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7/11/23
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BKM Capital Partners has acquired Commerce Carlsbad, an eight-building, 129.9k sf multi-tenant industrial park in Carlsbad. The project will be renamed “Pacific Coast Industrial Center” as part of BKM’s signature capital improvement program. The purchase price was not disclosed.
Situated at 5205 Avenida Encinas, on a prime, well-located site near I-5 and the Pacific Ocean, the park consists of 62 small-bay units with an average size of 2.5k sf. Built in 1985, the property features 16-foot to 18-foot clear heights, 66 grade-level loading doors, and an above-average parking ratio of three spaces per 1k sf. The market caters to an array of diverse industrial users that are drawn to Northern San Diego's pool of educated young workers and proximity to Los Angeles and Mexico.
As with most of its acquisitions, BKM intends to invest in significant capital improvements, such as upgrades to roofs, parking lots, paint, signage, HVAC, and landscaping, to bring the asset to its brand standards. The firm also plans to take advantage of existing vacancies and short WALTs to incrementally reduce the amount of office space at the park from 54% to 36%, resulting in a more functional office/warehouse mix.
Although there’s 3.2 msf of industrial space under construction in San Diego, demand in the North County submarket remains high with vacancy at just 2.6%, and the availability of light industrial product is even lower. “In the past five years, just 1.2 msf of small-bay space has been added to the market, accounting for less than 9% of new inventory, and the segment accounts for less than 6% of the industrial pipeline,” relates Brett Turner, Senior Managing Director of Acquisitions and Dispositions at BKM.
As such, Turner continues, “available industrial spaces under 50k sf in San Diego are currently leasing at a record average pace of 2.4 months. We’re confident that with our planned improvements, we will bring the rebranded Pacific Coast Industrial Center to full occupancy and market rates well within our anticipated hold period.”
Cushman and Wakefield’s Brad Tecca facilitated the transaction as a representative for the Seller. BKM represented itself.
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