Case Study · Maryland · Marina & Dry-Stack · SBA 504
Marina Feasibility Study, Maryland — An SBA 504 Worked Case
This is how our independent feasibility study company and feasibility consultant team analyzed the acquisition and dry-stack expansion of a Chesapeake Bay marina underwritten to an SBA 504 credit, from the boating demand and slip-and-rack absorption behind the pro forma through the debt-service coverage a lender must document. It is a representative, anonymized worked example of the methodology — not a specific client deal — set on a protected tidal harbor in tidewater Maryland.
A 250-slip Chesapeake marina, with dry-stack and service.
A sponsor came to our feasibility study company with a going-concern marina acquisition and an SBA 504 lender that needed the projected cash flow independently tested before it would commit. The subject is an established, roughly 250-slip full-service marina on a protected Chesapeake Bay tributary in tidewater Maryland, with a fuel dock and a haul-out and service yard already in place. The sponsor's plan pairs the acquisition with an expansion: a new four-tier dry-stack rack building of roughly 180 positions on owned upland, sized to convert unmet rack demand the market's few existing dry-stacks cannot serve.
Because a marina is a going-concern operating business wrapped around irreplaceable waterfront rather than passive real estate, the lender's question is not “what is the dirt worth” but “can this specific harbor generate the dockage, rack storage, fuel, and service margin to carry this specific loan.”11 Marinas are also named special-purpose properties under SBA rules and are listed as an environmentally sensitive industry, which is precisely the condition that turns a discretionary feasibility study into an expected one on a 504 credit.11 Our scope was the independent demand, absorption, competition, multi-stream margin, and debt-service analysis that supports that credit — underwritten stream by stream, not on a single blended rate.
Representative and anonymized. Every figure below is illustrative of a typical engagement of this type; the harbor, waterfront, and parties are composited, not a real named borrower, address, or completed transaction.
Boating demand on the Chesapeake, translated to slips and racks.
The demand read starts with the installed base of boats and where they are stored, not a rate applied to a waterfront. The Chesapeake is one of the nation's great recreational-boating estuaries, and its supply of permittable dockage is effectively fixed.
Nationally, the National Marine Manufacturers Association counts roughly 11 million registered boats in use and about 85 million Americans boating each year, with $55.6 billion of 2024 retail expenditure — a base that normalized after the 2020–2021 boom rather than collapsing.1 The translation that matters for a marina is that the installed fleet still needs storage, and storage is the last expense a boater cuts. Maryland's Chesapeake is a mature, supply-constrained boating market where strong harbors carry waitlists; the one genuine long-run demand risk is demographic, since the median U.S. boat owner was 60 at year-end 2024, offset by dry-stack and boat-club access models that lower the cost of entry.2 On the subject harbor, the model supports a stabilized wet-slip occupancy near 92 percent at annual-contract rates, plus rack demand the market cannot currently absorb.
Dry-stack is the expansion thesis, and it resolves the sector's core tension: boat demand is durable while permittable waterfront shrinks. A four-tier rack facility can generate four to five times the revenue of wet slips on the same land, storing roughly 15 to 20 boats per acre against 3 to 4 for wet slips, in a U.S. dry-stack market estimated near $669.6 million in 2024.45 The subject's roughly 180 new positions are sized to a stabilized ~90 percent utilization, subject to the two ceilings a feasibility study must respect — the local building-height limit, commonly 35 to 40 feet, and forklift launch throughput on a peak summer day.6
| Demand driver | Basis | Supported figure |
|---|---|---|
| Installed boat base (regional) | ~11M U.S. boats; Chesapeake a top boating estuary1 | Deep captive demand |
| Wet-slip dockage | ~250 slips, waitlist-supported, ~92% stabilized occupancy | ≈ $1.10M/yr |
| Dry-stack rack storage | ~180 new racks; 15–20 boats/acre vs 3–4 wet4 | ≈ $0.72M/yr |
| Fuel, service & ancillary | Multi-stream going-concern (fuel, boatyard, store)3 | ≈ $2.93M/yr |
| Blended stabilized revenue | Five streams, underwritten separately | ≈ $4.75M/yr |
Slip and rack absorption grounded in NMMA installed-base data and CT Acquisitions / Marina Dock Age storage economics; see sources 1–6. Figures are illustrative of the engagement type.
Slip scarcity, and a single rack competitor.
