Unlike a traditional restaurant, a food hall is a collection of food vendors and restaurants in one central location. Some food vendors will occupy small, preconstructed stalls with open, shared dining, and others will have a full kitchen and private dine-in seating.

From tacos and pasta to global cuisines and fine dining, a food hall offers unique access to a wide variety of foods in one location. Some of our nation’s most successful and famous food halls include Legacy Hall in Dallas, TX (also managed by The Food Hall Co) and Eataly in New York.

What effective food halls get right is to provide a variety of food vendor options at multiple price points in a space that offers convenience, various amenities, and an unforgettable ambiance. Some amenities across successful food halls include cooking classes, high-quality markets, table delivery, and entertainment like live music or other community events.

The year-over-year growth of the food hall market has averaged over 14% per year between 2018 and 2023.[2] In 2023, the exploding food hall market size was measured at over $582 million in revenue, up almost 3% from the previous year.[3]

On average, the standalone restaurant industry operates at or below 10% profit margins. Due to the benefits of a shared location and increased foot traffic, food hall restaurants and food stalls defy the usual numbers and generally generate between 15-20% depending on the location and local market conditions.[4]

There are two primary investment models we employ when creating a business plan for hospitality investments. In one model, we own only the real estate and operate as a landlord for the vendors within the location. We would preconstruct the vendor stalls, provide the point-of-sale system, and manage the marketing and community outreach for the location as a whole. The primary revenue driver in this model is rent from installed vendors.

In the second model, we own the real estate and one or more restaurants or food stalls within the location. We have expert teams in place to create and manage restaurant or food stall operations and are responsible for its growth.

The primary revenue driver in this model is both revenue generated by our own entities and rent from installed vendors. Rent from vendors can be either a predetermined figure or a percentage of total revenue generated, which is typically between 10-30%.

Revenue paths for hospitality investments vary depending on how the deal is structured. However, in most cases, these entities offer returns in cash flow, appreciation, and future exit. With solid profit margins and an experienced management team, the financial reward of hospitality investments is exceptional.

Hospitality investments offer an exciting opportunity for diversified revenue streams. With an ownership-only structure, there are few operations to manage, and rent comes in every month. With the ownership and operations structure, there is the added revenue of restaurant sales, in addition to rent.

When executed properly, a food hall is a community destination with high foot traffic and engagement with the locals. It offers an opportunity to become a staple in the local economy and attract desirable attention from the ever-exclusive foodie culture.

As a real estate investment, food halls can take shape with generally lower start-up costs, depending on the location and facility. There is also a significant amount of flexibility when it comes to vendor rotation. With such high financial return potential, they make a strong addition to any investment portfolio.

A food hall is unlike any other food and beverage investment. It’s far more complex than food truck courts and more involved than a traditional restaurant. The team you work with to manage a food hall will make or break the investment.

There are many boxes to check, from risk mitigation and regulatory compliance to quality control and community impact. Experience is critical. A track record is critical. From initial ideas to design and vendor selection, innovative and forward-thinking concepts are essential.

Our managing directors, together with CANDev and The Food Hall Co, have vetted experience in a myriad of real estate and food industry investment opportunities, including food hall development. As we capitalize on market trends and foodie culture, we’re confident a food hall investment is one you can get excited about.