Mendocino County Vineyard Sales Presented by Tony Ford and Tom Larson of NorCal Vineyards A division of RE/MAX Full Spectrum

Transcription

1 Mendocino County Vineyard Sales Presented by Tony Ford and Tom Larson of NorCal Vineyards A division of RE/MAX Full Spectrum

2 In the following slides we will review the number of relevant Mendocino County planted vineyard s sold between 2010 and The study areas are as follows: - Anderson Valley - Calpella & Redwood Valley - Potter Valley - Talmage & Hopland - Ukiah - Mendocino County (this is a sum total of all planted vineyard sales)

3 ANDERSON VALLEY VINEYARD SALES BY YEAR

4 CALPELLA & REDWOOD VALLEY VINEYARD SALES BY YEAR

5 POTTER VALLEY VINEYARD SALES BY YEAR

6 TALMAGE & HOPLAND VINEYARD SALES BY YEAR

7 UKIAH VINEYARD SALES BY YEAR

8 MENDOCINO COUNTY VINEYARD SALES BY YEAR

9 In the following slide we will explore the number of relevant Mendocino County plantable land sales between 2010 and The study areas are as follows: - Mendocino County (this is a sum total of all planted vineyard sales)

10 MENDOCINO COUNTY PLANTABLE LAND SALES BY YEAR

11 In the following slides we will explore the value of planted vineyard acreage per sale between 2010 and Prices per vineyard vary on the quality of the vineyard itself, a topic which we will discuss in later slides. The study areas are as follows: - Anderson Valley - Calpella & Redwood Valley - Potter Valley - Talmage & Hopland - Ukiah - Mendocino County (this is a sum total of all planted vineyard sales) *We have circled multiple sales with a green circle to denote Alternative Ag buyers who may have paid more for the property than an investor or farmer may have.

12 ANDERSON VALLEY PLANTED ACREAGE SALES PRICE PER ACRE $120,000 $125,000 $100,000 $70,000 $80,000 $44,

13 CALPELLA & REDWOOD VALLEY PLANTED ACREAGE SALES PRICE PER ACRE $52,000 $30,000 $30,000 $29,000 $30,000 $25,000 $35,000 $32,500 $20,000 $20,000 $20,

14 POTTER VALLEY PLANTED ACREAGE SALES PRICE PER ACRE $25,000 $25,000 $20,000 $21,

15 TALMAGE & HOPLAND PLANTED ACREAGE SALES PRICE PER ACRE $46,500 $37,000 $35,000 $35,000 $35,000 $40,000 $27,500 $30,

16 UKIAH PLANTED ACREAGE SALES PRICE PER ACRE $65,000 $42,000 $28,600 $30,000 $25,

17 C- A C grade vineyard is in need of immediate replacement, or near the end of it s life-cycle and will need replacement in the near future. It is not performing well due to age, pests, poor farming practices, water issues, or any other applicable farming factor. In the following slide we will explore the variations in price per acre based on the quality of the vineyard being represented in the sale. We ve graded vineyards on an A, B, C scale with the following criteria: A- An A grade vineyard is in good health and not in need of immediate replacement. It does not require improved farming practices in order to increase production or quality. The vineyard is performing well given it s age, location, and applicable farming factors and needs no foreseen improvement. B- A B grade vineyard is in good health and not in need of immediate replacement. It does require improved farming practices in order to increase production or quality. The vineyard is underperforming given it s age, location, and applicable farming factors.

18 ANDERSON VALLEY AVERAGE PRICE PER PLANTED ACRE BASED ON VINEYARD QUALITY $100,000 $90,000 $84,500 *The B-grade average price is higher than A-grade because we only had one property ranked as a B which subsequently sold for $100,000 per acre to a Lifestyle buyer. A B C

19 INLAND MENDOCINO COUNTY AVERAGE PRICE PER PLANTED ACRE BASED ON VINEYARD QUALITY $38,650 $35,115 $25,625 A B C

20 In the following slides we will explore the total number of sales in a given period by buyer type. We ve broken down buyer types into 4 categories. Those categories are: - Grape Farmer - Investor - Lifestyle Buyer - Alternative Ag We ve provided two date ranges for this study. The first range covers the entire range of the data from 2010 thru 2016 and the second range covers 2015 thru The purpose of looking at the last 3 years apart from the entire date range is to show the concentration of Alternative Ag buyers that have appeared in the vineyard market between 2015 and 2016.

21 Buyer Types % Grape Farmers (17) 41% Investors (11) 14% Lifestyle Buyers (6) 26% Alternative Ag (8)

22 Buyer Types % 20% Grape Farmer (4) Investors (7) 20% 35% Lifestyle Buyer (4) Alternative Ag (5)

23 Medical Marijuana and Vineyard Ground Value s

24 Can we anticipate cannabis growers buying vineyard ground for medical marijuana purposes? -This is a yes and no answer. Under the newly passed ordinance, cannabis cultivation permits can only be issued to properties that can prove prior cultivation and must fall within approved zoning districts. The majority of Mendocino county vineyard land falls into Ag and Rural Lands zoning two zoning districts that are approved for cannabis cultivation by the county. The portion of the ordinance that stipulates proof of prior cultivation will stand until January 1, 2020 when the county will begin reviewing applications for new grows. Therefore in order to qualify for a permit now, the seller of the vineyard, or a tenant, would need to have previously grown cannabis on the property, thus creating the yes and no answer where the desirability of vineyard ground is concerned. The current county ordinance states that the grow on the property must have been in place prior to January 1, Have we seen any sales go to cannabis growers? If so, what are their buying habits? -Yes. We have seen multiple vineyard properties go to cannabis growers in recent years, and in each instance they ve typically paid more for the land than the discerning grape grower may have. Their purchases lend to nearly 100% of the higher regional price-per-acre sales that you saw in earlier slides. If you can prove prior cultivation on your vineyard land it could be worth exponentially more per acre. What can we do to avoid inflated vineyard land values where cannabis buyers are concerned? - First and foremost, it appears that cannabis buyers are currently only seeking properties where prior cultivation can be proven. As noted previously, in January 2020 the county will begin issuing permits to new grows, at which time the value of vineyard land could grow exponentially based on who is willing to take top dollar from buyers looking to diversify the crop grown on the land. But ultimately the inflation of values on vineyard ground will come down to the individual land owners as things progress.