Tuesday, April 28, 2009

Sotheby's tries selling Okanagan wineries

Naramata Bench winery owner Keith Holman

Sotheby’s International Realty is one of the big names in the sale of luxury real estate around the world.

Five years ago, Sotheby’s found the Okanagan and acquired listings for eye-popping Okanagan estates (one Kelowna mansion with 38 acres currently lists at $8.7 million).

Now Sotheby’s has found wineries and vineyards. It has just announced an “exclusive” listing of the Holman Lang Vineyard Estates.

Sotheby’s Vineyard Collection (http://www.vineyardcollection.ca/) also lists three properties now operated by Sonoran Estate Winery of Summerland.

Over the past year, several British Columbia wineries have offered themselves for sale, generally without success because of the environment for finance. Three deals at least collapsed because the American lenders suddenly pulled out. Can Sotheby’s swim against that tide?

Keith Holman, who runs Holman Lang with his wife, Lynn, believes that Sotheby’s has the international reach to attract well-heeled buyers. Once those people appreciate the Okanagan’s beauty, lifestyle and potential, they will want to buy a piece of this paradise.

“The Okanagan and the Naramata Bench is getting a great reputation internationally for wine,” Keith says. “The potential of the Okanagan to be a wine destination is huge.”

The Holmans are long-time orchardists in the Penticton area. Their first winery, Spiller Estate Winery (a fruit winery) was opened in 2003 on a strategically located Penticton property with a heritage house now operated as a bed and breakfast.

Having caught the wine bug, they launched nearby Mistral Estate Winery in 2004. At the same time, they were able to buy the neighbouring Benchland winery (renamed Stonehill Estate Winery). The deal made sense because the two vineyards are next to each other.

In 2005, the Holmans bought Lang Estate Vineyards. One of the original wineries on the Naramata Bench (today more than 20 wineries operate on the Bench), Lang, which opened in 1990, gave the Holmans access to established wine markets and to an experienced winemaker.

Next, the Holmans bought a derelict view property on a Naramata Bench bluff overlooking Okanagan Lake and planted vines. This is now the location of their Soaring Eagle Winery, which opened in 2007, and their small Zero Balance winery, which opened in 2008.

Last year, they also opened the K Mountain Winery in Keremeos, their first winery venture off the Naramata Bench.

In bringing in Sotheby’s, the Holmans appear to be trying to free up cash now tied up in their wineries or in their other orchard properties. According to the Sotheby’s brochure, buyers can choose to run the wineries or to “leaseback the production to the Holman Lang group.”

Three Holman Lang properties are currently listed:

Mistral Estate Winery for $5,500,000. This winery occupies a 17-acre property. The upper seven acres is not in the Agricultural Land Reserve and thus is available for residential development. Houses here would have views not only of vineyards and orchards but also of the city of Penticton.

Stonehill Estate Winery for $3,975,000. This winery occupies 9.6 acres. The vineyard grows, among other varieties, an Austrian red called Zweigelt. The predecessor winery, Benchland, was the first to offer this wine in British Columbia.

Morgan for $2,400,000 (or $2,600,000 – there is a discrepancy in the listing materials). This is 12.8-acre property that is now a cherry orchard.

Sotheby’s also is offering all three of the winery and vineyard properties associated with Sonoran Estate Winery at Summerland. Arjan Smits and his son, Adrian, have had these properties on the market for several years. Again, the objective is to sell perhaps one and put the cash into the rest of the business.

Sonoran opened its first winery in 2004 north of Summerland, on a steep slope below Highway 97. The winery has now been relocated to a property on Gartrell Road, the street at the south edge of Summerland along with five wineries now are located.

Both the Gartrell Road winery (with three acres of vines) and the original winery (which includes a huge nine-bedroom house and 4.5 acres of vines) are listed at $3,600,000 each. The three-acre vineyard next to original winery is listed for $3,000,000.

Are all of these properties aggressively priced? Perhaps the Sotheby’s buyers can spot the potential of the Okanagan that will turn these into trophy buys.


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