Six competing harbors sit within a reasonable trailer-and-water radius, but only one offers dry-stack, and it is near capacity. Permittable waterfront is finite, so new supply arrives slowly — the durable moat behind a Chesapeake marina.
| Competitor | Type | Capacity | Distance | Read |
|---|---|---|---|---|
| Marina A | Full-service wet-slip | ~180 slips | 3 mi | Waitlisted; no rack storage |
| Marina B | Wet-slip + fuel | ~240 slips | 6 mi | Aging docks, deferred capital |
| Marina C | Dry-stack + wet | ~150 slips / ~120 racks | 9 mi | Only rack competitor; near capacity |
| Marina D | Yacht club (private) | ~110 slips | 5 mi | Members-only; not public supply |
| Marina E | Boatyard / service | ~70 slips | 12 mi | Service-led; minimal storage |
| Marina F | Tertiary creek wet-slip | ~130 slips | 16 mi | Shallow-draft, seasonal |
Competitive set surveyed for the engagement; anonymized. Announced and permitted supply was scanned, not just the standing set; permitting a new marina is slow, costly, and often impossible, which is what makes waterfront a supply moat.7
The read is a genuinely undersupplied rack market inside a tight wet-slip market. The nearest full-service competitor (Marina A) is already waitlisted and offers no covered rack storage; the only real dry-stack operator (Marina C) sits nine miles away and is near its forklift and rack capacity. The private yacht club (Marina D) is members-only and does not add public supply. A rigorous study does not stop at the standing set: it scans announced and permitted supply so the absorption forecast is not quietly overstated by racks or docks the trailing data cannot yet see. Here, the U.S. Army Corps of Engineers approval, state tidal-wetlands licensing, and local land-use gates that govern any new marina make replacement genuinely hard, so the subject's ~180 new positions fill unmet demand rather than splitting a saturated market.7
Maryland: favorable water, watchful on cost and tax.
The state backdrop is a tailwind for a Chesapeake marina, tempered by a rising tax overlay. Maryland's tidewater is scarce, protected, and affluent, and its bottom-control regime is friendlier to a lender than the short-dated submerged-land leases common elsewhere.
The decisive Maryland advantage is how the state treats the water beneath the docks. In much of the country a marina holds a short-dated state sovereignty-submerged-lands lease, and its remaining term is often the single largest financeability issue — SBA requires any leasehold, including borrower-only renewals, to run at least as long as the loan, so a short-dated bottom lease can make a 25-year loan ineligible.11 Maryland instead grants riparian rights to the upland owner and licenses tidal-wetlands structures through the Maryland Department of the Environment and the Board of Public Works, which typically gives an established marina more durable control of its water column — a favorable fact for the SBA loan-term match, and one this study documented rather than assumed.14
The climate read is comparatively benign for the sector. The Chesapeake carries materially lower hurricane frequency than Florida or the Gulf, where Hurricane Ian alone drove roughly $50 to $65 billion of insured losses, so the subject sits in a scarcity-moat region rather than a catastrophe-exposed one — but flood, storm-surge, and the post-2022 escalation in coastal insurance are still real underwriting items, and docks, not just upland structures, must be insured.167 The offsetting caution is cost and tax. Maryland's 2025 Budget Reconciliation and Financing Act added new income-tax brackets, a 2 percent capital-gains surtax on higher earners, and a 3 percent tax on IT and data services, raising both project costs and eventual exit friction, so the feasibility test turns on stabilized coverage rather than optimistic growth.15
On capital, Maryland is split between two SBA district offices, and the subject's tidewater location routes through the Baltimore District Office, which covers Baltimore City and every county except Montgomery and Prince George's — including the Chesapeake and Eastern Shore counties where marinas concentrate.13 On the 504 side, the debenture routes through a regional Certified Development Company — Business Finance Group and Mid-Atlantic Business Finance Company lead the Mid-Atlantic — with a bank first mortgage alongside; M&T Bank is the dominant Mid-Atlantic first-mortgage lender. The decisive new tool is the July 4, 2026 decoupling of the 7(a) and 504 caps to a combined $10 million, which materially enlarges bankable marina deal size.1312
Why this harbor holds its slips.
Marina demand is driven by waterfront geography, boating wealth, season length, and protected water — not by raw population — and the subject's site converts each of those into durable occupancy.
The subject occupies a protected tidal creek off the main stem of the Bay, with reliable channel depth for the mid-size powerboats and cruisers that dominate the Chesapeake fleet, and enough owned upland to build the dry-stack without new in-water permitting. Its catchment is an affluent tidewater boating population within an easy tow, the kind of household that keeps a slip through a soft year because storage is the last line it cuts. Deep, protected water plus upland for racks is precisely the combination that permittable-waterfront scarcity makes hard to replicate.7
The operating calendar and the bottom do the rest. Maryland boating is seasonal, concentrated May through October, and the subject offsets the off-season with winter haul-out and inside storage — a real working-capital requirement a careful study sizes rather than ignores. Because the marina controls its water column through riparian rights rather than a short state lease, the going-concern value and the loan-term match both rest on firmer ground than a leased-bottom peer, and the travelift and boatyard let the harbor capture service and haul-out margin that a bare-slip competitor cannot.146
The SBA 504 structure.
