“My friend David O’Reilly, who is as convinced as I am of just how special this vineyard is, recommended that I contact METIS to talk about options for the future. The METIS team not only took the time to really understand our property, they listened to our goals and needs for what a transition might look like and were able to market the property accordingly. They were acutely aware of our ideal terms for the sale and worked hard to ensure they were met.  They brought us multiple offers and were able to negotiate a unique transaction that allowed us to retain our brand, which was our preference.  METIS worked tirelessly through marketing, diligence, and closing in a timely and precise manner and we are thrilled with the result.”

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– Steve Lutz, Founder Lenné Vineyard

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CLIENT

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Founded in 2001, Lenné Vineyard is a super-premium vineyard and hospitality center located in the northeastern corner of the Yamhill-Carlton AVA in the Willamette Valley, with superlative views of the surrounding area. Founded by Steve and Karen Lutz and named in honor of Karen’s father, Lenné is a small gem and a direct-to-consumer driven business that grows and produces spectacular wines and built a loyal following and wine club. The Lenné Vineyard is planted predominantly to Pinot Noir and one acre of Chardonnay. A European-style farmhouse hosts guests both for tastings and in the one-bedroom short term rental. Lenné’s wines have been made at an offsite facility by famed winemaker David O’Reilly since their first vintage and have received critical acclaim year after year. It was David O’Reilly, a former METIS client, who suggested Steve contact METIS when he began to think about selling the property.

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CHALLENGE

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After 21 years building and managing Lenné Estate, Steve decided it was time for him to move towards retirement. While he still loved running the business, he knew that it was the right time for him to step back from the rigors of day-to-day operations. However, stepping back wasn’t stepping out for Steve. His ideal plans for retirement included maintaining the brand on a smaller scale with the remaining inventory and continuing to engage his loyal wine club, a group with whom he had built relationships over the past two decades.

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The challenge was to find a buyer who was looking for a super-premium vineyard site and tasting room to either develop a new brand or relocate an existing brand. Given there is no winemaking facility onsite, prospective buyers needed to have offsite production or be prepared to invest capital to build a facility on the property. Additionally Steve wished to lease the tasting room back for a period of time, potentially delaying a buyer’s brand launch.

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PROCESS

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The METIS team knew that Lenné Vineyard was a rare, polished gem that would be attractive to a wide variety of buyers. The team at METIS got to work on a discrete, multi-prong marketing effort and approached varying entities, including local, regional and international buyers resulting in a record number of CIM requests in the first week and multiple facility tours.  There were multiple offers to acquire Lenné Vineyard all at or above the expected valuation enabling METIS to negotiate a transaction withterms most suited to the founder’s objectives. 

 

One party, a partnership between real estate developer Eugene Labunsky and second-generation winemaker Jared Etzel, was particularly excited and willing to be creative. Eugene had been a longtime wine club member who knew the property well and recognized it’s potential. Jared was already familiar with the Vineyard. The opportunity to lease back the property was ideal for them as they were not yet ready to launch their new project and they were happy to have both the revenue from the lease and the continued high customer traffic. METIS worked with the Buyer to structure an offer that tightly matched the Seller’s desire for continued ownership of the wine brand and inventory while maximizing his total exit value. The offer was made and accepted less than two weeks after going to market.    

 

After the LOI was signed by both parties, METIS got to work crafting the terms of the Purchase and Sale Agreement, Lease-back, Purchase Price Allocation, and Due Diligence process, with the transaction consummating on the eve of the 2022 Harvest.

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OUTCOME

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METIS’ clients, Steve and Karen Lutz are pleased with the terms of the sale and happy that Lenné Vineyard will continue to be stewarded by someone who appreciates the unique and special site they created. Additionally, Steve is thrilled to have time to personally share with his customers his plans for the Lenné brand. Eugene and Jared are excited to have found a home for their new brand and secure fruit in the tight 2022 grape market for their inaugural vintage.

 

Eugene Labunsky said, “The first time I visited Lenné Vineyard, I fell in love with it. Steve planted a spectacular vineyard that produces high-quality wines vintage after vintage. And the hospitality center will be the perfect home to welcome guests to learn about our new winery project. I am thankful for the Lutz’s foresight to build such an incredible place and thrilled to be able to care for the project in the years to come.”