BKM Capital Partners and Kayne Anderson Team Up for $550 Million Light Industrial Investment
BKM Capital Partners, a prominent institutional fund manager that specializes in value-add light industrial properties, has made headlines with their recent announcement of executing a remarkable $550 million recapitalization. This strategic partnership with Kayne Anderson Real Estate not only marks Kayne's inaugural venture into the light industrial sector but also signifies an important milestone for BKM in fulfilling its ambitious growth plans.
Founded by Brian Malliet, BKM Capital is celebrated for its deep expertise in managing small-bay real estate investments. Malliet expressed enthusiasm about collaborating with Kayne Anderson and highlighted the potential for unlocking exceptional growth opportunities. The goal, he says, is to establish a long-term partnership that can drive sustainable value for investors and stakeholders involved—an objective they intend to achieve through meticulous market strategies and industry knowledge.
Kayne Anderson Real Estate boasts a diversified portfolio with strengths in sectors such as seniors housing, student housing, medical office, multifamily housing, and self-storage. With this new investment, they are keen to expand and explore opportunities within the light industrial market, seeing it as a space ripe for growth. Al Rabil, the CEO of Kayne Anderson, emphasized the strong fundamentals of the light industrial market, affirming the company's commitment to this new asset class alongside BKM.
The strategic momentum for BKM has been evident in its recent activities. The firm has not only executed this sizable recapitalization but also managed to involve itself in $575 million in acquisitions across 11 properties in 2023. The latest recapitalization pushes BKM's total acquisition activity to approximately $1.2 billion just in this year alone, encompassing over 4.5 million square feet across 25 transactions. Malliet believes this ongoing activity reflects BKM's strong advantages in the light industrial sector and places them in a favorable position for future growth.
BKM's newly acquired portfolio consists of nine properties, featuring over 2.1 million square feet of small-bay industrial space strategically located in urbanized areas throughout the Western United States. Notable assets within this portfolio include:
The portfolio's positioning in high-density urban markets underscores the potential for substantial rent increase, largely driven by a low level of new construction of similar smaller-bay industrial products in these areas. A diverse tenant base and shorter lease terms are anticipated to provide an advantageous rent rollover profile, allowing the portfolio to benefit from annual rent growth observed in the sector.
With industrial sector growth continuously outperforming expectations, the BKM team's strategic approach is set to yield exceptional returns. Brett Turner, Senior Managing Director of Acquisitions and Dispositions at BKM, noted their promising outlook, underscoring the greater demand for small-bay properties and their firm historical rent growth trends—elements that are essential in unlocking the property's future potential.
BKM Capital, based in Newport Beach, CA, has been an influential player in the real estate market since its establishment in 2013, having managed transactions exceeding $4.3 billion encompassing over 120 business parks and 22 million square feet of industrial space in the Western U.S. Their continual growth strategy is augmented by functional joint ventures, institutional investor funds, and tailored management accounts that cater to diverse investment needs.
This significant transaction was facilitated by Truist Securities, which facilitated the initial introduction of both firms and served as Left Lead on the deal. First Citizens Bank also played a crucial role as Joint Lead Arranger for the financing involved in this venture.
As BKM Capital Partners continues to shape the landscape of light industrial investment, their collaboration with Kayne Anderson Real Estate signals promising prospects in the evolving marketplace. Investors and market analysts alike will be watching closely as these entities navigate this promising new chapter together.
For more information on BKM Capital Partners and their investment strategies, visit bkmcp.com. Likewise, insights into Kayne Anderson Real Estate's portfolio can be found at kayneanderson.com.
Founded by Brian Malliet, BKM Capital is celebrated for its deep expertise in managing small-bay real estate investments. Malliet expressed enthusiasm about collaborating with Kayne Anderson and highlighted the potential for unlocking exceptional growth opportunities. The goal, he says, is to establish a long-term partnership that can drive sustainable value for investors and stakeholders involved—an objective they intend to achieve through meticulous market strategies and industry knowledge.
Kayne Anderson Real Estate boasts a diversified portfolio with strengths in sectors such as seniors housing, student housing, medical office, multifamily housing, and self-storage. With this new investment, they are keen to expand and explore opportunities within the light industrial market, seeing it as a space ripe for growth. Al Rabil, the CEO of Kayne Anderson, emphasized the strong fundamentals of the light industrial market, affirming the company's commitment to this new asset class alongside BKM.
The strategic momentum for BKM has been evident in its recent activities. The firm has not only executed this sizable recapitalization but also managed to involve itself in $575 million in acquisitions across 11 properties in 2023. The latest recapitalization pushes BKM's total acquisition activity to approximately $1.2 billion just in this year alone, encompassing over 4.5 million square feet across 25 transactions. Malliet believes this ongoing activity reflects BKM's strong advantages in the light industrial sector and places them in a favorable position for future growth.
BKM's newly acquired portfolio consists of nine properties, featuring over 2.1 million square feet of small-bay industrial space strategically located in urbanized areas throughout the Western United States. Notable assets within this portfolio include:
- - Hohokam Business Park in Tempe, AZ: A 79-unit property occupying 256,920 square feet.
- - Backlot Burbank in Burbank, CA: A 208,688 square-foot space comprising 16 units.
- - Concord Business Park in Concord, CA: Housing 28 units across 141,792 square feet.
- - Gateway Shoreline Business Centers in Fremont, CA: A 14-unit property offering 179,559 square feet.
- - Lionshead Landing in Vista, CA: A significant site providing 228,816 square feet with 54 units.
- - Inverness Exchange in Englewood, CO: This site features 103 units across 215,212 square feet.
- - Hughes Airport Center in Las Vegas, NV: A sizable asset hosting 58 units over 672,424 square feet.
- - West Valley Business Park in Kent, WA: This property consists of 158 units within a space of 205,719 square feet.
The portfolio's positioning in high-density urban markets underscores the potential for substantial rent increase, largely driven by a low level of new construction of similar smaller-bay industrial products in these areas. A diverse tenant base and shorter lease terms are anticipated to provide an advantageous rent rollover profile, allowing the portfolio to benefit from annual rent growth observed in the sector.
With industrial sector growth continuously outperforming expectations, the BKM team's strategic approach is set to yield exceptional returns. Brett Turner, Senior Managing Director of Acquisitions and Dispositions at BKM, noted their promising outlook, underscoring the greater demand for small-bay properties and their firm historical rent growth trends—elements that are essential in unlocking the property's future potential.
BKM Capital, based in Newport Beach, CA, has been an influential player in the real estate market since its establishment in 2013, having managed transactions exceeding $4.3 billion encompassing over 120 business parks and 22 million square feet of industrial space in the Western U.S. Their continual growth strategy is augmented by functional joint ventures, institutional investor funds, and tailored management accounts that cater to diverse investment needs.
This significant transaction was facilitated by Truist Securities, which facilitated the initial introduction of both firms and served as Left Lead on the deal. First Citizens Bank also played a crucial role as Joint Lead Arranger for the financing involved in this venture.
As BKM Capital Partners continues to shape the landscape of light industrial investment, their collaboration with Kayne Anderson Real Estate signals promising prospects in the evolving marketplace. Investors and market analysts alike will be watching closely as these entities navigate this promising new chapter together.
For more information on BKM Capital Partners and their investment strategies, visit bkmcp.com. Likewise, insights into Kayne Anderson Real Estate's portfolio can be found at kayneanderson.com.
Topics Financial Services & Investing）
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