Baltimore firm Watermark Property Group making waves in marina industry

Watermark Property Group of Baltimore acquired last month a Miami boat servicing company with sales of more than $5 million a year, part of the year-old firm’s plan to become one of the largest owners of marinas along the East Coast.

Buying Dixie Marine LLC marks only the second acquisition for Watermark, which bought a 150-boat marina in the Florida Keys late last year. Most of the nation’s 35,000 marinas are individually owned, and their prices have been driven down in the past few years by the commercial real estate slump.

Watermark President Keith E. Getter said he sees this as the time to buy and brand as many marinas as possible to become a nationally known operator, in much the same way as hotel chains and restaurants have done over the years.

He and Watermark CEO Brian McCarthy are privately funding 95 percent of the company’s costs but hope to attract other investors.

“We have a very ambitious vision, hoping to redefine the marina model,” said Getter, a former real estate and investment banker at Legg Mason Inc. and Stifel Nicolaus & Co. “Our focus is on being the leader of the marina services in the country.”

It’s an alluring prospect, and one that few companies have tried in the past, said David Preston, a broker with Falmouth, Mass.-based MarinasForSale.com. It can be expensive to buy and fix up large numbers of marinas to turn a profit from the effort, which might explain why most marinas remain independently owned, Preston said.

Like other areas of commercial real estate, marina sales have slowed considerably because of a lack of financing. What’s more, the market for waterfront land in areas like Florida has all but dried up, and the few marinas that have sold recently have been for less than $10 million.

But Preston said that could create an opportunity for Watermark to pick up some bargains from distressed sellers or banks that have foreclosed on marina properties in places like Florida.

Watermark hopes to acquire up to $600 million in marina properties with plans to convert them from aged mom-and-pop operations to full-service centers catering to the seafaring set. Getter declined to disclose the purchase price for Dixie Marine, but he noted the three-decades-old company has averaged sales of between $5 million and $10 million a year.

By upgrading the marinas it buys, Watermark could increase the amount of money it charges for boat storage. That’s where Dixie fits in, as the firm will oversee Watermark’s boat servicing business in Florida and other marinas as they’re acquired.

It’s an idea that is overdue, said Joy McPeters, CEO of Baltimore’s Marinalife, a Web site that gives boating enthusiasts information about marinas and books reservations at docks across the country.

“There’s been a huge gap between what the marinas offer and what the boaters actually want,” McPeters said. “This is what the industry needs, by far.”

McPeters founded Marinalife after finding a similar dearth of Web sites providing information about marinas, what their fees are, what services they offer and even how to track down their dock masters. It’s the same way between different marinas, she said. That makes it difficult to find information about services and amenities the marinas offer.