The California South/Central market comprises 424 hotel properties, which contain around 28,000 total rooms. Smaller hotels typify the area: The average building has around 66 rooms, easily below the 89-room-per-building U.S. average.


While lodging at the highest end (the Luxury or Upper Upscale classes) is slightly less common here than in the average U.S. market, the distribution of hotel classes is otherwise normal.


In the past 12 months, occupancy has averaged 61.4%—a level not that far off its recent lows. However, California South/Central escaped the worst of COVID-19's impact on the hospitality sector. Here, annualized occupancy dropped to a relatively high 53.1% in during the first wave of the pandemic. Its subsequent recovery has been proportionally smaller than most metros partially due to the fact that it did not decline that much in the first place.


As of November, 12-month average RevPAR in the California South/Central hotel market was climbing at an annual rate of 1.7%. That's in the green, if somewhat below the 5.6% increase observed nationally.


There are about 1,400 rooms underway in the California South/Central market, the largest under-construction pipeline in more than a decade. This extends a stretch of new development in the market, which saw 9 projects containing around 940 rooms deliver in the past three years. That development was partially offset by a number of demolitions, which took around 410 rooms off line over the same timeframe.


California South/Central has an active investment market, but recorded far fewer trades in the past 12 months than it has in recent years. That's consistent with a decrease in hotel investment playing out nationally.


​Employment in the market was recently increasing at an annual rate of 1.1%, or a gain of about 10,000 jobs. While a positive result, this does represent the weakest rate of job creation in the past 12 months, which at one point was as high as 2.9%.

Source: Costar

Vacancy in the Bakersfield retail market is 4.5% and has decreased 0.4% over the past 12 months. During this period, 200,000 SF has been removed from inventory, and there has been 63,000 SF of negative absorption. Total availability, which includes sublease space, is 4.9% of all inventory.


Within this market, General Retail is the largest subtype, with 18.4 million SF in this category.


Rents are around $19.40/SF, which is a 3.9% increase from where they were a year ago. In the past three years, rents have increased a cumulative 12.2%.


About 140,000 SF is under construction, representing a minor 0.4% expansion of inventory. In the past 12 months, 104 sales have taken place. Sales have averaged $171/SF, and the estimated value for the market as a whole is $220/SF.


Over the past three years, there have been 433 sales, which have traded for approximately $657 million. During this time, the market cap rate for Bakersfield has edged down to 6.5%, marginally lower than its trailing three-year average of 6.6%.


​Employment and population trends are uneven. The number of jobs has increased 1.5% in the past year, whereas population growth is nearly flat, having moved just 0.1%.

Source: Costar

The Bakersfield office market has a vacancy rate of 9.0%. This vacancy rate is 0.7% higher than it was this time last year. This increase in vacancy occurred because there was 94,000 SF of negative absorption and 17,000 SF of net deliveries.


Rents have increased 0.9% in the past 12 months and are currently around $23.00/SF. Roughly 4,400 SF is under construction in the Bakersfield office market. In the past year, there have been 68 sales, which have traded for approximately $68.9 million in volume and 470,000 SF in stock.


Vacancy is 13.5% in 4 & 5 Star buildings, and 27,000 SF has been absorbed in this asset class over the past year. Within 3 Star buildings, vacancy is 8.7% and there has been 150,000 SF of negative absorption. Currently, 8.4% of 1 & 2 Star space is vacant, and 28,000 SF has been absorbed in this space type over the past 12 months.


Rents are around $26.00/SF in 4 & 5 Star buildings, $27.00/SF in 3 Star buildings, and $19.10/SF in 1 & 2 Star buildings. Year-over-year rent growth was flat in 4 & 5 Star buildings, 2.1% in 3 Star buildings, and -0.6% in 1 & 2 Star buildings.


Of the 68 sales in the past year, one was of a 4 & 5 Star building, 17 were of 3 Star buildings, and 50 were of 1 & 2 Star buildings. Current vacancy is higher than its trailing three-year average of 8.5%. However, this figure is lower than the national trailing three-year average of 12.4%. The market is approximately 210,000 SF larger than it was three years ago, which is solely the result of construction as there has not been any demolitions. Rents have increased 11.6% over the past three years, higher than the national average of 2.5%. There have been 239 sales over the past three years, amounting to $313 million in volume and 2.0 million SF of inventory.


CoStar's estimated cap rate for Bakersfield has averaged 9.0% over the past three years, which is lower than the current estimated cap rate of 9.2%.


​The total Bakersfield office market comprises 16.2 million SF of inventory.


Source: Costar