Real Estate

Vacancy declined further in 2018, to 3.1%, from 5.5% in 2017. Average achieved rents increased from $0.46 psf (gross) in 2017 to $0.54 psf—an increase of 17%. Rents across all size ranges rose in 2018. Average achieved sale prices also increased, from $63.35 psf in 2017 to $84.28 psf—a 33% increase.

225 sale or lease transactions were completed in 2018, up from 208 in 2017 and 175 in 2016. New construction has not kept up with demand; hence, the lower vacancy rate. Two new business parks started construction in 2018 and will be delivered in 2019—Landings Logistics Center (138 acres) and Silver Wings Commerce Center (94 acres). These straddle Merle Haggard Drive adjacent to Meadows Field Airport. A 2.8 million sf fulfillment center anchors the Landings project, starting construction in 4Q18.

Our two main logistics parks—Wonderful Industrial Park (1,178 acres) and Tejon Ranch Commerce Center (1,400 acres) were both active with new construction in 2018. Wonderful completed construction of a 1.0 million sf spec building, promptly leasing it to Ross Dress For Less. Wonderful is now spec’ing another 1.0 million sf. Walmart also began construction on 600,000sf that will be completed in 2019. Majestic Realty completed and leased a 480,000sf spec warehouse in Tejon Ranch Commerce Center in 2018 and is entering 2019 under construction on a 579,040sf spec warehouse.

There are now some 50 DC’s or FC’s operating in the greater Bakersfield market. Other logistics users canvased the market in 2018 for availability, which should lead to more announcements in 2019.

Overall, the market absorbed 2.75 million sf of leased space in 2018 (up from 1.625 million sf in 2017), spread over 184 transactions (156 in 2017) for an average size of 14,972 sf (10,422sf in 2017). 863,000 sf sold in 2018 (1.125 million sf in 2017), comprised of 41 transactions (52 in 2017), averaging 21,047 sf (21,639sf in 2017).

What’s coming?

2018’s performance is expected to continue through 2019. We open 2019 with an identical number of requirements as we did in 2018.The continued strong national and local economies will be reflected in the Bakersfield market with continued new investment and growth of existing industries.

Kern County Real EstateBrokerage houses that specialize in business

 

 


Industrial Market

Q4 2016 Q4 2017 Q4 2018 Y-o-Y Change 12 Month Forecast
Vacancy 5.6% 5.5% 5.6% -2.3   ▲
Rents $0.64 $0.46 $0.64 +8.0  ▲


Overall Rental VS. Vacancy Rates (2007 – 2018)

Overall Occupier Activity (2008 – 2018)

 


Office Market

 

Q4 2017

Q4 2018

Y-O-Y Change

12 Month Forecast

Overall Vacancy(Office)

13.1%

13.2%

0.1%

   ▲

*Weighted Asking Rent spsf/month (Office)

$30.59

$31.45

2.2%

                   ▲
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 2018

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 2018

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