WEBVTT - Highrise Luxury on the High Seas

0:00:02.520 --> 0:00:09.560
<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News. You're listening to Bloomberg

0:00:09.640 --> 0:00:14.200
<v Speaker 1>BusinessWeek with Carol Masser and Tim Steneveek on Bloomberg Radio.

0:00:14.400 --> 0:00:16.600
<v Speaker 2>Back in March, our Bloomberg News team reported on an

0:00:16.640 --> 0:00:21.040
<v Speaker 2>ambitious project. A developer of resident towers in New York, Miami,

0:00:21.120 --> 0:00:23.079
<v Speaker 2>and Los Angeles has planning to spend more than a

0:00:23.120 --> 0:00:28.400
<v Speaker 2>billion dollars converting cruise ships into luxury condos on the seas.

0:00:28.920 --> 0:00:30.600
<v Speaker 3>I'll take a condo on the high season.

0:00:30.640 --> 0:00:33.639
<v Speaker 2>Okay, seven hundred and fifty thousand to eight million dollars.

0:00:33.680 --> 0:00:37.000
<v Speaker 2>The ships will travel the seas as people live on them.

0:00:37.120 --> 0:00:40.360
<v Speaker 2>That developer joins us now. Russell Galbot is managing principle

0:00:40.400 --> 0:00:43.239
<v Speaker 2>and co founder of Cress and Seas. He's also founder

0:00:43.479 --> 0:00:46.959
<v Speaker 2>of GFO Investments, also former chairperson of Norwegian Cruise Line.

0:00:47.000 --> 0:00:49.839
<v Speaker 2>He joins us from Miami. Russell welcome, How are you.

0:00:50.880 --> 0:00:53.120
<v Speaker 4>I'm doing great? Thank you. It's nice to be with you,

0:00:53.200 --> 0:00:55.680
<v Speaker 4>Carol and Tim. Tim and Carol, nice to be with you.

0:00:56.440 --> 0:00:58.560
<v Speaker 2>Just give us an update on where you are in

0:00:58.680 --> 0:01:02.840
<v Speaker 2>the conversion of a first cruise ship to luxury condos.

0:01:02.840 --> 0:01:04.440
<v Speaker 1>Where are you in the process?

0:01:04.640 --> 0:01:07.120
<v Speaker 4>So thank you so much. So we're through the design

0:01:07.160 --> 0:01:10.840
<v Speaker 4>phase with our partners Lasny who did the spa and

0:01:11.040 --> 0:01:15.120
<v Speaker 4>pool areas, and March and White, who did the interiors

0:01:15.160 --> 0:01:18.240
<v Speaker 4>of some of the units on board. So the design

0:01:18.280 --> 0:01:21.160
<v Speaker 4>is all done and we're in the process of now

0:01:22.400 --> 0:01:24.240
<v Speaker 4>talking to the yards in order to get all of

0:01:24.240 --> 0:01:26.200
<v Speaker 4>this work done on a timely basis and to be

0:01:26.280 --> 0:01:29.639
<v Speaker 4>ready for December of twenty six, which is only about

0:01:29.640 --> 0:01:32.320
<v Speaker 4>fifteen months away. So we're excited, all right.

0:01:32.400 --> 0:01:33.960
<v Speaker 3>I spent a lot of time in a yard, and

0:01:34.120 --> 0:01:35.480
<v Speaker 3>I know it can be time.

0:01:35.640 --> 0:01:38.360
<v Speaker 1>To spend a lot of time. Wait, a lot of time.

0:01:38.400 --> 0:01:42.039
<v Speaker 3>Where in a yard a shipyard or well a boat yard?

0:01:42.200 --> 0:01:43.920
<v Speaker 1>Is that what you're talking about? Yeah, I thought you

0:01:43.959 --> 0:01:46.120
<v Speaker 1>meant it like a backyard. You got it.

0:01:46.280 --> 0:01:48.680
<v Speaker 2>Now, you don't spend any time on the seas, Carrol,

0:01:48.720 --> 0:01:50.000
<v Speaker 2>You have to translate this stuff.

