Two Upvalley luxury hotel properties — which could sell for a combined total of as much as $200 million – are on the block.
The 50-room Calistoga Ranch hotel has been listed for sale and could fetch as much as $100 million.
Further south, the Hotel Yountville is also expected to change hands, and for almost the same price.
The 80-room Yountville luxury lodging property, located at 6462 Washington St., has a new owner all lined up.
According to a news release, Ashford Hospitality Prime, Inc. plans to acquire the Hotel Yountville for $96.5 million, or $1.2 million per “key.” The seller is the George Altamura family and partners The Doctors Company of Napa.
The sale is expected to close within 60 days, said the release.
“The acquisition of the highly acclaimed Hotel Yountville fits perfectly with Prime’s strategy of owning luxury hotels and resorts,” said Richard J. Stockton, Ashford Hospitality Prime’s chief executive officer.
Ashford Hospitality Prime already owns the 62-room luxury Bardessono Hotel & Spa in Yountville. In 2015, the Dallas-based real estate investment trust bought the Bardessono for a reported $85 million. The purchase price worked out to $1.37 million per room.
“This transaction presented a great opportunity for us given the quality of this asset and its unique location in an attractive market in the Napa Valley with high barriers to entry,” said Stockton.
“We expect to achieve improvements in the performance of this hotel given the operating synergies with our nearby Bardessono property,” he said.
According to the news release, for the 12 months ending Dec. 31, the Hotel Yountville achieved 87.8 percent occupancy and an average daily rate of $534.30.
During the same time period, Napa County hotels averaged 73.1 percent occupancy and an average daily rate of $306.24.
George Altamura, Jr. noted that his family has co-owned the hotel for almost 20 years.
“I think it’s time to move on and do different things,” Altamura, Jr. said. “The price was fair,” he said. “We’re happy with it.”
The hotel “is a jewel,” said his father, George Altamura. “Yountville is fabulous for business. Any investor would love to own a piece of Yountville.”
“Ashford realizes that you can’t beat the location,” said Altamura, Jr. The Hotel Yountville “is a great piece of property,” and “the profit margin is tremendous,” he said.
When asked if newer luxury hotels like the Archer Hotel in Napa might become competition to properties like the Hotel Yountville, Altamura, Jr. demurred.
“No matter how many hotels you build in Napa, Yountville is the cream of the crop.”
Hotel consultant and Napa Valley hotel owner Rick Swig said the luxury lodging market in Napa Valley has hit a peak. Interest rates are rising and the time is right to sell – and for a premium price, he said.
“Yountville continues to be the hottest destination in Napa Valley,” said Swig.
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The Hotel Yountville is “a solid hotel; newly renovated, well managed, in great location and destination. It hits on all cylinders. Sound like a good real estate deal to me.”
When asked what the Hotel Yountville sale would mean for hotel values in Napa, Swig said that the two cities are different.
“Napa isn’t Yountville. Napa is still a destination in the making. It doesn’t sit in the middle of vineyards like Yountville.”
Calistoga Ranch, located on 157 acres, is currently part of the Auberge Resorts Collection. The property, at 580 Lommel Road in Calistoga, was built in 2004.
In 2013, Auberge Resorts and a group of partners including vintner Bill Foley purchased Calistoga Ranch from Olympus Real Estate for an estimated $50 million.
Each of the resort’s 50 rooms are free-standing lodge units with various indoor/outdoor living amenities such as outdoor living rooms, showers and hot tubs. According to an Auberge fact sheet, rates are said to range from $685 to $4,250 per night.
Additionally, the property offers two food and beverage outlets, a spa, nearly 15,000 square feet of indoor and outdoor event space, an indoor/outdoor fitness center, yoga deck and two outdoor pools.
An on-site vineyard, wine cave, hiking trails and close proximity to many of the world’s most prestigious wineries also add to the allure of the resort, said the news release.
A separate residential component of 23 owner lodges at Calistoga Ranch is not included in this sale.
“Calistoga Ranch is one of the highest rated and most successful boutique luxury hotels in the United States that attracts high-end guests from all over the world,” said John Strauss, international director with Jones Lang LaSalle’s Hotels & Hospitality Group, the company handling the sale.
“This property is a crown jewel in the heart of the Napa Valley.”
Strauss said Upvalley luxury accommodations “are extremely sought after and successful and hotel investors are drawn to the market.”
Based on industry sources and market intelligence, Strauss believes the property could sell for as high as $100 million.
“As the fundamentals of the Bay Area and Napa Valley continue to improve, the success of this hotel and the investment market in Napa Valley has improved as well,” he said.
Swig said he also expects Calistoga Ranch to sell for a premium price.
“It’s clearly a world class resort hotel.”
Swig said that rising interest rates may eventually slow down Napa Valley resort and lodging sales. However, “as long as San Francisco stays hot, which I think it is going to, then Napa Valley stays solid.”
At the same time, due to more snow in the mountains which draws visitors to Lake Tahoe and more rain in the valley, which causes some to stay home, Swig does expect Napa County hotel revenue to decline somewhat, perhaps as much as 5 percent, in the first quarter of 2017.
But numbers will still be above pre-drought levels, he said.