TRC 10-K & 10-Q changes, risk factors and insider trading
Tejon Ranch Co. · NYSE · Real Estate · CIK 96869 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We may be subject to shareholder activism or proxy contests, which could adversely affect our business and stock price.”
New heading “The California property insurance market may adversely affect our development activities and property values.”
Largest changes
“We may be subject to shareholder activism or proxy contests, which could adversely affect our business and stock price.”see in full comparison
“The California property insurance market may adversely affect our development activities and property values.”see in full comparison
“If a property manager fails to effectively market and lease available units, maintain properties in a timely and cost-effective manner, comply with applicable laws and regulations, or provide satisfactory resident services, the performance of the applicable property may be adversely affected. …”see in full comparison
“We may become subject to shareholder activism, proxy contests or other campaigns by investors seeking to influence our strategic direction, capital allocation, governance practices or board composition. Responding to such actions could require significant time and attention from our Board of Directors and management team and could result in substantial legal, advisory and other expenses. …”see in full comparison
“California’s property insurance market has experienced reduced carrier participation, increased underwriting restrictions and premium volatility. If adequate insurance coverage becomes unavailable or cost-prohibitive for the Company, our tenants or future homeowners within our developments, we may experience delays in development timing, reduced transaction activity, or increased operating costs. In addition, limited availability or higher costs of insurance could adversely affect property values, buyer demand and overall marketability of our real estate assets. …”see in full comparison
“Our multifamily development, Terra Vista at Tejon, is in its initial lease-up phase and may not achieve anticipated occupancy levels or rental rates. Terra Vista at Tejon, our 228-unit multifamily community completed in 2025, is currently in its initial lease-up phase and has not yet reached stabilized occupancy. During lease-up, operating expenses are generally incurred at levels consistent with stabilized operations, while rental revenues increase gradually as occupancy builds. As a result, the property may generate operating losses until stabilization is achieved.”see in full comparison
Full comparison: every changed paragraph (23)
Adverse changes in economic conditions in markets where we conduct our operations and where prospective purchasers of future homes and commercial productsspaces live could reduce the demand for our products and, as a result, could adversely affect our business, results of operations, and financial condition. Adverse changes in economic conditions in markets where we conduct our operations and where prospective purchasers of our real estate products live have had and may in the future have a negative impact on our business. Adverse changes in employment levels, job growth, consumer confidence, interest rates, and population growth, or an oversupply of product for sale or lease may reduce demand, depress prices, and cause buyers to cancel their purchase agreements. This, in turn, could adversely affect our results of operations and financial condition. Additionally, increasing insurance costs, particularly in wildfire-prone areas such as California, may make homeownership and commercial property leasing less affordable for prospective buyers and tenants. Rising premiums or limited availability of fire insurance could further suppress demand and negatively impact property values, which, in turn, could adversely affect our results of operations and financial condition.
Higher interest rates and lack of available financing can have significant impacts on the real estate industry. Higher interest rates generally impact the real estate industry by making it harder for buyersborrowers to qualify for financing, which can lead to a decrease in the demand for residential, commercial or industrial sites. Higher interest rates can also lead to tighter construction lending markets impacting the development of industrial buildings within our projects. Any decrease in demand will negatively impact our proposed developments. Lack of available credit to finance real estate purchases can also negatively impact demand. Any downturn in the economy or consumer confidence can also be expected to result in reduced housing demand and slower industrial development, which would negatively impact the demand for land we are developing.
We are subject to various land use regulations and require governmental approvals and permits for our developments that could be denied. In planning and developing our land, we are subject to various local, state, and federal statutes, ordinances, rules and regulations concerning zoning, infrastructure design, subdivision of land, and construction. All of our new developments currently require or have required amending existing general plan and zoning designations, so it is possible that our entitlement applications could be denied. In addition, the zoning that ultimately is approved could include density provisions that would limit the number of homes and other structuresdensity that could be built within the boundaries of a particular area, which could adversely impact the financial returns from a given project. Many states, cities and counties (including neighboring Ventura County) have in the past approved various “slow growth” or “urban limit line” measures. If that were to occur in the jurisdictions governing the Company’s land use, our future real estate development activities could be significantly adversely affected.
Until final permits are received, litigation is complete, and final maps are received, we will have a limited inventory of real estate. Each of our four current and planned real estate projects, TRCC, Centennial, MV, and Grapevine involve obtaining various governmental agency permits, local government permits, such as building permits, overcoming litigation, and receiving final maps from local jurisdictions. A delay in achieving these items could lead to additional costs related to these developments and potentially lost opportunities for the sale of lots and parcels to developers and land users.
We are in competition with several other developments for customers and residents. Within our real estate activities, we are in direct competition for customers with other industrial sites in Northern, Central, and Southern California. We are also in competition with other highway interchange locations using Interstate 5 and State Route 99 for commercial leasing opportunities. Once they receive all necessary permits and approvals, Centennial and Grapevine will ultimately compete with other residential housing options in the region, such as developments in the Santa Clarita Valley, Lancaster, Palmdale, and Bakersfield. MV will compete generally for discretionary dollars that consumers will allocate to recreation and second homes, so its competition will include a greater area and range of projects. Intense competition may decrease our sales and harmnegatively impact our resultsoperating of operations.results.
Our developable land is concentrated entirely in California. All of our developable land is in California and our business is especially sensitive to the economic conditions within California. Any adverse change in the economic climate of California, or our regions of that state, and any adverse change in the political or regulatory climate of California, or the counties where our land is located, could adversely affect our real estate development activities. Ultimately, our ability to sell or lease lotsreal estate may decline as a result of weak economic conditions or restrictive regulations.
A prolonged downturn in the real estate market or instability in the mortgage and commercial real estate financing industry could have an adverse effect on our real estate business. Our residential housing projects, Centennial, MV, and Grapevine, are currently in the litigationentitlement phase, permitting phase, or are fully entitled and waiting for development to begin. If a downturn in the real estate market or an instability in the mortgage and commercial real estate financing industry exists at the time these projects move into their development and marketing phases, our resort/residential business could be adversely affected. An excess supply of homes available due to foreclosures or the expectation of deflation in housing prices could also have a negative impact on our ability to sell our inventory when it becomes available. The inability of potential commercial/industrial clients to get adequate financing for the expansion of their businesses could lead to reduced lease revenues and sales of land within our industrial development.
The process of a project's development begins, and financial and other resources are committed long before a real estate project comes to market, which could occur at a time when the real estate market is depressed. It is also possible in a rural area like ours that no market for the project will develop as projected. FarmingFarming, energy and mineral resources are also subject to business cycles and/or seasonality that could have a material impact to the business.
Our reserves and production will decline from their current levels. The rate of production from oil, natural gas, and mining properties generally decline as reserves are produced.depleted. Any decline in production or reserves could materially and adversely affect our future cash flow, liquidity and results of operations.
Our future revenue and profitability related to our water resources will primarily be dependent on our ability to acquire and sell water assets. In light of the fact that our water resources represent a portion of our overall business at present, our long-term profitability will be affected by various factors, including the availability and timing of water resource acquisitions, regulatory approvals and permits associated with such acquisitions, transportation arrangements, and changing technology. We may also encounter unforeseen technical or other difficulties, which could result in cost increases with respect to our water resources. Moreover, our profitability is significantly affected by changes in the market price of water. Future sales and prices of water may fluctuate widely as demand is affected by climatic, economic, demographic and technological factors, as well as the relative strength of the residential, commercial, financial, and industrial real estate markets. The factors described above are not within our control.
Moreover, our profitability is significantly affected by changes in the market price of water. Future sales and prices of water may fluctuate widely as demand is affected by climatic, economic, demographic and technological factors, as well as the relative strength of the residential, commercial, financial, and industrial real estate markets. The factors described above are not within our control.
Our multifamily development, Terra Vista at Tejon, is in its initial lease-up phase and may not achieve anticipated occupancy levels or rental rates. Terra Vista at Tejon, our 228-unit multifamily community completed in 2025, is currently in its initial lease-up phase and has not yet reached stabilized occupancy. During lease-up, operating expenses are generally incurred at levels consistent with stabilized operations, while rental revenues increase gradually as occupancy builds. As a result, the property may generate operating losses until stabilization is achieved.
There can be no assurance that Terra Vista will achieve anticipated occupancy levels, rental rates, or absorption timelines. Demand for rental housing in the greater Bakersfield submarkets may be affected by local employment conditions, competing supply, affordability of homeownership, broader economic conditions, and insurance costs in California. If lease-up occurs more slowly than expected, if rental rates are lower than projected, or if concessions are required to attract tenants, the project’s operating results and cash flows could be adversely affected.