0:01:50.120 --> 0:01:52.400
<v Speaker 1>Rust gets me, Yes, I don't. That's the story of

0:01:52.400 --> 0:01:52.800
<v Speaker 1>my life.

0:01:52.880 --> 0:01:54.520
<v Speaker 3>I'm a sailor. I've spent a lot of time in

0:01:54.520 --> 0:01:56.880
<v Speaker 3>a yard doing work myself or waiting for somebody to

0:01:56.880 --> 0:02:00.639
<v Speaker 3>do work. So that can be kind of tricky, especially

0:02:00.640 --> 0:02:02.040
<v Speaker 3>in a day where we were supposed to get a

0:02:02.080 --> 0:02:04.559
<v Speaker 3>labor report we didn't get it. Are the workers there

0:02:04.560 --> 0:02:07.640
<v Speaker 3>that trades people, because we find that increasingly harder and

0:02:07.680 --> 0:02:08.440
<v Speaker 3>harder to find.

0:02:09.360 --> 0:02:12.120
<v Speaker 4>No, No, the trades people are available, and you know,

0:02:12.200 --> 0:02:16.600
<v Speaker 4>all of the arts today are busy, but there's a

0:02:16.680 --> 0:02:19.680
<v Speaker 4>tremendous amount of talent. It's from Italy, from Germany, from

0:02:19.680 --> 0:02:22.320
<v Speaker 4>all of Europe, and that's predominantly where the ships are done.

0:02:22.360 --> 0:02:25.040
<v Speaker 4>And maybe one day it comes back to America, but

0:02:25.160 --> 0:02:27.800
<v Speaker 4>currently that's where it is, and we're exciting because we

0:02:27.840 --> 0:02:31.200
<v Speaker 4>have the talent, we have everybody on board, and we

0:02:31.240 --> 0:02:33.359
<v Speaker 4>will deliver on the product. And by the way, that's

0:02:33.400 --> 0:02:35.920
<v Speaker 4>just the first of three ships that we have planned.

0:02:36.240 --> 0:02:40.480
<v Speaker 4>So the Insignia comes in December of twenty seven and

0:02:40.560 --> 0:02:43.160
<v Speaker 4>our new build is coming in thirty two. So we're

0:02:43.160 --> 0:02:46.480
<v Speaker 4>pretty excited about what we have lined up. And as

0:02:46.520 --> 0:02:49.000
<v Speaker 4>you know, you know, the Earth's surfaces are seventy one

0:02:49.080 --> 0:02:53.320
<v Speaker 4>percent water, so while millions of Condominians are sold on land,

0:02:54.000 --> 0:02:57.200
<v Speaker 4>very seldom do you see any Condominions sold at sea.

0:02:57.639 --> 0:03:02.120
<v Speaker 4>So it's an exciting concept, a new indust and something

0:03:02.160 --> 0:03:05.840
<v Speaker 4>that's done very nicely because you know, it's anything that

0:03:05.880 --> 0:03:09.400
<v Speaker 4>you built in a shop is much easier than building

0:03:09.400 --> 0:03:14.000
<v Speaker 4>one off, so it's easier and more common to develop

0:03:14.080 --> 0:03:17.880
<v Speaker 4>a luxury cruise ship than it is a single individual condominion,

0:03:18.160 --> 0:03:20.760
<v Speaker 4>which you know, we have a lot of experience having

0:03:20.760 --> 0:03:24.880
<v Speaker 4>built condominians for over fifty years, right, But as.

0:03:24.760 --> 0:03:26.480
<v Speaker 3>You said, someone's building from the ground up is a

0:03:26.480 --> 0:03:28.920
<v Speaker 3>lot easier than doing a retrofit. So talk to us

0:03:28.960 --> 0:03:32.400
<v Speaker 3>about what how do you change these what are they

0:03:32.440 --> 0:03:35.240
<v Speaker 3>going to be like? Are they I have been on

0:03:35.320 --> 0:03:37.160
<v Speaker 3>a big ship, I know what those rooms are like,

0:03:37.240 --> 0:03:40.280
<v Speaker 3>But what is it about somebody who buys a luxury

0:03:40.600 --> 0:03:43.120
<v Speaker 3>residence on one of your ships? What does it look like?

