Newport Beach-based BKM Capital Partners has made one of the largest industrial deals of the past year in the western U.S., spending $425 million to buy nearly 2.7 million square feet of buildings from New York private equity giant Blackstone Group.
The sale, which works out to a price of roughly $160 per square foot, includes multi-building properties in and around Southern California, Northern California, Phoenix, and Portland, Ore.
Lake Forest’s Spectrum Centre Business Park, a multitenant property along Bake Parkway, was the only Orange County part of the transaction.
The center counts about 16 buildings totaling more than 200,000 square feet, according to CoStar Group Inc. records.
BKM, a value-add industrial investor that’s been an active buyer in Las Vegas and Arizona the past few years, said it bought most of the Blackstone assets through its Industrial Value Fund II. It also bought three of the properties in partnership with Los Angeles-based Canyon Catalyst Fund.
$101.3M in SoCal
Blackstone bought the Lake Forest site last September as part of a larger $13.4 billion portfolio buy, and immediately began looking to offload portions of that collection.
Elsewhere in SoCal, BKM ended up buying a large collection of industrial facilities in the San Diego County city of Vista.
The Lake Forest and Vista properties combined value is $101.3 million, according to BKM.
“Orange County and Northern San Diego County are truly hot markets for industrial occupiers seeking space within reasonable distance to the L.A. County ports at a discount to the Los Angeles market,” said Brett Turner, managing director of acquisitions for BKM.
“This was a rare opportunity to purchase two sizeable multitenant industrial properties in highly desirable markets.”
NorCal, Phoenix, Oregon
The rest of the portfolio touches three out-of-OC markets. BKM spent:
• $124.2 million for four Northern California assets;
• $157.5 million for four Phoenix properties, and;
• $42.4 million for one property in Oregon
The properties in the full portfolio are nearly 90% occupied.
BKM’s investing “is based on enhancing value through substantial capital improvements, strategic interior-unit sizing, and cosmetic improvements to deliver a higher-end industrial product for today’s new high-end manufacturing and warehousing users,” according to Chief Operating Officer Barbara Rea.
