N.E.X.T. Leadership Connection with Ellen Rogers
Leadership Connection will feature Ellen Rogers, Senior Vice President, Bank of America Merrill Lynch.
This summer, the real estate firm behind the Camp North End redevelopment, ATCO, announced that it had signed a 1,500-square-foot lease with Free Range Brewing. Free Range plans to open its second taproom at the project, a 76-acre project just north of uptown Charlotte.
“I definitely think this Free Range Brewery will have the same spirit and energy as the first (location),” said Damon Hemmerdinger, Co-President of ATCO, at a recent ULI Charlotte panel.
The number of craft breweries has grown to about 30 in Charlotte and nearly 50 in the region, and as the industry has grown, breweries have become highly coveted in commercial real estate developments. Once viewed as higher-risk tenants, breweries can help create a sense of place and bring energy to mixed-use projects.
On Oct. 24, ULI Charlotte hosted “Breweries as an Asset Class,” a panel discussion at Camp North End about how breweries are transforming commercial real estate. The discussion was moderated by Adam Williams of Legacy Real Estate and featured Hemmerdinger along with Jason Alexander of Free Range Brewing.
Alexander, who opened Free Range Brewing with his brother in 2015 on North Davidson Street, said he initially approached ATCO due to some uncertainty about the prospects for a lease renewal at their current property.
“We’re not feeling comfortable with the longevity of (our current location),” he said, noting that the brewery’s rental rate is well below the rate that more recent tenants have agreed to pay.
Hemmerdinger said that breweries are increasingly in demand because they represent the type of experience that can’t be purchased online. While consumers can turn to Amazon to buy any number of retail goods, “that doesn’t satisfy our human need to be part of an experience.”
ATCO underwrites a brewery as it would any other tenant, Hemmerdinger said, but it’s looking for retailers who will bring passion and energy to the project, not investment-grade credit. He added that 90% of the development’s rent roll should ultimately come from office tenants.
“We’re relying on big office users who want to be near something like what we’ve created,” he said. And if Free Range Brewing ultimately needs to relocate its brewing equipment when its original lease expires in four years?
“We’ve got a spot picked out,” Hemmerdinger said.
Notes provided by Will Boye of Yellow Duck Marketing