The intermediate subset is the predominant data set used to gauge YOY performance for marina investment activity. This subset curates sales between one and ten million dollars, since this is the price range where most marinas trade, while further capturing the greatest buyer pool and various buyer profiles (as compared to $20M+ transactions which are acquired by institutional investors).
Insights supported by this data include the slowdown in sales in 2020 which correlates with the pause in investment as the world watched how COVID would influence day-to-day life. More recently in 2022, we recorded a mere 18% of sales transacting in Q4, compared to 41% and 36% for the same time period in 2020 and 2021, respectively. While we believe the numbers reflect a great story of investor sentiment, they are not the complete set of sale records because many transactions are reported with undisclosed prices, while other deals are lagging or entirely unreported.
When we look at all reported data that is was collected for YOY comparison, we classify all sales reported with one exclusion – no portfolios. This means the data included in the set are deals sub-$1M, $1-20M, $20M+, redevelopment deals (existing marinas that were bought for other purposes, if not to be redeveloped as a new marina), and sales with undisclosed prices. You can understand how the latter categories do not indicate operational marina performance and investor demand, yet still serve as either supply being taken out of the market, revamped, or quality deals that did not report a price (arguably the most challenging category that can skew data).
Comparative Metrics
Comparing 2022 to 2021 is not exactly apples-to-apples when we consider the exceptional year that was 2021, and the lackluster second-half that we just experienced in 2022. A rapidly changing debt market stalled transactions (leading to price reductions), pushed investors to the sidelines, and quickly shifted the valuation landscape for the foreseeable future. Yet, recorded sales in the intermediate subset were at 114, compared 121 just one year prior. Additionally, the average price was up in 2022 by a little more than 5% – this indicates that more marinas sold at higher price points in 2022.
When we compare the entire intermediate subset with the Marina Sales Superset ($1-20M), we can see how total transaction volume is influenced by smaller and larger deals. On a micro level, we will further explore the intermediate subset when split in half, but the percentage of deals in the subset are consistently accounting for over 80% of all sales in the superset – support that most investment is in marinas priced under $10M.
Transaction Frequency
Further isolating the data, we uncover interesting stats about the quarterly closings. Now, many variables are involved in a marina transaction, several of which can delay a closing – a one-day delay could mean the difference between a sale being classified as Q2 or Q3. Yet, comparing the data to macroeconomic conditions, we see interesting results that support anecdotes and theories around how investor sentiment has changed over the course of three years.
We can see that 2020 had a slow start, 2021 was strong, coming off of a big Q4 2020, which carried through Q1 and Q2 2022. It was in Q4 where we recorded a significant pullback in transactions, likely due to the Fed interest rate hikes forcing many investors to pump the brakes, evaluate their household financial situation, and recalibrate offer prices. We can report anecdotally that this was the case in Q3 and most of Q4, but adjustments in both buyer and seller expectations led to successful transactions and renewed investment interest.
Intermediate Subset: The Breakdown
$1-4.99M2: In 2022, 87 transactions occurred between $1-4.99M (76% of the subset), with average and median price points of $2,354,901 and $2,000,000, respectively. Average price point is just <1% higher than in 2021, and median price is equal. Overall there were 8.5% less transactions in this tranche than in 2021, but price points stayed level YOY.
$5-9.99M3: In 2022, 27 transactions occurred between $5-9.99M (24% of the subset), with average and median price points of $7,036,935 and $6,750,000, respectively. The average price point is 4.3% higher in 2022, and the median price point is 6.4% higher. Transaction volume was about equal at 26-27 transactions, indicating that there is still interest and demand for assets in this price range that is on par with historical years. Just because the price point falls over $5M and under $10M, does not mean the marina is a bad investment – our experience has shows that traditionally, this is a tougher price range for a larger buyer pool because private buyers would be overextended, while institutional investors need more scale. This is changing, however, and as opportunities in this range continue to hit the market, we hope investment strategies take advantage of what are less frequent deals.
Disclaimer: To our knowledge, this data is not a complete set of marina sales. We strive to provide the most accurate data based on public record, but this will not always account for stock sales and other unreported sales. Price points tend to be reserved, most notably in non-disclosure states, but we still aim to record the sale as an arms-length transaction, even if we do not yet have the price.
