Investment Overview

Marcus & Millichap is pleased to present 2700 White Lane, a 149-unit studio apartment community situated at the Highway 99 interchange in Southwest Bakersfield’s Wible Orchard neighborhood. Originally constructed in 1965 as a Howard Johnson hotel, the property has been converted to multifamily use under Conditional Use Permit 23-0642, approved by the Bakersfield Planning Commission on February 29, 2024. The asset is being offered as a court-supervised sale through a receivership, presenting a compelling and heavy value-add opportunity with a defined scope of remaining work, strong rental comparables, and deep Section 8 demand. The two-story, L-shaped property encompasses approximately 59,600 square feet of building area across 149 studio units averaging approximately 400 square feet each, with kitchenettes in a hotel-conversion format. The site benefits from exceptional freeway visibility—Highway 99 carries more than 170,000 vehicles per day—and direct access from White Lane, one of Southwest Bakersfield’s primary east-west arterials. The immediate area is characterized by working-class residential neighborhoods and commercial corridors, with Valley Plaza Mall approximately two miles east and Downtown Bakersfield approximately five miles northeast. The property currently operates at 65.1 percent occupancy, with 97 units leased and 52 vacant. Approximately 40 percent of occupied units are leased to Section 8 voucher holders, and the Bakersfield Housing Authority has approved contract rents at this address ranging from $975 to $1,095 per month. This voucher concentration represents a strategic asset: Section 8 demand in the Southwest Bakersfield submarket is strong, providing a reliable tenant pipeline once the property achieves full CUP compliance and professional stabilization. Market rent support is anchored by Ming Tree Apartments at 5601 Ming Avenue, which achieves $1,075 per month for studios 2.5 miles from the subject on a comparable commercial corridor. This figure represents current achievable market rent, not a projection. Same-ZIP-code comparables in the 93304 area average $1,057 per month unadjusted, while the broader Southwest Bakersfield studio market (93309) averages $1,046 per month adjusted. A stabilized rent assumption of $1,075 per month is conservative relative to these benchmarks and falls $20 below the maximum Section 8-approved contract rent at the property. The single most significant risk mitigant in this transaction is that the remaining scope of work is defined and permitted. Fire sprinklers and alarm systems have been completed in accordance with the CUP, representing substantial life-safety capital already invested. The remaining CUP compliance items—five 8-by-20-foot masonry trash enclosures, six ADA parking stalls and path of travel, Los Carneros and White Lane sidewalk replacement, drive approaches and management signage, parking lot slurry seal and restripe, streetlight installation, landscaping, and perimeter security fence and gates—are specified in both the CUP punch list and a Patterson & Sons Construction estimate totaling approximately $745,000 for base construction (plans and permits excluded). Including permits, engineering, security fence, and contingency, buyers should underwrite $1.0 million to $1.3 million in total construction and soft costs. CUP-mandated impact fees— including a Park Development Fee of $312,155, plus Transportation Impact and Sewer Connection fees—are separate and typically addressed at closing through buyer responsibility, seller credit, or negotiated split. Sale comparable support is provided by Park Villa Apartments at 1405 White Lane, which sold in December 2025 for $18.6 million at a 7.00 percent cap rate per CoStar. Additional context includes The New Yorker at 1906 18th Street, a 57 percent-studio property that traded in August 2025 at 8.15 percent cap, and Chateau Villa at 420-426 Real Road in the Wible Orchard submarket, which sold in November 2025 at 8.04 percent cap. Studio and hotel-conversion product typically commands a 75 to 100 basis point premium to conventional apartment cap rates due to higher turnover and management intensity. These transactions confirm active investor demand for multifamily products in the Bakersfield market and provide context for buyer underwriting. With its 149-unit scale, approved entitlement, completed fire systems, defined construction scope, strong rent comparables, deep Section 8 demand pipeline, and same-street sale comp validation, 2700 White Lane presents a rare heavy value-add opportunity for experienced operators, 1031 exchange buyers seeking tax-advantaged deployment, Section 8-focused investors comfortable with the tenant profile, and regional funds targeting Central Valley workforce housing.