Cruise Ship Condo Conversions Planned

Inman News reports on the latest evidence of a housing bubble. "About 70 percent to 75 percent of the Earth's surface is covered in water. For condo developers, this means that something less than 25 percent to 30 percent of the globe can be stacked with residential units. Then again, what if condos could float? It's easy enough if you build them on a boat, and it's already happening." "To sell these units, promoters are using glitzy Web sites that gush glowing imagery of lavish living and travel adventures. And while the land-based condo boom has subsided in some previously hot markets." "There are tradeoffs for this seafaring lifestyle. While promoters say there are plenty of advantages to ship-based condos, the monthly maintenance costs can be high and ships tend to depreciate in value and will eventually be taken out of service." "Most of the residential units aboard The World area available for rent, according to ResidenSea. Renters must stay at least six nights, with rates starting at $1,200 per night, including food, port charges and gratuities." "John L. Letham, for a company that is promoting The Orphalese project, would not reveal how many of the units have been sold to date. To boost sales, company representatives are planning to appear 'at a number of prestigious yacht clubs over the next few months. Now we think we're ready to take this on the road,' Letham said. Last year, the company focused its sales effort in landlocked Las Vegas, a city that had seen an explosion in planned high-rise condo projects over the past few years." "Letham said that The Orphalese is definitely competing with land-based residential condo projects for buyers. 'We do see some of the competition being land-site high-rise condos. The only problem..(those) don't move.'" "The Orphalese will be retired after 50 years, and 'put into dry dock at a 'leading city of the world' to become a floating hotel/condo,' Letham said. If the project fails to get off the ground and into the water, Letham said that money will be returned to the prospective resident-owners." "And then there is the more budget-minded Condo Cruise Lines proposal for a series of more affordable ships that convert mothballed cruise ships into residential vessels. Mark Boyd, the visionary behind Condo Cruise Lines, said he hopes to launch a fleet of five condo ships. Units will range in price from $349,000 to $529,000, said Boyd, with annual fees ranging from $7,000 to $10,000 a year." "Unlike land-based condos, the sales of the ship units are not technically considered real estate transactions, Boyd said. Rather, it is a real property transaction, in essence buyers own 'a tin box in the midst of a ship that goes to sea,' Boyd said, adding that you don't need a real estate license to sell the units. Even so, some real estate agents are specializing in the sale of these properties." "'A lot of agents and brokers have gone nuts over this. It's fresh new inventory for them. They're easy to sell, and investors (can) make a lot of money,' he said. 'It's just like pre-construction condos.'"