BKM JV Buys Metroplex Shallow-Bay Park

BKM Capital Partners and German American Realty GmbH have acquired the three-building, 78,000-square-foot Post & Paddock Industrial Park in Grand Prairie, Texas, for approximately $11 million.

The property is 83 percent occupied, with no tenant accounting for more than 7.5 percent of its rentable square footage. BKM noted that its 1.7-year weighted average lease term provides opportunities for incremental rent growth through several smaller lease rollovers instead of a single large one.

The acquisition was made at below the asset’s replacement cost, Brett Turner, BKM’s senior managing director of acquisitions & dispositions, said in prepared remarks.

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Post & Paddock Industrial Park was built in 1984 and consists of three buildings totaling 27 units configured for smaller-format industrial users, with an average suite size of 2,800 square feet. The property offers 39 drive-in doors, 16-foot clear heights, and about 30 percent office finish.

The buyers plan a capital program focused on modernizing the asset’s appearance and functionality, including façade improvements, parking lot repairs, HVAC and roof work, refreshed paint and landscaping, upgraded building and tenant signage, and spec suite buildouts in vacant units.

The property’s shallow-bay configuration is consistently in demand in the submarket, particularly among last-mile distributors, light manufacturers, and service-oriented businesses that need flexible infill space, according to BKM.

Situated on 4.5 acres, the property is just off Highway 360, providing immediate access to Interstates 20 and 30, along with Loop 12.

Turner, with support from Charlie Farmer, BKM’s director of acquisitions & dispositions, led the acquisition. The sellers, PHP and Caprock, were represented by CBRE Senior Vice President Eliza Bachhuber and Senior Associate Elliott Dow.

A big focus on smaller spaces

The Great Southwest submarket has an overall vacancy rate of 8 percent, according to BKM, about 20 basis points tighter than the broader Metroplex. The micro-markets surrounding Post & Paddock are tighter still, the company reported, and with only about 455,000 square feet under construction across the Great Southwest, new supply so far provides little competition.

BKM’s acquisitions over the past year have ranged across the Southwest and the West Coast but have always focused on light industrial. 

Last July, the company, in partnership with Kayne Anderson Real Estate, bought three industrial campuses in the San Francisco Bay Area from Link Logistics for more than $120 million.

In September, the same two partners acquired a light industrial portfolio totaling 889,352 square feet in metro Phoenix for $167.9 million from an affiliate of Equus Capital Partners Ltd. The portfolio spans eight properties, 41 buildings and 364 individual units. 

And just last month, BKM purchased a 429,000-square-foot, 11-building Los Angeles–area light industrial campus from Germany’s DWS Group for $95 million.