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Cities with the most opportunity for new retail storefronts

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Swyft Filings used data from Lee & Associates to rank cities with the most opportunity for new retailers.
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COVID-19 was supposed to change the way Americans shopped. Experts widely predicted that people’s new habits of purchasing most goods online or using in-store and curbside pickup would remain after the pandemic ended. But two years later, consumers have gone back to in-person shopping.

To find which cities have the most opportunity for new retail locations, Swyft Filings used data from Lee & Associates’ 2022 Market Report to rank cities, creating an index that factors in retail space vacancy, cost, and new space being built. To get its index, this analysis looked at July 2022 to September 2022 data and ranked each of those three measures across 53 cities identified in the report, then averaged the rankings.

Brick-and-mortar retail sales topped $382 billion in August 2022, according to Lee & Associates, almost 25% higher than before COVID-19. In-person Black Friday shopping in 2022 was also up 12% from 2021, according to Mastercard SpendingPulse.

As consumers flock back to stores, retailers are opening more physical locations. U.S. retail space is at its lowest vacancy rate in 15 years, at 4.3%, according to Lee & Associates. This is causing retail rents to rise again—they’ve grown 4.2% annually through the third quarter. Supply levels are also on the rise; there are 61 million square feet of retail space in development, much of which is already leased.

A crowd of pedestrians walking past a supermarket storefront in downtown intersection.

Trong Nguyen // Shutterstock

#15. Chicago (tie)

– Vacancy rate: 5.8% (#4)
– Market rent: $1.70 per square foot (#18)
– Retail space under construction: 1,201,887 square feet (#42)

Chicago’s vacancy rate may be above the national average, but for the city, it’s at an all-time low.

North Michigan Avenue, one of the city’s major shopping streets, has lost some major retailers and is almost 30% vacant. This has provided opportunities for unique pop-up shops along the Magnificent Mile. Experiential retail, where customers can do more than examine items for sale, has also made a big push in Chicago. For example, Lululemon’s Lincoln Park location allows shoppers to test the Mirror fitness system or do meditation in the store’s designated Quiet Room.

View of the historic town of Jim Thorpe in the Lehigh Valley in Carbon County, Pennsylvania.

EQRoy // Shutterstock

#15. Lehigh Valley, Pennsylvania (tie)

– Vacancy rate: 5.2% (#13)
– Market rent: $1.32 per square foot (#7)
– Retail space under construction: 82,900 square feet (#44)

Lehigh Valley offers retailers a low barrier to entry, with rents far below the overall U.S. rate of $1.95 per square foot. Nine stores opened at Lehigh Valley Mall in 2022, with at least two more on the way. Multiple mixed-use developments throughout the area are in various stages of government approval that could add dining, grocery, and entertainment options to the valley’s retail scene.

Street view of downtown area of Detroit.

JKPhotogenic // Shutterstock

#14. Detroit

– Vacancy rate: 5.1% (#14)
– Market rent: $1.48 per square foot (#13)
– Retail space under construction: 735,283 square feet (#35)

The retail scene in Detroit is evolving.

Several traditional shopping malls in the metro area are being torn down, with some destined to be replaced by mixed-use development that will put residents closer to retail opportunities.

Meanwhile, a $1.5 billion project called District Detroit—which would incorporate residential, office, hotel, and retail space—aims to reinvigorate downtown. The development, which would include 100,000 square feet of retail space, is still in the planning stages.

The city streets of Columbus, Ohio.

CEW // Shutterstock

#12. Columbus, Ohio (tie)

– Vacancy rate: 4.0% (#31)
– Market rent: $1.51 per square foot (#15)
– Retail space under construction: 892,906 square feet (#14)

A slow recovery in workers returning to office buildings poses challenges for the retail market in Columbus. That said, local organizations are finding innovative ways to draw retail customers.

In October 2022, the Columbus Downtown Development Corporation and Columbus Fashion Council partnered to open Common Thread, an incubator hosting new retailers in the downtown area.

Historic traditional architecture on Main Street, downtown Spartanburg.