0:03:43.960 --> 0:03:45.680
<v Speaker 4>So I'll tell you. One of the things that we

0:03:45.720 --> 0:03:49.560
<v Speaker 4>do is we combine cabins. So on the Navigator, for instance,

0:03:49.560 --> 0:03:51.760
<v Speaker 4>there's only one hundred and eighty nine suites and they're

0:03:51.880 --> 0:03:56.200
<v Speaker 4>true residents. So it's something magnificent that gives you the space.

0:03:56.320 --> 0:03:58.840
<v Speaker 4>You own all of the space inside your cabin, and

0:03:58.840 --> 0:04:02.000
<v Speaker 4>you share the common amenities outside of your cabin with

0:04:02.040 --> 0:04:04.640
<v Speaker 4>your fellow one hundred and eighty nine other unit owners.

0:04:04.680 --> 0:04:06.000
<v Speaker 4>So you sort of have to think of it as

0:04:06.080 --> 0:04:08.560
<v Speaker 4>one hundred and eighty nine private yachts together on a

0:04:08.560 --> 0:04:11.240
<v Speaker 4>five hundred and fifty five foot long ship. And the

0:04:11.280 --> 0:04:13.600
<v Speaker 4>difference is that you don't have to worry about the captain,

0:04:13.640 --> 0:04:15.720
<v Speaker 4>the first mate, the second mate, or the third mate,

0:04:15.760 --> 0:04:18.279
<v Speaker 4>because it's all done for you. And you don't have

0:04:18.320 --> 0:04:21.200
<v Speaker 4>to worry about shipping your one hundred foot ship by

0:04:21.200 --> 0:04:24.560
<v Speaker 4>one hundred foot boat to Europe because this ship is

0:04:24.600 --> 0:04:26.480
<v Speaker 4>big enough that it can go to Europe and travel

0:04:26.520 --> 0:04:29.040
<v Speaker 4>the entire world, go to the North Pole, South Pole,

0:04:29.279 --> 0:04:31.440
<v Speaker 4>and all of those types of places in between.

0:04:31.600 --> 0:04:33.880
<v Speaker 3>I have to ask, though, so you have a bedroom,

0:04:33.920 --> 0:04:39.000
<v Speaker 3>I'm assuming yes you have ahead, you have a salon?

0:04:39.800 --> 0:04:42.840
<v Speaker 3>You have do you also have a galley of your

0:04:42.880 --> 0:04:45.320
<v Speaker 3>own that if you want to, you know, cooking something.

0:04:46.040 --> 0:04:51.400
<v Speaker 4>Yeah, all units have small All residents have small, small kitchens,

0:04:51.640 --> 0:04:55.040
<v Speaker 4>but the bigger units obviously have bigger kitchens. So, and

0:04:55.240 --> 0:04:58.160
<v Speaker 4>the idea of being on board the ship is not

0:04:58.279 --> 0:05:01.800
<v Speaker 4>to cook for yourself, but to a joy the company

0:05:01.800 --> 0:05:04.400
<v Speaker 4>of the ship, to discover the world and not have

0:05:04.600 --> 0:05:06.560
<v Speaker 4>But if you listen, if you want to have a party,

0:05:06.760 --> 0:05:10.360
<v Speaker 4>we also have a common chef's kitchen that you can use,

0:05:10.440 --> 0:05:12.360
<v Speaker 4>and you can have a chef from the ship as well,

0:05:12.600 --> 0:05:14.240
<v Speaker 4>or you can do it all on your own, depending

0:05:14.240 --> 0:05:17.240
<v Speaker 4>on whatever you want. So, but the idea really is

0:05:17.279 --> 0:05:20.280
<v Speaker 4>to spend your time and things that are fun and

0:05:20.360 --> 0:05:22.960
<v Speaker 4>luxurious and things that you want to do. So we

0:05:23.000 --> 0:05:25.239
<v Speaker 4>have we do have a lot of amenities on board.

