TEJON RANCH, CA-Caterpillar Logistics Inc. has bought 46 acres of land at the Tejon Ranch Commerce Center, where the tractor giant plans to build a 400,000-square-foot parts distribution facility to serve both dealers and customers throughout California and the Western US.
The price was undisclosed and difficult to estimate, because few land sales of scale have occurred recently in Kern County, although unimproved land has sold in the county for about $5 per square foot, according to Real Capital Analytics.
The large parcel partly reflects Caterpillar’s need to store its farming machinery, according to Joseph Drew, of Tejon Ranch Co., which owns the 425-square-mile industrial development 60 miles north of downtown Los Angeles and 30 miles south of Bakersfield. “Their equipment is pretty muscular and needs land for outside storage,” the senior vice president of real estate for Tejon Ranch.
Access was a major part of the decision by Caterpillar to locate in the southern edge of Kern County, CA, near the confluence of the Interstate 5 and State Highway 99, according to Steve Larson, Caterpillar vice president. “With its excellent accessibility to major highways and airports, this location will ensure the rapid delivery of Cat parts to dealers and customers,” he says in a statement.
Equally important for the tractor maker, according to Drew, was adjacency to the farmers of the San Joaquin Valley, who are among the customers requiring Caterpillar parts. Drew says the deal also reflects an improving market for industrial real estate in the region. “We think the cadence of these industrial opportunities is increasing a little bit,” he says.
Tejon Ranch is also the largest activated foreign trade zone in the state, with 2 million square feet of space contained in the zone, according to Drew.
IKEA and Famous Footwear are among the other tenants with large-scale distribution buildings at the development.
Caterpillar, which describes itself as “the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives,” says it selected the Tejon Ranch Commerce Center reviewing sites the state and the Western US.
The developer credits the Kern Economic Development Corp. for playing a role in the site selection process, in part by connecting Caterpillar officials with county departmental heads.
CBRE represented both parties in the transaction with Traci Buckingham representing Caterpillar and Doug Sonderegger representing Tejon Ranch.
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