BKM Capital Partners has acquired Scottsdale Commerce Center, an industrial business park, for $19.6 million. The seller was Onward Investors. Cushman & Wakefield’s Chris Toci represented the seller.
January 4, 2022 – Newport Beach, CA-based BKM Capital Partners, a vertically integrated institutional fund manager, has acquired Scottsdale Commerce Center, a four-building multi-tenant light industrial business park totaling 85,362 square feet in Scottsdale, AZ, for $19.6 million from Minneapolis, MN-based Onward Investors.
Brian Malliet, CEO of BKM Capital Partners, said, “Phoenix remains a key market for BKM, given the growth and demand for e-commerce and last-mile facilities that serve the greater Southwest and West Coast markets. Scottsdale Commerce Center checks all the right boxes for us as we work to uncover value-add industrial opportunities and continue to strategically expand our portfolio.”
This is BKM’s 25th acquisition in the Phoenix metro area, bringing its current holdings in the region to more than 2.2 million square feet across 13 projects, according to Malliet.
Located at 1435, 1465, 1505 & 1525 North Hayden Road in the McDowell Road Corridor on Scottsdale’s south end, Scottsdale Commerce Center is uniquely situated adjacent to multiple infill demand centers including Downtown Scottsdale, Arizona State University and Tempe’s business district, as well as Sky Harbor International Airport. The asset is also ideally placed along SR-101, providing ease of access to the broader Southeast Valley.
“Scottsdale Commerce Center is an institutional quality asset that presents a dynamic value proposition,” says Brett Turner, Senior Managing Director of Acquisitions at BKM Capital Partners. “By acquiring this property well below replacement cost, there is a tremendous opportunity to reposition the asset through our proven capital improvement and leasing strategy.”
Built in 1986, the asset is currently 100% leased across 15 suites, with unit sizes ranging from 1,800 to 25,000 square feet. BKM plans to modernize and reposition a property that is currently configured with a large amount of office buildout into functional industrial space. The value-add improvements are expected to attract long-term tenancy, drive rental rates, and meet increasing demand for e-commerce and last-mile occupiers.
BKM will leverage its existing local management team, which oversees their 2.2 million square foot Phoenix portfolio. With a vertically integrated and agile approach, BKM’s in-house property and construction managers will oversee structural and cosmetic improvements, including fresh paint, uniform landscaping, addressing and signage. A revamped appearance will reposition the property to outperform the competitive set, while in-place rents are naturally adjusted to market.
BKM Capital Partners has a built strong market position in the multi-use logistics and small- and mid-bay light industrial asset class. The company has created a vertically integrated operational platform that is supported by a team capable of managing the space and relationships of nearly 2,000 tenants.
The company fully realized its first institutional fund in September 2021, which generated exceptional results and provided confirmation for its investment thesis. The September portfolio recapitalization of BKM Industrial Value Fund I, along with prior asset sales, delivered returns to Fund I investors that well exceeded targets.
Cushman & Wakefield’s Chris Toci represented the seller.
About BKM Capital Partners
BKM Capital Partners is a proven real estate fund manager and operator focused exclusively on the acquisition, refurbishment, and operation of light industrial & multi-use logistics assets in the Western United States. Combining a deep knowledge of this niche industrial product type with in-house capabilities including on-site property management, asset management, and leasing to reposition and institutionalize light industrial assets, the firm continues to build on its proven track record, generating strong results with high levels of transparency and engagement for investors. Since its inception in 2013, BKM has successfully acquired more than 14 million square feet of industrial projects valued at more than $2.5 billion. The firm continues to grow its investment management business through strategic joint ventures, institutional investor funds and separate account equity capital. Additional information is available at www.bkmcapitalpartners.com.