Previous Tenants Buy Hi Seas MarinaPublished on June 12, 2020
Hi Seas Marina in Oconto, Wisconsin, recently changed hands from long-time owners to first-time buyers who were tenants at the marina.
John and Cheryl Mick had owned the marina since 2002 and are retiring. “This well-maintained facility boasts strong and consistent operating history under the Micks’ highly-capable management,” said Michelle Ash, Simply Marinas owner/broker.
Simply Marinas marketed the property on the firm’s website and its e-network of more than 12,000 investors. The marina was featured in a brochure mailed nationwide to marinas investors and on internet sites for investors and brokers. The team also made one-on-one contacts with potential buyers and worked with the local marina association.
The sale to Breanna and Bret Van Nuland closed on March 6. “The seller received other offers,” said George Ash, Simply Marinas national director. “The fact that they were his tenant, he got to know them and believed in them to continue to operate the marina successfully to maintain its legacy.”
As tenants, the Van Nulands were familiar with the marina’s challenges and opportunities. “Their motivation and interest were stronger than other prospects,” George Ash said.
Since the Van Nulands were first-time marina buyers, the Simply Marinas team advised them on what marinas in general sell for, at which cap rate, and specifically the details related to the Hi Seas property. The firm also introduced them to lenders, assisted with the contract, the due diligence and the negotiations.
Michelle Ash said Hi Seas is in a market where there is a strong demand for full-service marina facilities that combine storage, slips and repairs. “Hi Seas has the advantage of having a big portion of its income in storage rather than slip rental income, so if slip revenues go down, storage goes up.”
Hi Seas offers a combined wet and dry storage capacity of approximately 240 slips and operates at full occupancy. The 4.5 acre property is located on the shore of Lake Michigan’s Green Bay and includes the river frontage and basin. The vacant upland property offers potential to increase the indoor storage capacity and expand the repair service.
George Ash outlined several opportunities to expand the business and increase the new owners’ revenue potential:
- Increase rates. The marina is overdue for a rate increase. The current rates have been in place since 2013 and all slips and inside storage are at capacity.
- Construct an additional inside storage building. The former owner leased an off-site storage building that stayed full, even without advertising.
- Expand the service business by hiring a full-time in-house service technician. The previous owner turned down many potential service jobs. Additionally, no one worked during the “closed” winter season and service jobs could be performed during that time.
- Introduce winter sport retail/service such as snowmobile and ice fishing.
- Expand the brokerage or add a dealership. The previous owner offered minimal brokerage services, mainly as an amenity to slip and storage tenants.
Michelle Ash said the recovery in the area seems slow after a cold spring, flooding and the public health crisis. “However, we have buyers with continued strong interest in the area. Financing and observing the occupancy and cash flow trends after the crisis will be important factors that buyers look at in assessing acquisitions,” she said.
Ash said investors in general are remaining enthusiastic toward marina acquisitions. The Simply Marinas team closed on a marina portfolio after COVID-19 that included Grider Marina Resort and Wisdom Dock Marina Resort in Kentucky. They firm recently put four marinas under agreement and financed three new acquisitions.