A New Costco Is Coming to Lake Forest. Here Is Why That Matters.
When Costco Wholesale Corporation cuts a check for $12.5 million to acquire a piece of South Orange County real estate, it is worth paying attention. The company is not in the habit of guessing. Its site selection process is methodical, data-heavy, and built on one simple premise: Costco builds where people with money are moving.
In early 2025, Costco purchased the shuttered Regal Cinemas parcel at Foothill Ranch Towne Centre in Lake Forest. The company plans to demolish the old theater, clear the 16-acre site, and build a 160,811 square-foot warehouse with a full tire center. The Lake Forest Planning Commission approved the project on February 5, 2026. Costco's stated goal is to open by the end of 2026.
This blog covers where the property came from, how Costco evaluates a new market, what the two existing nearby Costcos tell us about the geography, and what the arrival of a new warehouse club signals for South OC's growth trajectory.
The Property: From Regional Cinema to Vacant Lot
The site at 26602 Towne Centre Drive sits within Foothill Ranch Towne Centre, a large regional power center located just off the 241 Toll Road in the Foothill Ranch submarket of Lake Forest. The center is anchored by Walmart Supercenter, Target, Hobby Lobby, Michaels, Old Navy, and PetSmart and has served as the primary retail hub for Foothill Ranch, Coto de Caza, Dove Canyon, and eastern Rancho Santa Margarita for decades.
The theater at the center operated first under the Regal Cinemas banner and later as Cinemark Lake Forest Foothill Ranch. Regal filed for Chapter 11 bankruptcy protection in September 2022, citing pandemic-era losses and a slow box office recovery. The Lake Forest location ultimately closed, and as of mid-2026 it is listed permanently closed on Yelp and other directories.
The theater building measured approximately 87,263 square feet. It sat on a 16-acre parcel that included the building and its surrounding parking field. After the closure, the parcel became a visible vacancy in an otherwise active shopping center, and a question mark for the city. Costco answered that question in early 2025.
The acquisition was a straight purchase: Costco paid $12.5 million for the property outright. Costco strongly prefers to own its buildings rather than lease. Ownership gives the company complete control over store design, parking layout, and long-term operational decisions. This was not a ground lease or a co-tenancy deal. Costco bought the land and will own the building it puts on it.
Project Details at a Glance
| Address | 26602 Towne Centre Drive, Lake Forest, CA 92610 |
|---|---|
| Former Use | Regal / Cinemark movie theater (87,263 SF) |
| Site Area | 16 acres (building + parking) |
| Purchase Price | $12.5 million (acquired by Costco Wholesale Corp.) |
| Ownership Structure | Purchased outright; not a lease |
| New Building Size | 160,811 gross square feet |
| Amenities | Full tire center; no gas station |
| Planning Commission Approval | February 5, 2026 |
| Target Opening | End of 2026 (per applicant) |
| OC Store Count | Costco's 14th Orange County warehouse |
The new Lake Forest store would be slightly larger than a standard Costco warehouse, consistent with the company's trend toward bigger-format locations in growing suburban markets.
How Costco Decides Where to Build
Costco's real estate team does not move quickly, and that is by design. The company typically studies a potential trade area for years before committing capital. Understanding how they evaluate a site helps explain why the Lake Forest decision makes sense right now, and not five years ago.
Trade Area Population and Density
Costco targets a primary trade area of roughly 10 to 15 minutes of drive time. Within that radius, they want a population large enough to sustain warehouse-level sales volumes. For South OC, the Foothill Ranch site draws from Lake Forest, Foothill Ranch, Coto de Caza, Dove Canyon, Rancho Santa Margarita, and portions of Mission Viejo and Trabuco Canyon. That trade area has been growing steadily for over a decade and accelerated significantly with major master-planned communities coming online after 2018.
Household Income
Costco's membership model works best in higher-income markets. Members pay an annual fee, then shop in bulk, and the economics only make sense to a household that has the discretionary income and the storage space to buy in volume. South Orange County consistently ranks among the highest-median-income submarkets in California. Foothill Ranch, Coto de Caza, and Dove Canyon are among the most affluent zip codes in the county, with median household incomes well above $120,000. For Costco, that is an ideal membership pool.
Executive Membership Saturation in Existing Stores
Before opening a new location, Costco reviews membership data from its existing stores. If the nearest warehouses are seeing heavy membership utilization from a particular zip code cluster, that signals the market is underloved by the current store footprint. Residents in the Foothill Ranch and eastern Lake Forest zip codes are likely driving past competitors or making the trip to Irvine or Laguna Hills. That kind of membership leakage is exactly what triggers a new location study.
Rooftop Growth Trends
Costco tracks building permit data and master-planned community timelines closely. New rooftops mean new potential members. A market with 3,000 new homes coming online over five years looks very different from a market with a static population. South OC has been one of the most active residential development corridors in California, and Costco's decision to move now reflects that pipeline.
