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Report: Craft Beer Still Brews Up Plenty of Real Estate Impact

Craft beer remains a key generator of commercial real estate traffic both nationally and locally — especially in the industrial and retail realms — even with a continued nationwide slowdown in the growth of craft brew sales.

That’s among the conclusions of a new national report by brokerage firm Cushman & Wakefield, outlining the dynamic impact that small and medium-sized beer-makers are still having on demand for commercial space.

Cushman researchers in San Diego — Jolanta Campion and Jack Hughson — report that the local craft brewing industry accounts for 1.1 million square feet of space countywide. The heaviest footprints are in North County and the Miramar area of central San Diego — also known locally as “Beeramar,” the home base of Ballast Point Brewing Co. and several other companies that are much smaller.

While not the only contributors, craft brewers have helped to tighten up the local region’s industrial vacancy rate (currently 4.2 percent) and its retail vacancy rate (now 3.9 percent). Steady demand for brewers’ products — and the tasting rooms and brewpubs to showcase them — is being stoked by San Diego County’s high proportion of 35-and-under millennial consumers, who make up 27.3 percent of the region’s population (the highest percentage among major U.S. cities).

Add in the influence of the San Diego region’s still-growing “foodie” culture, with new locally-focused, chef-driven restaurants opening every few weeks, and craft beer still has strong momentum despite nationwide deceleration in its sales growth. (Craft beer is also a big local tourist draw; the trip-booking site Travelocity this year ranked San Diego at No. 8 among the nation’s top major-metro beer destinations.)

San Diego County, at the end of 2016, was the nation’s biggest county for the number of active craft breweries, at 125 based on Cushman’s methodology, which included Brewers Association standards for classification as craft. An additonal 18 were in planning locally at that time (fifth in the nation).

Nationwide, Cushman & Wakefield notes that craft brewers since 2007 have taken up more than 55.6 million square feet of space – 81.4 percent of which is industrial, with 18.6 percent of it classified as retail. But after a peak 12 million square feet was absorbed by beer-makers nationwide in both 2014 and 2015, the figure dipped to 10 million square feet in 2016 (still higher than for any year between 2007 and 2013).

Thanks to the spreading footprint of even small brewers, which continue to set up satellite tasting rooms and other neighborhood extensions of their main facilities, the Cushman report notes that the majority of Americans now live within 10 miles of a craft brewer.

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