Dedeaux Properties CEO Brett Dedeaux On SoCal’s Evergreen Industrial Pull

For Dedeaux Properties, California’s infamously arduous development environment can be both a hurdle and a competitive advantage.

CEO Brett Dedeaux spoke with Commercial Observer about why the firm sees Tejon Ranch as such a compelling alternative to Los Angeles County and the Inland Empire, as well as how the state’s regulations can add value to entitlements, and why the company remains committed to its home turf.

The following is the second of a two-part conversation, and has been edited for length and clarity. Click here for the first part.

Commercial Observer: Tejon Ranch is rapidly expanding as an alternative logistics location. When did you start looking that far north?

Brett Dedeaux: A couple of years back, we bought land from Tejon Ranch and built about 230,000 square feet with excess trailer parking. That performed well, and we sold it to an owner-user in 2024, and that led to a broader joint venture with Tejon Ranch to build out more industrial space.

Labor is a big part of the appeal for any logistics company. There is affordable labor and more affordable housing in Tejon Ranch.

We kind of say, “Tejon Ranch is the Texas of California.” It is a very business-friendly environment where things get done relatively quickly. It is not as overly regulated.

For big-box deals, if you have to go farther and farther east to Beaumont, Banning or the High Desert, Tejon Ranch is a competitive alternative from a drayage and transportation cost standpoint. You can easily get back into the L.A. Basin, but you can also service Northern California and the Western and Northwestern U.S.

We also have plentiful power at Tejon Ranch, which is really key.

Then look at the San Fernando Valley. If it seceded from the City of Los Angeles, I believe it would be one of the largest cities in the country. It has a large population base, a big manufacturing base, a lot of aerospace and a lot of dated post-World War II inventory. It is mature and full.

Then you go up to Santa Clarita and Valencia, but those markets have also gotten mature and built out. They serve as big bulk distribution locations for a lot of major national firms — Nestle, Caterpillar, Ikea and others. For companies that need larger space, even under 200,000 square feet, you may not be able to find it in the Valley, so Tejon Ranch becomes that next jump over the hill.

It feeds off adjacent markets, and it also functions as a regional distribution hub. There is also a lot of housing planned up there.

We are excited about the buildings under construction and what comes next. We have more plans and strategies for the next phase.

We think it is the right time for Tejon Ranch. There is no vacancy up there, and we think the fundamentals are strong.

Your family has deep roots in Southern California, and you are a major business owner here. At the same time, California has a reputation for being heavily regulated, with issues like AB 98, Measure ULA and companies moving to other states. How do you view the state of the business environment?

It is interesting because we sometimes have to make the case for California to our capital partners.

They ask, “Why California?” because of what they read in the national press. We have to remind them: It is the most populous state. It has a very diverse economy. It is incredibly innovative. We have the largest ports.

Anybody who is a business owner here wants the state to remain competitive, cost effective, and a place where you can execute and transact.

What I have learned personally is that we have to be involved. I was on the board of CREDA. Our in-house counsel and our director of development are now on different boards in the Southern California and Inland Empire chapters. We have to make sure regulations and laws are reasonable and allow business to grow and thrive. That requires us to be more involved and to have a voice.

In one way, AB 98 and a more stringent regulatory environment than states like Texas also create inherent limits to oversupply. It is much tougher here.

For example, we just got close to 800,000 square feet approved in the City of Commerce, right outside Downtown L.A. Getting those types of deals approved has tremendous value because it is much more challenging to get approvals here, and that creates demand.

I tell our team: It is tougher to get these things across the goal line here than in a market where you can just blow and go, like Texas. But the drawback in those easier markets can be oversupply or zoning that is a little off.

Entitlements have value. A team that has the capabilities to get prime entitlements in a state like California can create a lot more value because it is harder to do.

At the same time, you want to support leaders in California who want to keep the state competitive and a place where people want to live and do business. We have to stay involved to make sure we are heading in that direction.

Would you consider investing in other states because of those issues, or are you still fundamentally bullish on California?

We are always evaluating new strategies. We have been in cold storage. We got into industrial outdoor storage early, 20 years ago. We have bulk distribution. Power is now a big thing in how we position ourselves with our facilities.

We will always evaluate other markets — San Diego, Otay Mesa, Kern County, Northern California, Central California, more northern areas. We also look at other port-related markets because we have a lot of port-related tenants. Seattle and other ports of entry are things we look at because our tenant base is there.

But with the size and scale of the Southern California market, with roughly 3 billion square feet, we feel like we are playing on our home court. We understand the fundamentals strongly. We know what buildings, size ranges and area pockets we want. We know where there are development moratoriums, where there are not; where you can get things done and where you cannot. That is a specialty and expertise we can use to our advantage.

We have underlying conviction in California. We are not burying our heads in the sand. There are concerns about the state’s direction and overregulation at times. But my view is: Stay involved and try to lead. 

We still think California is a great place to invest in real estate. Particularly right now, we think it is a really good time to invest in Southern California. We have deals in motion and a big pipeline. We feel the market is recovering, and it is a good time to zero in on fundamentally strong real estate in the right locations. That is our focus right now: Execute on what we know really well.

I am not moving to Las Vegas, but even if I did, with our company headquarters here and our assets here, you would still deal with a lot of the same tax considerations from a business perspective.

I have friends who moved to places like Wyoming or Jacksonville, and they still had to deal with California because the assets and business were here.

To make that kind of move really work, you would have to make a fundamental shift: Exchange properties into Wyoming or Nevada, move the headquarters, establish yourself there for years and really move the business. Some competitors have moved to Nevada and slowly shifted more of their business there over time.

We have also seen people who are based here start investing in Austin, Nashville and other growth markets. You have to look at those growth markets and understand them. 

But we are squarely focused here for the time being.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.