Co-Tenancy as a Core Design Principle

For decades, "location, location, location" meant picking the right corner. The next decade adds a second question that will matter almost as much: who else is on the corner with you? Co-location — sharing a roof, a wall, or a block with deliberately complementary businesses — is graduating from happy accident to explicit design principle, and it's cascading down from big-brand tactics to emerging concepts. Elite operators have known and applied this for decades, but we are increasingly hearing the term “co-tenancy” even from operators launching their very first brick & mortar concept. 

The big brands proved the mechanics. Ulta shop-in-shops inside Target and Sephora inside Kohl's demonstrated that two brands sharing traffic can both win: one gets
distribution without buildout, the other gets a traffic magnet and basket lift. The 2036 version of this logic belongs to emerging operators — and it's already visible.

Who's living it today. When Nashville's E+Rose picked its 12South site, founder Robbie Nowinski was explicit that the draw was the neighbors: the wellness cafe deliberately located next door to Ladybird Taco and Full Ride Cycling, betting that the synergy would create "more opportunities for impact, connection, vibrancy, health and wellness" for the whole block.1 In Atlanta, So. Fox literally shares operations with its sibling next door — its meats are butchered and managed by the Kinship team, one
wall away.2

We've watched breweries evolve into multi-business premises — taprooms hosting independent coffee roasters by morning and fried-chicken kitchens by night — so a single lease produces three daypart businesses. Outside Brewing, for example, runs three businesses on one premise, and brewery/coffee/coworking hybrids are multiplying nationally.

12South, Nashville

SO. Fox

Landlords are institutionalizing it. Boutique fitness brand BODYROK — now past 100 studios — keeps showing up in developments where leasing teams are explicitly curating wellness ecosystems: at Charleston's Morrison Yard, the developer stated outright that it is committed to clustering healthy food, fitness, beauty, and recovery uses together;3,4 at St. Petersburg's Camden Central, local coverage framed the BODYROK deal as part of a deliberate holistic-wellness tenant mix.5 The pattern: a Pilates studio next to a recovery lounge next to a skincare clinic next to a smoothie bar isn't coincidence — it's a designed daisy chain where each tenant is every other tenant's marketing department. 

Why it accelerates by 2036. Three reasons. First, customer acquisition cost: shared traffic is the cheapest CAC in physical retail, and it compounds daily. Second, real estate economics: splitting premises (or stacking day parts) amortizes rent and TI across multiple revenue engines. Third, the experience economy: consumers increasingly plan outings, not errands — workout, then smoothie, then coffee, then browse — and blocks engineered for that loop capture multiples of single-stop spend.

THE TAKEAWAY

Site selection models need a co-tenancy layer: not just traffic counts and demographics, but adjacency scoring. For emerging brands, the highest-leverage BD meeting might not be with a landlord — it might be with the complementary brand you want to grow next to, market after market. We expect "sister-site" expansion pacts between non-competing emerging brands (fitness × recovery × nutrition; taproom × roaster × maker retail) to become a standard growth strategy by the early 2030s. We see it every week at Homegrown today.

Sources

WhatNow Nashville, "E+Rose Planning 12South Location For This Spring" (2025) — https://whatnow.com/nashville/restaurants/erose-planning-12south-location-for-this-spring/ 
The Local Palate, "So. Fox: A First Look" (2026) — https://thelocalpalate.com/articles/a-first-look-at-so-fox/
Hill Partners, "First-to-Market BODYROK Fitness Studio Opening Soon at Morrison Yard" (2024) — https://www.hillpartnersinc.com/first-to-market-bodyrok-fitness-studio-opening-soon-at-morrison-yard/ 
Athletech News, "Bodyrok Hits 100 Studios, Looks to Become 'Global Category Leader'" (2026) — https://athletechnews.com/bodyrok-hits-100-pilates-studios-top-global-boutique-fitness-brand/
I Love the Burg, "Camden Central St. Pete lands ground floor retail stars in Top Buttons and BodyRok" (2024) — https://ilovetheburg.com/top-buttons-bodyrok-st-pete/

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