Why Do Rich People Want the Hassle of Owning an Island?
A conversation with the CEO of Private Islands Inc.
JOE PINSKER
MAY 7, 2015
MEGA PIXEL / ULYANA VYUGINA / SHUTTERSTOCK / ELISA GLASS / THE ATLANTIC
“As a symbol of great possession,” read an article in the inaugural issue of Fortune magazine in 1930, "the privately owned island may yet supplant even the steamship.” Eighty-five years later, it can safely be said that the supplanting is complete. Today, private islands are a status symbol that derive some of their power from being so scarce: One industry veteran estimates that there are only 2,000 islands that are close enough to land, located in stable regions, and allowed to be developed.
But why own an island at all, when a pied-à-terre in Monaco or a cabin in Sun Valley would do? Private islands usually aren’t near airports, so getting there is a hassle. Any construction—let alone maintenance and repairs—is going to cost about two to four times as much as it’d cost on land. And as one owner told The New York Times in 2005, “It can be a real bear getting groceries out there.”
Chris Krolow, the CEO and founder of the Toronto-based marketplace Private Islands Inc. and the host of HGTV’s Island Hunters, sees these obstacles as irritating but surmountable. He owns three islands, two in Ontario and one in Fiji. Krolow has been fascinated with the idea since he was a child, and other owners have cited early obsessions with Robinson Crusoe to explain their purchases. (I, for one, have not forgotten that Crusoe spent significant amounts of time fending off constant threats from extreme weather and cannibals.)
I spoke to Krolow about the current state of the industry, as well as why the idea of owning an island is so appealing. The interview that follows has been edited and condensed for the sake of clarity.
Joe Pinsker: How is the private-island industry doing now? How did it fare during the downturn?
Chris Krolow: During the economic downturn, everything had sort of halted. There were very few sales during the economic crisis. Over the last few years especially, we’ve definitely seen a resurgence in sales and inquiries. But the recession hit us pretty hard.
Pinsker: How was it in the early-to-mid 2000s?
Krolow: The market really only started when we amalgamated all our listings on our website. That’s when the market really took off. I would say the private island market didn’t really exist until before 1999.
Buck Island, in the British Virgin Islands, is on sale
for $30 million. (Private Islands Inc.)
Pinsker: Are you saying that the Internet played a big role in getting the industry to coalesce?
Krolow: Absolutely. When we started in 1999, there was a handful of brokers that had a listing here or there, so there really wasn’t a market, per se. There’re two kinds of markets. There’s a local market and there’s an international market. And islands in local markets, they’re obviously more sought after by people who actually live there and know the area. International markets—that’s where it didn’t really exist before. A lot of people didn’t have a reason to look into what the chances were of owning an island, let’s say, in Asia, or in the South Pacific. They were just told, “Oh, foreigners can’t own islands.”
Without the Internet, there would be no market. People aren’t looking for an island in a particular location all the time. They think they are at first, perhaps. But when they learn about our company, and they start to investigate, usually their criteria change, like, “I don’t want to spend more than four hours getting to my island, or six hours getting to my island.” So someone from the States might be open to an island in Canada. They could be open to the Bahamas. And now they’ve got direct flights from L.A. to Fiji, overnight flights. You could be on your own island in 14 hours and not even realize. You take a sleeping pill. Boom—next thing, you’re in your helicopter and you’re a mile away—so the world has become a lot smaller.
Pinsker: What do you think of how private islands are portrayed by the media? What are the press’s biggest misconceptions?
Krolow: I find it hilarious that the press is always talking about celebrity-owned islands. And you know what, there’s just really not very many celebrities that own islands. And most of them that were, were trying to sell them. It’s just something that adds to the whole allure of owning an island. The press is talking about Richard Branson, David Copperfield—the same names that come up over and over and over again.
Let’s face it, island ownership and celebrity—those two don’t necessarily fit together. If I tell you the global coordinates where my island is, you can literally pinpoint it—Boom! That’s it.
The other misconception, and now they’re doing articles on this, is you don’t have to be rich to own an island. And I think that’s probably the biggest one. A lot of articles out there are more geared toward, “Wow, the rich and the famous!,” “Oh! This guy owns an island!,” or “Wow! This guy owns two islands!” And the truth of the matter is a lot of our clients are not millionaires. They’re all a little bit better off than most, I guess. But I wouldn’t call them all super rich. We’ve had $20,000 islands. We’ve had $100 million islands.
“A lot of people take a lot of crap from their bosses, their jobs, and sometimes their families. The island is a place to get away from all of that.”
Pinsker: In the industry, is there a conversation about the environmental impact of all this? Can construction upset the local ecological balance?
Krolow: Islands are very sensitive environments, and the permit requirements are difficult. In Greece you need maybe 40 permits before you can build anything on an island. In Ontario, Canada, as of the last 15 years, you can’t build on any undeveloped island if it’s less than an acre.
But at the end of the day, I always tell my clients, “If you develop an island, the best thing for you to do is to really leave the smallest footprint possible.” And that’s also just in terms of enjoying the property, the amount of work involved, landscaping—I don’t like the idea of landscaping islands. I like to keep things as natural as possible. Islands like to take their space back. They overgrow very quickly. So I always like to advocate very little, or more-natural, landscaping.
And, you know, it’s hard to sell an island that has been over-developed, or where someone has really made their own mark. Any island where there was a finished home on it, either it sold instantly, or it took a while to sell. Like I mentioned before, island buyers are a very special breed of people. They want to make their own mark. They don’t want someone else’s vision.
Pinsker: You said that the Internet changed the market, but beyond that, I’m not sure what other innovations there could be. Is there a “new big thing” that people are talking about in the industry?
Krolow: One thing for our company is man-made islands. This is something that we’re quite interested in. We’re working with a couple of companies that specialize in man-made islands. We’re very interested in the World Islands in Dubai, which are all man-made, and seeing that development actually grow.
There are a few proposed developments in the Maldives. Right now, it’s a concept. It’s an idea. And, you know, I think for global warming, if you look at the Maldives, I think it’s extremely important. When you’re talking about actual survival, then price doesn’t matter so much. The cost to build a man-made island—let’s say a half-acre island in the Maldives—we’re talking $10 million, roughly. There’s a company that’s looking at making these man-made islands—a big mass of floating pieces of styrofoam that’s encased in concrete that’s actually drilled with massive metal cables into the seabed. So you have water that’s still flowing underneath the island. You’re not really destroying the reef and everything that’s there. You’re working with them.
Your sentiments collaborated there, somehow.