Reason No. 500 why craft beer is great: Reuse of old buildings

November 30, 2015Chris Crowell

reuse buildings craft beer — A building only a brewer could love — and make relevant again.

Sustainability is an integral narrative within the craft beer industry’s story, and many of these initiatives make for great headlines, but one of the most impactful sustainable attributes of the craft brewing industry, often overlooked, is the reuse of real estate and old buildings.

We already know the success rates of breweries, right now, is crazy high as far as local businesses go. A community that sees a new brewery open up, therefore, in addition to great beer, will gain a measure of stability in that area — quality jobs, consistent business and a community gathering spot. Breweries can become a building block within a city district or depressed downtown that props up the surrounding businesses and spurs development — and it does this, many times, in buildings that make little sense for other non-beer local businesses, locations that are often reminders of what is going or has gone wrong in a community.

Craft breweries typically operate an industrial space because it has the infrastructure in place with access to water, sewer and the power capacity necessary to run a full-scale brewery manufacturing operation. Through the repurposing of space, it is not uncommon for a brewery to set up operations in an antiquated industrial building because these opportunities are usually cheap to acquire or lease, bring a sense of character to the brewery and have the potential to offer tax incentives through revitalization efforts depending on programs in local jurisdictions.

Sustainability headlines

Colliers International looked at this trend in-depth in its recent national market study, “Craft Beer Pours into Commercial Real Estate,” exploring craft beer’s booming market share and the industry’s impact on cities across the country. Research Analyst A.J. Paniagua gathered data across 29 markets with growing craft beer industries.

In Colliers’ survey, an estimated 40 percent of all establishments are located within multi-tenant space with 60 percent in single-tenant buildings. The same survey also revealed that the more mature the local industry, the more likely top craft breweries will make use of retail-industrial space. Of markets in the growth phase, an average of 2.3 of the top 3 craft breweries reported use of retail-industrial space, compared to 2.5 those in the mature growth and stabilization/maturity phases.

The report states that the addition of new microbreweries and brewpubs will add modest amounts of square footage to each market, but the real impact will be felt through expansion plans of existing microbreweries as they begin to transition into regional brewery operations. A number of breweries have recently expanded their operations by opening large facilities across state lines, which will enable them to get their product quickly to an increased number of markets across the country. Most notably, California’s Sierra Nevada Brewing Company recently opened a 300,000-square-foot facility in Mills River, N.C., and Lagunitas Brewing Co. opened a new 300,000-square-foot facility in Chicago.

Chicago ranked first in Colliers’ Craft Beer in Commercial Real Estate ranking, with a 65.9% growth rate between 2013 and 2014, including 144 total breweries existing and 39 in planning.

“If recent trends play out, the future is bright for craft beer and the craft brewery market. In the markets we surveyed, there are more than 400 breweries in the planning stages,” said Michael L. Senner, SIOR, senior vice president with Colliers International.”

If all open as planned, Colliers estimates an additional 3.1 million sq. ft. of craft brewery inventory will be occupied, based on typical brewery sizes, boosting the already burgeoning craft beer industry.

In Chicago, craft breweries are frequently delivered in a repurposed location that other commercial real estate users surely passed on. Argus Brewery makes its home in a building built in the early 1900s that was a former stable for the Schlitz Brewing horse teams and carriages. Additionally, a number of breweries have recently expanded their operations by opening large facilities, which will enable them to get their product quickly to an increased number of markets across the country.

You can download the full report from Colliers here. You may also enjoy some facility planning advice from the CBB archives.