Page Light Studios // Shutterstock

#12. Spartanburg, South Carolina (tie)

– Vacancy rate: 4.5% (#22)
– Market rent: $1.06 per square foot (#1)
– Retail space under construction: 67,346 square feet (#37)

Spartanburg’s population grew by 18% between April 2010 and July 2021, which has increased the demand for more retail opportunities in the city. Vacancy rates have fallen in the last year, but an unprecedented amount of commercial development in Greenville County could open up more potential for new storefront space. The area has the lowest rental price per square foot on this list, and developers hope this will attract experiential-based retailers to the area.

Aerial view of downtown Dallas on a summer day.

Nate Hovee // Shutterstock

#11. Dallas-Fort Worth

– Vacancy rate: 4.8% (#20)
– Market rent: $1.81 per square foot (#24)
– Retail space under construction: 3,309,783 square feet (#15)

With almost 15% population growth since 2010, the Dallas-Fort Worth market has no shortage of retail demand. Supply is increasing—this metro area ranks in the top 10 metros with the most new inventory. That could make room for a lot of growth, as new retail tenants in the area—particularly small businesses—are most interested in stores fewer than 5,000 square feet, according to research firm CoStar.

Ariel view of south New Jersey.

Nick Vendetta // Shutterstock

#10. Vineland, New Jersey

– Vacancy rate: 6.1% (#2)
– Market rent: $1.18 per square foot (#3)
– Retail space under construction: 0 square feet (#53)

New Jersey’s largest city in terms of land area, Vineland sits in the central southern part of the state and is known as a hub of food processing. New stores have opened up or expanded to additional sites in recent years, but some mall owners have boosted occupancy by redeveloping retail space as fulfillment centers for online orders. Vineland’s historic downtown is part of the city’s redevelopment area and offers many incentives to businesses located there, including small business assistance programs, loans and microloans, and wage credits for hiring locally.

Houston's downtown city skyline over Root Square.

Sean Pavone // Shutterstock

#9. Houston

– Vacancy rate: 5.0% (#16)
– Market rent: $1.84 per square foot (#27)
– Retail space under construction: 4,527,218 square feet (#9)

Houston has made a good recovery from the pandemic in terms of job creation and new retail outlets. Hundreds of stores have opened in the last two years, which has caused the retail vacancy rate to decrease steadily, especially over the last year.

Restaurant concepts have been particularly strong in Houston, where franchises bearing the names of sports greats Tiger Woods and Shaquille O’Neal are joining the scene.

Downtown Boise, Idaho, farmer's market.

CSNafzger // Shutterstock

#8. Boise, Idaho

– Vacancy rate: 3.6% (#37)
– Market rent: $1.34 per square foot (#8)
– Retail space under construction: 682,454 square feet (#5)

Boise’s population increased during the pandemic, which has boosted the demand for retail stores. Restaurants are in demand, specifically for units with a drive-through, pickup window, or dedicated parking spots for pickup orders. Boise Towne Square, one of the city’s shopping malls, launched a program in 2022 specifically designed to attract Black- and minority-owned businesses.

Sunset aerial view of historic downtown Riverside, California.

Matt Gush // Shutterstock

#6. Inland Empire, California (tie)

– Vacancy rate: 6.1% (#2)
– Market rent: $2.06 per square foot (#35)
– Retail space under construction: 1,657,600 square feet (#12)

During the pandemic, shopping centers that had grocery stores did well in the Inland Empire, according to The Real Deal. Now, other types of retail are in demand across the region, which is east of Los Angeles and includes San Bernardino and Riverside counties. This may be partly due to the area’s population growth—it added 47,601 people between 2020 and 2021. Retailers looking to be part of a new development may have trouble finding space: Some new developments are almost fully preleased when construction starts.

 

Aerial of Trenton, New Jersey.

