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May 22, 2019
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Burbank Industrial Park Trades for $85 Mil


BKM Capital Partners has acquired Backlot Burbank, a 12-building, 302.9k sf industrial business park in the city of Burbank. The property was sold for $84.75 mil by a joint-venture between Shubin Nadal Associates and Penwood Real Estate Investment Management LLC, through its fourth value-added investment vehicle, Penwood Select Industrial Partners IV, L.P.

Backlot Burbank is located at 4100-4210 W. Vanowen Place, 2303-2333 N. Valley Street, and 4400-4510 W. Vanowen St, between the I-5 and SR-170 freeways and directly adjacent to the Hollywood/Burbank Airport, at the eastern edge of the San Fernando Valley. The complex is currently 100% occupied by a diverse range of 16 different tenants with unit sizes ranging from 6k sf to 100.2k sf with the average unit size of approximately 18.3k sf.

“Burbank has a very limited industrial supply and is the entertainment production epicenter for broadcasting and radio,” notes BKM Capital Partner’s CEO and Co-Founder, Brian Malliet. “It is home to major entertainment powerhouses including Warner Bros and Walt Disney.”

In fact, the Greater Los Angeles market boasts the world’s 20th largest economy with over $600 bil in GDP, predominately from the entertainment sector.

“The fact that the asset is fully-leased will provide immediate stabilized cash flow, allowing us to simultaneously enhance value for investors through our comprehensive value-add approach,” says Malliet. “In addition, the diversification among tenants and the staggered rent roll will limit tenant rollover exposure compared to single-tenant industrial properties where rollover exposure is much greater.”

BKM plans to implement a series of capital improvements to the property including new roofs, paint, and tenant and monument signage, among other upgrades.

“In-place rents at the property are currently 22-percent below market,” explains Brett Turner, Director of Acquisitions at BKM Capital Partners. “We plan to bring rents up to market as leases roll as well as capitalize on the ongoing rent appreciation throughout the region by strategically positioning the property as a flagship asset. This will allow us to significantly increase NOI and maximize returns to investors.”

CBRE represented the seller in the transaction.

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