Kayne Anderson Joining BKM Capital in Industrial Fund

Kayne Anderson Real Estate is joining forces with BKM Capital Partners in a $1.5 billion joint venture partnership.

The unit of Los Angeles-based investment powerhouse Kayne Anderson and Newport Beach-based BKM Capital will focus on light industrial real estate, specifically looking at small- and mid-bay properties, the Orange County Business Journal reported. Mid-bay buildings are defined as ranging between 200,000 and 500,000 square feet, while small bay buildings are generally under 200,000 square feet.

The joint venture is a “transformative step for BKM,” company founder and CEO Brian Malliet said in a statement, explaining the firm has “spent over a decade building an operating platform designed explicitly for small-bay industrial.” Both Kayne Anderson and BKM called light industrial one of the strongest performing real estate asset classes and said it is often overlooked by traditional institutional capital.

“The partnership allows for large-scale capital deployment into the light industrial sector and deepens BKM’s presence nationwide,” BKM said. The move will “support the acquisition and value-add repositioning of a targeted portfolio of small bay and mid bay industrial properties.” The capital company aims to double its holdings to $5 billion of assets under its watch over the next two years.

The joint venture recently bought a nine-building, 489,981-square-foot light industrial portfolio in Orlando, Florida, last month in one of the “largest light industrial portfolio trades in the Orlando metro in recent years,” BKM said in a statement.

Kayne Anderson started in 1984 as an investment management firm specializing in credit, energy, infrastructure and real estate. As of the first quarter of this year, the firm reportedly managed $38 billion in assets. It dove deeper into real estate in 2007 as it targeted investments ranging from $25 million to $1 billion. BKM Capital was founded in 2013 and entered the market with $77.5 million of transactions and five assets; it’s since grown to complete $4.5 billion in transactions across more than 120 properties.

— Chris Malone Méndez