I am so excited to chat with my colleague Julie Taylor, executive vice president of Colliers International, who is an expert in “food halls,” the dining areas that mix local purveyors serving locally sourced, healthy food with other retail to create community and meaningful relationships between retailers and customers. Most recently, Julie was instrumental in getting The Market into the ground floor of the Twitter building in San Francisco. She has leased over 600,000 square feet in 50 transactions in the Union Square trade area alone, including securing the Apple storefront for the owners of 300 Post Street in Union Square.
(The Twitter Building in San Francisco. Image via San Francisco Business Times)
ANJEE: How does the entry of a food establishment affect the retail environment around it?
JULIE: Food is a catalyst for all emerging markets to change. So whether it’s the Mission District or Hayes Valley or mid-Market or a shopping center environment, the shift always begins with food.
ANJEE: Do you feel that’s because it’s more approachable?
JULIE: In retail, what people eat really defines who they are — how they eat, how often they come together to eat, where they eat. The food offering at its most basic level is a reflection of the demographic of a community.
(The Market interior. Image via Curbed SF.)
ANJEE: That’s a really good point. The dinner table is the one time we had the ability to sit down and talk about the day without disruption or interruptions.
JULIE: Absolutely. The restaurant has replaced the family dining table for many families, and certainly for singles. Nobody wants to sit and dine at home alone so they go out with friends or meet friends at a communal table. Dining is often the only thing you do in a retail environment to intentionally interact with other people.
ANJEE: The food hall is the theme in various emerging markets. In Slovakia, they took an old market hall concept and converted it similar to what we see at the Ferry Building Marketplace. It’s beautifully done.
(The Ferry Building MarketPlace. Image via Page & Turnbull)
JULIE: What the market hall reflects is the way many people eat today, which is grab-and-go, or in a very casual communal environment. All over Europe, there are ancient food markets that are the center of communities. What we have today is a modern interpretation of that. Coming together to find food, to observe food, to smell it, to taste it together—that has been with us for centuries.
ANJEE: I heard an interesting statistic from Lyle Darnall at EDENS, who mentioned that we’re dedicating at least 30 percent of the total GLA (Gross Leasable Area) to food and restaurants. Do you agree?
JULIE: I think it’s a good mix, and we might see it increasing beyond that as long as the parking can support it. As long as you have enough parking and enough critical mass of fashion and other retail uses, the more food the better. But you can’t end up with 15 restaurants and three fashion tenants. That will not work. It’s too lopsided.
ANJEE: What do you feel is the right square footage for something like this for it to really be sustainable?
JULIE: Having variety is critical when you’re in a regional location. You have a lot of people coming to you, and when you’ve got a lot of people, you’ve got to have a lot of options. But they don’t have to be huge. There’s a teeny-tiny little food hall in Bernal Heights in San Francisco that’s maybe 1,000 square feet with five or six purveyors. It’s tiny, but it’s packed, and it’s perfect for that little neighborhood.
(331 Cortland in Bernal Heights. Image via Bernalwood.)
ANJEE: So going back to what you said earlier, it’s speaking to the community. If it’s done well, it’s really speaking to the community, versus being called “mass manufactured.”
JULIE: And that’s exactly what it (the market in Bernal) isn’t, which is why it’s so successful. I think it’s almost in response to mass-produced food venues. People love going to farmer’s markets and buying from the guy with the cart. Now we’ve figured out a way to put the guy in the cart under a roof so he’s there, she’s there, 12 months a year. So the food hall is a response to people buying at farmer’s markets, people favoring grab-and-go versus take-it-home-and-cook-it, and having their destination really speak to their locality.
ANJEE: Sure. We live in our communities for a reason, so if we can enhance them, they become more of a neighborhood.
ANJEE: In terms of what you’re seeing with landlords, some have concerns because the food purveyors are either startups or they’re going from an incubator concept to their own storefront, so to speak, within these food halls. How do you discuss the risks and rewards with institutional landlords?
JULIE: It’s a hard decision (for landlords) to make because it’s very capital-intensive to create a space that will accommodate eight, 10, 15 vendors. It requires an enormous amount of commitment and willingness to take risk because some of these vendors are not going to make it. It takes a very proactive decision to say, “I’m going to meet this face on and make this investment.”
ANJEE: This, to me, feels like it has significant sustainability. This just feels like this will be here for the long run. I don’t see this as a trend. Would you agree?
JULIE: I do agree. People’s desire for good food at an affordable price point is not a trend, that’s a constant. And whether an environment, a physical food hall environment, will stand the test of time 20, 30, 40, 50 years is really determined by the quality of the real estate. In urban locations where density is only increasing and people want that walk to an easily accessed meal, I don’t think that we’re going to see this go away.
ANJEE: Retailers today want to be as close to food as possible, because they know that’s really the anchor.
JULIE: That’s an interesting point. There used to be this feeling that people just go out to eat and then go home. Today, there is a much greater appreciation for restaurants as being part of the co-tenancy.
A lot of the flagships we’re seeing being created are paying attention. Club Monaco in the Flatiron District, for example, has a coffee shop, a florist and a mini version of a renowned local bookstore within. The most powerful and successful retailers are using those four walls to express that they have an incredibly deep understanding of who their customer is, so what’s inside those four walls is becoming much more a mirror of the customers’ taste and much more finely honed.
(Club Monaco. Image via NY Post.)
ANJEE: Which creates that stronger relationship.
JULIE: Exactly. It becomes almost an emotional relationship, the customer feels validated because the brand is mirroring who the customer is, not just what they wear, but what they care about and value.
JULIE: I think the consumption of food is the most intimate expenditure we create. You put it in your body, right? How people make those decisions and what they’re willing to eat, I think it’s a very, very personal choice.
ANJEE: And to your point as well, this is where what you provide in your insights is really important to an institutional landlord.
JULIE: Absolutely. If you choose the right food purveyor for your property, you’ll have a line out the door, and the project’s success will flow from that.
Anjee continues to be an insatiable collector of all things retail. She’s a student of culture living next door to future shoppers, whose fleeting trends constantly change the retail landscape … driving retailers, landlords and developers crazy!