Zipline Biz Makes Most of Charleston Real Estate

When it comes to unusual properties like the 10-acre Charleston Zipline Adventures park in South Carolina, few brokers know the ropes like Jimmy Kaiser.

With zoning challenges, accounting pitfalls and soaring competition for land, the $1.3 million deal, which closed last month, was about as easy to navigate as the park’s ropes course. Some brokers glided back and forth between pricing the asset for its business value or its land value. It was unclear which would be best for the seller — an entrepreneurial family who launched the business as a passion project years ago.

Kaiser, who is propelling a newer commercial branch of the mostly high-end, residential-focused Matt O'Neill Real Estate brokerage, approached the listing as an adventure in and of itself. The property was actively operating as a successful and “recession-proof” business that drew in Charleston-region locals, as well as far-flung tourists, to the small fishing region of Awendaw. But it was somewhat unique: the site had been zoned agricultural, and it also had a 2,872 square foot house on it.

Kaiser was familiar with the property, and the sellers were acquaintances. “A lot of our commercial deals come from our residential relationships,” Kaiser told LoopNet. “People start asking if we can help with this or that … and the answer is usually yes. If I have a niche, it’s in out-of-the-box, funky assets — RV parks, campgrounds, nonprofits, camps, land acquisition plays, and other things that aren’t just brick-and-mortar buildings where traditional cap rate formulas don’t easily translate.”

And a cap rate would be hard to come by for this one. The business wasn’t positioned to provide Kaiser with accounting details that would help him market a clear net operating income (NOI). That was one of the reasons it was hard to value the business, he conceded.

Sure, some buyers might be interested in using the property to continue hosting a zipline park, he thought, and they might even be interested in carrying the torch for Charleston Zipline Adventures.

But any of the buyers in that category, among many others, would be even more interested in how much the land is worth, Kaiser noted. He wanted to step back and make sure they were seeing the forest from the trees.

The team had the land appraised, as well as the improvements, which included three “giant towers,” tree platforms, a canopy system, seven zipline cable systems, an artificial rock-climbing wall and of course, the four-bedroom house. Having the recreational features appraised and inspected came with an increased level of scrutiny. “The industry is highly regulated, as you can imagine,” he said. “It’s under the same umbrella of, say, an amusement park.”

Despite the value of the zipline infrastructure, Kaiser didn’t necessarily start fishing for a zipline park operator. “It’s an interesting property, and people came out of the woodwork to just kind of kick the tires. It garnered a lot of interest from out-of-towners in other industries — hedge-fund managers in California or New York, for example — who are looking for a career change.”

But, understanding housing demand in the area, Kaiser’s first thought was that the site — nearly 10 acres of woodland about 20 miles outside of Charleston, along a major highway — would attract a residential developer who might subdivide the lot and put “15 or so homes on it.” But with construction material costs and interest rates soaring, homebuilders balked. “It wasn’t worth buying a $1.7 million property and spending another $150,000 to take down all the improvements,” Kaiser explained.

Zoning could have been another obstacle. Charleston County is notoriously difficult for navigating zoning changes, Kaiser said. “Any entitlement changes can take six months to one year, even if you’re lucky.” But under the sellers’ purview, the site had been incorporated in the nearby town of Awendaw. The site is still zoned agricultural, but with a recreational provision.

That opened Kaiser’s eyes to a world of possibilities. “Under that provision, a buyer could essentially do anything recreational they want— which is awesome,” he continued. “Plus, they could sell the house as residential, or use it as a facility for the business.” The agricultural zoning also opened the doors to agritourism, he said, and to farming, festivals, and any type of agri-business hybrids, such as roadside farmers’ markets.

One related sale of an adjacent property to a developer of soccer fields — which Kaiser says will surely help the zipline business — indicated the area’s zoning officials are motivated to keep welcoming lovers of the outdoors by encouraging development that builds an ecosystem for athletes, adventurers, bikers, kayakers and agritourists, Kaiser explained.

And that’s just the type of thing the buyer wants to do. The zipline course will remain an adventure park, under the new name Charleston Adventure Forest, with possible additions such as a petting zoo with blacksmithing activities, axe-throwing ranges, and potential camping sites that might include tree houses.

Although Kaiser was the listing agent for the deal, he also helped find the buyer. “The situation was a bit unusual in that I wasn't a dual agent, but rather, I represented the buyer as a quote-unquote ‘customer’ and the seller as a client, and had the two parties work with separate attorneys to close the deal.”

A local of the area, the buyer had previously done the zipline course with his family. “He’s someone who brokers jets for a living, who didn’t have any adventure park operations experience. But it’s going to be a family business, with his daughter coming on to run it as the general manager.” The buyer’s business background did help him navigate some insurance and financing challenges, Kaiser said.

The deal Kaiser brokered included all the fixed assets — such as the land, buildings and adventure park infrastructure — in the form of real property. Soft assets related to the business were handled between the two parties personally. “They could have sent it through a business brokerage, but there wasn’t enough skin on the bones to make it worth it,” Kaiser explained. “The land and the improvements are what made the asset so desirable.”

And with the land, the infrastructure and a bit of acumen for adventure, Kaiser concluded, “a zipline is a pretty sexy business.”