BKM Capital Partners Expands in Houston with Acquisition of Two-Park Light Industrial Portfolio

Transaction Marks Firm’s Second Houston Deal and Continued Expansion into High-Growth Sunbelt Markets

Houston, TX – August 26, 2025 – BKM Capital Partners, a vertically integrated institutional fund manager specializing in multi-tenant light industrial real estate, today announced the acquisition of a two-property, 242,555-square-foot portfolio in Houston’s high-growth Southwest submarket. The off-market transaction, completed in joint venture with BMA Capital Corp., marks BKM’s second acquisition in Houston and expands its regional footprint to more than 500,000 square feet across three assets.

Built between 1979 and 1980, the portfolio is 70% leased to a diverse mix of tenants. Located just one mile from the interchange of Interstate 69 and Beltway 8, the parks offer exceptional regional connectivity and access.

“This was a rare opportunity to acquire two adjacent, well-located parks in one of Houston’s most supply-constrained submarkets,” said Brett Turner, Senior Managing Director of Acquisitions & Dispositions, who led the BKM team negotiating the acquisition. Charlie Farmer, Director of Acquisitions & Dispositions, also played a key role in the transaction. CBRE National Partners represented the seller, Fort Capital.

Southwest Business Park consists of three buildings totaling 131,000 square feet on 9.2 acres. It features 12- to 18-foot ceiling heights, 80- to 120-foot truck courts, 24 dock-high and 29 drive-in doors, and 287 parking stalls. The adjacent Stonecrest Business Center houses 111,555 square feet across five buildings on 7.1 acres. It features 12- to 21-foot clear heights, truck courts of 65 to 100 feet, 305 parking spaces, and four dock-high and 18 drive-in doors.

“These assets offer exactly what today’s small and mid-size tenants are looking for—functional, flexible space in an accessible infill location,” Turner added. He noted that more than 90% of the occupied square footage is set to roll within the hold period, giving BKM a near-term opportunity to capture a 32% mark-to-market rent increase. “The staggered lease roll, combined with the ability to reposition and subdivide space, gives us a clear path to drive value while meeting market demand that’s largely underserved by new construction.”

BKM intends to implement significant capital improvements to enhance the assets’ overall appeal. Roughly $2.8 million will be allocated to exterior upgrades such as drought-tolerant landscaping, signage, and parking lot enhancements, as well as infrastructure improvements including roof overlays and HVAC replacement. An additional 3.2 million will fund interior improvements to reposition vacant suites and reduce office buildout, including subdividing larger spaces to cater to small-bay tenant demand.

“Houston is a prime example of the type of market where our platform can thrive—deep tenant demand, infill scarcity, and older product in need of repositioning,” said Brian Malliet, Founder, CEO, and CIO of BKM. “This acquisition strengthens our presence in the region and gives us meaningful runway to apply our operational and leasing strategies in a submarket where functional, small-bay space is increasingly hard to find. It’s a compelling environment for disciplined value-add investment.”

The investment comes at a time when market conditions are especially favorable for BKM’s approach. Development in Houston, once at record levels, has moderated sharply, and deliveries under 40,000 square feet are rare, making multi-tenant inventory increasingly scarce. In the Southwest submarket, the vacancy rate for sub-50,000-square-foot spaces is just 1.5%, according to local reports. This persistent imbalance is creating a strong leasing tailwind for BKM as it executes its repositioning plan.