Blackstone bought a luxury resort in Northern California’s wine country, as big-name investors bet that the artificial intelligence boom currently gripping the San Francisco Bay Area will increasingly translate into growing demand in hospitality, housing and other sectors.
The global investment giant paid $195 million for Stanly Ranch, a property that’s part of the Maryland-based Auberge Resorts Collection, at a foreclosure auction in late March after its previous owners defaulted on a $220 million loan.
The sale follows earlier signs of financial trouble at the luxury resort, which is located in the southern Napa Valley on a historic vineyard. Documents show that the resort’s Denver-based ownership group was notified in October of its default on more than $230 million tied to the roughly 700-acre property.
Blackstone Managing Director Scott Trebilco said in a statement to CoStar News that Auberge would continue to manage the resort, noting that the hospitality property is “just one hour from San Francisco, which we believe is well positioned to benefit from rising group and leisure demand for wellness and experiential travel, alongside the continued growth in corporate travel to the region as AI adoption accelerates.”
Last year, Blackstone bought the 277-room Four Seasons Hotel San Francisco — at the time citing a surge in demand in the artificial intelligence hub — and joined with DivcoWest to acquire a 25-story downtown building in the booming SoMa District that was subsequently leased in its entirety to AI leader Anthropic.
The real estate behemoth is also investing in housing in California. A neighborhood of rental homes in a fast-growing pocket of Southern California is a recent addition to Blackstone's growing portfolio of residential holdings.
The Stanly Ranch resort, developed by the Nichols Partnership and the Selby Development Group, opened in 2022 with 135 guest rooms as well as villas and vineyard homes for sale. The property also has three outdoor swimming pools with extras from poolside cabanas to wellness facilities and high-end restaurants as well as classes in subjects from pizza making to mixology. The property is connected to trails and rolling vineyards that are part of the surrounding countryside.
Judge Edward Stanly founded Stanly Ranch in 1856, and it became an integral part of the region's wine-making lore. He was a lawyer and politician who became a well-known figure in civic life after moving to California from North Carolina in the 1850s.
Leisure recovery
Institutional investors largely turned their backs on San Francisco following the COVID-19 pandemic that sent office vacancies to historic highs and foot traffic levels to new lows.
But in the past year, the city is enjoying a recovery thanks to explosive growth across the AI sector, coupled with many companies’ emphasis on in-person work. That has translated into a procession of high-profile office deals that has helped reshape demand dynamics in the nation’s tech hub.
Tenant activity in San Francisco has accelerated dramatically, pushing annual leasing volume to its highest level since 2019 and helping shift net absorption into positive territory.
The hospitality industry in the wine country north of the city — which encompasses some 210 hotels containing around 13,000 rooms — primarily caters to high-income leisure travelers from the Bay Area and Southern California, as well as fly-in visitors drawn to curated food-and-wine experiences, wellness retreats and destination celebrations.
The Napa Valley represents the luxury epicenter of the region, while Sonoma County and surrounding areas offer a mix of upscale resorts, boutique inns and more value-oriented accommodations that broaden the demand base.