BKM Capital Completes Two Industrial Buys for $175M

Following a “largest in market” acquisition strategy, the company purchased more than 1 million square feet of multi-tenant space in Las Vegas and the San Francisco Bay Area.

Hughes Airport Center, Las Vegas
Hughes Airport Center, Las Vegas

In two transactions totaling more than $175 million, BKM Capital Partners has acquired more than 1 million square feet of multi-tenant industrial space in Las Vegas and the San Francisco Bay Area, the company announced.

The larger and more recent purchase was Hughes Airport Center, a 670,900 square-foot, 13-building Class A complex in the Las Vegas Airport submarket. The property, at 420-770 Pilot Road and 711-839 Pilot Road, features clear heights ranging from 16 to 24 feet, 44 dock-high loading doors and 59 grade-level loading doors.

Sited between McCarran International Airport and the I-215 freeway, the complex is 86.6 percent leased. When BKM was initially awarded the acquisition, HAC was 79 percent occupied, but BKM was able to sign five new leases totaling 54,738 square feet prior to close of escrow, Brian Malliet, BKM’s co-founder & CEO, said in a prepared statement.

The asset was acquired at a significant discount to replacement cost, he added. “This is a best-in-class asset, the largest of its scale in the Las Vegas Airport submarket and our firm’s biggest transaction to date…. The property is poised to continue to attract strong tenant demand and serve as a last-mile delivery option based on its unique position directly across from the airport and one block from the Las Vegas strip.”

In January, BKM, through its programmatic joint venture with the Canyon Catalyst Fund, closed on the purchase of the last two buildings in one of the largest multi-tenant industrial properties in Silicon Valley, the 14-building, 352,280 square-foot Bayside Business Park in Fremont, Calif. The partnership purchased the park in stages, with the final closing having taken place on Jan. 10, a BKM spokesperson told Commercial Property Executive.

A largest-in-market strategy

BKM, of Newport Beach, Calif., an institutional fund manager with a niche focus on value-add, multi-tenant industrial investments, currently follows a “largest in market” acquisition strategy. “By acquiring the largest multi-tenant industrial assets in the markets we serve, we are able to devise units to match market demand, which translates directly into high occupancy, resulting in strong stabilized returns for our investors,” Malliet said in the prepared statement.

We find distressed assets in strong growth markets where we can drive value through property improvements and integrated, in-house property management,” added Brett Turner, BKM’s director of Acquisitions. “Because we are so active in Las Vegas, we will be able to immediately fix operational inefficiencies as well as invest a significant amount of new capital at the property, lease remaining vacant space, and increase NOI rapidly.”

Almost exactly a year ago, BKM launched its second value-add institutional fund focusing on multi-tenant industrial properties. The fund targets $300 million in equity commitments.

Image courtesy of BKM Capital Partners