Real Estate

Bakersfield’s overall economy has been negatively affected by the continuing oil recession, but not to the degree experienced during previous oil recessions, owing to our growing diversification. During the 3-year run-up to oil’s last peak value in July 2014, the Bakersfield MSA averaged 1.7 million sf of industrial building absorption per year. Since then, it has been averaging 1.9 million sf of absorption, including 1.56 million in 2016. Bakersfield stood at a 3.7% vacancy rate at the end of 2015; rising to 5.6% in 2016—but still lower than year-end 2014, when it stood at 6.9%.

 

The most notable change over the last couple of years is the demand profile. During the oil run-up, 42% of the market’s deals were oil-related, and construction uses accounted for 26%
of the deals. Over the last two years, oil accounted for only 19% of the deals, while construction and transportation contributed 33% each. Another noticeable difference is the number of deals
in the “other” category (like fitness clubs and churches), which doubled.

Sale prices are more than holding up, with brokers having  experienced record-breaking numbers. Lease rates, on the other hand have flattened or even declined in some areas, which last year’s report projected.

What’s coming?

The airport area is becoming ground-zero for industrial growth in the metro area, while the big logistics users will go to either Paramount Logistics Park or Tejon Ranch Commerce Center. The corridor between Hwy 99 and Airport Drive has two 100+ acre developments under way—the 138-acre Landings Logistics Center across the street from our airport, and an as-yet unnamed 114-acre development next door to the airport. Another 117-acre site is also available for sale.

Kern County Real EstateBrokerage houses that specialize in business

 

 


Industrial Market

Q4 2014 Q4 2015 Q4 2016 Y-o-Y Change 12 Month Forecast
Vacancy 6.9% 3.7% 5.6% +1.9%pp
Rents $0.54 $0.71 $0.64 -$0.13


Overall Rental VS. Vacancy Rates (2006 – 2016)

Overall Occupier Activity (2008 – 2016)

 


Office Market

 

Q4 2015

Q4 2016

Y-O-Y Change

12 Month Forecast

Overall Vacancy(Office)

8.3%

8.4%

1.0%

*Average Asking Rent spsf/month (Office)

$1.57

$1.60

1.03%

Overall Vacancy(Medical)

10%

9%

1.0%

*Average Asking Rent spsf/month (Medical)

$1.78

$1.76

0%

*All average asking rents have been broken down into a Modified Gross basis whereas Tenant pays for their own utilities & janitorial services.

Source: Cushman & Wakefield, Paccom Realty Advisors, Inc.

For a more detailed report, please click the following:  4Q 2016 – Bakersfield Office Market Report


 Central Valley Real Estate Benchmark

Paramount-Logistics-Park-Ariel-Shot

California’s Central Valley continued to experience a resurgence of growth in its commercial and industrial sectors in 2015 with the upward trend expected to continue throughout 2016.

Industrial Base and Vacancy 2016

Area

Base

Vacancy (sf)

Vacancy Rate

Kern

36,685,264

1,472,399

3.7%

Fresno

70,250,104

3,496,443

4.9%

Kings

6,866,222

2,154,000

31%

Madera

6,945,394

22,794

.03%

Merced

19,721,958

902,560

8%

San Joaquin

109,111,000

5,237,000

4.8%

Tulare

30,400,000

2,991,038

9.8%

 

Industrial Prices 2016

Area

Price/sf

Sales Price/sf

$28-85/sf*

Kern

$.27 -.37 NNN

Fresno

$.20 -.41 NNN

Kings

$.12-.16 NNN

Madera

$.38-.45 NNN

Merced

$.16-.34 NNN

San Joaquin

$.25-.32 NNN

Tulare

$.25-.30 NNN

Source: Local Realtors & California Central Valley EDC *depends on amenities