Real Estate Journal — November 27 - December 10, 2015 — 11A
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M id A tlantic
M id A tlantic R eal E state J ournal Philadelphia ranked 2nd out of 29 markets for craft beer inventory Growth of craft breweries impacts real estate in Philadelphia region
HILADELPHIA, PA — Colliers Interna- tional has released a 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 United States. Craft breweries are changing the beer market in the U.S., an evolving eco- nomic model that is result- ing in broader growth and benefiting a greater number of metros, rather than the limited number of markets where the large traditional major breweries are based. Out of 29 markets surveyed, 14.9 million s/f of space is occupied by craft breweries. Chicago, IL leads the pack with 1.6 million s/f, Phila- delphia came in 2nd with 1.5 msf, and Columbia, SC ranked last with a total of 33,000 s/f. A total of 1,457 breweries were surveyed across the 29 markets. In terms of the number of breweries, Port- land, OR has the most at 196 total breweries followed by Chicago, IL (144); Seattle, WA (119); Philadelphia, PA (116); and Denver, CO (114). “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 Rose Penny , research director for Colliers International. “If all open as planned, it is estimated an additional 3.1 million s/f of craft brewery inventory will be occupied, based on typical brewery sizes, boosting the already burgeoning craft beer indus- try.” The Philadelphia area encompasses all of East- ern Pennsylvania, Southern New Jersey and Delaware. The region is home to small start-ups brewing in barns to nationally recognized brands such as Dogfish Head, Flying Fish, Yards and the vener- able Yuengling. Key takeaways from this report, for which A.J. Pa- niagua, Colliers U.S. Re- search Analyst, gathered data across 29 markets with growing craft beer industries, include: •The addition of new mi- crobreweries and brewpubs will add modest amounts of square footage to each mar- ket, but the real impact will P
be felt through expansion plans of existing microbrew- eries as they begin to transi- tion into regional brewery operations. o 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. o Most notably, Califor- nia’s Sierra Nevada Brewing Company recently opened a 300,000-square-foot facility in Mills River, NC, and La- gunitas Brewing Company
opened a new 300,000 s/f facility in Chicago. • Craft breweries are rei- magining real estate and revitalizing neighborhoods. o Craft breweries typically operate in industrial space, as it has the infrastructure in place with access to water, sewer and the power capacity necessary to run a full-scale brewery manufacturing op- eration. o Through the repurposing of space, it is not uncom- mon for a brewery to set up operations in an antiquated industrial building because these opportunities are usu-
ally cheap to acquire or lease, bring a sense of character to the brewery and have the po- tential to offer tax incentives through revitalization efforts depending on programs in lo- cal jurisdictions. • In Colliers’ survey, an estimated 40% of all estab- lishments are located within multi-tenant space with 60% in single-tenant buildings. o The same survey also re- vealed that the more mature the local industry, the more likely top craft breweries will make use of retail-industrial space. o 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 stabiliza- tion/maturity phases. Col l iers Internat ional Group Inc. is a global leader in commercial real estate ser- vices with more than 16,300 professionals operating from 502 offices in 67 countries. With an enterprising cul- ture and significant insider ownership, Colliers profes- sionals provide a full range of services to real estate oc- cupiers, owners and investors worldwide. n
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