Earlier this month, the real estate investment trust SunStone Hotel Investors disclosed that it had contracted to acquire the new Four Seasons Resort Napa Valley, an 85-room luxury hotel located in Calistoga, Calif., for $177.5 million. Subsequent news reports pegged the price at closer to $175 million, which if consummated would still be the second-highest per-key hospitality purchase in the U.S.
With this acquisition, SunStone claims that it would own 24 percent of the luxury-market hotel rooms in northern California’s wine country, and 33 percent of the luxury market’s event space.
For the seller, Boston-based private equity firm Alcion Ventures, this acquisition represents the culmination of a decade-long trek that included construction delays (ground broke on the hotel in 2014) and different AEC project team members along the way.
AN ORGANIC WINERY DISTINGUISHES THIS RESORT
What makes this 22.5-acre property unique is that is the only Napa Valley resort with a working winery and vineyard on its premises. Elusa Winery, which specializes in Cabernet Sauvignon, sits on 4.7 acres and includes, along with its growing fields, a 4,960-sf production room, a 698-sf private tasting room, a 1,018-sf public tasting room, and 3,180 sf for barrel storage. The hotel and winery are adjacent to 20 two-, three-, and four-bedroom private residences whose asking price started at $3.5 million. (The residences are not part of the acquisition.)
The hotel, with 67 guest rooms and 18 suites, had a soft opening on October 1 and debuted officially a month later. Developed by Bald Mountain Development, which has bases in Aspen, Colo., and in Napa, the hotel was designed by Hirsch Bednar Associates (which specializes in hospitality) with Erin Martin Design, and was completed by Suffolk, which took over the project’s construction management duties in 2019 from another contractor that had built other Four Seasons resorts but wasn’t meeting the client’s quality expectations on the Napa project, according to Jim Stanley, Suffolk’s COO.
MODEST BEGINNINGS
Suffolk built the Four Seasons Resort and Residences in Boston, and was hired for the Napa project at the suggestion of Alcion Ventures. “When we were asked to step in, we essentially brought in people from across the U.S., and were able to ramp up our team in two to three months,” said Stanley. While most of the Napa property’s structures had been topped off when Suffolk arrived, “there was a lot of corrective work required to meet Four Seasons’ standards,” Stanley recalled in a video interview with BD+C yesterday. For example, nearly all the structures on the property needed to be reskinned, he said.
Several news reports peg the cost of developing and building Four Seasons Napa above $200 million. The resort’s amenities include two pools, two restaurants, fire pits, a 6,079-sf indoor spa and 6,850-sf outdoor spa; a 4,316-sf fitness center, and 16,341 sf of indoor/outdoor meeting spaces, with seven rooms. (The resort is positioning itself as a wedding destination.)
This luxurious resort bears only a faint resemblance to this property’s humble beginnings. From 1993 through 2012, it was home to Silver Rose Resort, a bed and breakfast with 20 rooms. Winemaker Thomas Rivers Brown took the reins of the operation in 2012, two years after Elusa was formed and started producing wine, initially with grapes from other vineyards. Brown reportedly oversaw the design of the new winery, which has an operational partnership with Four Seasons Resort. The winery opened its tasting room in September.
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