In our last blog post we shared our experience of finding (or, more accurately, trying to find) a property to build our Cabin. It was one of the toughest things we had to do to bring our dream to life and took us 15 months to find a property. With hindsight being 20/20, we learned some lessons that we wish we knew in advance. Here are some tips to help you as you try to locate the perfect property to build your brewery.
Get an agent: If you haven’t been involved in a commercial real estate deal before, seriously consider securing the services of a realtor. There’s a lot to learn and a lot to do. We used Patrick Sailer and Michael Massing at Colliers International. They know what breweries need, and have their fingers on the pulse of Calgary’s industrial market.
Be patient. Unlike buying a residential home, negotiations are a lot more protracted. We spent months going back and forth with our landlord before nailing down a final executed lease agreement.
Know what you need: Know exactly how high your ceilings need to be, how large your electrical and water supply must be and be aware of any restrictions on doing business in the area you have chosen. If you have to do a major upgrade to a utility on your own dime, you are looking at a very, very big bill – anywhere from $5,000 to as much as $100,000 if it means replacing a transformer or upgrading mains water supply to a building.
Be realistic: If you’re a startup business with no operating history, you are a massively risky proposition. Definitely negotiate hard and get the best deal, but make your offer as clean as possible – by that, we mean remove any small encumbrances on the landlord that imposes more work on them. Remove anything that would be a turnoff to the landlord, unless you really can’t make the deal work otherwise.
Remove emotion: Let’s be honest; landlords are shrewd business owners who are in the game for one reason - to make money. This is a business deal to them. Make sure you treat it the same way. Be courteous, be professional, but know that you will be cast aside without a second glance if a better deal comes along.
Always be looking: Not every property is advertised as being for lease. In fact, two of the buildings we put offers on never made it to market. We found one of them, our realtor found the other. Drive around the area you want to be in and see what looks attractive, then knock on the door or find the owner and ask questions. There is never harm in asking, and you just might get a good deal.
Check the rules: Check with your municipality’s planning department immediately to see if there are any issues that would impact your ability to meet your obligations. In our case, a landfill setback zone just skimmed one corner of our building - which under existing rules would have made the whole building subject to landfill setback variance rules. For a brewery (along with any food business), that would have meant a long (months) and costly (five figures) variance process with the City of Calgary and Alberta Environment and likely would have killed our project. We cannot thank the City of Calgary planning officials enough for understanding our predicament, taking into account the precedent that was set by Banded Peak Brewing in building a brewery in the area and taking the steps to update the rules so that we did not have to go through the same red tape.
The landlords we dealt with said that almost anything is possible - at the right price. So visit every property with an open mind. If it’s not perfect now, it may be with a small chunk of cash and a few weeks of hard work. Dream big, do your homework and always be thinking about your end goal. It WILL happen.
