Top Marina Management Firms Join Forces

Suntex Marina Investors, LLC  announced its transaction to join forces with established marina management company, Westrec Marinas.

One of the world’s largest owner-operators of marinas and marine-related businesses, Westrec Marinas provides professional management services to its properties, affiliates, and clients. Founded in 1987, Westrec owns and manages marina facilities located both in fresh and salt-water environments, handling vessels ranging in size from personal watercraft to megayachts. Management strategies unique to Westrec have been incorporated into its corporate philosophy throughout Westrec’s history. Customer service, its most important product, has remained a core company value since day one.

“Years ago, we realized the many synergies between Westrec Marinas and Suntex,” said Bryan Redmond, CEO, Suntex Marinas. “Westrec Marinas’ vision of offering the best in customer service and amenities, along with a memorable experience out on the water, aligns perfectly with our vision. The most rewarding part of this merger is knowing we now have added another whole network of marinas who share our core values and together we are poised for a fantastic future.”

“We pride ourselves on having the most comprehensive and experienced marina operating team in the business,” said Bill Anderson, president, Westrec Marinas. “Suntex brings significant innovations and more streamlined tools and processes for daily operations. In addition, they have meaningful reporting and financial forecasting with real-time data, a more established communication, and marketing effort, as well as additional capital to invest in repair and maintenance and capital expenditures for major projects at our current marinas. Together we have an unlimited opportunity to grow and prosper.”

“Our Suntex team could not be more encouraged regarding our partnership with Westrec,” said Johnny Powers, chairman of the board, Suntex Marinas. “Westrec’s decision to combine forces with Suntex is proof that relationships, culture, and integrity are paramount.”

“Since partnering with Suntex in March 2021, we have worked to help accelerate the Company’s continued growth,” said William Rahm, senior managing director and head of real estate at Centerbridge Partners and director on Suntex’s Board. “This transaction brings together two leading teams and businesses in the marina sector, where we continue to see significant growth opportunities to serve the increasing demand for boating and leisure activities.”

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Marina Business Gets Lift From Pandemic Boat Sales

Real-estate investor Centerbridge is combining the second- and third-largest marina owners to create a $2.5 billion company.

The second-largest owner of U.S. marinas is acquiring the third-largest owner, creating a new powerhouse in this niche real-estate business as boat sales surge during the pandemic.

Centerbridge Partners LP said it is paying about $400 million for Westrec Marinas, which the investment firm will absorb into its own Suntex Marinas. That will create a combined company with more than 50 marinas that is valued at $2.5 billion, making it the second-highest-valued U.S. marina owner after Safe Harbor Marinas.

Investor interest in the waterside properties started growing in 2019 when marinas gained more favorable tax treatment. Marinas got another boost with the rise in boat sales, which soared during the pandemic with more companies moving to coastal states with warmer climates. Boating also became more popular as a relatively safe way to socialize outdoors, along with camping and hiking.

“People who were [boating] some of the time are doing it more, and others are doing it for the first time,” said Billy Rahm, Centerbridge senior managing director.

Annual U.S. sales of boats, marine products and services totaled $49.3 billion in 2020, up 14% from 2019, according to the National Marine Manufacturers Association. Powerboat sales in 2021 were expected to surpass 300,000 for a second year in a row after hitting a record in 2020, the association said.

Analysts say the marina business resembles the manufactured-housing and recreational-vehicle industries before institutional investors discovered them and drove prices much higher.

Many institutional investors have viewed marinas as a terrible industry “because they own boats and have realized how much money they’ve sunk into them,” said Josh Dennerlein, an analyst with Bank of America who tracks the industry.

Yet, he added, they should have thought about the flip side and “that someone was making a lot of money to store their boats and maintain them.”

Some big investors became more intrigued with the prospect of owning marinas after the Internal Revenue Service ruled that fees paid for boat slips and boat storage counted as real-estate rents. That gave real-estate investment trusts that owned marinas the same tax benefits as those given to REITs that owned other commercial property.

The aging baby-boomer generation was stoking marina demand, even before the pandemic. More retirees have been spending their leisure time and savings on boating.

New marina construction, meanwhile, has been virtually nonexistent and barriers to new entrants are steep. There are few remaining development sites in sheltered harbors. New marinas would also have to overcome tough environmental regulations and possible community opposition.

“You don’t necessarily want a boat marina next to your beautiful $10 million waterfront home,” Mr. Dennerlein said.

Still, the marina business has its risks. Continued inflation would increase the cost of paying dockhands, boat-maintenance crews and other workers. An economic downturn would likely convince many would-be customers to avoid the cost of storage by keeping their boats in their driveways.

Most of all, analysts said, climate change raises the possibility of more hurricanes and rising sea levels that could upend the boating business. Mr. Rahm said Centerbridge has taken steps to mitigate climate change risks, such as investing in boat-storage locations at higher elevations.

New York-based Centerbridge estimates that there are about 11,000 marinas in the U.S. but most are individually-owned businesses. The industry is ripe for consolidation, Mr. Rahm suggested, because the minor marinas can’t match the investments larger companies like Suntex are making in technology and marketing.

Merger-and-acquisition activity in this specialized sector has picked up during the Covid-19 era and after the tax change. Real-estate investor Sun Communities Inc. acquired the largest operator, Safe Harbor Marinas, in 2020. Centerbridge became Suntex’s largest shareholder last year.

Mr. Rahm said his firm is eyeing other acquisitions as it builds a marina company that it is considering taking public later this year.

Suntex also has been investing in ways to expand marina revenue beyond docking, storage, maintenance, and food-and-beverage services. Many of the company’s marinas offer boat clubs and rentals that make tidy profits while giving non-boat owners a taste of ocean spray, fishing and water sports.

“If they really like it, they end up buying a boat,” Mr. Rahm said. “When they do, they’re highly likely going to keep their boat at a Suntex marina.”

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Sale Announcement | Moby Dick Marina Sold

SVN Marinas is pleased to announce it advised the owners of the Moby Dick Marina on the sale of their business in Fairhaven, MA to a private investment group led by America’s Cup winning sailor, Rome Kirby, and Tristram Worth of VMG Capital.  Founded in 1994 and acquired in 2005 by the Anezis and Zolotas families, the Moby Dick Marina is in a high-visibility location along I-195 in the hurricane barrier protected New Bedford Harbor.  The Marina has a 19,200 SF building with 80 dry-stack slips, 50 in-water slips and 5 moorings. 

Mike Howell, the owner of SVN Safe Haven Advisors and co-Council Chairman of SVN Marinas approached the owners of the Moby Dick Marina about the possibility of selling their marina to capitalize on the robust interest from prospective marina acquirers seeking attractive facilities in the Northeast and across the country. This is the first acquisition for VMG Capital who contacted SVN Marinas in their efforts to develop a larger marina platform.   

SVN Marinas advises on the acquisition and divestiture of marinas, marine properties and marine businesses. SVN Marinas has nearly twenty marina and marine properties publicly listed for sale and numerous other confidential and off-market deals.  For more information about SVN Marinas and available marina opportunities please visit our website.

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Sale Announcement | Sebastian River Marina & Boatyard

David Kendall (SVN | Florida Commercial) advised on the sale of Sebastian River Marina & Boatyard.  We congratulate the new owners and management team on acquiring this unique coastal marina, which is located in a federally designated “Opportunity Zone”.  With it’s close proximity to Sebastian Inlet, Sebastian River Marina & Boatyard is a convenient 120+ slip marina and full service yacht repair facility for boaters from all over Central Florida.  We are excited to see the new owners invest in their vision to build upon the legacy of one of Florida’s most unique coastal marinas.   

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