Analyzing the San Diego craft beer real estate boom

A photo of Stone Brewing Co.’s bright tanks forest located in its Escondido, Calif., brewery, which has a total of 55,000 sq ft and includes a 120-barrel brewing system built by Rolec in Bavaria, Germany.

San Diego is one of America’s craft beer capitals. Today, the southern California city (second largest in the state) is home to more than 70 breweries. Stone Brewing Co., Green Flash Brewing Co., Pizza Port Brewing Co., Lightning Brewery, Ballast Point Brewing Co. and AleSmith Brewing Co. are just a fistful of the excellent craft beer houses you can visit in the San Diego area. Along with making great beer and employing thousands of workers, those craft beer businesses are also boosting the local commercial real estate markets.

According to an excellent article in the San Diego Union-Tribune, local beer companies will need about 215,000 sq ft of new industrial space over the next 12 to 24 months to take the total brewery square footage over the one-million mark (an amazing stat). The article cites Todd Davis, a broker at Cassidy Turley, who has been specializing in brewery space needs since the mid-1990s. We quote the article:

With 71 craft beer companies operating in San Diego County at latest count, Davis said only a handful occupy more than 10,000 sq ft. And he said start-up costs can be significant — $500,000 or more in plumbing, drainage, equipment and other expenses — compared with the typical warehouse-type industrial user. But that’s not stopping new companies from making a go of it.

“I think it’s much more than a niche,” he said. “I think you’re going to see growth out there. If we look out beyond the next 12 to 24 months, I know a number of breweries are looking to ramping up even more than what’s going on now.”

According to the article, The Lost Abbey is planning an 80- to 100,000-sq-ft facility in the next five years, and Ballast Point is already committed to adding a 100,000-sq-ft plant in the Miramar area. We’ll keep you updated on further expansions.