Food halls have evolved well beyond their origins as mall food courts. They now serve as anchor tenants capable of reshaping entire mixed-use developments. Creating a successful food hall, however, requires understanding a complex mix of operational, financial, and demographic factors that many developers underestimate.
Jay Coldren, president and founder of Onset Hospitality, has spent four years advising developers on these challenges. Coldren previously led Time Out Market, the world’s largest food hall operator, before launching Onset in 2022 to design and operate communal dining spaces for mixed-use projects.
Coldren says his team spends significant time evaluating whether a food hall is viable in a given location. “If you put a food hall into an environment that is not fertile, it will wither and die very quickly based on the demographics, the foot traffic, and the overall commercial environment surrounding the development,” he explains.
The financial impact of a food hall often extends beyond its own revenue. Onset’s current project with Titan Development in Albuquerque, New Mexico illustrates this effect. The food hall is positioned between a medical center, a residential neighborhood, and two hotels.
Coldren notes that this placement is strategic. The food hall is expected to make the hotels more attractive, supporting higher rates and better occupancy. The medical center gains an amenity that supports meal service throughout the day and expands catering options. “If they can get a higher average rate and more occupancy, that’s as valuable as the financial returns from the food hall itself,” Coldren says.
This effect has been observed in other markets. Coldren points to a project with Time Out Market across from the Burj Khalifa in Dubai, where occupancy and rents in the building rose after the food hall opened. He argues that developers should not focus solely on the food hall’s direct return on investment. The broader lift to surrounding property values and commercial performance can be equally significant.
A common developer mistake is misjudging the optimal size for a food hall. Success depends on aligning square footage, vendor count, and foot traffic projections.
“There’s a certain amount of volume that an individual operator needs to be successful. If you make it too big, you end up cannibalizing it, and all the operators do poorly,” Coldren explains. Coldren advises aiming for a compact, high-traffic model, describing the ideal as “an incredibly busy eight to ten kiosk food hall,” rather than a sprawling, underused space.
The required numbers are sizable. A casual food hall needs between 1,100 and 1,500 visitors per day to sustain operations, with peak weekends requiring closer to 3,000. Where those numbers are unrealistic, Coldren recommends downsizing to ensure each vendor can operate profitably.
The food hall financial model differs sharply from traditional restaurants. Food sales alone are rarely the primary profit driver. “The food is almost break-even for these things. You make money on the bar, advertising, catering, and other things. The food is how you get 1,500 people a day to your space,” Coldren says.
Profitable food halls generate income through bar sales, digital advertising screens, catering, event programming, and private rentals. Multiple revenue streams insulate the operation from fluctuations in food costs and single-channel dependence. “Food halls can’t just be good at serving food and drinks — they have to do other things,” Coldren notes.
Coldren cites a recent study suggesting food halls fail at a much lower rate than restaurants, a trend he attributes to their partial real estate model and operational efficiencies. The industry has become more selective about location and operator expertise.
Even in prime locations, inexperienced operators can derail a project, Coldren notes. Success depends on a specialized skill set: designing contracts, managing shared infrastructure, and curating vendor mixes. The market is consolidating around a smaller group of experienced operators. “We’re seeing a culling of people who are good at it, because anybody can start a food hall, but not many people know how to do it,” Coldren says.
Developers are conducting more rigorous due diligence, focusing on proven operators and markets with demonstrated demand.
While many early food halls launched in major cities, Onset’s projects in Albuquerque, New Mexico and San Antonio show that smaller markets can support successful operations, provided the fundamentals are strong.
On San Antonio’s River Walk, a food hall across from a major convention center and near the Alamodome draws steady tourist and local foot traffic. According to Coldren, individual vendors in high-traffic locations can gross between $750,000 and $1.3 million annually, depending on placement within the hall and surrounding foot traffic.
Coldren emphasizes that proximity to multiple demand drivers matters more than relying on a single anchor. Food halls in isolated or low-traffic areas rarely achieve these results, regardless of city size.
Recent supply chain disruptions have created uncertainty for food hall developers and operators despite the sector’s overall growth. Instability in food and ingredient costs has led many projects to pause or slow their timelines.
“Anytime there is instability and potential cost increases on base things like where food comes from, everybody freezes,” Coldren explains. Projects that were moving forward are now on hold as developers and vendors wait for more stable conditions.
These challenges extend beyond construction delays to day-to-day operational economics. A spike in egg prices, for example, can shift menu costs and compress margins across the entire vendor lineup.
Onset is pursuing partnerships with large media companies to create branded food hall concepts in major retail spaces. The firm is also exploring international expansion, particularly in the Middle East. Coldren expects branded food halls to become more common, with recognizable concepts that can be replicated across markets. “We think this branded food hall offering and a more global footprint is where we’re heading in the next year or so,” he says.
Another opportunity is integrating food halls with entertainment and sports venues in downtown districts that combine residential, office, and event space. Coldren predicts more food halls will anchor or adjoin sports complexes, benefiting from a built-in audience and steady demand.
Developers should treat food halls as neighborhood-building assets, not just food service operations. The right food hall can increase property values, improve hotel and office occupancy, and generate consistent foot traffic for surrounding businesses.
Achieving these results requires careful market analysis, realistic foot traffic projections, and experienced operators. Developers must evaluate food hall returns through overall property performance, not standalone profit and loss. In the right markets, food halls serve as powerful anchors for mixed-use projects, driving community engagement and commercial success. As Coldren puts it, “These are gathering spaces that generate excitement and foot traffic. They’re great assets to have in the right market.”
The most successful food halls will combine operational expertise, diversified revenue streams, and strategic placement within mixed-use environments. For developers and investors, understanding food hall development fundamentals is essential to unlocking their full potential.
About the Expert: Jay Coldren is the president and founder of Onset Hospitality, a firm specializing in the design and operation of communal dining spaces for mixed-use developments. He previously served as Co-CEO at Time Out Market, the world’s largest food hall operator, before launching Onset in 2022.
This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.
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