Tejon Ranch Company to Start Construction on Its First Residential Multi-Family Community, Terra Vista at Tejon
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Insights
The strategic expansion of Tejon Ranch Co. into residential development is a significant pivot that could potentially enhance the company's revenue streams and diversify its risk profile. The decision to build Terra Vista at Tejon, a multi-family apartment community, is a direct response to the existing demand for housing in the region. This venture not only broadens the company's portfolio but also leverages the synergy between its retail and industrial sectors within the Tejon Ranch Commerce Center (TRCC).
From a market research perspective, the development aligns with current trends in mixed-use communities, which are increasingly popular for their convenience and lifestyle benefits. The proximity to the Outlets at Tejon and the promise of quality amenities could position the community as a desirable location, potentially increasing the property's occupancy rates and, by extension, its profitability. However, the success of this development will hinge on factors such as construction costs, rental pricing strategies and the regional economic climate, which could affect the disposable income of potential residents.
The progression of TRCC to a mixed-use master-planned community indicates a forward-thinking approach to real estate development. The integration of residential units within the existing commercial framework could create a self-sustaining ecosystem where residents have immediate access to employment and retail opportunities. This model of development is conducive to creating vibrant communities and can command premium pricing due to the added convenience.
However, the execution of such a large-scale project, with the first phase consisting of 228 units and the potential for up to 495 units, requires meticulous planning and management. The company must navigate zoning laws, community impact assessments and infrastructure development. The long-term success of the project will also depend on the company's ability to maintain the quality of the community and manage the increased operational complexities that come with managing residential properties.
The announcement by Tejon Ranch Co. represents a substantial capital investment with the potential for significant returns. The residential real estate sector has different risk-return characteristics compared to commercial real estate, which could impact the company's financials. The initial capital outlay for construction will likely affect short-term cash flows, but the long-term benefits could include stable rental income and asset appreciation.
Investors should monitor the project's progress closely, as delays or cost overruns could impact expected returns. Additionally, the company's entry into the residential market could be seen as a diversification strategy, potentially reducing its vulnerability to sector-specific downturns. The financial performance of this project will be a key indicator of the company's ability to execute its strategic shift and could influence investor sentiment and stock performance.
TEJON RANCH, Calif., Jan. 09, 2024 (GLOBE NEWSWIRE) -- Tejon Ranch Co. (TRC: NYSE) announced today it is taking the next step in its evolution as a real estate development company by moving forward with the development of residential communities on the Ranch, providing much-needed new housing for the region. The Company will begin construction to start the new year on Terra Vista at Tejon, a new multi-family apartment community located immediately adjacent to the Outlets at Tejon in the Company’s Tejon Ranch Commerce Center (TRCC). Terra Vista at Tejon is the Company’s first residential development and will complete the well-rounded progression of the Company to a fully integrated real estate development organization. This development will also begin TRCC’s transition to a mixed-use master-planned community. TRCC already includes a large employment base of industrial and retail users totaling over 8.2 million square feet of existing development, under construction or near construction, with an additional 11.1 million square feet of entitled space to be developed in the future.
“This is a significant step for the Company as we begin our first residential community,” said Tejon Ranch Co. President and CEO, Gregory S. Bielli. “It marks the next stage of a constant progression that will see Tejon Ranch eventually become home to more than 35,000 homes, both single-family and multi-family, for rent and for sale.”
The 228-unit first phase of the Terra Vista at Tejon apartment community, which will ultimately have up to 495 units, consists of studio, one, and two-bedroom apartment homes. The new community will be a convenient housing option for the thousands of employees working within TRCC and the surrounding area, as well as residents in south Bakersfield, the southern portion of Kern County, and the adjacent Mountain Communities.
“Located next to the Outlets at Tejon and all the great shopping opportunities available there, Terra Vista at Tejon will include a wide range of quality amenities that will make it a great place to live, transforming TRCC into a mixed-use community where people can live, work and play,” said Hugh McMahon, Executive Vice President of Real Estate, Tejon Ranch Co. “Amenities include a clubhouse with a pool, spa and fitness facilities, outdoor areas for entertaining and playing, including a large park area connected to the Outlets at Tejon that will host community gatherings and curated events, as well as a tot lot, dog park and multiple lawns for lounging or barbequing. The apartment homes will also feature fiber optic connectivity for high-speed internet and streaming services.”
Construction will begin in late January 2024, with the first units becoming available in the first half of 2025 and the remaining units in this first phase coming online soon thereafter.
About Tejon Ranch Company (NYSE: TRC)
Tejon Ranch Company is a diversified real estate development and agribusiness company, whose principal asset is its 270,000-acre land holding located approximately 60 miles north of Los Angeles and 30 miles south of Bakersfield. For more information on the company, please go to www.tejonranch.com. For more information on the Tejon Ranch Commerce Center, please visit www.tejoncommerce.com.
MEDIA CONTACT
Becca B. Bland
Director, Corporate Communications & Marketing
Cell 661.529.0139
Email: bbland@tejonranch.com
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