increase in dry storage demand as the racking and building possibilities grow with new technologies for larger boats, along with increasing forklift capabilities, which all in allow for a safe secure indoor environment to house boats. However, given the ever increasing size of yachts and superyachts these days, if the water depths are deep enough to support the vessels, you will find all these wet slip marinas are usually pretty full. People with 50/60/70/80ft+ boats obviously take up more space (which space is limited) and the desire for bigger and better isn’t going anywhere.
CJ: The pandemic clearly increased the demand for boats…but the lowest interest rate environment in my 52+ year career provided an opportunity for basically everyone to go purchase their “28ft centre console” fishing/day boat. So, we’ve had an enormous increasing demand.
[p5]Also, in Florida in 1989, the Florida State Legislature enacted the Manatee Protection Plan (MPP) for 13 counties. The MPP ensures the long-term protection of manatees within specific county boundaries. Each of these 13 counties is now allowed a maximum number of vessels collectively (both dry and wet). So, for example, if a county is limited to 5,000 boats, and it already has 4,850 vessels, one could only add 150 racks/wet slips – irrespective of the demand for same. This has really put a damper on the supply side of the equation.
MA: The past two years have continued to see a spike in marina acquisitions fuelled by new funds and groups entering the market. Investors are attracted to marinas due to the limited waterfront and therefore limited spaces to build marinas, attractive cap rates and accelerated depreciation. Add to this the appeal that waterfront properties have.
Various factors have continued to accelerate and keep the marina market strong and attractive: new funds and Wall Street players who entered the market; the pandemic effect on increase of boat sales driving marina occupancy near 100% occupancy, in general; cash buyers and alternative funding; and attractive cap rates compared to other commercial real estate asset types.
Marinas with mainly rental income from wet or dry slips as well as established long term commercial tenants are attractive due to lower risk and higher returns. Marinas with amenities are also a factor buyers prefer in order to maintain and attract customers.
[p6]JFB: Marinas have been a highly coveted asset. Two years ago, we would sell marinas before going out to the open market. It was a seller’s market, and the buyers were ready. The desire to acquire marinas has remained strong. However, changing market conditions have recently affected some buyers in how they acquire assets and how they assess the upside potential for increased value. The market did not change the appetite to acquire marinas, just the method by which they are acquired.
As this asset class becomes increasingly desirable, new investors are entering the space and request to be on the selective list when we are selling a marine property. As many groups tighten their approach, it has provided an opportunity for others to acquire trophy locations through their willingness to be aggressive, knowing that there is always an upside in rates due to the lack of available slips. Supply and demand dictates markets, and this is no exception. The lack of supply has driven the rates up and it is not likely to change in the active yachting markets.
Additionally, there is a market for long term marina leases. We have represented private owners and public entities in the bid process to operate premier marinas. The benefit of a lease is the reduction of capital needed for the price of an acquisition. Capital improvements may be needed, however this is subject to the condition of the marina, structure of the bid, and revenue sharing agreement.
[p7]Marinas that accommodate vessels from 40ft [12m] up to superyachts over 180ft [55m] will always be in demand in active yachting areas. Buyers typically seek marinas with greater than 100 slips, or any size marina that can accommodate megayachts, which command a much higher rate per linear foot. As a board member for the US Superyacht Association and Marine Industries Association of South Florida, I continue to see the reports showing a consistent upward trending demand for larger yachts.
More yachts are coming online while availability of slips is declining as marine properties succumb to other types of development. Our purpose is to promote the marine industry domestically and internationally, so that we protect marina operators and berths to accommodate the increasing number of yachts entering the market each year. It is critical to our industry. And it is because of this demand that the marina asset class will continue to increase as a coveted investment as new investors enter the market.
Q: Do you see chains/groups expanding and additional chains developing?
JFB: All marina investors are expanding, however many have greater access to capital and can expand more rapidly than others. Chains are expanding but they sometimes have certain restrictions which have allowed newer groups a better opportunity to enter the market and begin developing portfolios.
CW: Yes, we are seeing new capital finding new groups with the desire for each to acquire as many marinas as possible and expand in all markets.
CJ: Absolutely. The “institutional” world has finally caught on to the “cash flow cows” of marinas. We’ve seen at least four to six new entries into the marinas space that were not here before.
MA: Several funds and groups entering the market have contacted us with the intent of placing large investment amounts in marinas. Their intent is to create a marina portfolio and in some cases to partner with proven marina operators. Established marina groups who have consolidated several marinas continue to expand due to economy of scale, higher returns, and competitive edge.
Q: Is there a market for selling a single marina for buyers who wish to run it as their sole business (i.e. a new generation of start-up family/private ownership)?
MA: Very much so. Larger companies prefer marinas over US$10 million or so and have stringent requirements.
