BKM Capital Partners Acquires 228,518 Square-Foot Multi-Tenant Industrial Property in Portland, OR
PORTLAND, OR, March 24, 2023 – BKM Capital Partners, a vertically integrated institutional fund manager, has expanded its holdings in the Pacific Northwest with the purchase of Airport Business Center. The 11-building light industrial portfolio is situated in the heart of Portland’s NE/Columbia industrial corridor and was sold by an institutional investor.
“Continued supply chain shortages and the resulting high price of construction materials and labor have made it increasingly difficult to bring new, competitive supply to the market,” said Brian Malliet, BKM’s Chief Executive Officer. “For this reason, we continually look for opportunities to acquire well-built facilities in high-growth locations, where we can add value through strategic improvements, leasing, and integrated hands-on management.
“This investment provided us with an opportunity to buy an institutional-grade business park in Portland’s largest industrial submarket,” he added. “With little new construction and vacancies floating under 3.5%, we see significant opportunities to capitalize.”
Located at 6756 NE Alderwood Rd and 6620-7040 NE 79th Court, the 228,518-square-foot business park consists of 41 units with an average size of 5,600 square feet. The spaces were 92% occupied at the time of the sale by a diverse range of tenants across a broad range of industries.
BKM has put together a capital improvement program to improve the performance, costs and efficiency of Airport Business Park buildings. Overall, the 11-building package consists of 24% office space and features 17’ to 20’ clear heights, 79 dock- and grade-level loading doors and ample parking.
“With all our investments, our plans are to not just improve the asset’s curb appeal and bring its aesthetics in line with BKM’s brand standards, but we also seek to add value in meaningful, lasting ways,” adds Malliet. “Each of our decisions is made with the purpose of improving our buildings’ operations, efficiency, and use of resources. This ensures that we both adhere to our ESG guidelines and ensure our investments will have adequate years of remaining useful life by the time we exit.”
Among the upgrades BKM plans are the installation of new TPO all-weather roof systems with 15-year warranties, new skylights and LED lighting; using sustainable building materials to reduce energy use; replacing HVAC systems across the buildings; and reducing water use by cutting back landscaping and replacing trees with drought-resistant foliage. The asset’s paint scheme, design, and signage will also be reimagined to elevate the asset’s curb appeal and reflect BKM’s corporate branding.
Brett Turner, BKM’s Senior Managing Director of Acquisitions and Dispositions, adds that the firm also plans “to cut down the amount of office space in three of the vacant small-bay industrial units to create a more functional workspace for the new paradigm industrial tenants that are most prevalent in the market today. Robust demand for industrial space drove rental rates up by 12% over the year in Portland, so now is a perfect opportunity to add value to underperforming space. The strategic upgrades we plan for Airport Business Center will allow us to make the most out of our investment, while increasing the long-term value of the asset. Both are critical components of BKM’s investment strategy.”
The Portland industrial market experienced a record-breaking 2022, with absorption crossing the five-million-square-foot mark for the first time ever. Airport Business Park is located within a one-mile drive from the Portland International Airport, I-205 freeway MAX Rail Line and Cascade Station’s restaurants and stores, the area attracts a variety of industrial, R&D and manufacturing enterprises.
BKM acquired the asset through a joint venture partnership with TerraCore Capital.
About BKM Capital Partners
BKM Capital Partners acquires, manages, and repositions multi-tenant light industrial assets throughout the Western United States. The Newport Beach, Calif.-based real estate fund manager and operator delivers a leading value-add investment platform that provides institutional partners and clients with innovative, high-touch, and trusted service at every level. Since inception in 2013, BKM has acquired more than 15 million square feet across 72 industrial properties housing in excess of 3,000 tenants and valued at more than $2.6 billion. BKM is led by a sophisticated team that is poised for continued growth, with $1.85 Billion in AUM, and a steadfast dedication to its team, investors, tenants, and clients. Additional information is available at www.bkmcapitalpartners.com.