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| Brian Malliet |
NEWPORT BEACH, CA – BKM Capital Partners,
an institutional fund manager with a niche focus on value-add, light industrial
multi-tenant investments, has closed its strongest year yet with the
acquisition of three multi-tenant industrial portfolios, bringing the firm’s
total portfolio acquisitions in the past year to over $319 million spanning
2,000,000 square feet.
Just this week, the firm acquired a
two-property portfolio consisting of four buildings totaling 99,187 square feet
in San Diego, California.
“BKM is dominating
the light multi-tenant industrial market, and we are widely recognized as the
most active buyer of light multi-tenant industrial portfolios in the Western
U.S.,” says Brian Malliet, Co-Founder and CEO of BKM Capital Partners.
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| Brett Turner |
“By acquiring assets that have already been
assembled into portfolios, we are able to achieve geographic diversification
and scale in markets where we continue to see opportunity for value creation on
behalf of our investors.”
Most recently, the firm acquired
three light industrial multi-tenant portfolios encompassing more than 769,411
square feet for a combined total of $138.7 million. Each of these acquisitions
was acquired through BKM Industrial Value Fund II, L.P.
“We continue to focus on rapidly
acquiring well-positioned properties in strong growth markets, while
simultaneously ensuring that each acquisition is a precise fit with our niche
investment strategy,” says Malliet.
“Through that
strategy, we enhance value through extensive exterior capital improvements,
strategic interior unit sizing and cosmetic improvements, and deliver an
overall higher-end light industrial product for today’s new high-end
manufacturing and warehousing users.”
The firm’s three newly acquired
portfolios include:
$16.6 MILLION SAN DIEGO
PORTFOLIO
BKM Capital Partners has acquired a
two-property portfolio consisting of four buildings totaling 99,187 square feet
in San Diego, California.
“We were able to
acquire this portfolio below replacement cost and will be able to quickly drive
down operating costs by leveraging the economies of scale created by our
existing presence in the region,” says Turner who notes that BKM now
owns 854,440 square feet throughout San Diego.
The portfolio is currently 96
percent occupied with rents that range from 20 percent to 39 percent below
market rate.
“The near-full occupancy in this
portfolio provides immediate cash flow while also giving our team an
opportunity to bring rents up to market,” says Turner.
BKM plans to update both assets
with creative exterior façades, new paint, modern landscaping, and upgraded
tenant and monument signage, among other upgrades.
The properties are located at:
Del Abeto Commerce Center, 6352 and 6354 Corte del
Abeto, Carlsbad, California
Waples Industrial
Centre, 9540 and 9550
Waples Street, Sorrento Mesa, California
Mark Avilla at Cushman & Wakefield represented
the seller, 3G Properties. BKM represented itself in the
transaction.
$49 MILLION SOUTH BAY INDUSTRIAL
PORTFOLIO
BKM has also acquired the South Bay Portfolio,
which consists of five light industrial multi-tenant buildings totaling 221,651
square feet in Fremont, California.
Strategically located off Interstate 880, the assets provide excellent access
to East Bay markets to the north, San Jose to the south, and Palo Alto over the
Dumbarton Bridge to the west, according to Turner.
“Fremont has quickly emerged as the
manufacturing hub of the Bay Area, which will drive long-term demand for these
properties,” says Turner.
“Tenants are migrating to the region to take
advantage of comparatively lower rates while maintaining a strong connection to
the Silicon Valley and East Bay. This portfolio will benefit from the ongoing
migration and evolution of traditional manufacturing facilities.
"As
technological advances make the next wave of manufacturing more efficient,
tenants are requiring less space, therefore, driving demand for smaller, light
industrial multi-tenant assets.”
The property is
currently 94 percent occupied by a diverse range of 13 different tenants with
unit sizes ranging from 4,800 to 42,500 square feet.
 |
| Mark Avilla |
“The diversification
of tenants allows us to limit rollover exposure as no single tenant accounts
for more than 20 percent of the property,” says Turner.
“Rents across this portfolio are also
currently 20 percent below market value. We will be able to quickly bring rents
up to market as 50 percent of the leasable space expires within the first three
years.
"We will also be
able to capitalize on the increased rent growth throughout the region as more
than 9.0 million square feet of industrial has or is currently being purchased
and demolished by the tech giants such as Facebook, Apple, Google, and Amazon,
which are building campuses in the place of existing industrial product.
 |
| Mark Detmer |
" As a result,
vacancy throughout Fremont continues to tighten and there is very limited new
light industrial multi-tenant development planned over the next decade because
of the shortage of land.”
According to Turner,
BKM plans to implement new paint, landscape, signage and spec tenant
improvements to modernize the property, while also addressing deferred
maintenance.
The properties are located at
48430- 48490 Lakeview Blvd., 48500-48560 Fremont Blvd., 48400 Fremont Blvd.,
47745-47787 Fremont Blvd., and 47703-47737 Fremont Blvd. in Fremont,
California.
Eastdil Secured
represented the seller, Stockbridge. BKM represented itself in the transaction.
 |
| Bo Mills |
$73 MILLION WEST COAST INFILL
PORTFOLIO
BKM has acquired a portfolio of four properties
totaling 27 buildings and 448,573 square feet across California and Arizona.
“This was a rare opportunity to acquire a
highly functional, geographically diverse portfolio of scale well below
replacement cost and strategically positioned to perform over the next several
years,” explains Brett Turner, Managing Director of Acquisitions at BKM
Capital Partners.
“All assets in this portfolio are located in
top-performing industrial infill submarkets and alongside key transportation
corridors, making them attractive for last-mile delivery options and supporting
long-term tenant demand.”
The portfolio is currently 87
percent occupied with in-place rents 15 percent below market value. BKM plans
to implement a series of exterior and interior cosmetic improvements to the
properties including the addition of multi-tone paint, the modernization of
monument and tenant signage and landscaping, and addressing any structural
deferred maintenance.
“We will be able to quickly
stabilize the property by leasing remaining vacant space, as well as bringing
rents up to market,” says Turner. “By implementing a comprehensive capital
improvement plan, we will also be able to enhance the long-term value of the
assets and further attract high-quality tenants.”
In addition to these benefits, BKM
will also be able to increase cash flow by amassing economies of scale,
according to Turner.
“Each property
is located approximately five minutes from a BKM property management office,
which allows us to scale resources, ultimately driving down operating costs,
increasing NOI across the portfolio, and maximizing returns to our investors,”
he explains.
 |
| Ryan Sitov |
The four properties are located at:
Fullerton
Business Center, 4010-4080
North Palm Street in Fullerton, California.
Ramona Business
Center, 12901-13177
Ramona Boulevard in Irwindale, California.
Mowry Business
Center, 39975-38995
Cherry Street in Newark, California.
Baseline Business
Center, 230-245
Baseline Road in Tempe, Arizona.
Mark Detmer, Bo Mills, and Ryan
Sitov at JLL represented the
seller, Global Logistics Properties (GLP). BKM represented itself in the
transaction.
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| Nima Taghavi |
BKM Capital Partners, currently
raising their second institutional fund, was founded in 2013 by
Brian
Malliet and Nima Taghavi.
Headquartered in Newport Beach, California, BKM
Capital Partners is a fund manager specializing in the acquisition and
improvement of value-add light industrial multi-tenant properties in metro
areas across the Western U.S.
Contacts:
Alex Caswell/Lexi Astfalk
Brower Group
(949) 955-7940
