In the News

Morningstar purchases Peninsula's yacht club

Charlotte Business Journal - 09/03/2004

In a move that expands its business into a new arena, Morningstar Properties -- owner of Morningstar Storage Centers -- has purchased The Peninsula Yacht Club on Lake Norman.

And Matthews-based Morningstar is seeking to buy or develop additional marinas in the Carolinas and northern Georgia, says Dave Benson, company president. In particular, the company is targeting the Savannah and Atlanta areas, he says.

Terms of the local deal were not disclosed.

The Peninsula Yacht Club, which comprises a 405-slip marina and 20,800-square-foot clubhouse, is part of The Peninsula community. Both the club and the community were developed by Crescent Resources, real estate subsidiary of Duke Energy Corp.

Buying the operation will give Morningstar a good introduction to the marina business, Benson says.

"We can get our feet wet," he quips.

The yacht club will remain a private amenity for Peninsula residents, and its management company, East West Partners, has been retained.

Morningstar has set aside an undisclosed amount of money to update marina services and facilities, but details of those changes have not been determined, he says.

Morningstar has been weighing new real estate ventures for several years, after seeing the storage industry peak, Benson says. "We don't believe the opportunity is as deep and as easy to come by as before.

"This looks and feels like a business we would be able to understand," he says of the decision to pursue marina holdings. "There is a way for us to learn about the businesses without getting too far afield. This is such a well-known property -- the best and the brightest in our own back yard."

Jason White, a Crescent project manager, says the company decided to sell the yacht club after it became self-sustaining and development of The Peninsula was completed.

Cornelius Mayor Gary Knox, a resident of The Peninsula and a yacht club member, says Crescent considered several purchase offers for the yacht club, including one from its members and one from another marina. The Peninsula Club also expressed interest.

"From the membership perspective, there hasn't been any sweeping storm of change," Knox says of the new ownership. "They're going to keep it operating the way it is now, grow the membership and grow it as a business."

As part of its plans to pursue marina properties, Morningstar created a Morningstar Marinas subsidiary in January. Company officials then began discussions with Crescent in April and closed on the yacht club at the end of July.

The venture does not mean Morningstar is pulling back from mini-storage development. It has 58 storage centers in the Southeast, nine of which operate under the Morningstar name and the others under Shurgard Storage Centers Inc. Seattle-based Shurgard bought a 74% stake in Morningstar in June 2002. Morningstar had 49 properties when it sold that stake to Shurgard.

The Morningstar/Shurgard partnership recently opened a five-story storage facility in downtown Columbia. It has three more are under development in the Southeast, Benson says.