Hal Naiman stands inside his vacant brewery space, which was last home to So Many Roads Brewery. (Matt Geiger/BusinessDen)
It’s been a little over a year since Hal Naiman had a tenant brewing beer at a building he owns off Santa Fe Drive in Denver’s Baker neighborhood.
When So Many Roads Brewery closed, it left him with a 15,000-square-foot hole, eliminating a third of his rent at his 2.5-acre retail development at First Avenue and Santa Fe Drive. Before So Many Roads, the space was built out by Renegade Brewing in 2014.
But filling the space has proved futile. And there’s a growing lineup of available brewing space – four breweries announced they were closing last week alone – giving landlords a painful hangover. The owner of Great Divide, for example, announced last week that he is going to try to sell or lease his brewery in Ballpark. Crazy Mountain Brewing’s old space on Santa Fe nearby has also sat unused for more than four years.Â
And stripping out the tanks isn’t a silver bullet: shuttered spaces Epic Brewing and Ten Barrel Brewing – both in RiNo – are still vacant after removing brewing equipment.Â
Naiman has so far been unwilling to scrap the tanks as he tries to find another retail tenant at 918 W. First Ave. So far, 15 prospective businesses have toured the space, three of which were breweries.Â
“It’s a little bit of Murphy’s law: You tear it up and split it up and then someone will want it whole,” Naiman said.
The Front Range saw a massive increase in breweries for more than a decade. And a brewery was a big coup for landlords to add a draw to their properties. But the number peaked in 2023, and over the past year, 41 breweries closed in the state, according to the Boulder-based Brewers Association.
The biggest pickle for landlords is what to do with the empty brewing equipment. Do they scrap it and try to re-lease it to another use? Or do they keep the tanks, which can cost millions when new, and hope for another brewery to come in and use them?
“It’s been empty long enough that we’re certainly not attached to the equipment as we were earlier on,” Naiman said. “That being said, we haven’t torn it out either because we still strongly believe there’s a user that could utilize some of it, less likely all of it, because there’s a ton of it in there, based off what we’re hearing from the brokerage world.”
A big chunk of Naiman’s property is empty warehouse space. (Matt Geiger/BusinessDen)
Part of the predicament is that the brewing equipment itself has lost almost all its value, according to Matt Osterman, who started and runs contract brewery Sleeping Giant, which produces more than 100,000 barrels of beer annually.Â
Osterman said he gets emails every few days about new auctions on equipment. He’s seen fermenters that used to sell for $75,000 go for $1,500 at auction, thanks to the “crazy glut” of supply.
“For every one closing, five are barely hanging on,” said John Livaditis, who owns the real estate for Black Sky Brewery at 490 Santa Fe Drive.
Livaditis, who also runs local brokerage Axio Commercial Real Estate, added that the value of a local brewery has plummeted.Â
“I get lots of calls from people struggling, and they want to sell for maybe $300,000, and I tell them you couldn’t give it away for nothing,” he said.
Zach Cytryn, another retail broker in town with Fuel & Iron Realty, said he’s gotten more calls in the past year from people looking to exit the business than he has in his entire decade-long career.Â
“One of the shifts that happened in COVID is a lot of the food and beverage establishments wanted to downsize, wanted to pay less rent, have a more efficient labor model,” he said.
That spells trouble for people like Naiman, who are holding large, vacant spaces.
Divvying up the building into smaller suites is also a gamble without a tenant and a business plan for the space. Naiman said he’s willing to rent his Santa Fe building for between $12 and $18 per square foot per year, but rates depend on who takes the space and what it’ll cost to build out their business.
“It’s hard to know until you have a concept that seriously wants to be in there,” he said.
Naiman is one of the lucky ones, though, having the flexibility to play around with the space if a tenant wants only some of it. Bernard Hurley, owner of the former 36,000-square-foot Blue Moon Brewery at 3750 Chestnut Place in RiNo, is gung-ho on keeping that building the way it is.
Bernard Hurley stands inside the brewery at his RiNo building. (Matt Geiger/BusinessDen)
“We don’t really want to see anything change. We’d like to see somebody just come in, take over the space, enhance it, activate it more, get some entertainment, maybe serve liquor, maybe to get some other things going,” Hurley said.Â
“I think that this would be a home run for somebody.”
His former tenant left in March but is responsible for paying rent for another year. Blue Moon leased the space in 2015 for 20 years, with an option to leave after 10 with a year’s notice.
The brewery is leaving its equipment behind, which cost millions when it was installed, in hopes of getting the space quickly re-leased to another user. That would absolve the business of its financial obligations, which require the lessee to remove the equipment and restore the building to its shell condition, another significant expense.
The company had sophisticated equipment inside, like a pilot brewing system to make small batches for experimentation. Even the forklift was left behind.
Hurley has had some conversations with other breweries interested in the space. And since he owns six acres surrounding the property with plans to develop on it, there’s a real possibility that a new tenant could be part of something bigger.Â
“Everything that’s in here right now, somebody could walk in here tomorrow and take this over,” he said.
