BKM Partners with Kayne Anderson for $550 Million Investment Deal

BKM Capital Partners Collaborates with Kayne Anderson Real Estate

BKM Capital Partners, a prominent institutional fund manager excelling in value-add light industrial properties, has successfully executed a remarkable $550 million recapitalization deal for a diverse portfolio of nine light industrial properties. This strategic acquisition marks Kayne Anderson Real Estate's inaugural entry into the light industrial sector, highlighting its commitment to expanding into new real estate markets.

Unlocking Growth Potential in Light Industrial Sector

According to Brian Malliet, the Founder, CEO, and CIO of BKM, this partnership is an exciting step for both firms. "Combining our comprehensive experience in small-bay real estate investments with Kayne Anderson's established reputation allows us to harness significant growth opportunities. We look forward to nurturing this partnership into a long-term collaboration that aims to yield sustainable value for our investors and partners," he stated.

Insights from Kayne Anderson Real Estate

Al Rabil, Co-founder and CEO of Kayne Anderson Real Estate, expressed enthusiasm about entering the light industrial space. He noted, "At Kayne Anderson Real Estate, we continually seek investments in asset classes that exhibit strong fundamentals. Our venture into light industrial properties with BKM represents an exciting expansion of our investment strategy." His confidence in BKM’s expertise underscores the collaborative potential of this partnership.

Noteworthy Developments Over Recent Months

The last two years have seen BKM achieving substantial growth, with over $575 million invested across numerous strategic acquisitions just in 2023. By the close of the current year, BKM expects to reach an impressive acquisition total of approximately $1.2 billion, encompassing over 4.5 million square feet of industrial space.

Strategizing for Future Success

"This deal signifies a pivotal moment in our journey, empowering us to pursue significant value and rental growth across our portfolio," Malliet further added. The focus on excellence in light industrial markets is evident, as the team aims to build on the momentum gained and enhance their strategic impact in the industry.

Overview of an Impressive Portfolio

The newly acquired portfolio consists of 510 units spread over 2.1 million square feet of small-bay industrial space, strategically located in high-density urban environments across the Western U.S. Key properties include:

• Hohokam Business Park: 256,920 sq. ft., 79 units
• Backlot Burbank: 208,688 sq. ft., 16 units
• Concord Business Park: 141,792 sq. ft., 28 units
• Gateway & Shoreline Business Centers: 179,559 sq. ft., 14 units
• Lionshead Landing: 228,816 sq. ft., 54 units
• Inverness Exchange: 215,212 sq. ft., 103 units
• Hughes Airport Center: 672,424 sq. ft., 58 units
• West Valley Business Park: 205,719 sq. ft., 158 units

This portfolio of premium, infill last-mile assets presents excellent opportunities for rent increases. Their limited new construction in bustling urban areas creates favorable conditions for long-term tenant retention and revenue growth.

Future Plans for Expansion

Brett Turner, Senior Managing Director at BKM, highlighted the anticipated benefits of their strategic approach in the industrial sector. The team's systematic execution has led to exceptional returns and prepared them to fully harness future potential within the light industrial market.

About BKM Capital Partners

Based in Newport Beach, California, BKM Capital Partners specializes in investment management for small and mid-bay light industrial properties. The firm boasts a track record of successful transactions worth over $4 billion, demonstrating their commitment to operational excellence and client service.

About Kayne Anderson Real Estate

Kayne Anderson Real Estate oversees approximately $16.6 billion in assets, showcasing expertise across various sectors, including multifamily housing and self-storage. With a legacy of over 40 years, Kayne Anderson remains a significant player in the alternative investment management sphere.

Frequently Asked Questions

What does the recapitalization deal entail?

The $550 million recapitalization deal allows BKM Capital Partners to enhance its portfolio of light industrial properties in collaboration with Kayne Anderson Real Estate.

Why is this partnership significant?

This partnership signifies Kayne Anderson's entry into the light industrial sector, benefiting from BKM's established expertise and operational track record in this market.

How does this impact BKM's growth strategy?

This recapitalization is a pivotal step in BKM's growth strategy, enabling increased value creation and rent upturns across their industrial properties.

What is the profile of the acquired properties?

The acquired properties consist of small-bay industrial spaces located in urban centers, offering significant potential for rent growth due to demand and limited new constructions.

Who were the financial partners in this deal?

Truist Securities facilitated the introduction of the firms, while First Citizens Bank served as the Joint Lead Arranger for the financing of the transaction.

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