LAS VEGAS, Nevada, – December 2, 2014 – (RealEstateRama) — BKM Capital Partners, a fund manager and operator platform targeting value-add, multi-tenant industrial real estate in the Western U.S., has increased its investment in Las Vegas with the acquisition of two multi-tenant industrial parks encompassing 309,932 square feet of space, bringing its Las Vegas portfolio to over one half-million square feet.
Formed in 2013 and currently raising its first commingled fund, BKM Capital Partners acquired the assets for a total of $27.5 million. These acquisitions represent the fourth and fifth investments on behalf of the fund, joining properties in Phoenix and Portland, as well as another in Las Vegas.
“Paramount to our firm’s mission as we grow and raise institutional capital is ensuring that each acquisition precisely meets our defined investment criteria. As we scale up, we must also stay true to our process,” says Brian Malliet, CEO and Co-Founder of BKM Capital Partners. “Target assets such as Cheyenne and Wind River allow us to do just that, and our acquisition pipeline is well-stocked with deals such as these in markets like Las Vegas, upon which we remain bullish.”
BKM is the only fund manager specifically targeting value-add multi-tenant industrial properties in the Western U.S., according to Malliet, who notes that the firm continues to be active in both acquisitions and capital-raising, and expects to attract strong investor interest based on its specialization and track record.
BKM’s recent Las Vegas acquisitions include:
Cheyenne Technology Center
This six-building, 172,329 square-foot office and flex/industrial park presented a unique investment opportunity for BKM Capital Partners’ investors, according to BKM’s Director of Acquisitions, Brett Turner.
“The property’s current configuration demonstrated a tremendous opportunity for growth,” Turner says. “With major long-term credit tenants in place to provide substantial cash flow during the stabilization phase, BKM will employ significant capital upgrades in the first year of ownership to transition larger flex units into smaller, more desirable industrial units to increase occupancy and reduce tenant improvement costs, while making cosmetic exterior improvements such as paint, signage, landscaping, etc.”
BKM also plans to employ a new property management team to improve tenant acquisition and turnover time, and to launch a renewed leasing effort that will reintroduce the property to the market.
BKM acquired the property for a total of $18.415 million, or $107 per square-foot.
A $15.5 million senior loan was provided by PCCP, LLC, a finance and investment management firm with approximately $6 billion in assets under management on behalf of institutional investors.
Mike Johnson, Associate Vice President with PCCP, LLC said, “BKM is an experienced owner and specializes in acquiring and stabilizing multi-tenant business parks. Approximately $1 million of the loan will be used to build out the vacant shell space, reconfigure the vacancy to match local tenant demand, and provide turn-key suites for a quick move-in.”
BKM Capital Partners represented itself in the property acquisition. The seller, Voit Real Estate Services, was represented by Kevin Higgins and Garrett Toft of Voit Real Estate Services. The property is located at 3355-3675 West Cheyenne Avenue in North Las Vegas, Nevada.
Wind River Industrial Complex
A rare find in the current, improving market, the 137,603 square-foot Wind River Industrial Complex presents BKM Capital Partners with the opportunity to acquire and rehabilitate a property that is distressed due to lack of hands-on asset management, according to BKM Capital Partners’ Director of Acquisitions, Brett Turner.
“This is a strong property in a highly desirable location. Based on the property’s deferred maintenance and low occupancy, we were able to achieve a significant reduction in purchase price, acquiring the asset at a deep discount to replacement cost,” Turner explains.
BKM Capital Partners acquired the property for $9.1 million, or $59 per square-foot.
“Deals of this nature are extremely hard to find in the current market, and require a specialized understanding of the multi-tenant industrial market niche,” Turner continues.
Located in the popular Southwest submarket, adjacent to the Palms Hotel and one mile from the Las Vegas Strip, the multi-tenant masonry industrial building is comprised of 24 suites, and includes an adjacent 1.2-acre parcel of land.
“The most profitable strategy for this asset is to implement both structural and cosmetic improvements to enhance the property’s appeal and positioning in the market,” Turner says. “BKM will implement this strategy with characteristic alacrity to drive the asset’s performance.”
BKM Capital Partners represented itself in the property acquisition. The seller, a local private family, was represented by Kevin Higgins and Garrett Toft of Voit Real Estate Services. The property is located at 4301-4325 South Valley View Boulevard in Las Vegas, Nevada.
Los Angeles-based George Smith Partners arranged a total of $23.5 million in acquisition bridge financing for BKM Capital Partners for the acquisition of both properties. The bridge loan provides BKM a three-year term to execute its business plan of repositioning, renovating and leasing up the properties. Gary Mozer, Principal and Managing Director of George Smith Partners, arranged the financing, and was assisted by Michael Anderson, Katie Rodd, and Kyle Howerton, also of George Smith Partners.
Headquartered in Irvine, California, BKM Capital Partners is a fund manager specializing in the acquisition and improvement of value-add multi-tenant industrial properties in metro areas across the Western U.S. Combining a deep knowledge of this niche product type with in-house capabilities including hands-on property management and asset financing, the firm continues to build on its proven track record, generating strong results with high levels of transparency and engagement for its investors.
Additional information is available at www.bkmcapitalpartners.com. Inquiries can be answered directly by Brett Turner, Director of Acquisitions, at , or Charlie Ittner, Director of Investor Relations, at . BKM Capital Partners is the real estate arm of The Niru Group.
Founded by Nima Taghavi, The Niru Group is a private investment management firm focused on opportunistic direct investment into real estate, private businesses, and philanthropic organizations. The company is known for combining operating expertise and entrepreneurial know-how to generate superior results in business and real estate acquisitions.
Additional information on the Niru Group is available at www.thenirugroup.com.
Brower, Miller & Cole