Reliance on third-party property managers could adversely affect property operations and financial performance. We rely on third-party property managers to conduct the day-to-day operations, leasing, and maintenance of our multifamily development. As a result, our ability to maintain occupancy levels, achieve targeted rental rates, control operating expenses, and provide a satisfactory resident experience depends in part on the performance of these third-party managers.
If a property manager fails to effectively market and lease available units, maintain properties in a timely and cost-effective manner, comply with applicable laws and regulations, or provide satisfactory resident services, the performance of the applicable property may be adversely affected. In addition, because we do not directly control all on-site personnel and operational decisions, we may experience delays in identifying and correcting operational or leasing issues, which could result in lower occupancy, increased concessions, higher operating expenses, reduced rent collections, or reputational harm.
Our reliance on third-party managers may also increase the risk that properties under development or in lease-up do not achieve projected absorption rates, rental levels, or stabilization timelines. If a property manager underperforms or fails to meet our expectations, we may be required to replace such manager, which could result in operational disruption, transition costs, and temporary declines in property performance.
Any of these factors could adversely affect our results of operations, financial condition, cash flows, and the value of our real estate investments.
A complicating factor in any joint venture is that strategic partners may have economic or business interests or goals that are inconsistent with ours or that are influenced by factors related to our business.business or change over time. These competing interests lead to the difficult challenges of successfully managing the relationship and communication between strategic partners and monitoring the execution of the partnership plan. We may also be subject to adverse business consequences if the market reputation or financial position of the strategic partner deteriorates. If we cannot successfully execute transactions with strategic partners, our business could be adversely affected.
Market risk relates to the functioning of the New York Stock Exchange. Many factors affect market function: investor anticipation, shocks in other markets, and anything that limits the efficient functioning of the marketplace. Market risks can affect the price of our Common Stock.
We may be subject to shareholder activism or proxy contests, which could adversely affect our business and stock price.
We may become subject to shareholder activism, proxy contests or other campaigns by investors seeking to influence our strategic direction, capital allocation, governance practices or board composition. Responding to such actions could require significant time and attention from our Board of Directors and management team and could result in substantial legal, advisory and other expenses. In addition, the perceived or actual uncertainty associated with shareholder activism may create instability within the Company, disrupt our strategic initiatives, and adversely affect our relationships with strategic partners, employees and other stakeholders. These actions could also result in volatility in the market price of our Common Stock.
The California property insurance market may adversely affect our development activities and property values.
California’s property insurance market has experienced reduced carrier participation, increased underwriting restrictions and premium volatility. If adequate insurance coverage becomes unavailable or cost-prohibitive for the Company, our tenants or future homeowners within our developments, we may experience delays in development timing, reduced transaction activity, or increased operating costs. In addition, limited availability or higher costs of insurance could adversely affect property values, buyer demand and overall marketability of our real estate assets. Any of these factors could have a material adverse effect on our business, financial condition and results of operations.
Management's Discussion & Analysis (MD&A)
New heading “2025 Operating Results:”
Removed heading “Cash Flow and Liquidity”
Largest changes
“During 2025, investing activities used $62,306,000, primarily driven by capital expenditures of $63,210,000 related to real estate expenditures either under development or held for lease, and property and equipment investments. Of the $63,210,000, we used $34,073,000 for the completion of Phase 1 of our Terra Vista at Tejon multifamily development and $12,487,000 for road and water infrastructure improvements at TRCC to support continued expansion. …”see in full comparison
“During 2023, investing activities used $14,002,000, which was largely attributed to capital expenditures of $21,328,000 used primarily for real estate development. Of the $21,328,000, we spent $2,111,000 on permitting efforts for MV, $4,341,000 on litigation defense for Centennial, and $1,436,000 on permitting efforts for Grapevine. At TRCC, we primarily used $7,815,000 to develop road and water infrastructures. All real estate capital expenditures are inclusive of capitalized interest, payroll and overhead. …”see in full comparison
see in full comparisonIt is difficult to accurately predict cashCash flowsdue to the nature of our businessesandfluctuating economic conditions. Ourearningsandmaycash flows will be affectedfluctuate from period to periodbydue to thecommoditycommodity-driven nature of our farming and mineraloperations,operations and the timing of sales andleasesleasingof propertyactivity within our developmentprojects,projects. Some farming crops, notably pistachios, bear in alternate years which results in reduced revenues for those years. Development timelines, market conditions, and thebeginningtimeof development within our residential projects. The timing of sales and leases within our development projects is difficultrequired topredict due to the time necessary to complete the development process andnegotiatesalestransactionsorcanleasecausecontracts.variability in reported results across periods. Often, the timing aspect of land development can lead to particular years or periods having more or less earnings than comparable periods. Based onourcurrentexperience,projectionsweandbelieveavailableweliquidity,willmanagementhaveexpectsadequateto maintain sufficient cashflows,resourcescashtobalances,fundandinternalavailability on our line of creditoperations over the nexttwelve12months to fund internal operations.months. As we move forward with the completion of the litigation, permitting and engineering design for our master planned communities and prepare to move into the development stage, we may need to secure additional funding in the long-term through either the issuance of equity and/or by securing other forms of financing such as joint ventures equity and debt financing.
“We believe our existing cash balances, projected cash flows from operations, distributions from joint ventures, and available borrowing capacity under our revolving credit facility will be sufficient to meet our anticipated capital expenditures, debt service obligations, and working capital requirements for at least the next 12 months. Revenue-generating operations, joint venture distributions, and access to credit facilities are expected to provide ongoing liquidity beyond the next 12 months. …”see in full comparison
EBITDA represents earnings before interest, taxes, depreciation, and amortization, a non-GAAP financial measure, and is used by us and others as a supplemental measure of performance. We use Adjusted EBITDA to assess the performance of our core operations, for financial and operational decision making, and as a supplemental or additional means of evaluating period-to-period comparisons on a consistent basis. Adjusted EBITDA is calculated as EBITDA, excluding stock compensationsee in full comparisonexpense.expense and certain identified non-recurring items that are not indicative of our on-going operations or that may obscure our underlying results and trends. We believe EBITDA and Adjusted EBITDAprovidesprovide investors relevant and usefulinformationinformation, when reconciled to their most comparable GAAP financial measure, becauseittheypermitspermit investors to view income from our operations on an unleveraged basis, before the effects of taxes, depreciation and amortization, and stock compensationexpense.expense and other items impacting comparability. By excluding interest expense and income, EBITDA and Adjusted EBITDA allow investors to measure our performance independent of our capital structure and indebtedness and, therefore, allow for a more meaningful comparison of our performance to that of other companies, both in the real estate industry and in other industries. We believe that excluding charges related to share-based compensation facilitates a comparison of our operations across periods and among other companies without the variances caused by different valuation methodologies, the volatility of the expense (which depends on market forces outside our control), and the assumptions and the variety of award types that a company can use. In addition, the Company excludes certain items impacting comparability, such as shareholder activism advisory costs and legal expenses associated with the Centennial litigation, to provide investors with a clearer understanding of the Company’s core operating performance across periods. EBITDA and Adjusted EBITDA have limitations as measures of our performance. EBITDA and Adjusted EBITDA do not reflect our historical cash expenditures or future cash requirements for capital expenditures or contractual commitments. While EBITDA and Adjusted EBITDA are relevant and widely used measures of performance, they do not represent net (loss) income or cash flows from operations as defined by GAAP. Further, our computation of EBITDA and Adjusted EBITDA may not be comparable to similar measures reported by other companies. The following table reconciles EBITDA and Adjusted EBITDA to Net income, the most directly comparable GAAP measure.
Full comparison: every changed paragraph (93)
This discussion and analysis areis based on, should be read together with, and is qualified in its entirety by, the consolidated financial statements and notes thereto included in Item 15(a) of this Form 10-K, beginning at page F-1. It also should be read in conjunction with the disclosure under “Forward-Looking Statements” in Part 1 of this Form 10-K. When this report uses the words “we,” “us,” “our,” “Tejon,” “TRC,” and the “Company,” they refer to Tejon Ranch Co. and its subsidiaries, unless the context otherwise requires. References herein to fiscal year refer to our fiscal years ended or ending December 31.
We are a diversified real estate development and agribusiness company committedfocused toon responsibly usingutilizing our land and resources to meet the housing, employment, and lifestyle needs of Californians andwhile tocreating createlong-term valueshareholder for our shareholders.value. In support of these objectives, we have been investing in land planning and entitlement activities for new commercial/industrial and resort/residential land developments and in infrastructure improvements within our active industrial development. Our prime asset is approximately 270,000 acres of contiguous, largely undeveloped land that, at its most southerly border, is 60 miles north of Los Angeles and, at its most northerly border, is 15 miles east of Bakersfield.
