BKM Adds to Phoenix Metro Portfolio; Acquires 9-Building Multi-Tenant Light Industrial Property
Phoenix, AZ., (June 4, 2018) – 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 acquired Diablo Business Center, a 9-building multi-tenant light industrial business park totaling 105,000 square feet in Phoenix, Arizona for $8.1 million.
This is BKM’s 13th acquisition in the Phoenix metro area, bringing its holdings to more than 2.2 million square feet in the region, according to Brian Malliet, CEO and Co-Founder of BKM Capital Partners.
“We continue to see tremendous value throughout the Phoenix MSA, especially in the Airport submarket,” explains Malliet. “The airport submarket is experiencing unprecedented tenant demand, reflected in the 96% occupancy for freestanding industrial buildings, and currently has no future industrial construction planned throughout the area.”
“Diablo Business Center is an institutional quality asset that presents a dynamic value proposition,” says Brian Malliet. “By acquiring this property well below replacement cost, there is a tremendous opportunity to reposition the asset through our firm’s proven capital improvement and leasing strategy.”
BKM plans to implement a $1.8 million capital improvement program to the property, according to Brett Turner, Director of Acquisitions at BKM Capital Partners.
“Our targeted capital improvement program will allow us to reposition the asset as a market-leader in terms of functionality and aesthetics and attract and retain high quality tenants,” says Turner. “We also plan to immediately increase cash flow by leasing up vacant space as the building is currently 71-percent occupied.”
Planned improvements include creative speculative tenant buildouts, reviving dead units, the addition of private fenced yards, and upgrades to the exterior including, a modern, multi-tone paint scheme, attractive, drought-resistant landscaping, upgraded monument signage and standardized tenant signage, among others. BKM will also address structural improvements including a new roof, new parking lot, and an improved HVAC system.
In addition to these renovations, the property will also benefit from BKM’s existing on-site property management and leasing professionals, according to Turner.
“The property is located one-block west of our Cotton Center asset and management office,” explains Turner. “Through this existing presence and shared resources, we can further increase net operating income by reducing operating costs and leasing vacant space.”
Diablo Business Center is located one mile south of Phoenix Sky Harbor International Airport and is approximately ten miles from both downtown Phoenix and downtown Tempe. This central location strategically positions the property to provide quick access to the housing communities in the Southeast Valley, while being near the key commercial centers in downtown Phoenix, Arizona State University, and Scottsdale, as well as easy access to the entire metro area.
The business park is located at 3610-3660 East Wier Avenue and 4633-4645 South 36th Street Phoenix, Arizona. Bob Buckley at Cushman & Wakefield represented the seller.