GREEN ISLAND Rd. Wine Bottling/Distribution Facility. Wine Bottling/Distribution Facility AMERICAN CANYON NAPA COUNTY OFFERING MEMORANDUM

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1 OFFERING MEMORANDUM 303 FOR SALE ±457,000 SF Wine Bottling/Distribution Facility Wine Bottling/Distribution Facility FOR SALE ±457,000 SF C A L I F O N I A

2 303 CALIFONIA TABLE OF CONTENTS DEVELOPMENT HIGHLIGHTS 2 LOCATION Location Maps 5 Site Aerial 6 Parcel Map 7 Zoning Map 8 Site Plan 9 1 PROPERTY OVERVIEW Site Description 10 Buildings 11 Phases 13 - Phase I - Phase II - Phase III EQUIPMENT 15 MARKET OVERVIEW Napa/American Canyon 17 Selected Employers 18 WHY NAPA Napa Valley 19 Economic Base 21 Agriculture 21 Tourism 22 Trinchero Family Estates Wines 22

3 Wine Bottling/Distribution Facility DEVELOPMENT HIGHLIGHTS This property provides the most unique opportunity seen in the Napa Valley to accommodate a wide range of wine related uses from wine production, bulk storage, distribution, bottling, barrel storage and on-site wastewater treatment ponds all within the current zoning and land/use regulations. Located in the prestigious Napa Valley, this property located in the City of American Canyon, Napa County, California presents a unique opportunity to purchase a ±457,000 square foot warehouse/ distribution facility with a complete state of the art high speed 750ml wine bottling line, which is also available for purchase. Owned by Trinchero Family Estates (Sutter Home, Ménage a Trois, Napa Cellars, Trinchero, etc.) as a centralized bottling plant and a main warehouse/distribution facility, continued growth of Trinchero Family Estates brands has required relocation from this facility. This property represents one the largest industrial opportunities available in the North Bay area. Trinchero Family Estates currently bottles over 7.5 million cases of wine (9 liter case equivalents) in this facility and ships over 20 million cases of wine from this location. The property is located approximately 38 miles northeast of San Francisco in the City of American Canyon in the southern portion of Napa County, home to the world famous Napa Valley wine region and neighboring to the Sonoma County wine valley. Ideally located near the wineries and vineyards of Napa and Sonoma, this property is perfectly placed to accommodate the regions continued economic growth. The properties strategic positioning offers the following advantages: Located in the center of the Napa wine market and close proximity to the Sonoma wine market. Demand through strong growth of the local wine markets with wine production increasing through on and off site sales and tourism. Existing very low vacancy rates for warehouse and distribution product. Excellent access to interstates and major highways. Barriers to entry for industrial land. Available rail service with installation of spur line. 2 FOR SALE ±457,000 SF

4 303 CALIFONIA LOCATION LOW VACANCY RATES Located in the southern portion of Napa County, this property is ideally located in the closest industrial market to serve the wineries and ancillary wine businesses of Napa and Sonoma. The majority of Napa and Sonoma County vintners store their wine in the southern portion of Napa County ( South Napa ), making this market one of the three largest wine distribution and warehouse hubs in California with approximately 50 million cases of wine stored. 3 CONTACT US: Bill Kampton bill.kampton@colliers.com CA License No Phil Garrett, SIOR phil.garrett@colliers.com CA License COLLIERS INTERNATIONAL 360 Campus Lane Suite 101 Fairfield, CA DEMAND Napa Valley has over 700 wineries today as compared to less than twenty in This number is still growing and with it is the amount of wine being produced and bottled. This continued growth of the wineries brings with it the growth of support businesses such as corks, capsules, labels, bottles, boxes, tank and barrel manufacturers, other winery equipment companies, case good storage and wine shipping companies, all of which drive the demand for warehouse and distribution buildings in the Napa market. Also, competing for space in the Napa market are other business and industries other than those which are wine related. From one of the nation s largest bicycle importers (Dynacraft, Inc.) to specialty food companies (Mezzetta foods) businesses continue to locate and grow in Napa. These companies and others know Napa County s competitive advantage is a globally recognizable brand, the Napa County location. With the continued growth of the wineries and ancillary businesses, the South Napa warehouse and industrial market has grown to over ±12 million square feet of development, primarily serving the wine industry. With this strong growth of the wine industry, the market currently has an extremely low vacancy rate of 3.3% (American Canyon 0.3% and Napa 6.5%). With the continual bottling and storing of wine for future releases, the continued strong growth of this market is expected to be very bright. As noted above in the Demand section, the addition of non-wine related companies, who have made Napa home to their businesses, is also contributing to the low vacancy rate for the market as such companies are relocating and/ or expanding in Napa. ACCESS The property has excellent access to Interstate 80, just seven miles away via State Highway 12 or State Highway 37. Nearly adjacent to the property is State Highway 29 the major north/south thoroughfare which connects most of the cities and towns in Napa County.

