Charlotte breweries face rising rents and other costs

CHARLOTTE — More breweries are inching closer to lease renewals and renegotiations in a commercial real estate market much changed from the industry’s gold-rush days of a decade ago. The vacant warehouse spaces and dilapidated industrial buildings that offered a relatively cheap entry into the city are now at the heart of booming development corridors in areas like South End, NoDa and FreeMoreWest.

Those properties frequently are sold for increasing prices either for redevelopment or as an investment, with landlords seeing opportunity for higher rents as leases turn over.

That leaves breweries with three choices: stay and pay more, look for more affordable space or close, says Rick Benfield. He’s currently vice president for the N.C. Craft Brewers Guild board, president for the Charlotte Independent Beer Alliance board and on the executive team at Cabarrus Brewing Co. in Concord.

“At the end of the day, we know there’s going to be attrition — you can’t get away from it. We’re going to lose people, whether it’s due to financial concerns, lease concerns, or people have just been in it long enough,” he says.

At least seven breweries have closed so far this year. The DreamChasers Brewery in Waxhaw and Blue Blaze Brewing Co. closed after failing to reach terms with their landlords.

Weathered Souls Brewing Co. closed in lower South End after months of struggling to pay its rent. Its landlord is currently suing the brewery. Others that have exited the market: Midnight Mulligan Brewing and The Bevery in Wesley Heights, Belmont Brewhouse, Devil’s Logic Brewing and Frothy Beard Brewing Charlotte. Devil’s Logic’s building is listed for sale.

Charlotte’s brewery count ramped up dramatically from 2012 to 2019. It now sits at around 70 in the region, with 30 more in the areas beyond the contiguous counties to Mecklenburg.

Many breweries sign a 10-year lease in an up-and-coming neighborhood and think they’re set, but that flies by in the blink of an eye, Benfield says. It’s critical to become smarter in business planning and pay attention to what the market dictates.

“The neighborhood grows, the area grows, it attracts more businesses and so forth. You’re kind of a victim of your own success because what you’ve done is made your property more valuable,” he says. “If you don’t own your own building, you’re subject to your lease and your landlord.”

CBJ spoke with several brewery owners about their leasing scenarios, what they’re preparing for and industry concerns. Read their stories here.

(WATCH BELOW: Blue Blaze Brewing to close after 10 years)

Blue Blaze Brewing to close after 10 years

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