BKM, Kayne Team Up for Another Industrial Purchase

BKM Capital Partners and Kayne Anderson’s joint venture has added another industrial portfolio to its collection.

Newport Beach-based BKM and Los Angeles-based Kayne Anderson bought 889,352 square feet of industrial space across more than 40 buildings in the Phoenix area for $167.9 million, the Phoenix Business Journal reported. The seller was an affiliate of Equus Capital Partners.

The transaction marks BKM’s latest acquisition in the Phoenix area. In March, the firm purchased a four-property industrial portfolio for $191.9 million, according to the Business Journal. The most recent purchase was made “at a significant discount to replacement cost,” BKM said.

In May, BKM and Kayne announced a partnership with plans to spend $1.5 billion on industrial space across the United States. With the latest acquisition, BKM’s portfolio in Arizona grows to approximately 4.5 million square feet, according to the Business Journal. Overall assets under its management total $3 billion.

The Phoenix-area portfolio, consisting of buildings mostly constructed in the 1970s and ’80s, is 89 percent occupied and spans 364 units. Each unit averages a size of 2,400 square feet and has ceiling clear heights between 14 and 20 feet.

Plans call for BKM to “invest significantly in capital improvements to address deferred maintenance,” according to a statement from the firm. This effort will include roof replacements, upgrades to HVAC systems and an aesthetic revamp across the portfolio.

The acquisitions consist largely of properties in the Tempe area. They include 13 buildings at the Buttes Business Center totaling 188,282 square feet; eight buildings across 177,354 square feet at the Tempe Commerce Center; five buildings comprising 155,094 square feet at the Priest-Excel Business Park; six buildings at Expressway Corporate Center totaling 79,333 square feet; two buildings at Mineral Road Industrial Center for 68,693 square feet; and one building at Harl Industrial Park spanning 27,900 square feet.

In the Phoenix Airport submarket, BKM bought four buildings at Elwood Industrial Center totaling 133,076 square feet and two buildings at the Roeser Commerce Center with 59,620 square feet. — Chris Malone Méndez