BKM Capital Partners Completes $76.9 Million Recapitalization of San Diego Properties
Deal News | Dec 10, 2024 | BKM Capital Partners LP
BKM Capital Partners, an institutional fund manager specializing in multi-tenant industrial properties, has successfully completed a $76.9 million recapitalization of three San Diego business parks. These properties, totaling 342,073 square feet, are located in Otay Mesa, a rapidly developing industrial submarket. The deal marks BKM's first joint venture with Japan's Tokyu Land US Corporation. The three parks included in this transaction have undergone significant improvements under BKM's guidance, aligning with the company's strategic focus on value creation. BKM has invested over $1.4 million in enhancements, resulting in an 86% increase in rental rates and further entrenching the area's position as a hub for industrial activity. The properties are leased to 21 tenants and are positioned for future rent growth, benefiting from Otay Mesa's strategic location as a cross-border trade hub. This recapitalization is part of BKM's broader strategy to capitalize on market dynamics and ensure long-term success for their assets.
Sectors
- Real Estate
- Private Equity
- Logistics and Distribution
Geography
- United States – The recapitalization deal and properties are located in San Diego, a key industrial market in the United States.
- Japan – Tokyu Land US Corporation, part of the Japan-based Tokyu Fudosan Holdings Group, is a participant in the joint venture, linking the transaction to Japan.
Industry
- Real Estate – This industry is relevant as the article discusses a significant recapitalization deal involving industrial properties in San Diego, underscoring real estate development and management activities.
- Private Equity – BKM Capital Partners, a private equity firm, is involved in the recapitalization transaction highlighting activities related to investment and fund management in real estate assets.
- Logistics and Distribution – The properties are strategically located in Otay Mesa, a hub for logistics and warehouse distribution, making this relevant for the logistics sector.
Financials
- $76.9 million – The total value of the recapitalization transaction involving the three San Diego properties.
- $71.6 million – The initial purchase price paid by BKM for the Otay Mesa Industrial Portfolio in 2018.
- 86% – The percentage increase in the portfolios weighted average in-place rental rate after BKM's improvements.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| BKM Capital Partners | Fund Manager | Company | A private equity firm specializing in multi-tenant light industrial properties, involved in the recapitalization of the San Diego properties. |
| Tokyu Land US Corporation | Joint Venture Partner | Company | A real estate investment and operating company, part of Japan-based Tokyu Fudosan Holdings Group, partnering in the recapitalization. |
| Stockbridge Capital Group | Previous Owner | Company | The previous owner of the Otay Mesa Industrial Portfolio acquired by BKM. |
| Brett Turner | Senior Managing Director | Person | Senior Managing Director, Acquisitions & Dispositions at BKM Capital Partners, commenting on the strategy and success of the recapitalization. |
| Brian Malliet | CEO and Chief Investment Officer | Person | Founder, Chief Executive Officer, and Chief Investment Officer at BKM Capital Partners. |