BKM Capital Partners, an institutional fund manager with a niche focus on value-add, light multi-tenant industrial investments, has closed its second institutional fund, BKM Industrial Value Fund II, L.P., with $382 mil in equity commitments. In addition to $289.4 mil of equity commitments to the fund and parallel vehicles, BKM has invested a further $54.1 mil of Fund II LP co-investment capital and has up to an additional $38 mil of committed
non-discretionary LP co-investment capital to deploy into this strategy. Together, this equates to more than $1 bil in buying power.
Building on the success of the firm’s debut fund, which garnered $130 mil in commitments (consisting of $105 mil in fund commitments and $25 mil in deployed co-investment capital) and is already fully deployed, BKM’s Fund II will invest in undervalued light multi-tenant industrial assets in strong growth markets throughout the Western U.S.
BKM’s Fund II garnered investments from a mix of institutional investment sources, including U.S. endowments and pensions funds, family offices, and insurance companies. The fund, which had a first close in December 2017, is already being deployed into large business park portfolios throughout the Western U.S., including major acquisitions in California and Arizona, among others.
“We recognized the opportunity in light multi-tenant industrial early on and understood that this very specific property type was poised to grow faster than other industrial product,” noted Brian Malliet, Co-Founder and CEO of BKM Capital Partners. “Today, fueled by healthy demand and tight supply, light multi-tenant industrial is on track to be one of the best-performing commercial real estate segments in 2019.”
Powered by demand drivers including ongoing e-commerce growth, changing consumer preferences, and a resurgence of small businesses in need of space, light multi-tenant industrial has also emerged as a key investment target for institutions.
BKM is one of the largest owners of multi-tenant industrial portfolios in the Western U.S., with portfolio acquisitions totaling more than $500 mil and encompassing more than 3.4 msf in the past year alone. The firm owns and operates properties in six states, including California, Colorado, Nevada, Washington, Oregon, and Arizona.