Investment in Marinas: Opportunities and Considerations

Marinas are more than just recreational facilities; they represent significant investment opportunities in the leisure and real estate sectors. This article explores the specialized companies that own and operate marinas, the factors influencing investment decisions, and the unique challenges and benefits associated with these investments.

Investment Companies Specializing in Marinas

Several investment companies have specifically identified the marina market as a key area for growth and expansion. These companies often operate within the realm of real estate investment and management, focusing on waterfront properties and recreational facilities. Here are a few prominent players:

Safe Harbor Marinas

One of the largest marina operators in the United States, Safe Harbor Marinas is dedicated to managing and expanding its network of marinas. These marinas typically provide a wide range of services aimed at enhancing the experiences of boaters, including mooring, maintenance, and storage solutions.

MarineMax

Though primarily known as a boat retailer, MarineMax also has a significant presence in the marina sector. By offering boat slips and related services, they combine retail and boating infrastructure to create a comprehensive maritime lifestyle for enthusiasts.

Suntex Marinas

Suntex Marinas specializes in acquiring and managing marinas across the United States. Their focus on customer experience and enhancement of facilities makes them a standout in the industry. These companies are well-positioned to meet the changing needs of recreational boaters and provide a high-quality experience.

Eagle Point Marina

A smaller and more focused operator, Eagle Point Marina invests in marina properties to improve and modernize facilities. By providing top-notch amenities and services, they aim to attract more boaters and recreational users.

Investing in marinas requires a thorough understanding of the market dynamics, including regional demand, management expertise, and ongoing operational challenges. The growth of recreational boating and related waterfront activities makes the marina sector an attractive investment opportunity.

Publicly Traded REITs and Marinas

Some Real Estate Investment Trusts (REITs) may include marina properties in their broader portfolios. However, the unique nature of marina investments can pose challenges for REITs, particularly when it comes to UBTI (Unrelated Business Taxable Income). This can create taxable income for non-taxable entities, complicating investment strategies and tax planning.

REITs and other private equity funds (PE funds) often face significant tax implications when investing in marina properties. The deeded slip demand, which is a common source of income for marina operators, can lead to major tax problems. This further underscores the importance of careful research and strategic planning in the marina investment space.

Investors should also consider the operational and maintenance costs associated with marinas, which can sometimes be higher than expected. Additionally, variations in local regulations and public policies can impact the profitability and sustainability of these investments.

The Business Model of Marinas

The business model of marinas is often more akin to manufacturing than traditional real estate investments. Unlike most real estate investments, marinas provide not just a physical property, but also a service. This service-oriented approach can make the marina business more complex, as it requires ongoing upkeep, customer satisfaction, and adaptability to changing market demands.

For those focused purely on the real estate aspect, marinas can serve as a complementary asset to a broader property portfolio. However, for businesses that view marinas as a standalone business venture, the emphasis shifts towards managing a fleet of assets and delivering an exceptional customer experience.

The variety of marina operators and the complexities associated with marina investments highlight the importance of thorough due diligence before making any commitment. Understanding the nuances of the market, meeting the demands of boaters, and adapting to the evolving landscape of recreational boating are critical for success in the marina sector.