Vintage Trust Continues Liquidation

West Coast assets are moving and investors receiving payoff  
 
 

Weibel Hopland Winery, Mendocino County

Napa, Calif. -- The sale of its Cameron wine storage facility in south Napa on July 17 represents the latest development as Vintage Wine Trust continues its orderly liquidation. The firm announced in May that it was liquidating the properties it had acquired on behalf of investors.

The wine-oriented real estate investment trust (REIT) was formed in 2005 to buy vineyard and winery properties and then lease them--in many cases back to previous owners. Eventually the lessees could buy the properties back at agreed-upon terms.

Vintage Wine Trust (VWT) completed its private offering of common stock for $159.4 million in March 2005, securing debt financing of up to $250 million and providing total initial capital of approximately $400 million. As of June 2007, VWT said it had acquired $143 million of vineyards and wineries that had been leased back to the sellers or to third-party lessees. When VWT decided to liquidate, trust co-founder Joe Ciatti said the fund still had more than $45 million in cash.

In all, VWT expects to sell 15 vineyard and winery properties valued at $170 million, Ciatti told Wines & Vines. He said that more than half of the properties have been sold so far. He added, "All should be sold and the proceeds distributed to investors by the end of this year."

So far, the fund has made two distributions to its investors totaling $5.70 per share. The first for $3.30 per share was paid July 2 and $2.40 per share will be made on Aug. 29.

 

Joe Ciatti, co-founder Vintage Wine Trust

Ciatti expects a total distribution to investors of $7 to $7.40 per share. Shares in the fund cost $10, and Ciatti says they distributed 90 cents to investors as dividends, so investors will get about 79%-83% of their money back. "We wish it had turned out better," Ciatti said, "but considering the present economic situation, we did the best we could."

According to a memo to investors obtained by Wines & Vines, and other sources including Ciatti, here is the summary of where the properties stand. The acreage is total, not planted, and the value is that claimed by VWT in its material and website unless indicated otherwise. For more details on the property, visit vintagewinetrust.com/portfolio.aspx:

The earlier sales included:

Terra Ventosa Vineyard in Monterey County. Tenant: Constellation Brands. 1,408 acres, $37 million.
Sweetwater Vineyard in Monterey County. Tenant: Silverado Wine Partners (developed for Robert Mondavi). 1,445 acres, $30 million.
Both Terra Ventosa and Sweetwater Vineyard were sold to Silverado Wine Partners, which in effect bought back Sweetwater.

Huichica Hills Vineyard in Napa and Sonoma counties. Tenant: Robert Mondavi. 589 acres, $30 million.
The recent distribution was for these properties totaling $35 million in sales:

San Mateo Vineyard in Fresno County. 667 acres. Value $7.3 million.
Den Hoed Vineyard in Horse Heaven Hills, Wash. (investor in acquisition).
Cameron wine storage facility in Napa. Cost of property $1.6 million. Value: $14 million, according to North Bay Business Journal.
A winery and vineyard in Edna Valley in San Luis Obispo County. 100 acres, $8 million.
Weibel Hopland Winery in Mendocino County on 37 acres, $6 million.
Properties under contract include:

Pope Creek Vineyard in Madera County. 624 acres, $6.1 million.
Gravelly Ford Vineyard in Madera County. Tenant: Carson Smith Farming Company. 769 acres, $7 million.
Sparrow Vineyards in Lodi. Asking price in recent ads was $4.3 million.
Iron Corral Vineyard in Napa Valley. Tenant: Foster's Wine Estate-Americas. 424 acres, $9.5 million.
Property in talks but not yet under contract:

Matchbook Vineyard in Yolo County. Tenant: Crew Wines. 74 acres, $2.2 million.
Farmer Road in Polk County, Ore. Tenant: A to Z Wineworks, $1.3 million paid.
Dunnigan Vineyard in Yolo County. Tenant: Sirius Vineyards. 278 acres, $4.8 million.
Vintage Trust says these properties will complete the sale of its assets.