BKM Grows Phoenix Footprint With $157M Buy
BKM Capital Partners has acquired a three-property portfolio totaling 778,000 square feet in metro Phoenix for $156.8 million, public records show. Starwood Capital Group previously owned the assets dubbed Kyrene CommercePlex, Estrella Business Park II and Hohokam Industrial Park.
This was the firm’s most recent investment in the Valley, but not the only one this month. Two weeks ago, an affiliate of BKM acquired Rose Garden Business Park in Deer Valley, Ariz., also an industrial portfolio, for $35.1 million, from BKM. Cushman & Wakefield represented the seller in that deal.
A light-industrial trio in the Valley
Located at 8240-8380 S. Kyrene Road in Tempe, Ariz., Kyrene CommercePlex comprises five light industrial buildings totaling some 312,400 square feet. The 21.8-acre property features 53 dock-high doors and 40 grade-level doors.
Also in Tempe is the 134,200-square-foot Hohokam Industrial Park, recently renamed to Sky Harbor Landing. The campus at 2405 W. University Drive and 912-918 S. Park Lane comprises three buildings with clear heights of 14-20 feet.
Estrella Distribution Center occupies some 21 acres at 801 S. 75th Ave. in Phoenix. Completed in 2000, the 331,398-square-foot facility features 30-foot clear heights and a 165-foot truck court.
All three properties are in submarkets with tight vacancy rates. Estrella was fully occupied at the time of sale, while Kyrene CommercePlex and Sky Harbor Landing were 90 percent leased, according to Phoenix Business Journal.
In 2024, BKM acquired 26 mid- and light-industrial properties totaling 5.2 million square feet and the firm’s investment momentum carried on in the new year as well. In one of January’s deals, BKM purchased a portfolio of 260,877-square-foot light industrial buildings in metro Houston for $34.1 million.
Phoenix industrial still in high demand
Last year was a robust one for Phoenix industrial absorption, with 22.1 million square feet taken, nearly double the 2023 total of 12.6 million square feet, according to Cushman & Wakefield.
Last year was also a peak for construction completions. A total of 42.9 million square feet come online during 2024, outpacing the previous two years by more than 17.6 million and 10.4 million square feet, respectively, the same report shows.
The overall vacancy rate clocked in at 12.7 percent in the fourth quarter, marking the seventh consecutive quarter where vacancy levels rose, Cushman & Wakefield notes. That figure also represented a 10-basis-point rise over the quarter.
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