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interested as well
I looked at a few food halls in NYC from the debt perspective. Owner generally master leases the space and the sublets to tenants on short term leases - some MTM, others as long as 6 months.
Depending on the food hall, I have also seen 3yr and 5 year leases. Typical rent structures are: 1) pure percent rent , 2) Gross rent + percent rent, 3) NNN + percent rent. The rent structure Landlords can charge is dependent on the strength of the food hall, and their need to fill tenant stalls. Occupancy costs ( total rent + tenant expenses / sales) are going to be a key driver of how high a landlord can push rents at these projects.
What about TI allowances? I’m assuming for leases of such short duration, it doesn’t make sense for the landlord to fund? Also, how would the tenant justify paying TI for such short term leases?
I can send you a model if you can't find one. PPS has a template as well.
cpgame is your model still available?
Yeah PM me w/ an email and I'll send it over
can you send it to me too? thanks
Re: food hall model, start with this website:
https://www.pps.org/markets/
This is where I found it a couple years back--the site has generally good info about how to look at a food hall/public market from a business perspective and outlines some of the subsidy sources involved. If after reviewing this you do not find the model, please ping me and I can dig around for it.
Hello - I too am working on a food hall from an underwritten debt perspective. Trying to get a sense of operating metrics such as occupancy cost (rent + NNNs) and expected sales PSF. At what point does the gross rent just get too high for an average food hall business? I would also like to get a sense of NNNs outside of sub-metered gas, elec, water/sewer. I am also curious as to at what tenant SF it is more practical to quote a monthly fixed rent as opposed to a rent PSF. These property uses are certainly become more of a trend.
Food Hall Models (Indoor and Outdoor) (Originally Posted: 10/28/2017)
Due to overwhelming demand by WSO members seeking to improve the quality of grocery shopping for people worldwide, I've attached the two models I have. One is for an indoor market and the other is outdoor. Highly recommend reading a couple of the market case studies on Project for Public Spaces' (PPS) website as your inputs won't have any validity if you don't understand how food halls operate, how vendors rent their stall spaces, and how subsidy funds ultimately keep the hall afloat. Bon apetit!
Have my babies!
Do you still have the indoor model? I can't seem to find it in the attachment
Is this still available?
Supply and demand drivers for a food hall. (Originally Posted: 11/22/2017)
Hi guys, What do you think is the supply and demand drivers for a food hall? Any local metrics or research available? Like a nice 50K sq ft food hall with 40 different vendors that will cater to office workers and also tourists in an area. I find that this is could be a niche market that will not be in CBRE or JLL's market reports? Can anybody help me out here? Really appreciate it, thank you!!
I’ve seen broker white pages on food halls. I believe JLL in particular.
Top tier markets that have locals with high disposable incomes...
This^. You want to look at the demographic data, specifically the 1 mile radius for Daytime population, which will give you an idea for how many employees are within the area. Also take a look at avg. House hold income, as well as avg. population.
Where I live there’s a really popular food hall. The food is way overpriced and 75% restaurants have gone out of business and been replaced atleast 3 times each.
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