Individual buyers, lifestyle buyers, marina operators, and end users are here to stay. Keep in mind that in spite of recent consolidation of marinas by larger groups, the majority of marinas are still mom and pop owned and make a good match for individual buyers.
JFB: There is a market for selling a single marina. However, it is hard for a lone buyer to compete with the highly funded investment groups in prime locations which tend to sell for higher prices and lower cap rates. If a single marina is in a non-metro area, it presents a better opportunity for a single marina buyer.
CW: Are you referring to a family private ownership looking to sell their marina? If so yes, we have helped many private individuals and families sell their marinas. If you are asking if the marina class is a new possibility for families, I think that is often how it starts, from boat sales, to boat service and storage, these individuals and families establish a great business and service to get ahead and work well in markets.
Marinas can be time and cost prohibitive compared to other asset classes, which requires patience and flexibility in having to deal with Department of Environmental Management (DEP), Army Corps of Engineers (ACOE), MPP and other governmental agencies to get approvals, and the cost to construct (seawalls, dredging etc). That being said, there is a lack of marina developers and groups willing to undergo the time and risk these days. I think that there is a need for more marina developers to expand and grow the limited supply of marinas. I think people can be extremely successful if they pursue this as their sole business but do need to understand the industry and hurdles they will face.
CJ: It used to be more so with individuals. Today, individuals/families can’t afford the time or cost. If you could develop a new marina (or redevelop an old), it could conceivably take around three years to get the necessary permits from Department of Environmental Resource Management (DERM), DEP and ACOE.Furthermore, pricing and costs have increased so much that a marina acquisition today is probably well beyond the ability of most individuals/families. The average sale price of the marinas we’ve sold in the last three years is US$17 million…
Q: What tips would you give a marina owner wishing to sell?
[p8]JFB: The best thing a seller can do to prepare for a sale is to have as much documentation compiled and organised as possible. Having their financials in order, along with other documents relating to the condition of the marina, including surveys, recent capital improvements, permits, etc., makes the process much smoother.
When we represent sellers, we assist with obtaining due diligence items needed for a seamless transaction. We guide them in preparing how to best present the highest and best value and work with them through the entire sale process. Professional and experienced representation helps a seller achieve the best value through seeking interested parties who participate in a bid process. It is essential to have all the necessary information for the process to be successful.
CW: First work on understanding the market as a whole and think creatively.
CJ: Be prepared. Know the condition (and age) of everything – seawalls, docks, piers, pilings; know all the allowable entitlements. Are there any environmental issues? Is the asset in compliance with all governmental regulations? A well prepared seller can really add value to their asset.
MA: For decades, the Simply Marinas team has assisted sellers with pre-sale strategic planning and valuation before the marina is on the market. Based on our experience with over 250 marina transactions, we have recently released a guide that outlines tips, recommendations and strategies to help marina owners contemplating selling their marina: The Marina Owner’s Guide – How to Prepare Your Marina for Sale.
In addition to the team’s experience with marinas, its qualifications and business background have contributed to the comprehensive recommendations provided in the marina seller’s guide.

The Marina Owner’s Guide –
How to Prepare your Marina for Sale
The guide is divided into three sections. The first covers ongoing awareness and steps taken throughout the marina ownership; the second highlights steps to take as you approach the decision to sell; and the third addresses aspects of the sale. The publication provides recommendations that cover: pre-sale strategic planning, valuation, buyer qualifications, due diligence, contract negotiations and exit strategy. The guide aims to increase the marina’s appeal, add value, and offer a negotiation advantage that will be useful in discussions with buyers. “We suggest that marina owners allow sufficient time well ahead of when they plan to sell, to be able to implement some of these recommendations,” Michelle Ash says.
The Guide covers three stages for preparing a marina for sale:
Ongoing Preparation
• Study the Marina Market
• Understand what Marina Buyers Look For
• Identify New Profit Centres
• Explore Expansion Potential
• Maintain Reliable Financial Records
• Examine Deferred Maintenance
Exploring the Sale: Pre-Sale Strategic Planning
• Build Your Sales Team
• Your Marina Broker
Time to Sell: Ensuring a Smooth Sale
• Confidential Sale or Open Market
• Prepare a Due Diligence Package
• Prequalifying a Buyer: Financing and Price
• The Purchase and Sale Agreement
• The Transition
“We have put together this guide to provide marina sellers with the insights we’ve compiled to ease the process of selling your marina, achieving a seamless sales transition, and unlocking the full potential of your marina investment,” Ash explains.
Marina owners can request a digital copy from: team@simplymarinas.com
Michelle Ash, founder and principal of Simply Marinas, has an MBA, a PhD, and a post doctorate in business management related fields. She was CEO of a PBS affiliate with 150 employees and a US$50 million budget. National director, George Ash, undertook graduate work in real estate finance and has a BA in hospitality and recreation. He managed and owned award-winning hospitality businesses. They are also marina investors and lenders.

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