Toward the end of 2011, Caterpillar Logistics Inc. signed on to purchase 46 acres of land at the Tejon Ranch Commerce Center. There, 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 large parcel partly reflected Caterpillar’s need to store its farming machinery, according to Joseph Drew, SVP of real estate at Tejon Ranch Co., which owns the 1,450-acre industrial development 60 miles north of Downtown Los Angeles. “Their equipment is pretty muscular and needs land for outside storage,” he says.
Access was key to Caterpillar’s decision to locate on the southern edge of Kern County, according to Steve Larson, a 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 notes.
On a broader level, the deal reflected an improving market for industrial real estate in the region. “We think the cadence of these industrial opportunities is increasing a little bit,” says Drew.
And he isn’t the only one noticing an increase of industrial opportunities in Southern California. Although the region is a long way from pre-crisis levels of economic health, the improved employment picture along with what some industry sources are calling a “profound turnaround” in the industrial market are signs of a recovery…
…For the rest of the story, visit the February/March 2012 issue of Real Estate Forum.
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