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9/17/24
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BKM Capital Partners has acquired Escondido Business Park, a two-building, 153.4k sf multi-tenant light industrial park in the Airport submarket of Las Vegas, for $21.3 mil ($139/sf). The small-bay property will be upgraded and rebranded as Skyport Industrial Park.
Built in 1995, Escondido is comprised of two concrete block buildings that are fully leased to two tenants. The property features 24’-clear ceiling heights, ESFR sprinklers, a 150-foot truck court, and parking for 65 cars.
BKM will implement a $1.9 mil capital improvement program to execute both structural and cosmetic improvements to the property, including a modern paint scheme, refreshed landscaping, upgraded monument and building signage, new roofs, and full replacement of the parking lot to enhance the look and feel of the property while highlighting the projects unique functionality and excellent location.
As part of its repositioning process, BKM will take advantage of Escondido’s 1.7-year average WALTs and staggered rollover schedule to reconfigure and re-tenant the property, correcting a 46% market deficiency in rents. The firm has budgeted another $2.5 mil for speculative TIs to turn the two large units into nine white-boxed warehouses ranging from 7k sf to 31k sf each. Plans also call for new scrim, LED lighting, the addition of 10 new dock-high doors, bringing the total to 25, and increasing the park’s office component from 3% to 8% of net rentable area.
“The Las Vegas region has experienced significant population growth in recent years, which has driven immense demand for industrial space to service the market,” said Brett Turner, BKM’s Senior Managing Director of Acquisitions and Dispositions. “The Airport submarket is area’s main logistics hub, but there’s a significant dearth of small-bay industrial—vacancy for space under 30k sf is just 2.7%, versus a 5% in the broader market. Our improvements to Escondido will provide modern, functional product to that undersupplied sector.”
Las Vegas has consistently ranked as one of the fastest-growing metros in the United States, with a 12% population increase in the past five years alone. Escondido's strategic location just south of Harry Reid International Airport and its excellent access to both I-215 and I-15 make it ideally situated to serve the nearly three million residents in the area.
Turner led the BKM team handling the acquisition, which was made on behalf of the BKM Industrial Value Fund III. Colliers’ Michael Kendall, Vice Chair; Brian Riffel, Executive Vice President; Gian Bruno, Senior Vice President; and Tyler Jones, Vice President, represented the seller.
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