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As deindustrialization continues to play out across many cities in North America, the space left behind is supporting the growth of a sector catering for modern tastes: craft brewers.
“Craft brewing is such a hot sector right now,” says Kris Bjorson, Head of Retail/E-Commerce Distribution at JLL. “While they’re not appropriate for most heavy industrial sites, these small-scale brewers are perfect for many urban industrial centers that are being revived across the country.”
America’s brewing industry has snowballed in recent years, with 36 states more than doubling their craft beer production from 2011 to 2016, according to The Craft Beer Guidebook to Real Estate from JLL. As it’s grown it’s played a key role in the transformation of previously abandoned light-industrial buildings and turning barren neighborhoods into thriving communities.
According to the Brewers Association (BA), there were more than 5,300 small and independent breweries operating last year, including 826 new operations and only 97 closings. The growth added about 7,000 jobs to local economies for a total of 129,000 Americans employed by craft breweries.
Cities such as Portland (Oregon), Mesa (Arizona), Yonkers (New York) and Duquesne (Pennsylvania) have all been proactive in courting craft brewers in return for the economic and cultural benefits they bring.
“The rise of the craft brewing industry is proving to be a noteworthy catalyst in helping to revitalize communities or define a sense of place in a former industrial area that has now transformed into an emerging urban neighborhood,” says Aaron Ahlburn, Director of Industrial Research at JLL. “Part of the appeal is the economic benefits of having craft brewers in the area, from paying rents on previously unused buildings to creating local jobs. Along with other local businesses and retail, a lot of it has to do with the cultural fit in the neighbourhood, helping create a feel of community and identity.”
The brewers, in turn, get a home that fits their space, rent and transport access requirements within an urban environment, which not only enables them to produce their own style of beer but also to serve it to local craft beer fans on a nightly basis.
“Members of the craft beer community are generally proponents of sustainability, farm-to-table dining, biking to work and other types of behavior that underpin the brewers’ preference for urban-industrial real estate over traditional industrial complexes,” says Ahlburn.
To build their place in the community, many brewers choose to name their beers after local traditions and culture. Chicago’s Off Color Brewing teamed up with the Field Museum to create the pilsner “Tooth & Claw.” San Diego’s Karl Strauss Brewing produces the year-round “Tower 10 IPA,” named after lifeguard Tower #10 in Mission Beach, where the brewery founders started their business idea.
Indeed, the cultural fit of the location is the main issue that makes or breaks many craft brewery real estate deals. “Gentrifying neighborhoods are having an easier time finding new craft breweries to move into vacated industrial space or brownfield redevelopments than office parks or industrial warehouse zones,” Bjorson says.