The Leisure Investment Properties Group recently sat down with David Coyle of Mack David Buildings to discuss dry rack building construction and insights he has for adding this component as a valuable addition to your marina. David founded Mack David Buildings in 2015, after accumulating over 25 years of experience working on projects throughout the United States and Caribbean.
LIPG: David, we’re glad to have you here and appreciate you taking the time to share a little bit of your experience and insights into the dry stack business. You’ve been in the business for over 25 years now—how did you get started?
David Coyle: Having experience with all types of PEMB, my interest in dry stacks started with the first request for a quote. It intrigued me because I always look to improve on the status quo and find a better, more efficient way to store and access boats. I’m also a boating fan so that helped.
LIPG: And was dry rack specialization always the intent, compared to taking on wet slip or bulkhead projects?
Coyle: Well my interests have always centered on the architectural and engineering components of structures. So wet slips do not offer the same challenge that I desire. In the future MDB will venture into other aspects of marina building as we continue to grow, but dry stacks were the most natural progression or “next thing” that aligned with my experience and interests.
LIPG: We work with marina owners who either already have dry rack buildings or outdoor rack structures at their marina, as well as others who are considering adding them. If a marina operator is considering building dry racks, what are some of the important first steps to consider?
Coyle: First, it’s not a matter of WHAT to build, but WHO will be storing their boats in the racks? I always recommend having a serious market study completed to determine the depth of the rental market. Results will shed light on where customers will come from, the likely boat sizes to occupy the racks, as well as general demand for the storage option. These three elements are the foundation for determining the size of dry rack building that would be most effective for your marina, market and ROI.
LIPG: And once the study uncovers the feasibility of a dry rack building, what do you look for next?
Coyle: Once you know the depth of the market and what the expected absorption is, you will then need to match that with the local building regulations, zoning and height restrictions. For example, the market study may indicate that a four-story building could be filled, but your area’s zoning may only allow for a three-story building to go up. Typically some form of industrial or recreational zoning may be required for approvals.
LIPG: Is this where you see most delays and/or obstacles to successful approvals?
Coyle: Working with the municipality is certainly one area, but even if you have the required zoning, you may still run into neighborhood resistance (more specific to each location), increased material prices and even contractor delays. Local residents may fight the construction, dragging the project on for years. If you do your due diligence from the start, you will avoid issues that concern aesthetics, environment, and local regulations.
LIPG: In regards to materials, what delays or price increases have affected your business over the last year or so?
Coyle: There were certainly a few issues, mainly steel and aluminum prices taking a toll on the overall cost of project, but the inventory of these materials also impacted our business with time delays. The supply chain seems to be making these materials more available and delivery is faster, but these are factors marina operators will want to keep in mind when they engage us for a project.
LIPG: That’s a great point. How has this influenced your product and different design options?
Coyle: There are so many variables to consider in budget pricing, including options like open racks, three-sided racks, roof-only racks, completely enclosed buildings and then the various types of building décor. In addition, our budget pricing includes the concrete, fire suppression, electrical, plumbing, the actual building and erecting it.
LIPG: Is there a cost range you are budgeting for today based on where material availability, delivery times and other inputs to the business are at?
Coyle: On average, costs today anywhere you go are around $20k—$24k per rack, not including site work or softs costs. Each project is unique, however, so material prices and design options can influence the average “per rack” cost too. For instance, some estimates may tell you that they are lower than the $20-24k range, but these are usually just for the building and erecting, with give the impression of a much lower priced bid. This price can be wildly inaccurate based on the scope of the complete build of the project, and an important detail for the operator to know about when budgeting and sourcing the developers.
LIPG: It seems like a lot of the work you do is high-quality and exterior finishes are also attractive. Do you see a lot of requests for designs that “dress up” the building to be more than just functional storage?
Coyle: That’s right, we take pride in our work and suggest operators consider offering a better and more attractive product for their boaters. Boating has evolved to more hospitality than just storage, while the costs may be higher up-front, owners can realize great ROIs from a higher quality product.
LIPG: What can you share about the boat sizes and racks you are installing?
Coyle: One of the biggest trends in the boating industry is that boats are getting larger, and the newer dry rack facilities are designed with a forward-looking strategy that will accommodate these larger vessels. Going back to the initial market study ahead of any design work, knowing the market demand and sizes of boats to be stored will ultimately determine the capacity of the building.
But it’s more than just knowing how many boats and their sizes that will fit in the racks. We like to also focus on maximum boat load capacity to mitigate low rack utilization (wasted space) and vacancies due to inability to service market demand.
LIPG: Can you elaborate on the forward-looking mindset when an operator starts thinking about bringing dry racks to their marina?
Coyle: Sure. Think about the marina’s operations and how needs will changes as the market changes. Similar to how you work with owners to update their valuation as the market changes, operators should be cognizant of changes in their own marina with slip holders and what turnover takes place. For example, is the marina constantly losing customers to be replaced by new customers, and what do the new tenant boat sizes and age of vessel look like? In today’s market, boats are getting bigger, heavier, and taller, so depending on a marina’s market and boater demand, a dry rack building will need to be sized for these changes, and those to come, as well as give thorough consideration to the quality of materials and design.
LIPG: With new capital entering the market and expanding facilities, as well as new dry stack opportunities becoming available, what has Mack David been doing to adapt as the market shifts, along with subsequent operator demands for dry rack construction?
Coyle: Well something we’ve developed is a patent-pending system to accommodate future changes in boat size by using a quick release bolt system that makes it very simple to adjust the actual rack based on the boat that will be stored. Our ground stands are just as flexible. And since using this new product, we have found that the features greatly improve the day-to-day operations and creates efficiencies at the marina.
LIPG: Any final thoughts that you would leave marina owners and investors with as they think about their own dry stack endeavors?
Coyle: It goes back to doing the project right the first time. Many operators may want to skip options and studies like the boat market and environmental studies, usually to try and save on costs, but these reports provide significant information necessary to building a successful dry stack building and operation. We can plan all of this out so each operator has a good idea of budget and what to expect, but these costs are incredibly important for mitigating the potential for major issues or change orders down the road.
For more information on David Coyle and Mack David Buildings, visit their website at www.mackdavidbuildings.com