Total project cost lands at $12.5 million. The 504 program is purpose-built for owner-occupied fixed assets and construction, which is why an owner-operated, special-purpose marina with a ground-up dry-stack build routes here rather than to a flexible 7(a).
| Cost component | Amount |
|---|---|
| Land & upland real estate (existing marina) | $3.30M |
| Wet-slip docks & marine infrastructure (acquired) | $3.55M |
| Dry-stack storage building (~180 new racks) | $2.85M |
| Fuel dock, utilities & environmental upgrades | $0.70M |
| Travelift, forklift & service-yard equipment | $0.70M |
| Soft costs, dredging & contingency | $0.85M |
| Working capital, closing & SBA/CDC fees | $0.55M |
| Total project cost | $12.50M |
| Item | Figure |
|---|---|
| Bank first mortgage (50%) | $6.25M · ~9.5% · 25-yr amort. |
| SBA 504 CDC debenture (35%) | $4.38M · ~6.5% · 25-yr |
| Borrower equity injection (15%) | $1.87M |
| Total project cost | $12.50M |
| Annual debt service (stabilized) | ≈ $1.01M |
Structure per the SBA 504 model under SOP 50 10 8; 50/35/15 stack with a 15% special-purpose equity injection; 504 debenture maximum $5.5M; combined 7(a)-plus-504 ceiling $10M effective July 4, 2026. See sources 11 and 12.
The equity injection sits at 15 percent, not the baseline 10 percent, and that is deliberate: under the 504 model a special-purpose property carries a 50/35/15 stack — a 50 percent bank first mortgage, a 35 percent CDC debenture, and a 15 percent borrower contribution — rising to 20 percent when the borrower is also a new business, and marinas are squarely special-purpose.12 Because the bottom is controlled through riparian rights rather than a short state lease, the loan-term-match test that sinks many leased-bottom marina credits is satisfied here.14 One scope condition is non-negotiable: marinas are NAICS 71393, an environmentally sensitive industry, so a Phase I Environmental Site Assessment is required regardless of loan amount, and the fuel dock adds tank-and-line testing before disbursement.11 On a 25-year amortization — the bank first mortgage near 9.5 percent and the debenture near 6.5 percent — combined annual debt service is about $1.01 million, the number the projected coverage has to clear.
Feasible and bankable, on coverage the credit can document.
The stabilized model builds revenue from five streams — dockage, rack storage, fuel, service, and ancillary — nets cost of goods and operating expense, and carries the coverage to the lender's floor and beyond.
| Line | Basis | Amount |
|---|---|---|
| Wet-slip dockage | ~250 slips, ~35 ft avg, ~$130/ft/yr, ~92% occ3 | ≈ $1.10M |
| Dry-stack rack storage | ~180 racks, ~90% utilization3 | ≈ $0.72M |
| Fuel dock sales | Thin ~10–20% product margin3 | ≈ $1.55M |
| Service, haul-out & boatyard | Travelift + labor, ~25–35% margin3 | ≈ $0.80M |
| Ship store, winter storage & ancillary | Retail, transient & storage | ≈ $0.58M |
| Total operating revenue | Five streams | ≈ $4.75M |
| Cost of goods (fuel + store) | Fuel product cost + retail COGS | ≈ ($1.54M) |
| Gross operating profit | Revenue less COGS | ≈ $3.21M |
| Operating expenses | Labor, utilities, insurance, R&M, tidal-license, tax, G&A9 | ≈ ($1.75M) |
| Net operating income (NOI) | Gross profit less operating expense | ≈ $1.46M |
Fuel is carried at gross sales with product cost in COGS, so the ~60% marina operating-expense convention is not applied to fuel turnover; the resulting ~31% NOI margin is consistent with a diversified marina. See sources 3 and 9.
| Year | Stage | NOI | Debt service | DSCR |
|---|---|---|---|---|
| Year 1 | Acquisition integration / rack lease-up | ~$1.11M | ~$1.01M | 1.10 |
| Year 2 | Building occupancy | ~$1.31M | ~$1.01M | 1.30 |
| Year 3 | Stabilized | ~$1.46M | ~$1.01M | 1.45 |
DSCR computed as NOI divided by the period debt-service obligation. Coverage conventions per sources 7 and 11; the ~1.15x SBA convention sits below the ~1.25x a marina lender typically applies to special-purpose collateral.
