More than six inches of rain fell that day in late September 2023, flooding a large area of Asbury Park which included the Festhalle and House of Independents. According to the Asbury Park Press the restaurant owners were unable to get insurance to cover the losses from the flooding, and then the situation became untenable when they faced a steep rent increase.
Former general manager Nick Falco told the Asbury Park Press, "We were up for renewal of the lease starting next month. When we sat with (the landlord).... he was going to increase almost three times what we were paying," Falco said. The combined factors of the out-of-pocket cost to repair the flood damage, mixed with the increase in rent caused the owner to decide to close the doors on the Festhalle.