Appraisal Matters

I was reminded today by Tom DeLotto, CMM, of IGY how important management is to a marina.  Appraisal theory clearly states that market value is to be based upon competent management.  That being said, many investors entered the market without the specialized knowledge needed for a marina to succeed.  We see it all the time in our appraisal practice.  Good management makes all the difference.  Many were condominium or hospitality developers who did not see the pitfalls of not knowing the business and management issues involved in the marina industry.

For both the current owner or the possible Real Estate Owned (REO) owner of a property, get yourself a qualified management company.  Look for a CMM (Certified Marina Manager).  This is a certification awarded by the International Marina Institute through the Association of Marina Industries.  Like the MAI (Member Appraisal Institute) my husband has, the CMM designation shows a higher level of training for running a marina.  Would we try to manage a marina?  No!  We consult based upon our market data, comparison to other properties and financial performance.  For the day-to-day operations you need an expert.  We know how to manage appraisers, not marina employees.

Even if you’ve been running a marina for years, you may be great at repair, boat sales, or some subset of the industry.  Are you running the whole project well?  For lenders taking over a property, do you really think the local management company can do it?  Probably not.

All is not bad in the industry.  Many marinas are doing fine, but suffering from the credit crunch, as is all real estate.   Getting the projects back on track quickly will help all.

Eileen Simpson