Dedeaux Properties Plans Big Box Build in Tejon Ranch

Dedeaux Properties has acquired a 12-acre parcel of land to build a 250,000-square-foot industrial development in the Tejon Ranch Commerce Center in Tejon Ranch. The firm plans to develop a warehouse or distribution center with 32-foot clear heights and excess trailer parking. Construction will take nine to 12 months.

Tejon Ranch is an industrial hub located 75 miles from Los Angeles. Dedeaux’s Rishi Thakkar said that Tejon Ranch is “strategically located in the southern portion of California’s Central Valley… represent[ing] a superior value proposition for regional users who need to move goods throughout the Western United States.” This is especially true as industrial vacancy rates in Los Angeles have hit a record low. Last year, industrial leasing activity surpassed pre-pandemic activity, according to research from Marcus & Millichap. As a result, industrial rents increased 4.8% and the vacancy inched down 40 basis points, landing at 2.9%. While there is demand, only 4.4 million square feet of new industrial product came onto the market, supporting a need for large box developments in nearby markets, like Tejon Ranch.

The Tejon Ranch Commerce Center, where Dedeaux’s 12-acre land parcel is located, is a master planned development with the potential for a 20 million square feet of industrial development space. Nearly 6 million square feet has already been developed and leased by major occupier, including IKEA, Caterpillar, Famous Footwear, L’Oreal and Dollar General.

The Southern California market in general is the leading industrial market in the country. Both Los Angeles and the neighboring Inland Empire led the nation in industrial rent increases last year, according to research from Yardi Matrix. The Inland Empire had a 7.1% increase in rent, while L.A. posted an increase of 6.7% in rents. The vacancy rate also fell, down to 2% in the Inland Empire. Research from JLL shows that the market also had 26 million square feet of absorption.

Dedeaux is one of the most active developers in Southern California, but this acquisition is a foray into the Tejon Ranch market for the firm. With developments in Los Angeles, the Inland Empire, Santa Clarita, and the San Francisco Bay Area, this acquisition illustrates Dedeaux is continuing to expand into important industrial submarkets throughout the state.