Shopping-Mall Giants Back Expanded Delivery-Only ‘Ghost Kitchens’ in Food Courts

As the U.S. hospitality industry rebounds from pandemic closures, former hotelier Sam Nazarian is moving into the food-hall business, marrying the traditional dine-in model with delivery-only “ghost kitchens” in hopes of solving revenue problems that have long plagued retail and food spaces.

Mr. Nazarian said his new venture, Creating Culinary Communities, which counts investors such as shopping-mall giants Brookfield Asset Management Inc. and Simon Property Group, has plans for 1,000 ghost kitchens by the end of the year. The company on Tuesday plans to announce $80 million in Series B funding co-led by Brookfield and REEF Technology, a SoftBank Group Corp. -backed operator of food-delivery kitchens and hubs for goods and services.

The move to inject new life into food courts comes as ghost kitchens gained momentum when restaurants closed and more people turned to food-delivery services during the Covid-19 pandemic.

With plans to lease space in Brookfield and Simon malls across the U.S., Mr. Nazarian, C3’s founder and chief executive, is betting that housing dine-in and as many as 10 delivery-only kitchens in a single location—such as a mall, hotel or restaurant—will maximize profits and efficiency, he said.

“[We are] making sure these restaurants [and] food halls are operating almost at a 24-hour perspective,” said Mr. Nazarian, the founder and former chief executive of SBE Entertainment Group. “You may walk into a Krispy Rice in Chicago or New York or Austin…but in the back, we have seven to 10 of our other brands being cooked there for delivery.”