FotosForTheFuture // Shutterstock

#6. Trenton, New Jersey (tie)

– Vacancy rate: 5.7% (#5)
– Market rent: $1.73 per square foot (#23)
– Retail space under construction: 121,600 square feet (#21)

Trenton’s retail market isn’t quite as strong as other metro areas in the country. Trenton’s vacancy rate is higher than the U.S. average of 4.3%, which could be on the rise. The metro area’s absorption rate—the difference in the amount of space being used versus being vacated—has been on a downward trajectory for the third quarter of 2022 compared to the same timeframe in 2021.

Phoenix cityscape in downtown in the afternoon.

Sean Pavone // Shutterstock

#5. Phoenix

– Vacancy rate: 5.6% (#7)
– Market rent: $1.84 per square foot (#27)
– Retail space under construction: 2,215,603 square feet (#11)

Vacancy rates in Phoenix have been trending downward, now hitting levels not seen since the Great Recession. Developers are racing to meet demand—over 1.4 million square feet of space will come online by the end of the first quarter of 2023. While many outdoor malls in the city vie for shoppers’ dollars, smaller businesses tend to occupy street-level retail space.

Aerial view of downtown Omaha, Nebraska, in autumn.

Jacob Boomsma // Shutterstock

#4. Omaha, Nebraska

– Vacancy rate: 5.0% (#16)
– Market rent: $1.26 per square foot (#5)
– Retail space under construction: 310,936 square feet (#23)

Retail space is in high demand in Omaha, which may increase more due to a slowdown in retail construction during the pandemic. The downtown area lost a lot of foot traffic in 2020 and 2021, but it’s starting to show signs of life as more people return to offices. A new streetcar route may provide more retail development opportunities in the downtown area.

Long street of a historical part of Harrisburg, Pennsylvania.

Ludmila Ruzickova // Shutterstock

#2. Harrisburg, Pennsylvania (tie)

– Vacancy rate: 5.5% (#9)
– Market rent: $1.36 per square foot (#10)
– Retail space under construction: 166,778 square feet (#24)

In 2022, the retail market in Harrisburg has turned around. The vacancy rate fell nearly a percentage point from the first quarter to the third quarter. Even though retail space is getting harder to find, rents are still low compared to the nationwide rate of $1.95, giving retailers a lower barrier to entry.

St. Louis' downtown skyline from above.

Sean Pavone // Shutterstock

#2. St. Louis (tie)

– Vacancy rate: 5.7% (#5)
– Market rent: $1.29 per square foot (#6)
– Retail space under construction: 614,306 square feet (#32)

Vacancy rates in St. Louis have improved from 6% in the first quarter of 2022, and developers are filling long-vacant shopping centers and seeing new possibilities. A new soccer stadium is spurring residential development in downtown St. Louis, which will provide more customers for retail businesses in this neighborhood. Another proposal aims to transform 67 acres along the Mississippi River into a mixed-use development with 30,000 square feet of retail space. This development could get underway in 2023.

Rhine district in Cincinnati.

aceshot1 // Shutterstock

#1. Cincinnati

– Vacancy rate: 6.4% (#1)
– Market rent: $1.16 per square foot (#2)
– Retail space under construction: 331,708 square feet (#38)

Mixed-use developments prove to be popular locations for retailers in Cincinnati. Construction has picked up again this quarter, although construction costs have been sticking points in buildouts, which have increased from 15% to 30%, according to real estate management firm Colliers. The firm also told Midwest Real Estate News that for retailers with patience, foot traffic is slowly returning to the downtown area.

This story originally appeared on Swyft Filings and was produced and
distributed in partnership with Stacker Studio.

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How businesses can protect themselves from the rising threat of deepfakes

Dive into the world of deepfakes and explore the risks, strategies and insights to fortify your organization’s defences

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In Billy Joel’s latest video for the just-released song Turn the Lights Back On, it features him in several deepfakes, singing the tune as himself, but decades younger. The technology has advanced to the extent that it’s difficult to distinguish between that of a fake 30-year-old Joel, and the real 75-year-old today.

This is where tech is being used for good. But when it’s used with bad intent, it can spell disaster. In mid-February, a report showed a clerk at a Hong Kong multinational who was hoodwinked by a deepfake impersonating senior executives in a video, resulting in a $35 million theft.

