Welcome And Guest Background

Speaker 1 0:00

Well, hello, Bonita Bay Club members. This is Fred Fung, your general manager. I'm excited to be hosting today's podcast and welcoming Max Lummis, who's been a member here since 1998, is a past president of our board of directors, and is a real estate specialist with the Lummis-Reiter Team, who's closed over 1,500 transactions, generating more than $1 billion in sales volume. Welcome, Max. Thank you, Fred. It's a pleasure to be here. Well, let's get right You know, Bonita Bay is a very special community in many ways. What makes it unique and why do people buy here? Is it size, diversity, the scope of the offerings?

Speaker 0:43

Yeah, all of the above, actually. Bonita Bay is, you said it very well, a unique community in that it's very large compared to the other gated communities in Southwest Florida, and particularly the ones that we compete with for real estate and club members. Those clubs specifically are primarily Quail West, Mediterra, and Grey Oaks. And if you look at the numbers, Bonita Bay has 3,400 residences. The others have approximately 900 with Mediterra at uh 900, Grey Oaks at 900, and Quail West, I think, is about 600. So way less than what we have.

Market Shift And Pricing Reality

Speaker 1 1:26

That's great. So how is a real estate market in Bonita Bay right now?

Speaker 1:30

Is it a seller's market, a buyer's market? Interesting question that I get every day multiple times, as you might imagine. We saw over the last six or so years, the pre-COVID to the COVID to the where we are now timeframe. We actually saw prices double over the 2018, 19 to 23, 24 timeframe. And now we are in a reversal, if you will, not a hard reversal like we saw in 2008 and 09, but a sort of a soft reversal where buyers are exercising considerably more power in the negotiation process.

Amenities And The Membership Model

Speaker 1 2:09

Very interesting. And and so when it comes to decision making, how do club amenities factor into that?

Speaker 2:17

Well, club amenities in terms of real estate sales are huge. As you mentioned earlier, I was around when we began adding amenities in the 2012, 13, 14 timeframe, where the lifestyle center, the pool, the racket complex, an enormous number of amenities were added. And uh I used to refer to it as kind of the perfect storm because that was also a time period where a lot of people were coming to South Florida, Southwest Florida in particular. So where we were looking for members in 2011 and 12, as you well know, we became oversubscribed, leading to a waiting list for the club, but also a banner market for real estate, especially in 22, 23, and 24. But now, to answer your question in a long-winded way, we are on the other side of that slope, which is inevitable in Southwest Florida. We have upmarkets and downmarkets, and we just happen to be in a soft seller's market now.

Speaker 1 3:17

So you mentioned some of the other clubs in the area, and most specifically, I think you mentioned Mediterranean, Quail West, and Grey Oaks, and there are many others, obviously. But how does our club stack up against others that members may be considering?

Speaker 3:30

Well, the club itself stacks up extremely well in terms of the amenities that we offer and the community for that matter. As you know, in Bonita Bay, unlike the other three communities that we're discussing or talking about here, membership is optional. It is not optional in any of those other communities. You have to at least be a sports or social member. So given that, about 40% of the people that live in Bonita Bay are not club members. So we're looking at a portion of the overall residents, only a portion, a little over half, maybe a little more than that, that are actually club members. So when you look at the other clubs that we talked about, first of all, last year the average real estate sale in each of those communities was about $4 million in value. That's that's very high. As a comparison in Benita Bay, the average real estate sale last year was about $1.4 million. So we are competing with those clubs, which are also very amenity rich and also have sort of that intangible thing about being the Naples clubs, whereas we're sort of not. So, you know, it uh it certainly helps that we have a lot of amenities.

Speaker 1 4:52

You mentioned that the other three clubs that we discussed, you must become a member of the club, even within a social level. Would that be considered like a bundle community in in some respects, in some way?

Speaker 5:04

Is that not bundled in the sense that that typical real estate jargon is uses that term. Bundled typically refers to larger communities, all of which are golf members. And so unlike the four that we're talking about, and by the way, there's lots of others, but I just we just happen to be talking about Benita Bay and those three, they're very amenity-rich. The ratios are very low, meaning members per course. And bundled would be the Brooks, Copper Leaf, Spring Run that would be bundled.

Speaker 1 5:36

Now, understanding that those are still required to have some level of membership, and we do not, do you consider that to be a positive or a negative as it relates to where we have a non-mandatory membership component to the club?

