JOKR’s micro-warehouse -or “dark store” – in the Financial District. Photo by Gabriele Holtermann
ery apps are impacting NY’s real estate market
Caribbean Life, NOVEMBER 19-25, 2021 31
commerce apps. Gorillas might get a
little more “bang for their buck,” in
terms of what they can fit in each location,
he said, since they don’t need to
build out space for aisles and different
departments for customers to peruse.
Manhattan landlords were concerned
at first about leasing space to a brandnew
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, specifically, is
very well capitalized by strong, strong
VC backers. I think that helped to give
landlords a lot of confidence in what
these guys were doing.”
Some grocery stores are having the
opposite experience, the Brooklynbased
store owner said. Finding a large
and welcoming space is “crazy hard
to find,” 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.”
Any company choosing to enter a
market where rent is so high is probably
catering to a more affluent clientele
and has higher profit margins — he
pointed to Whole Foods, estimating
that the luxury grocer likely has a profit
margin ten points higher than his
store — and their stores in some of the
city’s most expensive neighborhoods.
“The bigger you are, the more buying
power you have, the lower your cost
of goods,” he said. “There’s people who
pass that on, it depends on the business
model, pass it on to the consumer and
the community, or they make a ton of
money.”
So far, the well-funded startups have
stuck to Manhattan and wealthier,
trendier neighborhoods in Brooklyn
and Queens – Downtown Brooklyn and
Long Island City. But Buyk, the most
recent entrant to the grocery delivery
game, has grown from six dark stores
in Manhattan upon launching in September
to 20 across four boroughs.
Their locations in the Bronx are the
first foray any of the apps have made
into the northernmost borough.
Buyk chose to launch in Manhattan
because the borough is “where
the real-time retail concept is needed
most,” the spokesperson said. Their
goal has always been to serve all five
boroughs, they said, and they plan to
continue expansion in New York City
before going nationwide.
Like Gorillas, Buyk’s ideal spaces
are between 3,000 and 4,000 square
feet, in a dense neighborhood but not
necessarily on a pedestrian-heavy thoroughfare,
and are preferable in an area
where street infrastructure allows for
efficient delivery routes. They also consider,
of course, the price and availability
of real estate.
They currently operate two dark
stores in the northern part of the
Bronx, covering Kingsbridge Heights,
Norwood, Williamsbridge, Bedford
Park, and Allerton, and plan to open
more soon.
Radhamés Rodríguez, president of
United Bodegas of America, said steadily
increasing rents are a huge problem
for corner stores, especially in
the last decade. Even successful stores
who need more space to keep up with
demand often can’t afford to expand,
he said, and some store owners who
occupy larger stores split the space and
rent part of it out to another business
so they can make the rent.
“You’ll see, a lot of stores outside
have flower shops too,” he said. “When
you see that, you’ve got to know that’s
because the rent is high. They do that
just to get something to pay the rent.”
Rodríguez, who has been in the business
for 30 years, said shorter leases
offered by landlords are also a problem
for store owners. Where a ten or 15 year
lease used to be the norm, five years is
now the longest most people can get.
“Before, you used to pay rent – it was
$1,500, $2,000,” he said. “When I used
to pay $2,500, that was a lot. But now,
the minimum is maybe $3,5000.”
Some pay up to $7,000 a month, he
said. He doesn’t blame the landlords —
it makes sense for them to try to get the
most of the space they have.
“The city, maybe they could do
something to help the bodegas,”
Rodríguez said. “Something, let’s say,
through tax for the landlord so they
could be more flexible when somebody
is trying to rent something. It could
help us to do that.”
The final installment in “The Race
to Deliver” will examine labor relations
between the companies behind
the grocery delivery apps and their
workforce.
Green Ivy Organic offers a large variety
of produce, fresh fl owers, and
grocery items. Photo by Gabriele
Holtermann