The Kroger Co. is pulling back from developing a network of automated e-commerce fulfillment centers and will instead focus on expanding its brick-and-mortar grocery store network.  

The grocery chain announced it would close three of its eight robotics-powered fulfillment centers. The centers marked for closure are in Groveland, Florida, Pleasant Prairie, Wisconsin, and Frederick, Maryland. 

The company has also scrapped plans for another fulfillment center in Charlotte but will still build a previously planned fulfillment center in Phoenix.

With the announcement, the Cincinatti-based grocer admitted that its pandemic-era gambit to invest in robotics-focused warehouses to expand its market reach was dragging its e-commerce earnings into the red and creating significant headwinds for its bottom line.

“We haven’t allocated enough capital to growing stores because we have allocated a lot of capital in other areas like fulfillment centers,” Kroger Chairman and interim CEO Ronald Sargent said on an earnings call Thursday. 

The company anticipates taking a write-down of approximately $2.6B in 2026 because of the closures. As part of that, Kroger will make a one-time payment of $350M to UK-based robotics company Ocado, which built the robotic fulfillment systems.

Sargent said Kroger plans to open 14 new grocery stores in the fourth quarter and increase new-store builds by 30% throughout 2026. In June, the chain said it will actualize a net loss of 30 stores over 18 months as it closes 60 underperforming locations but opens 30 new ones, according to Food Business News.

GlobalData retail analyst Neil Saunders characterized Kroger’s push to focus on automated customer fulfillment centers as a “misadventure” undertaken during the tenure of former CEO Rodney McMullen, who resigned in March after an internal investigation into his conduct.

While the automated warehouses drove down the cost of picking and packing groceries for online orders, Kroger wasn’t able to deliver the groceries at the scale needed to offset the additional shipping costs of servicing a farther-flung network, McMullen said, according to CoStar. 

Kroger said it will now deepen its relationship with the third-party grocery delivery services Instacart, DoorDash and Uber Eats instead.

Since the announcement and earnings call, Kroger’s stock price has lost some 6% of its value, hovering near a six-month low of $63.31 in midday trading Friday.

Trinity Capital Advisors and Nuveen Real Estate have unloaded Alexander Commerce Park, a three-building, 441,072-square-foot logistics portfolio in Raleigh-Durham’s Research Triangle Park. The property sold for $80.2 million. The park, delivered in 2023, is 100% occupied by four tenants, including Upper Deck, Wolfspeed, Wesco, and Running Logistics. Prologis was the buyer.

Trinity has been busy in the Triangle region. Over the past 10 years, the firm has acquired or developed over 9.0 million square feet of office, industrial, and life science assets totaling $2.2 billion in capitalization. Major projects include Eastgate 540 (980,000 square feet across six industrial buildings), 147 Exchange (274,370 square foot industrial building), Park Point (645,000 square foot adaptive reuse life science park), Spark LS (1.7 million square foot life science campus), and Southport Innovation Center (911,000 square foot life science/flex manufacturing campus).

Pete Pittroff, Dave Andrews, and Zachary Lloyd led the JLL Investment Sales and Advisory team representing the seller.

One of the biggest names in real estate investment is leading the pack as investors follow job growth and population migration to the Sun Belt.

Blackstone Real Estate Income Trust has struck a deal to acquire Preferred Apartment Communities for $5.8B in cash. The acquisition has been approved by the PAC board of directors and is expected to close in Q2, subject to approval by shareholders.

Overton Rise, a Preferred Apartment Communities property in Atlanta

The price values Atlanta-based PAC at $25 per share. Shares in the REIT closed at $23.27 on Tuesday, itself a higher value than at any time in the last 10 years. A year ago, PAC traded for $8.21 a share.

PAC owns both apartments and retail properties. Its apartment portfolio includes 44 communities totaling about 12,000 units concentrated in the Atlanta; Orlando, Tampa and Jacksonville, Florida; Charlotte, North Carolina; and Nashville, Tennessee, metros.

The company’s retail portfolio includes 54 grocery-anchored assets totaling about 6M SF. Most of those properties are in the Atlanta, Orlando, Nashville and Raleigh, North Carolina, metro markets.

“The company’s grocery-anchored retail portfolio performance has also been strong and resilient, and we believe these types of necessity-oriented assets located in areas with growing populations are well-positioned for continued growth,” Blackstone Real Estate Senior Managing Director Jacob Werner said in a statement.

The deal comes on the heels of BREIT’s $3.7B all-cash acquisition of Resource REIT in January, which will also close in the second quarter of this year. Resource is a nontraded REIT that owns 42 U.S. apartment communities totaling over 12,600 units. Resource’s portfolio, like that of PAC, tends to focus on warmer states, with garden-style assets in Arizona, Colorado, Florida, Georgia and Texas. 

These two deals are only the latest sizable buys for BREIT. Last July, the company bought affordable housing assets from American International Group for about $5.1B, and in June, BREIT acquired Chicago-based Home Partners of America for $6B. Home Partners owns more than 17,000 single-family rentals in the United States.