So far, the momentum of winery and vineyard sales on the Central Coast of California in 2018 has not been influenced by increased regulation, a slump in grape prices or fear that the wine business is on a negative verge of some kind or another.

Since the first of the year, winery and vineyard sales have been quite active due to the timing of several factors.

First, there are winery and vineyard owners of the ‘mature variety’ who have been contemplating a sale over the past several years or so. However, many had to warm to the idea of exiting the industry and needed time to give heirs a chance to change their minds about not wanting to take over the family business. When the 2017 crush and the holidays were over, they started taking the necessary steps towards a transfer of ownership. Grown children of winery and vineyard owners have come to realize that the wine business is not the same family business their parents maintained for decades. Many of them instead want to leverage inherited equity into investments that are nearer and dearer to their own interests and expertise. Winery and vineyard owners therefore have chosen to put their properties on the market rather than go through the succession process.

A second cause of the increase in winery and vineyard sales is the elevated regulation and level of resources, sophistication and expertise required to sell wine and wine grapes is growing more expensive and demanding. Young and mature winery and vineyard owners are reassessing their strengths and weaknesses and are discovering that perhaps they don’t have the resources necessary to take their winery or vineyard to the next level with competitive grape sales or marketing and distribution. They (accurately) conclude that given current real estate values, a sale makes more sense.

Third, buyer confidence in real estate is soaring. Buyers are completing winery and vineyard transactions large and small. Buyers for larger scale wineries (50,000+ cases annually) and vineyards (200+ acres) have been institutional investors, investor groups and large wineries with a variety of brands such as Gallo and The Wine Group. Medium size, wineries (10,000-50,000 annual case production) and vineyards (40-200 acres) are typically purchased by other larger wineries or wine companies. For smaller family owned wineries (up to 10,000 cases) and vineyards (typically under 40 acres), the buyers are generally lifestyle driven and often leaving the rat race for wine country.

As harvest 2018 comes to a close, we should see a new pool of buyers (including some bargain hunters) and some fresh winery and vineyard listings across the small, medium and large categories.