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What beer can
do for your town
United States | 2017
Grand Rapids: A case study
JLL Research
Michigan’s beer industry is big.
And we mean really big. This $10.5
billion behemoth of an industry
makes Michigan a top five pint-
producer in the U.S., without any
major in-state industrial producers.
Contributing 34,390 jobs and $942.0
million (1) in wages to its economy,
the Michigan beer industry is lager
than the economy of the Samoan
Islands. Pour-over, Grand Rapids
has 7.2 microbreweries per 100,000
inhabitants (2), making it Beer City,
USA. That’s a lot of brew…
1 www.mlive.com/business/index.ssf/2017/05/michigan_105b_beer_industry.html
2 www.forbes.com/sites/niallmccarthy/2016/11/01/which-u-s-cities-have-the-most-microbreweries-per-capita-infographic/#6a128d65e19b
(Photos pages 3 and 4 courtesy of Barfly Ventures)
10.5billion dollar industry
in Michigan
Michigan is a
top5pint producer in the USA
The industry contributes
34,390jobs in Michigan
Grand Rapids
What beer can do for your town
What beer can do for your town | United States | 201732 What beer can do for your town | United States | 2017
7.2microbreweries
per 100,000 inhabitants
What beer can do for your town | United States | 201754 What beer can do for your town | United States | 2017
Grand Rapids microbreweries have
impacted the community far beyond
these handcrafted, foam-haloed
ales that we just cracked open at the
office. By cultivating a hip bar scene,
young adults are crawl-ing to the
Midwestern beer mecca. 17.2% of the
city’s population is between the ages
of 25 and 34, well above the national
average of 13.3%. (1) But that’s not
all, GR’s breweries are more than just
watering holes for these Millennials.
They offer them high-quality jobs. The
Great American manufacturing jobs
that don’t require college degrees to
brew. What’s more is that their small-
batch craft is hard to offshore or
automate, making it a reliable source
for economic development. Investors
also see beer manufacturing as a
(h)opportunity to make some dough.
Breweries require at least $750,000
of invested capital in machinery and
industrial space to operate. In GR, we
see (and taste) new, local drafts every
month, signaling that funding is still
available for these frothy ventures. And
finally, talk about tourism… beer-
festivals, beer-museums, beer-buses,
beer-making-classes and biergartens
are just a few fan favorites directly
bringing in 42,000+ visitors and their
$7.05 million to Grand Rapids annually.
(2)
(while we’re on the clock too)
So why do we
care here at JLL?
42,000+
visitors who bring
$7.05
million annually
44
1 U.S. Census Bureau
2 http://www.mlive.com/beer/2015/10/craft_beer_
tourism_boasts_12_m.html
What beer can do for your town | United States | 201776 What beer can do for your town | United States | 2017
Case Studies
Founders Brewery: A history lesson
Way back in 1838 John Pannell founded the first brewery
in ye olde Grand Rapids. Considered a healthy alternative
to water, his German beer became a big hit in West
Michigan and by 1875 Grand Rapids had reached an
annual output of 16,000 barrels. Over the next forty-some
years, GR became a significant Midwest beer exporter,
producing at yeast 250,000 barrels annually by 1920. After
Prohibition swept the nation and corporations gobbled up
surviving breweries, the final Grand Rapids brewery closed
in 1951.
Then in 1997, Mike Stevens and Dave Engbers ended the
46-year beer drought by opening Founders Brewing Co.
Through introducing locally produced, artisanal beers
they inspired a “brewaissance” in the city. As consumers’
beer IQs rose through tasting this new breed of brew,
demand grew and more pubs opened to supply the craft
movement. By 2012, homegrown brewpubs, including
Mitten Brewing, Grand Rapids Brewing Company and
HopCat, had earned GR the coveted title “Beer City, USA”
from USA Today. Since then, the number of craft breweries
in the area has grown to 38 with hundreds of local drafts
on tap today. (1,2)
What beer can do for your town | United States | 20176
1 www.mlive.com/news/grand-rapids/index.ssf/2012/10/grand_rapids_beer_history.html
Photo courtesy of Founders Brewing Co.
2 https://revuewm.com/food-drink/microbrews/item/3282-west-michigan-brewers-carve-out-
space-in-22-3b-craft-beer-industry 38 in W Mi and 200+ in MI
6
What beer can do for your town | United States | 201798 What beer can do for your town | United States | 2017
There are dozens of reasons why
Brewery Vivant is special. Some say it’s
the beer, others the food, and us? We
think it’s the atmosphere. Housed in
a refurbished, historic funeral home,
Vivant is ironically a gathering place
for GR’s locale (alive, that is). Co-owner
Jerry Spaulding’s vision for the brewery
is a place “where people could sit down
for a unique beer and good food with
friends and strangers alike” (1). The
chapel’s interior promotes interaction
and adds differentiating vibes to
customers’ nights. Another reason why
we’ve seen these projects bubble up in
GR is that brewers often see lower price
tags for distressed properties.
