The major developments continue at Tejon Ranch Commerce Center, the 1,450-acre commercial and industrial hub on the Los Angeles Countyand Kern County border. Created by Tejon Ranch Co., the industrial complex is anchored by a 1.7 million-square-foot Ikea warehouse andalso includes tenants L’Oreal, Dollar General, Caterpillar, Famous Footwear and Camping World. 

In July, an undisclosed end-user acquired 58 acres at Tejon Ranch for a planned 725,000-square-foot distribution facility. Construction willbegin next year with occupancy scheduled for 2024. 

In February, Dedeaux Properties, a Commerce-based industrial developer, acquired 12 acres for a planned 240,000-square-footwarehouse. Construction commenced in September, and completion is expected in the spring of next year.

And in December, Scannell Properties, an Indianapolis-based entity, acquired 17.1 acres to build a 240,000-square-foot high-techmanufacturing facility for modular home manufacturer Plant PreFab. According to Deep Bhattacharya, president of Plant Prefab, thecompany will begin occupancy of its Tejon Ranch building in January.

Plant Prefab, which is headquartered in Rialto and has factories there and in Ontario, looked at 11 potential sites in different states beforedeciding on Tejon Ranch Commerce Center. Bhattacharya said the company was considering facilities in the Los Angeles area, the Bay Area,Nevada and Arizona. Ultimately, the company narrowed it down to a shortlist of California locations.

“We were looking for land that had proximity to our markets and proximity to the transportation corridors,” Bhattacharya said. “Weprincipally build homes in the L.A. area or the Bay Area.”

What made Plant Prefab decide to sign a lease at Tejon Ranch was “the location, the people and the incentives,” Bhattacharya said.
Bhattacharya said the company was also attracted to tax incentives in the form of sales tax abatement for the technological assets beingbrought in, as well as the area’s skilled labor pool.

“This wasn’t taking over someone else’s factory, this was building our own factory,” Bhattacharya said.

Derek Abbott, executive vice president of Tejon Ranch Co., said Plant Prefab was a different kind of tenant for the center.
“Plant Prefab as a diversification of our tenant base brings into play some use of manufacturing,” he said. “That kind of diversifies our tenantmix beyond more traditional logistics distribution.”

Opportunity at the eastside
The Commerce Center has a total of 11 industrial buildings with a pair of buildings currently under development on the east side of thecomplex. Approximately 6.5 million square feet of industrial space has been taken, and another 12 million square feet is available. 
“The westside land is completely absorbed,” Abbott said. “The eastside is really the opportunity area that still continues to exist.”
Abbott believes he knows why Tejon Ranch Commerce Center has attracted numerous “fantastic class A tenants.” 

“Many of them have seen what we’ve long seen in the Commerce Center,” Abbott said. “The strategic location is the biggest value. Theproximity to the I-5 and 99, as well as access to key ports. Two- and four-hour access to ports. All those key factors work for the logistics modelsof these companies. And total cost of operations plays into it.”

Mike McCrary of Jones Lang LaSalle Inc. has been serving as Tejon Ranch’s leasing agent.

“We’ve seen in the last 24 months the run-up in values,” McCrary said. “Regions like Tejon Ranch and Bakersfield are getting a lot moreattention. As you talk to the user, it’s just not the rent is more affordable; the availability of affordable housing is a big driver.”

In addition to industrial buildings, Tejon Ranch Co. is further embellishing the workforce housing landscape by adding affordable projects ofits own, with several master-planned communities nearby.

There’s the Grapevine, a master-planned community with 12,000 homes for sale and 5 million square feet of commercial real estate. Grapevinehas its entitlements and is working on permitting. 

The more ambitious Centennial project will have 19,333 homes for sale. Despite a few legal setbacks and protests from environmentalists, it’sworking its way through the entitlement process. 

There is also Mountain Village at Tejon Ranch, a 3,450-home residential community. 

Because of the arduous process of creating housing on this scale, the master-planned communities are still years away with no clearcompletion dates. 

In the meantime, the Commerce Center continues to grow.

“We’re excited to be an opportunity area for the continued expansion for Northern L.A. region and we’ve got great spaces coming online,”Abbott said, recalling how the Commerce Center project began with the occupancy of Ikea in 2006. 
Buildings developed since have been 450,000 to 700,000 square feet. 

He noted that urban Los Angeles doesn’t have the space that Tejon Ranch does.

“Here you have the opportunity to develop space with a great location, a supportive local government and no community opposition todevelopment at the Commerce Center,” Abbott said. “You’ve got that key access for inbound/outbound, great amenities and a great workforcefor those distribution and logistics uses.”

