FSBO: 600,000'+ Hops Farm & BrewPub Site near Seattle For Sale - $853,000 - Paying 10% Selling Commission

[Chris Newman]

First, some short background to set the context on why this sale commercial property is important in a huge new consumer trend, and why it's well-worth the selling price:

If you haven't noticed, craft beer brewing is exploding all over the world, and especially in the US with the Millennial generation. Washington state, with nearly 300 craft breweries, is #2 in the nation, just behind the huge California market, and growing far faster. This new product niche has become a $multi-billion industry and is projected to grow at 20% rates for at least the next five years. It's a lot bigger than legal pot.

But, craft beer is not just about the alcohol and artistic flavor profiles, although those play key roles in brand marketing. What's primarily driving this trend for craft beer is the "lupulin" in aromatic-style flavoring hops, with its soporific effects. Hops are a kissing cousin of marijuana, which is fully legal here. 

As with any other mood-altering substance, a user tolerance builds up and it takes more and more lupulin to get the same high. This phenomenon is well-recognized: 

Due to rapid local climate change, as is happening in California to the south, and the severe drought that it's causing all across our state, the hops industry in eastern Washington's Yakima Valley, producer of more than 75% of the US supply of hops and the #10 ag product in Washington, is collapsing. Irrigation-dependent hop harvests there are down, hopyards are being kept fallow to save the plants and thousands of acres of farmland with senior water rights is being bought up by California investors who are tearing down the hopyards from production. 

As a result, crop prices have doubled to as much as $40,000 per acre on the spot market (which is phenomenal for farm land) and the outlook is that this market price trend will also only continue for the foreseeable future.  "The Evergreen State" may have to change its motto.

Since hops are the most-costly ingredient in the most popular craft beers, this combination of increasing hops shortages from traditional suppliers in the face of fast-rising demand is putting craft brewers all over the country into a tight economic bind: If they don't heavily hop their beer, their sales will go way down. One local micro-brewer estimates a volume drop of 43%, without heavy-hopping.

So, for many reasons, including gaining exclusive access to the scores of rare "boutique" hops varieties that don't make it into commercial production, producing the critical hops in-house makes a lot of good sense for many brewers. If the location of the farm is also excellent,  selling beer at retail in an on-farm a tasting room or brewpub, also makes very good sense. Nothing is more profitable than complete vertical integration.

A Yakima Valley hops farmer and his thirsty plants, in happier days, before the 2015 drought.

But, every storm cloud has a silver lining because, with change comes new opportunities: As a result, Snohomish county, just north of Seattle and with a large stock of great farmland that doesn't need irrigation, is well-poised to pick up a lot of the Yakima Valley's hops production slack. Most of this farmland is much further off the beaten path, though.

There is no simply better place to grow hops with a visitor component than here, on 4,000 acre dike-protected Ebey Island, in the middle of the Snohomish river, one easy minute from I-5 at downtown Everett. Civilization leap-frogged over Ebey 100 years ago and I've never seen another such close-in slice of periurban rural paradise, with such a high agritourism potential, than here. That's why I bought the property in the first place, back in 2010.

This quiet green community is destined to become "The Napa Valley of Western Washington," with many new "liquid arts" tourist-oriented farm estates. (Wine, hard cider and distilled beverages are hot, too.)

This particular high-profile sale farm, stretching for 1/4 mile along a busy freeway, is the key anchor beer-tourism site for the whole of Ebey Island and, all things considered, no other location comes even close. This is ground zero and any beer tourists who visit Ebey, or travel I-5, will stop here, too.

An easy 30 minute drive from Seattle. 

Dike-protected Ebey Island, in the middle of the Snohomish river, is just one easy minute from downtown Everett, with freeway ramps to and from both directions. Every day, 70,000 vehicles cross this gateway chokepoint. In the middle, seen from a unique vantage point 40' up, on the trestle, is the 1/4 mile long green canvas that's currently named "Starbird Farm."

A very small representation of the Washington craft brewery tourism concentrations. Beer tourism is hot! For this property, X marks the spot! 

This one-of-a-kind 14.3 acres of prime quality non-irrigation farmland and its historic landmark barn, with 30 million vehicles passing by right next door every year, is just 30 minutes north of the exploding Seattle real estate market. Located in the epicenter of the concentrated craft brewery corridor along I-5, this land is absolutely perfect for growing high-value aromatic hops, a BrewPub/Beer Garden and regional agritourism in an open-space country estate setting. 

As far as I can tell, this will be the first "farm brewery" in the Pacific Northwest, possibly on the entire West Coast. These businesses are proving very popular on the east coast of the US and all over the world. People love to visit farms and to drink local craft beer that has been created "from the ground up." Certainly, there will never be another one of these "beer farms" that is remotely closer to Seattle: The land has all been developed.

Basically, this is a perfect place for a "Beer Theme Park." There are several of these in Europe and they're popular, but none at all in the US. How about an off-leash beer garden? There's room here.

Priced at a bottom line of $853,000, which is the raw land's breakup value (into its current 50 legal lots), without premium for the many other valuable features of the site. The "billboard" value of the public exposure alone (a sign on the landmark barn so close to the freeway) is an easy $300,000 per year.

This price works out to a land cost of about six cents on the dollar, compared to other commercial land just minutes away, where average market prices for undeveloped land are $1 million/acre. This same amount of land just minutes away would cost $14+ million and it wouldn't grow hops. The only real practical difference between the two commercial zones is that the wide variety of business activities that are already permitted here must be "agriculturally oriented."

I'm more than happy to pay a 10% selling commission to whoever can help me move this property for me. Courtesy to agents and brokers. I'm not willing to list this property and tie it up, but if you bring in a prospective buyer, I'm not going to poach them. My main concern is to get this property sold so that I can aggressively start buying more local farm land for my main REI niche of "clipping and flipping" local transferable development rights.

I'm going to be actively marketing this property myself in the NW, although I don't object to local sales "competition." But there are also at least 3,000 other craft brewers across the US who I won't be contacting and at least 100's of them would both love to jump into the hot Washington market and can afford this property. 

So, if you know the owners of an out-of-state brewpub, or one or more ambitious investors/entrepreneurs who want to jump into the craft brewing business with both feet, they'd probably love to hear about this opportunity. 

There's even a natural new brand name included: "Isaac Ebey" Besides Ebey Island, the unique name Ebey also appears on a road, a mountain, a slough and a large nature preserve. He lived a short, but fascinating life.

Isaac Neff Ebey, 1818 - 1857, one of Washington territory's first pioneers and entrepreneurs. Killed by indians. 

I've just posted a really extensive property marketing document at my BP FilePlace page at http://www.biggerpockets.com/files/user/ChrisNewma... You won't find a better crash course on the subject of growing craft beer hops in the face of climate change and selling beer in an agritourism setting. You'll also find a lot of informative links within the document to source documents, other beer farms and parks and news articles from which I gleaned the above information. 

If you don't know anything about growing hops, I've also posted on my BP FilePlace a great manual on setting up a smaller organic commercial hopyard. (It's not rocket science.) You'll find it here: http://www.biggerpockets.com/files/user/ChrisNewma...

If I was 10 years younger and not seeking a less-strenuous lifestyle, as well as focusing on increasing my farmland investment business, I'd be looking for a partner, not a buyer. However, I have decades of horticultural experience and years of research into what can be done on this property and I am available to stay on as a consultant. I also like a nice double-hopped IPA when the moon is full. :-)

If you have general interest questions, please post them below. For specifics, please PM me. 

Thanks!

Chris