BJ's Wholesale Club Holdings, Inc. 10-K

Item 2. Properties We operated 226 warehouse club locations as of January 29, 2022, of which 192 are leased under long-term leases and 14 are owned. We own the buildings at the remaining 20 locations, which are subject to long-term ground leases. A listing of the number of Company locations in each state is shown under Part I. "Item 1. Business." The Company’s leases require long-term rental payments subject to various adjustments. Generally, the Company is required to pay insurance, real estate taxes and other operating expenses and, in some cases, additional rentals based on a percentage of sales in excess of certain thresholds, or other factors. Many of the leases require escalating payments during the lease term. Rent expense for such leases is recognized on a straight-line basis over the lease term. The initial primary term of the Company’s operating leases ranges from 5 to 44 years, with most of these leases having an initial term of approximately 20 years. The initial primary term of the Company’s three finance leases is 20 years. Our home office in Westborough, Massachusetts occupies a total of 282,000 square feet. Our lease expires on January 31, 2026. We will be transitioning to a new home office in Marlborough, Massachusetts in fiscal year 2022. We operate three cross-dock distribution centers for non-perishable items and also have four perishable item distribution centers operated by a third party, which are expected to be purchased from Burris Logistics in fiscal year 2022. Our cross-dock distribution centers are leased under lease agreements expiring between 2031 and 2033, and range between 480,000 and 630,000 square feet in size. The third-party perishable distribution centers range between 114,000 and 264,000 square feet in size. We operate another cross-dock distribution center for Business-to-Business ("B2B") transactions, which occupies a total of 100,000 square feet. Our lease agreement for this center expires in 2029. See Note 4, "Leases" of our consolidated financial statements included in this Annual Report on Form 10-K for additional information with respect to our leases.