0:05:25.240 --> 0:05:30.039
<v Speaker 4>We have a huge library, a geographical center, observation decks,

0:05:30.160 --> 0:05:34.640
<v Speaker 4>beautiful pools and spa and so the content really is

0:05:34.680 --> 0:05:37.320
<v Speaker 4>to we have six different restaurants, so why would you

0:05:37.320 --> 0:05:39.600
<v Speaker 4>ever want to cook by yourself? But if you did,

0:05:39.839 --> 0:05:42.159
<v Speaker 4>we could also have any type of room service that

0:05:42.200 --> 0:05:43.480
<v Speaker 4>you want from any of the restaurants.

0:05:43.600 --> 0:05:46.480
<v Speaker 2>So I have a few questions regarding sure, just the

0:05:47.000 --> 0:05:50.080
<v Speaker 2>general idea of living on one of these, And one

0:05:50.160 --> 0:05:51.960
<v Speaker 2>is the initial cost I mentioned is seven hundred and

0:05:51.960 --> 0:05:54.560
<v Speaker 2>fifty thousand to eight million dollars a year, but the

0:05:55.200 --> 0:05:59.120
<v Speaker 2>annual maintenance fees talk a little bit about how much

0:05:59.160 --> 0:06:01.440
<v Speaker 2>those would cost, because some cases, according to our reporting,

0:06:01.680 --> 0:06:03.560
<v Speaker 2>could be two hundred and ten thousand dollars a year.

0:06:04.640 --> 0:06:07.400
<v Speaker 4>Yes, it could be. But when you look at that number,

0:06:07.480 --> 0:06:10.520
<v Speaker 4>it's inclusive of everything, right, So it's inclusive of your

0:06:10.560 --> 0:06:15.200
<v Speaker 4>big expenses like your fuel and all of the employees

0:06:15.200 --> 0:06:17.440
<v Speaker 4>who are there on board. Everybody's going to have their

0:06:17.480 --> 0:06:20.520
<v Speaker 4>own butler and so on, so when you think about it,

0:06:20.520 --> 0:06:23.360
<v Speaker 4>it also includes your real estate taxes, your insurance and

0:06:23.440 --> 0:06:26.479
<v Speaker 4>all of those other benefits, and I was just listening

0:06:26.520 --> 0:06:28.360
<v Speaker 4>to the story of the chaos in the world and

0:06:28.360 --> 0:06:32.080
<v Speaker 4>everything else that was on was on your station before Carolyn,

0:06:32.120 --> 0:06:35.320
<v Speaker 4>Tim and Tim Carroll, And I'll tell you, just think

0:06:35.320 --> 0:06:37.320
<v Speaker 4>about it. This is an opportunity to be at sea

0:06:37.360 --> 0:06:40.400
<v Speaker 4>and not even worry about the world's problems. I mean,

0:06:40.440 --> 0:06:42.960
<v Speaker 4>you really, you really have your own community, and you're

0:06:43.000 --> 0:06:46.400
<v Speaker 4>discovering the cultures and communities of everywhere else in the world.

0:06:46.520 --> 0:06:47.960
<v Speaker 1>I like the way you think when you say Tim

0:06:47.960 --> 0:06:48.760
<v Speaker 1>and Carroll or.

0:06:48.800 --> 0:06:54.000
<v Speaker 3>Carolynton, whatever, whatever you like, equal I love it.

0:06:54.000 --> 0:06:56.240
<v Speaker 1>It is. It's great. He loves everybody.

0:06:57.040 --> 0:06:59.680
<v Speaker 2>I want to know a little bit about the demographic here,

0:06:59.720 --> 0:07:02.280
<v Speaker 2>because I read about this and I look at it,

0:07:02.279 --> 0:07:04.440
<v Speaker 2>it seems like it's for retirees. And one thing that

0:07:04.880 --> 0:07:07.359
<v Speaker 2>we know as people do age is they do require healthcare.

