Why New York City's Food Halls Keep Closing

The restaurant business is thriving in New York City, with new eateries helping to drive retail vacancy in prime neighborhoods to an 11-year low.

The same can't be said for the city's food halls.

This year alone has seen at least three NYC food halls close their doors, including last week when Harry’s Table, a Cipriani-run Italian food market on the Upper West Side in the Waterline Square complex developed by GID, announced its intentions to shutter and lay off 72 employees. 

“There's no shortage of great food and beverage, specifically in New York City,” said Trip Schneck, managing partner and co-founder at Colicchio Consulting, a food and beverage experience consulting firm. “A $23 check average with no alcohol, and the rents that landlords are charging, it becomes difficult to make the economics work.”

Harry's Table is just the latest example of an NYC food hall opening to great fanfare, only to land in the market with a thud.

The 40K SF Citizens Market Hall in Brookfield Properties’ Manhattan West project said it would close in April. In May, Northend Food Hall in Washington Heights closed just four years after opening, Crain’s New York Business reported. 

Food halls offer chef-driven, quick-service restaurant concepts designed to give a more elevated, unique experience than mall food courts populated with national chains like Sweetgreen, Panda Express and Shake Shack. But NYC’s offerings have suffered for a few reasons, Schneck said.

The food hall trend has exploded over the past decade. In 2015, there were 75 nationwide, according to Garrick Brown Real Estate Consulting. By early 2023, the number had nearly quintupled to 343. 

But the pace of growth has slowed dramatically in the years following the pandemic, especially in New York.

Hybrid work, lack of alcohol and competition from restaurants and other food halls are causing difficulties for operators, and past failures have rendered landlords of top buildings skeptical.

Schneck said New York was the first market in the country to get a food hall, citing the one in the storied Plaza Hotel, which opened in 2008 and closed during the pandemic. The first food hall concepts weren’t refined, and operators didn’t have the opportunity to learn from others’ mistakes, he said.

“The problem with being on the leading edge and one of the early adopters of food halls is that you don't know what you don't know,” Schneck said. “Once you build your food hall, it's difficult to go back and change the layout.”

More recently, hybrid work and a slow return to in-person work have pummeled operators in NYC and other office districts, like The Loop in Chicago, where Revival Food Hall called it quits last summer. But another reason for the failures is that as the food hall industry built its blueprint for success, one missed opportunity became a glaring omission in both markets.

“The profit of these food halls is largely driven by alcoholic beverage,” he said. “A lot of the early food halls in New York and in the Loop were designed just for food stalls, and beverage was an afterthought.”

The early NYC food halls catered primarily to office workers and did 80% of their business between 11 a.m. and 2 p.m. on weekdays, he said. Most would close on the weekends because of the dip in foot traffic and because operators didn’t think about alcohol’s place in their venues.

This year's closures extended a pattern of food hall pain. Gotham Organization’s Gotham West Market ended its 11-year run in Hell's Kitchen at the end of last year. Canal Street Market, a 12K SF, Asian-themed outfit on the Lower East Side owned by real estate developer and entrepreneur Phil Chong, closed at the end of 2024.

The 35K SF Market Line food hall was envisioned as the Lower East Side's version of Istanbul's Grand Bazaar when it opened in 2018 as the retail centerpiece of the Essex Crossing megaproject. It shuttered in April 2024. 

In 2023, Williamsburg Market closed so abruptly that its vendors didn’t even know until they showed up at work, Greenpointers reported. Israel-based real estate investment firm LENY Group put the entire property into bankruptcy a year later.

Even food halls that aren’t closing have been forced to scale back or make changes.

The Tin Building by Jean-Georges in Lower Manhattan’s Seaport neighborhood reported a $33M loss last year, Bloomberg reported. The food hall, which was opened as a partnership between chef Jean-Georges Vongerichten and landlord Howard Hughes Holdings, plans to close at least a couple of its kitchens as a result.

In March, the Urbanspace food hall in Union Square was taken over by international food hall operator Time Out Market, Eater reported.

At least one of the food halls closing isn’t being replaced by food and beverage at all. Conservative nonprofit The Rosenkranz Foundation bought the condo that was formerly the Essex Crossing food hall for $15M this spring, Crain’s reported at the time.

Landlords of the food halls didn't respond to Bisnow's requests for comment.

Empire State Realty Trust Senior Vice President of Leasing Fred Posniak has had opportunities to work with food courts and food halls over the years, but he has leaned away from them because they often have poor credit and because operators’ curations have flopped, leaving a void, he said at a Bisnow event last month.

“Then, all of a sudden, you got a 20, 30K SF food court in your office building, and it looks like crap, looks awful,” Posniak said. “It definitely diminishes the asset for our office tenants.”

But many owners of older buildings that are struggling to attract office tenants still see the retail concept as a potential draw.

“We're fielding multiple calls a week as people are returning to the office, and office building owners are looking for ways to attract more office tenants,” Schneck said, adding that it’s largely owners of Class-A and B space as opposed to trophy buildings.

Schneck believes the slew of closures is just the advent of a new era of the NYC food hall. Broadway Food Court has opened near Canal Street Market’s former location, while Wonder, a food hall/ghost kitchen chain from Walmart’s former e-commerce president, Marc Lore, already had six NYC locations by last June, Eater reported.

“We're always going to see food hall closures. There are going to be ones that are poorly designed or conceived,” Schneck said. “I think New York will come out on top when it's all said and done.”