BKM Capital Partners, an institutional fund manager, has held the first close of its second institutional fund, BKM Industrial Value Fund II, with $135 million in equity commitments as well as $25 million in co-investments. The firm also currently has an additional $100 million of soft-circled equity commitments from European and U.S. institutional investors.
“Our first institutional fund, which closed in 2016 and is fully invested, has the same strategy as this second fund of acquiring value-add, multi-tenant industrial assets throughout major metro markets in the western U.S.,” said Nima Taghavi, chairman of the board and co-founder of BKM Capital Partners. “Additionally, we recently sold the first three assets in our Fund I.”
“We have an extremely strong pipeline of value-add investment opportunities, and this $160 million closing allows us to immediately begin deploying capital,” said BKM’s co-founder and CEO, Brian Malliet. “By being strategic in our specific focus and operator execution platform, we will capitalize on the growing demand for properties that serve as ‘last-mile’ delivery hubs for retailers and industrial users. This will maximize returns to our investors while we continue to fundraise over the course of the year.”
Fund II will invest exclusively in the acquisition, improvement and repositioning of distressed and undervalued light multi-tenant industrial assets in strong growth markets across the western U.S. BKM has already acquired four assets for the fund. These properties include Hughes Airport Center II in Las Vegas, Activity Business Center in San Diego, Inverness Business Park in Denver, and Expo Centre in Sacramento, with two additional assets in escrow.
Malliet noted that multi-tenant industrial is their niche. “While much of the big-box industrial sector has surpassed peak prices, we remain able to identify and acquire assets well below replacement cost, create value, and deliver strong risk-adjusted returns to investors.”
Fund II is on track to reach its target of $300 million by final close, planned for summer 2018.