5 Wine Bottling/Distribution Facility BARRIERS TO ENTRY The County of Napa realizes the importance of the wine industry and vineyards to its local economy and has enacted some of the most restrictive zoning and development standards to protect its agricultural lands from the expansion of commercial/industrial uses. With the ability to rezone agricultural lands for commercial uses being extremely restrictive, the amount of new commercial land entering the market is almost non-existent. These restrictive land policies coupled with the growth of the wine business, virtually assures the scarcity of new industrial land in the near future. ±50 PHASE III ±50 ±700 PHASE I ±50 ±60 ±100 ±60 PHASE II ±800 RAIL SERVICE 4 With the continued national and international growth of Napa Valley wines, many wineries are taking advantage of the cost savings of shipping by rail to destinations in the mid-west and east coast or to the nearby Port of Oakland. This shift in wine shipping is creating a higher demand for rail served facilities which there are few in the Napa market. This property, being adjacent to the Northern California Rail Line, has the potential for the extension of a spur line to the western elevation of the building which has existing knock out panels for rail car loading. With the addition of rail service to the building, this property would be one of few facilities in the entire market with rail transportation. ±457,000 SF Ponds FOR SALE ±457,000 SF

6 303 CALIFONIA LOCATION 12 YOUNTVILLE VACAVIL NAPA PETALUMA AMERICAN CANYON CANY FAIRFIELD 12 SITE NOVATO 680 VALLEJ O BENICIA SAN RAFAEL MILL VALLEY 580 RICHMOND 80 4 MARTINEZ PITTSB CONCORD WALNUT CREEK BERKELEY OAKLAND DANVIL SAN FRANCISCO SAN FRANCISCO INT L AIRPORT 101 SAN MATEO FOSTER CITY REDWOOD CITY 84 OAKLAND INT L AIRPORT PALO SAN LEANDRO SA DUBLIN 580 HAYWARD UNION CITY FREMONT 84 NEWARK

7 Wine Bottling/Distribution Facility SITE AERIAL N 6 FOR SALE ±457,000 SF

8 303 CALIFONIA 7 ± Acres ± 1,200 deep x ± 1,000 wide

9 Wine Bottling/Di st ri b u t i o n Fa c i l i t y SITE 8 CITY OF AMERICAN CANYON FOR SALE ±457,000 SF ZONING MAP

10 303 CALIFONIA SITE PLAN Proposed Rail Location Phase III 9 Phase II Phase I

11 Wine Bottling/Distribution Facility PROPERTY OVERVIEW SITE DESCRIPTION General Description Address City County State ±457,000 square feet of warehouse/distribution space 303 Green Island Road American Canyon Napa California Zip Code Number of Parcels Two (2) Assessor s Parcel Numbers & 031 Land Area Topography Shape ±27.42 acres (±1,196,593 square feet) Level Irregular Access Green Island Road via State Highway 29 Utilities Rail Zoning Electricity & natural gas provided by PG&E. Water and sewer provided by the City of American Canyon. With the additon of a spur line, the property can be served by California Northern Railroad, one of several Class III short-line railroad companies owned by RailAmerica, Inc. It operates over Southern Pacific Railroad tracks (now Union Pacific Railroad). General Industrial Warehouse/distribution and winery are permitted under this zoning. 10 FOR SALE ±457,000 SF

