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.