LANDSCAPE
New York City’s volatile real estate market
Clockwise from left: A Buyk courier delivers groceries, Green Ivy Organic
offers a large variety of produce, fresh fl owers, and grocery items, and
JOKR’s micro-warehouse (or “dark store) in Manhattan.
Photo by Gabriele Holtermann
COURIER LIFE, NOVEMBER 12-18, 2021 31
ier for the apps to expand than
it would be for a brick-and-mortar
grocery.
“We’re looking for 60,000 feet
minimum,” he said. “I’ve seen
some delivery app pop-up locations
where they’re taking advantage
of empty commercial
spaces in the city as a result of
the pandemic. They’re putting
up these gondolas, putting limited
SKUs, and they’re off to the
races on their e-bikes.”
Beard said looking for space
for Gorillas isn’t necessarily
easier than looking for a grocery
store or other retailer.
They need 3,000 square feet at
minimum, and “at grade,” or
level with the street — no steps
up or down.
One thing that does work to
their advantage is that they’re
not looking for the most attractive,
easily-accessible location,
since the stores aren’t open to
customers.
“We just need to be in ‘A’
markets, not necessarily at ‘A’
locations in those markets,”
he said. “So we prefer side
streets.”
Many landlords are worried
about the prospect of
delivery workers milling
around outside the store, he
said, but he hasn’t found that
to be a problem — Gorillas employees
aren’t gig workers like
Uber Eats or Doordash employees,
and the dark stores
do have break rooms inside
where couriers can sit down
rather than waiting for their
next order outside.
While Gorillas is certainly
well-funded, they do have a cap
on how much they’re willing to
spend on a lease, he said. Getting
started during the pandemic,
when rents were lower,
gave the company time to get
a “good foothold,” he said, and
the company was getting established
before the boom of quickcommerce
apps. As they’re just
looking for storage, he said, Gorillas
might get a little more
“bang for their buck,” in terms
of what they can fi t in each location,
since they don’t need to
build out space for aisles and
different departments for customers
to peruse.
Manhattan landlords were
concerned at fi rst about leasing
space to a brand-new company.
“Most New York landlords
are pretty sophisticated, and
you always have to weigh risk
with any deal you’re looking
at,” he said. “Gorillas, specifi -
cally, is very well capitalized
by strong, strong VC backers. I
think that helped to give landlords
a lot of confi dence in what
these guys were doing.”
Some grocery stores are
having the opposite experience,
the Brooklyn-based store
owner said. Finding a large and
welcoming space is “crazy hard
to fi nd,” he said, and the spaces
are pricey.
“Landlords would rather
cut up a large space and charge
more rent than get an anchor
tenant,” he said. “Supermarkets
are, margins are everything,
right? When you’re
paying rent in the millions, it
makes a space look less attractive
and appealing.”
The fi nal installment in
“The Race to Deliver” will examine
labor relations between
the companies behind the grocery
delivery apps and their
workforce.