Vintners looking to store large amounts of bottled wine or make it in Sonoma Valley likely give Helge Bruckner a call.
The real estate development companies he co-founded in the past four decades have turned a rural road between Vineburg and Schellville southeast of the city into an industrial wine corridor that has built and manages about 1.6 million square feet along Eighth Street East. And a successful business model crafted over that time to build a few hundred thousand square feet of light-industrial space in coming years.
Bruckner turns 78 this year. "I don't feel like that," he said from offices for Vintage Enterprises and related companies at 752 Broadway in Sonoma. "I feel a lot younger."
The model is fairly straightforward land development: find land, line up investors, get government approvals, build the space, fill it with tenants then keep the owners, tenants and financiers happy. Two key lenders have been Exchange Bank and Bank of America.
"If all my buildings are full, there is demand for it," Bruckner said, noting that the 1.6 million square feet are fully occupied.
Attracting the income-generating occupancy is where Bruckner's operation shines, said Bill Saks, who has led development of Carneros Business Park, a 53-acre upscale industrial property on Eighth Street East that's home to the likes of cheesemaker Laure Chenel’s Chevre and Italian cork supplier Ganau America. Bruckner built a 140,000-square-foot warehouse on nearly 8 acres of the business park in 2015 and late last year purchased as many acres on four lots and is in escrow to buy another this year, with plans for 200,000-plus square feet of buildings.
"His formula is to arrange occupancy before a shovel hits the ground," Saks said. "Preleasing is difficult, but he is so thorough in his approach that tenants have great confidence they will get what they're seeking. Most tenants need to know when they can move in. They want to see that the quality they think they see on drawings is what they can be anticipating they will get."
A big tenant draw for the Vintage portfolio came in 1998 with the construction of warehouse wineries for Viansa and MacRostie wineries at 21481 Eighth St. E. It was the first Vintage facility with a wastewater pretreatment system to levels of biological organic demand (BOD) and total suspended solids that are acceptable to go into the Sonoma Valley County Sanitation District sewer. Winery wastewater, particularly around harvest, contains grape juice and materials that can cause problems for the health of bacteria in municipal sewage treatment systems.
Some vintners that encountered increasing challenges getting a green light to build or expand production facilities in rural areas of Sonoma and Napa counties turned to business parks, and wastewater pretreatment systems operated by the landlord have become a selling point.
Vintage Enterprises has installed one pretreatment systems in the 580,000-square-foot, four-building Wine Country Business Park property, serving about a dozen wineries. A second was installed across the street at Carneros Warehousing, which has nearly 300,000 square feet in two buildings with MacRostie Winery and was built in 1998. A third facility is in the Sequoia Warehousing building in Carneros Business Park.
Another $800,000 was spent recently upgrading those systems.
A pretreatment unit is planned for the new Carneros Business Park buildings, with an added twist of recycling wastewater to reduce water use for irrigation.
"Otherwise, the county would not allow wineries to be there," Bruckner said.
One of the biggest tenants in the portfolio is Treasury Wine Estates, which occupies nearly 700,000 square feet in multiple buildings.
While many large industrial buildings around the North Coast are built with concrete walls poured then tilted into place, Bruckner has been adamant to use Butler-style pre-engineered steel buildings with heavy insulation. Some lenders called for use of concrete-tiltup construction, but Bruckner said these metal buildings don't gain as much heat during the day and, together with automated night-air cooling and north-facing truck doors, don't need supplemental air-conditioning systems. He noted that only two tenants in his portfolio have installed such traditional cooling.
FROM PHILOSOPHY TO CONSTRUCTION
Bruckner's path to North Bay commercial real estate development came by way of war-torn Europe. He was born in Romania in June 1940, as Germany was expanding across the continent. After the then Soviet Union swept into the country from the east in 1944 in the last months of World War II, his German-ancestry family worked red tape over the next three years to get out from behind the Iron Curtain, eventually settling in his mother's hometown.
His parents brought him to the U.S. from Germany in 1955 at nearly age 15. After high school in Marin County, Bruckner attended Sonoma State University then transferred to University of Heidelberg in Germany and again to University of Washington. Rather than studying a construction-related field, his coursework was mostly in the humanities, political science and philosophy.
"But in the summertime, already starting in high school, I always worked in construction, because that was a very good money-maker," Bruckner said. "You didn't have to know anything, and you got a pretty good wage, even as a laborer. It was good for your body anyway. I learned a lot."
When his first child came in 1970 while he was living in Seattle, "then it was time to get serious," he said. With a new family to support, he turned his summer money-maker into a career-builder.
The following year, he and Whitney Gilman started Vintage Builders in Sonoma. They met in high school when Bruckner came to the States then traveled together regularly thereafter. Vintage built speculative and custom homes, installed pools and completed various home-related projects, doing a lot of the work themselves — foundations, carpentry, electrical, plumbing. The company also owned Broadway Lumber and Vintage Nursery.
In the 1980s, that homebuilding business started transforming into Vintage Enterprises, a commercial real estate development company. Bruckner and Gilman in 1982 bought their first commercial land on Eighth Street East, big enough for a 39,000-square-foot warehouse.
"We thought it was way too big, so let's just build half of it, because we don't know if it will be leased," Bruckner said. "While we were pouring the foundation, people came by and wanted to lease it, so we kept building."
Then came two more warehouses in land purchases and projects the two financed themselves.
"We couldn't keep doing that without banking and investors," Bruckner said.
THE VINTAGE WAY DEVELOPS
With the fourth warehouse came a development model that continues to this day. Richard and Bernard McCambridge operated McCambridge Bros. Trucking and wanted to build a logistics facility and wine warehouse on Eighth Street East, but they needed help to make it happen. Gilman, Bruckner and the brothers formed Sonoma Warehouse, a partnership in which the developers were half-owners.
For their end of the arrangement, Vintage Enterprises Inc. would design the structures, secure entitlements and permits, get financing, lease the space then manage the facilities. More than a dozen properties along Eighth Street East have been built and managed under that model, now with about three dozen investors in the property ventures and Bruckner the common denominator.
"All of these are in it for the long-term investment," he said. "They want to pass it on to their children or a spouse.
Gilman died in 2008 at age 67 after a long bout with cancer. As member-owners of the various properties asked about succession plans, Bruckner has been positioning the real estate operations for the future.
Patrick Alcayaga came on as a facilities manager more than a decade ago. A year and a half ago, the property-management functions were rolled into a new sister company Sonoma Canopy Management, LLC, with Susan Norton as business manager. Another new entity Norton oversees, Premier Business Services, handles the leasing.
Jeff Quackenbush (firstname.lastname@example.org, 707-521-4256) covers the wine business and commercial construction and real estate.