The emergence of the food hall
By: J. David Chapman/September 20, 2018
Food trucks have been an essential component of rebuilding the urban fabric in American cities. Chefs and entrepreneurs have used food trucks to prove their concepts before taking the riskier brick-and-mortar alternative. Over several decades, the food court has also become a popular and convenient dining choice for families while shopping in malls. Both have contributed to the emergence of the next big thing as real estate and restaurant concepts collide.
This collision of real estate and food is commonly called the food hall. Food halls are becoming a favorite among real estate developers, who see them as an experiential retail strategy. The concept has become popular among consumers, who are eating out more than ever and want authentic dishes and communal dining experiences to satisfy increasingly sophisticated palettes.
Make no mistake – this isn’t the food court of yesteryear. The modern food hall is about celebrating food and sharing an experience, not providing an amenity to shoppers pausing for a quick bite. The most successful projects utilize interactive common area space as a focal point for community involvement – whether for farmers markets, tasting events or entertainment – where they offer a variety of high-quality, fresh and affordable cuisine.
Food halls are particularly attractive to building owners and managers because of their lower failure rates and added amenity to a project. Although there is limited data, it appears food hall failure rates will be significantly lower than restaurant failure rates, which is about 30 percent in the first 18 months of operation. Food halls provide a cheaper overall operating model, require significantly less startup capital, and perform well both in urban and suburban locales as the ultimate amenity for mixed-use, office and multifamily projects.
Oklahoma City’s first attempt at this concept, The Commissary, originally was planned to open in 2018 at 308 NW 10th St. in Midtown. The name has been changed to The Collective and will now open in early 2019 with seven full kitchens, seating areas, and full bars, on both ground floor and rooftop. Jenny Nguyen, who is the manager at Lee’s Sandwiches, is the new owner. Work is still underway on this former service station, garage and car dealership. Historic tax credits were key to the restoration, and with any luck Oklahoma City will see its first food hall concept early next year.
Dr. J. David Chapman is an associate professor of finance and real estate at the University of Central Oklahoma (jchapman7@uco.edu)