Sycamore Brewing's outdoor space. John D. Simmons jsimmons@charlotteobserver.com
Sycamore Brewing's outdoor space. John D. Simmons jsimmons@charlotteobserver.com

Development

What’s new in commercial and residential real estate in the Charlotte region.

Development

Where’s the growth coming next? Just follow the beer

March 24, 2017 06:02 AM

UPDATED March 24, 2017 11:30 AM

If you wanted to invent a foolproof system for tracking which neighborhoods are soon-to-be hotbeds for revitalization, gentrification and the M-word (Millennials), you could do worse than following the breweries.

In neighborhoods from South End to NoDa, Plaza Midwood to Villa Heights, breweries have moved in, repurposing old buildings and serving as a marker for hipness. That’s also the case farther afield from Charlotte, where breweries have popped up in towns like Belmont and Concord.

A brewery is often the first “pioneer” business pushing into a changing area, and a sought-after tenant for landlords seeking to renovate and reuse old buildings. Look at Blue Blaze Brewing, the first brewery in Charlotte’s “West End” – and the first tenant at Argos Advisors’ planned revitalization of the disused Savona Mill.

But what makes simple fresh beer such a potent symbol of change, hipsters and the powerful, often invisible forces that drive a city’s growth?

Never miss a local story.

Sign up today for a free 30 day free trial of unlimited digital access.

“A beer garden isn’t just defined by people outside drinking beer,” said Ryan Self, sales director at Olde Mecklenburg Brewery. “It’s considered a community hub.”

In 2009, when OMB opened just south of the official South End, it was Charlotte’s only locally owned brewery (Hard to believe now, right?). Their first building: A former adhesives factory.

“It was pretty beat up, but the bones were good,” said Self, speaking at a panel Thursday at the Urban Land Institute’s annual Carolinas Meeting. “It was empty warehouse buildings as far as the eye could see...Our idea and our hope was we could revitalize an area, that if we could start, more would follow.”

Rob Speir of Colliers International, an industrial real estate broker, handled the leasing. He was skeptical at first about putting a brewery in the space when OMB’s owners approached him.

“I just started shaking my head,” said Speir. “He kept saying ‘We’ll take it as-is.’”

 
Breweries in South End/Map by Ely Portillo

Speir’s not skeptical anymore: He has since worked with breweries such as Triple C, Bold Missy (coming soon in NoDa) and GoodRoad CiderWorks to find space.

Since its opening, OMB has expanded to a bigger building nearby and a slew of other businesses – another brewery, cider and hard-liquor distilleries, a new bowling, entertainment and restaurant venue – have all opened nearby.

“You can go to any town and see that same pattern...breweries completely turning a neighborhood around by picking a cheap site to start their own business,” said Sebastian Wolfrum, of Rocky Mount Mills’ Brewmill & Bull Durham Beer Co.

Speir said that since OMB opened, the amount of square footage devoted to breweries in the Charlotte region has gone from about 15,000 square feet to about 500,000 square feet. Statewide, the number of breweries is likely to hit 200 by the end of the year, Wolfrum said, up from two dozen a decade ago.

All that growth could make it harder for new breweries to open. The prime spots they seek – older warehouses near public transit like the Blue Line light rail – aren’t in infinite supply.

“From the real estate side, it’s getting tight,” said Speir. The industrial vacancy rate in Charlotte is under 5 percent, with even less vacancy among prime buildings that could be repurposed as breweries.

That has pushed rents higher, in part because landlords see breweries as such prime tenants.

“Landlords love to see them come,” said Spier. His advice for breweries seeking a spot in hot areas like NoDa and South End: “Your entry barrier is going to be pretty tough for where you want to be.”

Around OMB, property values and rents have shot up.

“We see a lot of landowners in that area have gone from having empty warehouse buildings in a rough part of town to having red-hot properties,” said Self.

Breweries also face another battle, this one in the regulatory sphere. OMB is one of several breweries leading an effort to raise the amount of beer they can produce without being forced to sign on with one of the state’s big beer distributors. State law caps breweries at 25,000 barrels – which OMB is approaching, having hit 21,000 barrels of production last year.

Self said OMB would shrink its footprint or curtail production before signing on with a distributor.

“That’s not an option for us,” he said.

Ely Portillo: 704-358-5041, @ESPortillo