New Listing

by / Wednesday, 26 April 2017 / Published in In the News, In the News, Marinas

The marina brokers of the Leisure Investment Properties Group of Marcus & Millichap (“LIPG”) is pleased to exclusively offer a marina for sale by the name of The Sailing Emporium, a premier full-service marina in the Town of Rock Hall, Maryland. Rock Hall is a well-known boating community on Maryland’s Eastern Shore that has long attracted boaters from Philadelphia and, to a lesser extent, the DC suburbs, who desire a central boating location on the Chesapeake Bay.

The facility is part of a chapter 11 bankruptcy reorganization with the Debtor in Possession. Approval of the sale is subject to approval by the Court, the Owner, and the Lender. This is an opportunity to acquire a well-known marina with significant upside potential for the next owner.

The Sailing Emporium occupies 10.62 fee simple acres on in the Southeast quadrant of Rock Hall’s bustling harbor. The facility, founded in 1978, is widely recognized as a premier marina and boat yard in terms of dockage, service and repair, and amenities. The primary revenue generating improvements consist of 152 numbered wet slips for boats up to 60-feet in length and a significant service department supported by a 35-ton Travel Lift and a 15-ton crane.

On the uplands, The Sailing Emporium encompasses multiple buildings painted brick red and built to resemble what could best be described as a charming New England Village. “The Emporium” building houses the offices, ship’s store, gift shop, and a customer lounge area. “The Bath House” has the restroom/shower facilities, and a large second level deck overlooking the marina. The “Dingy Storage Building” offers dinghy storage for approximately forty-four units.  Finally, “the Carriage House” has a laundry, storage lockers, lending library and a water-view deck area. An in-ground pool, large picnic grounds, and flower gardens complete the setting.

INVESTMENT OVERVIEW

Several compelling factors make The Sailing Emporium an attractive investment opportunity as follows:

  • Great central Chesapeake Bay location – The Sailing Emporium is located near popular destinations on the Bay including Annapolis, St. Michaels, and Oxford.
  • Access to prime boating area – The Sailing Emporium is only ½-mile from the Chesapeake Bay.
  • Multiple revenue streams – The Sailing Emporium generates revenue from dockage (seasonal and transient), yard storage, service and parts, and store sales.
  • Tremendous cash flow potential – The Sailing Emporium generated $311,000 in NOI on $1,645,000 in gross revenue in 2014 (19% operating margin). At 85% occupancy, it is projected to generate $445,000 in NOI on $1,852,000 in gross revenue (25% operating margin).
  • Upside from repositioning the marina to attract more power boats – At present, the mix of boats heavily weighted towards sailboats versus power boats. This is no surprise given the name and reputation. A new owner could reposition the property to be more power boat focused, which would generate additional NOI above and beyond what has been projected as power boat slip holders generate more service work and have a higher spend rate than sailboat owners.
  • Proximity to Philadelphia, Baltimore and DC metro areas – Over 16.5 million people live within 90 miles of The Sailing Emporium providing a large market from which to draw.
  • Excess land – Adjacent to the marina is nine acres of land suitable for residential development. While, not included in this offering, it is available for purchase by adeveloper looking to create a waterfront marina concept.

Based on a review of the financials provide by the Seller, The Sailing Emporium has seen a deterioration of its revenue and NOI since 2014. The deterioration runs counter to the economy, which has been improving over the past couple of years as the recession has faded into the background.  Family issues and managerial changes are the likely causes of the deterioration. As a result, LIPG asserts that 2013 and 2014 results are more representative of the operation and should be utilized by buyers in evaluating the property. During 2014, The Sailing Emporium generated gross revenue of $1,645,000 and an NOI of $311,000. At the time, occupancy by annual tenants was reported at 79%. Similarly, in 2013, the marina generated $321,000 in NOI on $1,779,000 in gross revenue.

LIPG’s pro forma business plan reflects two major assumptions: (1) an increase in the average rate per occupied slip to $5,000 annually in Year 1 and (2) an increase in the occupancy rate in the numbered slips to 85% over three years due to a repositioning of the marina to attract more power boats. These assumptions are supported by the survey of competitive marinas on page 40. In Year 1, LIPG is projecting NOI of $415,000 on $1,760,000 in gross revenue.

For more information and a detailed Offering Memorandum please contact the marina brokers of the Leisure Investment Properties Group at 813-387-4780 or visit our website at www.leisurepropertiesgroup.com .

 

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