The struggle and increasing demise of big-box retailers is helping give legs to a new trend in commercial real estate: food halls. Long a fixture in New York and San Francisco, food halls are now sprouting up in several major cities. The number of food halls in the U.S. grew almost forty percent in 2016. There are about 117 food halls around the country. By the end of 2018, Cushman and Wakefield, a commercial real estate firm, predicts that number will double. With the move toward urban infill in Phoenix and the on-trend loss of big-box retailers, could food halls be the next big trend in Phoenix?
A food hall is not a food court
First, let’s talk about what a food hall is and is not. You might hear the word food hall and immediately think of that bottom floor, corner of the mall, devoid of natural light; overwhelmed with tweens who are vying for a spot in line to order Panda Express, McDonalds’ or Chipotle. As patrons succumb to sensory overload, they are often dodging soaring French fries thrown from a group of kids nearby. That would be a food court and there’s a big difference. One is a tween hangout filled with mediocre QSR options, while the other offers chance to sample some of the best food a city has to offer in one space, minus the bad lighting and Lord of the Flies atmosphere.
Food halls are hip and innovative
Unlike their fluorescent lit counter parts, food halls tend to offer more innovative concepts in a well-lit, attractively designed hip environment. They give aspiring chefs and restaurateurs a chance to try out new concepts and refine menus without taking on the enormous financial risk of opening a bricks and mortar space of their own. Food halls also make a nice “next step” for food trucks, ready for a permanent location but not ready to open their own full-fledged restaurant.
DeSoto Central Market
Phoenix has one true food hall; the DeSoto Central Market, which opened in April 2015. Housed in what used to be the C.P. Stephens DeSoto Six Motorcars building downtown, owners carefully preserved the historic building. Today, it features seven boutique eateries, an artisanal market and deco-era bar. Right on trend. But is DeSoto the first in a long line oh so hip food halls for the Greater Phoenix area?
Developers love food halls
A few factors bode well for the growth of food falls in Phoenix. The City has created an extensive policy that encourage infill development, especially near light rail stops, and it has its own share of cavernous big-box retail spaces that have succumbed to Amazon. There has also been a push toward more mixed-use development. An increasing number of apartment buildings are going up and developers are looking to fill the bottom floors with a mix of food and retail businesses. A food hall’s ability to present several different kinds of eating experiences in one space makes it attractive to developers and land lords as does the foot traffic. Food halls also allow younger entrepreneurs to come to the table, so to speak; which is exactly who live in downtown Phoenix.
Is Phoenix food hall ready?
Now for the big ‘but.” Food halls are particularly hot in major cities such as New York, Chicago, Boston and San Francisco. One thing these cities have in common is the amount of people who use public transportation or their own two feet to get around. And here is the rub. Look up the term “Urban Sprawl” in the dictionary and you will see a picture of Phoenix. That may be the reason the only true food hall the Valley has is downtown. It remains to be seen whether a food hall would thrive in area where nobody is on foot.
Is J.C. Penney hip enough?
Would you drive to a food hall in a former J.C. Penney? The whole vibe of food halls is one of intense urban hipness. A food hall in a run-down mall from the 80’s that guards a massive parking lot, may not be able to pull off that hipness factor. The sad truth is, eating at a former J.C. Penney is simply not as cool as dining at an old car dealership in a historic building. So, while we can expect more food halls in Phoenix, we could cautiously predict they won’t be the answer to filling all the empty retail spaces.
At Landmark Title, we work with both hip and un-hip residential and commercial realtors, along with their clients to provide escrow and title services. If you have questions or need assistance, please contact our office at (602) 768-2800 or visit our website.