The feeding frenzy for the food hall model in Los Angeles, New York and beyond is growing, but recent indicators show the real estate play may be overcooked.
The number of food halls on both coasts, along with Chicago, Miami and others is set to quadruple, from 160 in 2016 to 450 by the end of 2020, according to a recent Cushman & Wakefield study, cited by the Los Angeles Times. Nearly a dozen notable food halls have failed in the last four years, and Cushman expects more of that as they proliferate.
L.A. is seeing its fair share of new food halls, many inspired by the success of DTLA’s Grand Central Market, which sees 2 million visitors a year, many ready to wait an hour for one of Eggslut’s famous breakfast sandwiches.
Some are being built from the ground up, but developers are also using them to fill hard-to-rent retail space. Essex Property Trust is adding a 21-vendor hall at the Santee Court apartment complex in Downtown L.A. Developer Urban Offerings wants to build a rooftop food hall at the Norton Building in the Fashion District.
In New York, the creator behind a Downtown Brooklyn food hall signed a lease with Boston Properties to open a 10,000-square-foot version, called The Hugh, in a Midtown Manhattan tower. And a 30,000-square-foot food hall in a Blackstone-owned shopping center in Queens, is also scheduled to open soon.
Consultant Rick Moses, who oversaw the recent renovation of LA’s Grand Central Market and is working on another location in Culver City, said developers should think twice before digging in.
“There is very little room for more,” he told the Times. “They have to be very special places to be successful.” But, he added, “we are past the peak.” [LAT] — Dennis Lynch