Costco Wholesale has bought the ground beneath its Alhambra warehouse for $58.9 million, ending 36 years as a tenant at the 195,473-square-foot Costco Plaza and taking full ownership of the site for the first time since the store opened in 1990. The retailer also picked up an adjacent parcel previously owned by its landlord, Kimco Realty, as part of the same transaction.
The Alhambra sale was one of four Costco-anchored properties Kimco unloaded this year, part of a package covering two shopping centers and two ground-lease parcels that brought in roughly $127 million total, according to CommercialSearch. Kimco disclosed the sales in its second-quarter 2026 earnings release, framing the move as an effort to redeploy capital into higher-yielding investments elsewhere in its portfolio.
Costco Plaza sits on more than 18 acres at 2207 W. Commonwealth Ave., about 7 miles southwest of downtown Los Angeles and less than 2 miles from Alhambra's city center. Beyond the Costco warehouse and its roughly 1,080 parking spaces, the property includes a gas station, tire service center, food court, pharmacy, optical department and hearing aid center, and it sits near Target, Aldi and the Fremont Plaza shopping mall, the same report notes.
Why Costco Wanted Full Ownership
A Costco spokesperson said the primary purpose of the acquisition was to purchase the fee interest in the property, per the outlet's reporting. That fits the company's broader national playbook: Costco's corporate real estate strategy tends to favor owning land outright and securing long-term ground leases on the 15- to 20-acre parcels its roughly 145,000- to 160,000-square-foot warehouse format typically requires, according to Investment Grade. Owning the dirt outright lets the retailer control site operations and strip away long-term occupancy costs tied to a landlord relationship.
Costco still leases other properties from third-party landlords in Phoenix, Corona and San Diego, so the Alhambra buyout is not part of a blanket policy shift — just one more site where the company chose to convert from tenant to owner. Kimco, notably, remains the property manager at Costco Plaza even after selling its ownership stake, the article adds.
A Deal Priced Below the Regional Average
Yardi Matrix data cited in the report puts the Costco Plaza sale price at $58.9 million, which works out to about $301 per square foot — below the Los Angeles County retail average of $354 per square foot recorded in the second quarter of 2026. That regional figure itself reflects a market under pressure: countywide retail sale prices fell 3.58 percent year-over-year during the same period, while average cap rates expanded 20 basis points to 6.2 percent, according to Kidder Mathews.
The broader softening shows up elsewhere too. Retail vacancy across Los Angeles County reached a 10-year high of 5.6 percent in the second quarter, even as average asking rents held roughly flat at $2.76 per square foot per month on a triple-net basis, per Encore Realty. A comparable downtown Los Angeles asset, the 330,784-square-foot Figat7th, changed hands for $207 per square foot when Brookfield Properties sold it for $68.5 million — another data point in a county-wide market where investment activity has shown clear pricing pressure this year, Kidder Mathews found.
Why the Site Still Commands Investor Interest
Despite the cooling numbers, Costco Plaza's trade area explains why a warehouse anchor like this still draws strong valuations even in a soft retail market. The property served an estimated population of 723,271 people within a five-mile radius as of 2025, with an average household income of $136,195 a year in that same radius, according to the CommercialSearch report. Essential-needs anchors tend to stay resilient even as general retail softens, which helps explain why Costco was willing to pay a premium to lock down permanent ownership.
For Kimco, the sale fits a pattern the REIT has followed elsewhere this year: shedding long-term, flat-rent leases with little embedded growth and rolling the proceeds into more dynamic holdings. Ross Cooper, in comments included in the report, said the sold assets carried long-term flat leases with very little embedded growth — a description that matches Kimco's stated plan to use the sale proceeds for future Section 1031 exchange investments. Under that section of the federal tax code, real estate investors can defer capital gains taxes and depreciation recapture by reinvesting all proceeds from a sale into qualifying like-kind property within 180 days, according to IPX1031.
Part of a Bigger Capital Shift
Kimco has been explicit that it is selling low-growth assets like Costco Plaza and redeploying into higher-growth, grocery-anchored centers instead. The company is North America's largest publicly traded owner and operator of open-air, grocery-anchored shopping centers, with ownership interests in 565 properties totaling around 100 million square feet of leasable space, per its second-quarter earnings release cited by GlobeNewswire. Hoodline previously reported that Kimco's $109M Broward shopping spree landed two Publix- and Walmart-anchored centers in Florida just weeks before the Alhambra sale closed, illustrating exactly where this kind of capital tends to land next.
Costco's appetite for owning its Southern California real estate outright isn't limited to buyouts like Alhambra. The company broke ground in September 2024 on its first U.S. mixed-use project in South Los Angeles's Baldwin Village neighborhood, pairing a 185,000-square-foot warehouse with 800 residential apartments built under California's AB 2011 affordable housing law, according to background compiled on Wikipedia. Locally, Alhambra officials have also been active on the commercial real estate front this year — the city council voted unanimously in August to place a measure on the November ballot that would ban data centers citywide, a move aimed at preserving commercial and office space for traditional businesses, as Hoodline reported in its story on Alhambra's data center ballot measure.
