Costco Wholesale Corporation is one of the highest-rated retailers in our ratings database, rated S&P: AA. The ICE BofA AA US Corporate Index, the category of Costco’s S&P rating, yielded 5.80% as of October 1, 2026 (FRED); that is an index average, not a quote on Costco’s own bonds. At August 30, 2026, Costco owned both the land and the building at 755 of its 939 warehouses (Form 10-K for fiscal 2026). The listings we track currently show 1 active Costco offerings, last observed October 23, 2026. When fewer than five active listings publish a cap rate, our tables show no median.
Of Costco’s 184 warehouse leases at August 30, 2026, 136 were land-only leases on which Costco owns the building (Form 10-K for fiscal 2026). On a land-only lease the landlord owns the land and Costco owns the building. Those counts describe Costco’s operating portfolio, not the mix of properties offered for sale, so review the ownership of the improvements and the rights in each offering. See the Costco credit rating and NNN cap rate page.
Costco Credit Profile
| Metric | Details |
|---|---|
| S&P rating | AA |
| Moody’s rating | no verified rating |
| Status | Investment Grade |
| Rated entity in our database | Costco Wholesale Corporation |
| Rating sources and dates | S&P Global Ratings AA. Ratings checked October 8, 2026. |
The Spread: Costco Bonds vs. NNN
The comparison uses the bond index yield for Costco’s rating category against the median asking cap rate on active Costco listings, when enough listings exist.
| Metric | Costco bonds (rating-category index) | Costco net lease properties |
|---|---|---|
| Yield measure (dates in the note below) | 5.80% (ICE BofA AA index) | Median asking cap rate n/a (1 listings with a cap rate) |
| Spread, cap rate minus index yield | Baseline | n/a |
| Obligor | The issuing entity named in the bond’s indenture | The entity that signs or guarantees the lease |
| Purchase size | Minimum denomination of $2,000 face, then $1,000 increments, on Costco’s 1.375% notes due 2027, 1.600% notes due 2030 and 1.750% notes due 2032 (prospectus supplement dated April 16, 2020); a dealer’s own minimum order can differ | Price of a whole property: median asking price $14.99M across 1 active listings we track |
| Liquidity | Trades over the counter through dealers | Sold as a whole property; time to sell varies |
| Income taxation | Interest is taxable income (IRC 61(a)(4)) | Rent is taxable income (IRC 61(a)(5)), partly offset by depreciation of the building when the landlord owns it; land is not depreciable (Treas. Reg. 1.167(a)-2) |
| 1031 exchange | Not eligible; Section 1031 covers real property only (IRC 1031(a)(1)) | Eligible when held for investment or business use (IRC 1031(a)(1)) and exchanged for like-kind real property within the identification and exchange deadlines in IRC 1031(a)(3) |
| Value at the end | Face value at maturity absent default; market price moves before then | Depends on the property, lease term, and market |
| Income growth | Fixed coupon | Only if the lease provides rent increases |
Bond yield: ICE BofA AA US Corporate Index effective yield (FRED series BAMLC0A2CAAEY), the category of Costco’s S&P rating, as of October 1, 2026; it is an index average, not a quote on Costco’s own bonds. Cap rate: median asking cap rate on active listings InvestmentGrade.com tracks, last observed October 23, 2026; asking cap rates are not closed-sale cap rates. n/a means too few listings to report a median.
What the Comparison Turns On
Warehouse clubs are large buildings (Costco reports about 138.7 million square feet of operating floor space across its 939 warehouses at the end of fiscal 2026, Form 10-K), and a buyer of a Costco property is underwriting the land and location as well as the tenant’s credit. On a land lease where Costco owns the building, the landlord has no building to depreciate (land is not depreciable, Treas. Reg. 1.167(a)-2), which leaves the cap rate, residual land value, and 1031 deferral as the main differences from the bond.
Frequently Asked Questions
How is Costco rated?
In our ratings database, Costco Wholesale Corporation is rated S&P: AA. Sources and dates: S&P Global Ratings AA. Ratings checked October 8, 2026.
How much of its warehouse real estate does Costco own?
At August 30, 2026, Costco owned both the land and the building at 755 of its 939 warehouses, and 136 of its 184 warehouse leases were land-only leases on which Costco owns the building (Form 10-K for fiscal 2026). The listings we track currently show 1 active Costco offerings.
Can a Costco land lease owner take depreciation?
Not on the land: land is not depreciable (Treas. Reg. 1.167(a)-2). On Costco’s land-only leases Costco owns the building (Form 10-K), so the landowner has no building to depreciate; confirm who owns the improvements in the lease.
Considering Costco Net Lease Property?
We source Costco properties nationally and underwrite the lease, the obligor, and the real estate. On the majority of transactions, there is no separate fee to you as the buyer.
Find it: Costco properties across lease terms and markets.
Fund it: financing matched to the tenant’s credit and the remaining lease term.
Exit it: buyers for Costco properties, including 1031 exchange buyers.
Exchange it: 1031 execution against the deadlines.
Related Reading
Educational content only. InvestmentGrade.com is a commercial real estate brokerage and educational publisher. We do not sell, broker, underwrite, or solicit any bonds, securities, or investment products. Yields, ratings, and prices referenced fluctuate continuously and are sourced from public market data as of the date noted. Nothing on this page constitutes investment advice, an offer to sell, or a solicitation to buy any security. Consult a licensed broker-dealer, registered investment advisor, or tax professional before making any investment decision. For SEC investor education, visit investor.gov.
