The long dormant boat slip and storage unit sales market is re-emerging after years of dismal sales. Marinas such as Sunset Harbour Yacht Club in Miami Beach, which had long slip sell lists a few years ago, now have waiting lists to buy slips. TheSun-Sentinel recently reported on the re-emergence of the market for boat slip and boat storage sales in South Florida. The Sun-Sentinelnoted an uptick in sales at Soverel Harbour Marina in Palm Beach Gardens and The Bluffs Marina in Jupiter, as well as the grand opening of the Dania Beach Boat Club, south of Fort Lauderdale. (Hemlock, Doreen. “‘Dockominium’ Sales voaPick up Speed.” Sun Sentinel, Nov. 28, 2014, Money sec.)
Marina owners and boat storage facility developers will likely be considering new slip and storage unit offerings. Such owners and developers should consider the options for sales programs, and issues that impact the availability and desirability of the different options. Options for slip and boat storage sales programs include:
- Deeded structures, including dockominiums or rackominiums, or subdivided land, or
- Non-deeded structures, including equity or non-equity membership programs or long-term subleases.
In the case of boat slips, the deeded interest structures are not available for the slips when the submerged land is leased from the government, rather than owned by the marina owner. Additional considerations in determining a structure include:
- The developer’s business plan to either operate the facility as a for-profit business or solely to sell the slips or units,
- The extent to which the market would accept membership vs. deeded structures,
- The positioning of the facility as a full service yacht club vs. solely as a boat slip or storage unit project,
- The willingness of banks to finance sales under the different options,
- The importance of maintaining slip and storage unit sales pricing levels on a long-term basis,
- The desire to control operations on a long-term basis,
- The cost of implementing the program, and
- Income and sales tax considerations.
As a result of the major decline in the slip and boat storage sales market preceding the Great Recession, consumers are most concerned about the long term viability of a marina facility and the ability of the slips or units to maintain value. Success for the sales program depends on the degree to which the developer is able to address such concerns.