By: Ellen Cans

Following the pandemic, New York City’s economy took a big hit, with vacant store fronts up for grabs all around. In early 2021, grocery delivery startups were able to snatch up short-term lease deals for retail spots in convenient locations, offering New Yorkers discounts and quick deliveries on groceries.

As reported by the NY Post, startup apps including GoPuff, Fridge No More, Gorillas, Jokr and Getir took their best shot, taking on vacant local storefronts with blacked-out windows to operate a business promising grocery deliveries in as little as 10 minutes.

Now as real estate attempts to recover, landlords and politicians are taking a stand against the startups, indicating their time to shine may be coming to a close. As per the Post, politicians are realizing that warehouses and delivery zones in central locations do not promote bustling pedestrian-happy streets. Local officials say a lot of the spaces rented by the apps are zoned for retail businesses, but are essentially being operated as warehouses. “I don’t see how [dark stores] could be legal in a retail area,” said Upper West Side councilwoman and former Manhattan borough president Gale Brewer.

Over the last year, the fast-delivery apps took on roughly 150 to 200 retail spaces in the city, as per Solomon Sharaby, a broker with KSR real estate. “There was a lot of vacant space,” Sharaby explained. Many of the deals closed were for just two years, with options for both the landlords and tenants to cancel, brokers say. “The landlords wanted the ability to cancel the lease because it wasn’t their ideal tenant and the delivery companies wanted a way out in case they couldn’t make it in the market,” broker Yoni Hader told The Post. Landlords are now looking to raise the rents above pandemic prices.

With the tide finally turning, people can start going out instead of ordering everything delivered, making the startup delivery apps obsolete. The darked-out stores don’t contribute to foot traffic, but rather obstruct the walkways with their numerous parked e-bikes. “They’ve run into a number of obstacles between rising rents, potential zoning issues and landlords who are not excited about them as tenants because they don’t add anything to the neighborhood,” Jeffrey Roseman, vice chairman of commercial real estate advisory Newmark Group, told The Post.

It might be fate, because at the same time, a lot of the smaller apps, which had initially relied on venture capital funding, are starting to run out of money. Most of the startups have not turned a profit.