Blue Water looking to buy small RV parks across US, CFO says

Blue Water Development, an Ocean City, Maryland-based hospitality provider for
recreational vehicle travelers, is seeking to acquire small RV resorts across the US, said CFO
Rafael Correa.


An ideal target is a "mom-and-pop"-owned outdoor RV park as small as 100 sites, if it is in a
high-demand market, but otherwise preferably between 225 and 250 sites, he said.
Most of the company's dozens of properties are RV parks but it also owns a chain of hotels,
two marinas, a waterpark and a boat-tour/parasail operation. The company focuses on
leisure travel resorts located near demand generators such as national parks, beaches and
cities with significant tourism, such as Washington DC, he added. None of its properties are
urban, roadside, airport or business-oriented.


Blue Water looks for assets that are either under-managed or have significant expansion
opportunities for which ownership lacks the capital.


Blue Water operates coast to coast in the US, but is strongest in the mid-Atlantic region, he
said, with strong presences also in Oregon, Maine, Florida and Texas.


This month, Blue Water acquired Endless Caverns, a Shenandoah Valley, Virginia-based RV
site near a tourist-accessible cave system. This was Blue Water's twelfth outdoor hospitality
sector acquisition in Virginia and twenty-second overall, Correa said.


Blue Water is interested in either buying RV parks directly or acquiring companies with such
properties, he said.


The firm has been approached on multiple occasions with fundraising offers, he said, and it
continues to be approached. Blue Water prefers to rely on a very limited pool of capital
partners, both private and institutional, that has given the company everything it has needed
so far with respect to growth capital, Correa said.


Interest in RV tourism has steadily increased in the US since 1980, with a big spike after the
onset of COVID-19 that has recently attracted much attention from sophisticated capital
institutions, Correa said.


The involvement of such institutions has boosted demand for Blue Water's three-year-old
business of managing third-party hospitality assets, he said.


Blue Water recently created a subsidiary, Great Outdoor Cottages, to manufacture park
model cottages, which are tiny houses on wheels. This startup is intended to help Blue Water
achieve vertical integration, Correa explained.


Blue Water was founded by Todd Burbage, its CEO, and Jack Burbage, his son, who remain
controlling shareholders, Correa said.


The corporate office has 75 employees, he said, and across the portfolio, at the height of the
season, the company has more than 3,000 employees.


In acquiring land assets, Blue Water competes with Equity LifeStyle Properties and Sun
Communities.


Blue Water manages approximately USD 150m in revenue a year, including the revenue of
third-parties companies that hire it for management, he said.


Its transactional law firm is Gebhardt & Smith, its outside accounting firm is BDL and its
banking partners include M&T Bank, Taylor Bank, Bank of Ocean City and Shore United.

Original article by Mark Coakley in Toronto of MergerMarket

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