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3/28/23
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BKM Capital Partners, in a joint venture partnership with TerraCore Capital, acquired Airport Business Center, an 11-building, 228.5k sf light industrial portfolio is situated in the heart of Portland’s NE/Columbia industrial corridor. The properties were sold by an institutional investor in a $37.3 mil ($163/sf) deal.
Located at 6756 NE Alderwood Rd and 6620-7040 NE 79th Ct, the business park consists of 41 units with an average size of 5.6k sf. The spaces were 92% occupied at the time of the sale by a diverse range of tenants across a broad range of industries.
BKM has put together a capital improvement program to improve the performance, costs and efficiency of Airport Business Park buildings. Overall, the 11-building package consists of 24% office space and features 17- to 20-foot clear heights, 79 dock- and grade-level loading doors, and ample parking.
Planned upgrades include the installation of new TPO all-weather roof systems with 15-year warranties, new skylights and LED lighting; using sustainable building materials to reduce energy use; replacing HVAC systems across the buildings; and reducing water use by cutting back landscaping and replacing trees with drought-resistant foliage. The asset’s paint scheme, design, and signage will also be reimagined to elevate the asset’s curb appeal and reflect BKM’s corporate branding. BKM also plans to cut down the amount of office space in three of the vacant small-bay industrial units to create a more functional workspace for the new paradigm industrial tenants that are most prevalent in the market today.
“Continued supply chain shortages and the resulting high price of construction materials and labor have made it increasingly difficult to bring new, competitive supply to the market,” said Brian Malliet, BKM’s Chief Executive Officer. “For this reason, we continually look for opportunities to acquire well-built facilities in high-growth locations, where we can add value through strategic improvements, leasing, and integrated hands-on management.
“This investment provided us with an opportunity to buy an institutional-grade business park in Portland’s largest industrial submarket,” he added. “With little new construction and vacancies floating under 3.5%, we see significant opportunities to capitalize.”
The Portland industrial market experienced a record-breaking 2022, with absorption crossing the 5 msf mark for the first time ever. Airport Business Park is located within a one-mile drive from the Portland International Airport, I-205 freeway MAX Rail Line and Cascade Station’s restaurants and stores, the area attracts a variety of industrial, R&D and manufacturing enterprises.
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