BrokerageDesignDevelopmentHospitalityReportsRetail

2019 is “The Year of the Food Hall”

Facebooktwitterredditlinkedinmail

At a time when headlines about the retail sector remain dominated by stories of closures and bankruptcies, food halls have emerged as one of the hottest growth trends — spurring real estate trade journal Globe Street to declare 2019 as “The Year of the Food Hall.” But what began as a trend that was largely relegated to just a few markets has since exploded.

When Cushman & Wakefield first began tracking this phenomenon in 2016, there were roughly 120 projects across the country. According to the brokerage firm’s latest Food Halls report, that number is on track to nearly quadruple, with 450 food halls expected to be operational throughout the United States by the end of 2020. This year, Denver will add five more food halls. Now become a suburban trend, not just an urban one, the suburban migration of food halls is evident in Denver with the Stanley Marketplace food hall taking root in Aurora.

The Evolution of Food Hall Design

  • Successful design is not just about creating the right aesthetic; it’s about increasing efficiency for vendors while expanding space for customers. For this report Cushman and Wakefield spoke to one of the nation’s leading food hall designers: Ed Eimer. He is president of Eimer Design, and he and his firm have designed 19 projects including Franklin’s Table (Philadelphia, PA), Rock Row (Westbrook, ME), Inner Rail (Omaha, NE), Crave (Purdue University) and The Old North State Food Hall (East Raleigh, NC). According to Eimer, “Over the past three years, food hall design has evolved rapidly and significantly.”
  • Eimer says the first major change in food hall design is the size of vendor stalls; booths that were originally 450 square feet have shrunk to 300. In addition, common storage, scullery and kitchen spaces have either been reduced or completely eliminated. “We have redesigned spaces so that a vendor can accomplish everything — prep, cooking and service in just 300 square feet,” says Eimer.
  • Eimer makes note of one more significant design change happening across the country — delivery zones. Since delivery has become such an integral part of the food stall operation, food halls are now being designed with designated pickup areas for third-party delivery services so that delivery does not interfere with the onsite customer experience.
  • First, the incubator nature of food halls means start-ups and, importantly, not every vendor has shelf life. Second, many vendors are attracted to shorter-term financial commitments, especially for new test concepts. Third, manageable levels of turnover within a food hall is actually ideal — it means the food offerings are always changing, giving consumers more reasons to return and explore. When planned with intention and care, food halls have the opportunity to shift the retail formula away from the impersonal food courts of the past that were purely commerce-driven.

What Impact do Food Halls have on CRE?

  • Developers are now bringing food halls to their office projects as added incentives to the traditional urban office high rise. Food Halls as a ground-floor amenity for office buildings. ASB Real Estate Investments is pursuing this strategy in Denver at the Colorado Center where it is building a retail main street, anchored with a food hall. The 12,220-square-foot food hall is set to open in January 2020 and will feature inspired creations from both locally and nationally known chefs. The food hall will house 10 unique concepts, a 40-foot bar, and coffee shop under one roof, in addition to an outdoor patio with Wi-Fi access.
  • For office developers, including food halls in their projects is a way to attract new tenants (and retain existing ones) while generating incremental occupancy and rent gains.

The Future of Food Halls

  • There is no doubt that the food hall trend will continue to evolve. With a market that has quadrupled in just five years, the food hall movement has seen remarkably few failures. We have tracked fewer than 10 notable failures in the past four years (against an inventory that stood at roughly 275 at the close of 2018). Most of those failed projects have been smaller food halls in poor locations that were underfunded. All in all, we look forward to witnessing the progression of success for food halls and it’s continued impact on CRE.
Previous post

Makeover Coming for Underutilized Platte Street Plaza

Next post

Desirable Cherry Creek Office Building Sells for $55M

No Comment

Leave a reply

Your email address will not be published. Required fields are marked *