Centerbridge, Suntex JV Aims for $1.2B Marina Buy

Centerbridge Partners has formed a joint venture with Suntex Marina Investors, the largest standalone marina owner in the U.S., that aims to acquire and develop more than $1.2B of marina real estate.

The joint venture, which expands a relationship between the two companies that began when equity player Centerbridge recapitalized Suntex in 2021, will be backed by Centerbridge-affiliated funds and institutional investors, who increasingly are drawn to RV resorts, boating facilities and other outdoor venues as an asset class.

According to a statement issued by the companies, the JV has obtained a revolving credit facility of up to $600M from lenders led by Wells Fargo and including Bank of America, Truist Bank, BMO Bank and First Horizon Bank.

The funds will be used to support new acquisitions and capital improvements at newly acquired facilities, as well as several new development projects across the US, the partners said. The day-to-day operations of the joint venture will be managed by Suntex, which will receive management fees.

Dallas-based Centerbridge has been consolidating its position in the fragmented boat marina industry, acquiring marina operator Westrec, the third-largest marina owner, in 2022 for $400M. The company’s marina portfolio now encompasses 88 properties, Bloomberg reported.

Centerbridge is counting on a shortage of high-quality marinas and boat storage space as a long-term growth opportunity.

“The marina industry has shown consistently strong fundamentals for many years, as enthusiasts have invested in more and bigger boats while the availability of high-quality marinas and boat storage remains scarce,” William Rahn, Suntex Marinas chair and global head of real estate at Centerbridge, said in a statement.

The post-pandemic 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.

Last year, Monarch Alternative Capital, an investment firm with about $11B in assets under management that maintains dual headquarters in New York and London, announced the formation of Go Outdoors, a platform to acquire, develop and operate marinas and RV resorts across the U.S.

Monarch 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.

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 have surged in the post-pandemic environment, increasing demand for docking, storage, and RV pad rentals. Recreational boating is now a $250B industry, according to the National Marine Manufacturers Association.