Grocery-anchored centers built a reputation as the most rock-solid type of retail real estate investment, which throw off steady returns in good or bad times. After all, everybody has to eat.

Well, Americans are still eating but they no longer buy all their Malomars at the little center down the road. Wal-Mart and other “supercenter” grocers have seized nearly 17 percent of the national shopping cart and the supermarket chains that anchor most neighborhood centers have lost their drawing power.

In the past decade, 30 chains have fallen. Safeway Stores Inc. recently announced it would close 26 store in Texas; Winn-Dixie Stores Inc. is in Chapter 11 bankruptcy and Albertson's Inc. has put itself up for sale — the latest casualties in a war of attrition.

“If you had any strong national or regional grocer in your center, investors assumed there wouldn't be much risk,” says Jim Garvey, director of acquisitions for Chicago-based LaSalle Investment Management, a real estate investment manager that oversees $26.4 billion in assets. “Now there's a lot of risk.”

Yet investors continue to spend heavily. Buyers have bid up prices and hammered capitalization rates down 90 basis points to 7 percent for the year ended Sept. 30, according to New York-based Real Capital Analytics.

Wal-Mart exposure

Even Winn-Dixie's decision to close more than a third of its roughly 910 stores hasn't diminished interest in the properties. In some cases, owners are filling the troubled chain's abandoned shells with tenants who are paying higher rents. In the first nine months of this year, investors paid an average of $153 a square foot, compared with $134 a square foot last year, according to Real Capital.

But experts continue to warn that investors are paying too much. “I think a lot of investors have just resigned themselves to the way pricing is,” says Bernard Haddigan, managing director of the National Retail Group for Encino, Calif.-based Marcus & Millichap. “They have become buyers at these crazy prices.”

New Plan Excel Realty Trust keeps a database of its centers and rates its tenant grocers according to their exposure to existing Wal-Mart Supercenters or the likelihood that one will appear. “If you find yourself with the No. 3, 4 or 5 grocer in the market and losing market share to Wal-Mart,” says Glenn Rufrano, New Plan CEO, “then you'd better be prepared to re-merchandise that space.”

Executives have predicted for years that some stimulus would drive money out of real estate — rising interest rates, a stock market rally or a rash of loan defaults. None of those have come to pass, and so investors in grocery-anchored centers are stuck in an odd position: Capital providers continue to throw money their way, but prices keep rising even on inferior assets.

That's a sure indication that a shakeout is likely, says Garvey. “There will be winners and losers,” he says. “What has long been viewed as an inherently safe format won't, by itself, allow you to be successful anymore.”