Newport Beach, CA BKM Capital Partners (BKM), a vertically integrated institutional fund manager, has closed on more than $750 million worth of transactions during the first three quarters of 2024, strengthening both its balance sheet and national footprint. In a market characterized by heightened financing challenges and economic uncertainty, BKM’s strategic acquisitions and dispositions demonstrate the firm’s ability to identify and capture high-value, opportunistic investments in an inefficient market within the multi-tenant light industrial sector.
“In a period where others have been hesitant, our team’s deep market expertise and disciplined strategy have allowed us to seize opportunities that others may overlook or are not aware of,” said Brian Malliet, BKM’s founder, CEO, and chief investment officer. “Our ability to secure assets with significant value-add potential at substantial discount to replacement costs is a testament to our rigorous approach. The success we’ve achieved this year underscores our commitment to executing a value-driven strategy, which captured cumulative rent growth of 50-90% over the last 36 months, proving that even in challenging market conditions, we can deliver strong results for our investors.”
In addition to the transactions completed thus far, BKM expects to close on an additional $650 million by year-end.
2024 Transaction Activity
BKM embarked on several transactions this year that allowed the company to strategically realign its portfolio while continuing its growth trajectory. The transactions were conducted either on behalf of BKM Industrial Value Fund III or in partnership with institutional partners, including one new investor.
So far in 2024, BKM has completed 13 acquisitions worth $385 million, spanning key markets in Arizona, California, Colorado, Nevada, and Oregon. The transactions highlight BKM’s continued focus on markets with strong demand fundamentals and limited new supply. Aggregating more than 1.9 million square feet, the properties acquired include:
- Baseline Business Park (100,375 s/f) and Ash Business Center (89,728 s/f) in Phoenix, AZ
- North Cabot Industrial Park (51,038 s/f) in Hayward, CA
- Baseline Business Park (100,375 s/f) and Ash Business Center (89,728 s/f) in Phoenix, AZ
- North Cabot Industrial Park (51,038 s/f) in Hayward, CA
- Cherry Commerce Center (97,799 s/f) in Newark, CA
- Canyon Industrial Center (198,728 s/f) and Faraday Industrial Park (99,348 s/f) in San Diego, CA
- Havana 37 Business Center (150,245 s/f) in Denver, CO
- Patrick & Mojave Airport Center (192,463 s/f) and Escondido Business Park (153,368 s/f) in Las Vegas, NV
- Airport Way Corporate Park (140,693 s/f), Columbia Commerce Center (375,429 s/f), and Tigard Business Park (259,124 s/f) in Portland, OR
Also this year, BKM closed on $306.5 million in dispositions involving six facilities in California, three assets in Arizona, two assets in Colorado, two in Nevada, and one in Oregon.
“BKM’s 2024 acquisitions are a clear demonstration of our ability to navigate a challenging market by focusing on assets with untapped value,” said Brett Turner, BKM’s senior managing director, acquisitions & dispositions. “Our established presence and proven track record in key markets have positioned us as a trusted and reliable buyer, which is why many opportunities are brought directly to us. This advantage allows us to secure deals at favorable terms, capitalizing on the inefficient market dislocations where others may struggle.”
“The properties we’ve acquired this year all present significant opportunities for value creation, whether through improved management, necessary renovations, or repositioning to capture higher market rents driven by unprecedented rent growth,” Turner adds. “Our management approach and long-term strategy are perfectly aligned to unlock this potential and drive double-digit annual NOI growth.”
Like with all its acquisitions, the 2024 assets are characterized by their strategic locations in Tier 1, high-barrier-to-entry infill markets, with significant discounts to replacement costs, positioning them for strong value-add potential. Many of these properties were acquired with short existing lease expirations, allowing BKM to implement its proven mark-to-market strategy, upgrading assets and capturing higher rents as leases roll over.
“Since our inception in 2013, BKM has consistently demonstrated its ability to grow and thrive, even in the face of economic headwinds,” said Malliet. “The trust that our institutional partners place in us is evident in the expansion of our existing relationships and the formation of new partnerships this year. As we look forward to closing out 2024 with another record year, we remain committed to our mission of delivering exceptional returns to our investors. Our outlook on the light industrial sector remains optimistic, and we believe that, even in the event of a significant economic downturn, multi-tenant light industrial properties will continue to perform well on a relative basis, ensuring ongoing value creation for our stakeholders.
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