During this week’s ICSC LAS VEGAS event, retail leaders from JLL delivered a broad analysis of the Marketplaces Industry, offering insights on the influence of prestige dining in hotels, the evolution of retail formats, shifts in investment activity and more.

Prestige Dining as a Strategic Asset for Hotels

JLL senior director of Americas retail research James Cook introduced the company’s new 2025 Hotel Restaurant Report, emphasizing that while hotel-located restaurants may not boost direct revenue significantly, they can play a crucial role in enhancing a high-end property’s appeal. “We looked at celebrity-chef, prestige-chef restaurants and [those with Michelin stars]. What’s interesting is that you don’t make a ton of money from the restaurant itself, but we found that you can charge higher room rates,” he said. Such establishments consistently command higher room rates compared to market averages: 8.8% more in average daily rate and an 18.6% increase in revenue per available room compared to their peers.

MORE FROM C+CT: Small Towns Want Steakhouses, Too. This Company Makes That Pencil by Combining Them With Hotels

Market Dynamics: Absorption and Demand

The U.S. retail sector’s negative-2.7 million square feet of net absorption in the first quarter was the first decline in 16 quarters, according to JLL. Nevertheless, retail demand remains robust. JLL’s recent Retail Market Dynamics report highlighted that expanding retailers often claim newly vacated space quickly, as nearly one-third of new leases are signed within five months of listing. And Cook pointed out that “sales volumes are up 13% year over year, so there’s still demand for investment in retail properties” despite broader economic uncertainties.

Experiential Retail: Balancing Demand and Costs

JLL president of retail advisory services Naveen Jaggi acknowledged that while demand for experiential retail persists, landlords are exercising greater caution than in 2021 and 2022. “The demand is still high by the owners,” he said, but now owners are sensitive to cost and tenant improvement cost for a 10,000- or 20,000-square-foot experiential user. “I was speaking to an investor yesterday that said that the days of doing three or four of those kind of concepts in a given project are probably lost for now,” Jaggi said on Monday. “They have to be very careful that these tenants have longevity.” Landlords are limiting the percentage of gross leasable area dedicated to food-and-beverage or entertainment to no more than 20%. That is indeed more than the previous mix of 10% or 15%, but the existence of a cap of such uses is notable nonetheless.

Value Retailers: Aggressive Expansion Amid Economic Sensitivity

In the face of shifting consumer sentiment, value retailers like The TJX Cos. are expanding steadily. Jaggi observed: “All of the value retailers are as aggressive as we’ve ever seen them.” He cited the 1.5 million-square-foot Town Square Las Vegas a mile south of the Strip that houses both Apple and TJX. It illustrates the increased blending of aspirational and value-oriented tenants in modern retail developments, he said. “You don't typically see aspirational lifestyle tenants in the same projects as your value tenants, but because those items are so in demand today, that’s something I wouldn't be surprised to see more in the future: a mix of the best operating value.”

Circular Retail: Embracing Sustainability and Resale

JLL president of retail property management Kristin Mueller highlighted the growing acceptance of circular retail, which prioritizes reusing, repairing or recycling items rather than sending them to landfill. That’s driven in part by younger consumers, who are “looking to spend more of their money on experiences and dining out,” she said. Retailers like H&M and Urban Outfitters are adapting by making a point of accepting used items, aligning with sustainability goals and consumer expectations. “We all know about [places] like Goodwill, The Salvation Army, Buffalo Exchange” for thrift shopping, Mueller added, “but it’s remarkable how many retailers are very purposefully taking back merchandise and recycling it.”

FROM THE ICSC SMALL BUSINESS CENTER: Solving the Retail Returns Problem: LiquiDonate’s Game-Changing Approach for Retailers

Investment Trends: Grocery-Anchored Centers and Lifestyle Formats

Chris Angelone, senior managing director and JLL Boston office co-head, discussed the continued high demand for grocery-anchored retail, noting that with “the lack of supply of [this type of] product on the market, pricing has gotten really aggressive. A lot of typical retail investors are getting priced out,” so they’re looking to power centers, unanchored strips, urban retail and lifestyle centers despite the operational complexities associated with these formats.

Luxury Retailers and Urban Market Dynamics

Angelone also offered insights into luxury retailers’ strategies and urban market performance, confirming the ongoing trend of high-end brands purchasing their own real estate, such as Ralph Lauren’s recent acquisition in New York’s SoHo neighborhood. “These companies are very cash rich,” he said, adding that when a brand plans to hold a property long term, the cap rate becomes largely irrelevant. Angelone noted that urban submarkets featuring mixed-use environments and high-quality, modern buildings are seeing strong absorption and occupancy, while other neighborhoods, even within the same market, continue to lag, underscoring the uneven nature of the post-COVID recovery.

The Path Forward

The consensus was clear: The Marketplaces Industry must continue to evolve by delivering value, creating unique experiences and meeting shifting shopper preferences in innovative ways. As Jaggi noted, “consumer surveys consistently rated a bookstore as one of the most in-demand retail concepts they wanted in every destination, [along with] toys.” The resurgence of retailers like Barnes & Noble underscores the lasting appeal of physical retail spaces that offer both engaging experiences and the opportunity to own meaningful items.