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The grocery industry's supply chain arms race just gained a powerful new financier. Ahold Delhaize USA, the parent company of Food Lion and four other major East Coast supermarket chains, announced today a $475 million strategic investment from Blackstone Credit & Insurance to construct a state-of-the-art automated distribution center in Burlington, North Carolina. The transaction, structured as a triple net lease, represents a novel financing approach for large-scale grocery infrastructure and underscores the private credit industry's expanding role in corporate America's supply chain modernization efforts.

The deal comes as grocery retailers face mounting pressure to upgrade aging distribution networks while preserving capital for store-level investments and digital transformation initiatives. For Blackstone, the transaction fits squarely within its infrastructure lending strategy, providing long-term, investment-grade exposure to essential supply chain assets backed by one of America's largest grocery operators.

Under the agreement announced January 13, 2026, Blackstone Credit & Insurance will own the facility and fund 100% of in-scope construction costs for the Burlington distribution center. Once construction is complete, Ahold Delhaize USA will lease the facility for long-term use, with an option to purchase the site in the future under pre-agreed terms.

This triple net lease (NNN) structure—where the tenant assumes responsibility for property taxes, insurance, and maintenance—offers distinct advantages for both parties. For Ahold Delhaize, the arrangement preserves balance sheet flexibility while securing access to critical infrastructure. The company avoids the upfront capital outlay of an $860 million project while maintaining operational control and a future purchase pathway.

"The investment is structured to align the timing of costs with the long-term benefits of the facility," the companies stated in their joint announcement. The long-term lease approach supports a project of this scale, reduces refinancing risk and enables Ahold Delhaize USA to deploy capital efficiently to advance major infrastructure investments.

For Blackstone, the deal delivers predictable, long-duration cash flows backed by an investment-grade corporate tenant. Christopher Yonan, Head of European Infrastructure at Blackstone Credit & Insurance, emphasized the strategic fit: "This investment reflects our focus on partnering with leading investment grade corporations globally by providing flexible, low-cost capital through our credit and insurance platform".

The financing gap between Blackstone's $475 million commitment and the project's $860 million total cost will be funded by Ahold Delhaize through a combination of internal capital and traditional financing sources, according to the announcement.

The Burlington facility represents a significant bet on supply chain automation and regional distribution efficiency. The highly automated distribution center will add more than one million square feet of additional distribution infrastructure, delivering fresh and frozen grocery items to Food Lion stores across the Southeast and Mid-Atlantic regions.

Construction is expected to begin in the first quarter of 2026, with an anticipated start of operations in 2029. The three-year construction timeline reflects the complexity of modern automated distribution facilities, which integrate robotics, conveyor systems, temperature-controlled zones, and sophisticated warehouse management software.

The facility will serve as a critical node in Food Lion's distribution network, which currently supplies more than 1,100 stores across 10 states. The location in Burlington, situated in North Carolina's Piedmont Triad region, provides strategic access to major interstate highways and positions the facility within a day's drive of Food Lion's core markets.

The site is expected to employ over 500 associates within ADUSA Distribution and ADUSA Transportation companies over time, representing a significant economic development win for Guilford County. North Carolina Governor Josh Stein welcomed the investment, noting Food Lion's deep roots in the state, where the company has done business for more than 65 years.

The Burlington investment underscores Ahold Delhaize USA's commitment to strengthening its position as the dominant grocery operator on the Eastern seaboard. The companies of Ahold Delhaize USA comprise the largest grocery retail group on the East Coast and the fourth largest in the nation, serving 26 million omnichannel customers each week.

The company's U.S. portfolio includes five major regional brands: Food Lion (primarily Southeast and Mid-Atlantic), The GIANT Company (Pennsylvania and neighboring states), Giant Food (Washington D.C. metro area), Hannaford (New England), and Stop & Shop (Northeast corridor). This multi-banner strategy allows the parent company to maintain strong regional identities while achieving back-end efficiencies through shared distribution and supply chain infrastructure.

Food Lion, the primary beneficiary of the Burlington facility, has demonstrated consistent market share gains in recent quarters. The brand has emerged as a growth driver within Ahold Delhaize's U.S. operations, benefiting from store remodels, expanded fresh food offerings, and competitive pricing strategies.

