Kern County is located at the southern end of California’s great Central Valley and is the gateway to Southern California, the San Joaquin Valley and California’s High Desert. With a population of approximately 809,903, Kern is the third largest county in California with 8,073 square miles. The county is approximately 110 miles north of Southern California and 280 miles south of the San Francisco Bay area. Kern’s strategic location offers one day turnaround to 36 million people and provides direct access to the world’s sixth largest economy via Interstate 55 and Highway 99 north and south, highway 46 west to the coast and Highway 58 east to Interstate 15.
The most attractive features of living in Kern County include affordable housing, low-cost transportation, a wide range of household consumer goods and services, and easy access to both beaches and mountains. Kern County’s population is expected to exceed 1,088,600 people by the year 2020. As shown in the following table, Kern County was the third fastest growing county in California last year with 2.1% growth.
With an industrial base of 31.5 million sf (3.6 million sf at Tejon industrial Complex), a vacancy rate of 10.3% (7.8% net of Tejon), and an average price of $2.00- $5.00 per square foot for finished industrial zoned land, Kern has a more affordable commercial real estate environment than many other counties in the state of California. Potential benefits associated with available sites around Kern County include Class I rail service from both the Union Pacific and BNSF, intermodal service, Foreign Trade Zone status and three state Enterprise Zones.
Bakersfield is one of the fastest growing metropolitan areas in the western United States, growing over 18.5% over the last five years.
Bakersfield is located along California’s main transportation corridor between major population centers in Southern and Northern California, and is the hub for key freeways, including Interstate 5 and State Route 99, which run north and south, providing a major link to Los Angeles, Sacramento and San Francisco. State Routes 166, 46 and 58 also provide easy access to the Central Coast, as well as the mountain and desert regions to the west. Located in Bakersfield, the Meadows Field Airport serves more than 700,000 people in or near the Southern San Joaquin Valley.
Prior to 1985, the Bakersfield industrial market was driven by oil production, oil servicing, agricultural processing and support industries. Historically, these industries provided almost recession proof performance until the mid-80’s downturn. Local officials began working on attracting a more diversified local economy, starting with enticing Frito Lay to build a 250,000 square foot plant on 600 acres of rural land, west of Bakersfield. Today, Kern County is still the leading oil-producing county in the continental United States and among the top agricultural producers in the nation. The economy continues to become increasingly diverse and the location of choice for many companies due to accessible transportation, low labor and housing costs and quality of life.
Beginning in 2003, local residential growth began hyper-performing, with demand far exceeding supply. Population growth averaged 4% per year for the 2000’s, and metro Bakersfield today is 500,000, the nation’s 63’d most populous area. Housing values rose nearly 300% between 2003 through 2007, losing 60% between 2007 to 2009, and gaining 20% between mid-2009 to mid-2010.
Oil-related service and manufacturing/distribution now form a majority of the demand for industrial space. Bakersfield is also home to companies such as Chevron Texaco, State Farm Insurance, AERA Energy and Smith Barney. Industrial land, once abundant, is now scarce. The competition for land is now even tighter, fueled by the enormous residential growth. Some 7,000 acres of raw land has been acquired by residential developers in the last few years, making it difficult for industrial land developers to compete. We expect some of this land to be converted back to industrial given the current market weakness.