Brewery Vivant’s
vibrant culture
CaseStudies 9
But breweries need more than just
mouthwatering beer and trendy
atmospheres to woo these millennials.
As Michigan’s beer market matures,
we’re beginning to see it resemble a
restaurant market. One reporter from
the Grand Rapids Business Journal
said, “when one brewery closes,
another opens in its place.” Keep
an eye out for bars and distributors
attempting to differentiate themselves
from the (six) pack.
Atwater Beer, a Detroit-based brewery,
is notorious for their taproom
innovations. Having entered GR in
2016, Atwater has already made a
name for itself through creating and
hosting unique events. The entre-
brew-neur has perfected Bike & Brew
tours and in-house music nights to
build experiences for their customers.
Atwater has also introduced variety
into their menus. They offer local,
seasonal food and brews such as their
Detroit Hard Cider, which pairs ever so
well with their farm-to-fork pheasant
and waffles. They also have ventured
into the realm of craft spirits and wine
through founding the Atwater Detroit
Distillery and Atwater Vineyards.
Atwater, the
great differentiator
8
1 www.mlive.com/business/west-michigan/index.ssf/2010/12/
brewery_vivant_opens_doors_on.html
Photos courtesy of Brewery Vivant and Atwater Brewery
What beer can do for your town | United States | 20179
What beer can do for your town | United States | 20171110 What beer can do for your town | United States | 2017
GrandRapids
We have noticed a few themes fermenting
in the market for beer space. Responding to a
tight industrial property market, braumeisters
are getting creative through adaptive-reuse
projects. By re-purposing dry cleaners, auto
garages, and even a fire station, brewers can
nurse their beer operations in underutilized
spaces, which offer cheaper rents and low
build-out costs.
Furthermore, brewery occupancy is higher
near the outskirts of town where they can
capture lower rents, $6.63 p.s.f. below the
median retail. Also, for manufacturers and
distributors, distance from the city-center is
advantageous because they require extensive
space of about 10,000 s.f. to operate. In
contrast, gastropubs and bars have a high
presence in central Grand Rapids, and pay an
average of $9.87 p.s.f.
Real estate trends
Average occupied s.f. of mapped breweries
12,757s.f.
*Retail data via CoStar, industrial data via JLL
Number of craft breweries in MI
West Michigan fundamentals Forecast
Total retail vacancy 4.4% ▼
Total industrial vacancy 4.6% ▼
Average retail rent (NNN) $9.81 p.s.f. ▼
Average industrial rent (NNN) $3.24 p.s.f. ▲
10
105
122
131
159
222
100
120
140
160
180
200
220
2012 2013 2014 2015 2016
For more information, contact:
Harrison West
Research Analyst
+1 248 581 3298
Harrison.West@am.jll.com
Robert Goldstein
Research Intern
+1 248 581 3367
Robert.Goldstein@am.jll.com
Andrew Batson
Research Director
+1 216 937 4374
Andrew.Batson@am.jll.com
About JLL Research
JLL’s research team delivers intelligence, analysis and insight through market-leading reports and services that illuminate today’s
commercial real estate dynamics and identify tomorrow’s challenges and opportunities. Our more than 400 global research
professionals track and analyze economic and property trends and forecast future conditions in over 60 countries, producing
unrivalled local and global perspectives. Our research and expertise, fueled by real-time information and innovative thinking around
the world, creates a competitive advantage for our clients and drives successful strategies and optimal real estate decisions.
About JLL
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. A Fortune 500
company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2016, JLL had revenue of $6.8
billion and fee revenue of $5.8 billion and, on behalf of clients, managed 4.4 billion square feet, or 409 million square meters, and
completed sales acquisitions and finance transactions of approximately $145 billion. At the end of the third quarter of 2017, JLL had
nearly 300 corporate offices, operations in over 80 countries and a global workforce of over 80,000. As of September 30, 2017, LaSalle
Investment Management had $59.0 billion of real estate under asset management. JLL is the brand name, and a registered trademark,
of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.
© 2017 Jones Lang LaSalle IP, Inc.
