[summersm343]

Beer & spirits hub brewing in Philadelphia. What's it mean for real estate?

Philadelphia was once known as The Workshop of the World, but it's fast becoming a hub for alcohol production, with more real estate dedicated to breweries, distilleries and fermenteries, according to a new report.

Just five years ago in 2012, Philadelphia only had a handful of long-established breweries and one startup distillery within city limits. That's changed, and it will continue to change, according to a report by JLL.

More than 30 separate companies will be in operation by 2018, including production breweries and eat-in brewpubs, and small-batch distilleries and fermenteries.

More real estate in Philadelphia is being dedicated for alcohol production facilities. Before 2012, about 118,200 square feet of space was dedicated for breweries, distilleries and fementeries, according to the report.

That number is expected to balloon to 267,200 square feet of space by 2018, representing 126 percent growth. About 183,400 square feet of real estate was earmarked toward this industry in 2016, the report reads.

Operators vary in size in Philadelphia, but of the 33 identified production facilities, 25 were under 10,000 square feet in size.

"When you think about this as a movement, it's very small-scale and very niche," said Lauren Gilchrist, vice president and director of research for JLL in Philadelphia.

Only seven surpassed 10,000-square-foot mark, including Yards Brewing Co.'s future 70,000-square-foot home in the former Destination Maternity facility at 456 N. 5th Street.

Other breweries that exceed that threshold include Philadelphia Brewing Co. at 38,000 square feet in Kensington (Philadelphia Brewing shares space with Commonwealth Ciders); 2nd Story Brewing Co. at 13,000 square feet in Old City; and Philadelphia Distilling's new 15,000-square-foot home in Fishtown.

This growth in demand and operators is helping local brewers and distillers find suitable real estate.

Montgomery County's Manatawny Still Works this year will open a tasting room on East Passyunk Avenue. And while developers and commercial landlords have approached the company since its inception in 2014, the frequency increased significantly in the past year, co-founder Derek Menaldino said.

"We believe this owes both to the growth and visibility of our brand and the numerous development projects in Philadelphia that want unique and high-end tenants to complement the vision for their projects," he said.

Here are a few beer and spirits developments in Greater Philadelphia:

-Iron Hill Brewery will open its 13th restaurant at the East Market development under construction at 11th and Market streets in Philadelphia.
-Dock Street Brewery in West Philadelphia opened a canning facility and tasting room adjacent to its brewpub.
-Wissahickon Brewing Co. opened in the East Falls section of Philadelphia, becoming the area's first brewery since the 1950s.
-Yards Brewing Co. will move into 70,000 square feet at the former Destination Maternity facility at 456 N. 5th Street. It's set to open in early 2017.
-Startup brewery Love City Brewing Co. by husband-wife team Kevin Walter and Melissa Walter will open an 11,000-square-foot, 20-barrel production facility in the Spring Arts district area of Philadelphia.
-Neshaminy Creek Brewing Co., after a lease fell through for a spot in Fishtown, will take over the former Guild Hall Brewing location in Jenkintown in Montgomery County.
-Roy Pitz Brewing Co. of Chambersburg, Pa., signed a lease to open a 4,000-square-foot brewpub on the ground floor of 990 Spring Garden St.
-Startup Locust Lane Craft Brewery opened a 5,200-square-foot production brewery on 50 Three Tun Road, a project by RedGoDevelopment.
-Brewery ARS by brothers Sean and Andy Arsenault in December 2016 opened on West Passyunk Avenue.
-Manatawny Still Works of Pottstown in Montgomery County this year will open a 600-square-foot tasting room on East Passyunk Avenue.
-Chester County's Bluebird Distillery will have a physical presence in Center City.
-Products from Boardroom Spirits in Lansdale are now available in Center City, and the distillery is expanding its production facility. A larger "hospitality space" is part of the expansion.
-Startup craft distiller Pennsylvania Distilling Co. will open a distillery in Chester County.
-Chester County’s Brandywine Branch Distillers accelerated its expansion after highlights in national media outlets catapulted it into distributors’ line of vision.
-Bucks County's Dad's Hat Pennsylvania Rye is expanding the size of its distillery from 6,000 square feet to 10,000 square feet, coinciding with the demand for its products.
-Philadelphia Distilling recently opened a Fishtown tasting room and a production facility

http://www.bizjournals.com/philadelp...iladelphi.html