Despite the fact that there’s always a market for megayachts, regardless of economic conditions, some owners and would-be owners do feel the financial pinch more than others. Right now, for example, yachts in the 80- to 100-foot realm and even up to 120 feet aren’t selling or being bought as much as has occurred in the recent past, mainly due to softening in yacht sales smaller than that-the feeder market, if you will.
That’s among the reasons why companies offering fractional ownership and leasing are getting more attention. Apparently it’s proven successful for Monocle Fractional Yachts, which reports that it’s sold out more than 90 percent of its current “yacht-o-minium” offerings, as it likes to call its fractional shares of megayachts from 100 feet on up. And as a result of that, Monocle Yachts is looking for owners of well-maintained yachts who might want to sell their vessel yet don’t want to enter the crowded brokerage market. The goal is twofold: meet the requests of its current wait-listed clients who want to buy shares, and give yacht owners a way to lessen out-of-pocket costs.
Called “Sell My Yacht,” the promotion permits owners to sell their yacht into an LLC and then offer a limited number of shares. Monocle takes on management of expenses, maintenance, and crew as well as marketing and finding qualified buyers for shares. As to those expenditures, Loren Simkowitz, president of Monocle, says, “We are the only management team who does not mark up any yacht expenses, allowing our owners to pay only ten cents on the dollar.” Monocle also says it maintains a database of individuals who typically own shares in fractional jets and vacation homes and therefore are already familiar with these types of programs.
The net cost of the yacht and all expenses are divided into 10-percent shares that entitle the buyers a percentage of use per year as long as the yacht remains in the program. For example, each 10-percent share purchased yields four weeks of use annually based on a rotating calendar schedule (two weeks in summer, two weeks in winter).
Monocle says that because of the LLC structure, owners can exit the program at any time, either by selling their share independently or through Monocle.
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