Issue link: http://winesandvines.uberflip.com/i/80303
MANA GEMENT ing, or return on investment if all cash was used. You can see what happens to cash flow if the farmer has a year like 2011, when an average crop was two tons per acre and an average price for Cab was $1,000 per ton. Vineyard land that's already planted with Cab goes for about $30,000 an acre. W&V: Are there particular sub-areas in Paso Robles that are in greater demand? Steinbeck: When talking about areas, we usually look at the east side of High- way 101 and the west side of 101. The east side is generally characterized by larger vineyards, good water production and a warmer climate, although it typi- cally sees a 40°-50°F temperature swing in the spring, summer and fall. As an example, one day last week our high here in town Paso was 105°, but by 7 p.m. it cooled to about 65°. Cab flourishes on the east side due to the warmer climate and the huge temperature swings. Water is more plentiful than on the west side, but the wells are much deeper—up to 1,000 feet. Some east-side wells produce 400-600 gallons per minute. The west side is characterized by small plots, less water volume and a cooler overall climate. The cooling evening "Some sellers want to retire. Others were hurt so badly by the frost in early April 2011 that it no longer makes financial sense to hang on." —Realtor Ed Steinbeck, RE/MAX Parkside Real Estate breezes through the Templeton Gap (the area along Highway 46 West) reach the west side earlier than the east side. Many varieties are farmed on the west side, with a concentration on the Rhone varietals. The west side seems to be preferred by buyers, probably because of the scenic, wooded terrain and building sites with great views. Parcel sizes are smaller on the west side than the east side, but the price per acre is higher. W&V: Appraisers in some parts of the state reportedly are backed up, and trans- actions are taking longer to close. Is this a problem in the Paso Robles area? Steinbeck: Appraisers in our area are usually able to complete their work within two months, depending upon the property and the complexity of the ap- praisal. An ag appraisal is very detailed and costly, costing upward of $5,000 or more—much different than a standard ap- praisal on a residential property. Apprais- als are required for any transaction where a loan is needed, and they are sometimes ordered by a buyer to check value or by a seller to establish an asking price. The shortest time period for completion I found was two months, and the longest approached six months. W&V: What can sellers do to make their properties more attractive to po- tential buyers? Steinbeck: Buyers want to see the num- bers on whatever they are buying. For a producing vineyard without a winery, buyers are interested in all of the planting details such as spacing, rootstock, clone, year planted, type of trellis system, who is doing the farming, how much the farming costs, what type of soil exists, whether the property is in the Williamson Act (for reduced property taxes), crop totals in tons produced for the past few years, who buys the fruit, is there a multi-year con- tract, well information including volume and quality, and so on. Hong Kong Wine & Spirits Fair participants attend a seminar about Spanish wine varieties. Hong Kong prepares to host wine fair ore than 19,000 wine trade buyers and a similar number of wine drinkers at- tended the Hong Kong International Wine & Spirits Fair in 2011. This year, fair sponsors are expecting an even larger crowd, with an estimated 900 exhibitors representing more than 70 countries and winegrowing regions. Now in its fifth year, the Hong Kong Wine & Spirits Fair will take place Nov. 8-10 at the Hong Kong Convention & Exhibition Centre. The fair's exponential growth mirrors the booming nature of the city-state's wine imports, which in 2011 jumped 40% (46% for wine imports from the U.S.) in dollars compared to the previous year, according to the Hong Kong Trade Development Council, which sponsors the fair. Events include the Hong Kong International Wine & Spirit Competition (now open for entries), the Asia Top Sommelier Summit, a contest to choose the "most beloved wine" and a new education zone. For more information visit hktdc.com/fair/hkwinefair-en. M —Kate Lavin 60 WINES & VINES SEPTEMBER 2012 Add a winery to the mix and buyers want to see detailed financial statements of profit and loss. Some sellers will provide a condensed version of these numbers until a sale is negotiated and the buyer is doing his due diligence inspections and investiga- tions. Once in escrow, the buyer needs to carefully review the preliminary title report to check for any liens, judgments, ease- ments or any other clouds on the title. If the negotiated purchase includes seller financing, the seller will usually require a credit report, proof of funds and a financial statement from the buyer. Use of seller financing is limited in most deals that I have seen, but with a down pay- ment of 30%-40% of the purchase price, seller financing can be advantageous for both buyer and seller. The larger acreage purchasers usually are cash buyers, as are most investors. The lifestyle purchasers tend to be cash buyers as well. A resident of the Santa Cruz Mountains, Laurie Daniel has been a journalist for more than 25 years. She has been writing about wine for publications for nearly 15 years and has been a Wines & Vines contributor since 2006.