BKM Capital Partners and Kayne Anderson Real Estate Acquire PacTrust Business Center for $30 Million

Transaction Underscores Opportunity in Undersupplied, High-Demand Silicon Valley Submarket

Newport Beach, CA – December 16, 2025 – BKM Capital Partners (BKM), a vertically integrated institutional fund manager specializing in multi-tenant light industrial real estate, and Kayne Anderson Real Estate, the real estate investment arm of Kayne Anderson, have acquired PacTrust Business Center for $30 million. The transaction represents a 55% discount to replacement cost and strengthens the firm’s foothold in the Silicon Valley’s specialized industrial market.

Situated on 7.3 acres in the heart of North San Jose’s highly coveted Golden Triangle area, PacTrust Business Center comprises 94,317 square feet across seven buildings. The industrial campus offers 38 units averaging 2,508 square feet, with heights ranging from 15.1 to 15.3 feet, 53 grade-level doors, and parking for 285 vehicles. The property, which will be renamed Montague Exchange, is currently 96% leased to a diverse tenant roster anchored by engineering, manufacturing, and technology users.

“With more than 20 million square feet converted to other uses over the past decade, Silicon Valley’s light industrial inventory is disappearing faster than it’s being replaced,” said Brett Turner, Senior Managing Director of Acquisitions & Dispositions at BKM. “This strategic acquisition gives us a high-performing asset in the heart of the Valley’s innovation corridor—offering suite sizes, infrastructure, and a location that are becoming increasingly hard to replicate.”

Built in 1982 and meticulously maintained, the property has sustained occupancy above 90% for more than a decade. Nearly one-third of current tenants have been onsite for 10 years or longer, supported by high-end interior finishes and functionality that caters to evolving user needs. No single tenant occupies more than 5.3% of the space, minimizing rollover risk and enhancing portfolio stability.

BKM plans to renovate the asset to its brand standards and optimize long-term leasing performance. Planned improvements include roof and HVAC replacements, paint, concrete wall repairs, landscaping, parking lot resurfacing, and new signage. Funds have also been earmarked for tenant improvements and commissions to further strengthen rollover execution.

“With limited new development and continued demand from specialized industrial and engineering users, high-quality product like this is increasingly difficult to find, especially in core Silicon Valley locations,” said Brian Malliet, BKM’s Founder, CEO, and CIO. “PacTrust Business Center offers stable in-place income, clear near-term leasing upside, and a long-term position in one of the most supply-constrained and innovation-driven markets in the country.”

PacTrust Business Center is located at 780 Montague Expressway, minutes from I-880, Hwy 101, and SR-237. The site enjoys immediate access to light rail, the Milpitas BART station, and San Jose Mineta International Airport. It also sits at the center of a dense employment and housing corridor, with more than 77,000 professionals working in tech and manufacturing within a three-mile radius, and nearly 6,500 new multifamily units recently delivered or under construction.

The seller, PacTrust, was represented by Cushman & Wakefield. Turner led the acquisition on behalf of BKM, with support from Michael Grossner, Director of Acquisitions and Dispositions.

Learn more about the property at bkmmontague.com.