BKM Capital Partners Acquires Two Texas Light Industrial Portfolios Spanning 750K-SF

Separate Transactions Expand Firm’s Small-Bay Holdings to 1+ Million Square Feet in Dallas-Ft. Worth and Houston.

Newport Beach, CA – August 26, 2025 – BKM Capital Partners, a vertically integrated institutional fund manager specializing in multi-tenant light industrial real estate, has acquired two Texas portfolios totaling 750,000 square feet. The two separate transactions, involving five properties across Houston and Dallas-Fort Worth, advance BKM’s strategy to scale its platform nationally by targeting high-growth, supply-constrained markets with significant value-add potential.

“This isn’t just about entering new markets—it’s about entering the right ones,” said Brian Malliet, BKM’s Founder, CEO and CIO. “Texas is an economic powerhouse with population growth, infrastructure investment, and a business-friendly climate all fueling demand for light industrial space. These portfolios align perfectly with our approach: institutionalize overlooked assets, cater to underserved tenants, and create long-term value.”

The newly acquired portfolios—one in Houston’s Southwest submarket and the other in the Northeast Dallas and Great Southwest submarkets—were purchased at a significant discount to replacement cost and collectively offer a 31% mark-to-market opportunity. Average current occupancy for the portfolios stands at 70% in Houston and 81% in DFW, catering to a diverse range of uses including industrial services and supplies, manufacturing, and logistics. Near-term lease rollover profiles further set the stage for immediate upside.

“These weren’t just opportunistic buys, but strategic,” said Brett Turner, Senior Managing Director of Acquisitions & Dispositions. “We’ve been tracking these markets closely. While the broader development pipeline in Texas remains active, new construction at the sub-100,000-square-foot scale is nearly nonexistent. That gives us a unique opportunity to meet growing tenant demand with repositioned, institutional-quality product that simply doesn’t exist elsewhere.”

In Houston’s Southwest market, BKM bought a pair of adjacent properties totaling 242,555 square feet from Fort Capital. The 131,000-square-foot Southwest Business Park houses 22 units in three buildings, while the Stonecrest Business Center features 17 units in five buildings totaling 111,555 square feet. Situated less than one mile from Interstate 69 and Beltway 8, the Houston properties provide superior access to population centers, corporate headquarters and port infrastructure.

Northward in Metro DFW, the firm acquired three assets with 512,000 square feet across 16 units. Previously owned by TA Realty, the properties include the 34,325-square-foot Northgate 22 in Dallas, a 42,506-square-foot facility at 501 106th St. in Arlington, and the Market Street Distribution Center, a five-building, 435,479-square-foot park in Garland. The properties span Northeast Dallas and the Great Southwest, two of the Metroplex’s most supply-constrained submarkets with direct connectivity to the Dallas CBD, DFW International Airport, major labor pools, and rooftops.

BKM has allocated $10.4 million toward capital improvements to elevate curb appeal, address deferred maintenance, and execute its signature repositioning program across all seven properties. Enhancements will include roof and HVAC upgrades, drought-tolerant landscaping, new signage, and refreshed paint and parking lots. One 27,500-square-foot building in Houston currently in shell condition will be built out into four market-ready suites.

BKM will also demise three large suites in Houston into seven smaller units, and five larger suites in DFW into 11 units, reducing the properties’ average unit sizes and rightsizing the share of administrative space at the buildings. These moves are designed to enhance leasing velocity in a segment starved for sub-10,000-square-foot options while meeting the rising expectations of today’s sophisticated users of small-bay industrial space.

“We’re underwriting significant NOI growth within the first 16 months just from leasing market-ready space at today’s rents,” said Turner. “But the real story is about flexibility. These assets give us optionality—whether that’s demising larger units, upgrading to meet modern user expectations, or even monetizing select buildings through targeted owner-user sales. It’s a highly dynamic portfolio with multiple paths to value creation.”

The properties are located in submarkets with strong fundamentals that reinforce BKM’s investment thesis. While overall vacancy in the 606.3-million-square-foot Houston market hit 6.2% at midyear, the Southwest submarket reported just 5.4% vacancy. Of the 17.8 million square feet currently under construction across the metro, only two million square feet is underway in the Southwest—and nearly all of it is for product exceeding 100,000 square feet.

Meanwhile, the 1.1-billion-square-foot Metro DFW market is the nation’s third largest, fueled by continued demand from reshoring, e-commerce, and supply chain expansion. The submarkets of Northeast Dallas/Garland and Great Southwest/Arlington posted midyear vacancy rates of 7.8% and 6.3%, respectively, with 1.2 million square feet of new development underway between them. That figure represents less than 8% of DFW’s overall 15.4-million-square-foot pipeline, most of which consists of larger projects or pre-leased space.

With few deliveries targeting small tenants and leasing momentum remaining strong, conditions continue to favor well-located, repositioned product that can meet evolving user demand.

“We’re not just acquiring buildings—we’re creating optionality for tenants and stable, risk-adjusted income for our investors,” said Malliet. “In a market where most new development skews larger, our ability to offer flexible, modernized space at scale is a meaningful differentiator.”

BKM acquired the Houston portfolio in partnership with BMA Capital Corp, while the DFW assets were acquired through its joint venture with Whittier Trust. CBRE represented the sellers in both transactions. Brett Turner, with support from Charlie Farmer, Director of Acquisitions & Dispositions, handled negotiations on BKM’s behalf.

“We’re fortunate to have strong relationships across these markets—with brokers, lenders, sellers, and our capital partners—who view us as a reliable counterparty and a skilled operator,” said Turner. “That trust gives us access to compelling opportunities where execution and certainty matter.”

Combined with the acquisition of Houston’s West Belt Business Park earlier this year, these transactions bring BKM’s Texas footprint to more than 1 million square feet, marking a key milestone in its evolution into a national light industrial platform.