Food Halls and mixed-use projects

By Michael K. Hatch
Attorney at Law

Over the past several years, the nation has experienced a “food hall” boom, as commercial real estate developers have incorporated the open eatery concepts into mixed-use projects.

What’s a “food hall?” Think of it as a mall food court, only with higher-quality outlets as opposed to the traditional fast food franchises. The eateries cater to the foodie movement, with participants ranging from food truck operators to celebrity chefs.

And they can go into a variety of venues, including mixed-use developments – multi-purpose buildings that can integrate residential, commercial, cultural, institutional, and/or industrial uses. Such a structure may include retail stores, restaurants and/or light industrial on its ground floor, offices on its second floor, and residences on the floors above.

Even as traditional shopping malls are in decline, food halls are enjoying explosive growth. According to Bisnow.com, Cushman & Wakefield, a global commercial real estate services company, began tracking the trend in 2015. At that time there were 70 such projects across the country. There are now more than 100, while 180 are expected to be completed by the end of 2018 and 300 by the end of 2020.

The movement started in busy downtown commercial centers in major cities, but has started to expand to suburbs. We haven’t seen any yet in the Rock Hill area, but the way things are trending, it probably won’t be long before we do. We’ll be watching with particular interest here at Morton & Gettys, where we have extensive experience with both restaurant leasing and mixed-use developments.

Reasons for food hall growth

Cushman & Wakefield executive Garrick Brown writes that the trend is driven by multiple factors. Consumer desires are changing, and shopping center owners are figuring out ways to accommodate them. Malls used to consider food retail as an extra added convenience for shoppers. Now, retailers are using the eateries to draw consumers to the shopping.

Increasingly, the food halls themselves serve as anchors for shopping centers. At the same time, they lower the risk for commercial property developers and owners, because the concept doesn’t depend on a single large tenant: Food providers have low startup costs and are easily replaced.

Michael K. Hatch an associate with Morton & Gettys Law Firm in Rock Hill, SC. His practice includes business and corporate law, commercial leasing and commercial real estate and development. He can be reached at (803) 366-3388 or michael.hatch@mortongettys.com.

Michael K. Hatch

Associate

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