BKM Capital Partners Acquires Texas Light Industrial Portfolio for $27.5 Million
- BKM Capital Partners
- Dec 2
- 3 min read
Three Properties Span 200,000 SF Across Infill Submarkets in DFW and Houston
Newport Beach, CA—December 2, 2025—BKM Capital Partners, a vertically integrated institutional fund manager specializing in multi-tenant light industrial real estate, has acquired a three-property portfolio totaling 200,300 square feet in Dallas-Ft. Worth and Houston for $27.5 million. Completed on behalf of BKM Industrial Value Fund III, the transaction strengthens BKM’s presence in one of North America’s fastest-growing mega-regions and advances its evolution into a national leader in the small-bay industrial sector.
“The industrial sector may be absorbing new supply, but with almost 99% of the DFW and Houston pipeline dedicated to large facilities, none of it is built for the sub-10,000-square-foot user,” said Brett Turner, Senior Managing Director of Acquisitions and Dispositions at BKM. “This portfolio fills that void with proven product in submarkets where shallow-bay assets have outperformed the market for over a decade.”
The portfolio, acquired at a 43% discount to replacement cost, consists of 67 units across 11 buildings strategically positioned in high-growth submarkets of Dallas-Ft. Worth and Houston. The properties include:
Great Southwest Business Park (formerly GSW Circle), featuring 73,600 square feet across 30 units in five buildings in North Dallas’ South Stemmons submarket;
Royal 35 Business Park (formerly Plaza Circle), four buildings totaling 24 units and 68,000 square feet in DFW’s Great Southwest submarket;
and Kinghurst Business Center (formerly Kinghurst Circle), 13 units in two buildings totaling 58,700 square feet in Houston’s Southwest Corridor.
The properties are 98% leased to a diverse array of tenants and feature 14- to 18-foot clear heights with an average unit size of just under 3,000 square feet. Originally constructed between 1981 and 1986, the assets offer modern functional layouts and 87 loading doors in a mix of configurations tailored to the needs of small to midsize users.
As part of its value-add approach, BKM will implement a $2.1-million capital improvement plan focused on enhancing exterior façades, roofs, HVAC systems, signage, landscaping, and targeted interior buildouts. The firm intends to leverage the properties’ weighted average lease term of just two years to capture a 26% mark-to-market opportunity in rents.
Since 2020, Texas has accounted for nearly 22% of net absorption in the U.S., with DFW and Houston each absorbing over 20 million square feet of industrial space last year alone. The sub-100,000-square-foot segment continues to outperform bulk product; vacancy for vintage shallow-bay assets has been trending below 5% since 2012.
Drilling deeper, shallow-bay rents in DFW’s South Stemmons and the Great Southwest submarkets have increased more than 25% since 2021, while light industrial product in Houston’s Southwest Corridor has enjoyed 27% rent growth over the same period.
The seller, Circle Industrial, was represented in the transaction by the JLL Capital Markets team. Brett Turner, with support from Charlie Farmer, BKM’s Director of Acquisitions and Dispositions, led negotiations on behalf of the firm.
“Texas has matured into one of the country’s most competitive industrial markets, with demand drivers and demographic trends that continue to support long-term investment,” said Brian Malliet, CEO and Chief Investment Officer at BKM. “What’s missing isn’t demand, though, it’s functional product that serves the everyday needs of small and midsize users. That scarcity allows us to unlock value through repositioning, not reinvention.”
This acquisition brings BKM’s Texas footprint to more than 1.2 million square feet, reflecting its continued conviction in the fundamentals driving small-bay industrial performance across Texas. The firm is particularly bullish on the Texas Triangle, a dynamic area connecting the 25 million-plus residents of Houston, DFW, Austin, and San Antonio.
With a combined economic output exceeding $1.32 trillion, the mega-region ranks among the world’s 15 largest economies and is projected to grow by 65% over the next 40 years—reinforcing the long-term demand fundamentals that continue to make Texas one of the most compelling industrial markets in the U.S.
Learn more here:
Great Southwest Business Park: https://properties.bkmmanagementco.com/p/commercial-real-estate-listings/Grand+Prairie-TX-75051/greatsouthwestbusinesspark
Kinghurst Business Center: https://properties.bkmmanagementco.com/p/commercial-real-estate-listings/Houston-TX-77099/kinghurstbusinesscenter