The stabilized 1.45x coverage is the figure the lender documents, and it clears the ~1.25x a going-concern marina lender looks for with real headroom, well above the ~1.15x SBA convention.7 By Year 2 the project already covers debt service at 1.30x. The Year 1 figure of 1.10x is intentionally close to break-even — it is the ramp year, as the acquired wet-slip base is integrated and the new dry-stack leases up — which is exactly why coverage is measured at stabilization rather than day one. Projecting day-one full occupancy or above-market rates, or blending a single margin across incompatible streams, is one of the most common ways marina pro formas fail review; the ramp here is deliberately graded and each stream carries its own margin.3
On the equity side, the $1.87 million injection earns growing levered free cash flow, held back hard in the early years for the dredging, dock, seawall, and storm-hardening reserve a marina genuinely needs — under-reserving that capital is itself a documented failure mode.7 The exit is valued on a going-concern basis, not a leased-fee cap rate: capitalizing a Year-10 stabilized NOI near $1.75 million at a conservative going-concern overall rate of about 10.5 percent — within the 8-to-12 percent range the market applies to marinas, and deliberately not a compressed premium-coastal rate — implies a gross value near $16.7 million, and roughly $7.5 million of net equity after selling costs and the outstanding bank and debenture balances.910 The return is earned from stabilization, rack lease-up, and amortization — not from cap-rate compression — and the blended result is an illustrative levered equity IRR of about 16 percent over a 10-year hold.8
Verdict: financially feasible and bankable. On independently derived, stream-by-stream demand, a stabilized 1.45x DSCR, and a ~16% levered equity IRR, the projections support the SBA 504 credit.
Independent demand, absorption, multi-stream margin, and DSCR stress.
The engagement was scoped the way a credit committee reads it. As an independent feasibility consultant, our role is to test the sponsor's projection against the market, not to restate it — the value of the deliverable is precisely that it carries no stake in the outcome. We derived wet-slip and rack absorption from the installed boating base, the competitive set, and local waitlist evidence, then underwrote each revenue stream at its own margin rather than applying a single blended rate across dockage, fuel, and service. Occupancy and rates were modeled on a graded ramp, not a capitalized peak.
The coverage analysis was then stress-tested. We ran debt-service coverage against occupancy, rate, and insurance-cost downside — the variables a marina is most exposed to — to confirm the credit still holds when rack lease-up slips or coastal insurance escalates. Two scope boundaries are worth stating plainly: as the feasibility consultant we reference, but do not perform, the Phase I Environmental Site Assessment that a fuel-and-boatyard marina requires; and the going-concern appraisal that allocates value across upland real estate, water-column rights, docks and FF&E, and business goodwill is a separate Certified General appraiser's engagement that runs in parallel.119 That combination — independent demand, absorption, multi-stream margin, and a stressed DSCR — is what lets the lender rely on the file.
Representative engagement
This is an anonymized, illustrative worked example of our methodology, built on market data current to 2026; figures are representative of a typical engagement of this type and do not depict a specific client, site, or completed transaction.
Underwriting a Maryland marina for an SBA loan? Start with the feasibility study.
Feasibility Study Company prepares independent marina and dry-stack feasibility studies for SBA 504 and 7(a) credits, built to the coverage standard your lender must document. A methodology briefing walks through the demand, absorption, multi-stream margin, and DSCR analysis behind a case like this one, calibrated to your harbor, waterfront regime, and revenue mix.
Request a methodology briefingData sources and dates.
The deal figures are illustrative of the engagement type; the market data that grounds each dimension is real and sourced, drawn from our standing Maryland, Marina & Boat Harbor, and SBA 7(a) & 504 analyses and the primary authorities they cite.
- National Marine Manufacturers Association (NMMA), 2024 Total Industry Sales data: ~11 million registered boats in use and ~85 million Americans boating annually; 2024 retail expenditures $55.6 billion (down 2.6% from 2023), normalizing from the 2020–2021 boom; storage cited across the sector as the last expense a boater cuts.
- Info-Link Technologies via NMMA: the median age of U.S. boat owners was 60 as of year-end 2024, with more owners in their 70s than in their 40s, offset by Millennial and Gen X entry and boat-club and dry-stack access models; the Chesapeake among the nation's largest recreational-boating estuaries (NMMA regional registrations).
- CT Acquisitions, 2026 marina brokerage guide (citing NACS-adjacent 2025 marina data): wet-slip $300–$700/ft/yr premium coastal, $150–$300 mid-market, $80–$150 inland; dry-stack $100–$200/ft/yr; fuel $1–3 million at 10–20% margin; service $500K–$3M at 25–35%; real estate ~40–60% of total value.
