Smaller warehouses are the focus of the new partnership.
BKM Capital Partners and Kayne Anderson Real Estate, the real estate investment arm of alternative investment management firm Kayne Anderson, have formed a $1.5B joint venture partnership targeting light industrial real estate.
The $1.5B commitment from Kayne Anderson Real Estate will focus on the acquisition and repositioning of small bay and mid-bay industrial properties, according to a release from the partnership.
“We’ve spent over a decade building an operating platform designed explicitly for small-bay industrial, which is both operationally complex and highly fragmented,” BKM Capital Partners CEO and Chief Investment Officer Brian Malliet said in a release.
“With Kayne Anderson’s support, we can now bring that model to scale across new markets with a partner who shares our long-term view,” Malliet added.
The partnership is zeroing in on “middle-market properties” with either below-market rents, high vacancy, operational inefficiencies or all of the above, according to the release.
Acquisitions have already been made, including the $550M recapitalization of a nine-property, 2.1M SF West Coast portfolio and the acquisition of five properties — more than 1.2M SF. altogether — in Las Vegas and Phoenix.
Though the overall industrial market is experiencing some softness, the partnership pointed to the U.S. light industrial market’s vacancy rate of 4.1% in Q4, a record low, which was driven by demand for these spaces from e-commerce, last-mile logistics and smaller manufacturers.
