Beer is not only among the oldest but also the most consumed beverages in the world. The beer market has been growing over the years. According to Statista, it is expected to bypass the $850 billion mark by 2025.
This growth is driven by changes in cultures that are continuously accepting drinking, changes in consumer preferences, increased disposable income, and an increase in the number of people who want to explore.
Modern beer drinkers are experienced and looking for quality over quantity. They know exactly what they want and will not compromise their happiness for beers that do not meet their requirements. This has led to the emergence of craft beer breweries. In the U.S., for instance, craft breweries are holding more than a quarter of the beer market share.
The Impact
Research has indicated that more than 75% of people allowed to drink alcohol legally live not more than ten miles from a brewery. This shows the impact that these breweries have in drawing people near them. However, does this affect real estate values?
According to researchers by the universities of North Carolina and Toledo, craft breweries have a positive impact on the value of real estate properties. They used Charlotte in North Carolina as a case study to see how craft breweries affect housing prices.
In their research, they found that whenever a brewery opened anywhere in the city or its neighborhoods, the prices of condominiums increased by about 3%. Family homes, on the other hand, increased by about 10%. However, this happens only when the brewery is less than a mile from the real estate properties.
This might be the reason for the increasing competition in housing and land in Charlotte. There were twenty-one new breweries opened in the area between 2009 and 2016. More have been opened to date.
But how do craft breweries increase real estate values? Here is how:
Craft Breweries Bring In More Businesses
The economic effect of craft breweries can be felt throughout the entire local community. The effect trickles down throughout the community and acts as a catalyst for the growth of other businesses.
It also attracts investors to come in and set up other businesses. Businesses such as self-serve beer shops, growler shops, and bottle shops find their way into areas with craft breweries.
Local companies and artisanal businesses also get a chance to flourish since the craft brewery is likely to do business with them instead of working with a business outside the community.
This is one of the reasons you are likely going to find some states offering tax breaks, grants, exemptions, and subsidies, among others. They do this to ensure that they have attracted breweries to their states. This increases the value of real estate properties.
They Boost Local Economies
When a new craft brewery is starting in your neighborhood, you are going to see large opportunities for redevelopment. This plays a crucial role in the development of the local economy, the revival of small towns, and the revitalization of the local community.
These are the most important indicators for gentrification and the growth of communities and economies. In addition, a craft brewery will pay licensing fees and sales taxes, and create more jobs for the local community.
The craft beer business contributes billions of dollars in revenue to the U.S. economy. A bigger percentage of this revenue goes back to the state and local economies. The business creates thousands of jobs every year.
These workers rent or buy houses near the craft breweries and spend money on local restaurants, and retailers, among others. As the local economy keeps on growing, so does the real estate value. The value of a property in a location with a stable and growing economy will be higher compared to that of a house in a location with a poor economy.
Craft Breweries Bring In People
The research conducted by the universities of North Carolina and Toledo also found that craft breweries attract new residents to a location that was previously under the radar. In addition, they bring in tourists who are willing to try new beers from the breweries.
However, there are things you need to do to keep the flow of people coming to your location and brewery. For instance, you have to better manage your brewery production using the right tools and software applications. This ensures efficient production and management of all the processes involved in beer production.
This way, you will be able to increase the appeal of small towns and rural areas that were previously shunned by people. In addition, craft breweries bring in experts in different fields who are willing to set up businesses to meet the demand of the growing population.
If, for instance, you look at some of the reasons to move to Chicago, you will find that Chicago’s 20 different breweries are one of them.
What do you expect to happen to the value of real estate property when a population grows with people who have money to spend? Of course, the value increases.
Vacant Properties are Filled
In North America alone, more than fifteen million square feet of space is occupied by craft breweries. As more craft breweries are getting opened, more vacant properties are getting tenants.
Most deindustrialized and rural areas have a lot of space – which is relatively cheap – as it has not been occupied for many years. These spaces are ideal for craft breweries since they already have power, sewage, and water in place.
When a brewery opens in these places, things change. Combined with all the other factors discussed above, these places see a change in their fortunes. People will move in, the quality of real estate properties will increase everywhere, businesses will start, and the local economy will grow.
When this happens, you can be assured of seeing an increase in the value of real estate properties. Everyone will be looking for a house to live in or even use for their business. Property developers will also move in to tap into the growing economy.
Craft breweries are growing across the globe. People are continuously embracing and accepting craft beers compared to a few years ago. Apart from affecting the beer market and growing the industry, they are also affecting almost all other industries, including the real estate industry. This explains the growing real estate value in areas near craft breweries.
