Bkm Capital Partners, a prominent institutional fund manager specializing in value-add light industrial properties, recently announced a significant $550 million recapitalization of a nine-property light industrial portfolio in partnership with Kayne Anderson Real Estate. This strategic move marks Kayne Anderson’s inaugural foray into the light industrial sector, expanding its already diverse portfolio across various alternative real estate asset classes.
BKM Capital Partners and Kayne Anderson Real Estate Forge Strategic Alliance
This collaboration leverages the specialized expertise of BKM Capital Partners in small-bay industrial real estate with the established financial strength of Kayne Anderson, a renowned alternative asset manager. Brian Malliet, Founder, CEO, and CIO of BKM, expressed enthusiasm for the partnership, highlighting the potential for unlocking significant growth opportunities. Al Rabil, co-founder and CEO of Kayne Anderson Real Estate and CEO of Kayne Anderson, echoed this sentiment, emphasizing the strong fundamentals of the light industrial market and BKM’s impressive operational track record. Both firms anticipate a long-term, mutually beneficial relationship.
BKM Capital Partners Demonstrates Continued Growth Momentum
BKM has experienced substantial growth in recent years, with over $575 million invested in strategic acquisitions in 2023 alone. This recent recapitalization brings BKM’s total acquisitions for 2024 to an impressive $1.2 billion, encompassing over 4.5 million square feet across 25 transactions. This transaction underscores BKM’s commitment to driving value and rent growth within its portfolio, further solidifying its position in the light industrial market.
High-Quality Portfolio Poised for Significant Growth
The nine-property portfolio at the heart of this transaction comprises 510 units and over 2.1 million square feet of small-bay industrial space strategically located in high-density urban areas across the Western U.S. These infill assets are well-positioned to benefit from the limited supply of new small-bay industrial construction in these markets.
The portfolio includes:
- Hohokam Business Park: Tempe, AZ (256,920 sq ft, 79 units)
- Backlot Burbank: Burbank, CA (208,688 sq ft, 16 units)
- Concord Business Park: Concord, CA (141,792 sq ft, 28 units)
- Gateway & Shoreline Business Centers: Fremont, CA (179,559 sq ft, 14 units)
- Lionshead Landing: Vista, CA (228,816 sq ft, 54 units)
- Inverness Exchange: Englewood, CO (215,212 sq ft, 103 units)
- Hughes Airport Center: Las Vegas, NV (672,424 sq ft, 58 units)
- West Valley Business Park: Kent, WA (205,719 sq ft, 158 units)
The diverse tenant base and shorter lease terms create a favorable rent rollover profile, enabling the portfolio to capitalize on the robust rent growth observed in the small-bay industrial sector. Brett Turner, Senior Managing Director of Acquisitions and Dispositions at BKM, emphasized the exceptional returns generated by these assets and the significant future potential driven by strong demand and historical rent growth trends.
BKM Capital Partners: A Leader in Light Industrial Investment
Since 2013, BKM Capital Partners has executed over $4.3 billion in transactions, encompassing more than 120 business parks and 22 million square feet of small-bay industrial space across the Western U.S. The firm’s continued growth is fueled by its strategic joint ventures, institutional investor funds, and separately managed accounts. Truist Securities and First Citizens Bank played key roles in facilitating this landmark transaction between BKM Capital Partners and Kayne Anderson Real Estate.
