BKM Capital Partners picked up four industrial business parks encompassing 442.2k sf in the Phoenix metro area for a combined price of $34.45 mil ($78/sf). The firm, which recently announced the final close of its debut institutional fund, BKM Industrial Value Fund I L.P., now has more than $150 mil in assets under management.
BKM most recent purchases include the Rose Garden Business Park, Metro Industrial Center, and 4100 Broadway in Phoenix, as well as the Arizona Corporate Center in Chandler, AZ. BKM acquired the four assets in a portfolio transaction from a private Los Angeles-based owner. With these acquisitions, the firm now has nearly 1 msf under management in the Phoenix market.
The combined occupancy of the four assets BKM acquired is 69 percent, providing the firm with a strong opportunity for value creation. BKM plans to implement significant interior and exterior improvements to attract new tenants and retain existing tenants, ultimately pushing rents up to market rate. Planned upgrades include new landscaping, paint, signage, roof, HVAC and asphalt updates as needed.
“Arizona ranked as the number one state for future job growth by Forbes last year and Phoenix is at the center of that. The growing population of residents and employers indicate an opportunity for active value creation over the next two to three years,” notes Brian Malliet, CEO and Co-Founder of BKM Capital Partners. “We were able to acquire the assets well below replacement costs and below historical peak pricing. Moving forward, we will use our operator model to turn each asset around, stabilize it and bring in strong returns upon stabilization.