From the New York Times: By GERALDINE FABRIKANT What is tougher than having one sleek mega-yacht for sale in a glutted market? The answer, for the moment at least, is having two mega-yachts on the market. In boom times, yacht enthusiasts would order a new dream boat and keep their old one for the two or three years the builder needed to complete the new boat. Then, they would quickly sell the older yacht to impatient new millionaires and billionaires eager for their requisite status symbols. But that equation changed with the financial crisis two years ago and took the superyacht market down with it. Some of the wealthy have ended up like Peter A. Hochfelder, the principal and founder of Brahman Capital Management, a private investment firm in Manhattan. Mr. Hochfelder already owned a 134-foot Lürssen, named Blind Date, that was built in 1995. He commissioned a second boat in 2007, a 161-foot Trinity yacht, that he christened with the same name. It was completed in 2009. Now, Mr. Hochfelder, who declined to be interviewed, has put both on the market, in the hope that he can sell at least one. He has been asking $9.5 million for the older yacht and $33 million for the new one, which is big enough to sleep 12 guests. Maintaining a big yacht, after all, is expensive. Yacht specialists estimate that Mr. Hochfelder pays about $4 million a year to run his two boats. “It was a fool’s paradise,” said Malcolm Maclean, editor at BoatInternational.com, a Web site that tracks the yacht industry. Now, he said of the owners who cannot get rid of their boats, “They have caught very bad colds.” By one estimate, 300 new boats were sold annually worldwide from the mid-1990s until the 2008 collapse, when sales dropped to about 100 boats. Gone are the days when a speculator could systematically put yachts up on the market and count on a quick sale. Ian McGlinn, the British car salesman, who died in June, made his fortune by lending Anita L. Roddick, the founder of the Body Shop cosmetics chain, £4,000 ($6,345) to open a second store. According to several yacht brokers, Mr. McGlinn commissioned a series of boats during the boom, all called Tigre d’Or, and sold them at a profit to buyers unwilling to spend two years waiting for a boat. Today, it certainly is a buyer’s market, with everything from 100-foot yachts to those measuring more than 200 feet for sale. The 161-foot Mine Games, a boat built by Trinity Yachts of Gulfport, Miss., was put on the market for $28 million several months ago, for example, because its owner, Chris Cline, who heads Cline Resource and Development, a mine development company, had a larger boat on order. The industry has picked up a bit in recent months, although most buyers remain on the sidelines. “The inquiry level is picking up,” said William S. Smith III, vice president of Trinity, the largest custom yacht builder in the United States. “And there is more activity in the used-boat market. But there is still a lot of inventory, and as long as that is the case, people are keeping their hands in their pockets.” Fear is part of the problem. The wealthy are holding on to their money, and even speculators who built yachts, confident that they could find willing buyers among the new rich, are largely on the sidelines. Nor has the drop-off been confined to the United States. “Lehman Brothers went down during the Monaco boat show of 2008,” Mr. Smith said. “And all of these European brokers were smug at first because they thought the European market was decoupled from the U.S. market. But before the show was over, they were not so smug. It had affected everybody.” Some specialists contend that Americans, who had long accounted for a majority of the yacht market, have lost so much money that they are leery of committing to any big-ticket items. Whether that suggests a permanent shift toward buyers in the fast-growing economies around the world is still unclear, but several boat brokers noted that among recent sales, one has been to a Mexican mogul and two to Malaysian businessmen. Mad Summer, a 257-foot yacht with a helicopter pad and refueling station, two Jacuzzis, a movie theater and other luxuries, was sold earlier last year. Although the price was never disclosed, the asking price was 135 million euros ($179 million). Specialists say the actual purchase price was $100 million, and the buyer was a Mexican who has renamed the boat TV. Several yacht brokers say the new owner is Emilio Azcárraga Jean, the billionaire head of Grupo Televisa, the giant Mexican TV and telenovella company. Lourdes Dussauge, a spokeswoman for Mr. Azcárraga, declined to comment. The Chinese have not come into the market, although brokers are hoping that the ultimate status symbol will catch their attention. “It is a big question mark whether the Chinese will embrace yachting,” said Bob McKeage, a yacht broker in Fort Lauderdale, Fla. “So far it is mostly Hong Kong Chinese, not mainland people.” It remains a question mark because forecasting cultural appetites for yachts is not simple. He noted, for example, that there was vast wealth in Argentina, Brazil, Chile and Venezuela, but only the Venezuelans were avid yacht buyers. While rank speculation may be gone from the yacht market, there are still billionaires who like to sail the seven seas and are willing to pay for that pleasure. Some yacht brokers say that Americans are holding back now largely because they fear being viewed as profligate when many people have lost jobs, and that they will soon return. And there are signs of life. Mr. Maclean of BoatInternational.com said an American had ordered a 344-foot yacht from Feadship, the Dutch shipbuilder. Meanwhile, M/Y Musashi, a new yacht for Lawrence J. Ellison, the chief executive of Oracle, is undergoing sea tests. But given the long lead time to build boats, it was probably ordered before the financial crisis, as was the yacht Silver Shalis for the real estate developer Larry Silverstein. Certainly, the escalating prices for assets like art and antiques suggest that the superrich are increasingly opening their purses and looking for investments that will hold their value. But whether Americans will dominate the market when better times return is a matter of debate among brokers. Mr. Smith, for example, said: “The Russians are coming back and so are the Indians. I don’t think Americans will dominate it as they once did.” For the moment, it is just as easy to charter as to buy. Chartering has come back faster than the business of buying boats, or, as Mr. Maclean put it, “Would you buy a house right now?” alluding to the uncertainties in that market. Shannon Webster, a yacht broker based in Fort Lauderdale, said her business this winter had been good. “It is not tremendous, but it is up quite a bit from last year,” she said. “My price points are about $200,000 a week. That is for a boat that sleeps 12 people and has 11 in crew. It is 164 feet.” But she added that yacht owners were more willing to negotiate. Certainly $200,000 a week is only for the very rich. But in comparison to a $20 million yacht, it is, some might say, a bargain.
I'm glad to say I have enough money to stay put, and hold my 20-foot Larsen yacht (combo ski and fish).
It's a good thing so many people here had a boner for boehner. Help is on the way wayward millionaires!
Republicans love and help rich people. They hate and oppress poor people. Democrats love and are the champions of poor people. They fight the evil rich people. Did I get that right?
Less Mega Yachts = less draw bridge risings down here. I hope the market stays sour for those spoiled jerks.
