Strategic Retail Sector Positioning: Navigating Family Office Capital Flows and Valuation Opportunities in 2025

The retail sector in 2025 is a mosaic of resilience and reinvention, shaped by shifting consumer behavior, technological disruption, and the strategic calculus of institutional investors. For family offices, the sector represents a unique intersection of growth, yield, and risk mitigation-a space where patient capital can capitalize on both cyclical and secular trends. As the Goldman Sachs report underscores, family offices are recalibrating their allocations, with public equities rising to 31% of portfolios and alternatives like private real estate and credit gaining traction. But the real action lies in the sub-sectors: necessity-driven retail, e-commerce enablers, and logistics assets are commanding attention, while traditional formats like regional malls face existential headwinds.

The Family Office Playbook: Balancing Public and Private Retail Exposure

Family offices are adopting a dual-track strategy in the retail sector, balancing public equity exposure with direct private investments. Public retail equities, now at 31% of family office portfolios, have returned to 2021 levels, reflecting renewed confidence in long-term growth, according to the Goldman Sachs report. Q2 2025 earnings data reinforces this optimism: 73% of U.S. retailers exceeded analyst expectations, with grocery chains and discounters like Dollar Tree and Macy's outperforming, according to the Refinitiv scorecard. Valuation metrics also tell a compelling story-median EBITDA multiples for retail stocks climbed to 9.15x, and revenue multiples hit 1.40x, signaling strong buyer demand for high-quality assets, per that Refinitiv analysis.

Yet family offices are not resting on public equity laurels. They're increasingly allocating capital to private markets, where control and operational expertise can drive value creation. Private real estate, for instance, now accounts for 11% of family office portfolios, up from 9% in 2023, according to the Goldman Sachs report. The Knight Frank 150 highlights logistics and industrial properties, luxury residential, and data centers as top targets, with 42% of family offices planning to boost exposure over the next 18 months. This shift is driven by the sector's dual role as a growth engine and a wealth preservation tool-a critical consideration in an era of geopolitical uncertainty and rate normalization.

Undervalued Sub-Sectors: Grocery-Anchored Centers and E-Commerce Enablers

While the broader retail sector is polarized, certain sub-sectors are emerging as strategic sweet spots for family offices. Grocery-anchored centers, for example, have become a bedrock of resilience. These assets, which combine stable foot traffic with e-commerce integration (think curbside pickup and omnichannel logistics), are outperforming peers. As CBRE's 2025 Retail Market Outlook notes, super-regional malls with grocery anchors saw 5.5% year-over-year value appreciation, outpacing the broader retail CRE market. Family offices are capitalizing on this trend, with a 23% surge in U.S. retail investment volumes in Q2 2025, driven largely by grocery-anchored and long-term net lease properties, according to a JLL report.

E-commerce infrastructure is another area of focus. The sector's valuation multiples remain volatile, with median EBITDA multiples at 10x and revenue multiples ranging from 1x to 5x, according to an e-commerce valuation guide. However, family offices are homing in on niche players with scalable digital platforms and strong EBITDA margins. For instance, businesses with EBITDA multiples of 4.12x (implying a $638,600 valuation for $155,000 EBITDA) are attracting attention for their balance of growth and profitability, as that guide explains. The key here is differentiation: family offices are avoiding crowded e-commerce bets and instead targeting logistics hubs, AI-driven inventory systems, and last-mile delivery networks-assets that underpin the sector's long-term evolution, as outlined in a Forbes article.

The Contrarian Case: Regional Malls and Experiential Retail

Not all retail sub-sectors are created equal. Regional malls, once the backbone of American commerce, are struggling with store closures and shifting consumer preferences. A Partner Valuation Advisors report notes that these assets face "existential challenges" as tariffs and discretionary spending trends weigh on performance. Family offices, however, are not entirely writing off the format. A subset of experiential malls-those reimagined as entertainment, dining, and wellness hubs-are showing resilience. These properties require active management and creative repositioning, aligning with family offices' growing preference for value-add strategies, as the Knight Frank 150 observes.

The Road Ahead: Strategic Positioning for 2025 and Beyond

For family offices, the retail sector in 2025 is about precision. The data is clear: necessity retail and e-commerce enablers are outperforming, while traditional formats face headwinds. As a J.P. Morgan report highlights, the sector's appeal lies in its ability to generate both income and capital appreciation-a rare combination in today's yield-starved environment.

Looking ahead, family offices must balance short-term volatility with long-term secular trends. This means:
1. Overweighting necessity-driven assets: Grocery-anchored centers and logistics properties offer defensive characteristics in uncertain times.
2. Leveraging operational expertise: Direct real estate investments allow family offices to add value through repositioning and tech integration.
3. Monitoring e-commerce valuation cycles: While the sector's multiples are still volatile, high-margin players with scalable infrastructure are worth the risk.

Conclusion

The retail sector is at a crossroads, and family offices are positioning themselves to navigate the transition. By prioritizing necessity-driven assets, embracing private market opportunities, and leveraging operational expertise, they're not just weathering the storm-they're capitalizing on it. As the Knight Frank 150 report aptly states, "The future of retail lies in adaptability, and family offices are leading the charge." For investors willing to think long-term, the sector offers a compelling mix of growth, yield, and strategic control-a rare trifecta in today's market.