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 Light Industrial Properties See Major Acquisition
BKM Capital Partners has invested nearly $90 million in two portfolios, totaling 750,000 square feet of light industrial space in Texas. This acquisition includes five properties located in prominent areas of Houston and the Dallas-Fort Worth region. The move is part of BKM’s strategy for national scaling within high-growth markets that are constrained by supply.
Details of the Acquisition
The newly acquired portfolios consist of one group situated in Houston’s Southwest submarket and another in the Northeast Dallas and Great Southwest submarkets. Notably, these properties were secured at a significant discount to replacement costs, presenting a 31% mark-to-market opportunity across the portfolios. The current average occupancy rate for the Houston portfolio sits at 70%, while the Dallas-Fort Worth portfolio records a higher rate of 81%.
In Houston, BKM acquired two adjacent properties covering 242,555 square feet for $29.5 million from Fort Capital. These include:
- Southwest Business Park: 131,000 square feet with 22 units across three buildings.
- Stonecrest Business Center: 111,555 square feet with 17 units across five buildings.
The Houston properties are strategically located less than one mile from Interstate 69 and Beltway 8, providing excellent access to key population centers and infrastructure.
In the Dallas-Fort Worth area, BKM purchased three properties totaling 512,000 square feet for $60.3 million. These properties include:
- Northgate 22: 34,325 square feet in Dallas.
- 501 106th St: 42,506 square feet in Arlington.
- Market Street Distribution Center: A complex consisting of five buildings that totals 435,479 square feet in Garland.
Investment in Improvements
BKM has allocated $10.4 million towards capital improvements across all seven properties. The improvements aim to enhance curb appeal, address maintenance concerns, and implement a repositioning program to maximize value.
Market Context and Vacancy Rates
The Houston market shows an overall vacancy rate of 6.2%, with the Southwest submarket at a lower rate of 5.4%. While 17.8 million square feet are currently under construction in the Houston area, only 2 million square feet are being developed in the Southwest submarket.
In the Dallas-Fort Worth Metro area, which boasts a total market size of 1.1 billion square feet—the third largest in the nation—vacancy rates in the Northeast Dallas/Garland and Great Southwest/Arlington submarkets stand at 7.8% and 6.3%, respectively. There is also 1.2 million square feet of new construction currently in progress.
Partnerships and Future Goals
BKM acquired the Houston properties in collaboration with BMA Capital Corp, while the DFW assets were obtained through a joint venture with Whittier Trust. The transactions were facilitated by CBRE, representing the sellers, with BKM’s negotiations led by Brett Turner and assisted by Charlie Farmer, Director of Acquisitions & Dispositions.
With these latest acquisitions, BKM’s total portfolio in Texas has surpassed 1 million square feet, marking a significant milestone as the company continues its national expansion in the light industrial sector.
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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