Imagine this: A bustling waterfront facility where the value isn’t just in the land or the buildings, but in the intricate dance between submerged leases, seasonal demand, and the ever-shifting economics of recreational boating. In an industry where fuel prices can capsize budgets and consumer confidence steers occupancy rates, valuing a marina isn’t a straightforward dockside appraisal—it’s a multifaceted voyage through real estate, machinery, and business operations.

Welcome to another edition of Beyond the Core Four, where we explore the nuances of appraising non-standard assets that go far beyond office towers, retail strips, apartments, or warehouses.

Overview

In a recent assignment, we appraised a proposed expansion of an established marina operation along the Southeast coast. This facility, spanning nearly 20 acres across multiple parcels, included an existing dry stack storage building for pleasure crafts, an office, utility structures, and a recently added restaurant overlooking the water. The site also featured a significant submerged land lease for wet slips primarily used for transient and commercial purposes. The developer aimed to more than double the dry stack capacity by adding hundreds of new slips in a state-of-the-art building, complete with parking, transient docks, and leasable commercial space.

This type of property sits squarely in the recreational boating industry, where operators provide docking, storage, fuel, repairs, and even food services to boat owners—mirroring broader trends in the U.S. marinas sector, which generates billions in revenue annually through a mix of essential services and ancillary amenities.

Drawing from industry reports, marinas like this one are part of a market valued at over $7 billion, with docking and storage services accounting for about half of total revenue. Fuel and merchandise sales contribute around 17%, while repairs and maintenance add another 13%, and food/beverage options round out the pie at roughly 9%. In the Southeast, where warm climates and extensive coastlines drive demand, these facilities often blend real estate with operational elements, making them prime examples of Beyond the Core Four assets.

To gauge the health of the industry, consider insights from recent market analyses on marinas in the US. The sector is mature, with moderate revenue volatility influenced by environmental factors like hurricanes and economic uncertainties. Over 2020-2025, revenue grew at a CAGR of 2.3% to $7.2 billion, though profit declined 13.2% to $947 million, resulting in a profit margin of 13.2% (down 16.8 percentage points). Employment rose 2.7% to 32,840 workers, while the number of businesses dipped slightly by 0.5% to 3,408. Key drivers include positive impacts from rising disposable income, households earning over $100,000, leisure time, and consumer confidence, offset by negative effects from crude oil prices.

Current performance highlights challenges like plummeting new boat sales (down 9.1% in 2024 and 7.3% in 2025) due to higher prices and economic caution, but offset by surging rentals via peer-to-peer platforms. Consolidation is accelerating, with major acquisitions like Blackstone’s $5.65 billion purchase of Safe Harbor Marinas in March 2025, expanding its portfolio to 149 locations. Marinas are diversifying into water sports (e.g., jet skiing, paddleboarding) to boost attendance, while hurricanes like Milton (October 2024) and a coastal storm in Santa Cruz (December 2024) caused significant damage, underscoring vulnerability to weather events.

Looking ahead, the outlook projects a 1.4% CAGR through 2030, reaching about $8.0 billion, amid tariffs inflating input costs and deregulation offering mixed benefits. Opportunities lie in enhancing accessibility through electric/hybrid boats, adopting Clean Marina certifications for sustainability, and integrating green tech like solar panels and bioretention systems. Overall, the industry shows resilience through adaptation, with growth potential in rentals, consolidation, and eco-friendly practices, though it faces headwinds from costs, weather, and shifting demographics.

The Challenge

The core tension in this appraisal lay in reconciling the property’s current as-is state with its prospective value upon completion and stabilization. This wasn’t a simple land valuation; it involved a leased fee interest, where the owner holds rights to the property subject to existing leases, including that submerged land component critical for marina operations. Distinguishing between real property (the land, buildings, and fixed improvements like bulkheads and docks) and personal property (machinery and equipment, or M&E, such as boat lifts, racking systems, and utility hookups) added layers of complexity.

Further complicating matters were the prospective timelines: We needed to estimate values not just today, but as if the expansion were complete in about nine months, and then fully stabilized a couple of years later. Market factors played a big role—rising crude oil prices can deter boat ownership, leading to higher vacancy in slips and storage, while increasing disposable income among high-earning households (those over $100,000) boosts demand for premium services. In this case, the challenge was amplified by the need to separate the business enterprise value (from ongoing operations like fuel sales and repairs) from the tangible real estate, all under the scrutiny of financing requirements that demanded precise breakdowns for collateral assessment.