Sales Tax Contribution to the Host City
Cities have long recognized that Costco is among the most valuable retail tenants a municipality can attract. A single Costco warehouse can generate more than $250 million in annual sales, producing meaningful sales tax revenue for the city. Lake Forest city officials expressed enthusiasm about the project from the start, noting that sales tax generation was a key benefit. Costco understood that dynamic and used it as part of its approval strategy.
The Housing Connection: South OC Has Been Adding Rooftops at a Steady Pace
Costco does not build ahead of demand. It builds when demand has already arrived or when the pipeline of new households is clear enough to underwrite the investment. South Orange County gave Costco both of those things at the same time.
Lake Forest alone has been one of the most active homebuilding cities in California over the last decade. The following master-planned communities have added or are adding thousands of homes within the Foothill Ranch trade area:
| Community | Notes |
|---|---|
| Baker Ranch | 2,600-home master plan in Lake Forest; largely complete, adding high-income single-family households directly in the trade area |
| The Meadows | Multi-builder master plan in Lake Forest adding over 1,000 homes; ongoing construction |
| Portola Center | Large Lake Forest community with single-family and attached product still delivering |
| Teresina by Shea Homes | 108 townhomes in Lake Forest; recently completed |
| Great Park Neighborhoods (Irvine) | Planned for up to 10,000+ homes; thousands already delivered, with thousands more under construction just north of the trade area |
| Rancho Mission Viejo | Sprawling master plan to the southeast adding homes, commercial, and amenities with strong Costco member demographics |
Each of those communities adds households with the income profile, the family size, and the lifestyle that drives Costco membership. A two-income household in Baker Ranch or Great Park buying in bulk for a family of four is exactly the customer Costco is designing this store for.
The broader story is about South OC's transformation from a largely built-out suburban market into one of the most active housing delivery zones in California. That shift did not happen overnight, and Costco watched it closely before committing $12.5 million to a single parcel.
The Two Nearby Costcos and Why a Third Makes Geographic Sense
When Eric mentioned that there is already a Costco a few exits down the 5 Freeway in Laguna Hills and another one in Irvine, he is correct. But the map tells a more nuanced story about why Lake Forest is the right next node.
Costco Irvine — 115 Technology Drive
This is the closest existing warehouse to the Lake Forest site. Located in Irvine's Irvine Business Complex area near the 405 and 5 interchange, this store has historically served a massive geographic footprint: Foothill Ranch, Lake Forest, Laguna Woods, Aliso Viejo, Rancho Santa Margarita, and eastern Irvine. That is an enormous trade area for a single warehouse. As Great Park Neighborhoods and eastern Irvine have grown, the Irvine store has absorbed significantly more demand than it was originally sized for. Members in Foothill Ranch driving to Irvine are crossing multiple freeways and adding 15 to 20 minutes each way.
Costco Laguna Hills — Laguna Hills Mall Area
The Laguna Hills Costco sits several exits south on the 5 Freeway and serves the southern corridor: Laguna Hills, Mission Viejo, Laguna Niguel, and Aliso Viejo. It pulls from a different population center and is not a convenient option for Foothill Ranch households, which sit to the north and inland off the 241 Toll Road rather than the 5. For a Foothill Ranch resident, the Laguna Hills store requires a full freeway commitment in the opposite direction of most daily commute patterns.
The Lake Forest site at Foothill Ranch Towne Centre fills a clear gap. It is positioned directly at the intersection of the 241 Toll Road and the growing residential communities in Foothill Ranch, Coto de Caza, and Dove Canyon. Residents in those zip codes currently have no warehouse option within a reasonable drive that does not involve fighting freeway traffic. The new store changes that entirely.
This is not Costco cannibalizing its own stores. It is Costco right-sizing its coverage map to match where the population has moved.
What a Costco Opening Signals to a Real Estate Market
There is a reason real estate professionals pay attention to retail anchors, and Costco in particular. A Walmart or Target follows existing population. Costco, with its membership model and high per-square-foot sales requirements, tends to move only when it is highly confident that the household income and population density will support its model for decades.
When Costco commits $12.5 million to purchase land outright in a specific submarket, it is making a long-duration bet on that community. The company is saying, in effect, that the people moving to Baker Ranch and Great Park and The Meadows are exactly the kind of households that build lifelong Costco memberships. That is a vote of confidence in South OC that goes beyond retail.
For buyers considering new construction in Lake Forest, Foothill Ranch, or Rancho Santa Margarita, the arrival of a neighborhood Costco is a quality-of-life upgrade that shows up in daily convenience. It is one more piece of retail infrastructure that makes the area feel less like a commuter suburb and more like a complete community.
Thinking About Buying in Lake Forest or South OC?
Lake Forest has some of the most active new construction in Orange County. From Baker Ranch to The Meadows to Portola Center, the city is adding homes across price points and product types. If you want to understand what is being built, what is selling, and where the best value is right now, I can help.
Contact Eric EngelbertBrowse Lake Forest Homes for Sale | Lake Forest New Construction