Deepfake technology, a form of artificial intelligence (AI), is capable of creating highly realistic fake videos, images, or audio recordings. In just a few years, these digital manipulations have become so sophisticated that they can convincingly depict people saying or doing things that they never actually did. In little time, the tech will become readily available to the layperson, who’ll require few programming skills.

Legislators are taking note

In the US, the Federal Trade Commission proposed a ban on those who impersonate others using deepfakes — the greatest concern being how it can be used to fool consumers. The Feb. 16 ban further noted that an increasing number of complaints have been filed from “impersonation-based fraud.”

A Financial Post article outlined that Ontario’s information and privacy commissioner, Patricia Kosseim, says she feels “a sense of urgency” to act on artificial intelligence as the technology improves. “Malicious actors have found ways to synthetically mimic executive’s voices down to their exact tone and accent, duping employees into thinking their boss is asking them to transfer funds to a perpetrator’s account,” the report said. Ontario’s Trustworthy Artificial Intelligence Framework, for which she consults, aims to set guides on the public sector use of AI.

In a recent Microsoft blog, the company stated their plan is to work with the tech industry and government to foster a safer digital ecosystem and tackle the challenges posed by AI abuse collectively. The company also said it’s already taking preventative steps, such as “ongoing red team analysis, preemptive classifiers, the blocking of abusive prompts, automated testing, and rapid bans of users who abuse the system” as well as using watermarks and metadata.

That prevention will also include enhancing public understanding of the risks associated with deepfakes and how to distinguish between legitimate and manipulated content.

Cybercriminals are also using deepfakes to apply for remote jobs. The scam starts by posting fake job listings to collect information from the candidates, then uses deepfake video technology during remote interviews to steal data or unleash ransomware. More than 16,000 people reported that they were victims of this scam to the FBI in 2020. In the US, this kind of fraud has resulted in a loss of more than $3 billion USD. Where possible, they recommend job interviews should be in person to avoid these threats.

Catching fakes in the workplace

There are detector programs, but they’re not flawless. 

When engineers at the Canadian company Dessa first tested a deepfake detector that was built using Google’s synthetic videos, they found it failed more than 40% of the time. The Seattle Times noted that the problem in question was eventually fixed, and it comes down to the fact that “a detector is only as good as the data used to train it.” But, because the tech is advancing so rapidly, detection will require constant reinvention.

There are other detection services, often tracing blood flow in the face, or errant eye movements, but these might lose steam once the hackers figure out what sends up red flags.

“As deepfake technology becomes more widespread and accessible, it will become increasingly difficult to trust the authenticity of digital content,” noted Javed Khan, owner of Ontario-based marketing firm EMpression. He said a focus of the business is to monitor upcoming trends in tech and share the ideas in a simple way to entrepreneurs and small business owners.

To preempt deepfake problems in the workplace, he recommended regular training sessions for employees. A good starting point, he said, would be to test them on MIT’s eight ways the layperson can try to discern a deepfake on their own, ranging from unusual blinking, smooth skin, and lighting.

Businesses should proactively communicate through newsletters, social media posts, industry forums, and workshops, about the risks associated with deepfake manipulation, he told DX Journal, to “stay updated on emerging threats and best practices.”

To keep ahead of any possible attacks, he said companies should establish protocols for “responding swiftly” to potential deepfake attacks, including issuing public statements or corrective actions.

How can a deepfake attack impact business?

The potential to malign a company’s reputation with a single deepfake should not be underestimated.

“Deepfakes could be racist. It could be sexist. It doesn’t matter — by the time it gets known that it’s fake, the damage could be already done. And this is the problem,” said Alan Smithson, co-founder of Mississauga-based MetaVRse and investor at Your Director AI.

“Building a brand is hard, and then it can be destroyed in a second,” Smithson told DX Journal. “The technology is getting so good, so cheap, so fast, that the power of this is in everybody’s hands now.”

