BKM Plans Repositioning of Multi-Tenant Industrial Park

Institutional fund manager BKM Capital Partners has acquired the Canyon Industrial Center for $70.2 million. The multi-tenant industrial park is located in San Diego’s Kearny Mesa submarket, near some of the West Coast’s densest population centers. 

A full 92% of the park’s 46 existing leases are set to roll over during BKM’s planned hold period at an average of one unit per month. BKM plans to invest more than $1.7 million to bring the circa-1979 Canyon Industrial Center from Class B to Class A status.

The acquisition and transformation of Canyon Industrial Center comes as the expansion and ramp-up of San Diego’s life science industry has helped to shrink the region’s light industrial inventory, notably in the nearby Sorrento Mesa/Sorrento Valley submarket.

“An estimated 500-plus industrial tenants have been displaced from Sorrento Mesa and Sorrento Valley,” said BKM CEO Brian Malliet. “With no new industrial projects currently planned or under construction in either submarket, and a Central County vacancy of just 2.7% at year-end, we expect to have maximum leasing leverage once we complete our improvements at the Canyon Industrial Center.”

BKM  represented itself in the transaction. The seller, a global investment advisor, was represented in the transaction by the Cushman & Wakefield team of Jeff Cole, Jeff Chiate and Bryce Aberg.

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