By James Phillpott, Director, Atlanta Industrial Brokerage
For the industrial owner whose facility is struggling to find its ideal tenant match, the search can be frustrating at times. When your space is well under 50,000 square feet, your ceiling heights don’t hit 32 feet, and your location may be off the beaten path, it can be a challenge to figure out how to market your property to potential tenants. Perhaps someone has mentioned your property might be “functionally obsolete.”
One option for many non-traditional industrial buildings could be a production craft brewery. It’s a rapidly growing industry in the state, and that growth shows no signs of slowing. As recently as 2008, there were only three production craft breweries in Georgia. Today, there are 30, with most being either in the Atlanta area or Athens, and 13 more are between the planning and build-out stages. By the end of 2016, it’s likely at least six more will open. The breweries on the way are located all across the state, from Atlanta to Augusta, Greensboro and even Valdosta, showing the demand for the industry is spreading beyond the big city.
Sweetwater Brewing is the state’s best example of the impact a craft brewery can have, growing to become Georgia’s largest brewery on Ottley Drive in South Buckhead, and now sparking development of Third & Urban’s Armour Yards, which is one of the most anticipated major redevelopment projects in the Atlanta area.
Craft breweries can be a good option for some industrial owners because the needs of a brewery can be quite unique. Some of their main considerations tend to be having adequate floor space for their brewing equipment, adequate utilities capacity for their needs, and parking space for event space or tasting-room customers. In addition, ceiling heights of 20 feet work for most breweries, but they can even adjust to smaller than that, depending upon a number of factors.
One example there is Orpheus Brewing, whose owner Jason Pellett worked with 17-foot ceiling clearances by having his tanks custom built so he could be sure he’d have the space he needed to work. Pellett, whose brewery opened in 2014 on Dutch Valley Place on the northeast end of Piedmont Park, was able to provide a win-win situation for his landlord when he signed a lease, bringing a small but promising business into a space that had been too limiting for many tenants.
Some of the challenges faced by the owners of the Dutch Valley property are its lack of daytime parking – only seven spots available before 6 p.m. – a location that can’t be seen from any main street, tight driving space to reach the loading area, and low ceiling heights. But Pellett saw a dream spot for his brewery, after looking for the perfect location for more than a year and having an offer on another space fall through. What minor challenges it brought, he found, were far outweighed by the advantages.
“The biggest things we were looking for were about 16,500 square feet of space, evening parking, high enough ceilings, and a location where people want to go,” Pellett said. “So this was a great fit for us. It may not be the perfect spot for a lot of businesses, but it really checked off all our boxes.”
While many businesses would balk at the limited day-time parking, Pellett was even willing to sign a lease that said he couldn’t open prior to 6 p.m. After that, he’s able to make use of 120 spots around the facility, as the other businesses close for the day. And, while some businesses would worry about the lack of street frontage, Pellett said that wasn’t a consideration for him.
“We don’t even have a sign,” he said. “We’re only open 4 hours a day on days when we open. I don’t want people driving by, seeing our place and pulling in. If they did, we probably wouldn’t be open anyway. People who come to Orpheus make it a point to come here.”
Breweries like Orpheus can be a good option to consider for these sorts of spaces, but here are a few other things an owner should consider when doing so:
- Can they do what they need within the confines of the building? If a brewery has to build any additional structures as they grow, like a silo, that has to be taken into consideration early.
- Do they have enough capital to make necessary improvements and to grow the business? It’s important to remember that almost any craft brewery you’d talk to is a small start-up. And many craft brewery owners do not have prior experience running a business. If they have adequate seed money put together for the build-out, that’s a big advantage.
- Will any zoning or regulatory issues prevent a brewery from operating on the property or will there need to be a special exception granted by the municipal leadership? Make sure any zoning issues are taken care of well ahead of time to avoid delays and other problems.
- Do they need any special fire protection? The risk may not be huge, but the milling of wheat and barley generates flammable dust, and breweries regularly heat large amounts of fuel to make their beer. So this is worth considering.