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12/16/24
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BKM Capital Partners completed a $550 mil recapitalization of a nine-property light industrial portfolio with Kayne Anderson Real Estate. This transaction marks the first entry into the light industrial sector for Kayne Anderson Real Estate, an alternative asset manager with an established track record in the alternative real estate sectors of seniors housing, student housing, medical office, multifamily housing, and self-storage.
Shoreline Business Center, Fremont |
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The nine-property portfolio consists of 510 units and over 2.1 msf of small-bay industrial space located in high-density urban areas throughout the Western U.S. The portfolio encompasses:
• Hohokam Business Park, a 256.9k sf, 79-unit property in Tempe, AZ
• Backlot Burbank, a 208.7k sf, 16-unit property in Burbank, CA
• Concord Business Park, a 141.8k sf, 28-unit property in Concord, CA
• Gateway & Shoreline Business Centers, a 179.6k sf, 14-unit property in Fremont, CA
• Lionshead Landing, a 228.8k sf, 54-unit property in Vista, CA
• Inverness Exchange, a 215.2k sf, 103-unit property in Englewood, CO
• Hughes Airport Center, a 672.4k sf, 58-unit property in Las Vegas, NV
• West Valley Business Park, a 205.7k sf, 158-unit property in Kent, WA.
The portfolio of quality, infill last-mile assets offers significant opportunity for rent growth, largely in part to the limited amount of new construction of smaller-bay industrial product in these high-density urban areas. The portfolio's varied tenant base and shorter lease terms create a favorable rent rollover profile, poised to capitalize on the high annual rent growth seen across the small-bay industrial sector.
"As growth in the industrial sector continues to outperform market expectations, these assets have delivered exceptional returns thanks to our team's strategic approach," says Brett Turner, Senior Managing Director of Acquisitions and Dispositions at BKM. "With ongoing demand for small-bay industrial properties and strong historical rent growth trends, we see significant future potential, which our institutional management expertise is well-positioned to fully unlock."
Since 2013, Newport Beach-based BKM has completed $4.3 bil worth of transactions involving more than 120 business parks and 22 msf of small-bay industrial space in the Western U.S. The firm continues to grow its investment management business through strategic joint ventures, institutional investor funds, and separately managed accounts.
Truist Securities facilitated the introduction between Kayne Anderson Real Estate and BKM Capital Partners and served as Left Lead, while First Citizens Bank acted as Joint Lead Arranger on the financing for the transaction.
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