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January 26, 2010 Portlandbiz

Auction company, marina brokerage team up

By Carol Coultas

Three years ago, marinas were hot properties, bought by investors who expected significant returns by developing shore-side condos, or leveraging dockominiums -- private slips for rent or sale to boat owners eager for a permanent berth.

Then came 2008 and its high gas prices, which put a dent in recreational boating, followed by 2009's recession that prompted the sale of many boats. The result, according to Jed Harris, a principal of Portland's MarinaSales, a national brokerage for marinas, has been a 10-20% decline in the value of marinas, prompting some investors to seek a quick sale before their mortgage notes come due.

"It's been a tough climate for the industry, but for people looking to buy a marina, they are likely to get a steal," he says.

To enhance a quick turnaround, MarinaSales is partnering with Tranzon Auction Properties on Exchange Street. The auctioneers, part of a national network, can bring marina owners into contact with motivated buyers and accelerate marketing and sales of the properties, according to Mike Carey, vice president of Tranzon.

"We excel where time is of the essence," says Carey. Last year Tranzon sold 175 properties through auctions, typically completing the transactions in six to eight weeks, he says. By comparison, Harris says selling a marina through conventional means usually takes a year.

Harris says he expects there will be more marina owners looking for a speedy sale over the next several quarters as three- to-five year mortgage notes come due at a time when the marinas' values have declined. One of the benefits of teaming up with an auction company is getting a fair market price through its assessment procedures. MarinaSales currently holds about 20 listings, of which maybe two or three will consider the auction option, says Harris, but he expects that number will grow.

Carey says Tranzon's network of 32 offices across the country provides an instant base of investment buyers, and its aggressive marketing of the properties ensures high exposure in that market.

"We're connected with folks who are always looking to buy," he says. "Instead of throwing pebbles into the water to get people to notice our properties, we take a 50-pound boulder and toss it in."

Tranzon makes its money from commissions on the sales, which vary on a case-by-case basis, says Carey. In 2008, the company logged $45 million in transactions, according to President Tom Saturley.

Marc Anton, founder and principal of MarinaSales, says that the national dockominium market dried up last year, but expects it will come back eventually. Chandler's Wharf in Portland and a marina on Sebago Lake have successfully offered dockominiums. By way of example, Anton says marina investors could rent slips at $4,000-$5,000 per year, or sell them for $125,000, realizing an immediate return on their marina investment - a successful business model until the market slowed down.

The partnership will be announced tomorrow at the International Marina and Boatyard Conference in Tampa, according to Harris.

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