Published: 22 February 2016
By: Meghan Morris
The Irvine-California based firm originally targeted $200 million for the value-add vehicle.
BKM Capital Partners has held a final close for its debut fund with $105 million in commitments, the firm said Friday.
The Irvine, California-based firm originally targeted $200 million for BKM Industrial Value Fund I, an industrial-focused, value-add vehicle. BKM closed a family and friends round of financing in June 2014 and started institutional fundraising in January 2015. Brian Malliet, the firm’s co-founder, said BKM decided to close its debut fund before it hit its target so that the firm could begin investing.
“As we nurtured continued interest in the fund, we identified strong investors and made the strategic choice to close at $105 million, giving us $300 million in buying power to invest immediately in order to take advantage of a growing pipeline of prime investment opportunities,” the chief executive officer told PERE.
BKM has already invested about 50 percent of the fund’s equity, starting with capital raised in the family and friends round to buy about $100 million of properties. The firm is targeting multi-tenant industrial properties throughout the western US, focusing on markets such as Washington, Oregon and California. BKM plans to renovate and reposition the property to bring in new tenants, the firm said in a statement. It is seeking a 15 percent net internal rate of return for the fund.
The firm is planning to launch its second fund when the debut vehicle is 75 percent invested, “or when we see extraordinary investment opportunities that fit our strategy,” Malliet told PERE. He said BKM is planning to be three-quarters invested in the second or third quarter of this year.
BKM most recently purchased an industrial asset in Tempe, Arizona. The firm bought a 98,000 square foot property for $8.9 million last month, according to real estate data provider Real Capital Analytics.