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September 22, 2021
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BKM Capital Partners Executes $261 Mil Recapitalization with Investcorp for Multi-State Industrial Portfolio


Newport Beach-based BKM Capital Partners executed a $261 mil recapitalization of its value-add industrial Fund I, expanding a partnership with Investcorp and marking the successful completion of an investment thesis involving the fund managers’ first fund. The flagship investment vehicle launched in 2013 and is currently comprised of seven multi-tenant industrial assets totaling roughly 1.3 msf of space in top-tier industrial markets. A joint venture between Investcorp and BKM Capital Partners acquired the portfolio.

“Investcorp moved quickly and decisively to capture an opportunity to control a critical mass of institutional-quality, multi-tenant industrial product in two highly desired industrial growth markets of Seattle and Phoenix,” said Herb Myers, Co-Head of Real Estate North America at Investcorp.

Multi-tenant parks attract a growing entrepreneurial tenant base, cater to numerous users and allow for growth within the park, typically leading to higher tenant retention and a lower risk profile for owners.

The assets held in Fund I encompassed five properties in Metro Phoenix and two in Seattle, two core light industrial markets. The Fund I portfolio houses a diverse tenant base of roughly 450 tenants and is 93% leased.

The properties include:

• Black Canyon Business Park in Phoenix: 11 buildings totaling 170.8k sf
• Rose Garden Business Park in Phoenix: Nine buildings totaling 157.6k sf
• Twins Business Park in Tempe: Two buildings totaling 120.5k sf
• Metro Industrial Center in Phoenix: Five buildings totaling 113.8k sf
• Ash Business Center in Tempe: Nine buildings totaling 89.7k sf
• Seattle Exchange I in Tukwila submarket: 27 buildings totaling 478.4k sf
• Seattle Exchange II in Tukwila submarket: 11 buildings totaling 183.2k sf

The Fund I portfolio of quality, infill last-mile assets offers the opportunity for rent growth, in part since there’s been virtually no new construction of smaller-bay industrial product in these high-density urban areas of Seattle and Phoenix. The portfolio’s large tenant base and short lease terms provide smooth rent rollover profiles.

The collaboration and synergies created between Investcorp and BKM Capital Partners emerged earlier this year and helped form the foundation for this Fund I recapitalization. In Q1 2021, Investcorp acquired Tempe Commerce Park, a five-building, 536k sf, multi-tenant, light industrial park in Tempe, Arizona, from BKM Capital Partners.

CBRE’s Darla Longo, Barbara Perrier, Brett Hartzell, Rebecca Perlmutter, Joe Cesta and Eric Cox handled the Fund I listing for BKM. Local market expertise was provided by CBRE’s Sean Durkin, Jackie Orcutt and Bill Bayless, while CBRE’s James Millon and Tom Traynor provided debt and structured finance advisory services.

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