One of the possible solutions is for businesses to have a code word when communicating over video as a way to determine who’s real and who’s not. But Smithson cautioned that the word shouldn’t be shared around cell phones or computers because “we don’t know what devices are listening to us.”

He said governments and companies will need to employ blockchain or watermarks to identify fraudulent messages. “Otherwise, this is gonna get crazy,” he added, noting that Sora — the new AI text to video program — is “mind-blowingly good” and in another two years could be “indistinguishable from anything we create as humans.”

“Maybe the governments will step in and punish them harshly enough that it will just be so unreasonable to use these technologies for bad,” he continued. And yet, he lamented that many foreign actors in enemy countries would not be deterred by one country’s law. It’s one downside he said will always be a sticking point.

It would appear that for now, two defence mechanisms are the saving grace to the growing threat posed by deepfakes: legal and regulatory responses, and continuous vigilance and adaptation to mitigate risks. The question remains, however, whether safety will keep up with the speed of innovation.

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Small banks emerge as the top source for small business financing

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Findbusinesses4sale used the Fed's Small Business Credit Survey data to compare approval rates among small business financing options.
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When it comes to borrowing money, small businesses are most likely to apply at large banks. But they often find success with their counterparts in the finance world: small banks.

Small banks—or those with less than $10 billion in total assets—comprise most of the banks in the U.S., much like small businesses account for nearly all U.S. businesses. More than 80% of small businesses that applied for financing at small banks were at least partially approved in 2022, according to data from the Fed’s most recent survey of small business employers. However, only 30% of small businesses applied at small banks when they sought financing.

About 2 in 5 small business employers applied for some traditional financing in 2022. Most needed the money to meet operating expenses, while a little over half sought cash to expand their operations.

Findbusinesses4sale used the Fed’s Small Business Credit Survey data to compare approval rates among small business financing sources, taking a closer look at their differences. Approval rates are based on applications for loans, credit, and cash advances at the various institution types. The Fed report was released in March 2023 based on a 2022 survey of nearly 8,000 small businesses with employees.


A bar chart shows the share of small business applicants at least partially approved for loan requests, separated by the type of source applied to.

Findbusinesses4sale

Small banks surpass online lenders, finance companies in approval rates for small business applicants

Also known as community banks, small banks are well-equipped to lend to small businesses because of their intimate knowledge of local economies. Small businesses are often young, with short histories, small operations, little collateral, and unproven financial success. These factors can make it difficult for founders to qualify for credit and loans—they’re simply a riskier investment for a funder to take on.

Small banks’ decision-makers live within the same areas where they grant loans, and they have insight into how certain businesses could fare within their neighborhoods. That makes it easier for them to analyze the risk of lending to small businesses and, in turn, decide whether to approve their applications. At least 3 in 5 (61%) applicants considered to be a medium or high credit risk were approved for financing at small banks; at large banks, not even half (45%) of these riskier applicants were approved.

By operating across smaller locales, community bank operators also have the opportunity to forge stronger relationships with business founders. The Fed survey shows that about 2 in 3 small businesses that applied for financing with these banks did so because of an existing relationship. Many of these relationships were forged in the heat of the COVID-19 pandemic, when community banks came through for small businesses with relief funds, including more intensive support in understanding and completing complex applications.

Small firms applying to other sources, such as online lenders and finance companies, are most often motivated by making quick decisions and perceiving that they have a higher chance of being approved. That was the case five years ago, but approval rates for both sources lagged behind small banks in 2022. Indeed, approval rates at both have fallen significantly since 2019, while approvals at small banks have grown.

Both online lenders and finance companies still approve slightly higher shares of applicants with medium to high credit risks compared to small banks, but only by a few percentage points. At the same time, many more borrowers reported dissatisfaction and challenges working with these lenders, including high interest rates and unfavorable repayment terms.

On the other hand, the vast majority of borrowers from small banks were happy with their experience—much more than those who borrowed from any other type of lender.

Story editing by Ashleigh Graf. Copy editing by Paris Close. Photo selection by Ania Antecka.