How The Club Lifts Values

Speaker 5:51

I'm not sure. It's a good question. It certainly is a positive for the community. And that's the reason that a lot of people are attracted to Bonita Bay that are non-members of the club is because you can get a condo in Bonita Bay for a half million dollars. You can enjoy all the things that the community offers with the hiking, the biking, the beach. We have a marina, as you know, inside the community, which really sets us apart. But you can't, by definition, use the club. So I believe that it does set up for competition with those other communities, clearly. And we see it all the time when we're taking people around to the various properties and showing them the club and all the amenities that they can enjoy being a member of Benita Bay. I see.

Speaker 1 6:39

Now, is there a relationship between the club, its offerings and the facilities and residential property value?

Speaker 6:48

Oh, yeah, 100%. Without the club itself, and if we weren't so amenity-rich, clearly property values would not be what they are today, despite the fact that we've had a bit of a downturn. But we're coming, keep in mind what I just said, we're coming down off of a doubling of real estate value. So we're still very high compared to the 10 years, if you do a 10-year look back. So there is no doubt. And again, you can look at the Lifestyle Center, you can look at the racket complex, the pool, the five golf courses. I mean, those amenities drive values within the community.

Speaker 1 7:25

I think some people have referenced if you took your house in Bonita Bay and you moved it outside the gates, it would be worth less, which would support that statement that you made that there is a positive influence on property value within Bonita Bay.

Speaker 7:42

No doubt. No doubt. I mean, we rarely see people move out of Bonita Bay. Unless it's for a health or age-related reason. People who come to Bonita Bay and enjoy the club stay until, again, they are forced to move for some reason. They love it. The club is an intricate fabric of their lifestyle. And right now we're in spring break. Try to get into anywhere in the club. It's uh yeah, it's great.

The Proposed Clubhouse Impact

Speaker 1 8:12

Well, here's the million-dollar question. Maybe the maybe the $110 million question. Do you feel that the proposed clubhouse project will have a positive influence on real estate and real estate values in Bonita Bay?

Speaker 8:25

Yeah, I mean, that's that's an easy question to answer because the answer is yes. The more difficult question to answer, of course, is how much? And that's the question that has been asked by a number of members. You know, I play in golf groups and I hear uh other people's opinions of what's going on. But at the end of the day, again, I keep analogizing this. I know this is like the 800-pound gorilla of projects, but had we not done what we did, and by the way, it was not easy back then to do what we did. People look back now and they go, oh, well, that was a no-brainer. No, it was not a no-brainer. Our membership wasn't full. We were facing what we thought were dark times. We had just come through some very dark times, the Great Recession. Had we not done the things that we did, property values would have suffered, club membership would have suffered, and we wouldn't be what we are today.

Speaker 1 9:20

Well, the project that you championed during your presidency was one of the most difficult in terms of the feedback that you're referring to, where people now say, of course we should have done that, but it was not a no-brainer at the time. And that was the sports complex that included the pool, the breezeway, and the redo of the sports center. And boy, looking back now, it's such a huge component of the lifestyle for club members that, you know, we all applaud you on your courage to push forward with that.

New Generations Want More

Speaker 9:52

Well, thank you. I appreciate that. I continue to think as an analogy to that, that where we are today is somewhat the same. Particularly, you have to understand that our demographic is that most of the housing here, there was a huge boom between 1996 and 2002. So all those people that that bought in that time frame are aging, you know, close to 80 years old right now, as we know. We've seen that demographic. Now the people that are coming in to replace them are by and large in their 50s and 60s, maybe a few in their 40s. And their view of what a clubhouse should be for a club like Benita Bay is not the same as it is for someone who is 85 years old. It's just not.

Speaker 1 10:38

So reading between the lines and putting you on the spot, is it safe to say when you bring that new member into the clubhouse and they compare it to some of the other clubs that we spoke about, are they looking at this saying, this is absolutely sufficient or are they wanting more?

Speaker 10:56

No, they're all they're always wanting more. It's part of the generational thing, if you will. You know, we're we're lucky as a nation, frankly, that we are able to afford more than our parents were able to afford. And that's true of these 50-something year olds that are coming to Southwest Florida for either a quasi-retirement or retirement to enjoy the winters down here. They like and want and expect high-level amenity-rich environment. Well said.

Speaker 1 11:24

Well, Max, it's been a pleasure chatting with you about Bonita Bay Real Estate. We really appreciate your perspectives and contributions to the club over the years. And thanks to all the listeners. We'll be back soon with another podcast. Bye for now.