ORANGE COUNTY, CA – BKM Capital Partners, an institutional fund manager with a niche focus on value-add, light multi-tenant industrial investments, has announced the final close of its second institutional fund, BKM Industrial Value Fund II, L.P., with $382 million in equity commitments.
In addition to $289.4 million of equity commitments to the fund and parallel vehicles, BKM has invested a
further $54.1 million of Fund II LP co-investment capital and has up to an additional $38 million of committed non-discretionary LP co-investment capital to deploy into this strategy. Together, this equates to more than $1 billion in buying power.
Building on the success of the firm’s debut fund, which garnered $130 million in commitments (consisting of $105 million in fund commitments and $25 million 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.
We have made significant investments since founding BKM to build out an operating platform with both asset management and property management businesses.
"As a testament to our platform and to us as fiduciaries, we have evolved from a first-time fund manager with two institutional investors to our second fund and now having more than 20 institutional investors.”
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.
“BKM’s ability to more than double our fund investments in less than 24 months speaks to the depth of our expertise in this product type,” says Brian Malliet, Co-Founder and CEO of BKM Capital Partners.
“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.
"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.
“Today’s institutions are seeking investments that are strategically positioned to perform well for the long term,” Malliet says. “By honing our first-hand expertise in the acquisition, improvement, and operation of these assets, we now have a proven investment platform through which these institutions can achieve strong long-term growth while earning consistent risk-adjusted returns.”
“We are one of the only operators in the market with the experience and financial strength needed to acquire and profitably operate large portfolios of multi-tenant industrial product,” says Malliet. “In this endeavor, our track record speaks for itself.”
BKM is one of the largest owners of multi-tenant industrial portfolios in the Western U.S., with portfolio acquisitions totaling more than $500 million and encompassing more than 3.4 million square feet in the past year alone.
The firm owns and operates properties in six states, including California, Colorado, Nevada, Washington, Oregon, and Arizona.
“Although we are excited about the continued interest in our investment strategy and our team’s ability to execute on that strategy, we remain focused and disciplined on investments that provide our investors with an adequate “margin of safety” in order to protect the downside,” according to Taghavi.
While many real estate companies may find it difficult to identify properties that fit their investment criteria, we have a competitive advantage in our markets based on our position as the most active buyer within this product type. This track record will fuel our growth for years to come,” says Taghavi.
BKM Capital Partners currently manages over 6.9 million square feet totaling more than $1 billion in assets under management.