All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Jeff Karger
Senior Vice President
+1 616 649 3532
Jeff.Karger@am.jll.com
Bob Horn
Senior Vice President
+1 616 649 3533
Bob.Horn@am.jll.com
Andrew Greiner
Associate
+1 616 649 3535
Andrew.Greiner@am.jll.com

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Grand Rapids Beer Report

  • 1. What beer can do for your town United States | 2017 Grand Rapids: A case study JLL Research
  • 2. Michigan’s beer industry is big. And we mean really big. This $10.5 billion behemoth of an industry makes Michigan a top five pint- producer in the U.S., without any major in-state industrial producers. Contributing 34,390 jobs and $942.0 million (1) in wages to its economy, the Michigan beer industry is lager than the economy of the Samoan Islands. Pour-over, Grand Rapids has 7.2 microbreweries per 100,000 inhabitants (2), making it Beer City, USA. That’s a lot of brew… 1 www.mlive.com/business/index.ssf/2017/05/michigan_105b_beer_industry.html 2 www.forbes.com/sites/niallmccarthy/2016/11/01/which-u-s-cities-have-the-most-microbreweries-per-capita-infographic/#6a128d65e19b (Photos pages 3 and 4 courtesy of Barfly Ventures) 10.5billion dollar industry in Michigan Michigan is a top5pint producer in the USA The industry contributes 34,390jobs in Michigan Grand Rapids What beer can do for your town What beer can do for your town | United States | 201732 What beer can do for your town | United States | 2017 7.2microbreweries per 100,000 inhabitants
  • 3. What beer can do for your town | United States | 201754 What beer can do for your town | United States | 2017 Grand Rapids microbreweries have impacted the community far beyond these handcrafted, foam-haloed ales that we just cracked open at the office. By cultivating a hip bar scene, young adults are crawl-ing to the Midwestern beer mecca. 17.2% of the city’s population is between the ages of 25 and 34, well above the national average of 13.3%. (1) But that’s not all, GR’s breweries are more than just watering holes for these Millennials. They offer them high-quality jobs. The Great American manufacturing jobs that don’t require college degrees to brew. What’s more is that their small- batch craft is hard to offshore or automate, making it a reliable source for economic development. Investors also see beer manufacturing as a (h)opportunity to make some dough. Breweries require at least $750,000 of invested capital in machinery and industrial space to operate. In GR, we see (and taste) new, local drafts every month, signaling that funding is still available for these frothy ventures. And finally, talk about tourism… beer- festivals, beer-museums, beer-buses, beer-making-classes and biergartens are just a few fan favorites directly bringing in 42,000+ visitors and their $7.05 million to Grand Rapids annually. (2) (while we’re on the clock too) So why do we care here at JLL? 42,000+ visitors who bring $7.05 million annually 44 1 U.S. Census Bureau 2 http://www.mlive.com/beer/2015/10/craft_beer_ tourism_boasts_12_m.html
  • 4. What beer can do for your town | United States | 201776 What beer can do for your town | United States | 2017 Case Studies Founders Brewery: A history lesson Way back in 1838 John Pannell founded the first brewery in ye olde Grand Rapids. Considered a healthy alternative to water, his German beer became a big hit in West Michigan and by 1875 Grand Rapids had reached an annual output of 16,000 barrels. Over the next forty-some years, GR became a significant Midwest beer exporter, producing at yeast 250,000 barrels annually by 1920. After Prohibition swept the nation and corporations gobbled up surviving breweries, the final Grand Rapids brewery closed in 1951. Then in 1997, Mike Stevens and Dave Engbers ended the 46-year beer drought by opening Founders Brewing Co. Through introducing locally produced, artisanal beers they inspired a “brewaissance” in the city. As consumers’ beer IQs rose through tasting this new breed of brew, demand grew and more pubs opened to supply the craft movement. By 2012, homegrown brewpubs, including Mitten Brewing, Grand Rapids Brewing Company and HopCat, had earned GR the coveted title “Beer City, USA” from USA Today. Since then, the number of craft breweries in the area has grown to 38 with hundreds of local drafts on tap today. (1,2) What beer can do for your town | United States | 20176 1 www.mlive.com/news/grand-rapids/index.ssf/2012/10/grand_rapids_beer_history.html Photo courtesy of Founders Brewing Co. 2 https://revuewm.com/food-drink/microbrews/item/3282-west-michigan-brewers-carve-out- space-in-22-3b-craft-beer-industry 38 in W Mi and 200+ in MI 6
