Boating Industry

February 2017

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Page 33 of 51 34 | Boating Industry | February 2017 BY JONATHAN SWEET A recent wave of consolidation in the marina segment has the potential to drastically reshape how and where boaters spend their time on the water. For an industry that has been dominated for decades by small, family-run operations, it's a dramatically different look. Major, well-financed players have jumped into the segment in a big way – and there's no reason to think that will change. The availability of capital, along with the aging of many Baby Boomer marina owners, has created an unprecedented opportunity for investment and growth. "Those two factors coming together have allowed it to be a good time for us to grow and build a business that lots have talked about, but nobody's ever accomplished on an institutional scale," said Bryan Redmond, founding principal and head of acquisitions for Suntex Marinas. "Marinas histori- cally have been generational assets, passed along generation to generation. For whatever reason in the marketplace there seems to be an opportunity where a lot of the owners, typically in their 60s or 70s, and for whatever reason, do not have family members they're looking to hand those to. They'd rather convert that to cash and put that into the marketplace rather than just having one hard asset." As of the end of 2016, Suntex owned 26 marinas and operated another five. The company has ambitious goals for 2017, planning to add another 20 to 25 marinas this year, Redmond said. The majority of that growth will be in Florida, the West Coast and in the Northeast, in both coastal and inland lake locations. Suntex plans "to effectively double in size" in 2017, Redmond said. "We have the plans and the capital to achieve that and show that consistent growth through 2018 and 2019 through acquisitions and investing back in our assets." IGY Marinas, which currently has a portfolio of 15 marinas focused on the yacht segment, is also seeing the opportunity to grow. "There is definitely an uptick in consolidation within the industry today in the United States as several players have raised funds for this specific purpose," said Tom Mukamal, CEO of IGY THE CHANGING MARINA CLIMATE Consolidation, innovation coming to marina segment Marinas. "We continue to be in a very low- yield environment. Additionally, traditional real estate has gotten quite expensive. So, marinas can, under the right circumstances, be purchased at attractive pricing and provide good cash flows when compared to tradi- tional real estate." IGY, which has a large international pres- ence, recently added its first South Florida location: One Island Park, located on Miami Beach's Terminal Island. "Miami is one of the leading luxury yacht- ing destinations in the United States, making this a significant achievement for our targeted growth strategy in Florida," Mukamal said. The other big player making noise in the marina market these days is Safe Harbor. The company made its public debut at the 2016 International Marina and Boatyard Confer- ence with a portfolio of 31 marinas in 12 states. Now with 36 locations in 14 states, the company bills itself as the largest owner and operator of marinas in the United States. Safe Harbor declined to be interviewed for this article, but in an interview last fall, CEO Marshall Funk said the company plans to continue its careful growth in 2017. Like Suntex and IGY, Safe Harbor cited the fresh availability of capital as the key to this consolidation wave. "The problem has always been the ability to attract capital because marinas are such a little business," Funk said. "It's been very diffi- cult to raise the cash to do it on a large scale." For current owners, Safe Harbor says the Marinas like Suntex's Liberty Landing are designed to be a one-stop shop for boaters.

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