We currently operate in fivesix reporting segments: real estate - commercial/industrial; multifamily; real estate - resort/residential; mineral resources; farming; and ranch operations.
Our commercial/industrial real estate segment generates revenues from real estate leases, and sales of land and buildings, with TRCC representing our primary commercial and industrial development.
In 2025, we expanded our real estate operations to include a dedicated multifamily segment focused on the development, lease-up, and long-term ownership of residential rental communities within TRCC, beginning with Terra Vista at Tejon. The addition of multifamily residential leasing further diversifies our portfolio and is expected to enhance long-term recurring revenue streams.
Our resort/residential real estate development segment is actively involved in the land entitlement and pre-development activities, both internally and through a joint venture. Our active developments within this segment include Mountain Village, Grapevine, and Centennial.
Our mineral resources segment generates revenues from oil and gas royalty leases, rock and aggregate mining leases, a lease with National Cement of California Inc., and water sales.
Our farming segment produces revenues from the sale of wine grapes, almonds, and pistachios, and we are expanding our permanent crop portfolio to include olives.
Lastly, our ranch operations segment generates revenues from game management activities and ancillary land uses, including grazing leases and filming activities.
Our commercial/industrial real estate segment generates revenues from real estate leases, and land and building sales. The primary commercial/industrial development is TRCC. In 2025, we plan to expand our real estate operations to include residential leasing, further diversifying our portfolio and enhancing long-term recurring revenue streams. The resort/residential real estate development segment is actively involved in the land entitlement and pre-development efforts both internally and through a joint venture. Our active developments within this segment are MV, Centennial, and Grapevine. Our mineral resources segment generates revenues from oil and gas royalty leases, rock and aggregate mining leases, a lease with National Cement of California Inc., and water sales. The farming segment produces revenues from the sale of wine grapes, almonds, and pistachios, and we intend to expand into olives. Lastly, the ranch operations segment consists of game management revenues and ancillary land uses, such as grazing leases and filming.
For 2025, net income attributable to common stockholders was $75,000 compared to net income attributable to common stockholders of $2,690,000 in 2024. The primary factor driving the decrease was an increase in corporate expenses of $2,976,000, primarily due to higher shareholder-related expenses associated with a contested board election and proxy defense efforts. Additionally, equity in earnings of unconsolidated joint ventures decreased by $2,519,000 due to lower fuel and non-fuel revenues at Petro Travel Plaza, or TA/Petro. The above decreases were partially offset by a $3,514,000 improvement in the operating results from farming segment, driven by improved pistachio revenues, and a $2,362,000 increase in profit from the real estate commercial/industrial segment, driven by higher profit from land sales. Total profit from land sales for the year was $1,875,000.
For 2023, net income attributable to common stockholders was $3,265,000 compared to net income attributed to common stockholders of $15,808,000 in 2022. The primary factor driving the decrease was the absence of land sales in 2023 within the commercial/industrial segment, contributing to a $20,454,000 decrease in segment operating profits. Additionally, the mineral resources segment operating income decreased by $2,787,000 largely attributable to limited opportunities to sell water as a result of 100% SWP allocation. The above decreases were partially offset by improved farming segment operating results of $5,503,000 mainly due to cost reductions. Also offsetting the decreases were income tax expense savings of $5,070,000 derived from lower taxable profits when compared with the prior period.
During 2025,2026, we will continue to invest funds towards vertical development within our active commercial and industrial development,operations at TRCC, including constructionthe ondevelopment of an additional industrial building and related infrastructure. We also expect to continue with lease-up activities at Terra Vista at Tejon, our new multi-familymultifamily apartment community located immediately adjacent to the Outlets at Tejon atwithin TRCC. We will also invest funds as necessary towards litigation defense, permits, and maps for our master plan mixed-use developments and for master project infrastructure. Securing entitlements for land, as is currently the case with our landCentennial project, is a long,lengthy arduousand complex process that can take several years and involves litigation. During the next few years, our net income will fluctuate from year-to-year based upon, among other factors, commodity prices, production within our farming segment, the timing of land sales and the leasing of land, industrial space, and/or multi-family apartment units within our industrial developments, and equity in earnings generated from our unconsolidated joint ventures.
Impairment of Long-Lived Assets, Real Estate Development – We evaluate our real estate development projects for impairment on an ongoing basis. Our evaluation for impairment involves an initial assessment of each real estate development to determine whether events or changes in circumstances exist that may indicate that the carrying amounts of a real estate development are no longer recoverable. Possible indications of impairment may include events or changes in circumstances affecting the Company’s strategic plan for the real estate development, the entitlement process, government regulation, litigation, geographical demand for new housing, and market conditions related to pricing of new homes and development costs.
•Commercial/industrial revenues increased to $15,006,000 for the twelve months ended December 31, 2025, reflecting year-over-year growth of 20%, primarily driven by land sales within TRCC. Included in these results was $3,737,000 of land sales revenue from two land sales, including $2,373,000 following the Company's satisfaction of performance obligations related to a 2022 land sale, and a 1.8-acre land sale designated for a future hotel development at TRCC.
•Commercial/industrial real estate segment expenses increased $92,000, or 1%, from $7,910,000 in 2024 to $8,002,000 in 2025. The increase in expenses is primarily attributed to the recognition of $1,862,000 in cost of sales, incurred to satisfy the performance obligation associated with Nestlé land sale transaction executed in 2022 and a land sale in 2025. The above mentioned increase was partially offset by reductions in both operating expenses and general and administrative expenses during the period.
•Commercial/industrial real estate segment expenses decreased $143,000, or 2%, from $8,053,000 in 2023 to $7,910,000 in 2024. The decrease in expenses is primarily attributed to lower property tax expense,expenses, partially offset by higher insurance cost and general and administrative expenses over the comparative period.
•Commercial/industrial real estate development segment revenues were $11,758,000 for the twelve months ended December 31, 2023, a decrease of $28,757,000, or 71%, from $40,515,000 in 2022. The absence of land sales was the primary driver of this decrease. We sold three land parcels in 2022, totaling 98.2 acres, for $29,796,000, whereas in 2023 we did not sell any land parcels. The decrease was partially offset by higher landscaping revenues of $728,000 and increases in Pastoria Energy Facility leasing revenues of $230,000.
•Commercial/industrial real estate segment expenses decreased $8,303,000, or 51%, from $16,356,000 in 2022 to $8,053,000 in 2023. The decrease in expenses is primarily attributed to the absence of $8,623,000 in cost of sales from the land sales in 2022.
For 2025,2026, TRCC willis continueexpected to beremain the primary driver of new activity within the Company. Construction began in January of 2024 on Terra Vista at Tejon, our new multi-family apartment community located immediately adjacent to the Outlets at Tejon. We expect to start the construction of a 510,385 square-foot industrial building in 2025 throughThrough the TRC-DP 1 joint venture formed with Dedeaux Properties.Properties, we expect to commence construction of a 510,385 square-foot industrial building during 2026. We also expect the commercial/industrial segment to continue to experienceincur operating costs, net of amounts capitalized, related to professional service fees, marketing, commissions, and planning costsactivities as we continuepursue to pursueadditional development opportunities. These costs are expected to remain generally consistent with current levels of expenselevels, with any variability in future periods driven primarily by the futuretiming tied toof specific absorption transactions in any given year andtransactions, near-term inflation,inflationary pressures, and tariff and trade policy impacts. TCWD water assessments vary depending on water availability and variable costs of delivering the water.
The actual timing and completion of development isare difficult to predict due to the uncertainties of the market. Infrastructure development and marketing activities and costs will continue over several years as we develop our land holdings. We anticipate shorter lead times and more stable prices for materials, with electrical components being a notable exception. We will also continue to evaluate land resources to determine the highest and best uses for our land holdings. Future sales of land are dependent on market circumstances and specific opportunities. Our goal in the future is to increase land value and create future revenue growth through planning and development of commercial and industrial properties.
Multifamily
2025 Operating Results:
•Multifamily revenues of $732,000 for the year ended December 31, 2025 consisted primarily of rental income generated during the initial lease-up phase of Terra Vista at Tejon, which commenced leasing in May 2025.
•Operating expenses of $2,279,000 reflect normal property-level costs as well as expenses associated with the initial lease-up period, including marketing, staffing, and other start-up costs.
