Yes, it is a hotel… we don’t chat much about RE in Napa, anyone own???
According to standard hotel math the purchase price should be $535k per room…A thousand times the daily room rate times 80 rooms…More like $40m…Why the premium?..Must be planning upgrades …
Or…maybe Napa Valley is being eyed as an exclusive area with somewhat limited properties, so destined to appreciate substantially in the future???
Rooms rates would have to go to $1200/n to justify that $100m…
Slooooow, long term play?
Maybe there is oil on the property. …Gold? Too many people paying way too much…Makes one wonder when the gravy train will end.
How many people spend $500/n on hotels. .Let alone $1200…I remember 20 years ago that was the most expensive in the world for a standard room…Villa D’este or the Splendido in Porto Fino…or maybe the GeorgeV in Paris…
Funny you mention that…my Director comes up from So Cal all the time. Every time, he goes why is your freaking city so crowded all the time? You know, tourists, conventioneers, etc??? Considering that we have a fair number of hotels in the area (between Union Square, Financial District, and SOMA) one would think it shouldn’t be that crowded all the time, but yeah, often booked fairly solidly that he has to go get a room farther out. It is the Fab 7x7 you know. Many times he pays that or slightly less for just an average run of the mill room with no frills.
I invested in a hotel in Menlo Park 65 rooms, $500/n Cost $35m…ok numbers…but no home run
I think that Napa play is a continuation of people/companies “hoarding” key items, be it art works or select properties. The bet is long term that these will really go up. Hey, beats that interest one gets from that checking account, right???
We once paid 400 a night on last Florida key - Key West. We were on spring break and rented a car and drove overseas highway. Our friends in Miami told us it might be a 2 hour drive there. Of course after stopping everywhere, we reached Key West by sundown. After visiting local establishments and getting some beverages, we decided we have to stay overnight. All budget places were full as it was spring break and the only ones left were 400 a night. We were young and stupid but no regrets.