SAN DIEGO, Calif., (March 1, 2018) – BKM Capital Partners, an institutional fund manager with a niche focus on value-add, multi-tenant light industrial investments, has acquired Activity Business Center, a 160,943 square-foot, five-building multi-tenant light industrial property in the Miramar submarket of San Diego, California. The industrial complex was acquired for $28.1 million.
Activity Business Center
“Miramar is one of the highest performing industrial markets in all of San Diego,” says Brian Malliet, CEO and Co-founder of BKM Capital Partners. “The submarket currently outperforms many of the county’s industrial hubs, with an average industrial occupancy of 97.1 percent. This acquisition was an opportunity to acquire a high-quality multi-tenant industrial asset in an exceptionally strong market at competitive cost.”
BKM acquired the industrial complex approximately 39-percent below its replacement cost, according to Malliet.
“Our ability to source, acquire, and profitably operate light multi-tenant industrial product in markets across the western U.S. is what sets our firm apart,” explains Malliet. “We benefit from deep broker relationships and a heightened understanding of this sector, which creates opportunities to identify assets in strong markets below peak prices and create significant value for our investors.”
Activity Business Center is currently 92.6 percent occupied with a diverse range of 38 different tenants. Average unit sizes are approximately 3,743 square feet, according to Brett Turner, BKM’s Director of Acquisitions.
“The property’s diversified tenant base and unit size will limit tenant rollover exposure by a single tenant,” explains Turner. “Based on the tightening Miramar market, we will also be able to quickly lease up remaining vacant space and grow rents over time. The in-place rents at the property are approximately 10-percent below market value, which will allow us to strategically increase NOI over the next few years.”
BKM Capital Partners plans to rebrand the multi-tenant industrial complex and implement a series of renovations including upgrades to the parking lot, exterior paint, landscaping, monument signage, lobby and the addition of a new outdoor common area.
“The seller initially acquired the property in 2015 and completed a series of cosmetic improvements,” says Turner. “We will capitalize on these upgrades, while creating deeper value by rebranding the asset and further modernizing the property to appeal to the region’s growing quality tenant base.”
Turner adds, “Through our integrated property management approach and extensive expertise in the light multi-tenant industrial niche, we will also be able to immediately fix any operational inefficiencies, which will quickly drive increased cash flow for the asset and maximize long-term value for investors.”
Centrally located in close proximity to San Diego’s key transportation corridors including the I-15 freeway, SR-163, SR-52 and the I-805, Activity Business Center is located at 9235-9265 Activity Road and 9520-9530 Padgett Street in San Diego, California.
Cushman and Wakefield represented Lincoln Property Company as the seller in this transaction. BKM Capital Partners was not represented.
About BKM Capital Partners
BKM Capital Partners was founded in 2013 by Brian Malliet and Nima Taghavi. Headquartered in Newport Beach, California, BKM Capital Partners is a fund manager specializing in the acquisition and improvement of value-add multi-tenant industrial properties in metro areas across the Western U.S. Combining a deep knowledge of this niche industrial product type with an operator platform that includes in-house capabilities including on-site property management, asset management, and construction management, the firm continues to build on its proven track record, generating strong results with high levels of transparency and engagement for investors. Additional information is available at www.bkmcapitalpartners.com.