There's no hotter retail trend than food halls, and Tampa has two under construction
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: May 24, 2017

On the northern fringe of downtown Tampa, two historic buildings are being transformed into the hottest retail trend in the U.S.

Food halls, which bring together different restaurateurs in one communal space, are under construction in the Armature Works building on the Tampa Heights waterfront and at 1701 N. Franklin St., where the Hall on Franklin is slated to open in June.

Each features an array of Tampa Bay restaurateurs; the Hall on Franklin has seven vendors with food that ranges from grilled cheese sandwiches and milkshakes to poke bowls. The Armature Works food hall has wood-fired pizza and a local ramen restaurant, among other vendors.

Locale Market, which combines multiple food stations - from burgers to sushi to charcuterie - from celebrity chef Michael Mina under one roof, opened in St. Petersburg in 2014. Tampa's Oxford Exchange isn't a food hall but employs a similar emporium model, with a full-service restaurant, coffee and tea bars, a bookstore and a lifestyle boutique under one roof.

Food halls appeal to adventurous millennial palates, allowing consumers to sample a bit of everything instead of ordering one large meal. They also offer a retail experience that can compete with Amazon: It can't be purchased online, but lends itself to sharing on social media.

"While there are a number of these growth-mode sectors, no other retail category has generated as much aggressive expansion in the past few years as food-related retail," according to a report from Cushman & Wakefield Inc. that was touted at this week's International Council of Shopping Centers convention in Las Vegas.

"And arguably, there is no hotter trend within that category as food halls."

The Cushman report's top 20 food halls include iconic spots like Seattle's Pike Place Market and Eastern Market in Washington, D.C. It also lists relative newcomers like the renovated Union Station in Denver as well as Liberty Public Market in San Diego.

By 2019, Cushman predicts there could be as many as 200 food halls in the U.S.

Food halls become iconic gathering spots for cities - places that end up plastered all over social media as the must-see destinations for leisure and business travelers. Creating a spot like that for Tampa - and helping the city build a more cosmopolitan identity - was a big motivating factor for Jamal Wilson, the investor behind the Hall on Franklin.

Wilson traveled extensively after selling his mortgage business in 2013 and visited several food halls across the country before deciding to launch the Hall.

"We have all these different entrepreneurs and restaurants in Tampa," Wilson said. "This is a way to bring it all together so you're really getting a taste of Tampa."

All food-based concepts, from restaurants to grocery stores, have been bright spots in retail real estate, filling holes left by small shops that can't compete in the ecommerce era. But restaurants, particularly casual dining chains, aren't immune from the same pressures facing brick-and-mortar retail and have seen elevated bankruptcies in recent months, according to the Cushman report. Tampa's own Bloomin' Brands Inc. (NASDAQ: BLMN) is struggling to adapt to changing consumer preferences and has been investing heavily in takeout and delivery, hoping to boost lagging sales.

The food hall concept not only appeals to consumers, it's also more economically feasible for vendors, who are renting only a few hundred square feet. Because of that, Cushman is forecasting that food halls will continue to drive real estate development.

"The rise of food and beverage retail, the explosion of new and unique fast casual and chef-driven startup concepts, and the increasing in restaurant rents in major cities are among the many real estate factors that have aligned to propel this trend," according to the report.

"The need for incubator space and the relatively cheaper overall rents that operators face when opening concepts in food hall environments compared to leasing independent space are all positives when it comes to feeding future demand for food hall space."

Ashley Gurbal Kritzer is senior reporter for the Tampa Bay Business Journal.