Marina to Marina External Obsolescence

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I’ve seen the effects of passing train vibrations and sound on the absorption rate and sale prices of adjacent custom residential subdivision homes.  I’ve seen the effect of high tension power lines on individual residential subdivision lot sales and prices.  I’ve done graphical analyses of violent crime rates on approved office land per floor area prices.  Today was something new.  I got to experience the effects that one or two marinas can have on their neighbors.  It’s a textbook case… but I don’t write textbooks.

A Crowded MarinaI’m in the process of doing a marina competitive survey for a particular body of water.  There are mid-range marinas on this peninsula that offer a full range of services.  They look nice and have high occupancy rates.  Within almost a stone’s throw away is “the trailer park of docks”, as one marina office manager referred to it.  Describing a marina that way made me just too curious for words so I had to take a drive over there.

What I saw was a small marina that had partial 30 amp electrical service, no water, old docks in fair condition and no buildings.  The boats within were mostly small commercial fishing boats, but that didn’t explain why this marina had such a bad reputation or its effects on its neighbors.  As I started talking with other people a picture started to form.

  • The dockside electrical system worked sporadically.
  • The rates at the docks were so low that they attracted boaters of the wrong  caliber so this dissuaded some prospective renters at the nearby marinas
  • The condition of the docks could only be described as fair and both the length and width of each pier gave the marina poor visual eye appeal.
  • Crimes committed on and against neighboring marina boats was uncomfortably high.  From what I was told, the tenants of this marina were the culprits.

As I came to find out, the clientele at this marina was having an unfavorable influence on its neighbors.  Doors had been smashed and things stolen.  With no restrooms the clientele visited the adjacent marina and sometimes made their way into restrooms where they were not wanted.  Do you think the word gets around?  As Sarah Palin would say, “you betcha”.  It didn’t take much for nearby boaters to tell me their tales.  And we all know how much I like to listen to a good story!

What was fascinating was that this problem marina was not working alone.  It had a friend – the public landing next door.  The landing had no piers, utilities or buildings – you moored your boat alongside the bulkhead.  Now what could be wrong with that, you say?  By itself, nothing.  I like public landings and believe they have their place in the maritime community.  In this case, however, it worked in conjunction with our problem marina to present the appearance of a rock bottom boater area.

A Tale of Irony

What was so ironic about this situation was that the two nice marinas within a stone throw away were not affected one bit!  How could that be?  The reason was the perception of distance.  Although not far, neither had a direct visual to the problem marina and it was much less convenient to walk to those two marinas than it was to use the buildings of the adjacent marina.  The two marinas also had fencing, which I can only assume helped.

External Obsolescence

The Dictionary of Real Estate Appraisal defines external obsolescence as:

“An element of depreciation; a defect, usually insurable, caused by negative influences outside a site and generally incurable on the part of the owner, landlord, or tenant.”

So what we have is a marina that cannot increase their slip rates as much as the other two marinas partly due to external obsolescence (and partly due to a fewer services than the two marinas a stone throw away), it cannot attract the level of clientele that could be docked at the facility (i.e. it had smaller boat sizes), and it developed somewhat of a “reputation” among boaters due to its neighbor.  This marina suffers from external obsolescence due to its proximity to an undesirable marina.  Those marinas farther away (though not by much) were unaffected.  I call this marina to marina external obsolescence.

So can you guess the morals of this story?

  • External obsolescence isn’t just about buildings, odors or vibrations.  What you neighbor does or fails to do is just as important.
  • External obsolescence can affect nearby properties differently.
  • External obsolescence is not always about incomes or the people who live in a neighborhood.

Marinas can have external obsolescence from nearby competitive marinas too.

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