Hal Naiman stands inside his vacant brewery space, which was last home to So Many Roads Brewery. (Matt Geiger/BusinessDen)
It’s been a little over a year since Hal Naiman had a tenant brewing beer at a building he owns off Santa Fe Drive in Denver’s Baker neighborhood.
When So Many Roads Brewery closed, it left him with a 15,000-square-foot hole, eliminating a third of his rent at his 2.5-acre retail development at First Avenue and Santa Fe Drive. Before So Many Roads, the space was built out by Renegade Brewing in 2014.
But filling the space has proved futile. And there’s a growing lineup of available brewing space – four breweries announced they were closing last week alone – giving landlords a painful hangover. The owner of Great Divide, for example, announced last week that he is going to try to sell or lease his brewery in Ballpark. Crazy Mountain Brewing’s old space on Santa Fe nearby has also sat unused for more than four years.Â
And stripping out the tanks isn’t a silver bullet: shuttered spaces Epic Brewing and Ten Barrel Brewing – both in RiNo – are still vacant after removing brewing equipment.Â
Naiman has so far been unwilling to scrap the tanks as he tries to find another retail tenant at 918 W. First Ave. So far, 15 prospective businesses have toured the space, three of which were breweries.Â
“It’s a little bit of Murphy’s law: You tear it up and split it up and then someone will want it whole,” Naiman said.
The Front Range saw a massive increase in breweries for more than a decade. And a brewery was a big coup for landlords to add a draw to their properties. But the number peaked in 2023, and over the past year, 41 breweries closed in the state, according to the Boulder-based Brewers Association.
The biggest pickle for landlords is what to do with the empty brewing equipment. Do they scrap it and try to re-lease it to another use? Or do they keep the tanks, which can cost millions when new, and hope for another brewery to come in and use them?
“It’s been empty long enough that we’re certainly not attached to the equipment as we were earlier on,” Naiman said. “That being said, we haven’t torn it out either because we still strongly believe there’s a user that could utilize some of it, less likely all of it, because there’s a ton of it in there, based off what we’re hearing from the brokerage world.”
A big chunk of Naiman’s property is empty warehouse space. (Matt Geiger/BusinessDen)
Part of the predicament is that the brewing equipment itself has lost almost all its value, according to Matt Osterman, who started and runs contract brewery Sleeping Giant, which produces more than 100,000 barrels of beer annually.Â
Osterman said he gets emails every few days about new auctions on equipment. He’s seen fermenters that used to sell for $75,000 go for $1,500 at auction, thanks to the “crazy glut” of supply.
“For every one closing, five are barely hanging on,” said John Livaditis, who owns the real estate for Black Sky Brewery at 490 Santa Fe Drive.
Livaditis, who also runs local brokerage Axio Commercial Real Estate, added that the value of a local brewery has plummeted.Â
“I get lots of calls from people struggling, and they want to sell for maybe $300,000, and I tell them you couldn’t give it away for nothing,” he said.
Zach Cytryn, another retail broker in town with Fuel & Iron Realty, said he’s gotten more calls in the past year from people looking to exit the business than he has in his entire decade-long career.Â
“One of the shifts that happened in COVID is a lot of the food and beverage establishments wanted to downsize, wanted to pay less rent, have a more efficient labor model,” he said.
That spells trouble for people like Naiman, who are holding large, vacant spaces.
Divvying up the building into smaller suites is also a gamble without a tenant and a business plan for the space. Naiman said he’s willing to rent his Santa Fe building for between $12 and $18 per square foot per year, but rates depend on who takes the space and what it’ll cost to build out their business.
“It’s hard to know until you have a concept that seriously wants to be in there,” he said.
Naiman is one of the lucky ones, though, having the flexibility to play around with the space if a tenant wants only some of it. Bernard Hurley, owner of the former 36,000-square-foot Blue Moon Brewery at 3750 Chestnut Place in RiNo, is gung-ho on keeping that building the way it is.
Bernard Hurley stands inside the brewery at his RiNo building. (Matt Geiger/BusinessDen)
“We don’t really want to see anything change. We’d like to see somebody just come in, take over the space, enhance it, activate it more, get some entertainment, maybe serve liquor, maybe to get some other things going,” Hurley said.Â
“I think that this would be a home run for somebody.”
His former tenant left in March but is responsible for paying rent for another year. Blue Moon leased the space in 2015 for 20 years, with an option to leave after 10 with a year’s notice.
The brewery is leaving its equipment behind, which cost millions when it was installed, in hopes of getting the space quickly re-leased to another user. That would absolve the business of its financial obligations, which require the lessee to remove the equipment and restore the building to its shell condition, another significant expense.
The company had sophisticated equipment inside, like a pilot brewing system to make small batches for experimentation. Even the forklift was left behind.
Hurley has had some conversations with other breweries interested in the space. And since he owns six acres surrounding the property with plans to develop on it, there’s a real possibility that a new tenant could be part of something bigger.Â
“Everything that’s in here right now, somebody could walk in here tomorrow and take this over,” he said.