•Because the property has not yet reached stabilized occupancy as of December 31, 2025, operating results for the year reflect the impact of the lease-up phase, and operating margins are not indicative of stabilized operations. We expect to achieve stabilized occupancy during 2026, which we anticipate will result in improved operating income compared to 2025 as the property transitions from its lease-up phase to stabilized operations.
Our resort/residential segment activities include defending entitlements, land planning and pre-construction engineering and conservation activities for our Centennial,MV, Grapevine, and MVCentennial projects. We are in the preliminary stages of development; hence, no revenues are attributed to this segment for these reporting periods.
•The resort/residential segment remains in the investment phase with no revenues recognized in 2025. Segment expenses decreased $338,000 to $2,277,000, or 13%, when compared to $2,615,000 in 2024. The decrease was primarily attributable to the decrease in professional service fees and payroll costs.
•The expenses within the resort/residential segment consisted of operating expenses of $1,632,000, general and administrative expenses of $609,000 and depreciation and amortization of $36,000 for the twelve months ended December 31, 2025.
We are in the preliminary stages of development; hence, no revenues are attributed to this segment for these reporting periods.
•The expenses within the resort/residential segment consisted of professionaloperating service feesexpenses of $1,352,000,$1,742,000, general and administrative expenses of $1,215,000$831,000 and otherdepreciation expensesand amortization of $48,000$42,000 for the twelve months ended December 31, 2024. The main components of the other expenses included travel and entertainment expenses and depreciation expenses.
•In 2023, resort/residential segment expenses decreased $101,000 to $1,528,000, or 6%, when compared to $1,629,000 in 2022. The decrease is namely attributed to a decrease in payroll costs. The expenses consisted of general and administrative expenses of $1,384,000, professional service fees of $99,000 and other expenses of $45,000 for the twelve months ended December 31, 2023. The main components of the other expenses included travel and entertainment expenses and depreciation expenses.
The resort/residential segment will continue to incur costs in the future related to professional service fees, public relations costs,relations, and staffing costs as we continue to go forward withadvance permitting and pre-development activities forin the aboveMV, Grapevine, and Centennial communities. We expect theseThese expenses are expected to remain consistent with current years' costlevels in the near termterm, andincreasing only begin to increase as weindividual moveprojects transition into theactive development phase of each project in the future.development. The actual timing and completion of entitlement-related activities and the beginningcommencement of development isremain difficult to predict due to the uncertainties of the regulatory approval process, the length of time related to litigation defense, and thebroader statuseconomic of the economy.conditions. We will also continue to evaluate our land resources to determineidentify the highest and best use for our landholdings.holdings, Ourwith the long-term goalobjective throughof thisenhancing process is to increase theland value of our land and createcreating future revenue opportunities through resort and residential development.
We regularly monitoring the markets in order to identify the appropriate time in the future to begin infrastructure improvements and lot sales. Our long-term business plan of developingfor the communitiesdevelopment of MV, Centennial,Grapevine, and GrapevineCentennial remains unchanged. AsAdvancement homeof buyerinfrastructure trendsinvestment changeand subsequent lots sales is contingent upon obtaining development capital, and we are actively pursuing capital formation strategies in California to a more suburban orientation and the economycontext stabilizes,of wecurrent market conditions. We believe the perception of land values will also begin to improve. Long-termlong-term market fundamentals, such asincluding California's significant documentedwell-documented housing shortage and proximity to the large Southern California population center we believecenter, will support future housing demand in our region.
•Revenues from our mineral resources segment decreased $578,000, or 6%, to $9,636,000 in 2025 when compared to $10,214,000 in 2024. The decrease was primarily attributable to lower oil and natural gas production volumes and pricing, along with reduced cement sales volumes.
•Mineral resources expenses decreased $245,000, or 3%, to $6,807,000 in 2025 when compared to $7,052,000 in 2024, reflecting lower cost of sales associated with reduced water sales.
•Revenues from our mineral resources segment decreased $7,071,000, or 33%, to $14,524,000 in 2023 when compared to $21,595,000 in 2022. The decrease is primarily attributed to lower water sales revenue of $6,625,000. The SWP allocation was at 100% in 2023, due to heavy rainfall in California, which severely limited our water sales opportunities, whereas in 2022 the allocation was at 5%. Additionally, the Company experienced a decrease in royalties of $587,000 due to lower price per barrel for oil production, combined with lower production volume of cement and aggregate production, when compared to 2022.
•Mineral resources expenses decreased $4,284,000, or 33%, to $8,685,000 in 2023 when compared to $12,969,000 in 2022 as a result of having less cost of water sales.
•During 2025, farming segment revenues increased $4,813,000, or 34.6%, from $13,925,000 in 2024 to $18,738,000 in 2025. The increase was primarily driven by $5,339,000 in pistachio crop revenue recognized in 2025, as there was no pistachio harvest in 2024 as pistachios are an alternate bearing year crop and 2024 was a down-bearing year. The year-over-year increase was further supported by higher almond pricing and increased wine grape sales.
•During 2025, farming segment expenses increased $1,299,000, or 7%, from $17,551,000 in 2024 to $18,850,000 in 2025. This increase was primarily due to higher crop-related cost of sales associated with the 2025 pistachio harvest.
•During 2023, farming segment revenues increased $949,000, or 7%, from $13,001,000 in 2022 to $13,950,000 in 2023. The factors contributing to this increase are as follows:
◦Pistachio crop revenue increased by $3,990,000 in 2023, which was partially offset by a $1,531,000 decrease in crop insurance and a $873,000 decrease in prior year crop price adjustment. Pistachio revenues increased primarily because the 2022 crop did not bear fruit due to a mild winter.
◦Almond revenues decreased $743,000 due to unfavorable pricing for crops sold in 2023 when compared to 2022. Additionally, the variations in the mix of almonds sold also contributed to this decrease. During 2022, a majority of almonds sold were of the Nonpareil and Monterey varieties, which generally sell at a higher price.
◦Wine grape revenues decreased $180,000 due to unfavorable pricing, partially offset by higher yields.
•During 2023, farming segment expenses decreased $4,554,000, or 23%, from $19,811,000 in 2022 to $15,257,000 in 2023. The decrease is mainly attributable to lower water holding cost of $3,040,000. Additionally, utility costs decreased by $805,000 due to water availability in 2023 resulting in less need of water transmission costs to pump water for farming.
•Revenues from ranch operations increased $284,000, or 5%, from $5,195,000 in 2024 to $5,479,000 in 2025. The increase was primarily attributable to an increase in game management and other revenue of $415,000, primarily attributed to higher guided hunt revenues and increased revenue recognized from hunting memberships. The increase was offset by the decrease in the grazing revenue of $131,000.
•Ranch operations expenses increased $397,000, or 8%, from $4,864,000 in 2024 to $5,261,000 in 2025. This increase was primarily attributable to higher operating expenses of $489,000 mainly associated with additional property taxes of $164,000, additional labor cost of $158,000 and higher repairs and maintenance expenses of $135,000.
•Revenues from ranch operations increased $401,000, or 10%, from $4,106,000 in 2022 to $4,507,000 in 2023. This is primarily attributed to an increase in grazing lease revenues due to improved pasture levels as a result of 2023 winter rains, which allowed for more cattle grazing on Company's land.
•Ranch operations expenses were $5,043,000 in 2023, which stayed consistent when compared to $5,024,000 in 2022.
Total other income decreased $1,231,000, or 62%, to $750,000 for the year ended December 31, 2025, compared to $1,981,000 for the year ended December 31, 2024. The decrease was primarily attributed to a $1,359,000 reduction in investment income on marketable securities reflecting lower average invested balances during 2025.
Total other income increased by $697,000, or 40%, from $1,722,000 in 2022 to $2,419,000 in 2023. Investment income recognized on marketable securities increased by $1,923,000 due to an increase in average funds invested and higher market interest rate in 2023 compared with 2022. This increase was offset by a decrease of $1,226,000 in other income mainly due to an absence of long-term deferred gains from the sale of the 18-19 West joint venture.
Corporate general and administrative costs increased $1,220,000, or 12.4%, to $11,092,000 during 2024 when compared to $9,872,000 in 2023. The increase was primarily attributable to higher stock compensation expense of $1,053,000 over the comparative period. The main components of the 2024 corporate expenses included salaries and compensation expenses of $10,261,000 and other expenses of $831,000. Other expenses include professional services fees, licenses and fees, and depreciation expenses. The year-over-year increase in compensation expense is not expected to be a trend, but rather to return to historical averages in the future.
