NEWPORT BEACH, Calif., (Aug. 12, 2019) – BKM Capital Partners, an institutional fund manager with a niche focus on value-add, light industrial multi-tenant investments, has acquired Federal Way Industrial Portfolio, a two-property portfolio consisting of eight buildings totaling 133,595 square feet in Federal Way, Washington. BKM acquired the portfolio in an off-market transaction for $14.7 million.
“This was a rare opportunity to acquire two highly functional business parks strategically located in metro-Seattle’s tightest industrial submarket,” says BKM Capital Partners Managing Director of Acquisitions, Brett Turner. “With current occupancy at 75 percent and fundamentals that are poised to drive new industrial users to the market, there is a clear opportunity to build value in these assets.”
The multi-tenant industrial portfolio is strategically located just south of the Kent Valley industrial submarket off I-5, giving tenants direct access to the Port of Tacoma. Turner points to a recently formed partnership between the Northwest Seaport Alliance and the Port of Seattle as a key factor in BKM’s value-add strategy.
“This recent partnership has significantly increased container volumes, which is pushing tenant demand south,” he explains. “This puts our newly acquired portfolio in a direct path of growth, which we can leverage to increase occupancy and maximize performance.”
BKM will invest $3 million in capital improvements to renovate and reposition the properties, including the conversion of one building from office to industrial.
“The portfolio was originally constructed in 1979, and while it is extremely functional, it has lacked the proper capital investment to modernize the property,” explains Turner. “Our plan is to reposition the portfolio as an institutional grade asset that is aligned with the demands of today’s tenants which will allow us to quickly lease remaining vacant space, bring rents up to market, and enhance the long-term value of the property.”
This acquisition also comes on the heels of BKM recently surpassing $1 billion in AUM. The firm has been extremely active in the light, multi-tenant industrial space, and continues to expand its portfolio throughout the western region.
The properties are located at:
- 34004 – 34016 9th Avenue South
- 33623 – 33799 9th Avenue South and 801 – 815 South 336th Street in Federal Way, Washington.
BKM was represented by Max White & Nicholas Ratzke with Neil Walter Company in the off-market acquisition. The seller, a private investor, was represented by Max White & Nicholas Ratzke with Neil Walter Company.
About BKM Capital Partners
BKM Capital Partners, currently raising their second institutional fund, was founded in 2013 by Brian Malliet and Nima Taghavi. Headquartered in Newport Beach, California, BKM Capital Partners is a fund manager specializing in the acquisition and improvement of value-add light industrial multi-tenant properties in metro areas across the Western U.S. Combining a deep knowledge of this niche industrial product type with an operator platform that includes in-house capabilities including on-site property management, asset management, leasing management, and construction management, the firm continues to build on its proven track record, generating strong results with high levels of transparency and engagement for investors.