This story originally appeared on Findbusinesses4sale and was produced and
distributed in partnership with Stacker Studio.

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The new reality of how VR can change how we work

It’s not just for gaming — from saving lives to training remote staff, here’s how virtual reality is changing the game for businesses

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Until a few weeks ago, you might have thought that “virtual reality” and its cousin “augmented reality” were fads that had come and gone. At the peak of the last frenzy around the technology, the company formerly known as Facebook changed its name to Meta in 2021, as a sign of how determined founder Mark Zuckerberg was to create a VR “metaverse,” complete with cartoon avatars (who for some reason had no legs — they’ve got legs now, but there are some restrictions on how they work).

Meta has since spent more than $36 billion on metaverse research and development, but so far has relatively little to show for it. Meta has sold about 20 million of its Quest VR headsets so far, but according to some reports, not many people are spending a lot of time in the metaverse. And a lack of legs for your avatar probably isn’t the main reason. No doubt many were wondering: What are we supposed to be doing in here?

The evolution of virtual reality

Things changed fairly dramatically in June, however, when Apple demoed its Vision Pro headset, and then in early February when they were finally available for sale. At $3,499 US, the device is definitely not for the average consumer, but using it has changed the way some think about virtual reality, or the “metaverse,” or whatever we choose to call it.

Some of the enhancements that Apple has come up with for the VR headset experience have convinced Vision Pro true believers that we are either at or close to the same kind of inflection point that we saw after the release of the original iPhone in 2007.Others, however, aren’t so sure we are there yet.

The metaverse sounds like a place where you bump into giant dinosaur avatars or play virtual tennis, but ‘spatial computing’ puts the focus on using a VR headset to enhance what users already do on their computers. Some users generate multiple virtual screens that hang in the air in front of them, allowing them to walk around their homes or offices and always have their virtual desktop in front of them.

VR fans are excited about the prospect of watching a movie on what looks like a 100-foot-wide TV screen hanging in the air in front of them, or playing a video game. But what about work-related uses of a headset like the Vision Pro? 

Innovating health care with VR technology

One of the most obvious applications is in medicine, where doctors are already using remote viewing software to perform checkups or even operations. At Cambridge University, game designers and cancer researchers have teamed up to make it easier to see cancer cells and distinguish between different kinds.

Heads-up displays and other similar kinds of technology are already in use in aerospace engineering and other fields, because they allow workers to see a wiring diagram or schematic while working to repair it. VR headsets could make such tasks even easier, by making those diagrams or schematics even larger, and superimposing them on the real thing. The same kind of process could work for digital scans of a patient during an operation.

Using virtual reality, patients and doctors could also do remote consultations more easily, allowing patients to describe visually what is happening with them, and giving health professionals the ability to offer tips and direct recommendations in a visual way. 

This would not only help with providing care to people who live in remote areas, but could also help when there is a language barrier between doctor and patient. 

Impacting industry worldwide

One technology consulting firm writes that using a Vision Pro or other VR headset to streamline assembly and quality control in maintenance tasks. Overlaying diagrams, 3D models, and other digital information onto an object in real time could enable “more efficient and error-free assembly processes,” by providing visual cues, step-by-step guidance, and real-time feedback. 

In addition to these kinds of uses, virtual reality could also be used for remote onboarding for new staff in a variety of different roles, by allowing them to move around and practice training tasks in a virtual environment.

Some technology watchers believe that the retail industry could be transformed by virtual reality as well. Millions of consumers have become used to buying online, but some categories such as clothing and furniture have lagged, in part because it is difficult to tell what a piece of clothing might look like once you are wearing it, or what that chair will look like in your home. But VR promises the kind of immersive experience where that becomes possible.

While many consumers may see this technology only as an avenue for gaming and entertainment, it’s already being leveraged by businesses in manufacturing, health care and workforce development. Even in 2020, 91 per cent of businesses surveyed by TechRepublic either used or planned to adopt VR or AR technology — and as these technological advances continue, adoption is likely to keep ramping up.

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