Various segments of the Napa Valley wine community were jubilant last week over a single real estate transaction hailed as “the return of the lifestyle buyer.” In Napaspeak, a lifestyle buyer is someone who doesn’t care if they ever make a profit from their investment—they simply want to be lord of the manor.
Michael and Sandra Davis, owners of a computer company in Southern California, paid $4.7 million for a small winery on the Silverado Trail near Calistoga. They received 106 acres of land, 9 acres of vineyards, and a permit to produce 20,000 cases of wine. The property had been on the market for a year when there was a sudden spike in interest. The Davis couple outbid the other prospects and paid cash for the winery.
Don’t go breaking out the Schramsberg just yet. Most observers caution that this is not the beginning of a trend, but merely a sign that the bottom of the market is now a memory. To put things in perspective, $4.7 million is the price of an apartment on Park Avenue in Manhattan—between two and four bedrooms, roughly 2000 square feet.
Of course, the two lifestyles are very different. To fit into the upper brackets in New York, it’s necessary to spend a great deal on clothes, jewelry and restaurant meals. You must attend the theater and the opera, be seen at gallery openings and get involved in charity events. In Napa, there will also be some upfront investment. Michael and Sandra Davis will have to hire a superstar winemaker as well as a consultant, purchase the best French oak barrels and construct a glitzy building to store them in. Beyond that, their main responsibility will be to hang out at the property, drink their own wine and serve as benign but gracious ambassadors of the Napa lifestyle. It’s true that they’ll have to travel a bit—attend high-end consumer tastings, visit distributors and conduct winemaker dinners in fancy restaurants—but none of it should be a hardship.
The Napa property doesn’t come with a doorman, but what do you expect for $4.7 million?
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