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As the terrorist threat evolves, federal authorities are concerned about the possibility that terrorists could attack people not just where they live, but where they shop and play.

For restaurant and bar owners in the Washington D.C. area, there's a tough balancing act between security and hospitality.

Intelligence Correspondent Catherine Herridge reported on "Special Report" that public spaces are the new focus for terror groups Al-Qaeda and ISIS.

"With soft targets, you can still get the type of impact you're looking for from a terrorist's perspective and that is mass casualties and psychological impact," said Dan Botsch, a former CIA intelligence officer.

Herridge reported that Homeland Security and D.C. police recently held a security briefing for local restaurant and bar owners.

Bar owner Bill Duggan said the feds urged business owners to meet with employees, develop an evacuation plan, and provide the city with floor plans in case of a hostage crisis.

"People think about this every day, and we've been insulated for so long, that, yeah, I think the realities of the rest of the world are possibly coming home to us," he said.

Watch the full report above.

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