Swells Among The Swells - The World condominium cruise ship - Brief Article

Kiplinger's Personal Finance Magazine, August, 2001 by Sean O'Neill

REAL ESTATE | This is no joke: First, you pay $7 million for a FLOATING CONDOMINIUM. Then you're told you have to bring your own helicopter.

A NEW LUXURY cruise ship, The World, is putting a wildly upscale twist on the term "mobile home." For between $2 million and $7 million, you can own a piece of The World by buying one of the 24 remaining residences on the first cruise ship/condominium, which is scheduled to launch in December from Norway.

Making a succession of stops in celebrated ports of call, The World will anchor three-fourths of the year for events such as the Cannes film festival in France and the Grand Prix auto race in Monaco. The ship, which resembles a 12-deck wedding cake the length of two football fields and the width of an ice-hockey rink, will carry a battalion of 252 crew members and about 550 residents and guests. This is no crammed-to-the-gills party boat.

An oceangoing resort has been a real estate idea seeking venturesome capital since the 1980s, says Tom Ogg, editor of CruiseReviews.com. Skeptics doubted anyone would ever sink money into a floating mortgage. But the number of potential seafarers has finally reached critical mass: Since 1983, the number of Americans with a net worth greater than $5 million, adjusted for inflation, has tripled, to 500,000. The dozen penthouses on The World sold out the fastest, despite a hefty, $7-million price tag.

Driving range Included. The least-expensive condo on The World--an 1,100-square-foot, two-bedroom unit --goes for about $2 million, which makes it roughly as pricey ($2,090 per square foot) as Bill Gates's mansion. For just $1.5 million more, says Jim Gilbert, editor of Show-Boats International magazine, you could buy an 80-foot yacht sufficiently seaworthy to sail the seven seas in style.

Here's what your money will buy: Every condo boasts an ocean view from its veranda. Each condo's entryway has interior double doors to permit a grand entrance to the living room, which features a wood or stone floor, coffered ceiling, designer furniture and three Internet connections. Your servants or guests may live in one of 88 less-sumptuous suites.

An annual fee of about 6% of the purchase price covers utilities, gratuities, daily housekeeping, concerts, cultural seminars, massages at the Clinique La Prairie spa, and use of the driving range and open-air tennis court. Occasional use of the helipad is also included, but it's strictly bring-your-own-helicopter.

Meals are available at one of four restaurants and a gourmet delicatessen. "You're freed from dining at a designated table, which a typical world-cruise ship would require," notes Anne Campbell, editor of CruiseMates.com.

Out to sea. ResidenSea, the firm that runs the affairs of The World, says the average tenant is an executive in his mid fifties from the U.S. or Europe who plans to live on the ship three months a year. ResidenSea requires tenants to have a home elsewhere, partly because the ship is not meant to be a floating tax haven. Tenants must also have a net worth of at least $5 million. Owners or their heirs collect any insurance claims if the ship sinks or is damaged, and any proceeds if the owners one day collectively vote to sell the ship.

Richard Reed of Scottsdale, Ariz., recently took the plunge and paid $2.7 million for a two-bedroom, 1,353-square-foot condo on The World. This is not the first time that Reed has combined the comforts of home with the indulgence of travel. After making a fortune with a chain of tae kwon do schools, Reed bought a second home in Breckenridge, Colo., where he vacationed for 25 years. But, he says, he "never lingered long enough to make friends, and the scenery became boring." For a decade Reed also owned a sailing yacht with two bedrooms and a kitchen. But he spent more time repairing the yacht than he did sailing it. Recently, he sold his second home and looks forward to his time sailing on The World. "Its close quarters," he says, "should forge fantastic friendships."

Indeed, life amidst a bunch of swells on the high seas has proved so alluring that ResidenSea (call 305-264-9090 for more information) has ordered a sister ship to meet demand in 2004. --Reporter: KATHY JONES