More South Florida Breweries on Tap Despite Uphill Battle for Real Estate - SVN Commercial Advisory Group Commercial Real Estate Services Sarasota & Manatee Counties

Breweries are experiencing explosive growth as consumers develop a taste for homegrown offerings, but opening a brewery isn’t easy.

Jose Mallea set out in 2012 to open a brewery in Miami’s Little Havana neighborhood, but the city had yet to craft its zoning regulations for beer makers.

Instead, he opened Biscayne Bay Brewing Co. in Doral, which allows manufacturing with dual industrial-retail uses — an ideal recipe for breweries.

“We spoke with Miami and it said, ‘It’s going to be difficult for you to get the manufacturing and commercial retail space,’ ” Mallea said. ”It’s a very unique process to craft beer. A city that does manufacturing will get it because they deal with someone who produces medical goods or other food products, so they understand some of that.”

Mallea’s hunt for a home illustrates one of the many hurdles faced by the burgeoning beer-brewing industry. Beyond location, they struggle to find the right real estate at affordable prices.

Breweries need at least 18-foot ceilings to make room for giant tanks and sturdy floors to handle the weight. They can’t afford standard retail rents since they normally serve only beer and possibly bite-sized snacks.

“They are relatively difficult deals to do only because a brewery is not able to pay the kind of rents for the most part that some of these restaurants with full liquor are able to pay,” said Rafael Romero, senior vice president at JLL in Miami.

Jonathan Carter, executive managing director of retail services at

Colliers International in Miami, said, “The biggest issue breweries face is that the industrial production facility takes up space for which they want to pay a lower industrial rent as opposed to a retail rent.”

This means breweries often settle for something others don’t want. Just ask 26° Brewing Co.

“Oh, man. It took us nearly a year to find our space,” said Greg Lieberman, co-founder and co-owner. “It took us probably longer than it took us to build the space.”

In 2015, 26° Brewing found a shuttered Bealls clothing and home goods store near the Intracoastal Waterway in Pompano Beach. The 21,000-square-foot property at 2600 E. Atlantic Blvd. previously was a Winn-Dixie supermarket, which positioned the space well for a brewery since it already had high ceilings and an open floor plan.

As a bonus, the brewery secured below-market rents.

“Part of it was the fact that the building was old. We had to put a lot of money into renovating it,” Lieberman said. “I think they were having a hard time renting the unit for whatever reason. It’s a large space. They didn’t want to subdivide it I don’t think. We were in a position to negotiate.”

Lieberman, who declined to disclose his rent, said he and his project partners did plumbing, electrical and air-conditioning work.

Hefty remodels are a common theme among new breweries. Biscayne Bay Brewing also had plenty to do at its 15,000-square-foot space at 8000 NW 25th St., including electrical wiring, drainage, slab reinforcement and the installation of a boiler and chiller on the roof. The brewery opened in 2014, two years after Mallea and his partners started work.

“That stuff is somewhat complicated from a technical standpoint,” he said.

EXPLOSIVE GROWTH

On a recent Monday morning, brewers at Biscayne Bay Brewing were starting to make 500 gallons of Biscayne Amber Ale. That’s 15 barrels of the less hoppy, more sessionable, malty and dark-fruit flavored beer, said brewer Chris Gil. Brewing “is a complicated way to make a tea.” It’s six hours of work until the beer is put in a fermenter tank for five to seven days.

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Biscayne Bay Brewing, which serves beer in its tap room and distributes to restaurants and supermarkets, is steadily growing. It expects to brew 3,000 barrels for a second year in a row, more than double its 1,200 barrels in 2017, Gil said.

This reflects a growth pattern seen across the country. Craft beer consumption grew 4% by volume in 2018, according to the Brewers Association trade group.

Florida lags behind the national boom with 285 breweries last year, up 23% from 66 in 2013. The U.S. had 7,450 breweries, up 40% from 3,032 in 2013.

The growth of craft breweries has been fueled by a taste for off-the-beaten path experiences and homegrown flavors.

“And it doesn’t get much more homegrown than the concept that’s actually brewing beer,” said JLL’s Romero. Consumers would “rather be part of something that’s local and fresh and cool and feels like home. That’s the big thing. People are creating these concepts that feel like home, and people gravitate naturally.”

Beyond brewing their beer on site, breweries also ”feel like home” with offerings that have a local flavor.

At Biscayne Bay Brewing, La Colada beer is an homage to the Cuban coffee served in four-ounce cups to share. Ingredients include cold-brewed Cuban coffee.

HISTORY REPEATS

The nod to craft breweries is history repeating itself.

Breweries were big before Prohibition. There were 4,130 breweries in 1873 with the number hovering in the 2,000s in the following decades before Prohibition wiped out legal sales, according to the Brewers Association.

“Breweries were the local drinking establishment,” said Mallea, who is on the association’s board of directors. “You didn’t have cold storage. You didn’t have the logistics you have today. When breweries made beer, they have to sell it in their local market and usually right away.”

Consolidation quickly followed the repeal of Prohibition.

“It went from over 1,000 to hundreds to dozens. It became this very sort of monopolized industry where it was large players in these markets,” Mallea said. “Eventually that might have gotten down to single digits, the biggest of the biggest, who were running beer manufacturing in this country.”

Resurgence started in the late 1990s with explosive growth in 2011 when the openings started increasing by 1,000 annually.

Cities responded in recent years with brewery regulations, and Biscayne Bay Brewing finally got permission to open the first downtown Miami brewery on the third floor of the historic Old U.S. Post Office and Courthouse at 100 NE First Ave.

South Florida cities took a long time to embrace breweries. Mallea said Biscayne Bay Brewing’s Miami permitting is still taking some time.

“That’s the fascinating thing. A year-plus of permitting and all that stuff, and months of work to get open,” Mallea said.

This article was originally written & published By Lidia Dinkova | September 24, 2019 at 06:00 AM on GlobeSt.com

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