Yachts International

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f bloggers who obsessivel­y compile statistics for a living are to be believed, then 2014 was a banner year for the brokerage industry. More than 400 yachts over 80 feet (24.3 meters) were sold, making a huge dent in the glut of inventory that has been lying at marinas wearing “for sale” signs since the economy imploded around 2008.

This fact, when combined with what top brokers are calling a resurgence in spending in the 80- to 140-foot (24.3 to 42.6.-meter) range, means buyers walking the docks as 2015 begins are encounteri­ng a far different reality than they’ve known the past half-decade. If you haven’t been to a boat show in a few years, things have definitely changed. No longer are high-quality, low-engine-hour, highly maintained models a dime a dozen, and for the handful that remain, there are far more buyers than during the past few years. All of it makes for the fastest-moving brokerage market the yachting world has seen since about 2006.

“A lot of inventory has gone away,” says Bob Cury, owner of Robert J. Cury & Associates. “What that’s done has lessened the amount of later-model, quality, pedigree yachts. Also in the last few years, a lot of the major manufactur­ers have reduced their production. Whether you talk about Trinity or Burger, Delta, Hatteras—any of the U.S. manufactur­ers—a lot of them aren’t building as many boats, so there’s been less and less new inventory coming to the market. For the first time in six, seven years, it’s slowly, slowly becoming a seller’s market versus the buyer’s market it has been for a while now.”

Crom Littlejohn, a broker with Merle Wood & Associates, saw the turnaround kick into high gear at the Fort Lauderdale Internatio­nal Boat Show last fall. The year 2013, he says, was the first time since 2008 that qualified, serious clients returned to the docks, but they made few offers until months later, closer to the beginning of 2014. This past fall was different. He had just returned from the Monaco Yacht Show, where he says it was hard to pinpoint more than two large-yacht sales, a statistic many brokers attributed to the weak European economy. Then, just a month later, came the Lauderdale show, which he says led to 12 to 18 sales of yachts 78 feet (24 meters) and above, with still a few deals in the works. Buyers in late 2014 were giving the nod much faster than in late 2013, too, with offers being made while the Lauderdale show was still in progress.

Expectatio­ns are for that intensity to continue into the 2015 Miami Yacht & Brokerage Show and beyond. Most important to the speed of deals is that as the current year begins, buyers and sellers are far more of the same mind when it comes to pricing. No longer are they tens of millions of dollars apart, as had been the case with some owners trying to keep prices high while the economy sputtered.

“The market has solidified a bit,” Littlejohn says. “It’s not as

willy-nilly as it had been in the past. The sellers have come to the reality of what the market is; they’re listening to the market where before they were still out there in la-la land hoping that somebody was going to come back and offer them their expectatio­ns.”

Littlejohn is not the only one seeing more deals happening, and happening faster. The same phenomenon has become clear in about the past year to Steve Elario, a broker with Y.CO.

“Finally, a boat that might have been $60 million, but was really worth around $40 million, in the past two or three years, the sellers have become more realistic about listing their boats in a buyer’s market,” Elario says. “The last Miami show [in 2014], I sold the 124 Lloydship Endless Summer, and we closed in a month. That was exciting to me. We’re seeing more serious buyers coming through the boat shows.”

Activity seems to be particular­ly brisk in the midrange market compared with recent years. Whereas yachts 200 feet (60 meters) and larger continued to sell fairly well during the recession—a multibilli­onaire who loses some net worth usually can still afford a superyacht—the midrange market was a dying quail because millionair­es who had stretched themselves suddenly became overlevera­ged and, in a lot of cases, left yachting altogether for a while.

They’re now returning, not only to the brokerage market, but also to charter, which many sales brokers see as a positive indicator for yacht purchases going deeper into 2015 and 2016. Cury, whose company has a small charter division with just one full-time employee, says his firm booked more than 100 charters in 2014, a terrific number versus previous years. Littlejohn says some charter yachts in the Merle Wood fleet also have a solid number of weeks already booked for 2015, a fact he is taking as a sign of overall increased spending to come.

“I think we all saw a good, healthy charter season for the [Christmas and New Year] holidays,” Littlejohn says. “When folks out there with an interest in yachting start spending hundreds of thousands of dollars on a week’s vacation, it’s telling us that the economy is doing okay.”

All three brokers are urging serious buyers to make offers without delay on yachts that meet their criteria. And while it’s true that brokers always want buyers to make fast offers, this year, for the first time in a long time, it appears they have a reason for pushing.

“I think it’s going to firm up even more into a seller’s market,” Cury says. “The manufactur­ers aren’t going to produce inventory that fast, and a lot of them won’t build without an order, so a lot of stuff coming off the lines already has names on it. The boat I was showing today was a 160-foot boat. There aren’t five of those sitting on the shelf that are seriously for sale, late model, clean and well-equipped. We’re telling the buyer, ‘Don’t scratch your head for a couple of weeks.’”

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