Simply Marinas team is qualified to assist you with valuation, due diligence and financing.
From an article Marina Dock Age requested us to write on Tips on Buying and Selling Marinas:
Certain marina attributes enhance a buyer’s investment in any market. These include its location, the condition of the facility, its amenities, and the extent to which buyers are basing their purchases almost solely on cash flow and current income. If the marina or boatyard has a potential upside and an ability to add value, these are definite pluses. If the marina is well maintained with professional management, needs no significant maintenance and shows a positive cash flow, then it’s in good shape to sell, especially if it has attractive amenities.
It should be noted that certain buyers are willing to buy sites, which are currently not cash flowing or need an overhaul of their amenities, but only if they have a clear upside and a discounted purchase price. An important factor contributing to a closed sale is owner financing, that is, the ability of the owner to finance all or some of the purchase.
What about marina speculative development projects? Buyers were willing to pay seller’s price if the marina fit their vision and could be permitted for expansion or a residential project, such as a glamorous resort condominium. Today, buyers are not interested in building a marina unless the purchase price is at a very low discount. Even then, buyers seem to prefer rental income to other income sources due to lower risk.
Cap rate is the most important factor in establishing value. The value of a marina is based on the current cash flow and cap rate, which is bridging the schism between buyers and sellers and causing more marinas to sel. Here’s the math. To determine a marina’s cap rate, the seller needs to divide the marina’s net operating income (NOI) by the value of the property. The seller wants to sell the property at the lowest possible cap rate because that means it is being offered at the highest possible price. Cap rate is property specific. There’s a shortage of marinas that meet buyer’s expectations of a cap rate closer to 9 or 10 percent. We have seen marinas selling at lower cap rates in 2016.