CW Retail - Food Halls Report

FOOD HALLS OF AMERICA

50,000 sf Eataly or Anthony Bourdain’s planned 155,000 sf mega project at Pier 57 in Manhattan. The key to success here is understanding the customer base and where those cus- tomers are coming from. Is it a tour- ism-based site? Is it transit-oriented? Is it an amenity in a new urban office high-rise where primary customers might be the lunchtime office crowd? wave of the food hall movement. While there is no doubt that as the popularity of food hall projects builds, market saturation will eventually become an issue. But that is unlikely in the near term. Clearly there are generally fewer opportunities to develop such projects within major transit hubs in the U.S., but there are hundreds of untapped potential sites such as the nation’s airports, as well as transit hubs in both primary and secondary markets that have yet to have developed such space. Tourism-based sites across the nation also present significant opportunities, either stand-alone projects in those urban areas popular with tourists to major malls that thrive on tourism-based retail. In fact, mall operators are increasingly looking to food hall concepts to add to their tenant mixes. This is evident with single-op- erator concepts like Eataly. But we also anticipate mall operators will enhance their food, beverage and entertainment tenant mixes to include some plug-and-play food hall developers by next year. There remains plenty of room for growth when it comes to larger food hall projects in 2017 and beyond. We expect the big trend going forward will be the mini food hall as project amenity. Cushman & Wakefield tracked 20 existing projects in our survey this year as well as another couple under construction. There are other challenges as project devel- opers and investors look ahead to ride the

As mentioned earlier in this report, most of those 15 projects in the works that develop- ers did not yet want to list as active are mini food halls planned for ground floors of new urban office, multifamily or hospitality projects. This trend is in its infancy and is likely to emerge as the most significant driver of this trend going forward. Ultimate- ly, there is potential for hundreds of these types of projects across the nation in both new and existing projects where the densi- ties required for smaller food halls would be easily within reach.

The U.S. will close 2016 with a total of 35 new food hall projects totaling 771,000 sf of space.

CUSHMAN & WAKEFIELD

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