A Rising Tide Lifts All Brokers
Yacht brokers can work anywhere the money is, but for most of the good ones, South Florida is home.
Andrew Cilla is No. 45. Joe Collins is 43. Those are the numbers on their yacht broker's licenses, which are issued in numerical order. When they entered the business back in the 1970s there were fewer than 50 people licensed to sell boats in Florida. Thereafter, licenses were not required for some years, but that changed in the early '90s.
As established brokers, Cilla and Collins were among the first to apply when licenses became mandatory. The latter event was something of a reform in the business, which with its rapid growth had attracted some characters who were not going directly to heaven. Obviously, those mentioned in this piece are not among them.
“Some brokers are highly reputable,” says a man with long experience in the field, “but some of them will sell their mother’s heart.”
Today there are more than 2,500 licensed yacht brokers in Florida, about 750 of them in South Florida. They are a major part of one of Florida’s largest industries, larger even than the citrus industry. Most of the top brokers will be on hand for the upcoming Fort Lauderdale International Boat Show, the largest of its kind in the world. At the show the customers will come to them, but that is not normal for the business. Yacht brokering is among the most mobile professions. Its stars travel the world to make their deals. But a number of the best-known companies either are based here or have a sizeable presence. After all, Fort Lauderdale isn’t nicknamed “The Venice of America” for nothing.
Cilla is the fourth owner of Luke Brown Yachts, established in 1971. Collins is one of his senior brokers in a firm noted for long-term employees. Most of the 14 brokers have been in the business 20 years or more. Some people literally grew up in the boating business in Florida. Bob Denison, president of Denison Yacht Sales, is the third generation of his family in one of the area’s best-known companies. Jody O’Brien, with the international Fraser Yachts operation, as a toddler used to accompany his broker mother on her rounds.
Yacht brokers are nothing if not mobile. It is routine for them to travel to make deals. The contacts for this story, all residents of South Florida, were visiting places such as Monaco, Newport, R.I., and Chicago this summer. Jody O’Brien spends considerable time doing business in the islands and this summer is headed for Bali, Indonesia, where he will spend a year while his daughter attends school there.
“I can be anywhere and work, as long as I have the ability to communicate globally,” he says. “I’ll come back whenever I have to.”
Brokers such as O'Brien are born to the business, but others found their calling almost by accident.
“I didn’t take school seriously and when I got out I couldn’t get a job,” Cilla says. “I had been racing on sailboats and when I came to Fort Lauderdale and I couldn’t afford an apartment, so I was living on a boat docked at Harbor West. That’s how I became interested in the business.”
Unlike most businesses, yacht brokerages don’t always have predictable value. It isn’t as if they have customer lists with repeat business month after month. And, like real estate, those specializing in major yachts often have negotiated commissions, but more than a few make $500,000 annually. The periods of drought, such as the recent recession, can be painful. A broker accustomed to the good life may become frantic when months pass without income.
For many brokers, selling boats may be only part of their livelihood, for some a minor part.
“Some brokers may sell one boat a year, maybe one in two years, but they do other things to generate income from a boat sale,” Cilla says. These may include fees for arranging financing, insurance and other services related to a sale.
“Brokers usually find themselves in the middle,” says a man who has done considerable work in the marine field. “When somebody wants to sell a boat, they usually want to polish it up a bit, and the broker has the contacts with the people who can do that. Then, when they sell the boat, the new owner, no matter what he pays, always wants to improve it, so again the broker knows the people to do that job.”
Some of the premier companies avoid extracurricular work, emphasizing that they deal only in brokerage.
In this special section, we profile some of the area’s best-known practitioners in an often lucrative, sometimes glamorous, but equally often tedious field.
Luke Brown YACHT's
Andrew Cilla, owner of Luke Brown, recently reflected on the changes he has seen in the business since the 1970s.
“It’s totally different today,” he says. “When I started there was no M.L.S. [multiple listings service] and if you had a listing, it was your listing. There was no easy entry into the business. We all used to get together at Chuck’s [on Fort Lauderdale’s 17th Street] and if somebody wanted to get into the business we’d meet him, and if he wasn’t a nice guy, we didn’t do business with him. Today anybody has access to 110,000 boats worldwide.”
Luke Brown is an example of a business principally rooted in Florida.
“We are more of a provincial firm, with 80 percent of our business in the U.S. Other firms are probably 70-30 the other way.”
