The northeast squeeze
When we opened Sociable back in 2012 we did so with a tremendous amount of uncertainty. At the time, there were very few cider taprooms in the country, and even fewer making the kind of drier, innovative stuff that we have so much fun making and sharing with our friends and fans. That uncertainty, coupled with what amounted to not enough money, made starting our cidery in a building we owned completely out of reach.
Before real estate got wacky in NE Minneapolis, we were very fortunate to be able to work side-by-side (see what I did there) with local developer Hillcrest to build out a newly rehabilitated space as a renter. For those of us who remember opening day, the place looked very different than it does today. A few hand-built picnic tables, some wire spools tipped on end, and all of our production equipment located directly behind the bar and our 2000 square foot taproom. It was cozy, and felt like ours, but as we grew, that feeling began to meet with reality.
Our building was a part of a larger development that included Sociable, our parking lot, the adjacent 50k feet of office, the Dunbar armored truck building, and the warehouse and offices over where you can find Bauhaus. Hillcrest eventually sold the development, and a series of subsequent re-trades created a revolving door of land-lords first based in Madison and then Chicago. Each sale had a new landlord entering the NE market with expectations of passing on higher rents.
We began to hear stories that our peer brewery friends and neighbors who had not negotiated lease extensions or inflation capped rent increases were getting price-squeezed out of their spaces. Those aren’t my stories to tell, but get a couple pints in one of the OG NE brewers to hear all about aggressive, rent-seeking landlords. Many brewers helped create destination foot traffic to very off-the-beaten-path corners of the city. They pumped hundreds of thousands of dollars into converting low-rent warehouses into more refined (and higher-rent) retail space. With the path now well worn, some landlords wanted to get paid off of all that brewery trail cutting.
While the macro-economics of it is frustrating, the real driver for Sociable’s push to buy was to move past asking for permission to pump more money into the building. The initial unexpected popularity of our taproom, the growth in demand for our packaged product, the adjustments necessary during Covid, all required us to change the space to fit those unique and evolving needs. Owning allows us to do that more nimbly.
I’d like to tell you we called our land lord(s) and said, “hey we’d like to buy this, lets determine a fair market price,” and then they said, “sure.” Alas, that’s not how it went. Turns out a rent-paying and stable anchor tenant is rather valuable. Our offers to purchase were rebuffed for the better part of 4 years, across two different landlords. Our very real threat to vacate the building and the concurrent weakness of the overall office market finally motivated our land-lords to make a sale. After hard negotiations around everything from price to parking easements we can now finally call 1500 Fillmore St. home.