News Summary
BKM Capital Partners has made significant strides in Texas by acquiring two portfolios of light industrial properties totaling 750,000 square feet for nearly $90 million. This expands their portfolio to over 1 million square feet in Texas, highlighting their strategy for growth in high-demand markets. With properties located in key areas including Houston and Dallas-Fort Worth, BKM plans to invest in capital improvements, aiming to enhance the overall value and appeal of their investments.
Texas Sees Nearly $90 Million Investment in Light Industrial Properties
BKM Capital Partners has made significant investments in Texas’s industrial real estate sector by acquiring two substantial portfolios that together encompass 750,000 square feet of light industrial space for nearly $90 million. The properties include five locations in Houston and the Dallas-Fort Worth area, marking a strategic move to support BKM’s plan for national scaling by focusing on high-growth and supply-constrained markets.
Details of the Acquisitions
The Houston portfolio consists of two adjacent properties totaling 242,555 square feet purchased for $29.5 million from Fort Capital. These properties are the Southwest Business Park, which includes 131,000 square feet with 22 units spread across three buildings, and the Stonecrest Business Center, gathered across five buildings totaling 111,555 square feet with 17 units.
The investment in the Dallas-Fort Worth area features three properties which amount to 512,000 square feet for $60.3 million. The sites include Northgate 22, measuring 34,325 square feet in Dallas; 501 106th Street in Arlington, which spans 42,506 square feet; and the Market Street Distribution Center, a five-building complex totaling 435,479 square feet in Garland.
Market Conditions and Property Performance
Presently, the average occupancy rate for the newly acquired Houston portfolio stands at 70%, while the DFW portfolio is at 81%. The market overall has a vacancy rate of 6.2%, with the Southwest submarket recording an even lower rate of 5.4%. Notably, while 17.8 million square feet are under construction in the Houston area, only 2 million square feet is located in the Southwest submarket.
In the Metro DFW area, which features one of the largest markets in the country with a total size of 1.1 billion square feet, vacancy rates in the Northeast Dallas/Garland and Great Southwest/Arlington submarkets are 7.8% and 6.3%, respectively. Additionally, there is currently 1.2 million square feet of new construction underway in these regions.
Improvement and Future Plans
BKM Capital Partners plans to invest an additional $10.4 million in capital improvements across all seven properties acquired. This investment aims to enhance curb appeal, remedy maintenance issues, and implement a repositioning program to optimize the properties’ performance and value. The acquisitions were made in partnership with BMA Capital Corp for the Houston properties and through a joint venture with Whittier Trust for the DFW assets. The sellers in these transactions were represented by CBRE, while transaction negotiations were overseen by Brett Turner, with support from Charlie Farmer, the Director of Acquisitions & Dispositions.
Background on BKM’s Strategy
BKM Capital Partners, founded by Brian Malliet, continues to recognize Texas as a vital economic powerhouse, driven by robust population growth, significant infrastructure investments, and a business-friendly climate. With these recent acquisitions, BKM’s total portfolio in Texas has surpassed 1 million square feet, signifying a major milestone in their ongoing expansion into the light industrial sector on a national scale.
The investments align with BKM’s strategic focus on tapping into high-demand areas, further indicating confidence in the Texas market and its long-term economic prospects.
Deeper Dive: News & Info About This Topic
- Realty News Report: BKM Spends $90 Million for Texas Industrial
- Colliers: Houston Industrial Market Update
- San Antonio Express-News: Lovett Industrial Plans $30 Million Logistics Center
- Business Wire: Lovett Industrial Launches Next Phase of 610 Business District
- CoStar: Brookfield Boosts Holdings of Smaller Format Industrial Buildings
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