Rincon Corporation is representing parties who are interested in entering into long-term leases for the development and operation of premium varietal vineyards in Santa Barbara and San Luis Obispo counties.

The terms of these leases typically run between 25 to 40 years in length. They generally have a minimum annual rent running in the range of $400 to $600 per acre, with percentage share of the crop in the range of 8% to 12%. While of course there are many variations, a mature vineyard in a normal year may produce about 7 tons per acre. The price per ton varies according to varieties and years, but in today’s market might run $1,200 per acre. This translates into a 10% sharecrop being worth $840 per acre.

The tenant-operator pays for all expenses of development and operation, including any increase to your property tax as a result of the improvement. The landowner takes no risks below the guaranteed annual rent. This is often significantly more than the existing net cash flow is from current farming operations.

The type of ground sought by vineyard developers is level to rolling. Even hilly ground will work, with the most important attribute being the microclimate of that specific site. Soil types are not as critical, with some operators actually preferring well drained, but less productive soil. Minimum size blocks are generally about 100 acres, depending upon the distance to operator’s other vineyards.

If this is something that might fit into your financial and operational picture, or you would like more information, call Larry Lahr or Frank Ferrero at Rincon Corporation.