Corporate general and administrative costs increased $173,000,$2,976,000, or 1.8%,26.8%, to $9,872,000$14,068,000 during 20232025 when compared to $9,699,000$11,092,000 in 2022.2024. The increase iswas primarily attributabledue to higher salaryshareholders' expenses associated with a contested board election and stockproxy compensationdefense expense recognized during the period, offset by lower professional service expense.efforts. The main components of the corporate expenses included salariesgeneral and compensationadministrative expenses of $9,007,000$7,980,000, operating and otherprofessional service expenses of $865,000. Other expenses include professional services fees, licenses and fees,$5,723,000, and depreciation expenses.and amortization of $354,000.
Corporate general and administrative costs increased $1,220,000, or 12.4%, to $11,092,000 during 2024 when compared to $9,872,000 in 2023. The increase was primarily attributable to higher stock compensation expense of $1,053,000 over the comparative period. The main components of the 2024 corporate expenses included general and administrative expenses of $6,578,000, operating and professional service expenses of $4,169,000, and depreciation and amortization of $345,000.
During 2024,2025, equity in earnings from unconsolidated joint ventures increaseddecreased $4,013,000,$2,519,000, or 58%,23%, to $10,881,000$8,362,000 when compared to $6,868,000$10,881,000 in 2023.2024.
•The Petro Travel Plaza equity in earnings decreased $2,192,000 or 27% when compared to 2024. Total revenues decreased $12.8 million, or 8.3%, year over year, driven primarily by a $9.6 million, or 8.9%, decline in fuel revenues reflecting lower volumes, as well as a $3.2 million, or 7.0%, decrease in non-fuel revenues. Fuel costs of revenues declined $9.0 million, or 10.1%, however, the reduction did not fully offset the decrease in fuel revenues, resulting in a $2.9 million, or 6.1%, decline in total gross profit for the period.
•During 2024, equity in earnings from unconsolidated joint ventures increased $4,013,000, or 58%, to $10,881,000 when compared to $6,868,000 in 2023.
•The Petro Travel Plaza equity in earnings increased $1,965,000 or 31% when compared to 2023, which is largely attributable to higher fuel margins.
•The Petro Travel Plaza equity in earnings increased $1,965,000 or 31% when compared to 2023, which is largely attributable to higher fuel margins. Equity in earnings for our TRC-MRC LLC joint ventures increased by $1,613,000 due to higher rental rates or rental escalations, and the new revenue stream generated by the completed industrial building of the TRC-MRC 5, LLC joint venture.
During 2023, equity in earnings from unconsolidated joint ventures decreased $884,000, or 11%, to $6,868,000 when compared to $7,752,000 in 2022.
What changed in the latest 10-Q
Risk Factors
There have been no material changes to the risk factors previously disclosed in Part I, Item 1A in our most recent Annual Report on Form 10-K.
No wording changes found in this section.
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Management's Discussion & Analysis (MD&A)
New heading “Olive Expansion”
New heading “Weather Conditions”
Largest changes
The Company continues to monitorsee in full comparisonand assess the impact ofbroader macroeconomic and geopoliticalconditionsdevelopmentsonthatitsmay affect production costs. Labor costs, including bothinternalemployees andthroughcontractlaborlabor,contractors,havecontinuecontinued toincreaseincrease, and the Company expects this trend to continueover the near future. The Company utilizes external labor contractors, as necessary, for large projects, such as pruning and harvesting, as a way to manage our labor needs. The ongoing conflict in the Middle East has contributed to significant volatility in global fertilizer markets. The Company expects fertilizer costs, along with other key production inputs such as chemicals, fuel, and labor, to remain elevatedin the near term.WhileThe Company utilizes contract labor for seasonal activities, including pruning and harvesting, to supplement its workforce. In addition, fertilizer, chemicals, fuel, and other agricultural inputs remain subject to price volatility. Although the Companyactively worksseeks to manageitstheseinput cost exposurecosts through operational planning and procurement strategies,there can be no assurance that these measures will be sufficient to fully offset the impact ofcontinuedpriceincreasesincreases,inwhichinput costs could adversely affectthe Company'soperatingresults and financial condition.results.
•Equity in earnings wassee in full comparison$1,290,000$3,100,000 for the three months endedMarchJune31,30, 2026, an increase of$132,000,$545,000, or 21%, from$1,158,000$2,555,000duringfor thesameprior-yearperiod in 2025.period. The increase was primarily attributable to improved results at the TRCC/Rock Outlet Center LLC jointventureventure,ofwhere$184,000,the equity loss narrowed by $274,000, due to the absence of aone-timetenant turnoverwritedownwrite-down recognized during the second quarter of 2025. Equity inMarchearnings2025.fromThetheincreasePetrowasTravelpartiallyPlazaoffsetHoldings, LLC joint venture also increased bya$119,000,decreaseprimarilyinreflecting improved operating margins. In addition, the TRC-MRC joint ventures collectively reported higher equity inearningsearnings,recordedprimarilyforreflectingtheimprovedTA/Petrooperatingjoint venture of approximately $117,000 driven by a 26.7% decline in year-to-date fuel gross margin compared to the same period in 2025.performance.
“•Equity in earnings was $4,390,000 for the six months ended June 30, 2026, an increase of $677,000, or 18%, from $3,713,000 for the prior-year period. The increase was primarily attributable to improved results at the TRCC/Rock Outlet Center LLC joint venture, where the equity loss narrowed by $458,000, due to the absence of a tenant turnover write-down recognized during the second quarter of 2025. …”see in full comparison
During the firstsee in full comparisonthreesix months of 2025, investing activities used$32,650,000.$49,551,000. We made capital expenditures, inclusive of capitalized interest and payroll (exclusive of stock compensation), of$17,544,000$37,146,000 for real estate development. At TRCC, we spent$11,586,000$22,850,000 of construction cost on Terra Vista at Tejon and$1,957,000$5,663,000 on infrastructure improvements at TRCC-East. We also spent$543,000$1,469,000 and$346,000$1,073,000 on permitting efforts for MV and Grapevine, respectively, and$775,000$1,863,000 onre-entitlementlitigationcostsdefense for Centennial. Within our farming segment, we spent$2,030,000,$3,752,000, which included cultural costs for orchards currently classified as under development and replacement of machinery and equipment. Additionally, we used$9,018,000$9,519,000 to acquire water assets. We had marketable securities of$15,280,000$23,655,000 that matured, and we reinvested$21,410,000.$26,652,000. Lastly, we received proceeds of$142,000$310,000 from joint venture distributions.
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Centennial at Tejon Ranch, or Centennial, had entitlements approved in 2019 by the Los Angeles County Board of Supervisors. These approvals were litigated in two lawsuits filed in Los Angeles County Superior Court. As previously disclosed and summarized in our annual report on Form 10-K, this litigation resulted in LA County rescinding and setting aside the Centennial approvals in compliance with the court’s final judgment, and the Company considers that litigation resolved. There have been no material developments during the three months ended MarchJune 31,30, 2026, that would change that conclusion. Now that this litigation is resolved, the Company is in the process of working with LA County to advance the Centennial project and is seeking re-entitlement of the Centennial project (“re-entitlement”). We expect that re-entitlement will involve processing project and use entitlements that are substantively similar to the Centennial approvals that were approved by the LA County Board of Supervisors in 2019. In that regard the Company is presently circulating a recirculated partial draft environmental impact report (“RPDEIR”) for public review and comment that is expected to facilitate the consideration of re-entitlement before LA County’s Regional Planning Commission and (ultimately) the Board of Supervisors late this year.
•A joint venture, TRC-DP 1, LLC, or the DP1 Joint Venture, with Dedeaux Properties to develop, manage, and operate an industrial building of 510,385 square feet at TRCC-East. On April 28, 2026, we contributed approximately 24.57 acres of land to the DP1 Joint Venture and construction commenced, with occupancy expected in the first quarter of 2027.
•On October 4, 2024, we entered into a joint venture with Dedeaux Properties to develop, manage, and operate an industrial building of 510,385 square feet of space.
Leasing commenced in May 2025, and the project was approximately 71%77% leased as of MarchJune 31,30, 2026, reflecting continued absorption toward stabilization. Terra Vista at Tejon represents the initial residential component of TRCC and is intended to support housing demand from employees working in nearby distribution, retail, hospitality, and service uses, including employees who work at the Hard Rock Casino Tejon. The Company continues to position its multifamily platform to benefit from regional employment growth, while monitoring key operating metrics such as occupancy, leasing activity, renewal rates, concessions, and rental rates, which may fluctuate based on market conditions, competitive supply, and broader economic factors.
