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Saturday, November 16, 2013

Wineries for sale

Over the past months a number of well known wineries have sold: Araujo, Clos Pegase, Qupé, Viansa. It appears there are a lot more wineries and vineyard property on the market now. Why? One is the economy as people have been waiting for real estate prices to start heading up. The second may be that a number of owners are getting too old to run a winery any more. These are the folks who jumped in during the '70s and '80s growth years for California wine.

Who will be the buyers? There are always investment groups looking for longer term gains. They'll be looking somewhere other than Napa Valley as property there is too expensive to expect to make a profit. Anyone buying in Napa is a "lifestyle" buyer, not an investor. Prime vineyards in Napa, such as in the Rutherford and Oakville areas, goes for a quarter million dollars an acre or more. Bare plantable land is about $100,00 plus-or-minus. Napa vineyard and winery prices held steady during the recession years. You can assume prices are starting to go up again. Central California, Oregon and Washington state probably offer better value. Also, some lesser known areas of California like Lake County and the Sierra Foothills may draw some attention.

I'd like to buy about, um, 100 sq. ft. please.
Image from

Besides investment groups, there are current winery owners such as Bill Foley who may add to their portfolios before prices rise. You can bet there will be some Chinese investors as there's lots of speculation of huge future growth in that market.

A number of wineries are buying vineyard land now, too. Part of the reason is speculation of an upcoming grape shortage as demand for U.S. wine is growing steadily. And, of course, there's that future boom in Chinese consumption.