12 303 CALIFONIA 11 BUILDINGS The property consist of three adjoining buildings totaling ±457,000 square feet of warehouse with an additional ±21,820 square feet of covered area adjacent to the buildings for processing materials and secured storage. This area is lighted, sprinklered, and on a concrete slab. OFFICE IMPROVEMENTS There is a total of ±11,625 square feet of office area in the three phases. SHOP SPACE There is an existing machine shop in Phase II, a forklift repair shop and a general maintenance shop in Phase III, and an equipment wash down pad located outside of Phase III. ELECTRICAL SERVICE 3,600 Amps, three phase, 277/480 Volt service. PARKING There are approximately 250 passenger vehicle spaces on site. ADDITIONAL LAND There is ±1.75 acres of unimproved land located in the southwest corner of the property which could be utilized for expansion of the production water treatment system, additional trailer parking, additional buildings, employee parking, etc., if appropriate approvals are obtained. The buildings were built in three phases: Phase I constructed in 1989 of ±150,000 sf Phase II constructed in 1990 of ±90,000 sf Phase III constructed in 2000 of ±217,000 sf WASTEWATER PONDS Two wastewater ponds with a ±2.2 million gallon capacity. These ponds receive all of the production wastewater thereby eliminating any discharge of the production wastewater to the public sewer system. This system yields continued savings in municipal sewer charges. The treated wastewater is used on site for landscape irrigation.

13 Wine Bottling/Distribution Facility Dock High Doors Phase II Grade Level Doors 12 Phase I Phase III FOR SALE ±457,000 SF

14 303 CALIFONIA 13 PHASE 1 - improved with the following: ±150,000 square feet (±300 deep by ±500 wide) Ten (10) dock high doors. All have ±45,000 lbs. hydraulic levelers, dock locks, shelters, electric doors, swing lights and compressed air. One (1) grade level door (±12 x ±14 ) Clear height of ±24 - ±26 Night air cooling Ceiling insulation R-30 Wall insulation R-19 Metal roofing system ±6 concrete floors (3,000 PSI) with #3 s at 18 O.C. each way over 4 of class 2 aggregate base. Column spacing of ±50 deep by ±60 wide PHASE 2 - improved with the following: Four (4) dock high doors. All have ±45,000 lbs. hydraulic levelers, dock locks, shelters, electric doors, swing lights and compressed air. Three (3) grade level door (two ±12 x ±14 and one ±10 x ±10 ) Clear height of ±20 - ±22 Night air cooling Ceiling insulation R-30 Metal roofing system ±6 concrete floors (3,000 PSI) with #3 s at 18 O.C. each way over 4 of class 2 aggregate base. Column spacing of ±100 deep by ±60 wide PHASE 3 - improved with the following: Nine (9) dock high doors. All have ±45,000 lbs. hydraulic levelers, dock locks, shelters, electric doors, swing lights and compressed air. One (1) grade level door (±12 x ±14 ) Clear height of ±24 - ±26 Refrigeration glycol cooling Night air cooling Ceiling insulation R-30 Wall insulation R-19 Metal roofing system ±6 concrete floors (3,000 PSI) with #4 s at 3 O.C. each way. Column spacing of ±50 deep by ±50 wide Knockout panels for rail loading

15 Wine Bottling/Distribution Facility 14 FOR SALE ±457,000 SF

16 303 CALIFONIA EQUIPMENT 15 BOTTLING LINE There are two (2) high speed, state of the art bottling lines located in Phase II. One is a 750ml bottling line and the other is a 187ml bottling line. The 750ml line is for sale and can be purchased with the building and the 187ml line will be relocated to a different facility. The 750ml line is a high-speed Bertolaso line devoted to running at approximately 365 bottles per minute and consists of the following components: Empty glass depalletizer Bertolaso 60 head bottle purger 75 value filler 16 head corker Bertolaso 15 head capper R & G capsuling equipment Accumulation table Krones pressure sensitive labeler Wayne Carton erecter and partition inserter Hartness case packer Wayne case sealer Berchi unitizer Pallet wrap machine The line has change parts to accommodate 8 different bottle configurations: including claret, burgundy and hock bottles with cork or screw caps (PVC and foil). Other components of the line are two pre-bottle stainless steel tank of ±6,200 gallons each, plate and frame filter, and a series of pumps. The line has low oxygen control. Located outside of Phase II are nineteen insulated stainless steel pre-bottling storage tanks from ±975 gallons to ±40,074 gallons for total bulk storage of ±345,000 gallons. Other equipment which could be included with the 750ml line are: Boilers Compressors Compressed gas storage tanks Equipment in machine shop Miscellaneous pumps and hoses Stainless steel tanks

