BKM Capital Partners Kicks Off 2020 With Major Deal
The firm acquired an 11-property industrial portfolio throughout Western states for $425 million.
“BKM’s expertise is in acquiring and improving value-add multi-tenant light industrial properties in key markets throughout the western U.S., and we actively invest in Phoenix, Northern and Southern California, and Portland,” Brett Turner, managing director of acquisitions at BKM Capital Partners, tells GlobeSt.com. “Each property in this newly acquired portfolio is within our targeted markets, a product-type fit, and within our targeted return profile for our investors; therefore, these assets were complementary to our existing portfolio.”
BKM purchased the portfolio through its Industrial Value Fund II and through its partnership with Canyon Catalyst Fund. “We acquired eight of the properties through our BKM Industrial Value Fund II and three of the properties in partnership with Canyon Catalyst Fund, which is Canyon Partners’ real estate emerging manager program managed on behalf of the California Public Employees’ Retirement System,” says Turner. “This funding structure was mutually beneficial for our firm and CalPERS.”
In its standard business strategy, BKM plans to add value to the portfolio through a capital improvement program. “We will use our in-house capabilities and resources to reposition and rebrand the properties as necessary, performing cosmetic and structural upgrades to maximize the assets’ appeal to smaller industrial users in these regions,” says Turner. “For some of the properties, we will achieve this added value through cosmetic upgrades such as paint, landscaping, and signage in order to complete lease-up and align rental rates with the market. Other assets may require more extensive redevelopment efforts to achieve maximum value in their respective areas.”
The industrial sector is the current darling of the commercial real estate market, and this portfolio was a major opportunity to secure market share in popular markets. “These are highly desirable properties in key western markets. Multi-tenant industrial assets as a whole are an attractive investment category to both institutional and private ownership,” says Turner. “That said, the category is highly management intensive, and BKM is uniquely positioned to add value to the assets with onsite property management and leasing professionals.”
This year, BKM plans to remain an active buyer in this core strategy. “We will continue to identify and acquire well-located assets in strong growth markets that align with our investment thesis and implement capital improvements at the property and tenant level as necessary,” says Turner. “We are specialized in this multi-tenant light industrial product, and will continue to look for assets in this product type throughout the Western U.S. to which we can create value through our vertically integrated operator platform.”