BKM Capital Partners, an institutional fund manager, has raised $289.4 million for its BKM Industrial Value Fund II, bringing the total equity commitments to $382 million. A final close was held in March 2019.
In addition to $289.4 million of equity commitments to the fund and parallel vehicles, BKM has invested a further $54.1 million of Fund II LP co-investment capital and has up to an additional $38 million of committed non-discretionary LP co-investment capital to deploy into this strategy. Together, this equates to more than $1 billion in buying power.
The fund has a diverse global investor base comprised of public and private pensions, insurance companies, asset managers, endowments, family offices, and high-net-worth individuals.
BKM Industrial Value Fund II was launched in 2017 with a $300 million fundraising target.
The fund, which had a first close in December 2017, is already being deployed into large business park portfolios throughout the Western U.S., including major acquisitions in California and Arizona, among others.
“BKM’s ability to more than double our fund investments in less than 24 months speaks to the depth of our expertise in this product type,” says Brian Malliet, co-founder and CEO of BKM Capital Partners. “We recognized the opportunity in light multi-tenant industrial early on and understood that this very specific property type was poised to grow faster than other industrial product. Today, fueled by healthy demand and tight supply, light multi-tenant industrial is on track to be one of the best-performing commercial real estate segments in 2019.”
Powered by demand drivers including ongoing e-commerce growth, changing consumer preferences, and a resurgence of small businesses in need of space, light multi-tenant industrial has also emerged as a key investment target for institutions.
“Today’s institutions are seeking investments that are strategically positioned to perform well for the long term,” said Malliet. “By honing our first-hand expertise in the acquisition, improvement, and operation of these assets, we now have a proven investment platform through which these institutions can achieve strong long-term growth while earning consistent risk-adjusted returns.”
In February 2019, it acquired three industrial portfolios for a combined consideration of $138.7 million.
The company purchased a two-property portfolio consisting of four buildings totaling 99,187 square feet in metro San Diego. 3G Properties sold the properties for $16.6 million. At the time of sale, the property was 96 percent occupied.
In addition, BKM Industrial Value Fund II acquired South Bay Portfolio, a five-building light industrial portfolio, totaling 221,651 square feet, in Fremont, Calif., for $49 million. At the time of sale, the portfolio was 94 percent occupied. The seller was Stockbridge.
And BKM purchased a portfolio of four properties, totaling 27 buildings and 448,573 square feet, across California and Arizona. Global Logistics Properties sold the assets for $73 million. The portfolio is currently 87 percent occupied.
In August 2018, the fund acquired a 302,000-square-foot industrial business park in Burbank, Calif., for $84.75 million. The seller was Shubin Nadal Associates and Penwood Real Estate Investment Management.