BKM, Investcorp Close $158M Industrial Deal

Valley View Business Center IV. Image courtesy of BKM Capital Partners

BKM Capital Partners has expanded its Las Vegas footprint by 740,000 square feet in one fell swoop with the acquisition of a seven-property light industrial portfolio.

Acting in partnership with an affiliate of Investcorp, BKM purchased the assets from Terry York Properties in an off-market transaction valued at a total of approximately $157.8 million, according to the Clark County Recorder’s Office.

Boasting coveted locations in the city’s Southwest submarket, the group of small-bay properties is close to the Las Vegas Strip and between 5 and 7 miles of the Harry Reid International Airport. The collection consists of 21 buildings spanning four locations, including the 481,100-square-foot Valley View Business Center I-IV, the 140,600-square-foot Decatur Crossing II, the 71,300-square-foot Sunset Business Center and Gateway Business Center, the smallest of the group at 46,900 square feet. With 240 tenants in place, the portfolio was 98 percent leased at the time of sale.

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BKM will take on the role of operating partner, and as part of its investment strategy, the industrial real estate-focused institutional fund manager will add value to the assets via strategic capital improvements that will include interior-unit sizing, new HVAC units and cosmetic upgrades.

With the closing of the transaction, BKM’s presence in metropolitan Las Vegas exceeds 2.3 million square feet. In 2019, the company made a major play in the market with the $111.3 million acquisition of Pacific Business Center, an approximately 900,000-square-foot complex in neighboring Henderson.

Best buy

Las Vegas industrial properties are highly coveted among investors in the current climate. The metro recorded a total vacancy rate of just 1.9 percent in the fourth quarter of 2022, marking a record low, according to a report by Avison Young. Demand for space is robust, and rental rates continue on the upswing, having increased nine consecutive years to an average of $12.17 in 2022. The investment community is more than a little keen on the Las Vegas market, and the rising sales figures tell the story.

“Las Vegas’s quality industrial real estate continues its long-term upward trend in value. This is evidenced by the fact that the average price per square foot on completed transactions has increased year-over-year for eight consecutive years,” according to the Avison Young report. The Las Vegas industrial sector logged a record-setting average price of $203.26 per square foot in 2022.