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Spring, 2023: Bringing Business Home
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Food Halls Offer Taste of Success

Landlords see faster turnarounds after closure compared with stand-alone restaurants.

March 22, 2023
Commercial & Investment Real Estate

Food halls—eating destinations that include several small, locally developed restaurants and typically a bar—emerged from the pandemic in relatively good shape. Of the 82 food halls opened since March 2020, only 15 were shuttered, a closure rate of 18%, according to Cushman & Wakefield data compiled for Bisnow. Contrast that with the 20% to 22% closure rate for independent restaurants in their first year, Phil Colicchio, food, beverage, and entertainment expert at Cushman & Wakefield, told Bisnow in January.

The number of food halls now nets at 321 operating across the country, with another 145 under development. Part of the success stems from the business model. Even if food hall vendors close at a similar rate to independent restaurants, the food hall is likely to survive, experts say.

Number of food halls in development in the U.S.

145
A 45% increase in the coming years. Cushman & Wakefield’s Phil Colicchio and Trip Schneck say communal settings and varied cuisines are key to their success.

Good Deal for Landlords

“If you’re a landlord and you’ve just leased 3.5 thousand square feet to a restaurant that doesn’t make it, you’re two years in the hole. But with a food hall, if a stall doesn’t make it, you’re able to transition very, very quickly,” Colicchio told Bisnow writer Maddy McCarty. With the typical licensing system, the downtime can be counted in hours or days.

In addition, revenue is coming from corporate sources, as businesses book the halls for events at relatively inexpensive prices.

In a typical food hall, vendors rotate periodically, according to Bisnow. But some concepts have stuck. A South American food vendor at ChefScape Kitchen, in Leesburg, Va., has been there four years.

In Minneapolis, a food hall called Eat Street Crossing is scheduled to open with a different take this spring, Bisnow reports. The partners are chefs opening options they intend to be permanent.

Adapted from “Downtime Counted ‘In Hours’: Food Halls Emerge as the Safe Bet for Restaurant Industry Development,” by Maddy McCarty, published by Bisnow (bisnow.com), Jan. 9, 2023.

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