BKM Capital Partners, an institutional fund manager with a niche focus on value-add, light industrial multi-tenant investments, has acquired West Valley Business Park, an industrial asset consisting of 179 units in 19 buildings totaling 205,655 square feet in the Kent Valley submarket of greater Seattle, Washington. BKM acquired the property from seller, Entera Properties, in an off-market transaction for $30.45 million.
“This was a rare opportunity to acquire a premier multi-tenant industrial park at 35% discount to value, located in seattle’s highly sought-after kent valley industrial submarket,” says bkm capital partners managing director of acquisitions, brett turner. “even with nearly 600,000 square feet of new warehouse space recently delivered to this submarket, the industrial vacancy rate remains low at only 4%, placing upwards pressure on rents. These fundamentals demonstrate the high level of demand in the market and opportunities to attract new users to the region.”
West Valley Business Park is strategically located south of the intersection of the I-5 and I-405 freeways and just 13.5 miles from Downtown Seattle, with frontage on SR-181, known as West Valley Highway, a key north-south arterial bisecting Kent Valley.
Turner points to BKM’s acquisition strategy of identifying and tracking this opportunity and communicating with ownership for several years as instrumental in the firm’s successful acquisition.
“Our firm developed a relationship with the seller over several years and initially submitted a letter of intent to purchase the asset in 2016, which positioned us well to close this off-market transaction when the timing was right,” Turner explains.
Originally constructed in 1982, West Valley Business Park is 92% leased to 164 tenants. In-place rents are well below market, presenting BKM with an opportunity to implement its value-add strategy and bring rental rates up to market. The firm plans to invest approximately $1.2 million in capital improvements to renovate and reposition the property, notes Turner.
“Our proven repositioning strategy, which focuses on targeted capital improvements and on-site property management, will allow us to quickly lease up the small amount of remaining vacant space and enhance the long-term value of the property,” Turner continues.
BKM has been active in the Seattle region of late, having recently acquired Federal Way Industrial Portfolio, a two-property portfolio consisting of eight buildings totaling 133,595 square feet in Federal Way, Washington.
“Our firm has been focused on this dynamic area because Puget Sound is one of the strongest industrial markets in the country, due to strong business growth and a lack of developable land,” says Turner.
BKM has been extremely active in the light, multi-tenant industrial space, recently surpassing $1 billion in AUM, and continues to expand its portfolio throughout the western region.
West Valley Business Park is located at 19226 66th Avenue in Kent, Washington.
BKM represented itself in the off-market acquisition. The seller, a private investor, also represented itself.