A luxury Napa Valley resort that opened with fanfare just three years ago is now facing a $230 million foreclosure—a dramatic turn that highlights the mounting pressures on California’s high-end hospitality market. Stanly Ranch, the sprawling 700-acre “wellness village” in south Napa, could be auctioned off to the highest bidder within 90 days if its owners can’t resolve the default.
The property’s ownership group, SRGA LP, received notification on October 16 that their construction loan had fallen into default, according to Napa Valley Register. First American Title, acting on behalf of lender Claros Mortgage Trust, filed the notice of default after $220 million on the $235 million mortgage wasn’t paid when it came due on August 18, as reported by the Press Democrat. By mid-October, the total outstanding amount had grown to $230.4 million.
From High Hopes to Financial Distress
When Stanly Ranch opened in April 2022, it represented a triumph of long-delayed ambition. The project had languished for years before receiving a $45 million investment in 2021 that finally brought construction to life, the Napa Valley Register reported at the time. The ownership group secured a $235 million construction loan in August 2022 from Claros Mortgage Trust to complete the ambitious development.
The resort boasts 135 cottages and guest rooms spread across 78 buildings, three restaurants including a 200-seat dining venue, multiple pools, a high-tech wellness compound called Halehouse, and 110 permanent residences. Nightly rates at the Auberge Resorts-operated property start around $700, while the attached residential villas sell for upwards of $4 million, according to SFGate. Earlier this year, Stanly Ranch earned a Michelin key, a designation reserved for hotels that provide “much more than others in its price range.”
Red Flags Were Invisible—Until They Weren’t
What makes this foreclosure particularly striking is how suddenly it materialized. In Claros Mortgage Trust’s latest quarterly financial report filed in early August, the Stanly Ranch mortgage (internally called “loan 5”) carried a risk rating of 3—the middle tier on the real estate investment trust industry’s five-level scale, notes the Press Democrat. The loan made up more than half of Claros’ portfolio but wasn’t among the 20 troubled mortgages on the company’s watchlist. Just weeks later, the project was in default…