- HEDA Shelves and Emergen Research: a four-tier dry-stack facility generates four to five times the revenue of a wet-slip marina on the same land, storing ~15–20 boats per acre against ~3–4 for wet slips, while avoiding dredging, dock maintenance, and storm-surge and collision exposure.
- Global Industry Analysts via MarketResearch.com: U.S. dry-stack boat-storage market ~$669.6 million in 2024, part of a ~$2.5 billion global market projected to reach ~$4.6 billion by 2030 (11.1% CAGR). Single-provider forecasts with differing definitions.
- Marina Dock Age: storage income is “more stable, and less labor-intensive than service or boat sales”; dry-stack build cost ~$40,000–$75,000 per position (automated $75,000–$100,000+); owner-operator payroll normalized into NOI; local building-height limits commonly 35–40 feet and forklift launch throughput a ceiling on peak-day utilization.
- Leisure Investment Properties Group (LIPG), 2023 Marina Investment Report: the irreplaceable-waterfront / no-new-supply thesis; U.S. Army Corps of Engineers, state, and local permitting that makes replacement slow and costly; SBA LTV of 65–80% and a DSCR- and debt-yield-driven market; post-Ian insurance escalation cutting into NOI and the warning that docks, not just upland, must be insured.
- DealStream: EBITDA multiples commonly 3x–5x (5x–6x premium coastal); per-slip rule of thumb ~$5,000–$15,000; leasehold 10–20% value discount for sub-10-year bottom leases and a 5–15% fee-simple premium; sum-of-the-parts triangulation.
- marinaappraisal.com (Gerard McDonough, MAI): the operating-expense ratio near 60% for a basic marina; formula-derived cap rates “theoretical at best,” with credible rates drawn from the market; going-concern value triangulated across income capitalization, EBITDA multiple, and sum-of-the-parts, with owner-operator payroll normalized into NOI.
- Trade Only Today: income-capitalization cap rates historically ~8% for marina deals under $10 million and ~10% for $20 million-plus, with buyers seeking 9–10 caps and sellers 8 or lower, before institutional entry compressed premium-asset yields.
- U.S. Small Business Administration, SOP 50 10 8 (effective June 1, 2025): marinas as special/limited-purpose property; NAICS 71393 Marinas listed as environmentally sensitive (Appendix 6), Phase I ESA regardless of loan amount, fuel-dock tank-and-line testing before disbursement; owner-occupancy 51% (existing) or 60% (new construction); the leasehold rule that any lease term including borrower-only renewals must equal or exceed the loan term; feasibility discretionary but expected for special-purpose and ground-up projects.
- SBA 504 program structure (SOP 50 10 8; SBA 504 Procedural Notice 5000-852522): the 50/35/15 capital stack — 50% bank first mortgage, 35% CDC debenture, 15% borrower equity — with a 15% special-purpose equity injection rising to 20% for a new business plus special-purpose property; 504 debenture maximum $5.5 million; combined 7(a)-plus-504 ceiling raised to $10 million effective July 4, 2026 (SBA Policy Notice 5000-879058).
- U.S. Small Business Administration, Baltimore District Office and Washington Metropolitan Area District Office directories (current 2026): the Baltimore District covers Baltimore City and all Maryland counties except Montgomery and Prince George's, including the Chesapeake and Eastern Shore counties; M&T Bank the dominant Mid-Atlantic 7(a) and first-mortgage lender; 504 debentures via CDCs led by Business Finance Group and Mid-Atlantic Business Finance Company.
- Maryland Department of the Environment (Tidal Wetlands Division) and Board of Public Works; Maryland Department of Natural Resources: Maryland's riparian-rights regime and tidal-wetlands licensing generally give an upland marina owner more durable control of the water column than short-dated sovereignty submerged-land leases elsewhere, a favorable fact for the SBA loan-term match.
- Maryland Budget Reconciliation and Financing Act of 2025 (HB 352, signed May 20, 2025): two new income-tax brackets, a 2% capital-gains surtax (AGI >$350,000), and a 3% sales tax on IT and data services (effective July 1, 2025), with the corporate rate unchanged at 8.25%; U.S. Census Bureau Vintage 2024 (Maryland 6,263,220). Grant Thornton and RSM summaries (2025).
- Swiss Re Institute (December 2022) and Munich Re: Hurricane Ian insured losses of ~$50–65 billion, the second-costliest insured loss on record; the Chesapeake carries materially lower hurricane frequency than Florida and the Gulf, but flood, storm-surge, and coastal-insurance escalation remain real underwriting items.