Active Investor in Pacific Northwest Buys Industrial Property Near Seattle Airport

BKM Capital taps into demand for smaller industrial facilities used for last-mile logistics

A real estate fund manager bought a business park near Seattle-Tacoma International Airport in the latest example of investor demand for smaller industrial properties in the region.

BKM Capital Partners, based in Newport Beach, California, paid $29 million to buy the nearly 130,000-square-foot SeaTac Industrial Park from New York investment firm Clarion Partners, according to King County property records.

Developers focused on building large warehouses in greater Seattle have added fewer "small-bay" buildings in recent years, resulting in some of the tightest availability rates in the region, according to CoStar analytics.

Buildings sized at 50,000 square feet or less that are popular as so-called last-mile delivery facilities or for light-industrial operations have an availability rate that's roughly half of the region's overall 10.5% industrial availability rate.

BKM's latest purchase offers "cross-dock functionality for small-bay users in a submarket where industrial properties of this caliber are both in high demand and in short supply," the company said in a statement.

The buildings on 13th Place South are 92% leased, BKM said in the statement. The buyer plans to spend nearly $2 million on renovations and upgrades at the warehouses, which were built in the mid-1970s.

BKM has spent over $4.5 billion in more than 120 small- and mid-bay light industrial and flex properties since 2013, including several in Oregon and Washington, CoStar data shows. The company last month announced it recapitalized a nine-property light-industrial portfolio totaling 2.1 million square feet across five western states that included the 205,000-square-foot West Valley Business Park in Kent, Washington.

The $550 million recapitalization added Boca Raton, Florida-based alternative asset manager Kayne Anderson Real Estate as a partner, according to a release.

BKM in December 2023 also bought a five-building light-industrial park in the largest industrial deal of the year by total price in Portland, Oregon.