CW Retail - Food Halls Report

Quality “Quality” as it relates to food hall projects is not just about the architectural or design quality, but the tenant roster as well. The new crop of food halls being developed in the U.S. include a wide variety of projects ranging from reclamations of historic industrial buildings to new, upscale space in shopping centers or ground floor retail in other types of projects (office, multifami- ly or hospitality). But note that the design of the most successful operations in the market don’t just embrace cutting-edge design flourishes like “industrial chic” or exposed brick and timber construction; their layouts tend to be “outside the box.” The traditional food court—one built around a common seating area surrounded by a periphery of food vendors—has been replaced with more interactive layouts that allow consumers to experience the same space in different ways depending on the seating. Another primary design difference is driven by the greater need for common areas for social events. Today’s food hall is built on the ancient model of a central market being the focal point of community involvement. Whether it is space for host- ing entertainment or cultural events, or to offer culinary classes, tasting events or farmer’s markets, the addition of more common area space helps to generate even greater consumer resonance and loyalty to such projects. The reality is that projects that merely camouflage aging food courts with just a name change and little attention to design or layout upgrades are much less likely to build the same levels of consumer loyalty than are those that build truly interactive spaces with quality tenants. Here is where the issue of tenant rosters is critical: New fast casual restaurant concepts continue to dominate the general

marketplace in terms of expansion to meet consumer preferences. This is also the sweet spot for food hall tenancy, particular- ly when it comes to startups. Although, we have certainly seen no shortage of demand from many better known national chains. The cheaper costs of launching a food hall-based location instead of a full restau- rant in most urban areas means food halls will continue to thrive as a real estate option for test concepts, startups and even food truck operators looking for their initial bricks-and-mortar presence. Location, Location, Location… Location is always a central concern for any retail real estate-related project. But for food halls it is the primary concern. The levels of foot traffic needed to sustain an 8,000 sf mini food hall with just 10 vendors are significantly different than those need- ed to sustain a larger project like a new

Food Halls of America 2016

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