Ohio sees 148 percent increase in new craft breweries opening since 2012, over $2.2 billion economic impact; Southwest Ohio boasts 43 percent of craft beer Ohio market share.
As craft breweries continue to open and expand throughout the state of Ohio, the craft beer industry will have a significant impact on the commercial real estate market, according to a new CBRE Report entitled Ohio Craft Beer Taking Flight. The report examines brewpubs, micro, and regional breweries and the commercial space they occupy in Cleveland, Akron, Columbus, Cincinnati and Dayton.
The industry especially took off in the Buckeye state after legislators passed House Bill 243 in 2012, which allows breweries to operate tap rooms within their space without purchasing an additional license. Ever since, breweries throughout Ohio have acted as a catalyst for economic development and rehabilitation of many urban and suburban neighborhoods. Since 2012, the number of craft breweries has jumped from 63 to 156 through June 2016, a 148 percent increase. Those 156 breweries take up 1.7 million square feet of commercial space.
The economic impact of craft beer is not limited to absorption of square footage. According to the Brewer’s Association, Ohio was raked 7th in the country with $2.2 billion worth of economic impact from craft brewing in 2014, including breweries, wholesalers and retailers. In terms of jobs, the Ohio craft brewing industry supports 2,166 jobs directly in 2014, with substantial impact to other related jobs in wholesale and retail.
The impact that the craft beer industry has had on Southwest Ohio’s(Cincinnati, Northern Kentucky and Dayton)commercial real estate market is exceptional. The region’s modern craft beer craze began when the Boston Beer Company (Samuel Adams), started production in Over-the-Rhine in 1996. Since then, the number of craft breweries in the region has grown from two to 36, including 13 craft breweries in Dayton which occupy 100,000 square feet of space. Out of the three regions in Ohio studied in the report, Southwest Ohio has the majority of the craft beer market share in terms of square footage at 43 percent.
In Cincinnati, craft brewery operations represents 658,290 square feet, with 82 percent of the space being industrial while retail represents 18 percent. Multiple brewers use historic brewing facilities repurposed to accommodate modern technologies. Rhinegeist, for example, operates in Christian Moerlein’s former bottling plant built in the 1800s and modern day Christian Moerlein operates atop the former lagering tunnels of Kauffman Brewing Co. on Moore Street.In Dayton, Warped Wing Brewing and Dayton Beer Company are operating in a former industrial building in the downtown area.
Repurposing older industrial space gives craft beer consumers a unique taproom experience, according to CBRE’s Doug Whitten, vice president.
“Many breweries are taking advantage of Cincinnati’s historic brewery infrastructure left behind during the city’s brewery boom in the late 1800’s,”Whitten said.“By repurposing this older space they not only give their consumers a unique taproom experience,but they are also giving otherwise neglected or obsolete space new life.”
The growth of the craft beer industry in Cincinnati and throughout Ohio shows no signs of slowing down anytime soon and will continue to have a significant impact on local economies, job growth and the commercial real estate market. Currently in Ohio, craft breweries are responsible for 1.4 million barrels of beer or approximately 6.3 percent of total output in the U.S. Nationally, Ohio is ranks fourth in total craft beer production by barrel, behind Pennsylvania, California and Colorado.
Because craft beer variations are limitless by nature, differentiation is starting to come from the space the craft breweries occupy, according to Kevin Schutte, managing director for CBRE’s Cincinnati office.
“As the Ohio craft brewing industry continues to gain popularity,consumers look for a unique atmosphere and experience,” Schutte said. “We expect commercial real estate will continue to play an important role in that experience.”
CBRE’s Cincinnati office provides a complete spectrum of commercial real estate services including asset services, brokerage services, corporate services, debt and equity financing, facilities management, industrial and logistics services, investment sales, office services, project management, research, and valuation and advisory services.
Here is a link to the full CBRE Report. It is well worth the read!