PHOTO GALLERY: See photos of two model homes
Derek Nelson is not a gambler, but that doesn’t mean he’s not a risk-taker. The home builder, an Arthur Rutenberg Homes franchisee, has opened two model homes priced at more than $2 million this summer.
Arthur Rutenberg Homes/Nelson Homes has opened two $2 million model homes this summer. This is the Modena model in The Concession. (Staff photo / Harold Bubil)
One, the Ravenna, at $2.2 million, is in The Lake Club, the most upscale of the 10 villages in the 17,500-acre Lakewood Ranch.
The other, the Modena, at $2.5 million, is in The Concession, about a mile to the east.
Arthur Rutenberg Homes/Nelson Homes also has a model in Haddington in Lakewood Ranch’s Country Club East, where prices start in the $800,000s.
Nelson said “the numbers” support his big play into the upper end at The Lake Club. “I’m bullish on the market,” he said. Activity is strong there, supporting Nelson’s investment.
“The ultra-luxury market continues to improve,” agreed Lakewood Ranch’s vice president of sales, Jimmy Stewart. “What we have seen in that market segment is square footages and prices continuing to rise.”
Twenty-nine houses are under construction in The Lake Club, Stewart said. The average selling price, including pool, lot and house, is $1.8 million. The average includes a recently signed contract on a $6.8 million mansion of more than 20,000 square feet now being built by London Bay Homes, and another sale at $3.6 million.
Derek Nelson at the card table in his Ravenna model at The Lake Club in Lakewood Ranch. Although he is not a poker player, Nelson, an Arthur Rutenberg Homes franchisee for five years, is "doubling down" on the luxury market by having two $2 million models open at the same time. The other one is in The Concession. (Staff photo / Harold Bubil)
The only other builder in The Lake Club offering a house/lot model for more than $2 million is London Bay Homes, based in Naples.
“The rest of the builders (including John Cannon, Todd Johnston and T.J. Nutter) are in the million-five, million-six range,” Nelson said. “As you see new models go up, you are going to see that price tag trend upward.
“People are wanting bigger,” he added. “They are wanting more features. They believe in the housing market.”
As the luxury market rebounds, Nelson is riding the wave.
“Last year, my average sale price was $850,000,” he said. “My average this year is $1.150 million. It has come up $300,000. Some of that has to do with having a couple of $1.5 million models last year, the Marbella, and the Amalfi at The Concession.”
Soon, Nelson will build a $1.3 million model in a new section of Country Club East called Seacroft, which he will share with Lee Wetherington Homes and John Cannon Homes.
Houses in Seacroft will range from $800,000 to $1.3 million, including lot.
He said he expects a continuing flow of former CEOs, business owners and entrepreneurs to provide his customer base.
“The other thing I am seeing every day is Midwest and Northeast folks coming down,” Nelson said. “The baby boomers are retiring. It is their last home and they want it right. They want kids and grandkids visiting them. They want the space and the multigenerational casitas and guest spaces.”
Both of the new Nelson houses have guest houses. The Modena’s is a completely separate house of 1,262 square feet with a bedroom suite and large “club room” to go with a 507-square-foot cabana space overlooking the 12- by 40-foot pool. The Modena is also shown with a covered spa and a putting green.
The Ravenna has a 4,140-square-foot main house with a 400-square-foot casita and a 730-square-foot lanai/cabana overlooking the 12- by 35-foot pool and spa/sun shelf. The shelf is a ledge of shallow water into which two lounge chairs are placed.
Northerners aren’t the only buyers coming into The Lake Club, Nelson said.
“I am seeing a lot of buyers from Lakewood Ranch,” he said. “They bought a second home of 2,200 to 2,400 square feet, and they have decided to spend more time in Florida. It was three months, and now it is six or seven months, so they want more space. They are upsizing.”
Nelson came up through the Arthur Rutenberg Homes ranks while working for former franchise holder M. Pete McNabb, now retired.
Nelson started in 1989 as a building supervisor and became building company president in 1997.
Five years ago, he started his own company, building in Country Club East and reinvesting profits in his business.
As you may recall, it was not a great time to build houses.
No debt
Despite having been named Arthur Rutenberg Homes’ “Builder of the Year” four times, he never thought of having a $2 million model, much less two at one time.
“I never thought the market would come back as strong as it has, this quickly,” Nelson said.
He admits he’s had “a lot of tough nights,” thinking about the money he has invested. “But the nice thing is there is no debt service on the model. It has been my capital. That helps, but you still have sleepless nights because you have the carry, the upkeep, electric bills, what have you.
“The Concession model, I am partners with Art (Rutenberg); it’s the last one we are partnering on. This one (the Ravenna), I own; the Haddington, I own. I have gotten to the point that it is just my capital moving forward.”
To determine the prices, “We look at history, what we have done well with,” Nelson said. “The Ravenna is a little over $2 million. I originally wanted to be at $1.5 or $1.6. As we continued designing and developing the model, with the cost of features creeping up, and the homesite prices going up in Lakewood Ranch (this site is $359,000),” the cost started to rise.
Soon he became just like many of his customers. He wanted more, and the $2 million level was exceeded.
“The synergy that Arthur Rutenberg Homes brings is, you have the corporate architects, the corporate designers and the local builder,” Nelson explained. “You are all meeting and discussing the model, and you tell the architect, ‘We want to be around 4,000 square feet.’ Well, it always comes in 300 or 400 feet bigger, and then you have to decide if you want to take space out and dice up the plan.
“It is not worth it,” he added.
“You go from 4,000 to 4,300 feet, and that is a big chunk of money you have added that you weren’t planning on — and our buyers do that, too. At the red-line meetings, they want to add a bedroom or add four feet out; same exact thing.”
Just like his customers, Nelson wants the best for his models.
“The corporate designer says, ‘I found a great marble floor,’ ” he said. “Well, we were going to go with a wood floor, or something less expensive, and now it is another $5 or $6 a square foot.
“But it makes sense. With the investment you are making, when you walk through a $2 million home, you want every room to feel like it is a $2 million home. You don’t want to skimp.”
Several Lake Club buyers have gone well beyond building a copy of a model.
In the past two years in The Lake Club, a half-dozen mansions, ranging in size from 13,000 to 20,000 square feet, have been built.
