BKM Capital Partners Acquires 450,000 SF Light Industrial Park in Metro Portland

BKM Capital Partners has announced the acquisition of 217 Distribution Center, a five-building, multi-tenant industrial park in Metro Portland, Ore. An institutional investor sold the 451,062-square-foot asset for an undisclosed price.

Situated at 10950­–11065 SW 11th St. in the city of Beaverton, the 1970s-era property is comprised of 13 units ranging in size from 9,945 to 67,459 square feet. It features 68 dual-dock-high and 12 grade-level loading capabilities, up to 24-foot-clear heights, and access to 14 railway dock doors. Less than 9 percent of its total footprint consists of office space.

“This transaction presented a prime opportunity to acquire a critical mass of infill light industrial square footage at a nearly 50 percent discount to replacement cost in one of our target markets,” stated Brett Turner, senior managing director of acquisitions and dispositions at BKM. “The Beaverton industrial submarket is greatly supply constrained, with a 2.5 percent vacancy and new construction accounting for just 1 percent of inventory.”

As part of its value-add strategy, BKM intends to invest approximately $4 million in capital improvements, including upgrades to roofs, parking lots, landscaping, HVAC systems, interior spec Tis, and updates to the signage and paint scheme to bring the asset to brand standards. Plans call for increasing the number of units from 13 to 15, decreasing the average unit size from 34,697 to 29,975 square feet.

With a high-visibility location along Highway 217, and access to the Portland Metro and broader Pacific Northwest, the asset caters to regional and national logistics-focused tenants. The complex is currently 100 percent leased to mostly credit tenants, including Nike, Rexel, Blue Ocean Logistics and the Beaverton Police Department. BKM intends to leverage the asset’s 3.5-year WALTs to correct in-place rents, which are 20 percent below market rates, over its 60-month hold period.

The 217 Distribution Center was one of several industrial assets the undisclosed institutional seller was looking to liquidate by year’s end.

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