May 5, 2019

Marina AerialBy Dwain Bodkin and George Canning

Marinas are recreational-based businesses that are subject to economic pressures. They are either located on a lake, a river or on land. They tend to be difficult to market because of potential environmental issues and the challenge of obtaining of financing (bank or VTB – vendor take-back). Despite some of these handicaps they tend to be a viable business enterprise over the long term.

In order to determine the “state” of the marina business, it would best to study transacted sales of this real estate product over a given period of time.

We located 248 marinas selling since January 1, 2010 forward in Ontario through MPAC property line records. Unfortunately, like every data base, the data needs to be sorted. For example, 88 of those sales were based upon a consideration of $1 or $2. This means that either these sales were sold via a share purchase and thus the purchase price is not recorded, or it was sold to a family member for “love and affection”. Searching through the remaining 160 sales were duplicate sales while others were not sales of Marinas. Any sale that sold below $100,000 was also removed from the data set. This reduced the data set down to 138 actual transacted sales. Of the 138 sales, 21 where of Marinas not located on water with the balance being located on water. We did not differentiate the sales of marinas located on water from those that had rental cabins, or offered full or partial services, or by the number of slips.

Displaying sales data graphically tends to indicate patterns more quickly than viewing numbers. Below is a Time Series Graph of all the sales of Marinas located on water. The solid line at the bottom of the graph is a LOWESS line which is a locally weighted smoother. It does exactly as the name implies.

Generally the graph is portraying that sales of water based Marinas have been flat. The average price of a water based Marina is $1,316,871 with a maximum sale price of $14,000,000. However, what is of interest is the increasing frequency of water based Marina property sales from 2018 forward which is causing the LOWESS smoother line to start to lift. Is this a signal of stronger pricing of water based Marinas in Ontario?

Marina Graph 1











Below is the same Time Series graph but of Marina sales from 2018 forward. We see the increase in the LOWESS line but it drops off. That is not to be taken as a signal that the Marina market is lowering. It simply means that the most current sales were at a lower price then that previous ones. What is important is the general overall lift in the sales throughout 2018.

Marina Graph 2











Below is a Bar Chart of the above data of water based Marinas, but grouped into their most common sale prices. Sales from $100,000 to $1,000,000 dominate the types of marinas selling in Ontario. This is of interest because these sales almost reflect not a Marina “business” that have sold but perhaps a lifestyle one. Many of the Marina sales would be deemed “Ma and Pa” type establishments. Once we move away from this group of sales, we see that the frequency of the higher priced Marinas selling, starts to diminish. The reason is that there are less available buyers and difficulties in financing would be the chief reasons why the distribution of these high priced Marinas are infrequent. Also we have to be aware that another reason why we are not seeing more higher priced Marinas selling is that if there is no reason to these properties will not change ownership.

Marina Graph 3











When it comes to Marinas that are located on land we are see a similar picture in terms of direction of sales activity. The blue line is the LOWESS smoother as mentioned before. We see a generally flat price line from 2010 to 2017 with some stronger pricing noting after 2017.

Marina Graph 4












Below is a Bar Chart of the groupings of the various selling prices by their frequency. The market for these types of Marinas are $100,000 to $800,000. Certainly there are sales of higher priced non water Marinas selling but the buyers start to thin out.

Marina Graph 5










In the valuation of water based Marinas it is not centred on “the price per slip”. That rate can be widespread because it is influenced by the number of slips and amenities that the Marina has to offer. Certainly the key factor is the financial statements of the Marinas, and whether they are on land or not. However, it takes a lot of specialization to truly understand the financial picture of every Marina. The historical financial picture is only a snap shot of what has occurred financially. In the valuation of Marinas it is best to create a pro forma statement that reflects the next up and coming year. After all, it is in the next year’s budget that the mortgage payments are made assuming a consummated sale. In the case whereby the Marina is in a downward cycle, Marina buyers tend to be very optimistic and will pay something towards the future potential of the property. It is a balance between the reality of the actual economic performance of the Marina and the future expectations of growth and business.

All real estate/business operations are interested in some type of a rate of return. After all, that is one of the principle reasons why Marinas are purchased. It is an investment. As such, a rate of return can be drawn from Marinas sales that reflect both the state and perhaps optimism of the buyers. These rates are known as Capitalizations Rates and are a product of the division of the net operating income (without debt and amortization) into the actual sale price of the Marina. It is also a risk rate. The other interesting measure of Marinas is the Gross Income Multiplier which is the ratio between the sale price of the Marina and its gross income. Both the capitalization rate and the Gross Income Multiplier do tell us something about valuation when it comes to either the selling of a Marina or the financing of one.

Certainly the graphical data from both the water and non water marinas is telling us something about the future. The data is telling us we might be seeing some upward pressure on this type of real estate investment. Future Marina markets are going to interesting to watch. There are many Marina owners who want to retire. However, finding the buyer that has the financial capability is another matter. This will mean that there is going to be a lot of negotiating between the buyer and the seller. That is where Marina experts in both the valuation and selling of Marinas become a critical component.

For the Marina operator on water or on land that wants to sell, it is best to start putting a plan together. This plan cannot succeed without good advice from a lot of experts.


Marinas are perhaps one of the most difficult properties to sell. Issues such as financing or environmental or lack of expansion or share sale vs asset sale and even VTB all come to play when selling a marina. In today’s market the majority of buyers have the same acquisition criteria that are based on Cap Rates that can cover a mortgage and generate stable profits. Since being in the marina sales for the past 15+ years we have used cap rates and now rely on Gross Income Multipliers to establish value.

Marinas do not sell overnight and on any given time there are probably thirty plus available here in Ontario.


Dwain Bodkin, Sales Representative                                       

Sutton Group Preferred Realty Inc.                                          

Office 519-438-2222                                                                 

This email address is being protected from spambots. You need JavaScript enabled to view it.   


George Canning AACI, P.APP

Canning Consultants Inc.

Office 519-471-8746

This email address is being protected from spambots. You need JavaScript enabled to view it.

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