  • 5. What beer can do for your town | United States | 201798 What beer can do for your town | United States | 2017 There are dozens of reasons why Brewery Vivant is special. Some say it’s the beer, others the food, and us? We think it’s the atmosphere. Housed in a refurbished, historic funeral home, Vivant is ironically a gathering place for GR’s locale (alive, that is). Co-owner Jerry Spaulding’s vision for the brewery is a place “where people could sit down for a unique beer and good food with friends and strangers alike” (1). The chapel’s interior promotes interaction and adds differentiating vibes to customers’ nights. Another reason why we’ve seen these projects bubble up in GR is that brewers often see lower price tags for distressed properties. Brewery Vivant’s vibrant culture CaseStudies 9 But breweries need more than just mouthwatering beer and trendy atmospheres to woo these millennials. As Michigan’s beer market matures, we’re beginning to see it resemble a restaurant market. One reporter from the Grand Rapids Business Journal said, “when one brewery closes, another opens in its place.” Keep an eye out for bars and distributors attempting to differentiate themselves from the (six) pack. Atwater Beer, a Detroit-based brewery, is notorious for their taproom innovations. Having entered GR in 2016, Atwater has already made a name for itself through creating and hosting unique events. The entre- brew-neur has perfected Bike & Brew tours and in-house music nights to build experiences for their customers. Atwater has also introduced variety into their menus. They offer local, seasonal food and brews such as their Detroit Hard Cider, which pairs ever so well with their farm-to-fork pheasant and waffles. They also have ventured into the realm of craft spirits and wine through founding the Atwater Detroit Distillery and Atwater Vineyards. Atwater, the great differentiator 8 1 www.mlive.com/business/west-michigan/index.ssf/2010/12/ brewery_vivant_opens_doors_on.html Photos courtesy of Brewery Vivant and Atwater Brewery What beer can do for your town | United States | 20179
  • 6. What beer can do for your town | United States | 20171110 What beer can do for your town | United States | 2017 GrandRapids We have noticed a few themes fermenting in the market for beer space. Responding to a tight industrial property market, braumeisters are getting creative through adaptive-reuse projects. By re-purposing dry cleaners, auto garages, and even a fire station, brewers can nurse their beer operations in underutilized spaces, which offer cheaper rents and low build-out costs. Furthermore, brewery occupancy is higher near the outskirts of town where they can capture lower rents, $6.63 p.s.f. below the median retail. Also, for manufacturers and distributors, distance from the city-center is advantageous because they require extensive space of about 10,000 s.f. to operate. In contrast, gastropubs and bars have a high presence in central Grand Rapids, and pay an average of $9.87 p.s.f. Real estate trends Average occupied s.f. of mapped breweries 12,757s.f. *Retail data via CoStar, industrial data via JLL Number of craft breweries in MI West Michigan fundamentals Forecast Total retail vacancy 4.4% ▼ Total industrial vacancy 4.6% ▼ Average retail rent (NNN) $9.81 p.s.f. ▼ Average industrial rent (NNN) $3.24 p.s.f. ▲ 10 105 122 131 159 222 100 120 140 160 180 200 220 2012 2013 2014 2015 2016
  • 7. For more information, contact: Harrison West Research Analyst +1 248 581 3298 Harrison.West@am.jll.com Robert Goldstein Research Intern +1 248 581 3367 Robert.Goldstein@am.jll.com Andrew Batson Research Director +1 216 937 4374 Andrew.Batson@am.jll.com About JLL Research JLL’s research team delivers intelligence, analysis and insight through market-leading reports and services that illuminate today’s commercial real estate dynamics and identify tomorrow’s challenges and opportunities. Our more than 400 global research professionals track and analyze economic and property trends and forecast future conditions in over 60 countries, producing unrivalled local and global perspectives. Our research and expertise, fueled by real-time information and innovative thinking around the world, creates a competitive advantage for our clients and drives successful strategies and optimal real estate decisions. About JLL JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. A Fortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2016, JLL had revenue of $6.8 billion and fee revenue of $5.8 billion and, on behalf of clients, managed 4.4 billion square feet, or 409 million square meters, and completed sales acquisitions and finance transactions of approximately $145 billion. At the end of the third quarter of 2017, JLL had nearly 300 corporate offices, operations in over 80 countries and a global workforce of over 80,000. As of September 30, 2017, LaSalle Investment Management had $59.0 billion of real estate under asset management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof. Jeff Karger Senior Vice President +1 616 649 3532 Jeff.Karger@am.jll.com Bob Horn Senior Vice President +1 616 649 3533 Bob.Horn@am.jll.com Andrew Greiner Associate +1 616 649 3535 Andrew.Greiner@am.jll.com