Wise tenantsRendering: Plant Prefab’s design for a framing area.

Added McCrary, “These tenants have got a lot more wise to not just where their product is coming from, but where they are going.”
Abbott and McCrary also note how business-friendly Kern County has been. The county has been working with Tejon Ranch to expediteprojects and tenancy there for decades now.

Melinda Brown, vice president of business development at the Kern Economic Development Corp., calls her agency “the right arm for(Tejon Ranch’s) economic strategy for the county.”
“They have a great relationship with the county,” Brown said. “They have a development agreement to help speed the planning and permittingprocess.”

She called Tejon Ranch Commerce Center one of the country’s largest economic engines. The Commerce Center accounts for $1.5 million inproperty tax a year and it accrues $2.7 million in sales tax annually. 
 

McCrary points to the Dedeaux Properties project as an example of the demand for Tejon Ranch Commerce Center space. 
“They’re a very prominent California developer that has developed throughout the Inland Empire and Los Angeles,” McCrary said. “TheDedeaux have customers asking for industrial buildings outside of the area. The Dedeaux family looked at it and said, hey, we’ve got entitledland, it’s an affordable price. Let’s build a building (on speculation) and we’ll probably find a home for some of our customers.”
Dedeaux has so much confidence in the market that the company is erecting a building without a tenant in hand, according to McCrary.
“(Dedeaux) scoured Southern California for what would be a suitable location,” McCrary said. “They too saw the benefit of entitled land sothey don’t have to go through the (California Environmental Quality Act) process. They saw a community in Kern County that’s very pro-business. They saw affordability in the land. They considered the labor and the transportation networks.” 
McCrary said that even after Dedeaux and Plant Prefab complete their warehouses, there is still plenty of runway for additional tenants at theCommerce Center.
“We have enough entitled land that we can accommodate a number of great corporate neighbors,” McCrary said. 

TEJON RANCH, CA, January 9, 2024, Tejon Ranch Co. (TRC: NYSE) announced today it is taking the next step in its evolution as a real estate development company by moving forward with the development of residential communities on the Ranch, providing much-needed new housing for the region. The Company will begin construction to start the new year on Terra Vista at Tejon, a new multi-family apartment community located immediately adjacent to the Outlets at Tejon in the Company’s Tejon Ranch Commerce Center (TRCC). Terra Vista at Tejon is the Company’s first residential development and will complete the well-rounded progression of the Company to a fully integrated real estate development organiza􀆟on. This development will also begin TRCC’s transition to a mixed-use master-planned community. TRCC already includes a large employment base of industrial and retail users totaling over 8.2 million square feet of exis􀆟ng development, under construction or near construction, with an additional 11.1 million square feet of entitled space to be developed in the future.

“This is a significant step for the Company as we begin our first residential community,” said Tejon Ranch Co. President and CEO, Gregory S. Bielli. “It marks the next stage of a constant progression that will see Tejon Ranch eventually become home to more than 35,000 homes, both single-family and mul􀆟-family, for rent and for sale.” 

The 228-unit first phase of the Terra Vista at Tejon apartment community, which will ultimately have up to 495 units, consists of studio, one, and two-bedroom apartment homes. The new community will be a convenient housing op􀆟on for the thousands of employees working within TRCC and the surrounding 
area, as well as residents in south Bakersfield, the southern portion of Kern County, and the adjacent Mountain Communities. 

“Located next to the Outlets at Tejon and all the great shopping opportunities available there, Terra Vista at Tejon will include a wide range of quality amenities that will make it a great place to live, transforming TRCC into a mixed-use community where people can live, work and play,” said Hugh McMahon, Executive Vice President of Real Estate, Tejon Ranch Co. “Amenities include a clubhouse with a pool, spa and fitness facilities, outdoor areas for entertaining and playing, including a large park area connected to the Outlets at Tejon that will host community gatherings and curated events, as well as a tot lot, dog park and multiple lawns for lounging or barbequing. The apartment homes will also feature fiber optic connectivity for high-speed internet and streaming services.” 

Construction will begin in late January 2024, with the first units becoming available in the first half of 2025 and the remaining units in this first phase coming online soon thereafter.

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About Tejon Ranch Company (NYSE: TRC) 
Tejon Ranch Company is a diversified real estate development and agribusiness company, whose principal asset is its 270,000-acre land holding located approximately 60 miles north of Los Angeles and 30 miles south of Bakersfield. For more information on the company, please go to www.tejonranch.com. For more information on the Tejon Ranch Commerce Center, please visit www.tejoncommerce.com.