Billionaire Ed Roski Jr. began his career at Majestic Realty Co. in 1966 and is now chairman and chief executive. The real estate development company his father founded has been instrumental in developing its home base in the City of Industry into an industrial powerhouse, and operates a portfolio of about 50 million square feet of industrial, office and retail space. Roski said he cannot recall a time when the Los Angeles County industrial market was as tight as it now. As a result, his firm is focused more than ever on development opportunities outside the county's borders.

Question: What areas are you looking at for new development?

Answer:

Everybody is basically trying to think about which way the development is going to go. Of course you can go over to the Palmdale-Lancaster-Bakersfield area; you can go over to the Victorville-Barstow area; or you can continue to go east through Moreno Valley, Beaumont and Banning. Pretty soon we will be in Needles. Recently the expansion has continued to go east. So does it jump over the Tejon Pass?

Q: What are you betting on?

A:

We are continuing to look for opportunities in the three areas I expressed to you. It's such a very dynamic market. Everyone is looking at all three areas.

Q: What about north and south of Los Angeles?

A:

There is continuing development going south in San Diego County but it's constrained by the land. Ventura County has never really been an area up until now that has gotten a lot of interest. There is basically only one freeway there. It is kind of a no-growth area and secondly there is no airport, whereas if you go east you have the Ontario International Airport.

Q: When you look back 10 years ago, did you ever think you'd be looking for industrial land in Victorville?

A:

No, definitely not. But today that is where the available land is. The industrial buildings are getting bigger and bigger so they need more land.

Q: But what about the smaller companies that don't need the 1 million-square-foot buildings and want to be close to Los Angeles?

A:

They have to redevelop older buildings those built in the 1920s to the 1940s by taking them down and demolishing them. They put in state-of-the-art buildings with higher ceilings and sprinkler systems.

Q: That seems costly.

A:

It's becoming uneconomical for a company to locate in the city of Los Angeles, which means that we complicate the process. Companies have to locate farther out, but each one of us still has to go to the store to buy something. So you've got more trucks going farther distances, spending more time on freeways, to bring products into the city of Los Angeles.

Q: What does that mean for the city's economic future

.A:

Today most of L.A. city is basically a service business. Our last hurrah was the aerospace companies they left. So now most everybody in L.A. is moving to service-type industries, not manufacturing. The land is just too expensive.

Q: So what do you think is going to happen?

A:

It is going to be harder to deliver milk from Yuma, Ariz. to South Central L.A. You are going to have to get the milk here.

Q: I understand you have taken trips to Shanghai and Tokyo to scout new multi-story warehouse buildings

A:

I was quite impressed with buildings in Shanghai, Hong Kong and Japan. The land is so expensive over there they have to look at going up. People live in high-density units so you can service a lot more people within a shorter distance. We are all spread out.

Q: You don't think it could work in Los Angeles?

A:

We are spending a lot of time ourselves studying it. We haven't yet been able to come up with a system that really solves all of the challenges. You can't take a 65-foot truck up a corkscrew driveway. Over there they have small vehicles that load and deliver. At some point we are going to be able to come up with a viable solution.

Q: What might that be?

A:

Here, it would take a building where you could load using a cross-country truck. Then you could unload it with smaller trucks that distribute inside the city, so (the smaller trucks) could maneuver up the ramps.

Q: So does all this give you headaches, or is this the kind of challenge you like?

A:

Southern California is definitely the strongest and the most vibrant market in the U.S., which makes it kind of fun.

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