Appetizers
August 6, 2007
The New Gold Rush

Just how valuable is vineyard land in northern California these days, aside from Napa Valley, where fantastic prices being paid for vineyards gives a skewed vision of the market?

To adjust our perspective, let's do some math based on sales figures announced this morning for two substantial vineyards, one in Yolo County, the other at Lodi.

Vintage Wine Trust Inc., a San Rafael real-estate investment trust focused exclusively on the wine trade, is buying the 422-acre Dunnigan Vineyard southeast of Dunnigan in Yolo County for approximately $4.8 million, and the 283-acre Sparrowk Vineyard east of Lodi for about $4.2 million, trust officials revealed today.

That works out to $11,374 an acre for the Yolo County property, $14,841 for the Lodi site. Is Lodi land that much more highly regarded than Yolo? Not necessarily. Of the 283 acres in the Sparrowk Vineyard, about 260 acres already have been planted, primarily to zinfandel and cabernet sauvignon. Of the 422 acres in the Dunnigan Vineyard, only about 278 acres have been planted, largely to pinot grigio and chardonnay. Vintage Wine Trust officials say they expect to develop as vineyards another 120 acres in the Dunnigan purchase next spring.

The purchases increase substantially Vintage Wine Trust's investment in the Sacramento region as a source of fine wine. This spring, the trust paid Sacramentans John and Lane Giguiere $2.2 million for the couple's 320-acre "Matchbook" property in the Dunnigan Hills of Yolo County, which includes a 73.5-acre vineyard. Vintage also earmarked an additional $3.4 million to develop more vineyards and to build a winery on the site. Under the terms of the sale, the Giguieres, who make wines under the banner of Crew Wine Company, will lease back the holdings for 10 years.

Under a similar arrangement, Sirius Vineyards LLC, which has owned the Sparrowk and Dunnigan vineyards, will lease back the properties through 2009, say Vintage Wine Trust representatives.

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