May 17, 2022 – Newport Beach, CA-based BKM Capital Partners, a vertically integrated institutional fund manager, has acquired the Riverside Junction Portfolio, a two-asset portfolio in Portland, OR from the Gardeners and Ranchers Co-op for $18.55 million. The multi-tenant light industrial portfolio totals nearly 100,000 square feet across three buildings and includes Riverside Junction and 26th Avenue.
“Both of these assets are well-suited for our strategy,” said Brian Malliet, CEO of BKM Capital Partners. “Portland is a key industrial market, and we’re excited to continue building our footprint of multi-tenant industrial properties within it. The assets are strategically situated in high-density infill submarkets with no new competitive product planned for development and meet the rising demand for e-commerce and last-mile facilities in the Pacific Northwest markets.”
The portfolio consists of Riverside Junction, a two-building, multi-tenant industrial park located at 17800-17900 N.E. Riverside Parkway in Portland’s East Columbia Corridor submarket. It also includes 26th Avenue, a single-tenant industrial building located at 4930 S.E. 26th Ave. on the southeastern end of downtown Portland in the Clackamas submarket.
“With this acquisition, we’ve gained a diverse portfolio composed of both multi-tenant incubator and last-mile distribution product,” said Brett Turner, Senior Managing Director of Acquisitions at BKM Capital Partners. “We saw was an opportunity to acquire a portfolio well below replacement costs, reposition the assets through capital improvements, and strategically bring rents to market rates as well as unlock more hidden value.”
This is BKM’s fourth acquisition in the Portland market, bringing its current holdings in the region to nearly 500,000 square feet. Capacity Commercial Group represented the seller.
Riverside Junction was built in 2018 and features 64,000 square feet of rentable area across 15 suites, averaging 4,238 square feet of space. The project includes modern improvements and is currently 100% leased. Units are served by 11 grade level loading doors and clear heights of 16 feet. The submarket’s concentration of large corporate tenants, including Amazon, Owens Corning, and Subaru, have been a draw for a supporting mix of small-bay users that also value proximity to Portland’s high-density population hubs. The Riverside Junction property has easy freeway access via the 181 St. entrance to I-84.
26th Avenue—soon to be rebranded Raymond 26th—is a 35,000-square-foot tilt-up industrial building built in 1970. The building features 26-foot clear heights and is serviced by four grade level and four dock high doors – a premium feature for highly infill Portland projects. The building has been fully leased to the same master tenant since 2011. It presents a value-add opportunity to bring a more modern and aesthetically appealing asset to a market that presents high barriers to entry and has no new supply slated to be delivered in the foreseeable future. The property is easily accessible due to its location on the edge of downtown Portland.
BKM will leverage its existing local management team, as well as vertically integrated and agile approach to breathe new life into the properties. BKM’s in-house property and construction managers will oversee structural and cosmetic improvements, including fresh paint, uniform landscaping, addressing and signage.
BKM Capital Partners has a built strong market position in the multi-use logistics and small- and mid-bay light industrial asset class. The company has created a vertically integrated operational platform that is supported by a team capable of managing the space and relationships of nearly 2,000 tenants.
The Portland market is ranked among the top 10 by year-over-year industrial growth, at 8.6%, according to CBRE. “We saw a chance to add to our holdings in a prime market,” Malliet concluded. “The robust leasing volume in the Portland area is expected continue driving rent growth, which will create significant investment upside for us.”