Foodies Rejoice: Food Halls Are Exploding Onto The Bay Area Restaurant Scene
Enter San Francisco’s Ferry Building on the weekend or during the lunch hour and there will be long lines of people ordering their favorite drinks from Blue Bottle Coffee or waiting to chow down on a burger from Gott’s Roadside. The 65K SF Ferry Building is the Bay Area’s premier example of a food hall’s potential and many more food halls are trying to follow in its culinary footsteps.
While there are about a dozen food halls around the Bay Area, many more are in the works as part of office, multifamily or retail projects.
In the Bay Area, food halls attract local foodies, tourists and office employees alike to sample a wide range of locally sourced food. Food halls are becoming so popular that Cushman & Wakefield's latest Food Halls of North America report expects the number of food halls nationally to triple to 300 by 2020.
“It’s just white-hot,” Cushman & Wakefield Vice President, Retail Intelligence, Americas Garrick Brown said.
The San Francisco Bay Area is a prime market for food halls as one of three hubs of food culture in the U.S. next to Las Vegas and New York City, Brown said.
The growth of the slow food movement started by local chef Alice Waters also supports the core element of food halls: authenticity. Brown said Bay Area residents are more interested in experimental, authentic food options and less interested in processed fast foods.
From a vendor perspective, renting a space in a food hall involves a small commitment and can be a great way to start a business. Startup costs are much lower than for a full-scale restaurant, he said. It also provides a brick-and-mortar location for food truck operators who could prepare foods and pack up the truck and go mobile. Ground-floor food halls also make it easier to lease the upstairs offices, he said.
“It is consumer demand, vendor demand and landlord demand. With all three of those [entities] wanting to get in on the game, it is about to explode,” Brown said.
Big tech companies are considering food halls as part of the ground floor of their buildings or within their campuses as a way to provide better connections to the local community and space for local restaurants and vendors to benefit from access to the tech employees on campus, Brown said.
The initial layout of the food hall was half grocery store and half food hall, he said. The thought was Twitter employees would grab groceries on the way home and eat lunch at the cafeteria within the offices.
Instead, the food hall space was most popular and the market struggled. The operator ended up downsizing the market and added more food vendors. There is now a waiting list of vendors, Brown said.
Food Halls Of Different Flavors
The next iteration of food halls will be from mall landlords who are considering some kind of food hall concept as part of redevelopment, Brown said. At local malls, there will likely be more chef-driven concepts, he said.
These food halls will move away from the traditional food court that provided a common seating area and fast-food options and was secondary to the shopping experience, according to the Cushman & Wakefield report. Modern food halls provide a celebration of food itself and typically have shared seating and offer entertainment and social events.
Food halls will start to appear in different iterations with some focused on local specialties, such as the 40K SF Oxbow Public Market in Napa, and others focused on a specific type of food. The 30K SF China Live is focused on Chinese food. An operator also is interested in opening a food hall in Japan Town, Brown said. BCV Architecture + Interiors renovated and designed the Oxbow Public Market and The Ferry Building Market.
Brown said there will be more food halls in San Francisco and an explosion on the Peninsula, South Bay and East Bay. He said the East Bay could easily command a gourmet food hall of similar quality as the Ferry Building in San Francisco.
He said food halls are becoming part of suburban projects as well. In San Mateo County, there are three projects in the pipeline that would include food halls. A multifamily transit-oriented development in San Mateo called Passage will include a food hall with healthy local options. The San Francisco International Airport also is adding a small food hall to open in the summer with three local vendors in the international terminal.
What It Takes To Stay Open
He said food halls typically can’t operate as independent projects and need to be included with offices, apartments or as part of larger developments. For example, the company converted a historic Sears building in Atlanta into Ponce City Market, a mixed-use development with a food hall, retail, apartments and an office building.
In the Bay Area, The Public Market in Emeryville has been undergoing a massive renovation as part of a larger mixed-use redevelopment that will add a full-service grocery store, residential, 180K SF of retail and 120K SF of office. The 20K SF market is up to 17 vendors, including two that will open later this year.
For the most part, Bay Area food halls tend to stay in business. Only two in San Francisco didn’t work out in recent years: Brown said there were two small food halls under 5K SF in Castro and Noe Valley that didn’t have a lot of vendors and never had enough foot traffic.
“You either have to become a destination for people to go or are in a destination people go to,” Brown said.
He said food halls that work have a functional space that maximizes efficiencies and not just a cool, inviting space. Food halls have to provide flexible leases and provide some assistance to vendors that may need help with point-of-sale systems and make sure that vendors can afford to lease the space so it is profitable for everyone, Brown said.
“We deal with all these different fads. Sometimes they stick and sometimes they don’t. Food halls are designed to weather that,” he said.