REIT Acquires Winery, Vineyards

The Hopland property, which includes a winery and 31-acre vineyard, was acquired from Ste. Michelle Wine Estates for $6.2 million (not including closing costs). The property includes storage and modern processing facilities, winery-related equipment, and a winery with offices and tasting room. Weibel Inc. has agreed to a six-year lease of the facility that includes extension options.

The San Mateo vineyard, which borders the San Joaquin River, was acquired for $7.2 million (not including closing costs). The vineyard is contracted to a major wine producer that Vintage did not name. An independent grower has leased the property for an initial term of seven years.

Vintage specializes in buying properties and leasing them back to the original owners, freeing up capital for other purposes. The company was formed in January 2005 and completed a private common stock offering in March 2005 that brought in net proceeds of $145.9 million. The company quickly built a portfolio of six vineyards at a cost of $97.9 million, including acquisition costs. Prior to this latest transaction, the company owned approximately 3,914 acres in Napa County, Sonoma County, the Central Coast and the Central Valley.

The Terra Ventosa and Huichica Hills vineyards, acquired in March 2005, are leased to the Robert Mondavi Corp., a branded winery that is a wholly owned subsidiary of Constellation Brands Inc. The Pope Creek Ranch vineyard, also acquired in March 2005, is leased to two independent wine grape growers. The Iron Corral Ranch vineyard, acquired in June, is leased to Foster's Wine Estates Americas, a branded winery that is a wholly owned subsidiary of Foster's Group Ltd. The Gravelly Ford vineyard, also acquired in June, is leased to Carson Smith Farming Company Inc., an independent wine grape grower. The Edna Valley vineyard and winery, acquired in December, is leased to The Wine Group LLC, a branded winery. The leases have an annual rent escalator of 2.0%.