0:07:07.440 --> 0:07:09.840
<v Speaker 2>And I know that people think a lot about living

0:07:09.840 --> 0:07:11.840
<v Speaker 2>in places that are close to that is close to

0:07:11.960 --> 0:07:14.120
<v Speaker 2>abundant and quality healthcare.

0:07:14.400 --> 0:07:16.280
<v Speaker 1>How do you get them on the ship.

0:07:17.240 --> 0:07:19.600
<v Speaker 4>Well, there's a full time doctor and two nurses on

0:07:19.640 --> 0:07:22.040
<v Speaker 4>board who will know all of your medical records. Okay,

0:07:22.400 --> 0:07:26.400
<v Speaker 4>so it's not for emergencies, but it is there, and

0:07:26.120 --> 0:07:31.400
<v Speaker 4>they're there for emergencies, not for operations or ongoing other

0:07:31.440 --> 0:07:34.280
<v Speaker 4>types of things. But I would also tell you that

0:07:34.440 --> 0:07:37.840
<v Speaker 4>I would say that you're wrong when it comes to

0:07:37.880 --> 0:07:41.040
<v Speaker 4>who actually buys, because there's families on board that are

0:07:41.040 --> 0:07:44.840
<v Speaker 4>buying today. Remember, the world today is quite different because

0:07:45.360 --> 0:07:49.200
<v Speaker 4>today between satellites, between Starlink and our existing satellites, our

0:07:49.240 --> 0:07:51.840
<v Speaker 4>existing satellites have gotten so much better that when you

0:07:51.880 --> 0:07:54.840
<v Speaker 4>go to the north and the South, you have absolute clarity.

0:07:54.920 --> 0:07:56.640
<v Speaker 4>So when you go to one of the conference rooms

0:07:56.640 --> 0:07:59.280
<v Speaker 4>on board, you can be in your office in Tokyo

0:07:59.760 --> 0:08:02.240
<v Speaker 4>or in Berlin and no one would know that you're

0:08:02.280 --> 0:08:05.320
<v Speaker 4>on a ship in Alaska. No one, because that's how

0:08:05.320 --> 0:08:08.760
<v Speaker 4>good the communications are. So you'll find that on board

0:08:08.800 --> 0:08:11.080
<v Speaker 4>we have we have two families who have bought that

0:08:11.160 --> 0:08:14.000
<v Speaker 4>are taking their children with them on a year round

0:08:14.000 --> 0:08:16.720
<v Speaker 4>cruise because they want them to experience and learn first

0:08:16.800 --> 0:08:20.760
<v Speaker 4>and the world. And what's interesting is that because of

0:08:20.880 --> 0:08:25.320
<v Speaker 4>COVID that the availability of materials for third grade or

0:08:25.400 --> 0:08:28.440
<v Speaker 4>second greatest, first grade is for all classes is so

0:08:28.560 --> 0:08:29.480
<v Speaker 4>much more improved.

0:08:30.320 --> 0:08:32.360
<v Speaker 3>Russell, one of the things I've got to ask, because

0:08:32.360 --> 0:08:34.440
<v Speaker 3>you're planning for a lot more ships. You mentioned one

0:08:34.440 --> 0:08:37.840
<v Speaker 3>coming out next year and then another one in another

0:08:37.960 --> 0:08:42.920
<v Speaker 3>bunch of years. Are people lining up already putting deposits

0:08:42.960 --> 0:08:45.720
<v Speaker 3>down because it's not an awsiness unless they buy it

0:08:45.760 --> 0:08:46.559
<v Speaker 3>and stick with it.

0:08:47.400 --> 0:08:50.959
<v Speaker 4>Absolutely, we we and we are open for business. All

0:08:51.000 --> 0:08:55.040
<v Speaker 4>you have to do is just happenings dot com.

0:08:55.240 --> 0:08:58.400
<v Speaker 3>How many have already said yep, plunked a deposit down

0:08:58.480 --> 0:09:00.320
<v Speaker 3>and said we're going to do this sign a con track.