17 Wine Bottling/Distribution Facility 16 FOR SALE ±457,000 SF

18 303 CALIFONIA MARKET OVERVIEW NAPA AMERICAN CANYON In a change of direction from recent history, Napa s vacancy rate increased in the first quarter, from 2.1 percent to 6.5 percent. This increase was almost entirely a result of three industrial buildings totaling 175,362 square feet at 2751 Napa Valley Corporate Drive going on the market in the first quarter. This multi-building property is the former Dey Labs campus that the County of Napa purchased in December 2013 with plans to renovate and occupy the office portions of the campus. American Canyon s already minuscule vacancy rate inched even further downwards from 0.6 percent to 0.3 percent in the first quarter. The largest transaction in the quarter was Billet Transportation s pre-lease of 122,000 square feet at the to be constructed Lombard Crossings Industrial Park. 17 MARKET COMPARISONS INDUSTRIAL MARKET SUB-TYPE BLDGS TOTAL INVENTORY SF DIRECT VACANT SF DIRECT VACANCY RATE SUBLEASE VACANT SF SUBLEASE VACANCY RATE TOTAL VACANT SF VACANCY RATE CURRENT QUARTER VACANCY RATE PRIOR QUARTER NET ABSORPTION CURRENT QTR SF NET ABSORPTION YTD SF COMPLETED CURRENT QTR SF UNDER CONSTRUCTION SF AVG ASKING NNN AMERICAN CANYON Industrial ,851 20, % - 0.0% 20, % 5.3% 18,617 18, $0.75 R&D Flex Warehouse 26 5,625, % - 0.0% - 0.0% 0.0% TOTAL Total ,237,005 6,365, ,808 20, % 4.2% - 0.0% 517,808 20, % 4.2% 0.6% 4.4% 327,439 18, ,439 18, , $0.75 $0.57 NAPA Industrial 100 2,344, , % - 0.0% 175, % 3.7% (88,992) (88,992) - - $0.92 R&D Flex ,641 61, % - 0.0% 61, % 11.0% (5,308) (5,308) - - $0.88 Warehouse 35 3,274, , % - 0.0% 158, % 1.4% (112,481) (112,481) 61, ,400 $0.67 Total 150 6,126, , % - 0.0% 395, % 2.1% (206,781) (206,781) 61, ,400 $0.81 SUISUN CITY

19 SELECTED AREA EMPLOYERS 1 Wineshipping.com 2 Folio Wine Group 3 Springhill Suites Hotel 4 Collotype Labels 5 Sutter Home Winery (3 locations) 6 Treasury Wine Estates (2 locations) 7 Zypher Express Wine 8 Bronco Winery (2 locations) 9 The Doctors Company 10 Biagi Bros. Trucking 11 Culture Stone 12 Napa County Airport 13 Kendal Jackson Winery 14 Copperpeak Logistics 15 Vitro Packaging 16 Wallaby Yogurt 17 Mezzetta Foods 18 Western Wine Services (3 locations) 19 Boisset Wine 20 Winecare Logistics 21 Coca Cola 22 Barry Callabaut, USA 23 Hess Winery 24 Don Sebastiani & Sons 25 Annette s Chocolates 26 Dynacraft Bicycles 17 Wine Bottling/Distribution Facility FOR SALE ±457,000 SF

20 303 CALIFONIA WHY NAPA 19 NAPA COUNTY S COMPETITIVE ADVANTAGE IS A GLOBALLY RECOGNIZABLE BRAND. The famous Napa Valley is world renowned for its wineries, vineyards and restaurants. Locally grown and produced wines are sold throughout the United States and exported to countries around the globe. Tourists come to Napa to visit local wineries, sample wines, dine at some of the finest restaurants in California and enjoy the comforts of a relaxing trip to a spa or a stay in a bed & breakfast. NAPA VALLEY Fine wine and fine wine grapes are overwhelmingly the source of Napa s prosperity and prominence. Napa s unique terrain and climate and its high standards of viticulture and winemaking result in premium pricing and growing demand for its grapes and wine. Napa County produces 20% of the state s total wine volume and 27% of the state s sales as a result of the quality of Napa County s grapes and wine. The full economic impact of the wine and vineyard sector in Napa County is estimated to exceed $13 billion dollars annually. The wine and vineyard sector is Napa s largest employer. Napa s wine and vineyard sector directly, and indirectly through the services and products they consume or generate, provides nearly 46,000 jobs in Napa, nearly half of the county s total employment. These jobs generate wages of nearly $2.1 billion. Total cases of wine produced in Napa County in 2011 was ±49.7 million. (Source: Napa Valley Vintners, Economic Impact of Wine and Vineyards in Napa County, Stonebridge Research, 2012)

