Just when I thought that Florida's condo developers had learned their lesson, I came across this article about a new twist on condo living. 'Seniors' (55+) can now buy condo units on a cruise ship that has all the amenities of a typical, land-based Active Adult Retirement Community (AARC) and can transition them right through to the enhanced medical services of a Continuing Care Retirement Community (CCRC) as they get older.
Now I have to admit this is a somewhat novel idea, and as a huge Jimmy Buffett fan I can appreciate the appeal of living on a ship, but I don't know if the condominium ownership structure makes a lot of sense for these retirees. They tie up a big chunk of cash of front to buy the ship-board 'condo' (initiation fees from $259,000 to $499,000) plus pay monthly dues to cover all the standard ship-board expenses. In exchange they get to live in a "typical cruise ship size stateroom" which to me means cramped bedroom with one porthole and no kitchen. I hope they don't get tired of the martini bar and all-night buffet because a home-cooked meal isn't really an option. They also have no say over where their 'home' goes from day to day - would you buy a house that some guy in a hat could decide to move to Mexico overnight? To me a nice beachfront home near top-notch medical facilities and a savings fund to cover a cruise or two per year would be a more reasonable use of retirement funds for 99% of folks.
What this really sounds like to me is a sneaky way for ship-builders to get early sales commitments for their ships, albeit in small increments, in order to secure financing to build them. If cruise lines aren't going to buy ships why not sell them to retirement community operators who can then condo them out to retirees. It's the same 'pass-the-buck and take a fee' financing mentality that got us in trouble with all sorts of securitized lending. It reminds me a lot of the old condo-hotel scheme of a couple years ago used to raise capital for hotel-building. Most of those developments worked out very poorly, especially for the condo-hotel unit buyers. Let's hope this cruise ship scheme has smoother sailing.
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