THE 184-foot Pangaea is just shy of an icebreaker-class rating. Expedition vessels are a growing niche in the yacht market.

MIDDLE: BEFORE photo. Bottom: Giant started life as a Russian icebreaker and salvage vessel, but was transformed to offer the ambiance of a luxury ocean liner.

Beyond the ice-class hulls and first-class accoutrements, the potential value in retired commercial vessels is one of their strongest selling points. “You can buy these boats for pennies on the dollar compared to building from scratch,” says Howard Stein, a Fort Lauderdale-based captain who oversaw the conversion of one such vessel into the 194-foot yacht Altair. “We bought the yacht for well under $1 million but still put another $8 or $9 million into it,” he admits.

TOP VIEW With their nearly impregnable hulls, massive fuel tanks and powerful engines, commercial vessels are attracting adventurous boaters who want to convert them to white-yacht standards. If chosen carefully, these boats can be upgraded to world-class expedition vessels or “shadow boats” that do the heavy lifting and leave the primary yachts unburdened. But buyers who sink millions of dollars and months of work into these craft face uncharted resale waters.

Yachtsmen would normally spend five or six times that amount on a new 200-foot, custom expedition yacht with luxury quarters for 18 guests. The former North Sea pilot boat transformed into Altair had the value-added bonus of “boxcars full of spare parts and even an extra engine,” adds Stein, who bought the Dutch boat in 1997 on behalf of the owner. “We figured this was an inexpensive way to go from a high-speed yacht to a full-displacement vessel that could also cover long distances.” Stein then piloted it on an 8,000-mile maiden voyage to Australia, where it was converted by Oceanfast into a luxury yacht.

Like converting an old home, refitting a commercial yacht has myriad challenges. “A refit is cheaper, but it’s more complicated than building from scratch,” Stein says. “You start taking things apart and you’re not sure what you’ll find. I had my heart in my mouth when they were removing panels. I was betting the Dutch government, like any government, would spend inordinate amounts of money—stupid money, really—maintaining the boat.” Stein was correct: Structural damage on the 25-year-old vessel was minimal.

Giving Altair the ultimate makeover involved a jigsaw-puzzle process of removing decks and adding cabins, building in high-tech electronics systems with miles of cable, installing plumbing and on-board sewage systems and rebuilding the diesel-electric engine. After a year, Stein was able to bring it back to Florida looking like a high-caliber “white” yacht. “We used her as intended,” he says. “We saw the best part of the world on her. The only ocean we didn’t cross was the Pacific.”

Treasures Sunken
Still, Altair’s owners only broke even when they sold to new owners in Greece a year-and-a-half later, Stein says. As much fun as it may be to own an expedition yacht, selling the vessel is typically not an enjoyable process.

LATITUDE CAN cruise 40 days without refueling. The boat carries the owner and a 15-member crew to remote fishing areas.

Calculating the return on investment for a conversion project can be difficult. Market conditions affect the value of these vessels, as well as the idiosyncrasies of the individual yachts themselves. The asking price for Latitude, originally listed for sale in January 2004, was recently dropped by $1.5 million because its sport-fishing owner received only a few nibbles and no firm offers. Also listed last year, Giant has an asking price of $49.5 million. Owner Herzog is waiting for the right owner and has chosen to enjoy the boat rather than sell it at a price he believes is too low. Latitude’s owner also plans to continue to use the yacht for fishing trips and charter expeditions while waiting for the right of    fer. Some owners, while waiting for a sale, defray operating costs and create tax advantages for their vessels by putting them out for charter.

Stokes says it is not uncommon for yachts as unique as these to stagnate on the market for several years. “If the yacht is grossly overpriced, then it tends to get forgotten,” he says. On the other hand, some might consider the $15 million asking price for a vessel like Bart Roberts a steal. “For 265 feet, that is a lot of yacht for the money. You couldn’t touch that with a new build.”

