FreshDirect is on the Move. Literally.   Leave a comment

As most of you in the NYC area know, FreshDirect is a virtual grocery store that started over 10 years ago focusing its business in Manhattan. The idea was to capitalize on a market that relied heavily on delivery for so many things but especially food!

Though there were numerous grocery stores located throughout the city at the time, it was never particularly easy to do a full shopping anywhere without the help of a car or a cab, neither of which are good options in the City. And who wants to lug lots of shopping bags on the NYC subway and then walk five flights of stairs to their apartments?

FreshDirect quickly became the amazon.com of the grocery world and grew fast, extending into the rest of the boroughs, Long Island, Westchester and parts of New Jersey.

Currently located in Long Island City, Queens, FreshDirect is outgrowing its space quickly and is looking to move. In addition, they are also looking to expand into other markets such as Philadelphia, Chicago and Boston.

They are focusing their new headquarters in either NY or NJ, but the Harlem River Yards in the Bronx seems to be the frontrunner due to an old fashioned means of transportation…rail. Both states are aggressively going after their business, but it’s the use of rail that seems to be driving their decision. And NYC is throwing as much weight as it can to keep the NYC-born online grocer. Apparently, they are offering a package of cash and tax benefits worth up to $112MM keep FD in the boroughs.

The Harlem River Yards rail is a key component of why this location is a primary consideration for FD but its easy proximity and quick access to highways directly connecting to various states for future expansion and core markets of their current business model also make it an attractive spot.

A major British conglomerate, Wm Morrison Supermarkets, has invested $50MM in FD (10% stake in the co.) with the aim of expanding FD’s services. Philadelphia is currently being tested as the first major market for FD to offer their services outside of NYC.

The Bronx location is also key due to a lot of the local relationships with wholesale food markets and companies. Sounds like FD has zeroed in on the Harlem River Yards and are just hammering out the final details. We shall see…

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Posted January 20, 2012 by CBC REalta Group in CRE Trends

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