21 Wine Bottling/Distribution Facility Geographically, Napa County has a land area of 754 square miles, most of which is protected from urban development by extremely protective land use policies. All cities and towns in the Napa Valley share the same ideal of protecting the agricultural and open space lands from development. City and County policies promote urbancentered growth with homes and businesses concentrated in incorporated cities to preserve farmland and open space; these goals are supported through use of the Williamson Act, conservation easements, or public ownership. Napa County has maintained a large portion of its land area as a rural agricultural environment with vineyards comprising about 43,000 acres (9%) out of 465,000 total acres. Following the course local land use policies, almost 80% of Napa County s population lives in five incorporated cities, American Canyon, Napa, Yountville, St. Helena, and Calistoga (listed from south to north and located along Highway 29). The balance of the population lives in a number of small unincorporated towns, such as Oakville, Rutherford, Angwin and Pope Valley, which are located throughout the valley. The City of Napa is the largest community with a population of 78,800, followed by American Canyon with 16,836 and St. Helena with 6, FOR SALE ±457,000 SF

22 303 CALIFONIA 21 ECONOMIC BASE Napa County s economy is based primarily on vineyard operations, wine production including bottling, storage and distribution and tourism. Major employment sectors include agriculture (primarily vineyards), manufacturing (primarily wineries), local government, hospitality, retail, and healthcare. Between 1999 and 2008 the number of business establishments in Napa County increased by 13.7% primarily in personal services, educational services, manufacturing, and wholesale trade. During the same time period overall employment in Napa County grew at a fast pace (17.6%), especially compared to California statewide job growth of 6.8%. Several sectors experienced a significant increase in the number of new jobs over the past decade including manufacturing, hospitality, local government, and business support. The greatest job growth occurred in the manufacturing and hospitality sectors. Overall, local employment, with 323 jobs per 1,000 residents, is on par with the national average (318), and 8% higher than the statewide average (299). The majority of the work with the vines is hand work with some mechanical harvesting and pruning. While mechanical harvesting can be economically more feasible for some vineyards, many growers believe premium wine grapes should be handpicked. Hand work is also required for leafing, tying, and thinning of the crop (dropping). The need for hand labor also increases with higher density plantings. In Napa County, about 75 percent of the grapes are hand-picked. In 2011, Napa County had ±43,581 acres planted and approximately 1,600 growers. The value of all types of agricultural production in 2013 was approximately $662,177,500. Wine grapes are overwhelmingly the largest crop representing 99.1% of the gross value of all agricultural production in Napa County. Napa Valley features hundreds of wineries and vineyards that grow many different grape varieties including Cabernet Sauvignon, Chardonnay, Merlot, Zinfandel, and other popular varietals. AGRICULTURE In Napa County, agriculture employment is the key to the beginning of the wine process. As a percentage of the total economy, agriculture employment in Napa County is eight times the national average and almost three times the statewide average. Grape vines require significant amounts of labor year round, especially during harvesting.

23 Wine Bottling/Distribution Facility TOURISM The county s vineyards and wineries are the foundation of Napa County s economy, with tourism bringing in a powerful second economic infusion. The Valley s national reputation, rural charm, natural beauty, and excellent climate have made it a premier getaway location for couples from around the world. With over 4.7 million visitors annually, many smaller wineries sell most of their wine from their tasting rooms and from wine clubs, which many tourists join while visiting the winery. Sales to the tourists continue even when they leave the Valley as most will buy Napa Valley wines because of the regions fine reputation. A visitor profile study shows that the Napa County travel market is predominantly comprised of domestic visitors, about half coming from California, and the rest from across the United States, with a small percentage of international visitors representing more than 20 countries. 22 TRINCHERO FAMILY ESTATES WINES FOR SALE ±457,000 SF

24 303 CALIFONIA 303 AMERICAN CANYON C A- LNAPA,CA I F O N I A Bill Kampton bill.kampton@colliers.com CA License No Phil Garrett, SIOR phil.garrett@colliers.com CA License Bottling/Distribution Wine Bottling/Distribution Facility Facility 360 Campus lane, Suite 101, Fairfield, CA USA Information provided herein has been obtained form the owners or from other sources deemed reliable. We have no reason to doubt the accuracy but regret we cannot guarantee it. All properties subject to change or withdrawal without notice 6/19/14