He notes that other conversions, such as the cargo-carrying Lady Lola’s Shadow, have been profitable. That vessel sold for about $6 million recently, according to sources, netting at least $1 million. While the market for these vessels may be select, expedition yachts will always appeal to adventurers who prefer uncharted waters. “This market is a niche,” Stokes says, “but it’s a growing niche.”

Scott Cate, owner of a 184-foot conversion named Pangaea, says that he would build the same boat all over again. “I would tweak things,” he says. “But essentially, I’d follow a similar design with the same floor plan.”

Pangaea was originally built by Halter Marine in 1998 as a yacht that looks and performs like a commercial vessel. It was refitted in 2002 to give it the appearance of a more traditional pleasure yacht. Cate says Pangaea is just shy of an icebreaker-class rating and has, in fact, pushed truck-size icebergs out of its way on trips to Alaska. “We’ve been out in Perfect Storm weather in 75-knot winds, and the only damage was a dented Jet Ski,” he says. “But we can also go into ports with white yachts and not be conspicuous.”

TOP: BEFORE photo. Bottom: Lady Lola’s Shadow carries supplies for the main yacht, Lady Lola.

Now located in the South Pacific, Pangaea has visited more remote locations than most expedition yachts. Cate tells stories right from the pages of Herman Melville. He spent six weeks aboard the vessel recently near remote islands such as the Marquesas and Tuamotu, where he caught 300-pound marlin off the back of the yacht and dived among hundreds of sharks. “We never saw a dock,” he says. “We were self-sufficient. It is the ultimate off-road trip, but you have to get that far away to experience it.”

Some yachtsmen employ these converted commercial vessels in ways that mimic the boats’ original function. Owners commonly transform them into shadow boats—repurposed supply boats that essentially follow a mothership carrying an array of smaller vessels and equipment.

Lady Lola’s Shadow, a 186-foot converted supply vessel that tracked the 205-foot Lady Lola, is probably the most well known of these. The Shadow, as Lady Lola’s former captain, Stan Antrim, calls her, had a mission to carry a Bell 430 Executive twin-engine helicopter (along with 2,000 gallons of jet aviation fuel), a three-man submarine, a 32-foot motorlaunch, a 36-foot high performance boat and four smaller boats. “If you had to build a yacht to carry all that stuff, it’d be in the 400-foot range,” Antrim says. Shadow, which Antrim says cost about $5 million to buy and refit, was far less costly.

After perusing listings from all over the world, Antrim found Shadow among hundreds of supply vessels in the Louisiana bayou. Owner Duane Hagadone, a real estate developer from Idaho, wanted it ready in four months, so the local shipyard worked 24 hours a day, seven days a week, to turn the boat into a dapper servant ship. Because Hagadone’s guests would stay aboard the mother ship, the Shadow’s interior did not have to achieve a yacht-like finish. But the modifications were extensive, including the addition of a massive shelter to keep boats and helicopter out of the elements. “It sits out of sight of the mothership,” Antrim explains. “But you can use the toys at any time, including the helicopter—which many harbors now prohibit. It also makes the mothership look more elegant, instead of being bogged down by stuff.”

Tom Gonzales, a California businessman and owner of a 120-foot Benetti white yacht, is an enthusiastic convert to the shadow boat concept. “It cracks the code on how to get the best bang for your buck in yachting,” he says. “If you are trying to buy a 120-footer with everything the shadow boat offers, it would be $65 million to $70 million. But with the shadow boat and yacht, you could be into the game for less than $15 million.” In addition, Gonzales notes, a shadow boat keeps the yacht’s most valuable real estate—the upper deck—free of clutter.

Sacks Group’s Stokes has been working closely with the owner of a 60-foot Ferretti mothership who proposes to use a 150-foot shadow boat to transport the cruiser to the Mediterranean, and then serve as a floating fuel dock. “Not only do you save on transatlantic transport costs but you have 30,000 gallons of duty-free diesel at your disposal,” he says. “The owner can drive the 60-foot boat into the harbor himself, without all the fuss and expense of a large yacht. People are creating cost-efficient ways to use these supply vessels.”

Michael Verdon is a senior correspondent for Worth. michael.verdon@verizon.net

Additional Information
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