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 Having recently closed a high-end cabernet sauvignon vineyard deal for Healdsburg's Lambert Bridge Winery and another 11-acre vineyard/estate sale of Weeping Willow Vineyard, off Grove Street in Sonoma, Chris Blakeslee and Michael Crain, local vineyard advisors and brokers are reporting that at least one segment of the real estate business appears to be more than holding its own.  

In announcing the Lambert Bridge sale this week they stated, "... the outlook is good for winery, estate and vineyard properties in Sonoma and Napa Wine Country. Properties with existing vineyards or good quality vineyard sites, are being snapped up faster now than before the downturn." Gerrett Snedaker, CEO/broker of Frank Howard Allen Realtors in Sonoma agrees that vineyard land and wineries are in demand right now. "With the low value of the dollar, these business opportunities are less expensive to foreign investors than they were a couple of years ago."

Snedaker added that FHA has an 18-acre vineyard parcel on Nelligan Road in escrow with a Canadian buyer. Another of his agents is working with a Korean business looking to purchase local vineyards and farms. Allan Tose, of Century 21 Wine Country in Sonoma,  a vineyard and land specialist, notes that there is a high level of buyer interest in not only vineyard land, but good land for other agricultural uses with in Sonoma and Napa Counties.  He said that the activity really started to increase around last November. But it is the premium locations that have gained in value, especially with respect to vineyards, he added.

While generally supporting the observation that good vineyard properties are selling well, Nicki Naylor of Pacific Union in Sonoma, cautions that not all vineyard properties are equal. "A lot depends on the appellation, the type of grapes grown and the asking price." She noted that there is not a lot of vineyard property on the market in Sonoma Valley, but even here the price must be realistic or it will not sell quickly. On the bright side, she also pointed out that some very high-end vineyards, particularly hillside cabernet vineyards in Napa County or pinot noir vineyards in the Russian River Valley or with Sonoma Coast designation, are sold almost as fast as they are put up for sale.

Naylor said that a high-end pinot vineyard in a prime Sonoma County location would go for about $110,000 per acre, but that price is overshadowed in the Napa Valley where super-prime hillside cab land runs $275,000 to $300,000 per acre. There is a difference between a commercial vineyard affected by wine-market forces and what might be called "estate properties," with a few acres of grapes. The latter's value is determined more by its residential qualities than its wine-producing potential.

These estate properties too are holding their value, but for different reasons. Jim Duncan of Coldwell Banker DeAnza Realty in Sonoma says, "The really nice, high-end properties have weathered the storm very well."  Duncan added that these estate properties have high-end architectural features, exceptional views and other amenities that make them very desirable.

Snedaker confirms that high-quality estate properties are moving quickly, noting that FHA has a $4.2 million estate in escrow that never really hit the market, and they have another offer on a $3.3 million estate that was only up for three weeks. He added that these are domestic, not foreign buyers.

Tina Shone of Sotheby's  agrees that vineyard properties are selling well right now, but notes that virtually all properties in Sonoma Valley are moving better than they were five months ago.

"We're busier now than we were earlier.  More sales are closing. The fact is that this is a great place to live and there is only so much land. Sellers are now more realistic about their prices and buyers are becoming more willing to make offers," Shone added.

Still, Duncan noted, as Crain did, that there are  "institutional investors" out there who are seeking vineyard properties aggressively and have contributed to the active vineyard-property marketplace. Players in that arena include the California Public Employee Retirement System (CalPERS), Premier Pacific Vineyards and firms like Vinum Capital Management LLC, which recently formed a $250 million private-equity fund that will focus entirely on acquiring and operating mid-size premium and super-premium wine properties.

These players plus a significant number of private investors, foreign and domestic, continue to drive a segment of the local real estate business that shows no sign of weakening.

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