New $1.5B Joint Venture Targets Booming Light Industrial Sector

BKM Capital and Kayne Anderson formed a $1.5B venture targeting value-add light industrial assets, reports Commercial Search. The new initiative expands BKM’s investment reach beyond its traditional West Coast base into infill markets across the US

A Growing Opportunity

According to BKM founder, CEO & CIO Brian Malliet, the market for small-bay light industrial properties remains inefficient, creating openings for experienced investors. He noted that historical rent growth in BKM’s core markets has ranged between 70 to 90 percent over the past four years.

The Strategy

The venture plans to deploy capital over 18–36 months in high-growth markets with below-market in-place rents. BKM’s current target markets—California, Arizona, Nevada, Colorado, Oregon, Washington, and Texas—have experienced rent growth of 10 to 12 percent in the last year alone.

Shifting Focus

BKM shifts from the western US to infill markets nationwide, targeting low vacancies, strong rent growth, and limited supply in light industrial properties. Light industrial vacancy hit a record-low 4.1% in late 2024, with leasing activity rising 12% year-over-year.

Recent Moves

In recent months, BKM has made several notable transactions. It recapitalized a 2.1M SF West Coast portfolio for $550M and acquired 778K SF in Phoenix for $156.8M. It also partnered with StepStone Real Estate to recapitalize the 10-building Pacific Business Center in Las Vegas for $154M.

Why It Matters

The partnership targets light industrial assets, leveraging strong tenant demand and limited supply for value-add investment opportunities.

What’s Next

BKM and Kayne Anderson will target infill markets with strong growth and rent gaps, capitalizing on favorable leasing conditions.