Newport Beach, Calif.-based BKM Capital Partners sold Tempe Commerce Park, a five-building, multi-tenant, light industrial park in Tempe, Arizona, for $85.35 million. The buyer of the 536,051 square-foot asset was Investcorp.
BKM Capital Partners’ Brett Turner, Managing Director of Acquisitions, said “We recognized the value-add potential of this asset and market very early on, which enabled us to deliver an attractive product to the market. This transaction demonstrates the strength of our investment thesis, our operating platform, and our commitment to generating returns for our investment partners.”
Tempe Commerce Park comprises five buildings at 7340, 7350, and 7360 S. Kyrene Road and 7343 and 7333 S. Hardy Drive on 37.7 acres within the infill Tempe submarket. The asset had been held by BKM’s Industrial Value Fund I and was acquired in 2015.
The buildings were constructed between 1995 and 1997 and have been institutionally owned and maintained since that time. The buildings feature 24- to 28-foot clear heights and ample parking. Tempe Commerce Park is 93 percent leased and home to eight tenants with the majority of the tenancy consisting of investment grade tenants.
Turner adds, “the deal is proof that our integrated operating platform continues to create value in distressed and undermanaged light industrial assets. The success we achieved at this property is due to our hands-on management coupled with a strategic capital improvement plan, resulting in stabilized cash flow and increased net operating income.”
The improvements included new paint, the addition of new entries and awnings, as well as demising space and conversion of office space to industrial uses to align with today’s tenant demand.
This site is near Sky Harbor International Airport, downtown Phoenix, a BNSF intermodal facility and Interstate 10, which offers easy access to Phoenix and other major Southwest cities. This location allows tenants to reach more than 1.8 million people within 15 miles of the property and nearly 4.9 million within 55 miles. Additionally, numerous key markets like Los Angeles, San Diego and Las Vegas are reachable within a day’s drive.
JLL handled the transaction on behalf of the seller and arranged an acquisition loan for the buyer. Additionally, working on behalf of the new owner, JLL placed the five- year, floating-rate acquisition loan with MetLife Real Estate.
The JLL Capital Markets Investment Sales Advisory team representing the seller was led by Senior Managing Director Mark Detmer and Senior Director Ryan Sitov, along with local market experts Executive Vice President Steve Sayre and Managing Directors Mark Gustin and Dave Seeger. The JLL Capital Markets Debt Placement team representing the new owner included Executive Managing Director Kevin MacKenzie, Senior Director Michael Gigliotti and Director Jason Carlos.