After 20 years in the residential and commercial real estate business in the San Francisco Peninsula, crunching numbers to establish a good investment, I planned to retire to the Napa Valley in 1987. Until I moved here, I had been a wine consumer that knew very little about the process of the wine industry and my curiosity got the better of me.

I was curious about the values of all of these vineyards throughout the Napa Valley. I wanted to know: What has the appreciation of vineyards been over the years? Are they a good investment? How do you measure the cash flow from the vineyard? Coming from a commercial background, I was incorrectly thinking of Internal Rates of Return, Cap Rates, Gross Multipliers, Present Investment VS Future Dollars, and Return on Investment. All around me were hundreds of acres of vineyard land with varietals of every kind, and I had no idea what they were worth at the time or what they had been in the past.

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One day the trees went out to anoint a king for themselves. They said to the olive tree, ‘Be our king.’ But the olive tree answered, ‘Should I give up my oil, by which both gods and men are honored, to hold sway over the trees?’
—Judges 9:8-9

But I am like an olive tree flourishing in the house of God; I trust in God’s unfailing love for ever and ever.
—Psalms 52:8

Move over grapes, the olives are coming. As olives thrive in much the same micro-climate as grapes, our wine growing regions have seen thousands of new olive trees being planted recently. They are not only being planted for their economic benefits, but people are lining their drive-ways and placing them in their gardens for their beauty as well.

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(A busman’s holiday is when a person goes and sees how others do his/her same job)

Having lived in Napa for 13 years and in Sonoma County for 14 years, working with vineyard and winery properties, I have received a great education of how the grapes grow. I have been exposed to how the vineyard is taken care of, how the harvest takes place and how the wine maker creates from what Mother Nature handed to him/her. I feel that it is truly an art form. Both Napa and Sonoma counties are unique unto themselves. Each has their own identity with their varied varietals. Every wine consumer has their own favorite varietal and that is what makes these beautiful areas so wonderful. We have pretty much the entire field covered when it comes to variety of wines to choose from.

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I received calls from people from people at least once a week, asking the question: How come the Napa and Sonoma Counties has such a spread in vineyard values per acre cost in the same county? We see the statistics stating that Napa Valley vineyard values on a per acre value run from $60,000-$350,000 per acre apiece. For Sonoma County, a price per acre vineyard value can vary from $60,000 up to $140,000 per acre in value in the same County.

My explanation is “American Viticulture Areas” (AVA) or commonly known as Appellations. So what is an AVA or Appellation?

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