BKM Capital Partners Acquires Metro Phoenix Industrial Asset for $38 Million
California Firm Expands Portfolio with Seven-Building Light Industrial Park in North Mesa, AZ
July 6, 2022 – Newport Beach, CA-based BKM Capital Partners, a vertically integrated institutional fund manager, acquired Mesa Ridge Business Park in Metro Phoenix for $38,350,000. The 153,000-square-foot light industrial park includes seven buildings in North Mesa and was sold by Mesa Ridge Business Park I, LLC, a company formed by Randall Investment Group, Michael Wilson, and Eric Rinestone.
“This was a prime opportunity for BKM to expand our Phoenix portfolio with a high-visibility industrial asset in a submarket that is becoming increasingly infill in-nature with the continued expansion of master-plan neighborhoods and high-density housing,” Brian Malliet, CEO of BKM Capital Partners, said “This market stands to benefit from favorable migration trends and a business-friendly operating environment that has generated employment growth that is outpacing the national average by more than double.”
The property is currently 97% leased across 39 units that range in size from 1,661 square feet to 10,436 square feet. Located at 618-2716 N. Ogden Rd. and 4215-4255 E. McDowell Rd., the park features seven tilt-up structures built in 2007. This is BKM’s 26th acquisition in the Metro Phoenix area, bringing its current holdings in the region to more than 2.3 million square feet across 14 projects.
BKM’s in-house property and construction teams will embark on an asset improvement program encompassing upgrades to parking lots, ESG projects, as well as improvements to roofs, water wise landscaping, HVAC, lighting, signage and incorporating BKM’s distinctively branded paint design. BKM will leverage its existing local management team, as well as vertically integrated platform and agile approach to breathe new life into the asset.
Brett Turner, Senior Managing Director of Acquisitions at BKM Capital Partners, said, “In addition to the property improvements, we expect to capture additional value since existing in-place rents, which are approximately 25% below market, will deliver significant upside as leases roll. Market experts projecting a high-end five-year average Phoenix annual rental growth rate of 10.8%.”
The North Mesa site is adjacent to Falcon Field Airport and Boeing’s 1.35-million-square-foot manufacturing campus, which generates $2.2 million in daily economic benefit to the submarket and is home to more than 100 businesses providing more than 1,400 jobs. There’s significant tenant demand stemming from Boeing’s manufacturing center, where its Attack Helicopter and Unmanned Airborne Systems divisions are based. Boeing counts more than 500 suppliers and related vendors in Arizona.
BKM Capital Partners has a built strong market position in the multi-use logistics and small- and mid-bay light industrial asset class. The company has created a vertically integrated operational platform that is supported by a team capable of managing the space and relationships of nearly 2,000 tenants.
Cushman & Wakefield’s Bob Buckley represented the seller.
About BKM Capital Partners
BKM Capital Partners is a proven real estate fund manager and operator focused exclusively on the acquisition, refurbishment, and operation of light industrial & multi-use logistics assets in the Western United States. Combining a deep knowledge of this niche industrial product type with in-house capabilities including on-site property management, asset management, and leasing to reposition and institutionalize light industrial assets, the firm continues to build on its proven track record, generating strong results with high levels of transparency and engagement for investors. Since its inception in 2013, BKM has successfully acquired more than 14 million square feet of industrial projects valued at more than $2.5 billion. The firm continues to grow its investment management business through strategic joint ventures, institutional investor funds and separate account equity capital. Additional information is available at www.bkmcapitalpartners.com.
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