Costco Wholesale Acquires Alhambra Plaza From Kimco Realty for $58.9 Million, Ending 36-Year Ground Lease

Costco Wholesale has purchased the land underlying its Alhambra, California warehouse from Kimco Realty for $58.9 million, collapsing a ground lease arrangement that had been in place since the store opened in 1990. The transaction, which closed August 21, 2026, also includes an adjacent parcel previously owned by Kimco Realty, giving Costco Wholesale fee-simple control of the site for the first time in the property's 36-year operating history.

Deal Terms and Property Details

The acquisition covers Costco Plaza at 2207 W. Commonwealth Ave. in Alhambra, a 195,473-square-foot retail center situated on more than 18 acres approximately seven miles southwest of downtown Los Angeles. At $58.9 million, the transaction implies a price of roughly $301 per square foot — below the Los Angeles County retail average of $354 per square foot recorded in the second quarter of 2026.

The center is fully leased and anchored by the Costco Wholesale warehouse, which includes a gas station, tire service center, food court, pharmacy, optical department, and hearing-aid center, along with approximately 1,080 parking spaces. The property sits within a regional retail cluster that includes Target, Aldi, and Fremont Plaza mall. The trade area population exceeds 720,000, with average household incomes above $136,000.

Costco Wholesale also acquired fee interests in leased properties in Phoenix, Corona, and San Diego as part of the same programmatic effort to own rather than lease its warehouse sites.

End of a Long-Term Landlord-Tenant Relationship

Costco Wholesale has operated at the Alhambra location since 1990, making it one of the retailer's longer-standing tenancy arrangements. Kimco Realty, a real estate investment trust focused on open-air shopping centers, had held the property in its portfolio with Costco as the dominant tenant. Kimco's historical portfolio data showed the Alhambra asset at 100% occupancy, with Costco Wholesale occupying the largest share of gross leasable area.

By acquiring the fee interest, Costco Wholesale eliminates its ground lease obligations at the site and takes direct ownership of both the improvements and the underlying land.

Costco's Broader Real Estate Strategy

The Alhambra transaction reflects a long-standing approach by Costco Wholesale to own the real estate underlying its warehouse operations. The company's real estate holdings were valued at $31.9 billion as of a recent quarter, spanning more than 900 warehouses globally. A Northmarq managing director estimated that Costco owns roughly 80% of its sites, with each location typically covering 15 to 20 acres. That executive characterized the company's posture plainly: "They don't rely on landlords… They are the landlord. They sell in bulk. They operate in bulk. And they own in bulk."

The Alhambra deal converts what had been a long-term ground lease into outright ownership at a per-square-foot price that comes in below prevailing Los Angeles County retail benchmarks, despite the property's infill location and strong demographic profile.

Market Context

Los Angeles County retail real estate averaged $354 per square foot in the second quarter of 2026. The $301-per-square-foot figure implied by the Alhambra transaction represents a discount to that benchmark, consistent with ground lease buyout structures where pricing reflects existing lease terms rather than open-market retail values.

Sources: Kidder Mathews / Hoodline, August 21, 2026