Inside Boston’s Craft Brewing Boom: Q&A with CushWake’s Scott Gredler

Ever since the founding of Boston Brewing Co. in 1984, Boston has been heralded as one of the epicenters of the craft beer scene in America. But in the last decade, the number of breweries in the city has quadrupled. Today, there are more than 150 microbreweries in Massachusetts.

But what effect has this brewing boom had on the local CRE market? It turns out, much of the development has been in reclaimed industrial and retail space, rather than in ground-up construction. Cushman & Wakefield’s Boston office also reports that around 90% of its microbrewery and larger regional brewery transactions have gone into industrial properties averaging 15,000 square feet.

To find out more, we chatted with Scott Gredler, senior director at Cushman & Wakefield in Boston.

Q. Would you call the recent growth/popularity of craft breweries in Boston a ‘craft brewing boom’?
A. You could certainly call it a boom. Interestingly, some of the larger, more well-known craft breweries, like Harpoon and Sam Adams, were established a few cycles ago, but the surge in popularity for this sector has driven breweries into the inner suburbs, like Somerville and Everett. And now as this boom continues, we are seeing establishments farther out into the suburbs proper.

Q. What impact is this boom having on the retail and industrial markets in Boston and the surrounding suburbs?
A. A good example of this impact is Hyde Park, which despite being part of Boston has always maintained a very suburban feel. Only five or six years ago, rents were around $6-7 per square foot, but now we’re at $10-12. This is directly traceable to a reduction in supply and maintaining of demand, and breweries play a big part of that demand now.

Q. On the retail side, are owners/landlords now seeking out brewery tenants for new developments?
A. Yes, they are. In particular, Boston-area landlords or developers focused on mixed-use developments are trying hard to curate their tenant list, and vibe and culture are more important than they’ve ever been. Breweries aren’t always the most profitable tenants in a mixed-use development on a square foot basis, but the cache and vitality, as well as foot traffic, they bring to a development makes them highly valued. Even if landlords cannot secure a brick and mortar brewery, we will often see them partner with one to create a beer garden or open-air experience. Assembly Row’s collaboration with local brewery Slumbrew (pictured above) is a good example of this, as is the Castle Island brewery on Constitution Wharf in Charlestown.

Q. On the industrial side, what effect is this additional demand for space having on that market?
A. For urban industrial assets, breweries are being eclipsed by flex tech as the premiere use for those kinds of buildings. But in the suburbs, no landlord will fail to market their industrial properties to potential craft breweries. They are definitely boosting demand and pricing there. Landlords are mindful that breweries are start-ups, in many ways, with all the attendant risks of failure or short tenancy. But overall, they’re having a positive effect on the market.

For comments, questions or concerns, please contact David Cohen