Luxury apartments could be coming to Bakersfield | News
Bakersfield may soon have some of the fanciest apartments the city has ever seen.
Institutional investors lured by the city’s booming rental market plan to build at least two rental communities with high-end amenities such as resort-style gymnasiums and massive swimming pools in the northwest or southwest of Bakersfield, said multifamily residential broker Marc Thurston with ASU Commercial.
“We’ve had smaller versions of it here in Bakersfield, but I don’t know if we’ve had it that bad,” he said, declining to divulge the names of the hedge fund-type investors behind the projects. .
The good news is that while similarly equipped rental communities cost between $3,200 and $3,400 a month in places like Irvine, Thurston added, in Bakersfield, they probably won’t cost more than about $2,500 a month when they’re introduced — and they’ll offer more interior space per unit than comparable apartments in Southern California.
Institutional investors of the kind Thurston speaks of have only recently entered the Central Valley rental housing market. He said the couple who recently secured property in Bakersfield for the apartment development did so after being unable to find suitable complexes for sale locally.
Those investors were drawn by the area’s open economy, low vacancies and rents that recently topped $2,000 a month, Thurston said. They are likely to find tenants among local medical professionals, engineers and young lawyers, he added.
In recent years, the quality of Bakersfield’s rental communities has increased as the city has attracted more people from big cities used to writing larger rent checks.
Sage Equities’ 44-unit 17th Place Townhomes, the downtown’s first market-priced rental complex in many years, has attracted young professionals, many from outside the area. The local developer has since begun construction on an equally upscale 53-unit townhouse project nearby.
Sage director Anna Smith said via email that the interest from institutional investors validates the stability of the local rental market. She noted that her company has seen increased demand among professionals during the pandemic.
Fuller Apartment Homes, meanwhile, moved forward with Bolthouse Properties on Park West at Stockdale River Ranch, a 312-unit luxury rental housing complex at Heath Road and Stockdale Highway in southwest Bakersfield.
Manager Andrew Fuller said by email that it’s not uncommon for outside developers to enter the local market near the peak of a property cycle. He questioned the notion that rents will continue to grow at the high rate of recent years, adding that he feels rents are “at or near (their ceiling) for this cycle”.
He added that Park West employs the services of a major national luxury design firm and that the community’s amenity package “is on par with what you would find in any major suburban market.”
Thurston, who has documented unprecedented tension in the local market with reports showing citywide vacancies recently hovering around 1%, said the projects he plans to develop over the next two years are “a cut above” even the amenities of Park West.
The level of luxury on offer is akin to big city rental communities where developers try to outdo the amenities of their neighbors.
“It’s almost an escalating arms race to try to compete and attract these kinds of (well-heeled) tenants,” Thurston said.
He agreed Bakersfield tenants would pay so little, but he said monthly prices above $2,000 might not be out of the question.
Ian Williams Sharples, board member of the Income Property Association of Kern, said by email he was seeing signs rental demand remained strong locally and any new product would only help.
“Adding supply, even at the ultra-high (end), helps alleviate existing pressures on tenants as they will have more housing options,” Sharples wrote. “However, we still need to find ways to make affordable housing development more viable.”