JJ Fleeman, CEO of Ahold Delhaize USA, framed the investment as both a capacity expansion and a strategic commitment to the region: "Through the new distribution center, ADUSA Distribution and ADUSA Transportation will expand their capacity to support Food Lion's growth in the state, along with bringing new jobs".

The Ahold Delhaize transaction exemplifies Blackstone Credit & Insurance's infrastructure investment thesis and demonstrates the platform's significant scale in the asset-backed lending market.

Blackstone Credit & Insurance's Infrastructure and Asset Based Credit group manages over $100 billion and has over 80 investment professionals, as of September 30, 2025. The platform has experienced remarkable growth, with assets under management more than doubling to $295 billion over the last three years, making it Blackstone's fastest-growing business segment.

The Infrastructure and Asset Based Credit platform focuses on providing investment-grade credit, non-investment grade credit, and structured investments across the real economy in sectors including infrastructure, commercial finance, fund finance, consumer finance, and residential real estate loans. The grocery distribution sector fits naturally within this mandate, offering essential infrastructure assets with long-term cash flow visibility.

Blackstone's willingness to commit $475 million to a single distribution facility reflects both the platform's capital deployment capacity and its conviction in the grocery sector's resilience. Unlike discretionary retail, grocery distribution serves non-cyclical consumer demand and benefits from secular tailwinds including population growth, urbanization, and the ongoing integration of e-commerce fulfillment into traditional distribution networks.

The triple net lease structure also aligns with Blackstone's insurance business, which seeks long-duration assets to match long-term policyholder liabilities. The predictable lease payments from an investment-grade tenant provide an attractive risk-adjusted return profile for insurance capital.

The Blackstone-Ahold Delhaize transaction signals a broader trend: the increasing role of private credit in financing corporate infrastructure investments that traditionally relied on corporate balance sheets or project finance structures.

Several factors are driving this shift. First, corporations face competing capital allocation priorities, from digital transformation to shareholder returns, making off-balance-sheet infrastructure financing increasingly attractive. Second, private credit providers like Blackstone can offer execution certainty, structural flexibility, and speed that traditional lenders may struggle to match for complex, large-scale projects.

Third, the current interest rate environment has made alternative financing structures more competitive with traditional corporate debt. While triple net leases typically carry higher effective costs than senior secured debt, the operational and strategic benefits—including balance sheet preservation, reduced refinancing risk, and optionality—can justify the premium.

For the private credit industry, grocery distribution infrastructure represents an attractive asset class: essential, non-discretionary, backed by investment-grade operators, and characterized by long asset lives and stable cash flows. As grocery retailers continue investing in automation, cold chain capabilities, and omnichannel fulfillment, the sector may attract increasing private credit capital.

The complexity of the transaction is reflected in the roster of advisors. J.P. Morgan acted as exclusive financial advisor to Ahold Delhaize USA and A&O Shearman served as legal counsel. Milbank LLP acted as legal counsel to Blackstone Credit & Insurance.

The involvement of J.P. Morgan as financial advisor suggests the company evaluated multiple financing alternatives before selecting the Blackstone triple net lease structure. The choice of A&O Shearman and Milbank—both elite corporate law firms—underscores the transaction's sophistication and the importance both parties placed on structuring protections and future optionality.

The Burlington distribution center represents one data point in a broader grocery industry supply chain investment cycle. Major operators including Walmart, Kroger, Amazon Fresh, and regional players are collectively investing billions in distribution automation, cold chain infrastructure, and last-mile fulfillment capabilities.

These investments reflect both defensive and offensive imperatives. Defensively, retailers must maintain cost competitiveness as labor costs rise and consumers demand faster delivery. Offensively, superior supply chain capabilities create competitive advantages in product freshness, inventory turns, and the ability to profitably serve both stores and e-commerce channels.

For Ahold Delhaize, the 2029 operational start date for the Burlington facility positions the company to meet anticipated demand growth in its Food Lion markets while incorporating the latest automation technologies. The three-year construction timeline also allows the company to phase capital deployment and potentially incorporate technological advances that emerge during the build period.

The transaction's success may encourage other grocery operators to explore similar financing structures for major infrastructure investments, potentially creating a new asset class for private credit investors seeking long-duration, investment-grade exposure to essential supply chain infrastructure.