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The Real Deal Los Angeles

L’Oreal signs major lease in unincorporated Kern County

Distributors continue to seek lower-cost alternatives to L.A.
By Greg Cornfield | September 18, 2018 02:30PM

The Tejon Ranch Commerce Center in Kern County (Credit: Colliers International, iStock)

One of the world’s largest cosmetics companies will soon fill up half of a 480,000 square-foot industrial center in unincorporated Kern County, where space is more easily attainable than in Los Angeles County.

L’Oreal will lease 240,000 square feet for the regional logistics operations of its SalonCentrics subsidiary, according to Colliers International, which negotiated the transaction for the Tejon Ranch Commerce Center.

The deal is another sign that major companies are continuing to look further afield from Los Angeles County as a housing and affordability crisis pushes them into other markets. L.A.’s tight industrial market has pushed up rental rates while depressing vacancy rates to their lowest level since the early 2000s.

The Tejon Ranch center is located about an hour north of the San Fernando Valley. It offers direct access to Interstate 5, as well as to lower home prices and apartment rental rates for employees compared to Los Angeles and Ventura counties.

Officials at SalonCentric said incentives offered by Kern County under the banner of its Advance Kern program helped persuade the company to relocate. The incentives, available only to companies occupying properties in unincorporated areas of the county, will allow SalonCentric to seek reimbursement for a portion of the property taxes it pays and the sales taxes it generates.

“You have to also remember that at least for now, total operating costs for businesses in Kern County are among the lowest in the state and many companies are taking increasing notice of that fact,” John DeGrinis, who represented the Tejon Ranch center in the lease, said in a press release.

Other major projects in unincorporated areas have proven to be a source of tension as Southern California searches for answers to the housing crisis while being sensitive to those concerned about development in far-off areas, where such projects could create further sprawl.

In August, developer Tejon Ranch Company won the planning commission’s endorsement for a massive 12,000-acre Centennial community plan set to create nearly 20,000 new homes and 10 million square feet of commercial space. The proposal for the planned community will soon be considered by the L.A. County Board of Supervisors.

Other tenants at the Tejon Ranch Commerce Center include Dollar General, IKEA, Famous Footwear and Caterpillar Inc.