“Whether it’s institutional capital or whether it’s private capital, we’re seeing a lot of interest in the grocery-anchored shopping center,” JLL president of retail advisory services Naveen Jaggi said during an ICSC LAS VEGAS session titled The Next Big Retail Categories. What will grow even more popular in the next several years, he said, is the grocery-lifestyle hybrid: combining a grocery store with retailers specializing in sectors like soft goods, fashion and services.

“We’re going to see a big change in the way the fabric of our shopping experience [looks] so that we can meet all the demands, not just a certain demand, of the American consumer,” said Jaggi, an ICSC trustee. Why the evolution? He said more consumers want a one-stop shopping experience within a 15-minute drive instead of rushing from retail center to retail center during a single shopping trip.

Also at ICSC LAS VEGAS, private equity investor Andrew Smith observed that food-and-beverage “is a huge component” of today’s retail development — so much so, in fact, that he’s noticed a “herd mentality” in the sector.

Food-and-beverage tenants are now “a de facto anchor for a lot of shopping centers,” added CBRE senior vice president Jimmy Slusher, Smith’s fellow panelist for a session titled Private Equity and the Marketplaces Industry: What You Need To Know. But due to herd mentality, some centers are becoming oversaturated with food-and-beverage concepts, said Smith, managing director and co-founder of Savory, which invests primarily in restaurant brands like R&R Barbecue, Swig and Via 313 Pizzeria. “You just cannot have too much of one thing in any center,” he said. “Be very, very cognizant of that, and build centers that are lifestyle centers to bring you there for multiple reasons than just food-and-beverage.” Slusher cited one REIT that permits a maximum of only 35% of the tenants at any shopping center to be food-and-beverage business. “They don’t want the operators cannibalizing themselves,” said Slusher.

Smith also issued a warning: Don’t invest in a retail brand that’s able to borrow lots of money. “Everybody wants to talk about everybody failing,” Smith said. “They’re not failing because of their own mismanagement of the business. They have too much debt on their books. They made decisions five and 10 years ago that are now rearing their heads, and we’re dealing with it today.”

Despite this reality, private equity “is good for everybody in this room,” Smith said. “Sometimes people think private equity is going to … break. That is just a fallacy.” Sure, some private equity investors seek to squeeze as much out of a business as quickly as possible, he said, but most, including Savory, view their portfolios through long-term lenses.

Further advocating for private equity investing, Smith noted that fast-growing food-and-beverage brands like Mediterranean chain Cava, Dutch Bros Coffee and salad and grain-bowl chain Sweetgreen wouldn’t be alive without it.