Marina Properties Recession-Proof? CNL Lifestyle Thinks So, and Picks Up Two Chesapeake Bay-Area Assets
- Jun 01, 2010
June 1, 2010
By Barbra Murray, Contributing Editor
In all actuality, no sector of the commercial real estate industry has proven completely impervious to the recession, but the marina property sector has come very close, according to CNL Lifestyle Properties Inc. And the Orlando-based REIT has just increased its assets in the sector with the recent acquisition of Bohemia Vista Yacht Basin and Hack’s Point Marina in Maryland’s coveted Chesapeake Bay area.
CNL Lifestyle purchased Bohemia Vista in Chesapeake City and Hack’s Point in Earlville from covenant Cove Marine Inc. for an aggregate $7 million. Both properties have been under the operation of Aqua Marine Partners, which will continue to manage the marinas under a new long-term lease agreement with CNL Lifestyle. The transaction marks CNL Lifestyle’s entry into the Mid-Atlantic market, and allows for its exposure to boaters throughout the Wilmington/Philadelphia corridor. The company plans to spend approximately $300,000 over the next 12 months to enhance the overall appeal of the properties. Longer-term plans include additional dock expansion, an endeavor that will be evaluated over time by CNL Lifestyle and Aqua Marine.
Real estate is cyclical, and the recession and credit crunch pushed the industry down into a deep valley, sparing no sector–at least, not completely. The marina property sector has been faring better than most. “The business has persevered so well throughout the recession,” Byron Carlock, President and CEO of CNL Lifestyle, told CPE. “There have been no bankruptcies or a single default among the operators at our properties.”
CNL Lifestyle is the largest owner of marina slips in the United States and a leading owner of golf courses and theme parks. “People have continued to pursue pleasures in good times and bad, even during recessions, but they pursue their passions as affordably as possible,” Carlock said.
The company’s marinas are within a two-hour drive of major cities. “Destination resorts did get hurt more than regional resorts; the thesis is sound, but now we’re seeing the stats to back it up,” he said.
Further bolstering the success of marina properties is the numbers game. “There’s a supply/demand imbalance,” Carlock noted. “Not too many more marinas will be built because of environmental regulations regarding construction by waterways and oversight by coastal commissions.”
CNL’s acquisition of Bohemia Vista and Hack’s Point adds 239 wet slips to its portfolio, and increases its total commercial real estate portfolio to 121 properties.