Litigation wasn’t directly involved here, but the setup mirrored scenarios where disputes arise over leasehold improvements or obsolescence—think environmental regulations on submerged lands or functional depreciation in aging dry stack systems. For financiers, the risk was clear: If the expansion didn’t stabilize as projected, how secure was the collateral? For developers and investors, the question was whether the added slips and commercial space would justify the capital outlay in a market where younger demographics prefer renting over owning boats, and retirees drive a surge in leisure activities.

Analytical Approach

To tackle this, we employed a comprehensive methodology that integrated the three traditional valuation approaches—cost, sales comparison, and income capitalization—tailored to the marina’s unique profile. Starting with the cost approach, we analyzed replacement costs for the existing and proposed dry stack buildings, accounting for depreciation and obsolescence. This was supported by market data on construction costs for similar waterfront facilities, adjusted for regional factors like labor and materials in the Southeast.

The sales comparison approach drew from paired data on recent marina transactions in comparable coastal markets, focusing on metrics like price per slip or per square foot of storage. We reconciled differences in location, size, and amenities, such as the presence of on-site restaurants or transient docking, to derive indicators for the subject’s leased fee interest.

Finally, the income approach was pivotal, projecting net operating income from docking fees, storage rentals, fuel sales, repairs, and ancillary revenue streams like the restaurant. We factored in vacancy rates influenced by external drivers—such as leisure time trends and consumer confidence—and applied capitalization rates derived from investor surveys in the recreational sector. For the prospective values, we used discounted cash flow analysis to account for the ramp-up period to stabilization, incorporating assumptions about absorption rates for the new slips.

A key differentiator was our breakdown of M&E value separately from real estate, using specialized appraisal standards for machinery like boat handling equipment. This ensured the total value reflected contributory assets without double-counting. Throughout, we conducted macro and micro market analyses, examining supply/demand in the local boating scene and broader industry volatility, where fuel costs can swing profit margins dramatically.

(Visual: Embed a simple chart titled Cost vs. Market Contribution in Marina Assets. Use generic bars showing hypothetical breakdowns: Real Estate (70%), M&E (20%), Business Enterprise (10%). Caption: Illustrating how integrated components require careful allocation in specialized valuations.)

Outcome & Takeaway

The appraisal yielded layered value conclusions: A current as-is figure for the leased fee, prospective values upon completion (split between real estate and M&E), and a stabilized outlook that encompassed the full business potential. While specific numbers remain confidential, the process highlighted how prospective valuations can bridge financing gaps for Developers, providing lenders with a roadmap from construction to cash flow.

For Attorneys in litigation support: This case underscores the importance of robust methodologies in expert testimony. When disputes involve leasehold interests or asset separation, a well-reconciled appraisal can strengthen arguments by demonstrating compliance with standards like USPAP, potentially swaying outcomes in condemnation or partnership dissolution cases.

For Financiers: Market obsolescence—driven by factors like oil price fluctuations or shifts in boat ownership demographics—directly impacts collateral security. Understanding prospective stabilization helps mitigate risks in loan underwriting, ensuring that values align with realistic income projections rather than optimistic developer forecasts.

For CPAs and Investors: The divergence between tangible assets (real property and M&E) and intangibles (business goodwill from operations) is crucial for tax reporting, depreciation schedules, and investment decisions. In marinas, where revenue streams like repairs contribute significantly, accurate allocation prevents over- or under-valuation in financial statements or estate planning.

Overall, this appraisal reinforced that in Beyond The Core Four properties, value isn’t static—it’s tidal, influenced by economic currents and operational synergies.

Call to Think / Engage

Have you faced hurdles in valuing waterfront assets where submerged leases and expansion prospects blur the lines between real estate and business value? Share your experiences in the comments—let’s discuss how these challenges play out in your practice.

Disclaimer: Case details, figures, and ownership data have been modified to protect confidentiality. Examples are based on real assignments, restructured for educational purposes in compliance with USPAP and firm policy.

Daniel Boring, CRE®, MAI, ARA, ASA | Senior Vice President – Valuation Advisory Services | Kidder Mathews

If your firm would like a private presentation on these valuation topics, feel free to reach out. I regularly brief legal teams, CPAs, and family offices on complex appraisal issues.

Please note that the Beyond the Core Four newsletter will be taking a break during the Christmas holidays and will return in January of 2026.