Multi-Tenant Distribution Warehouse Outlook

Smaller Warehouse, Bigger Performance

The multi-tenant distribution (MTD) warehouse segment is generally described as warehouse/distribution buildings with small-to-medium footprints (typically 200,000 square feet or smaller), often with column spacing of 40 feet by 40 feet and clear height under 24 feet. Traditionally, tenants of these facilities tended to be local and regional distributors. More recently, the rapid growth of eCommerce has given rise to a new type of tenant who needs to support ever-tighter delivery commitments.

Healthy demand and tight supply has made MTD among the best performing commercial real estate segments. In 2017 MTD boasted the highest year-over-year rent growth of any property type. Further, its value on a per-square-foot basis is approximately 20% higher than the broader warehouse market with pricing continuing to increase. This segment realized a total return of 13.3% in 2017, well ahead of the overall commercial real estate return of 7.0%. On a one-, five- and 10-year basis, MTD properties have outperformed the broader commercial property market and other industrial segments. 

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September 20, 2018

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BKM CAPITAL PARTNERS

 

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 in-house capabilities including on-site property management, asset management, and structured financing, the firm continues to build on its proven track record, generating strong results with high levels of transparency and engagement for investors. 

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BKM MANAGEMENT COMPANY

 

BKM Management Company manages a portfolio of 8.2 million square feet of multi-tenant industrial properties for BKM Capital Partner’s private and institutional investors. With a focus on “boots on the ground” execution at the property level, BKM has in-house capabilities for both property management and leasing. The teams at the property level are focused on ensuring the tenants thrive and that the properties managed in the most efficient way.

 

 

 

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