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BKM Capital Partners Picks Up 450k sf Industrial Park in the Metro Portland Area

12/14/23

BKM Capital Partners has acquired 217 Distribution Center, a five-building, 451k sf multi-tenant industrial park in Metro Portland. It was sold by an institutional investor. The price was not disclosed.

Situated at 10950-11065 SW 11th St in the city of Beaverton, the 1970s-era property is comprised of 13 units ranging in size from 9.9k sf to 67.5k sf. It features 68 dual-dock-high and 12 grade-level loading capabilities, up to 24-foot-clear heights, and access to 14 railway dock doors. Less than 9% of its total footprint consists of office space.

With a high-visibility location along Hwy 217, and quick access to the entire Portland Metro and broader Pacific Northwest, the asset caters to regional and national logistics-focused tenants. The complex is currently 100% leased to mostly credit tenants including Nike, Rexel, Blue Ocean Logistics, and the Beaverton Police Department. BKM intends to leverage the asset’s 3.5-year WALTs to correct in-place rents, which are 20% below market rates, over its 60-month hold period.

“This transaction presented a prime opportunity to acquire a critical mass of infill light industrial square footage at a nearly 50% discount to replacement cost in one of our target markets,” stated Brett Turner, Senior Managing Director of Acquisitions and Dispositions at BKM. “The Beaverton industrial submarket is greatly supply constrained, with a 2.5% vacancy and new construction accounting for just 1% of inventory.”

As part of its value-add strategy, BKM intends to invest approximately $4 mil in capital improvements, including upgrades to roofs, parking lots, landscaping, HVAC systems, interior spec TIs, and updates to the signage and paint scheme to bring the asset to brand standards. Plans call for increasing the number of units from 13 to 15, decreasing the average unit size from 34.7k sf to 30k sf.

The property was one of several industrial assets the undisclosed institutional seller was looking to liquidate by year’s end. The off-market transaction comes on the heels of BKM’s sale of the neighboring Beaverton Industrial Center to STAG Industrial in the third quarter.

The transaction also caps off a year of significant activity for BKM, which strengthened both its investment capabilities and its Western U.S. industrial portfolio via several strategic acquisitions and dispositions.

In 2023, BKM acquired 14 properties totaling 2.2 msf in 43 buildings in Portland, OR, Las Vegas, NV, Denver, CO, and Northern and Southern California. The acquisitions brought the firm’s total portfolio to over 10 msf in six states. Additionally, ownership interests in BKM’s Pacific Business Center (748k sf) in Henderson, NV and Backlot Burbank (306k sf) in Burbank, CA were acquired by StepStone Real Estate through a new partnership formed earlier this year.




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