Supermarket chain Trader Joe's has purchased a former Rite Aid store in one of Southern California's most affluent cities, adding to the grocer's growing portfolio of owned properties across the nation.
Monrovia, California-based Trader Joe’s, known for its value-priced, private-label groceries, bought a freestanding vacant retail store in Santa Monica for $22 million, or about $1,200 per square foot, from a private family trust, according to CoStar data. Rite Aid vacated the space this year as part of its Chapter 11 bankruptcy filing.
The transaction ranks as the most expensive retail sale in the past two years in the affluent beachside city roughly 15 miles west of downtown Los Angeles, according to CoStar data.
"This transaction highlights how grocers are adapting to Southern California’s severe supply constraints" for retail space, said Catherine Yeh, CoStar's director of market analytics for Los Angeles. "With retail construction at a standstill, the most competitive players are turning to adaptive reuse and property acquisitions to secure prime locations."
Trader Joe's already operates 25 stores across the Los Angeles metropolitan area, including three in Santa Monica. The latest purchase adds to a smaller but growing group of locations the company owns outright rather than leases.
Trader Joe’s owns 28 commercial properties around the country totaling about 8 million square feet: 13 stores, 14 warehouses and its 28,000-square-foot headquarters in Monrovia, 20 miles northeast of downtown Los Angeles.
The company has expanded aggressively nationwide in 2025, opening nearly 30 new stores and pushing its total footprint to more than 600 locations. Southern California remains a core market for the chain, particularly in dense, supply-constrained neighborhoods.
Owning properties
The company's owned stores include longtime freestanding Southern California units in Encino, Pasadena, the Antelope Valley and Orange County, along with recently constructed freestanding properties in Michigan and Minnesota. The company is also building a freestanding store in Broken Arrow, Oklahoma, that it plans to move into in 2026.
The grocery retailer has increasingly targeted ownership opportunities for long-term locations. In October, it paid $10 million for a store in Scarsdale, New York, where it has operated since 2006, and in January it bought a Trader Joe's store in Costa Mesa, California, where it has operated since 2002, for $29 million from a private individual.
As for industrial holdings, Trader Joe's moved into a million-square-foot distribution center it owns in Los Angeles County's Antelope Valley in June. The retailer also owns similar properties across the country in distribution points scattered from Irving, Texas, to Daytona Beach, Florida, to Nazareth, Pennsylvania.
The company owns all of the industrial properties it occupies except for a million-square-foot warehouse near Bowling Green, Kentucky. As for stores, its biggest landlords are shopping center REITs Regency Centers and Kimco Realty, according to CoStar data.
LA's tight supermarket scene
The Santa Monica acquisition reflects a broader rebound in retail investment across Los Angeles. Retail property sales volume in the region through mid-December climbed 21% year over year to $4 billion, according to CoStar data.
Los Angeles’ grocery-anchored retail market has remained unusually tight due to limited new development. Retail inventory has grown by just 140,000 square feet over the past decade, and the current pipeline represents only 0.1% of existing space, compared with a national pipeline of 0.4%, according to CoStar data.
That scarcity has pushed grocers toward repurposing outdated or vacant sites for their own uses.
Whole Foods announced plans to open a 60,000-square-foot new store on the ground floor of 5420 Sunset, a mixed-use property with 735 residential units being built on the site of a former Food 4 Less grocery-anchored store in Hollywood.
Meanwhile, discount chain Grocery Outlet is retrofitting a former Rite Aid store in Hollywood. And Erewhon purchased a property in downtown Los Angeles for a potential store.
Rite Aid’s retreat has accelerated this shift to ownership and adaptive reuse.
The drugstore chain shuttered 59 locations across Los Angeles County in the wake of its 2025 bankruptcy, and many of the best-situated former stores are already being redeveloped into new retail uses. A La Crescenta location, for example, is slated to reopen as a Planet Fitness, and an Echo Park location is slated to become a Sprouts supermarket.