Any utilities (HVAC vents/returns, lighting, etc) that are in the ceiling print of the soffit can be extended downwards into the soffit.

What's required?

1) Coming up with proportions for the soffit, those proportions will create the tray within.
2) Identifying anything that needs to be moved, or anything in the walls that could impinge on the design.
3) Frame your soffit.
4) Move the things identified in step 2.
5) Add additional lighting/electrical or as required.
6) Sheetrock the soffit.
7) Trim and paint.

Mongo