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12/10/25
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BKM Capital Partners has acquired a two-property, 193.8k sf light industrial portfolio in Houston for $24.9 mil ($128/sf). Situated in two of Houston’s most supply-constrained submarkets, the portfolio includes 44 units across seven buildings and is currently 87% occupied by a diverse mix of tenants.
One of the properties, Fairway Park Business Center, is located on an eight-acre site in Northwest Houston. Constructed between 1974 and 1977, it consists of 135.6k sf of space in five buildings. The other property, Rockley Road Business Center, is located in Southwest Houston and consists of 58.2k sf of space across two buildings on a four-acre site. It was built in 1980.
The assets feature highly functional layouts with dock-high and grade-level rear-loading, 14- to 20-foot clear heights, generous truck courts, ample parking, and immediate access to major transportation corridors.
“The Rockley and Fairway properties stood out because of their highly functional layouts, prime infill locations, and clear potential to enhance performance through targeted operational improvements,” said Brett Turner, Senior Managing Director of Acquisitions & Dispositions at BKM. “Given the limited availability of smaller, flexible industrial space in these Houston submarkets and the properties’ strong, diverse tenant base, this portfolio presents an immediate and actionable opportunity to deliver significant value for our investors.”
BKM plans to execute a $6.1 mil capital improvement program to enhance both the visual appeal and operational functionality of the assets. Approximately $3.7 mil will go toward exterior upgrades, including building and tenant signage, drought-tolerant landscaping, roofing and HVAC replacements, and parking lot improvements.
Another $2.4 mil is earmarked for tenant improvements aimed at boosting leasing velocity. Plans also include demising large suites into smaller units and reducing total office buildout from 44% to 28% of net rentable area.
“We acquired these assets for their clear rent growth potential and strong tenant demand, supported by Houston’s expanding economy and a constrained development pipeline,” said Brian Malliet, Founder, CEO, and CIO of BKM Capital Partners. “With a weighted average lease term of just over two years, the portfolio gives us flexibility to quickly capture approximately 15% in rent growth across the majority of units.”
The Houston metropolitan area is one of the nation’s largest industrial markets, supported by major infrastructure assets including the Port of Houston, extensive freeway networks, and two international airports. The Northwest and Southwest Houston submarkets, in particular, offer low vacancy rates of 4.8% and 5.8%, respectively, and vacancy rates as low as 1.5% for spaces under 50,000 square feet. This environment positions the portfolio for sustained tenant demand and robust leasing performance.
CBRE National Partners represented the seller, Fort Capital, in the transaction. Turner, with support from Charlie Farmer, Director of Acquisitions & Dispositions, led the acquisition for BKM, on behalf of the firm’s BKM Industrial Value Fund III.
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