Wall Street Wine

Two new Real Estate Investment Trusts (REITs) have formed that have vineyard land as their focus. To-date, Reit’s have not focused on vineyards, but instead commercial properties.

Vintage Wine Trust has  raised $159 million in a private offering and expects to fatten it’s kitty to $459 million through bank loans and other opportunities. Global Wine Partners, out of Napa Valley and backed by MKF Group, a wine industry consultancy, says it is funded with $245 million and expects to have resources in the neighborhood of $300 million to invest in vineyards.

Reading the economy is not much different than the old art of Kremlinology, whereby western Soviet scholars would divine the meaning of how various Soviet communist party members stood in relation to each other at May Day parades to figure out just what the hell was going on with that closed country’s internal politics. We are all looking for signals to tell us which direction the economy is heading and what direction individual industries are heading.

I’m not sure there is anyway to read the emergence of these two new Reits and all the money behind them as anything other than a bullish indicator for the wine industry. Yet there is a principle in economic tea leaf reading: when everyone is bullish, you can be sure the surge is near its peak.

I don’t think were are anywhere near everyone being bullish on wine…yet.

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2 Responses

  1. huge - May 3, 2005

    The Motto comment at the bottom is a classic (even for him):
    “As for rival Vintage Wine Trust, “If they’re successful, there will be two of us,” Motto said. “If not, there will be one of us.” “
    What an ass.

  2. vonglass - July 25, 2005

    How do I get information on either of the REIT issues – Vintage Wine Trust OR Global Wine Partners. Phone numbers, contact persons, or emails will help. Thanks. [email protected]

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