UNPARALLED VINEYARD & WINERY OPPORTUNITY 2015 Diversified Income Streams A world-class specialty vineyard, a commercial real estate leasing opportunity, and a create your own wine label package under the tutelage of a renowned winemaker.
Unparalled Vineyard & Winery Opportunity D I V E R S I F I E D I N C O M E S T R E A M S An unusual event. Relatively few vineyards are blessed with the combination of soil, climate, sunorientation, and vines that it takes to ascend to the high-scoring world of specialty wines. Nevertheless, this vineyard is clearly one of them. Vineyard investment managers have mentioned famous labels in the same breath as this stellar offering. Located in Oregon s most coveted appellation, this rare property is part of a unique and multi-faceted business opportunity. Why is this property available? The owner of this property, a noted and soughtafter winemaker, has been planning and implementing his long-term expansion strategy for over a decade. He obtained this prized vineyard, developed it carefully, and is now ready to enter into a sale and lease-back arrangement. This step gives rise to an opportunity for a buyer to own premium vineyard real estate in the heart of Oregon s most favored American Viticulture Area (AVA.) At the same time, the buyer will enjoy current income from leasing a new build-tosuit winery to the winemaker. Page 1
What does Diversified Income Stream mean? At a time when many conventional investments are increasingly volatile, it can be reassuring to have a multi-faceted package that encompasses an important producing vineyard, a solid build-to-suit commercial real estate build-to-suit project (pre-leased), and an opportunity to participate in the centuries-old culture of fine wines at the highest levels of achievement. This opportunity incorporates all three. How do these elements fit together to create diversified income streams? The vineyard is producing nicely. Some of it will need to be planted further, but it has been carefully designed, planted, and tended by one of the most qualified vintners in the country. Its production can be utilized entirely by the buyer to produce some of the finest wines available in Oregon, or the grapes can be sold at premium prices to local winemakers (who are quite aware of the unique qualities of this particular property.) The demand for the owner/winemaker s wines has reached the point that he simply must have more winery capacity. He is ready, willing, and able to commit to a longterm commercial lease of the existing buildings and the (build-to-suit) winery building, which is now shovel-ready with plans, specifications, and a detailed construction budget. He is now in a position to sell the vineyard to develop working capital to operate the winery and grow his custom winemaking consulting business. The build-to-suit winery facilities lease, which includes the existing tasting room/guest house, office, and barrel storage facility, will provide a solid long-term return on investment to the buyer of the vineyard, as he/she invests the additional Page 2
capital required to build the winery building in accordance with the detailed plans/specs/construction budget that have been developed by an experienced architect/engineering/construction management team. The total of these elements (property purchase, build-to-suit winery building, and additional planting) comes to approximately $2.9 million. The third component of this multiple income stream package is perhaps the most compelling. At a time when equity investments are geared to quarterly earnings, and are subject to sometimes disturbing fluctuations, this aspect of the opportunity package hearkens back to centuries of wine-making tradition. Creating an award-winning wine label is not easy, but the winemaker in this case has done it more than once. The buyer of this vineyard will be able to obtain, under separate contract, personal, one-on-one access to the winemaker for the purpose of developing or improving the buyer s own wine label and brand. Wineries vie for the attention of this winemaker, but the buyer of this vineyard will have priority for his services under one of the few consulting contracts awarded each year. Competition This vineyard is potentially one of the top competitors in its AVA (American Viticulture Area.) It has built solid relationships with winery customers in this appellation. These relationships form a strong competitive advantage. Page 3
Growth & Expansion A portion of the vineyard is well established and growing nicely. Another part is ready for planting to continue the commercial growth process. The Create Your Own Wine Label program will utilize as much of the vintage as the buyer wishes, and existing relationships with area wineries provide support for selling the remaining grapes. Support & Training The seller will provide personal introductions to selected winery customers. In addition, he will provide continuing professional counsel under the separate Create Your Own Wine Label consulting program. The seller will pay a solid market rate on the lease-back improvements The three-part opportunity package includes the seller s commitment to a longterm lease-back of the build-to-suit winery building and the existing building improvements (including the existing tasting room/guest house, office, and barrel storage facility.) How many employees are there, and what functions do they provide? The buyer will need to engage a contract vineyard manager from among the several that are available locally. Page 4
What does the customer base look like? Many wineries in this appellation are top-rated in the state. A list will be provided to qualified prospective buyers upon execution of the required NDA. Are any capital expenditures required to continue current production levels? There is no deferred maintenance, but to utilize the entire vineyard to its full potential, several acres will need to be planted. Details and budget will be provided in the financial forecast and the pro forma ROI analysis. What kind of marketing does the vineyard do? Customer relationships have been developed via local industry associations, trade shows, and juried wine competitions. What do the finances look like? Financial reports, projections, and analysis will be provided to the prospective buyer upon execution of the required NDA and evidence of financial qualification. Page 5
Summary This triple-play opportunity has been carefully designed to provide the buyer with real estate stability, along with three diversified income streams: Sale of premium specialty wine grapes Commercial real estate lease of the ($1.6 million) build-to-suit winery building, along with the existing tasting room/guest house, office, and barrel storage facility. An opportunity to enter into Create Your Own Wine Label consulting program with the world-renowned winemaker. ### Contact: Gary Richards, Principal Broker Pacific Northwest Business Brokers gary.richards@pnbrokers.com (503) 991-5601 Co-Listed with Mary Martin Miller, CCIM Principal Broker Miller Consulting Group, LLC Page 6