Summary of FirstSecond Quarter and YTD 2026 Performance
For the three months ended MarchJune 31,30, 2026, we had a net income attributable to common stockholders of $151,000$2,635,000 compared to a net loss attributable to common stockholders of $1,464,000$1,712,000 for the three months ended MarchJune 31,30, 2025. On the revenue side, the primary driver of this $1,615,000$4,347,000 increase in net income was a land sale related to the TRC-DP1, LLC, in addition to higher mineral resources revenues of $938,000$279,000 attributed to higher water sales revenue. On the expense side, corporate expenses were $2,350,000$2,061,000 lower than prior period, due to lower compensation expense and the non-recurring nature of shareholders' activism expense incurred in 2025. The above mentioned factors were partially offset by a $1,331,000$408,000 increase in income tax expense, primarily due to a change from a $1.3 million$435,000 income tax benefitexpense in the prior period to a $59,000$843,000 income tax expense in the current quarter.
For the six months ended June 30, 2026, we had net income attributable to common stockholders of $2,786,000 compared to a net loss attributable to common stockholders of $3,176,000 for the six months ended June 30, 2025. On the revenue side, the primary driver of this $5,962,000 increase in net income was the land sale, increased revenue from our multifamily segment, and higher mineral resources revenues of $1,217,000 attributed to higher water sales revenue. On the expense side, corporate expenses were $4,411,000 lower than prior period, due to lower compensation expense and the non-recurring nature of shareholders' activism expense incurred in 2025. The above mentioned factors were partially offset by a $1,739,000 increase in income tax expense, primarily due to improved operating results.
During the threesix months ended MarchJune 31,30, 2026, our critical accounting policies have not changed since the filing of our Annual Report on Form 10-K for the year ended December 31, 2025. Please refer to that filing for a description of our critical accounting policies. Please also refer to Note 1 (Basis of Presentation) in the Notes to Unaudited Consolidated Financial Statements in this report for a discussion regarding newly adopted accounting principles.
•Commercial/industrial real estate development segment revenues were $9,663,000 for the three months ended June 30, 2026, compared to $5,092,000 for the same period in 2025, an increase of $4,571,000, or 90%. The increase was primarily attributable to higher land sale activity. During the current-year quarter, the Company completed a $6,854,000 land sale in connection with the TRC-DP1, LLC, compared to land sales of $2,373,000 in the prior-year quarter. Gross profit from land sales was $2,000,000 during the current-year quarter, compared to $595,000 in the prior-year period.
•Excluding land sales, revenues from recurring operations increased $90,000, or 3.3%, to $2,809,000, primarily due to $46,000 increase in TRCC leasing revenues, a $35,000 increase in TRCC management fees and reimbursements, and a $34,000 increase in Pastoria Energy Facility revenues, partially offset by a $25,000 decrease in commercial leasing revenues and a $19,000 decrease in landscaping and other services revenues. Operating income from recurring operations increased $169,000, or 13%, reflecting the increase in recurring revenues and continued expense management.
•Commercial/industrial real estate development segment revenuesexpenses were $2,762,000$6,212,000 for the three months ended MarchJune 31,30, 2026, compared to $3,215,000 for the same period in 2025, an increase of $8,000,$2,997,000, or 0.3%,93.2%. fromThe $2,754,000increase forwas primarily attributable to higher cost of land sales associated with the threecurrent-year monthsquarter endedland Marchsale. 31,Cost 2025.of land sales was $4,854,000 during the current-year quarter, compared to $1,778,000 during the prior-year quarter.
•Excluding cost of land sales, segment expenses decreased $79,000, or 5.5%. Selling, general and administrative expenses decreased $162,000, or 21.0%, primarily due to the reversal of previously recognized stock-based compensation expense during the quarter, which is not indicative of ongoing operating expense levels. Depreciation and amortization expense decreased $8,000. These decreases were partially offset by $91,000, or 16.0%, increase in operating expenses, primarily attributable to professional services related to efforts for obtaining additional financing to fund future infrastructure development at our commerce center.
•Commercial/industrial real estate development segment revenues were $12,425,000 for the six months ended June 30, 2026, compared to $7,846,000 for the same period in 2025, an increase of $4,579,000, or 58.4%. The increase was primarily attributable to the second-quarter land sale discussed above. During the six months ended June 30, 2026, the Company completed a $6,854,000 land sale in connection with the TRC-DP1, LLC, compared to land sales of $2,373,000 during the prior-year period.
•Excluding land sales, revenues from recurring operations increased $98,000, or 1.8%, to $5.6 million. The increase was primarily attributable to higher TRCC leasing revenues of $68,000, increased Pastoria Energy Facility revenues of $57,000, higher communication lease revenues of $53,000, and an increase in TRCC management fees and reimbursements of $17,000, partially offset by decreases in commercial lease revenues of $58,000 and landscaping and other services revenues of $39,000. Operating income from recurring operations increased approximately $159,000, or 6.7%, reflecting the increase in recurring revenues and continued expense management.
•Commercial/industrial real estate development segment expenses were $7,890,000 for the six months ended June 30, 2026, compared to $4,871,000 for the same period in 2025, an increase of $3,019,000, or 62%. The increase was primarily attributable to higher cost of land sales associated with the second-quarter land sale discussed above. Cost of land sales was $4,854,000 during the current-year period, compared to $1,774,000 during the prior-year period.
•Excluding cost of land sales, segment expenses decreased $61,000, or 2.0%. Selling, general and administrative expenses decreased $222,000, or 13.0%, primarily due to the reversal of previously recognized stock-based compensation expense during the second quarter of 2026, which is not indicative of ongoing operating expense levels. Depreciation and amortization expense decreased $12,000. These decreases were partially offset by a $173,000, or 15.0%, increase in operating expenses, primarily attributable to higher landscaping services costs.
•Commercial/industrial real estate development segment expenses were $1,678,000 for the three months ended March 31, 2026, an increase of $23,000, or 1.4%, from $1,655,000 for the three months ended March 31, 2025. Selling, general and administrative expenses decreased by $59,000, or 6%, for the three months ended March 31, 2026 compared to the prior year period. The decrease was primarily attributable to the reversal of previously recognized stock-based compensation expense during the quarter, partially offset by normal fluctuations in administrative costs. The reversal of stock-based compensation is not indicative of ongoing operating expense levels. Operating expenses increased by $86,000, or 15%, for the three months ended March 31, 2026 compared to the prior year period, primarily due to higher landscaping services costs of $47,000 and increased maintenance fees of $42,000.
During the quarter ended MarchJune 31,30, 2026, vacancyindustrial ratesmarket conditions in Southern California showed signs of stabilization. In the Inland EmpireEmpire, increasedvacancy bydeclined 5030 basis points to 8.1%7.8%, the first quarterly improvement in over a year, while net absorption remainedrebounded negative atto approximately 2.83.1 million square feet.feet following negative absorption in the prior quarter. Average monthly asking rents continued to decline,soften, reachingdeclining to approximately $1.00$0.99 per square foot. Gross leasing activity reached a record 16.7 million square feet, reflecting renewed tenant activity as rental rates moderated.
The San Fernando Valley and Ventura County industrial markets also demonstrated improving fundamentals during the quarter. Combined net absorption totaled approximately 371,000 square feet, reversing negative absorption recorded in the prior quarter. Vacancy improved to 3.8% in the San Fernando Valley and 3.3% in Ventura County, while no new supply was delivered for the third consecutive quarter. Average asking rents remained stable at approximately $1.45 per square foot in the San Fernando Valley and $1.27 per square foot in Ventura County.
The San Fernando Valley and Ventura County industrial markets continued to experience tight conditions, supported by positive demand. In the San Fernando Valley, vacancy increased 30 basis points to 3.9%, while Ventura County vacancy increased by 10 basis points to 3.6%. Average asking rents in the San Fernando Valley decreased modestly by $0.01 to $1.41 per square foot, while Ventura County rents increased to approximately $1.27 per square foot.
Industrial users seeking larger spacesfacilities arecontinue goingto consider locations further north into neighboring Kern County, and particularlyincluding TRCC, which has attracted increased attention as marketSouthern conditionsCalifornia continueindustrial tomarkets tighten.stabilize Additionally,and leasing activity improves despite higher vacancy rates than recent historical lows. TRCC isalso in a position to capture tenant awareness due to our ability to provide a competitive alternativecompetes for userstenants inseeking alternatives to the Inland Empire and the Santa Clarita Valley,Valley. however,However, there can be no assurance that these advantagesfactors will offset market vacancy increases,levels, rentrental softening,rate pressure, regulatory constraints, tenant consolidation trends or competitivecompeting developmentindustrial activity.development.
