April 9, 2018 – BKM Capital Partners, an institutional fund manager with a niche focus on value-add, multi-tenant light industrial investments, has acquired Expo Centre, a 122,253 square-foot multi-tenant industrial business park near Cal Expo and Downtown Sacramento for $10.1 million.
The seven-building industrial park was acquired off-market and is located in one of the tightest industrial metro markets in all of Sacramento, according to Brian Malliet, CEO and Co-Founder of BKM Capital Partners.
“THIS ACQUISITION REPRESENTS OUR ENTRY INTO THE SACRAMENTO MARKET, AND IS LOCATED IN AN A+ INFILL LOCATION IN AN EXTREMELY DYNAMIC INDUSTRIAL SUBMARKET,” SAYS MALLIET. “THE EAST SACRAMENTO MARKET CURRENTLY HAS AN INDUSTRIAL OCCUPANCY OF APPROXIMATELY 96-PERCENT. THIS IS DEMONSTRATIVE OF THE SIGNIFICANT DEMAND THROUGHOUT THE REGION, WHICH WILL ALLOW US TO STRATEGICALLY POSITION THE ASSET FOR LONG-TERM GROWTH AND GARNER INTEREST FROM QUALITY TENANTS OVER THE NEXT SEVERAL YEARS.”
Located less than four miles from downtown Sacramento, Expo Centre is currently 81-percent leased with in-place rental rates at approximately 18-percent below market value.
“Through our integrated property management approach, we will be able to share resources with our newly acquired property in Fremont, and quickly lease remaining vacant space, bring rents up to market value, and improve operational inefficiencies,” explains Malliet. “This will quickly increase NOI and cash flow for the asset. The diverse portfolio of 32 different tenants across a variety of industries currently at the property also provides limited tenant rollover exposure.”
BKM Capital Partners plans to implement a series of capital improvements to reposition the property as the market leader in terms of functionality and aesthetic, according to BKM’s Director of Acquisitions, Brett Turner.
“We always look for properties where there are opportunities for significant value creation,” says Turner.
“This is a quality asset in a prime location, but is lacking in terms of needed cosmetic improvements and modernization. We plan to update the property with new paint, landscaping, and signage, among other improvements.”
Turner explains, “These capital upgrades will enhance the overall value of the asset, as well as maximize returns to investors and rent appreciation over time.”
The property is located alongside the SR-160 at 1761-1791 Tribute Road in Sacramento, California. BKM Capital Partners acquired the property from a private syndication managed by Sperry Equities. Palmer Capital represented the seller in the transaction.