The Next Institutional Frontier: Marinas, RV Resorts

It’s a trend that developed as we emerged from the pandemic and has intensified ever since: more and more people are flocking to outdoor endeavors now that they’ve been freed from the confinement we all endured during the darkest days of the outbreak.

The get-outside-and-live phenomenon has been a bonanza for rustic lodgings, resorts that accommodate RVs and marinas for sailing vessels of all sorts, a bonanza that increasingly is attracting commercial real estate investors looking for a hot growth sector.

The latest player to bet on the great outdoors is Monarch Alternative Capital, an investment firm with about $11B in assets under management that maintains dual headquarters in New York and London.

This week, Monarch announced the formation of Go Outdoors, a platform to acquire, develop and operate marinas and RV resorts across the US.

Monarch has launched the platform with the recapitalization of two portfolios and partnered with Safe Harbor Development, an owner and operator of marinas. Safe Harbor Development will manage the existing portfolios and grow the platform through acquisitions and development, Monarch said in its announcement.

The company’s statement said the marina and RV resort sectors are in the early stages of becoming an institutional asset class.

“Monarch believes these sectors are historically overlooked real estate asset classes which benefit from attractive growth tailwinds and are in the early stages of institutionalization,” the company’s statement said.

The platform will initially encompass 11 marinas and 4 RV resorts, including more than 5,500 marina slips and 500 RV pads located throughout Georgia, New York, Pennsylvania and Tennessee. Monarch calls the existing portfolio “institutional quality properties [that] offer upscale services and amenities for their guests.”

According to Monarch, marinas and RV resorts benefit from attractive industry fundamentals enabling them to produce robust, high growth rental revenues. A strict regulatory environment, scarcity of available land and the capital intensity of new developments result in high barriers to entry, limiting the supply of new marinas and RV resorts, the company said.

Recreational boat registrations, boating participation and RV ownership are surging, increasing demand for docking, storage, and RV pad rentals. Recreational boating is now a $250B industry, according to the National Marine Manufacturers Association.

“The creation of a sizable institutional platform will provide operating capabilities, benefits of scale, and long-term capital to acquire additional properties throughout the US and capitalize on a highly fragmented market,” Monarch said in its release.

“The launch of our marina and RV platform comes at a dynamic time for the industry given the attractive supply-demand fundamentals and increasing industry consolidation” said Ian Glastein, managing principal and co-head of real estate at Monarch.

Last year, private equity firm Centerbridge Partners acquired Westrec Marinas, the third-largest US owner of marinas, for $400M.