BKM Capital, Kayne Anderson Forge $1.5B Partnership
The joint venture will focus on middle-market light industrial assets.
BKM Capital Partners and Kayne Anderson Real Estate launched a $1.5 billion joint venture targeting value-add light industrial real estate opportunities in middle-market areas.
BKM Capital’s small-bay light industrial strategy is focused on markets experiencing significant historical rent growth, with cumulative gains of 70 percent to 90 percent over the past four years, according to Brian Malliet, founder, CEO & CIO of BKM Capital Partners.
“The market continues to be inefficient as lease expirations burn off, which will continue to present opportunities for experienced managers for the next three to four years, allowing us to offset macroeconomic uncertainties effectively,” Malliet told Commercial Property Executive.
“We intend to deploy capital over the next 18 to 36 months in U.S. markets characterized by strong growth and below-market in-place rents.”
BKM Capital’s current key industrial markets (California, Arizona, Nevada, Colorado, Oregon, Washington and Texas) have seen 10 percent to 12 percent rent growth during the past year.
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The joint venture is expected to shift BKM Capital’s focus from the western region to infill markets across the U.S. with common fundamentals.
In the fourth quarter last year, the sector posted a record-low vacancy rate of 4.1 percent, wide spreads between in-place and market rents, and limited new development, according to the company. Leasing increased year-over-year by 12 percent.
BKM Capital’s recent deals
Late last year, BKM Capital has recapitalized a nine-property, 2.1 million-square-foot West Coast portfolio for $550 million.
In March, the company expanded in Phoenix by acquiring a three-property portfolio from Starwood Capital Group totaling 778,000 square feet for $156.8 million. The assets were Kyrene CommercePlex, Estrella Business Park II and Hohokam Industrial Park.
In January, BKM Capital partnered with StepStone Real Estate to recapitalize the 10-building Pacific Business Center in Las Vegas for $154 million.
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