Needham Ranch Finally Breaks Ground

Trammell Crow Co. and Clarion Partners has officially started vertical construction on the long-awaited Center at Needham Ranch, an 869,760-square-foot, 7-building industrial and commercial campus in Santa Clarita. The project is the first phase of a larger 132-acre, 4.2 million square foot business and industrial park, which was initially conceptualized in 2000 and approved in 2003, before getting caught in litigation and then stalling during the Great Recession. Trammell Crow and Clarion Partners acquired 54 acres of the project in 2017, and have pushed it into construction.

“The Greater L.A. North market is, unlike a lot of industrial markets that are bulk distribution oriented markets, a very diverse industrial base,” John Balestra, SVP at TCC’s Southern California office. “Demand was initially driven by aerospace and aviation, then defense and media and entertainment. In the San Fernando Valley, where the average industrial size is 20,000 square feet, there are a lot of manufacturers and entrepreneurial types of companies. We are really building product to appeal to a much broader segment of the industrial base than we typically do. What has changed, both from the time the project was originally conceived, even since we acquired it a little more than a year ago, is the realization that the demand is very broad. We are getting initial inquires from a real broad range of occupiers.”

With a severe industrial supply shortage throughout the Greater L.A. market and in the San Fernando Valley, this project will certainly have a major impact. Trammell Crow has already received interest from potential users, and some of those inquires are informing the construction of the project. For example, some uses may require more parking. “We are seeing activity from manufacturing companies with significant levels of employment, which drives the need for higher levels of parking and power,” explains Balestra. “We are moving forward on a speculative basis, but we have two smaller parcels that are an acre or two. They were originally contemplated to be a retail pad or smaller offices, and we are now planning to develop those as parking lots to support the adjacent buildings where the occupiers may need more that the standard parking of 1.5 to 2 parking spaces per 1,000 square feet. These buildings are going to be more about the people that work in them than the boxes that are stored in them.”

The units, which range in size from 34,270-to-209,559 square feet will be offer for lease. The property will include all the best: 30-to-36-foot interior clear heights, ESFR fire sprinklers and abundant dock high loading with large truck courts and yard areas. Despite the demand, the developers have yet to begin the leasing process. “It is still early, but we will play it out as they come. For a great tenant with term, we are certainly not averse to signing leases before the buildings are completed,” says Balestra. “The opportune time to strike a deal is when the building is being completed and the tenant can walk through and experience it. The fact that we are getting the level of interest we are is a testament to the scarcity of product, particularly new product.”

Phase 1 is scheduled to deliver in the first quarter 2019. Clarion has a long-term in vestment strategy for this asset.