Given California’s regulators' recent efforts at the local and state levels to tighten restrictions on industrial zoning and specific industrial uses, we anticipate further legislative activity in this area. The Company’s existing and planned developments are designed to align with current regulatory requirements, while incorporating flexibility where possible to adapt to future policy changes. Through our Company advocacy strategies,efforts, Tejon Ranch will engage to influencein policy discussions tothat support our commercial and industrial development goals.objectives.
We expect our commercial/industrial real estate development segment to continue to experienceincur costs, net of amounts capitalized, primarily related to professional service fees, marketing costs,marketing, planning costs,activities, and staffing costs,personnel as we continue to pursue development opportunities. FromIn a macroeconomic perspective,addition, capital market conditions remain relatively restrictive, and higherelevated interest rates and more limited construction financing availability may contributecontinue to a near-term slowdown in newslow commercial real estate development activity.activity in the near term.
The actual timing and completion of future development isprojects difficultremain subject to predict,market dueconditions toand theother uncertainties of the market.uncertainties. Infrastructure developmentdevelopment, marketing activities, and marketing activities andrelated costs couldmay continue to increase over several years,years as we develop our landholdings. We will also continue to evaluate our land resources to determine thetheir highest and best uses for our landholdings.use. Future land sales arewill dependentdepend on market circumstancesconditions and specificthe availability of suitable opportunities. Our goallong-term in the futurestrategy is to increaseenhance landthe value andof createour future revenue growthlandholdings through planning and development ofactivities that support future commercial and industrial properties.growth.
•Multifamily revenues ofincreased $696,000to $857,000 for the three months ended MarchJune 31,30, 2026, comparedfrom to no revenues$15,000 in the prior-year period, asreflecting theincreased propertyoccupancy was not yet placed in service in 2025. The increase reflectsfollowing the commencement of leasing activity and initial occupancy atafter the Company’sproperty multifamilywas development.placed in service during the second quarter in 2025.
•Multifamily segmentnet expensesoperating wereincome $1,024,000was $345,000 for the three months ended MarchJune 31,30, 2026, representing an increase of $832,000, compared to $192,000a fornet operating loss of $(166,000) in the threeprior-year months ended March 31, 2025.period. The increaseimprovement wasreflects primarilyrevenue attributable to (i) depreciation and amortization expense of $0.5 milliongrowth following the assetcommencement beingof placedleasing activity, which outpaced increases in service, and (ii) higher property-level operating expenses of $259,000 and selling, general and administrative costsexpenses of $72,000 associated with ongoing leasing and operations.
•The Company expects multifamily revenues to continue to increaseincreasing as leasing activity progresses and occupancy levels improve. As occupancy increases, the Company also expects operating margins to improve as fixed operating costs are spread across a larger leased base.
•Multifamily revenues increased to $1,553,000 for the six months ended June 30, 2026, from $15,000 in the prior-year period, reflecting increased occupancy following the commencement of leasing activities after the property was placed in service during the second quarter of 2025.
•Multifamily net operating income was $534,000 for the six months ended June 30, 2026, compared to a net operating loss of $(358,000) in the prior-year period. The improvement reflects revenue growth following the commencement of leasing activity, which outpaced increases in property-level operating expenses of $563,000 and selling, general and administrative expenses of $84,000 associated with ongoing operations.
•The Company expects multifamily revenues to continue increasing as leasing activity progresses and occupancy levels improve. As occupancy increases, the Company also expects operating margins to improve as fixed operating costs are spread across a larger leased base.
Resort/residential real estate development segment expenses were $356,000$363,000 for the three months ended MarchJune 31,30, 2026, aan decreaseincrease of $30,000$59,000 from $386,000$304,000 for the three months ended MarchJune 31,30, 20252025. withThe noincrease was not attributable to any significant fluctuations across individual expense categories.
Resort/residential real estate development segment expenses were $719,000 for the six months ended June 30, 2026, compared to $690,000 for the prior-year period. The modest increase of $29,000, or 4%, reflected normal fluctuations across various operating expense categories, with no individual expense category or operational factor materially affecting the year-over-year comparison.
Our long-term business strategy to develop the master-planned communities of MV,Mountain Village, Centennial, and Grapevine remains unchanged. We believe the fundamental drivers of housing demand in California, including a large and growing population base,population, persistent housing supply constraints, and affordability-driven migration to the suburban and exurban regions of Los Angeles and Kern Counties, continue to support long-term demand for residential development in our markets.
While near-term market conditions, including elevated interest rates and affordability pressures, may impactaffect the pace of housing activity, California’s well-documented housing shortage reinforcescontinues to support the long-term need for thoughtfullyadditional planned communities. We believe our developments are well-positioned to help address this structural imbalance.housing. Accordingly, the majority of expenditures and capital investments within our resort/residential real estate segment are expected to remain focused on these three communities.
As development activities progress, we expect to evaluate a variety of financing alternatives to fund future project development, including joint ventures with strategic partners, debt financing, and the potential issuance of additional equity securities.
As we move forward with our master planned communities, we expect to explore funding opportunities for the future development of our projects. Such funding opportunities could come from a variety of sources, such as joint ventures with financial partners, debt financing, and/or our issuance of additional common stock.
•Mineral resources segment revenues were $3,533,000$1,789,000 for the three months ended MarchJune 31,30, 2026, representing an increase of $938,000,$279,000, comparedor to18%, $2,595,000from $1,510,000 for the threeprior-year months ended March 31, 2025.period. The increase was primarily driven by higher water sales, which increased by$195,000 $628,000,due orto 43%,higher reflecting increased demand and sales activity.demand. Rock aggregate revenues increased $141,000,$65,000, or 52%,11%, quarter-over-quarter,reflecting primarilyboth due to a 50.6% increase inhigher sales volumes,volumes indicatingand strong underlying demand. Cement revenues increased $116,000, or 26%, supported by a 30.6% increase in volumes, partially offset by slightly lowerhigher average realized prices per ton. Cement revenues increased $32,000, or 5%, driven by higher sales volumes, as average realized prices per ton were essentially unchanged. Oil and gas revenues increased $37,000, or 20%, primarily due to higher production volumes and commodity prices.
These increases were partially offset by a decrease in oil and gas revenues of $49,000, or 25%, primarily due to lower production volumes and pricing.
•Mineral resources segment expenses were $2,488,000$890,000 for the three months ended MarchJune 31,30, 2026, an increase of $403,000,$100,000, or 19%,13%, from $2,085,000$790,000 for the threeprior-year months ended March 31, 2025.period. The increase was primarily due toreflected higher costs of water sales of $417,000, or 35%,$141,000, consistent with the increase in relatedwater revenues.sales revenue, and a $51,000 increase in operating expenses, partially offset by a $92,000 decrease in selling, general and administrative expenses. The prior-year period included a net credit to cost of sales of water resulting from a true-up of estimated water delivery costs.
•Mineral resources segment revenues were $5,322,000 for the six months ended June 30, 2026, an increase of $1,217,000, or 30%, from $4,105,000 for the prior-year period. The increase was primarily driven by water sales, which increased $823,000, or 56%, due to higher demand. Rock aggregate revenues increased $206,000, or 24%, primarily reflecting higher sales volumes. Cement revenues increased $148,000, or 13%, driven by higher sales volumes, as average realized prices per ton were relatively unchanged. These increases were partially offset by a $12,000, or 3%, decrease in oil and gas revenues, primarily due to lower production volumes and commodity prices.
•Mineral resources segment expenses were $3,378,000 for the six months ended June 30, 2026, an increase of $503,000, or 17%, from $2,875,000 for the prior-year period. The increase primarily reflected higher costs of water sales of $558,000, consistent with the increase in related revenues, and a $61,000 increase in operating expenses, partially offset by a $117,000 decrease in selling, general and administrative expenses.
Demand for the Company's water is influenced by annual State Water Project ("SWP") allocations, hydrologic conditions, and customers' operational needs. Higher SWP allocations generally reduce demand for supplemental water supplies, while lower allocations may increase demand. Accordingly, water sales may fluctuate significantly from period to period and results for the current quarter or year-to-date period are not necessarily indicative of future operating results.
Prices for oil and natural gas are subject to volatility due to changes in supply and demand, marketand uncertainty andother factors beyond the Company's control, including domestic and global inventory levels, geopolitical developments,events, macroeconomic conditions, and evolving regulatory conditions in California and international disputes.developments. Oil and gas production in California has generally declined in recent years, inreflecting parta duecombination toof increasedincreasing regulatory constraints.requirements, natural production declines, reduced capital investment, and other industry factors.
