In D.C. and nationally, food halls are rising: Consultancy report
Food Halls continue to appear all across the country, and are gaining breakneck momentum in the Washington, D.C. area. According to a report by consultancy Cushman & Wakefield, there’s a reason these food halls are as popular and appealing as they are. Food Halls in North America 2018 notes how economically robust the concept is for developers and restaurant operators—they offer an e-commerce-proof product that can’t be replicated by a website a consumer is browsing while lounging in the convenience of their home. Furthermore, these food halls offer a true dining and social experience, the cornerstone value proposition of high-end, sit-down restaurants that offer patrons a sampling of local and/or global fare in an upscale setting.
Food halls growing in Metro-Washington, D.C.
Pike and Rose in North Bethesda, Md. is a luxury, mixed-used development that announced a food hall this year. The recent announcement of an Asian food hall, The Block, coming in 2019 should be no surprise. It will occupy a 500-square-foot space at 967 Rose Avenue, and feature vendors that include Pokéworks offering poke bowls, Taiwanese “SnoCream” and Asian street food, according to Bethesda Magazine.
The food hall was first reported by Washingtonian Magazine and is yet another addition to the evolving and voluminous food hall scene in Metro-D.C., which includes recent and upcoming projects: Ballston Quarter (Arlington, Va.), Isabella Eatery (Tysons, Va.), Latin Marketplace (NoMa, D.C.), and Common Ground. (Rosslyn, Va.)
Store Reporter announced in July the opening of The Spot, an Asian food hall operating at the base of the Metropolitan luxury apartment community in Rockville Town Center, Md.
The food hall model
According to Cushman & Wakefield, food halls offer a less expensive operating model to restaurants than they have currently, although the increase in food hall penetration in major urban markets is also a reason that restaurateurs will see increased competition and more restaurant failures.
The $2.4 billion purchase of the building above Chelsea Market by Google, in March 2018, is another demonstration that the food hall is not just a strong value play for restaurants, but also for developers, mall operators and mixed-use developers.
Food halls are not a fad—food halls are the sharing economy for restaurants. They are here to stay and, for most of the United States, the trend has only just begun.”
Cushman Wakefiled, Food Halls in North America 2018
“…food halls represent a cheaper and more flexible alternative to investing in standalone restaurant space,” says the Cushman & Wakefield report. “Food halls are not a fad—food halls are the sharing economy for restaurants. They are here to stay and, for most of the United States, the trend has only just begun.”
The food hall model is usually tasked to and operated by a master operator. This gives partner restaurant operators a model where they can show off artisan products and foods and provide a diversity of concepts and service-style systems, ranging from urban street fare to polished, sit-down service. Typically, the master food hall operator will also provide space to gourmet markets or street vendors who can offer foods to be prepared at home, further adding a mix to the built-in food ecosystem.
Food halls by the numbers
Flexibility is key in this format, and there are a variety of short- and long-term options that the master food hall operator can provide to tenants and subtenants. “Deals often include common area maintenance charges for communal dining and/or cooking, preparation, freezer/cooler or office space.” The report notes that, in many ways, the food hall represents for restaurant operators the shared economy version of a dining venue.
Cushman & Wakefield project about 180 to 190 food hall projects in operation in the United States by the end of the year, and 300 by the end of 2020. If the 190 number is accurate, the end-of-year 2018 count would represent a 64 percent increase over the 116 total that was tallied at the end of 2017.
Additionally, there were 44 U.S. food hall projects under construction as of this spring, currently. Expect to see more of these experiential dining forums locally as we close out the year, and more announcements of upcoming projects due to their popularity with savvy restaurant operators, property developers and landlords.
Author credit: Rick Zambrano
Photo credit: Clark Construction (featured), Pike and Rose (inline)
This article originally appeared in the spring issue of Eatery Pulse News (D.C.).