As food halls flood cities, some wonder about benefits of the boom

Early next year, Zeppelin Station, a 100,000-square-foot “creative workspace and culinary concourse” filled with street food vendors, bars, and a full-service restaurant, will open in Denver. Envisioned as a commercial development with a food hall at its nexus, it’s part of a bigger vision the developer, Zeppelin Development, has to create a more active workspace to attract tenants.

“People want the same things when they come to work that they want when they come home,” says developer Kyle Zeppelin.

A fixture in Denver and the company behind numerous residential and mixed-use projects in the city’s RiNo neighborhood, Zeppelin believes the food hall concept offers a great hook for companies looking to provide the amenity-filled workspaces the younger, more tech-savvy demographic desires. This new spin on the concept also points to the proliferation of food hall-focused development, and the increasing creativity needed to stand out from the crowd.

A rendering of Zeppelin Station, a soon-to-open mixed-use project in Denver featuring a food hall and commercial space.

Dynia and Zeppelin Development

Food halls are booming in the United States, with gargantuan new ones anchoring retail districts and neighborhood developments across the country. According to an analysis by Cushman & Wakefield, the number of food halls operating in the United States will exceed 200 by 2019, an increase of 700 percent since 2010 (that means going from roughly 6 million square feet from 3 billion). In Manhattan, there are 16 such projects in operation and more in the works.

Over the last decade, the idea has gone from innovative to expected, becoming a centerpiece of large-scale developments in New York (DeKalb Market Hall), Chicago (Time Out media company is at the helm of one proposed project), Detroit (the rehab of the Stone Soap Building) and Dallas (Legacy Food Hall), among many others

With these projects becoming an increasingly common aspect of large-scale urban developments, it’s easy for a cynic to ask if we’ve hit peak food hall. A recent New Yorker article on the subject, focused on somewhat poor returns for vendors, suggests developers see it as a great marketing tool: “Drop a food hall into the mix, and the whole development basks in the soft, Edison-bulb glow of the small food businesses inhabiting its ground floor, luring tenants with the siren song of pour-over coffee and craft beer.”

Food halls’ rapid expansion comes due to their location at the nexus of different trends: commercial projects seeking foot traffic and customers amid the retail apocalypse, the foodie culture juggernaut, and a desire for developers to find experiential hooks to turn large-scale developments into destinations.

Zeppelin Station offers a somewhat different spin on the concept by pairing the idea with a office space, a strategy also being advanced by the team behind Revival Food Hall in Chicago and the Pinnacle Red Group in Oakland, according to a recent New York Times article. Located adjacent to the company’s developments in RiNo, a neighborhood Zeppelin helped pioneer years ago, the concept for a multi-ethnic food hall compliments the overall project, which is 75 percent workspace, offering the kind of third space many want to socialize, meet, and collaborate.

But is it a good return on investment? For Zeppelin, the food hall would at the very lease provide a draw for commercial clients, itself a big benefit in a competitive market. If the expansion of the trend is any indication, many see its value.

According to a report by the Urban Land Institute, the concept has been a catalyst for neighborhoods in Anaheim, California (the Packing House), and Washington. D.C. (Union Market). One of the oldest such developments in the U.S., Chelsea Market in New York City, has continued to expand, with developers announcing plans last year to invest an additional $35 to $50 million to double food and retail floor space. Increasingly, developers are adapting layouts and lease terms on new food hall projects, tweaking designs to make them easier to navigate and allowing small vendors to exit more quickly.

It remains to be seen if Zeppelin Station, and the new generation of food halls, show that kind of return and demonstrate that level of staying power. But they are indicative of a trend that shows few signs of slowing.

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https://www.curbed.com/2017/12/22/16811926/real-estate-development-food-hall-denver-zeppelin