Temecula Wine Country Hits Baby Boomer Skid
Record number of properties are up for sale in area as retirement and rising debt are creating challenges
RIVERSIDE COUNTY — B.J. Fazeli and his wife, Wendy, were floating down the Douro River in a tour boat in Portugal’s wine country on a warm summer evening in 2023. While sipping wine and gazing at terraced vineyards along the river, his wife of 45 years popped the question: “What is your exit plan for the winery?”
His 67-year-old wife asked because the 71-year-old veteran marketing executive from Orange County wasn’t getting any younger. Fazeli’s winery, one of 10 in Temecula that make up the De Portola Trail of wineries, is on the brink of change. “I’ve always said that I’d be carried from the winery to the grave,” Fazeli said. Instead, he listed Fazeli Cellars Winery for sale at just under $20 million in March.
So far, there are no takers for the destination winery that boasts Persian-influenced architecture throughout the hillside grounds, including a production facility, restaurant and tasting room that offers 20 varietals of boutique wines from cabernet sauvignon to sauvignon blanc.
“There were a lot of tire kickers,” said Fazeli who listed the winery for three months before taking it down. He’ll wait until the dust settles after the presidential election before dipping his toe back into the market.
Fazeli, like many other winery owners in Temecula Valley Wine Country, is part of a wave of owners who want to sell their properties as they approach retirement age or have become burdened with debt, operational expenses and other issues.
After half a century, there are a record number of properties up for sale in Temecula Valley Wine Country. The 93 combined vineyard and winery operations have an economic impact of $2.7 billion in the region, according to a study by the Temecula Valley Winegrowers Association and other groups in California hired to provide an assessment of the industry.
These include Falkner Winery selling for $14 million, Palumbo Family Vineyards for $6.95 million; Rancho Pacifica Ranch for $3.98 million; Thornton Winery for $17.9 million; Monte De Oro Winery for $17.5 million; and Avensole Winery for $19.5 million.
“My wife and I, Loretta, have been looking to sell for a few years,” said the 77-year-old wine veteran Ray Falkner. “It has to do with the fact that I’m at retirement age. We’ve just reached that stage of life.”
Nick Palumbo, 57, and his wife, Cindy, 55, are ready to sell their winery as well. “We’re done and tired,” said Nick Palumbo of Palumbo Family Vineyards. “I do all of the farming and winemaking, and my son said he doesn’t want to run the business.”
The volume of wineries for sale in Temecula Valley has grabbed the attention of wine aficionados, near and far.
“For sure, it is the most that I’ve seen,” said John Ovrom, president and founder of Exit Consulting Group Inc. in San Diego, who has built a clientele in California’s wine industry.
“It’s a tough industry to make money. People fought through COVID. Now business is trying to get out,” said Ovrom, whose business specializes in transitions and exit strategies for family-owned businesses and others. “COVID delayed the transactional stuff. There’s been a little bit of a backlog.”
Ben Fraleigh, a broker who has been selling wineries in Temecula for nearly 50 years, said he never has seen so many for sale. “There’s no growth. You can’t find enough people to harvest grapes,” said Fraleigh with FirstTeam Real Estate. “In the last several months, people are coming out wine tasting and not buying wine. That is a problem. The economy could swing one way or the other. That’s what’s going on.”
Baby boomers tapping out
Terri Delhammer, a broker with GRE Land and Commercial Real Estate, sees something else going on. “I think it’s generational,” said Delhammer, who is handling some of the wine listings for sale. “All of the baby boomers are hitting retirement at the same time. Running a winery is a lot of work.”
Fazeli, as well as other winery owners, also say that mom and pop wineries can’t afford to invest the millions needed to keep up with mega operations.
As an example, these insiders pointed to the valley’s hot spot, Europa Village Wineries & Resort, a destination resort that offers European-themed venues for wine tasting, dining, weddings and other events.
“It’s a tough place to compete. You have to offer something more than just good wine,” said Jim Hart, who sold his Hart Winery for $6.4 million to Paso Robles-based Halter Ranch back in 2022. “We would have had to put quite a bit of money into it to keep up with the Joneses.”
He’s now running a smaller winery, Volcan Mountain in Julian, just east of San Diego, along with his 62-year-old brother, Mike.
“Everyone thinks it’s glamorous to come into the wine industry, but it’s hard work with little reward. It’s cheaper to buy than it is to build,” said Wilson of the new owners coming into the valley to replace “the old and tired” first generation.
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