Marina Dock Age, April 2007

A fresh approach to valuing a marina
by Dennis P. Kissman

During all the years that I have been involved in the marina industry, there is one question that I have been asked more often than any other: how does one value a marina?

Throughout the years, we get several calls from real estate appraisers asking for financial standards for the industry that they can use to compare their valuation of a marina to the industry norms. Over the past few years, several industry trade publications, the Association of Marina Industries, and the National Marine Manufacturers Association have conducted surveys and gathered information about boaters, marinas, and boatyards. These are just some examples of the documented, published resources on the benchmarks and financial performance of marinas.

No easy comparison

What makes it difficult for those outside of the industry to disseminate this information is the fact that no two marinas are exactly the same. Without an intimate understanding of this industry, it is difficult to produce meaningful standards of financial performance from this information alone. As the years pass, the process for collecting information has improved, and as more and more business owners participate in submitting information, the data will become more refined and more reliable.

The lack of available, reliable information is compounded today by the exploding values in waterfront real estate. Marinas are water-dependent businesses, and the value of those businesses is not keeping pace with the real estate that the marina sits on.

One approach to solving this problem has been the conversion of marinas into dockominiums and rackominiums, i.e., the sale of individual wet slips and dry rack units to boaters. This is one solution that we have seen work in several markets, but it is not necessarily an option for every market. We have reached this conclusion based on a number of market feasibility studies that we have conducted to identify the size and depth of the market for the conversion of marinas to dockominiums or rackominiums. Let me explain.   Continue »

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