Appraisal Matters

As the “Riddler” might say, “Riddle me this:  when is an occupancy rate not an occupancy rate?”  When it’s a Marina occupancy rate.  Better yet, when there are two marina occupancy rates.

When we inquire about competitive marina occupancy rates, there are two ways participants can respond.  They can cite the average occupancy for the entire year or the occupancy just during in-season (we’re assuming a seasonal marina market, of course and not the lucky 12-month locations).  Fully occupied in Summer is not the same as mostly empty in Winter.  We ask both questions, but it seems many appraisers who speak to marina owners and managers do not.

This becomes more convoluted when you factor into consideration transient slips.  Some marinas have dedicated transient slips, others do not.  Most have slip rental agreements whereby if the boater is gone 48 or 72 hours in a row, they have the right to add that slip into the rental pool.  Yes, I have seen marinas that have 100 percent occupancy and also have lots of transient income by re-renting leased slips to transients.  If the marina has some slips that are functionally obsolete (i.e. very difficult ingress/egress or located along a fairway), these may always show in the vacancy rate but be available for transients, which is not ideal.

So is the occupancy rate for the Summer or year-round?  Is it wet-slip only or does it include dry stack or dry storage on and off season?  Does it include transient occupancy?  Should there be a “physical” occupancy rate and an “economic” occupancy rate?  The term “occupancy rate” needs to be defined and consistent when conducting competitive surveys.

John Simpson, MAI