BKM Capital Acquires Black Canyon Business Park, Plans $5M Upgrade

By Liviu Oltean, Associate Editor

Black Canyon Business Park

BKM Capital Partners plans a major upgrade for Black Canyon Business Park in Phoenix after buying it as part of a three-property, $42.8 million deal. The Irvine, Calif.-based firm acquired the asset for $13.1 million or $59.71 per square foot.

Also included in the portfolio was Hayden Island Business Park in Portland, Ore., and Patrick Commerce Center in Las Vegas.

Shortly before the acquisition, the 219,410-square-foot Black Canyon property lost its main tenants, which cut occupancy from 95 percent to 34 percent. BKM is planning to invest over $5 million in the asset, with an eye toward repositioning Black Canyon as a traditional multi-tenant industrial park.

The acquisition was the first for BKM Industrial Value Fund I L.P., a $300 million commingled fund scheduled to close next March, according to Brian Malliet, the firm’s CEO.

“We are active on both the acquisition and capital raising fronts as we near the close of a productive 2014,” Malliet said in a statement. “I believe we are the only fund manager in market specifically targeting value-add multi-tenant industrial properties in this geography. As such, we are excited at the opportunity to assemble within the fund an optimal portfolio of assets precisely fitting our investment criteria, starting with these three.”

“Undermarket opportunities still exist in the multi-tenant industrial niche. We have been successful in finding and acquiring properties at approximately 40 percent off replacement cost and 50 percent off peak market value on a per square foot basis,” Malliet added. ‘Buying right’, as we say, and then fixing what is broken in each acquisition, are the fundamentals of our strategy.”

Image Courtesy of BKM Capital Partners via Official Website