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| Backlot Burbank industrial business park, Burbank, CA |
BURBANK, CA – BKM Capital Partners,
an institutional fund manager with a niche focus on value-add, multi-tenant
light industrial investments, has acquired Backlot Burbank, a 12-building,
302,869 square-foot industrial business park in the Los Angeles submarket of
Burbank, California. The firm acquired the property for $84.75 million.
Located between the I-5 and SR-170 freeways, and directly adjacent to the
Hollywood/Burbank Airport, this is one of the only business park assets in
Burbank, according to BKM Capital Partner’s CEO and Co-Founder, Brian
Malliet.
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| Brian Malliet |
“We continue to acquire value-add multi-tenant industrial properties in markets
that are strongly positioned to perform over time,” says Malliet. “Burbank has
a very limited industrial supply, and is the entertainment production epicenter
for broadcasting and radio. It is home to major entertainment powerhouses
including Warner Bros and Walt Disney.”
In fact, the Greater Los Angeles market boasts the world’s 20th largest
economy with over $600 billion in GDP, predominately from the entertainment
sector.
“Burbank is the perfect perennial location for tenants servicing
the entertainment industry due to increasing traffic throughout Los Angeles,”
says Malliet. “The Backlot Burbank industrial park provides convenient access
to Hollywood and downtown Los Angeles, as well as Westside Los Angeles and its
surrounding commercial districts.
"The asset will continue to benefit from the
ongoing growth in Hollywood and DTLA that is pushing north towards Burbank.”
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| Brett Turner |
The
industrial business park is currently 100-percent occupied by a diverse range
of 16 different tenants with unit sizes ranging from 6,000 to 100,217 square
feet with the average unit size of approximately 18,292 square feet.
“The fact that the asset is fully-leased will provide immediate stabilized cash
flow, allowing us to simultaneously enhance value for investors through our
comprehensive value-add approach,” says Malliet. “In addition, the
diversification among tenants and the staggered rent roll will limit tenant
rollover exposure compared to single-tenant industrial properties where
rollover exposure is much greater.”
BKM Capital Partners plans to implement a series of capital
improvements to the property including new roofs, paint, and tenant and
monument signage, among other upgrades.
“We focus on highly functional assets with strong upside
potential,” says Brett Turner, Director of Acquisitions at BKM Capital
Partners.
“We were able to acquire this asset at a discount to its replacement
cost, and will be able to significantly enhance property value through our
comprehensive capital improvement plan and integrated property management
platform.”
By repositioning the asset and integrating a series of upgrades,
BKM will also be able to steadily grow rents, according to Turner.
“In-place rents at the property are currently 22-percent below
market,” explains Turner. “We plan to bring rents up to market as leases roll
as well as capitalize on the ongoing rent appreciation throughout the region by
strategically positioning the property as a flagship asset. This will allow us
to significantly increase NOI and maximize returns to investors.”
The property is located at 4100-4210 W. Vanowen Place; 2303-2333 N. Valley
Street, 4400-4510 W. Vanowen Street in Burbank, California. CBRE represented
the seller, a joint-venture between Shubin Nadal Associates and Penwood
Real Estate Investment Management, LLC, through its fourth value-added
investment vehicle, Penwood Select Industrial Partners IV, L.P.
For more information, please contact:
Alex Caswell/Lexi Astfalk
Brower Group
(949) 955-7940
