Costco plans to open a new Los Angeles warehouse located beneath an affordable housing complex, marking a creative expansion strategy for the retail giant.
The project, located in the Baldwin Village neighborhood in South Los Angeles, is expected to open in 2027, CEO of Costco said Ron Vachris during the company’s first quarter fiscal 2026 earnings call last month.
“We have a project in Los Angeles where we are working with developers [where] there are some affordable housing overtaking a Costco just north of LAX,” Vachris said. “This project will open in 2027.”
Vachris said the unconventional approach allows Costco to enter markets where traditional big-box development would be nearly impossible.
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Costco plans to open a new warehouse in Los Angeles beneath an affordable housing complex. (Angus Mordant/Bloomberg via Getty Images / Getty Images)
“That would be a market we could never go into and find 25 acres to build a Costco,” he said. “It just wouldn’t happen.”
The strategy, Vachris added, also help the business getting closer to customers while reducing congestion in some of its busiest warehouses.
“We’re finding creative ways to connect with our members and alleviate pressure from some of our busiest locations,” Vachris said. “…We continue to see opportunities in markets that we would have questioned in the past.”
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A Costco parking lot in Los Angeles. (Brian van der Brug/Los Angeles Times via Getty Images/Getty Images)
The project, developed by Thrive Living, will include approximately 800 apartments built above the warehouse. The building will also include a rooftop pool and fitness center, according to the Wall Street Journal.
About 184 apartments are expected to be for low-income households, the WSJ reported.
Teleprinter Security Last Change Change % COST COSTCO GROSS CORP. 924.88 +9.57 +1.05% Thrive Living founder Ben Shaoul estimates the total development cost at around $425 million, according to the WSJ.
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The project, located in South Los Angeles, is expected to open in 2027. (Lindsey Nicholson/UCG/Universal Images Group / Getty Images)
During the retail giant First Quarter 2026 Results Last month, CFO Gary Millerchip also highlighted unprecedented pizza, pie and e-commerce sales during the holiday season.
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Costco and Thrive Living did not immediately respond to FOX Business’ request for comment.
