BKM Capital Partners entered the Denver market with the $20.2 million acquisition of 215,268 square feet of flex space in Inverness Business Park.
The deal included eight buildings at 14 Inverness Drive East in Englewood. The price, which equates to $93.84 per sf, represents a 57 percent discount to replacement cost, according to Brian Malliet, CEO of BKM Capital Partners.
BKM Capital Partners is an institutional fund manager with a niche focus on value-add, multitenant light-industrial investments.
“Denver is a dynamic market with strong fundamentals and tremendous growth potential,” said Malliet. “The property is situated in the affluent area of Englewood, within the southeast submarket, which is the largest in the Denver metro area. This provides access to a strong base of potential tenants in various business sectors.”
The property fronts Inverness Golf Course and offers access to Interstate 25 via County Line and Dry Creek roads, as well as E-470 access. It is 91 percent leased by 86 tenants averaging approximately 2,750 sf. Notable tenants include Conquest One, Canon Solutions America, Rethink Restoration Partners and Habitat Management Inc.
“This acquisition is well aligned with our ongoing investment strategy, which is to identify extremely well-located, institutional-quality industrial assets with a value-add opportunity,” said Malliet. “Drawing upon our in-house management platform and niche expertise in multitenant industrial, we will be able to quickly improve the asset and bring rents to market, generating strong yields for investors.”
BKM plans to invest nearly $2 million in upgrades, including a complete rebrand to reintroduce the asset to the market, as well as fresh paint, upgraded landscaping, cosmetic upgrades to the lobby and signage, and various structural improvements, such as improved roofing, parking surfaces and HVAC.
“There is an immediate opportunity to increase NOI in this asset by leveraging current demand from image-conscious tenants seeking a location near major regional anchors such as the Denver Tech Center,” said Brett Turner, director of acquisitions. “As we execute on our strategy, we will be able to quickly improve operational efficiencies and maximize the value of this multitenant industrial asset. Moving forward, we are seeking additional assets in the Denver metro area in order to continue to build value and increase economies of scale.”
Newport Beach, California based BKM purchased the Inverness asset from 14 Inverness Property LLC, an affiliate of Centennial-based Global Pacific Properties. Newmark Knight Frank represented the seller.