WESTERN SNAPSHOT, JULY 2004

Bakersfield, California Office Market

Graham Harrison Senior Associate NAI Capital

Growth is occurring in all corners of the Bakersfield, California, office market, but the southwest and northwest areas in particular are the ones to watch, says Graham Harrison, senior associate at NAI Capital. “The southwest submarket continues to be Bakersfield’s prime business district,” he says. “Making up 63 percent of our total [office] market, it is located in the center of the city’s population and is home to many of Bakersfield’s insurance and financial services, real estate brokerages, and oil companies.”

Expansion of the approximately 258,000-square-foot University Centre in the southwest submarket will no doubt attract more large corporations looking for new office space. Although plans are not finalized, there are 14 acres of available land near the office park. The Crossings at Riverwalk, a Castle & Cooke mixed-use development, will contribute more vibrance and 137,000 square feet of upscale office space to the area when it opens in the fall.

Bakersfield’s northwest office submarket continues to grow, particularly the Coffee Road corridor, as the area has lots of developable land — with more of it being rezoned for commercial uses. M.S. Walker & Associates is developing the 42,600-square-foot Riverlakes Professional Plaza. Also, Greg D. Bynum & Associates is developing Granite Falls, a 14-acre owner/user office park.

The government tenants, law firms and medical offices in Bakersfield’s central business district have helped to keep that submarket stable. In the southwest sector, the recently renovated 80,000-square-foot California Plaza now offers Class A improvements including upgraded suites with glass conference room walls and granite reception counters.

About 8 percent of Bakersfield’s 7.2 million square feet of office space is vacant. Class A rental rates in the city range from $1.45 to $2.15 per square foot.

Harrison reports that Bakersfield’s northeast office submarket, in addition to the west side, offers available land for office development. Long Beach, California-based The Abbey Company has a significant office presence in the city but most of the new projects are being done by regional and local developers.

In Bakersfield’s office leasing market, State Farm Insurance currently occupies 575,000 square feet of space. “The company has more than 1,000 employees with plans to relocate and hire an additional 1,200 employees,” says Harrison. Chevron Corporation has leased 145,000 square feet at University Centre in the southwest sector.

“The Bakersfield office market is stable and growth continues to be non-industry specific,” says Harrison. “Our local economy is strong and continues to be strengthened by the low cost of living and low cost of real estate.”

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