Friday, June 14, 2024

Labatt USA puts Perry Street offices, brewery up for sublease

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Six years after announcing with great fanfare that it would anchor the Pegula family’s adaptive-reuse project on Perry Street with its new corporate headquarters, Labatt USA is putting its office space and first-floor corner brewery up for sublease because it’s no longer using either of the spaces or making craft beers locally.

But it’s still maintaining its U.S. headquarters and employees in Buffalo, largely as a fully remote workforce, while it seeks out smaller office space for occasional team meetings and other uses.

Labatt’s headquarters staff has been working remotely since the Covid-19 pandemic. The brewery has been used infrequently since then and has been fully closed for about a year.

“During the pandemic, we shifted to remote working, like many other companies. This has impacted foot traffic downtown, which in turn has affected our Brew House small-batch business,” said company spokeswoman Mary Beth Popp.

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The corner brewery is separate from the Draft House restaurant, which is operated independently and is unaffected.

The decision by Labatt to abandon the space marks yet another delayed impact from the Covid-19 pandemic, which sent workers home for weeks, months or even years in some cases as it fundamentally changed the workplace while wreaking havoc on the commercial real estate market.

The beer company, a subsidiary of a Costa Rican-based beverage giant, had been occupying much of the first two floors of the five-story building at 79 Perry since 2018, following a $20 million renovation of the building by the former Pegula Sports & Entertainment business owned by Terry and Kim Pegula.

It brought its corporate office and 70 employees from its prior home in Fountain Plaza, and set up an “innovation” microbrewery on part of the first floor to produce small batches of test beers to try out new flavors in hopes of expanding the customer base.

That all changed when the pandemic struck in 2020, forcing the company to go fully remote.

The brewery and tasting room were also affected, and never fully reopened or recovered. Popp said “we brew there infrequently” and had reopened after Covid “for large arena events, but closed about a year ago.”

Instead, Popp said, the company is focusing its efforts on Labatt Blue and Blue Light, which “continue to perform well,” and is still supporting its local workforce, now just over 50, by “prioritizing remote work that our employees prefer.”

The outdoor patio at Labatt USA building at 79 Perry St. in the shadows of the KeyBank Center.

The Pegulas purchased the five-story former Hi-Temp Fabrication building in February 2017 for $7 million and then unveiled plans to renovate it into a mixed-use facility that would include the first-floor restaurant and brewery, offices for both Labatt and the Pegula businesses, and apartments on the fifth floor. Located at the corner of Illinois and Perry streets, the 81,075-square-foot building was originally constructed in 1914 for Peerless Mill Supply Co.

Labatt USA – which is owned by Florida Ice & Farm Co. S.A., or FIFCO – had signed a 10-year lease on both spaces, so the sublease would be available through 2028.

Hunt Commercial is marketing more than 11,000 square feet of second-floor office space as well as a 3,500-square-foot first-floor brewery and tasting room space, not including equipment. They are being offered separately, at $17 per square foot and $10 per square foot, respectively. The brewing equipment would be offered separately.

The first floor space features a test brewery that included a 10-barrel, four-vessel brew house with 11 fermenters. A 400-square-foot tasting room gave visitors a chance to not only taste new styles – delivered over 30 feet straight through tubes from eight brite tanks – but also to provide staff with input on what they like or what changes to make.

However, “it’s not that another brewer couldn’t come in,” Corto said. “So it’s a phenomenal opportunity for an existing operation that wants to expand capacity or put itself in a high-visibility location near the Buffalo Sabres.”

The second floor has 11 private offices, several bullpen-style and collaboration spaces, conference rooms with beer brands and logos on the walls, a covered outdoor patio and an indoor bar and kitchen. There’s also a storage area and a safe.

Reach Jonathan D. Epstein at (716) 849-4478 or

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