Luke Brown has adapted to the changes. It has a European office (Southhampton, England) and is the broker for the Southeast for new boats produced by Selene, yachts built in China, and for Nordic Tugs, built in Washington state. It also has a yacht services company. Cilla points out that despite the number of licensed brokers, a minority of people sell the majority of boats.
“Twenty percent of the brokers make 80 percent of the sales,” he says.
Many yacht brokers grew up in the business, which means they lived near water. But it’s not a necessary credential to do well in the field. Jeff Erdmann, owner of Bollman Yachts in Fort Lauderdale, spent his formative years in Oshkosh, Wis. Although located on the shore of Lake Winnebago, it is known much more for its annual air show than for boats. Erdmann was living in Texas, selling copy machines. He takes it from there:
“It was 1988 and the economy was not strong, and not a lot of people were buying copy machines. I had a small boat on Lake Travis, and I saw an ad for a course in yacht brokering, and I thought it was a good time to change careers. Then I learned that the best markets for boats were in California and Florida. I moved here.”
Good move. Erdmann wound up buying the company from his boss, Pete Bollman, who took time off and has since returned to work for the company in Jacksonville. Erdmann has become an important figure in the industry, being named Yacht Broker of the Year in 2010 by the Florida Yacht Brokers Association. He was influential in convincing the state to cap its sales tax on boats at 18 percent. Opponents predicted that tax revenues would decline. Instead, they increased due to higher sales.
Ardell Yacht and Ship Brokers
A section on leading brokers would not be complete without a mention of Craig Cadwalader. The president of Ardell Yacht and Ship Brokers, and several related companies, is among the first names mentioned when other brokers discuss the most successful people in their industry. He has been one of the area’s top brokers since the 1970s, when he first came to Fort Lauderdale. He already had a decade’s experience with the company in California. He was named “yacht broker of the year.” He politely declined to be interviewed for this story.
Denison Yacht Sales
This company goes back to 1948 when it began as a boat builder. Today a third-generation family member, Bob Denison, is president of a company that is now an important yacht broker. His father Christopher, better known as Kit, is still active in a firm that is trending toward the high end of the business. The company is headquartered off Fort Lauderdale’s New River, but its about 50 employees are in seven offices around the world. Bob Denison spent time this summer opening a new office in Monaco, specializing in major yachts. And as this issue went to press he added an office in Seattle.
As part of that expansion, Denison has become the exclusive representative for Mondo Yachts, an Italian company located near Monaco.
“Bobby is branding a super-yacht division,” Kit Denison says. “There will be five specialists, including me, focusing on that part of the business. Yacht brokerage is similar to other personal sales businesses; it’s people to people, a matter of trust. Those who serve people well, do well.”
Fort Lauderdale may have the reputation as the yachting capital of the world, but in fact every city along Florida's east coast with ocean access has a bustling boating industry, especially in the winter when boats arrive from all over. Even though his 33-year-old firm, HMY Yacht Sales, is headquartered in Dania, founder Steve Moynihan works out of its Palm Beach Gardens office. Likewise Allied Marine, based in Fort Lauderdale, has its active brokerage business in Stuart.
“We have six brokers in the office, and a number of road warriors,” says Tom Jenkins, who after 35 years (25 of them selling Hatteras in Fort Lauderdale and Stuart) has a client list of 4,000. He is also coming off his best year ever. “I didn’t do anything different. You just have to be available to service your clients 24 hours, seven days a week.” One thing Jenkins does differently is publish a monthly newsletter. He also has his own “Tom Jenkins Yacht Sales” business card in addition to the standard Allied Marine card. You can guess which one he hands out.
Sean Fenniman calls Jenkins the “rock” of the office. And people call Fenniman one of the hottest brokers around. A Stuart native, he’s been on the water since his early years, and he has a degree in marine zoology from the University of Florida. He was working as a boat captain in 1997 when a yacht broker asked him, “Would you rather work on a boat or own a boat?”
“I told him I guess I’d rather own a boat. And he said then you should consider brokerage.”
He turned out to be a natural, averaging 35 to 40 sales a year, both new boats and used. He estimates he’s sold 500 boats in his 16 years in the work. And he and his family enjoy his own boat, a 44-foot Garlington. He also has a racing shell, keeping in shape by rowing around Stuart’s abundant waterways several times a week. “I can scout boats along the way,” he says.
Fenniman’s favorite customer is not the super-wealthy person (probably with inherited money) who buys a mega-yacht worth millions, but rather the man who buys a $500,000 to $3 million boat. He calls that “a thank you to themselves for working hard to afford it. And there’s no better place to be than to have yourself and your family ensconced on a boat.”