OK Brightens Future in Faraway Tejon Ranch

The new year is looking bright for Tejon Ranch Co., which cleared a major hurdle last month for the company’s future in real estate development after the Los Angeles County Board of Supervisors approved the massive Centennial project. The company, located in a northern corner of L.A. County, plans to build 19,000 new dwellings when Centennial is complete. By a 4-1 vote, the supervisors voted Dec. 11 to advance the master-planned project. While most of the board saw Centennial as a step toward solving a countywide housing crisis, Supervisor Sheila Kuehl cast a dissenting vote, citing concerns about wildfire. Tejon Ranch Co. owns the largest single piece of private property — encompassing 270,000 acres — in the state of California. The company has worked to diversify its revenue stream beyond its core activities of farming and cattle ranching by pushing into the development of residential and industrial projects. Revenues for the agricultural side of the business declined this year due to weak crop yields, lower commodity prices and complications from the trade war with China. According to Seeking Alpha Senior Editor Gil Weinreich, the real promise of Tejon Ranch lies ahead when its real estate projects come into fruition. “Tejon may have a lot of good news ahead of it and most of the bad news behind it,” he wrote in a post on Nov. 12. In addition to the big approval for Centennial, the company has moved forward with industrial development. In November, Tejon Ranch and Majestic Realty Co. announced their latest joint venture: a 580,000-square-foot industrial facility, to be constructed in nearby Tejon Ranch Commerce Center by 2019’s third quarter. Two months earlier, Colliers International brokerage team John DeGrinis, Patrick DuRoss and Jeff Abramson, who exclusively represent Tejon Ranch Commerce Center in lease transactions, landed a commitment from SalonCentrics, a subsidiary of cosmetics giant L’Oréal USA, to occupy half of the new 480,480-square-foot structure at 5335 Wheeler Ridge Road. Craig Peters of CBRE Group Inc. represented L’Oreal in the deal. For investors, Tejon Ranch has a solid list of tenants, including Ikea, Dollar General and Caterpillar Inc. Shares of Tejon Ranch Co. closed Jan. 2 at $16.77, marking a 1.5 percent decline since the Centennial news. The Dow Jones Industrial Index fell 4.2 percent in the same period.