DENVER – Newport Beach firm BKM Capital Partners has acquired its second Denver property; Valley Business Center, a 203,231-square-foot, five-building multi-tenant light industrial property located at 700 West Mississippi Avenue. The institutional fund manager purchased the property for $24.3 million.
BKM Capital Partners acquired Valley Business Center from Mountain West Industrial Properties. Murray Platt, Doug Viseur, and Daniel Close at CBRE represented the seller in the transaction. BKM represented itself.
Valley Business Center is currently 100 percent occupied and features 20 different tenants including FedEx Kinkos, Colorado Lottery, Black & Decker and Municipal Energy Systems to name a few.
“The central Denver industrial submarket has consistently outperformed many of Denver’s other major submarkets with historically low vacancy rates and high demand,” says Brian Malliet, CEO and Co-Founder of BKM Capital Partners. “In fact, the industrial vacancy rate in central Denver is 3.6 percent, which is well below the metro average of 6.1 percent. The property is also strategically positioned between downtown Denver, Cherry Creek and the Denver Tech Center, the largest office submarkets in the city with projected employment rates in the metro region set to increase by 26-percent by 2023.”
BKM believes the asset will benefit from this ongoing growth in the region and said that the acquisition is consistent with the firm’s strategy to acquire large-scale multi-tenant industrial properties in high-growth markets, where it can amass economies of scale and drive returns for investors through its comprehensive value creation strategy.
“We target best-in-class markets where we have a growing presence and assets that are aligned with our niche approach and core investment thesis to enhance value through strategic improvements, leasing, and integrated hands-on management,” says Malliet. “We acquired Inverness Business Park, a 215,268 square-foot, eight-building multi-tenant industrial asset in Denver last year. The addition of Valley Business Center will expand our portfolio as we continue to seek out opportunities in the region and allow us to immediately drive down operating costs.”
Constructed in 1983, Valley Business Center is an institutional-grade asset that features top of the line industrial features such as concrete tilt-up wall construction, 16-20’ clear heights and ESFR sprinkler systems, however, it lacks key cosmetic upgrades and modernization, according to Brett Turner, managing director of Acquisitions at BKM Capital Partners.
“Because of this, we were able to acquire the asset below replacement cost and plan to implement a series of upgrades to the property, which include modernizing the building facades with a multi-tone paint scheme and upgraded materials, uniform landscaping, and revamped project standard signage and addressing, among others,” says Turner. “These strategic upgrades will allow us to increase the long-term value of the asset.”