Building Equity: State of the Vineyard Real Estate Market

Building Equity: State of the Vineyard Real Estate Market

The leading expert in Central Coast vineyard real estate, Jenny Heinzen is thrilled to share her insider knowledge at this year’s Sustainable AG Expo & International Sustainable Winegrowing Summit in San Luis Obispo, where she’ll cover Building Equity: State of the Central Coast Vineyard Real Estate Market. California’s #1 Vineyard Broker, here’s a insider look at Jenny’s savvy market and investment insights:

Central Coast Market Overview

Natural Resources: Limited ground for new vineyards and limited water is influencing supply with rising demand in the Paso Robles area and beyond. Well restrictions (Executive Order N-7-22) and the Sustainable Groundwater Management Act (SGMA) impact the Paso Robles groundwater basin.
Grape Pricing: Limited supply and a dried-up bulk wine market have significantly increased grape pricing and demand.
Lifestyle Buyers from Los Angeles and the Bay Area bring significant wealth to the region. These Buyers see value in Central Coast vineyard properties and the coveted lifestyle this region has to offer.

Market Conditions

  • The Central Coast typically sees about 24 significant winery and vineyard real estate sales per year.
  • Today there’s less activity in Monterey and Santa Barbara Counties. The bulk of the activity and excitement is in Paso Robles and the region has reached a compelling phase for all types of buyers.
  • Lifestyle transactions are most affected by interest rates.
  • Buyers are primarily local family-owned wine companies.

Vineyard Values & Recent Sales

2022 Top Players

60% Family-owned Wine Companies (DAOU, Halter Ranch, Riboli, etc.)
20% Lifestyle Buyers (generally from the Bay Area and Southern California)
15% Institutional Investors (Kylix/Grapevine Capital)
5% Major Wine Companies (Gallo, Constellation, Duckhorn)

Typical Buyers

  • Pristine Vineyards
  • Westside
  • Good Water
  • 8-10% ROI, Replacing Traditional Investments
  • Lifestyle: Visit and Enjoy
  • Managed Externally
  • $3-$10M

Typical Sellers

  • Older Vines (25+ years)
  • Business with the Real Estate
  • Family-owned & Operated
  • DTC
  • High Inventory
  • Want to Sell for a Premium

How to Build Equity

Entitlements: tastings, events, vacation rental, multiple parcels/split, plantable acres & water.
Generate Income: grape sales, rentals (traditional or vacation rental), private campgrounds, events, and more.
Old Vines: Graft vines or replants.
Build a home (non-specific), add a prefab or ADU.
General clean-up or update home on the property.
Hire the best agent for the specific property type.

Avoid Common Transaction Issues

  • Start Pre-Planning Now
  • Organize Recordkeeping
  • Frame Your Financials
  • Exercise Discretion
  • Know ALL of Your Options—contact Jenny at (805) 260-0581

Vineyard Tax Benefits

  • Deductible Vineyard Expenses
  • Depreciation
  • Net Operating Losses (NOLs)
  • Cash Method of Accounting
  • Real Estate Asset Borrowing Capabilities
  • Soil and Water Conservation
  • Post-Harvest/Pre-Bud Break Costs
  • Estimated Tax Payments
  • Farm Income Averaging
  • Fuel Tax Credit
  • Williamson Act
  • Sales Tax Savings on Ag Items

Looking Ahead

What are we likely to see in 2023 winery and vineyard sales?
  • Continued focus on Paso Robles with a premium for Westside Paso Robles.
  • Production focus for ROI in the Eastside districts.
  • Continued narrowing supply of land suitable for high-end wine production.
  • Overall, the market will remain vibrant, and realistic sellers will be successful.
Paso Robles Vineyard Real Estate
Looking to buy or sell Central Coast vineyard real estate? Jenny Heinzen
serves institutional investors, commercial wineries, growers, and high-net-worth individuals with a focus on exceptional client care. Equipped with over two decades of industry expertise and $275+ million in closed real estate transactions, she's prepared to help you achieve your goals.
Contact Jenny at (805) 260-0581 or email [email protected]

Here for You

If you're looking for a proven Paso Robles vineyard and winery expert, Jenny Heinzen is prepared to listen, share expertise, and deliver on your goals.