BURBANK, Calif., (August 6, 2018) – BKM Capital Partners, an institutional fund manager with a niche focus on value-add, multi-tenant light industrial investments, has acquired Backlot Burbank, a 12-building, 302,869 square-foot industrial business park in the Los Angeles submarket of Burbank, California. The firm acquired the property for $84.75 million.
Backlot Burbank. This is one of the only business park assets in Burbank.
Located between the I-5 and SR-170 freeways, and directly adjacent to the Hollywood /Burbank Airport, this is one of the only business park assets in Burbank, according to BKM Capital Partner’s CEO and Co-Founder, Brian Malliet.
“We continue to acquire value-add multi-tenant industrial properties in markets that are strongly positioned to perform over time,” says Malliet. “Burbank has a very limited industrial supply, and is the entertainment production epicenter for broadcasting and radio. It is home to major entertainment powerhouses including Warner Bros and Walt Disney.”
In fact, the Greater Los Angeles market boasts the world’s 20th largest economy with over $600 billion in GDP, predominately from the entertainment sector.
“Burbank is the perfect perennial location for tenants servicing the entertainment industry due to increasing traffic throughout Los Angeles,” says Malliet. “The Backlot Burbank industrial park provides convenient access to Hollywood and downtown Los Angeles, as well as Westside Los Angeles and its surrounding commercial districts. The asset will continue to benefit from the ongoing growth in Hollywood and DTLA that is pushing north towards Burbank.”
The industrial business park is currently 100-percent occupied by a diverse range of 16 different tenants with unit sizes ranging from 6,000 to 100,217 square feet with the average unit size of approximately 18,292 square feet.
“The fact that the asset is fully-leased will provide immediate stabilized cash flow, allowing us to simultaneously enhance value for investors through our comprehensive value-add approach,” says Malliet. “In addition, the diversification among tenants and the staggered rent roll will limit tenant rollover exposure compared to single-tenant industrial properties where rollover exposure is much greater.”
BKM Capital Partners plans to implement a series of capital improvements to the property including new roofs, paint, and tenant and monument signage, among other upgrades.
“We focus on highly functional assets with strong upside potential,” says Brett Turner, Director of Acquisitions at BKM Capital Partners. “We were able to acquire this asset at a discount to its replacement cost, and will be able to significantly enhance property value through our comprehensive capital improvement plan and integrated property management platform.”
By repositioning the asset and integrating a series of upgrades, BKM will also be able to steadily grow rents, according to Turner.
“In-place rents at the property are currently 22-percent below market,” explains Turner. “We plan to bring rents up to market as leases roll as well as capitalize on the ongoing rent appreciation throughout the region by strategically positioning the property as a flagship asset. This will allow us to significantly increase NOI and maximize returns to investors.”
The property is located at 4100-4210 W. Vanowen Place; 2303-2333 N. Valley Street, 4400-4510 W. Vanowen Street in Burbank, California. CBRE represented the seller, a joint-venture between Shubin Nadal Associates and Penwood Real Estate Investment Management, LLC, through its fourth value-added investment vehicle, Penwood Select Industrial Partners IV, L.P.
About BKM Capital Partners
BKM Capital Partners, currently raising their second institutional fund, 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.