BKM Capital Partners Launches Second Value Add – Institutional Fund; Targets $300 Million In Equity
ORANGE COUNTY, Calif., (February 6, 2017) – BKM Capital Partners, an institutional fund manager with a niche focus on value-add, multi-tenant light industrial and small and mid-bay industrial warehouse, has launched its second institutional fund, BKM Industrial Value Fund II, L.P., which will target $300 million in equity commitments, delivering $850 million in buying power.
The fund, which will invest in the acquisition, improvement and repositioning of undervalued multi-tenant light industrial business parks in markets across the Western U.S., comes on the heels of the closing of BKM’s debut fund for which the firm raised more than $105 million in fund equity and $30 million in co-investment equity for a total of $135 million.
BKM Capital Partners was founded in 2013 by Brian Malliet and Nima Taghavi who both have 25+ year resumes in the commercial real estate world. “There is a disconnect in the market in our niche asset class that has allowed us to consistently acquire these properties at a significant discount to replacement cost and peak pricing,” says Brian Malliet, CEO and Co-Founder of BKM Capital Partners. “We have a deep pipeline of opportunities, which is why we have more than doubled our target equity goal for Fund II.”
BKM Capital Partners has already closed more than $340 million in transactions, recently bringing its first three Fund I assets full cycle, achieving IRRs above 38-percent on each asset and multiples ranging from 2.0-2.5.
“The key to our platform’s success is our specific focus on multi-tenant light industrial assets, a strict underwriting discipline with a meaningful amount of margin of safety in all of our assumptions and an intensely hands on approach with our asset management and property management,” explains Nima Taghavi, Executive Chairman of BKM Capital Partners. Taghavi notes that BKM Industrial Value Fund II will follow a similar strategy, targeting assets that provide a significant opportunity for value creation over the fund’s five-year term.
BKM targets distressed assets that can be renovated, repositioned, and re-tenanted to drive maximum value. The BKM team is comprised of professionals with long careers in this product type focused on performance and strong yields for our investors.
BKM is unique in its ability to recognize value where others cannot, according to Malliet, who notes that this characteristic gives BKM insight to a deep pipeline of opportunities and an advantage over competitors.
“As specialized operators, we understand what works in these properties, and we know exactly how to execute,” says Malliet. “Further, our deep broker relationships enable us to review off-market properties regularly, giving us the ability to create significant value by acquiring assets well below replacement cost and peak pricing.”
BKM’s current portfolio encompasses 18 properties in 4 states including assets in Las Vegas, Seattle, Oregon, and Phoenix, among others. The firm plans to continue to grow its portfolio in the Western U.S.
As part of this continued growth of offices in Seattle, Phoenix, Las Vegas, and California, BKM Capital Partners has also relocated its headquarters to a recently renovated creative office building in Newport Beach, California. Previously located in Irvine, the firm will now be headquartered at 1701 Quail Street, Suite 100, Newport Beach, California 92660. For BKM, the new office space means improved client service, new amenities for employees and room for growth.
BKM has nearly tripled in size in the past year. BKM’s new offices are an open, collaborative space allowing for a better work environment for current and future staff.