Marina Underwriting 101: NOI, Cap Rates, and EBITDA for First-Time Investors

Marinas are interesting investments because they don't fit perfectly into one category. Part of a marina operates like traditional commercial real estate, while another part can look much more like an operating business.

The docks, upland property, and water lease generate fairly predictable income through slip rentals and storage. But many marinas also have fuel docks, service operations, restaurants, cafés, or retail stores. Those parts of the property depend more heavily on labor, inventory, seasonality, and day-to-day operations.

That mix is also what can make marina valuation confusing, especially for first-time buyers. You might hear one person talk about cap rates, another focus on EBITDA, and a lender bring up an entirely different set of metrics.

Here is how the main pieces fit together.

Start With the Revenue

Before calculating NOI or applying a cap rate, it helps to understand where the marina's revenue is actually coming from.

A typical marina can earn income from:

• Annual and seasonal slip rentals: Usually the core source of revenue, especially at marinas with strong occupancy or waitlists.
• Transient moorage: Nightly or weekly visitors. Rates can be higher, but the income is less predictable.
• Dry and winter storage: Dry stack, trailer storage, or boats stored on land during the offseason.
• Fuel sales: Often a lot of revenue on paper, but margins can be relatively thin.
• Service and repair: Mechanical work, haul-outs, detailing, bottom work, and other marine services.
• Retail and food: Ship stores, bait, ice, supplies, cafés, or restaurants operated by the marina.
• Other income: Parking, liveaboard fees, utility charges, or leases to restaurants, charter companies, and other businesses operating on the property.

NOI: Looking at the Marina as Real Estate

Net operating income, or NOI, is one of the most important numbers in commercial real estate. At a basic level: NOI = Property Revenue − Operating Expenses.

NOI tells you how much income the property produces before considering financing, depreciation, income taxes, or major one-time capital projects.

For a marina, operating expenses might include:

• Payroll
• Property taxes
• Insurance
• Utilities
• Repairs and maintenance
• Marketing and administrative costs
• Property management

Cap Rates: Turning NOI Into Value

Once you have a realistic NOI, you can use a cap rate to estimate the value of the property.

The basic formula is: Value = NOI ÷ Cap Rate.

Say a marina produces $668,000 in NOI.

At a 7.5% cap rate: $668,000 ÷ 7.5% = about $8.9 million.

At a 7.0% cap rate: $668,000 ÷ 7.0% = about $9.5 million.

That difference is significant, which is why deciding what cap rate is appropriate matters so much.

A lower cap rate generally means investors view the income as more stable or less risky and are therefore willing to pay more for it.

For marinas, some factors that could support a lower cap rate include:

• High occupancy or an established waitlist
• A large portion of revenue coming from annual slip rentals
• Docks and infrastructure in good condition
• Limited ability for new competing marinas to be developed nearby

On the other hand, an investor might require a higher cap rate if the marina has aging infrastructure, significant seasonal revenue, substantial storm exposure, or income that depends heavily on the current owner's relationships and operations.

EBITDA: Looking at the Marina as a Business

Another metric you will hear frequently is EBITDA, which stands for earnings before interest, taxes, depreciation, and amortization.

EBITDA comes more from corporate finance and private equity than traditional real estate.

Instead of dividing NOI by a cap rate, investors can value a business using an EBITDA multiple: Value = EBITDA × Multiple.

For a marina, EBITDA becomes especially relevant when a meaningful part of the property's earnings comes from fuel, service, retail, food, or other operations.

This is one reason large marina operators or consolidators may focus more heavily on EBITDA than a traditional real estate buyer.

NOI and EBITDA can look similar, but there are a few important differences.

Using Both: A Split Valuation

Because many marinas contain both real estate and operating businesses, one way to value them is to separate the two.

The stable property income can be valued using a real estate cap rate, while the more operational income can be valued using a higher cap rate or lower EBITDA multiple to account for the additional risk.

For example, annual slip revenue is relatively predictable when a marina has stable occupancy and a waitlist.

Service revenue is different. It can depend on weather, staffing, customer demand, and how effectively the service department is managed.

It therefore makes sense that an investor might be willing to pay more for each dollar of stable slip income than for each dollar of service income.

The exact split is not always obvious, but thinking about the marina this way helps explain why two properties with similar total revenue can have very different values.

A Simple Example

The following example is hypothetical, but it shows how these concepts work together.

Assume a 200-slip marina with 90% annual occupancy.

Now assume annual operating expenses are:

That gives us: EBITDA = $1,388,000 − $660,000 = $728,000.

Now assume we include a $300-per-slip annual replacement reserve: 200 slips × $300 = $60,000.

That brings underwritten NOI to: $728,000 − $60,000 = $668,000.

Using a 7.5% cap rate: $668,000 ÷ 7.5% = about $8.9 million.

Another approach is to separate the property's real estate and operating income.

Suppose $520,000 of NOI is connected to slips, storage, and other relatively stable property income, while $148,000 is connected to fuel, service, and retail.

If the property income is valued at a 7.0% cap rate: $520,000 ÷ 7.0% = about $7.43 million.

If the operating income is valued at a 12.0% cap rate: $148,000 ÷ 12.0% = about $1.23 million.

That produces a combined value of roughly $8.66 million.

The split valuation is slightly lower because part of the marina's earnings comes from operating businesses that are considered riskier than annual slip income.

For a marina that earns almost all of its money from annual moorage, the difference between the two valuation methods would probably be much smaller.

What Lenders Care About

The lender looks at the marina a little differently than the buyer.

Instead of only asking, "What is this property worth?" the lender is focused on whether the marina generates enough reliable income to comfortably repay the loan.

Three of the main metrics are LTV, DSCR, and debt yield.

For marinas specifically, lenders may also pay close attention to:

• Historical performance rather than relying heavily on future projections
• How much income comes from transient or operating businesses
• Dock and infrastructure condition
• Upcoming capital needs

A lender does not want to make a 10-year loan against a marina whose docks may require millions of dollars of work soon after closing.

The Bigger Picture

The easiest way to understand marina underwriting is to recognize that you are looking at two investments at the same time.

The real estate side includes the slips, storage, upland property, and leasehold interests that generate recurring rent.

The operating side includes fuel, service, retail, restaurants, and other businesses layered onto the property.

NOI and cap rates are generally more useful for understanding the real estate side. EBITDA and multiples help explain the operating side. Lenders look across both but are ultimately focused on whether the marina produces enough sustainable income to support its debt.

For a first-time marina investor, some of the biggest mistakes are also fairly easy to identify: focusing on operating sales instead of operating margins, ignoring future dock replacement costs, or accepting every seller add-back without questioning it.

Once you separate those pieces, marina financials become much easier to understand.