Costco Wholesale

Costco owns approximately 80% of its 600-plus locations in the United States, with the remaining 20% on ground leases or traditional leases. Internationally, the ownership mix is lower but still substantial, particularly in Canada and Mexico. The company has stated on earnings calls that it prefers full ownership to control long-term occupancy costs and avoid rent escalations. This makes Costco one of the largest owner-occupiers of commercial real estate in North America.

No. Costco does not operate a separate real estate investment trust or external property fund. All real estate is held on its corporate balance sheet and developed in service of its warehouse operations. The company occasionally sells and leasebacks select properties, but this is rare and typically done for tax efficiency rather than as a capital-raising strategy. Its real estate decisions are made by an internal site-selection and construction team reporting through the COO.

Costco self-finances the vast majority of its new warehouse construction from operating cash flow. With over $10 billion in cash on hand and minimal long-term debt — around $6 billion as of its most recent filing — the company rarely taps credit markets for property development. This balance-sheet strategy keeps its cost of capital low and insulates its expansion plans from interest-rate cycles. Any external borrowing is typically backed by the company's unsecured credit rating, not by specific real estate collateral.

Site selection and real estate development fall under the operations and merchandising leadership, ultimately reporting to CEO Ron Vachris, who spent decades managing Costco warehouses before ascending to the top role. Craig Jelinek, the prior CEO, was similarly steeped in warehouse operations. The company does not employ a dedicated chief investment officer or real estate CIO — property decisions are embedded in the operational leadership, reflecting Costco's view that real estate is inseparable from the core business.

Because Costco is the primary tenant in nearly all the properties it owns, its real estate exposure is effectively a concentrated bet on its own retail performance. The portfolio is not marked to market regularly and is carried at depreciated cost, so its balance-sheet value is conservative. In a prolonged retail downturn, the company could face impairment charges on underperforming locations, but its history of same-store sales growth and membership renewal rates above 90% suggest low vacancy risk. The main vulnerability is geographic concentration — a cluster of owned warehouses in a declining region would be difficult to exit without a sale-and-leaseback structure.

Walmart leases a substantial portion of its stores and increasingly uses ground leases for its supercenters, treating real estate as a financing tool. Target does the same, with many stores in multi-tenant developments where it does not control the underlying land. Costco almost never shares a building or leases its anchor locations — it wants full site control, from traffic flow to gas-station placement. This produces a cleaner operating model with no third-party landlord negotiations delaying remodels or expansions, but it also ties up more capital per store than competitors' approaches.

Costco does not disclose a ranked list of properties by value, but its distribution-center network includes several million-square-foot campuses. The Tracy, California logistics complex is one of its largest owned hubs, serving the Bay Area and Northern California markets. The company's Issaquah, Washington headquarters campus is also fully owned, spanning multiple buildings. Internationally, Costco owns major warehouse clusters in Japan and Korea, where land values in urban corridors give those sites significant replacement cost.