BKM Capital Partners Unveils New White Paper Highlighting the Untapped Potential of Small-Bay Industrial Real Estate

“Great Things Come in Small Packages” explores why multi-tenant light industrial properties are outperforming in today’s market.

Newport Beach, CA—April 2, 2025—BKM Capital Partners, a vertically integrated institutional fund manager specializing in value-add light industrial real estate, has released its latest white paper, “Great Things Come in Small Packages: Opportunities Abound in Multi-Tenant Light Industrial Facilities.” This timely report offers a deep dive into the drivers behind the exceptional performance of small-bay industrial assets and outlines why this underappreciated sector is poised for continued growth.

While large-scale logistics hubs have traditionally dominated headlines, BKM’s analysis highlights the outsized opportunity in multi-tenant, small-bay industrial properties—assets defined by their smaller unit sizes, urban infill locations, and diversified tenant bases. These facilities have become essential infrastructure for last-mile logistics, light manufacturing, and R&D, offering long-term value through flexibility, resilience, and sustained tenant demand.

Key takeaways from the report include:

Demand Outpacing Supply: Despite accounting for a majority of leasing activity, small-bay assets represent less than 2% of the current construction pipeline. Their scarcity is driving rent growth and investor interest.

Resilience Amid Market Shifts: While larger industrial buildings face rising vacancies, small-bay properties continue to benefit from structural demand drivers, including e-commerce expansion, reshoring of manufacturing, and proximity to urban centers.

Tenant Diversity and Risk Mitigation: Small-bay properties serve a wide range of industries—logistics, life sciences, retail, and more—making them less vulnerable to sector-specific downturns. BKM’s own portfolio includes over 2,000 tenants, with no single industry comprising more than 15% of total revenue.

Strategic Lease Structures: With average weighted lease terms of just 2.53 years, BKM is able to capitalize on rent growth opportunities, achieving over 30% re-leasing spreads in recent quarters.

Value-Add Opportunity in Aging Inventory: A significant portion of the small-bay market consists of older properties. Through targeted renovations and sustainability enhancements, BKM has unlocked NOI growth and capital appreciation across its portfolio.

“This report underscores what we’ve long believed at BKM—small-bay industrial is not just a niche sector; it’s a strategic cornerstone of modern logistics and light manufacturing,” said Brian Malliet, BKM’s Founder, CEO, and Chief Investment Officer. “The combination of location, flexibility, and tenant diversity makes these properties incredibly resilient and well-suited to today’s evolving industrial landscape.”

The paper also emphasizes the importance of vertical integration and operational excellence in managing these complex, multi-tenant assets. BKM’s in-house business intelligence platform, BKM Intel, is a critical component of its success, enabling real-time insights across more than 5,000 buildings to drive performance and efficiency.

As capital continues to seek durable, income-generating real estate, “Great Things Come in Small Packages” offers valuable insight for institutional investors, developers, and market participants looking to understand the next chapter of industrial real estate.

Click here to download the full report.