If you think selling a house in this market is tough, try selling a $22 million winery.
That's what Larry Kirkland has been trying to do for more than a year to no avail.
The Napa rancher turned winery owner has been looking for a buyer for his Western-themed Kirkland Ranch Winery in southern Napa County ever since it emerged from bankruptcy in the summer of 2007.
That was right about the time the economy began to falter. His hopes for a quick sale faded further as the mortgage meltdown turned into a full-blown credit crisis, making it tougher for buyers to borrow money.
Now he's resorting to that last-ditch sales tactic becoming increasingly common in the battered housing market -- the real estate auction.
Running out of time to meet his goal of selling the winery by the end of the year, Kirkland and his advisers opted for a sealed-bid auction to drum up some interest in the property.
Buyers have until Wednesday to submit bids for one of two options.
Bidding starts at $22 million for the 69-acre winery property, including 45 acres of vineyards. Buyers also have the option to purchase an additional 186 acres of land, 110 planted in vineyards. The opening bid for the combined properties is $26 million.
The $22 million reserve price is less than half what the winery was valued at when it entered bankruptcy in 2006. A lot has changed since then, said Robert Nicholson with International Wine Associates, a Healdsburg firm that has been marketing the winery to prospective buyers.
"The volatility of the financial markets has made it really difficult for buyers to determine what the real value of things are," Nicholson said. "They are looking very hard at valuations, and they are looking particularly hard at cash flows."
Kirkland Ranch isn't the only Wine Country sale to run aground in the current market. Last month, a deal to sell the historic Chateau Montelena winery in Calistoga to wealthy French vintner Michel Reybier fell apart. The deal collapsed in part because the value of the Euro weakened significantly and the global credit crunch stemmed the flow of investment funding.