Lunch and Learn: Location Search

Location, Location, Location

One of the first questions people will ask you about your brewery is: “Where is it located?” Location is key, and it can be a challenging process to determine the perfect spot. If you’re new to the business, hiring a commercial real estate firm to advise your search may be crucial. Not only will they set up showings for you, but they will locate buildings with your specific criteria, and most importantly will assist in negotiating the lease. The following post will detail our process in finding our location, as well as our experience in working with TaTonka Real Estate Advisors, our selected firm. We offer this information to you because of our open source beer philosophy. It is our goal to provide you with an inside look of our experience to inspire your own craft beer endeavors.

Why Saint Paul?

The simple answer is water and opportunity. First of all, our beers were crafted in Roseville, Minn., a city which uses water provided by St. Paul Regional Water Services. The water used in beer is often overlooked, but it is a critical ingredient that impacts taste. If we had decided to pursue a site in Minneapolis, we would have had to adapt our recipes to the Minneapolis water system in order to get the same taste. Brewing in St. Paul means that we can continue using our original recipes.

Secondly, we have been watching the microbrewery explosion in the Twin Cities, and nearly every new taproom and microbrewery has opened in the Minneapolis area. We thought it was best to branch out and bring the greatness of craft beer to the other side of the river. Not to mention - Saint Paul has a rich historical foundation in beer, so we thought it would be good karma to bring craft beer back home.

Criteria

The first step was to develop a list of criteria for the brewery and taproom. The list changed over the course of a year, as the vision of Tin Whiskers changed. Initially, we were planning to focus our efforts on building a larger wholesale production brewery, rather than a microbrewery and taproom. At that time we were looking for:

• Minimum of 5,000 square feet
• Minimum of 15 foot ceilings
• Loading dock access
• Light industrial zoning
• A long rectangular footprint
• A location that is easily accessible and easy for customers to find
• Close to a residential neighborhood or close to alternate transportation, such as the light rail
• Concrete floors
• Limited need for renovations (read: not millions of dollars in renovations)
• Cost of $4-8 per square foot per year
• Opportunity for lease

You may be thinking - well great list, but where did it come from? There were a lot of practicalities to think through. The square footage desire was determined by roughing out the space we would need for the equipment, the building costs that we could afford, and our plans for future growth. Our initial plan of a distribution focused brewery would have required a larger system and light industrial zoning. With this plan, we would have needed 5,000+ square feet because of potential beer volume growth. The ceiling height was determined by looking at the equipment options, and roughing out the space needed.

Eventually, we changed our vision to focus on a taproom and microbrewery. We decided to pursue this route for a few reasons - including funding and market demand. With this plan, intangible things like curb appeal became more important in the space. We also had to relook at financials, because commercial space tends to be more expensive than light industrial space. The needs for ceiling height were based on equipment size and ease of installation. A taproom has slightly lower minimum ceiling requirements because the equipment size is not as large and we wanted to maximize our commercial location options.

At that point, we changed our location expectations to include:

• A residential area with strong craft beer drinking demographics
• 1500-5000 square feet
• A square footprint (preferred)
• Minimum of 12 foot ceilings
• A building and neighborhood with interesting, historical character
• Limited need for renovations (read: not millions of dollars in renovations)
• Concrete floors with adequate load bearing capability
• Opportunity for lease or purchase

Gut Feel

Beyond the laundry list of criteria, there is the all-important matter of gut-feel. There were well over 50 sites considered. We gathered all options into a spreadsheet with the headings listed below and worked through ranking them.

• Location
• Location notes
• Google maps link
• Real estate link
• Demographics
• Square footage
• Cost
• Notes

Some locations were simply too difficult to find. It is important that customers can easily access our business. Some were too expensive or too small.

For the sites that couldn’t be eliminated from research we had to hit the ground. We toured dozens of sites (about 25), and continued filling out our ranking spreadsheet. Some of the sites just didn’t have any character. Others needed too much work, or had odd floorplans.

We were on a quest to find the perfect site, and did not want to make any compromises. Once we walked into the Rossmor building, it instantly felt like home. It was the perfect space. The Rossmor building included concrete floors, tall ceilings, plenty of space, a mix of residential areas and businesses, and great neighboring restaurants (Keys Café, Black Sheep Pizza, and Sawatdee). Most of all, the building has the intriguing historic factor and the most incredible floor to ceiling windows. This location can’t be beat. It took us a long time to find, but was well worth the wait. Details include:

• Square footage: 3,415
  • 1,366 square feet reserved for the taproom
  • 1,322 square feet reserved for the brewery
  • 727 square feet reserved for utility space
• Windows: 22
  • Three walls have window space
  • 12 large windows sized 57.5” x 111.5”
• Flooring: Concrete at 10” thick
• Occupancy: 103 people

Working with TaTonka Real Estate Advisors

Working withTaTonka Real Estate Advisors was an enormous help through the process of finding a location. First of all, TaTonka was there to help us find sites that met our criteria. Beyond that, they were able to set up tours to efficiently look at buildings. Since we were considering so many sites, it was helpful to have an outside agency set up the tours, often going from one location to another. The more sites we visited, the easier it became to understand what we wanted in a location, and the easier it became to communicate those ideas to TaTonka. There is no substitution for seeing each possible site first hand.

The most valuable aspect of working with TaTonka was the advice and guidance we received during the lease and contract for deed negotiations. They looked out for known issues and worked to make sure the deal was fair and and in Tin Whiskers’ favor. Without their guidance, this process could have turned out very differently.

About TaTonka Real Estate Advisors

Taken from TaTonka’s website in December 2013

TaTonka Real Estate Advisors is a Twin Cities based commercial real estate advisory firm that represents Tenants and Buyers in their negotiations to lease or purchase property. TaTonka handles office, industrial, medical, retail, land and investment requirements throughout the Twin Cities metro area. In addition, we manage national requirements through our Society of Industrial and Office Realtors (SIOR) network.

• We represent tenants and buyers of commercial space exclusively rather than the interests of institutional owners.
• We listen carefully to our clients to fully understand their goals and objectives.
• We diligently research market alternatives to present the most qualified options to our clients based on their specific requirements.
• By maintaining a database of lease and sales comps we are able to counsel our clients on an appropriate offer to accurately reflect current market conditions.
• Our market knowledge and expertise provides critical leverage when focusing on a lease renewal or relocation.
• Our experience in negotiating lease and purchase agreements ensures that details are not overlooked and that market terms and concessions are accounted for in the final document.
• Our understanding of the process ensures that a realistic project timeline is developed up front and adhered to throughout the implementation of a successful real estate plan.
• Trust is the foundation of our client relationships. We gain our clients confidence and trust through our integrity and timely communication.
• 85% of our annual business is generated from past clients and their referrals which stands as a testimony to the loyalty and satisfaction of our clients.
• We value our client relationships and seek opportunities to enhance their success as opportunities arise.
• We judge our success by the results we achieve for our clients and their overall satisfaction with our services.

The Next Chapter

At the end of the day, finding a location takes patience and hard work. But it may also come down to your gut feeling. Now that we have a building, our dream of opening a microbrewery and taproom is finally coming to fruition. It opens a new chapter - we are no longer homebrewers. We have an actual brick and mortar space to call our own.

If you have questions about our experience of finding a location, please feel free to contact us. If you have questions about using real estate advisors, the TaTonka website is a good place to start.

Or better yet, stop by to meet us in person. Tin Whiskers will open in Q2 of 2014. We look forward to meeting you and working together to make great beer. Cheers!