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
