BKM Capital Partners executes $ 261 million recapitalization with Investcorp for multi-state industrial portfolio


NEWPORT BEACH, Calif .– (COMMERCIAL THREAD) – BKM Capital Partners, based in Newport Beach, Calif., Completed a $ 261 million recapitalization of its industrial value-added fund I, expanding a partnership with Investcorp and marking successful investment thesis involving the first fund of fund managers. The flagship investment vehicle was launched in 2013 and is currently comprised of seven multi-tenant industrial assets totaling approximately 1.3 million square feet of space in leading industrial markets. A joint venture between Investcorp and BKM Capital Partners acquired the portfolio.

Brian Malliet, CEO and Founder of BKM Capital Partners, said: “This recapitalization of BKM Fund I is the true definition of win-win. We are incredibly proud of our ability to make a full investment on our first fund which generated remarkable results and vividly supported our investment thesis. This process began with the formation of this portfolio, continued through stabilization, including the completion of necessary capital improvements and leasing, to deliver impressive returns to our Fund I investors, as well as ” to present an investment opportunity of institutional caliber that appealed to Investcorp.

“Investcorp has acted quickly and decisively to seize the opportunity to control a critical mass of institutional grade multi-tenant industrial products in two highly sought-after industrial growth markets, Seattle and Phoenix,” said Herb Myers, Co-Head of real estate in North America. at Investcorp. “We look forward to expanding our partnership with BKM through this investment. ”

Multi-tenant fleets attract a growing entrepreneurial tenant base, cater to large numbers of users, and allow growth within the fleet, typically leading to higher tenant retention and a lower risk profile for landlords.

“Completing the monetization of our first fund is an important milestone for BKM. The outstanding performance achieved by BKM for Fund I investors is remarkable, especially given the turmoil caused by the pandemic last year, ”said Brett Turner of BKM.

Assets held in Fund I included five properties in the Phoenix metro area and two in Seattle, two key light industrial markets. The Fund I portfolio houses a diverse tenant base of approximately 450 tenants and is 93% leased.

The properties include:

  • Black Canyon Business Park in Phoenix: 11 buildings totaling 170,816 square feet

  • Rose Garden Business Park in Phoenix: Nine buildings totaling 157,604 square feet

  • Twins Business Park in Tempe: Two buildings totaling 120,496 square feet

  • Metro Industrial Center in Phoenix: Five buildings totaling 113,822 square feet

  • Ash Business Center in Tempe: Nine buildings totaling 89,728 square feet

  • Seattle Exchange I in the Tukwila submarket: 27 buildings totaling 478,435 square feet

  • Seattle Exchange II in the Tukwila submarket: 11 buildings totaling 183,162 square feet

Fund I’s portfolio of quality last mile assets offers the potential to increase rents, in part because there has been virtually no new construction of smaller bay industrial products in these high-rise urban areas. density of Seattle and Phoenix. The portfolio’s large tenant base and short lease terms provide smooth rental turnover profiles.

The collaboration and synergies created between Investcorp and BKM Capital Partners emerged earlier this year and helped lay the groundwork for this recapitalization of Fund I. In the first quarter of 2021, Investcorp acquired Tempe Commerce Park, a tenant-owned light industrial park. multiples of 536,051 square feet in Tempe, Arizona from BKM Capital Partners.

Darla Longo, Barbara Perrier, Brett Hartzell, Rebecca Perlmutter, Joe Cesta and Eric Cox of CBRE managed the Fund I listing for BKM. Local market expertise was provided by Sean Durkin, Jackie Orcutt and Bill Bayless of CBRE, while James Millon and Tom Traynor of CBRE provided debt and structured finance advisory services.

Longo said: “BKM’s Fund I portfolio has been well received in the market, ultimately generating interest from a number of high quality institutional buyers looking to expand their holdings in an asset class in which Brian and the BKM team have established a strong presence and successfully built a cutting edge operating platform around.

About BKM Capital Partners

BKM Capital Partners was founded in 2013 by Brian Malliet. Based in Newport Beach, California, BKM Capital Partners is a real estate fund manager specializing in the acquisition and improvement of value-added, light industrial and multi-tenant properties in metropolitan areas of the western United States. . BKM Capital Partners combines in-depth knowledge of this type of niche industrial product with a vertically integrated operator platform that includes in-house capabilities to reposition and convert existing assets, improve property management, integrate lease management and institutionalize light industrial properties characterized by fragmented ownership positions. The company continues to build on its proven track record, generating strong results with high levels of transparency and investor engagement. Additional information is available at www.bkmcapitalpartners.com.

About Investcorp

Investcorp is a global investment manager specializing in alternative investments in the areas of private equity, real estate, credit, absolute return strategies, GP holdings and infrastructure. Since our inception in 1982, we have focused on generating attractive returns for our clients while creating long-term value in our companies in which we invest and for our shareholders as a prudent and responsible investor.

We invest a significant portion of our own capital in the products we offer to our clients, ensuring that our interests are aligned with those of our stakeholders, including the communities in which we operate, in order to generate creation of lasting value. We pride ourselves on partnering with our clients to provide tailor-made solutions to their needs, using a disciplined investment process, employing world-class talent and combining the resources of a global institution with an innovative approach and entrepreneurial.

Investcorp is now present in 12 countries in the United States, Europe, the GCC and Asia, including India, China and Singapore. As of June 30, 2021, Investcorp Group had $ 37.6 billion in total assets under management, including assets managed by third-party managers, and employed approximately 430 people of 45 nationalities around the world in its offices. For more information, visit www.investcorp.com and follow us @Investcorp on LinkedIn, Twitter and Instagram.

The material provided here is for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy interests in the Fund or in any other security. Past investment results should not be taken as an indication of future performance.


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