Reinventing the Marina World

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michael-verdon

Anyone paying attention to the marina space knows it has seen the most M&A activity in the industry. Unlike the now-dwindling flurry of acquisitions by boatbuilders and equipment manufacturers, marinas are still a hot commodity.

The sector’s two largest players, Safe Harbor and Suntex, weren’t even around six years ago (though Safe Harbor is an offshoot of Marinas International, and Suntex has multiple marina veterans). Now the two are making regular headlines with $10-plus-million acquisitions of marquee marinas and boatyards.

Thirty years ago, Westrec was in a similar position as the main marina consolidator. The former giant has since settled into being a sizable but stable company with 22 marinas, without a continuing appetite for acquisitions — at least not on same scale as Safe Harbor, with 85 marinas, and Suntex, with 45 facilities. And counting.

Flush with private-equity money, these companies show no signs of slowing down. Southern Marinas, with a $500,000 war chest, also entered the fray this summer and expects to have eight to 10 marinas by year’s end. Companies such as Oasis, Morningstar and others, including some non-U.S.-based companies, are also entering the acquisition game with eyes wide open.

With the current feeding frenzy, valuations tend to be high, and competition is fierce. It’s a good time to own a high-end marina or yard. Even midrange marinas, valued from $3 million to $5 million, are attracting wealthy individuals and small corporate buyers. Several hundred marinas are now for sale, and with an aging owner demographic, that number will increase.

Time will Tell

This is good news for the owners of the properties, of course, but what about the marina and boatyard sector in general? Time will tell.

Several aggregators and dockominium business models that surfaced in the last boom were escorted out by bankruptcy courts in the downturn.

In the near term, it’s gratifying to see owners who have put a lifetime of work being able to cash out. The M&A fever also impacts a relatively small percentage of the estimated 12,000 marinas nationwide — about 3,500 are considered A-listers, so the big players may end up acquiring maybe 10 percent of those as they move down into the sub-$10 million market.

Will service be the differentiator? Most consolidators have plans to invest in infrastructure upgrades or service improvements to justify the slip and service price hikes that are bound to come. Some have five-year plans for infrastructure improvements, while others invest right away to upgrade their new properties.

Service has become one of those buzzwords that everyone loves to hold out as a differentiator, and once again, time will tell if the marketing hype lives up to the reality for boaters living under the new marina owners.

Annapolis, Md.-based Oasis Marinas has introduced a concierge concept taken from the luxury hotel industry. CEO Dan Cowens, who spent 20 years in hotel management, puts the staff through training programs similar to the Four Seasons. Oasis dock hands, or “service associates,” do everything from making restaurant reservations to finding babysitters for visiting boaters.

Its Snag-A-Slip app adds another level by letting transients book slips not only at marinas, but also at residential slips. “I always thought it was crazy that you could book a flight from your smartphone any time, but you needed to call between 8:30 and 4:30 Monday to Friday for a slip,” Cowens says. His bottom line on service: “We should all be making the pie bigger, and the way we do that is by providing better service to the customers.”

Split-Personality Marinas

Newer marinas are also adopting a split- personality between community outreach and privacy for boat owners. Many have slips, but also sailing programs, boat clubs and boat rentals.

ONE°15 Brooklyn Marina, the first new marina in the New York City area in years, is a perfect example. It’s a 100-slip marina that can facilitate 16- to 100-foot boats, with a bar, restaurant, bakery, Harbor Club (read: yacht club) and a wave-attenuating system that ONE°15 had engineers design after they couldn’t find an attenuator to tame New York Harbor’s confused wave patterns.

Beyond the upscale yacht club element and million-dollar view of the Manhattan skyline, the marina also has a “Community Dock” with a fleet of member sailboats, a sailing school for the public, kayak racks and access for nonprofit boating programs. It also has the only ADA-compliant dock ramps in metro New York.

“The Community Dock will be the last piece as we continue to ramp up,” says Estelle Lau, ONE°15 deputy CEO. “It’s very important to us and integral to the success of the marina.”

Another interesting part of this new marina is that its owner, Arthur Tang, is based in Sing­­apore and is developing similar projects in southeast Asia. “He understands that if you open the waters to different types of people, they will come,” Lau says. “Our marina in Singapore, for instance, has just 250 boats but 4,000 members. Our goal is to get people to engage in the boating lifestyle without necessarily having the expense.”

Tang’s goal is perhaps the clearest direction for where the marina world should head if it really wants to reinvent itself. 

This article originally appeared in the September 2019 issue.

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