Seafaring condo works with agents

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NEW YORK -- ResidenSea Ltd., the Norwegian-owned and Bahamas-based company that plans to build a seafaring condominium ship for the super-rich, is dealing with travel agents in the sale of the vessel's apartments, which range in price from $1.8 million to $6.6 million, an executive of the company reported.

Although sales of the apartments are being channeled mainly through real estate brokers and Christie's auction house, ResidenSea is eager to work with agents in arranging sales, said Robert Burnett, president of ResidenSea U.S.A., the New York-based sales office for the Americas.

"We've been dealing very successfully with travel agents," he said. "A half-dozen agents have introduced us to buyers." Burnett declined to disclose the remuneration involved or whether it was in the nature of a brokerage fee or finders fee. "We've worked with travel agents on a selective basis this year, and we'd like to expand that in 1999," he said."

Burnett also reported that the planned vessel's 86,000-ton, 286-apartment specifications have been downsized to accelerate the vessel's financing and permit its delivery by early 2001. Plans for 183 guest suites on the vessel, to be available for use by apartment owners or others, are being downsized to about 80 such units, he said. A final plan for the ship, which will be called the World of ResidenSea, is expected to be ready in 30 days, whereupon bids will be invited from several yards, Burnett reported.

The executive said the decision to downsize the ship was not determined by soft demand. "Sales are ahead of schedule," said Burnett. "There would have been no difficulty selling the original apartment inventory before delivery of the ship." Rather, he said, the downsizing of the ship was to reduce the original $500 million price tag for the vessel, enabling the company to step up the timetable for ordering it.

"The financing for the vessel is not based on proceeds from apartment sales but debt and equity of the investors," he said. "With less capital requirements, we can get the ship built faster."

Additional dealings with agents are expected to take place once the vessel is in operation, according to Burnett. Since the project was announced last year, 65 of the units have been sold for a total of $131 million, said Burnett.

Plans call for the vessel to pursue a round-the-world itinerary each year, with approximately 250 days in port, timed for high season in many leading destinations. The vessel's designers are finalizing plans for a ship just over 35,000 tons with 100 to 125 apartments, he disclosed. The size of individual apartments, which range from 1,000 square feet to several thousand square feet,will not be reduced in the new design, Burnett said. "If anything, the apartments are being enhanced in response to many suggestions of the buyers," he added. Apartments will have two or three bedrooms, each with a bathroom, as well as living and dining areas, equipped kitchens and a terrace with whirlpool.

Buyers pay a 10% deposit and are required to pay a second 10% deposit in 12 months, he noted. The remainder is payable upon the delivery of the vessel. All funds are deposited in an interest-bearing escrow account with Chase Manhattan Bank, he said, adding: "If the ship isn't delivered, the down payments are fully protected." About half of the buyers are from the U.S., and the other half are from Europe, principally the U.K. and Scandinavia, Burnett said.

The principal investors in ResidenSea are Norwegian, led by Knut Kloster Jr., whose family was the principal investor in Norwegian Cruise Line for many years. ResidenSea maintains two phone lines: (800) 799-9792 and (212) 332-1660.

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