Retail real estate has always evolved alongside consumer behavior. Department stores once anchored malls. Big-box retailers reshaped power centers. Restaurants and lifestyle tenants followed as developers began focusing on creating environments rather than simply leasing space.
Today the industry is entering another transformation — one driven not by retail, but by experience.
Across the country, shopping center owners, landlords, investors, and developers and cities are searching for tenants that do more than sell products. They want concepts that generate unique visits, consistent traffic, extend dwell time, and turn properties into destinations. Increasingly, those concepts fall into one category: Location-based entertainment (LBE).
Location-based entertainment is not just another tenant category. It is rapidly becoming the next anchor of modern retail development.
Entertainment Is the New Anchor
From immersive attractions and competitive socializing venues to sports-driven entertainment experiences, LBE is rapidly becoming one of the most powerful tools available to revitalize and differentiate retail properties.
Yet while interest in the sector has surged, many in the retail real estate community are still learning how to evaluate and structure these projects and transactions. That is because location-based entertainment is fundamentally not retail. It operates on a separate set of economic drivers, development requirements, and operational dynamics.
Understanding those differences is essential to unlocking its potential.
A Different Kind of Tenant
Traditional retailers operate within predictable financial metrics — sales per square foot, standardized buildouts, and familiar operating models. Entertainment venues operate very differently.
Rather than sales per square foot, the metrics should be evaluated in terms of ‘experience per square foot.’
Location-based entertainment (LBE) concepts typically require larger footprints with higher ceilings; higher upfront capital investment, and more complex design/development and operational structures. Venues often range from 10,000 to 40,000 square feet, and development timelines can approach 12 months from lease execution to opening.
Their revenue models are also more diversified. Admissions and number of visitors are the primary driving component of performance. Yield price per visit is usually the main topline revenue number.
But complimentary food and beverages, unique and related merchandise, private events and corporate bookings, memberships, and corporate sponsorships can often represent significant revenue streams.
Lease structures may also differ from traditional retail arrangements, frequently involving longer terms — 10 to 15 years — with hybrid rent structures or participation components tied to venue performance. For landlords accustomed to traditional retail metrics, evaluating these tenants requires a deeper understanding of how the business operates. However, when properly structured, the results can be transformative.
The Three Pillars of Successful LBE
Not every entertainment concept succeeds. In our experience, the strongest projects consistently share three critical elements: Intellectual property, capital and operations.
Intellectual Property
Successful entertainment concepts begin with a compelling idea. Often that idea is reinforced by recognizable intellectual property or a distinctive brand identity that creates differentiation in a crowded experiential marketplace. Consumers increasingly choose experiences that are memorable, shareable, and unique. Strong branding and proprietary attractions help create those moments — and drive repeat visitation.
Capital
Location-based entertainment is a capital-intensive business. Significant investment is required not only for initial build-out but also for ongoing upgrades, technology improvements, and periodic refreshment of the experience.
Consumers expect novelty and innovation — successful operators continuously reinvest to maintain excitement. For landlords evaluating potential tenants, the strength and stability of capital behind a concept is often one of the most important indicators of long-term viability.
Operations
Even the most creative concept can fail without disciplined execution. Entertainment venues require expertise in guest experience, staffing, safety, food and beverage management, marketing, and technology systems.
The best operators understand how to design and develop venues that maximize throughput while delivering consistently high-quality customer experiences. Operational strength is often what separates successful venues from short-lived attractions.
The Metric That Matters: Traffic
For shopping center owners and investors, the value of location-based entertainment can be measured by one metric: Traffic generation.
A well-executed entertainment venue can generate 100,000 to 300,000 visits annually, often with extended dwell times and strong repeat visitation. Guests typically arrive in groups and spend several hours on property. The resulting halo effect can be significant.
Owners frequently report 25 to 30 percent increases in spending at adjacent restaurants and retail tenants when entertainment attractions are introduced. In many cases, LBE has also become a powerful strategy for repurposing large or underperforming retail spaces. Former department store boxes and oversized retail footprints can often be transformed into experiential anchors that bring new life to a property.
Competitive Socializing and the Experience Economy
One of the fastest growing segments within the LBE sector is competitive socializing — venues that combine interactive sports with dining, drinking, and group experiences. Concepts built around golf, baseball, basketball, and other participatory activities attract a wide range of audiences, particularly young adults between 18 and 35 with disposable income.
These venues work because they combine three powerful drivers of consumer behavior: Physical activity. Social interaction. Shared experiences.
At the same time, family-focused entertainment concepts continue to perform strongly in suburban markets, while immersive attractions target tourists to thrive in high-traffic destinations and mixed-use developments. Selecting the right concept requires a clear understanding of the audience a property serves.
Food, Beverage, and Events: The Hidden Revenue Engine
While the attractions themselves often receive the most attention, food and beverage offerings have become central to the success of many entertainment venues. Well-designed F&B programs extend dwell time, increase per-visit spending, and enhance the overall guest experience.
Equally important are corporate events, group bookings, birthday celebrations, and private functions, which often can provide significant additional revenues. Successful operators actively market these opportunities to nearby office districts, schools, and community organizations to fill weekday and softer shoulder periods. These additional revenue streams provide stability and help maximize the long-term performance of the venue.
Replacing the Department Store Anchor
As department stores continue to disappear from the retail landscape, many shopping centers are searching for new anchors capable of generating traffic and energy. Location-based entertainment is increasingly filling that role. However, not every retail space can easily accommodate an entertainment venue.
Physical constraints such as column spacing, ceiling heights, infrastructure capacity, and the ability to support food and beverage operations can significantly affect feasibility. In some cases, landlords must invest capital to modify existing structures to meet the requirements of entertainment operators. But when the right concept is matched with the right space, the results can be transformative.
Experience Matters
At Samuels & Company, we have been involved in the development and expansion of some of the most successful entertainment concepts in the United States. Our work has included supporting Merlin Entertainments across multiple U.S. projects, helping guide the growth of Andretti Indoor Karting & Games, and participating in the nationwide expansion of iFLY indoor skydiving locations.
These experiences have provided a front-row view of how the entertainment sector is reshaping retail real estate. They have also reinforced a simple truth: Consumers increasingly seek experiences that cannot be replicated online. Shopping centers that successfully integrate entertainment are evolving into places where people gather, compete, celebrate, and spend time together — not simply places where they shop.
Howard Samuels is president of Samuels & Co., a Los Angeles-based real estate firm with an emphasis on retail, entertainment, and mixed-use projects.
This article was originally published in the May 2026 issue of Shopping Center Business magazine.