BKM Capital Partners (BKM) and Kayne Anderson Real Estate acquired an 889,352-square-foot light industrial portfolio in Metro Phoenix for $167.9 million.  The transaction was completed at a significant discount to replacement cost. An affiliate of Equus Capital Partners sold the portfolio, which features 364 units in 41 buildings, collectively 89% occupied by a diverse array of tenants.  

The properties, primarily built in the 1970s and 1980s, have a collective WALT of approximately two years, presenting a 22% mark-to-market opportunity in rental rates.

BKM plans physical upgrades, capital improvements and strategic reconfigurations. Select larger units will be demised into smaller, high-demand configurations catering to growing tenant needs for right-sized, flexible industrial space. On-site property management will be deployed to improve service delivery and drive tenant retention while rents are marked to market.  

This acquisition represents the sixth investment made through the BKM-Kayne Anderson joint venture since the partnership was announced earlier this year. It brings BKM’s total assets under management to more than $3 billion.

The seller was represented by CBRE’s Rusty Kennedy, Joe Cesta, and Darla Longo. Brett Turner and Michael Grossner, Director of Acquisitions and Dispositions, led BKM’s in-house acquisitions team.