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Office Food Halls to Be Born Again Among the Ashes

The restaurant industry is a battlefield, the fallen strewn out in every direction with boarded up windows and closed signs for all to see. Lockdowns, capacity limits, and shrinking demand has hit owners hard. Few have been hit as hard as those operating in office food halls or food courts, relying on demand from office workers who aren’t there. Food halls may have been the first casualties of the pandemic, but they’ll be the first to be reborn when this is all over. 

Before the pandemic ‘food hall’ was an amenity that commercial offices were smitten with. Taking a page out of Silicon Valley’s playbook, where tech companies are known for providing free meals from trained chefs as a way to attract and retain talent, landlords all across the country were courting chefs, restaurants, and eateries to create the perfect lunchtime locale. A study by US-based office furniture maker Steelcase found 61 percent of offices in the United States have some form of a cafeteria or local eatery on site. Workplace experts know that work doesn’t stop at lunch, often a good bite to eat and informal conversations among co-workers can spark new ideas and lines of collaboration. For many employees, an on-site coffee shop, cafe, or eatery is the perfect place to meet with colleagues or get a little extra work done on your break. The pandemic has put all that at risk. 

At Greenway Plaza, Houston’s largest office complex, totaling more than 4.4 million square feet, Parkway Properties has been carefully curating food tenants at its underground foodcourt ‘The Hub’ since acquiring the property in 2016. Spots like Burger-Chan and Feges Barbecue established themselves as award-winning eateries, being singled out by renowned local food critics as exceptional eateries. They went from serving thousands of customers to a few dozen. 

“Everything came to a grinding halt in the course of 24 hours,” Feges Barbecue co-founder Erin Smith told Eater Houston. “People were very aware of what was happening, and when Judge Hidalgo issued the ‘stay home, work safe’ order on March 17, our workforce went to zero overnight. The office building was closed, the doors were locked, and nobody was here.” 

For many businesses operating a food establishment in an office food court, takeout and curbside isn’t an option for survival. Even if customers have access or restaurants have access to the curb, few people are thinking of an office food court as a dining destination. Parkway Properties worked with its food tenants, offering rent abatement and devising ways to bring in new customers. It wasn’t enough to save Burger-Chan, which closed its Greenway Location last year, now operating as a cloud kitchen via delivery or pickup. Feges has been scrapping by, buoyed by a second free-standing location, working twice as hard to make a fraction of the profit. 

Their story is playing out in food halls and food courts across America. 

Toronto’s Harbour Eats by Mercatino, a 10,000 square foot space at Menkes new ultra-luxe 35-floor One York office building in the heart of the cities South Core Business District closed entirely, selling off all the kitchen equipment. Gansevoort Market and Pennsy Food Hall in New York City announced their end. In Austin, restaurants at Fareground are packing it up. Tampa Bay’s The Hall on Franklin has closed. Micro Food Hall in Midtown Atlanta shut its doors permanently. Puck Food Hall in Memphis closed at the end of December. Chicago’s Wells Street Market and Time Out Market have both closed. Workshop in Charleston shut down. The Barn in Lexington, gone. If you live in a major American metro, it’s not hard to find a closed food hall near you. 

“Here’s the problem,” Ravi Nagubadi, owner of Art of Dosa in Revival Food Hall, told the Chicago Tribune. “Everything that is good for a vendor (at a food hall) is predicated on crowds, which are no longer going to be allowed. The financial mechanics of a food hall for the next year or more could be called into question. What made it financially viable in years past is no longer in the new normal.”

Food halls are only one part of the problem. Restaurant closures are happening at a staggering space. Food publications and blogs have daily lists of closures. An estimated 110,000 restaurants have closed since the pandemic began. Maybe one of them was your favorite lunch spot.  

“What these findings make clear is that more than 500,000 restaurants of every business type—franchise, chain and independent—are in an economic free fall,” Sean Kennedy, executive vice president, public affairs, for the National Restaurant Association, told Bloomberg.

The flipside to food halls is that while they may have been some of the first to go, they’ll also be some of the first to come back. Dozens of food halls have closed permanently but practically just as many only closed temporarily, they’re ready to come roaring back when office employees finally make it back to work. The economics that makes food halls work: low cost of capital, shared resources, and community dining space makes opening a food stall in a food hall one of the easiest ways to start serving up grub. Restaurants that shut down during the pandemic are now looking at a revival in their local food hall. Talented chefs and restauranteurs left out of work want back in the game as soon as possible, there are few easier ways than pursuing a food hall location. 

“Now more than ever, restaurant partners are attracted to the food hall model due to the ease of operations and lower financial risk. We’re seeing that momentum and excitement at Assembly Food Hall and are well-positioned for a successful opening in spring 2021,” said David Daniels, senior vice president of marketing at The Food Hall Co., which operates Nashville’s Assembly Food hall. 

If you thought the pandemic would free us of food halls, you’re likely to be dead wrong. Many may not have survived, but they’ll soon be back with a vengeance followed by even more behind them. Outside of our office lunch spaces, many believe that pent-up demand will usher in a new version of the Roaring Twenties that will have restaurants and retailers roaring back. From the ashes, the restaurant industry will be reborn because no matter what happens one fact remains inescapable: people are hungry. 

Associate Editor
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