•Farming segment revenues totaled $895,000$750,000 for the three months ended MarchJune 31,30, 2026, aan decreaseincrease of $661,000,$143,000, or 42%,24%, compared to $1,556,000$607,000 for the sameprior-year period in 2025.period. The decreaseincrease was primarily attributable to pricing adjustments recognized on prior-year pistachio crop sales, partially offset by lower almond carryover crop sales volume when compared with prior period.revenues. During the firstsecond three monthsquarter of 2026 and 2025, the Company sold approximately 264,00079,000 pounds and 572,000156,000 poundspounds, respectively, of almond carryover crop, respectively.crop.
•FarmingDirect segmentfarming expenses were $1,989,000$521,000 for the three months ended MarchJune 31,30, 2026, compared to $824,000 for the prior-year period, a decrease of $559,000,$303,000, or 22%,37%. from $2,548,000 during the same period in 2025. ThisThe decrease was primarily attributable to a $681,000$272,000, or 61%, reduction in cost of sales relateddue to almond crops, consistent with the decline inlower almond sales revenue.and Thisa $55,000, or 18%, decrease wasin depreciation and amortization expense, partially offset by a $162,000$24,000, or 35%, increase in fixedselling, watergeneral obligationand expense.administrative expenses.
•Operating income from farming before fixed water obligations was $229,000 for the three months ended June 30, 2026, compared to an operating loss of $217,000 for the prior-year period, an improvement of $446,000. This improvement reflects a $143,000, or 24%, increase in total farming revenues combined with a $303,000, or 37%, decrease in direct farming expenses. The Company believes this measure is useful because it presents the operating performance of farming activities excluding fixed water obligations, which are incurred to preserve the Company's long-term water rights regardless of the level of farming activity.
•Farming segment revenues totaled $1,645,000 for the six months ended June 30, 2026, a decrease of $518,000, or 24%, compared to $2,163,000 for the prior-year period. The decrease was primarily attributable to lower almond revenues resulting from reduced sales of almond carryover crop. During the first six months of 2026 and 2025, the Company sold approximately 343,000 pounds and 727,000 pounds, respectively, of almond carryover crop.
•Direct farming expenses were $1,504,000 for the six months ended June 30, 2026, compared to $2,529,000 for the prior-year period, a decrease of $1,025,000, or 41%. The decrease was primarily attributable to a $953,000, or 55%, reduction in cost of sales due to lower almond sales and a $94,000, or 14%, decrease in depreciation and amortization expense, partially offset by a $22,000, or 21%, increase in selling, general and administrative expenses.
•Operating income from farming before fixed water obligations was $141,000 for the six months ended June 30, 2026, compared to an operating loss of $366,000 for the prior-year period, an improvement of $507,000. This reduction reflects a $518,000, or 24%, decrease in total farming revenues combined with a $1,025,000, or 41%, decrease in direct farming expenses. The Company believes this measure is useful because it presents the operating performance of farming activities excluding fixed water obligations, which are incurred to preserve the Company's long-term water rights regardless of the level of farming activity.
Water holding costs represent fixed costs incurred to maintain the Company's long-term water rights and related infrastructure. These costs are generally incurred regardless of the volume of water purchased or used in farming operations. Accordingly, changes in these costs are not necessarily indicative of changes in farming activity or operating performance but reflect the Company's long-term strategy of preserving water resources to support its agricultural and real estate development operations.
Seasonality
Almond, pistachio, and wine grape sales are subject to significant seasonality,seasonal, with the majority of revenues typically generated during the third and fourth quarters of the year. Almonds and pistachios are generally sold at prevailing market prices, while wine grapes are sold under contracted pricing arrangements with wineries.arrangements.
Olive Expansion
During 2026, the Company planted an additional 150 acres of olive orchards, bringing total olive acreage to approximately 300 acres. Olive trees generally require several years to reach commercial production, and accordingly, the newly planted acreage is not expected to generate meaningful revenues in the near term. The expanded olive acreage is expected to further diversify the Company's agricultural commodity mix over the long term.
Weather Conditions
Weather conditions can significantly affect chill accumulation during dormancy, a period critical to tree and vine development. Winter conditions generally provided adequate chill accumulation for the Company's almond and pistachio orchards. Significant rainfall during the February 2026 almond bloom created less favorable pollination conditions, and because harvest has not yet begun, the Company cannot yet determine the impact of these conditions on its crop yields.
Input Costs
In 2026, the Company plans to expand its crop portfolio within the farming segment through the planting of a second block of olive orchard. This initiative is expected to further diversify the Company’s commodity mix and better position it to respond to changing market conditions Weather conditions can significantly affect the number of chill hours and chill portions accumulated during dormancy, both of which are critical to tree and vine development. Entering the 2026 crop year, California’s agricultural regions benefited from a more traditional winter cooling cycle compared to the previous year, providing the pistachio and almond crops with the robust chill accumulation necessary to break dormancy effectively. In February 2026, significant rainfall occurred during the almond bloom. At this point, it is too early to determine the impact this weather phenomena will have on our crop yields.
The Company continues to monitor and assess the impact of broader macroeconomic and geopolitical conditionsdevelopments onthat itsmay affect production costs. Labor costs, including both internalemployees and throughcontract laborlabor, contractors,have continuecontinued to increaseincrease, and the Company expects this trend to continue over the near future. The Company utilizes external labor contractors, as necessary, for large projects, such as pruning and harvesting, as a way to manage our labor needs. The ongoing conflict in the Middle East has contributed to significant volatility in global fertilizer markets. The Company expects fertilizer costs, along with other key production inputs such as chemicals, fuel, and labor, to remain elevated in the near term. WhileThe Company utilizes contract labor for seasonal activities, including pruning and harvesting, to supplement its workforce. In addition, fertilizer, chemicals, fuel, and other agricultural inputs remain subject to price volatility. Although the Company actively worksseeks to manage itsthese input cost exposurecosts through operational planning and procurement strategies, there can be no assurance that these measures will be sufficient to fully offset the impact of continued priceincreases increases,in whichinput costs could adversely affect the Company's operating results and financial condition.results.
Water
TRC insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-07-28 | Velasquez Robert D |
Shares withheld for tax |
1,458 | $18.47 | $26.9K |
| 2026-07-28 | Velasquez Robert D |
Grant/award |
2,854 | $18.47 | $52.7K |
| 2026-07-28 | Mcmahon Hugh F. Iv |
Grant/award |
2,876 | $18.47 | $53.1K |
| 2026-07-28 | Mcmahon Hugh F. Iv |
Shares withheld for tax |
1,385 | $18.47 | $25.6K |
| 2026-07-28 | Houston Michael R.w. |
Shares withheld for tax |
1,119 | $18.47 | $20.7K |
| 2026-07-28 | Houston Michael R.w. |
Grant/award |
2,808 | $18.47 | $51.9K |
| 2026-07-14 | Yee Kenneth |
Grant/award |
565 | $18.70 | $10.6K |
| 2026-07-14 | Dakos Andrew |
Grant/award |
918 | $18.70 | $17.2K |
| 2026-07-14 | Speron Eric H. |
Grant/award |
1,587 | $18.70 | $29.7K |
| 2026-07-14 | Metcalfe Norman J |
Grant/award |
1,253 | $18.70 | $23.4K |
| 2026-07-14 | Mccall Jeffrey Joseph |
Grant/award | 1,587 | $18.70 | $29.7K |
| 2026-07-14 | Gammon Denise A |
Grant/award | 918 | $18.70 | $17.2K |
| 2026-07-14 | Bielli Gregory S. |
Grant/award | 918 | $18.70 | $17.2K |
| 2026-07-14 | Betts Steven A. |
Grant/award |
1,320 | $18.70 | $24.7K |
| 2026-07-14 | Leggio Anthony L. |
Grant/award |
1,119 | $18.70 | $20.9K |
| 2026-07-14 | Tisch Daniel R |
Grant/award | 1,787 | $18.70 | $33.4K |
Well-known investors holding TRC (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Renaissance Technologies | 2026-06-30 | 368,648 | $6.9M | 0.01% | Added 6% |
| D. E. Shaw & Co. | 2026-06-30 | 97,953 | $1.8M | 0.0% | Added 88% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 49,280 | $921.5K | 0.0% | Added 2% |
| Two Sigma Investments | 2026-06-30 | 20,815 | $389.2K | 0.0% | Added 26% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 15,283 | $285.8K | 0.0% | Added 15% |
| Millennium Management (Israel Englander) | 2026-06-30 | 13,980 | $263.4K | — | Sold out |