What kind of market is there for million-dollar condos in West with country club comforts — but also pricey membership fees and no ocean views?
The developer insists buyers are responding enthusiastically to the luxury project in a pastoral setting featuring lakes and golf courses, as well as fine dining, a spa and other perks at the prestigious Boca West Country Club.
The Group said it has sold more than 50 of the 139 units at Akoya at Boca West, where prices range from about $900,000 to more than $3 million.
The Boca Raton-based firm is counting on a strong tourist season and a big marketing push in the Northeast to drive sales at the $160 million development during the remainder of the year.
But housing analysts aren’t as bullish, pointing out that Akoya is nowhere near the beach or Intracoastal Waterway, where most luxury condos are built.
What’s more, large initiation and social fees on top of the cost of the Akoya condos limit the pool of potential buyers, observers say.
“The non-ocean views are not as big of a problem as the membership fees and the club dues,” said Jack Winston, of Goodkin Consulting in Miami, whose firm advised Siemens on Akoya. “Boca is a very desirable place to live, but the buyer profile for that type of development has definitely shrunk.”
Boca West is a development of more than 3,400 homes on 2,000 acres between Yamato and Glades roads next to Florida’s Turnpike.
The 10-story Akoya at Boca West is expected to open by mid-2018, a full four years after Siemens unveiled the project’s plans.
The condos were delayed twice while Siemens sought construction financing and redesigned the units.
During a recent hard-hat tour of the building shell, marketing director Rob Siemens said the developer decided to start construction without financing in place to increase the velocity of sales. The firm figured it could drum up more interest if prospective buyers could actually see the condos for themselves, he said.
“They need to be able to walk through and visualize and look at the views,” said Siemens, the son of CEO Richard Siemens. “It makes a humongous difference.”
But anyone who buys a home or condo in Boca West must pay a one-time initiation fee of $70,000, with 20 percent of it refundable when it comes time to sell, Siemens said. In addition, social dues total about $1,000 a month.
Mandatory memberships fell out of favor in many communities across South Florida during the housing bust because some residents couldn’t afford the fees, analysts say.
Even with the market fully recovered, the forced memberships have remained a major turn-off for buyers, said Ken Johnson, an economist and real estate professor at Florida Atlantic University.
In some cases, desperate sellers have slashed asking prices of the homes and still can’t draw interest for buying into these communities, he said.
“The story doesn’t usually end happy on the resale,” Johnson said.
Peter Zalewski, principal of the Condo Vultures consulting firm in Miami, said the typical luxury condo buyer wants an oceanfront address. And while golf-course views still are enticing, he said, the sport is losing appeal as a recreational pastime.
“This might be a little bit of a challenging situation,” Zalewski said.
Akoya is the first residential development inside Boca West in about two decades. Two years ago, Siemens Group paid $13.5 million for the nearly seven-acre property.
Richard Siemens has built more than 15,000 homes across the state. His local projects include Polo Club, Boca Raton; Century Village in Pembroke Pines; Gleneagles Country Club in Delray Beach; West Boca Medical Center; Delray Medical Center; and a handful of shopping centers.
Rob Siemens said the firm is confident this latest project will be a success. He downplayed analyst concerns, pointing out that Boca West is a financially sound club that recently completed a $50 million clubhouse renovation without any assessment to homeowners.
“If somebody wants to live in a country club and have all the amenities of a club, it’s not an issue,” Siemens said of the membership and social fees. “Demand is there.”
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