Condo Cruise Ships ... The Next Real Estate Boom?

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Condo Cruise Ships ... The Next Real Estate Boom?
            
 
         With developers slowly running out of waterfront property, a Florida entrepreneur has found a way to create new 'land'

 

    DESTIN, Fla., Jan. 13 /PRNewswire/ -- Pensacola native Mark Boyd had been a consultant to a number of Gulf Coast condo real estate developers when he realized that it wouldn't be long before there was no more prime waterfront property available anywhere in the state. "With nearly eighty million baby boomers starting to retire this year, and a large number of them wanting to live where it's warm, someone needed to come up with a solution, so I thought of assembling a group of investors to purchase a cruise ship and convert the cabins to condominiums," Boyd said recently.

 

    Upon researching the idea, he developed a formula to produce the typical $15 million annually it takes to operate a mid-size luxury cruise ship. As a result, the condo owners will only pay a standard condo fee of between $7-10,000 a year for a suite costing from $349,000 to $529,000, and that's all.Boyd won't divulge the formula, but says a portion of the fee is derived from the ongoing casino and nightclub operations on the ship.

    Ten million people worldwide take cruises each year and 80 percent of them are Americans.

Today's cruise market can't keep up with the demand. Many cruise ships are leaving port with 104 percent occupancy and travel agencies are telling customers to book cruises at least six months in advance. The ships keep getting bigger and bigger to address the huge shortage in cabins. As the cruise lines add larger ships, they retire the smaller ones.  "Many of these ships still have 20 or 30 years of life left in them and can accommodate several hundred passengers in great comfort," says Boyd. "We will take a
retired cruise ship and convert every two to three cabins into luxury suites and sell them to investors." Luxury cruise ships are not your typical 3,000-passenger mega-ships. They sport first-class amenities and have more personal
service. They cater to the wealthy and many passengers arrive at the terminal by limousine.

    Luxury cruise prices range from under $400 to $1000 per person, per day,according to Cruise Lines International Association (CLIA), the industry's leading trade organization. "That's $5,600 to $14,000 per week," says
Thomas Blackburn, Boyd's partner and Executive Vice President. "Our condo suites will rent from $3,000 a week for our basic single-suite, to $6,000 a week for our largest three-room penthouse suite, thus making luxury cruising a
little more affordable, while at the same time providing a tremendous return on our condo owners' investments," he adds.
    The investment condo market may experience a lull, but some experts feel
the best is yet to come. And the industry is not dependent on the baby boomers. It's a fact that there are 700,000 more millionaires in America this year than there were at
the same time just last year.  The trend has continued for the past three
years and is expected to continue for years to come, and real estate is a
staple in the investment portfolios of many of these nouveau riche.
    Neither the cruise nor the investment real estate industry is expected to
decline dramatically as their stability is grounded in two common truths ...
Americans love to travel, and Americans love to make money.
    Condo Cruise Lines' first ship is already being reserved by prospective
condo purchasers in the same manner a real estate condo development sells its
units pre-construction.  The reservation process requires the purchaser to
provide a $10,000 deposit which is refundable with interest for any reason by
either the purchaser or Condo Cruise Lines.
    The benefits of investing in a condo suite on a luxury cruise ship are
huge. You have no ongoing electric bill, water/sewer bill, cable bill, or even
groceries, and your condo building contains health spas, daily housekeeping,
shopping, several restaurants, several cocktail lounges, a casino and an ever-
changing view. A benefit for pre-construction real estate condo investors is
that the condo development is already built and the units are, for the most
part, priced under the current average price tag for real estate condos. The
condo suites rent for roughly $3-6,000 a week year-round. The condo fee is
about the same as a beachfront condo, between $7,000 and $10,000 a year,
and most importantly ... you never worry about hurricanes ... the ship simply
moves out of harm's way.
    "All-in-all I think we have developed a whole new parallel real estate
market," says Boyd. "We want to augment what the investment real estate
industry is already doing ... and add a little fun to it at the same time," he
adds.