0:09:01.200 --> 0:09:03.120
<v Speaker 4>We have one hundred and eighty nine units, we have

0:09:03.200 --> 0:09:07.200
<v Speaker 4>thirty nine spoken for, and we're looking at selling every

0:09:07.200 --> 0:09:10.520
<v Speaker 4>single day. And again, crescenseas dot com. You can pick

0:09:10.559 --> 0:09:12.439
<v Speaker 4>your unit and you can see all the different ships

0:09:12.480 --> 0:09:14.920
<v Speaker 4>that we have, and we'd love for your for your

0:09:14.920 --> 0:09:21.120
<v Speaker 4>listeners and for your to google and crestinseas dot com

0:09:21.559 --> 0:09:22.560
<v Speaker 4>and find their cabin.

0:09:22.720 --> 0:09:23.760
<v Speaker 1>I do have one other question.

0:09:23.800 --> 0:09:27.320
<v Speaker 3>Do those people treat it like a vacation house or

0:09:27.320 --> 0:09:30.520
<v Speaker 3>something and that they're not on it for long periods

0:09:30.559 --> 0:09:31.960
<v Speaker 3>of time or they're back and forth?

0:09:32.280 --> 0:09:33.400
<v Speaker 1>And is that Carol?

0:09:33.480 --> 0:09:35.599
<v Speaker 4>Thank you for asking that question. That's one of the

0:09:35.679 --> 0:09:38.160
<v Speaker 4>most important things that I didn't get to before, and

0:09:38.200 --> 0:09:40.560
<v Speaker 4>that is is that if you don't want we will

0:09:40.600 --> 0:09:43.200
<v Speaker 4>rent your unit for you when you're not there, just

0:09:43.240 --> 0:09:46.240
<v Speaker 4>as any other residence has it. And by the way,

0:09:46.280 --> 0:09:48.360
<v Speaker 4>if you are only on the ship, and you have

0:09:48.440 --> 0:09:50.280
<v Speaker 4>the right to come and go as much as you want,

0:09:50.480 --> 0:09:52.560
<v Speaker 4>if you're only on the ship four or five months,

0:09:52.800 --> 0:09:56.560
<v Speaker 4>your entire cost of maintenance is paid for by us

0:09:56.600 --> 0:09:59.800
<v Speaker 4>renting it out for you. So it's really a wonderful

0:10:00.000 --> 0:10:02.840
<v Speaker 4>opportunity to enjoy seeing the world, getting on and off

0:10:02.840 --> 0:10:05.760
<v Speaker 4>whenever you want your vacation home. And guess what. So

0:10:05.800 --> 0:10:08.880
<v Speaker 4>many people have their vacation homes in Miami, it's you know,

0:10:09.080 --> 0:10:11.959
<v Speaker 4>it's unbelievable. Or in New York, or in Los Angeles. Well,

0:10:12.000 --> 0:10:15.320
<v Speaker 4>guess what this particular home can be in all three

0:10:15.360 --> 0:10:18.360
<v Speaker 4>places in the same year. And you can enjoy all

0:10:18.400 --> 0:10:21.520
<v Speaker 4>three places in the same time by owning one vacation home,

0:10:21.760 --> 0:10:24.360
<v Speaker 4>not owning three vacation homes. Because we will travel the.

0:10:24.280 --> 0:10:26.760
<v Speaker 3>World, all right, We got to run russ nice spending

0:10:26.800 --> 0:10:29.200
<v Speaker 3>some time with you. Russell galbat He is matching principal

0:10:29.240 --> 0:10:32.920
<v Speaker 3>and co founder of Crescent C's also founder of GFO Investments,

0:10:32.960 --> 0:10:36.240
<v Speaker 3>former chairperson on Norwegian Cruise Line. Joining us from Miami,

0:10:36.480 --> 0:10:39.240
<v Speaker 3>Timm and Carroll, Carolyn Tarrlyn Town, Timm and Carroll.

0:10:39.280 --> 0:10:41.000
<v Speaker 1>Okay, I like it, Tim, I like it.

0:10:41.200 --> 0:10:44.040
<v Speaker 2>Russell comeback Star and appreciate you joining us.