Situated in two of Houston’s most supply-constrained submarkets, the portfolio includes 44 units across seven buildings and is 87% occupied by a diverse mix of tenants. Together, the two properties — intended for light industrial use — total 193,819 s.f. of space and were acquired at a 42% discount to replacement cost.
Property: Fairway Park Center and Rockley Road Business Center in Houston
Price: $24.9M
Seller: Fort Capital
Buyer: BMK Capital Partners
Fairway Park Business Center, located in Northwest Houston, comprises 135,571 s.f. across five buildings. Rockley Road Business Center, in Southwest Houston, includes 58,248 s.f. in two buildings. Both properties feature functional layouts with dock-high and grade-level rear-loading, 14- to 20-foot clear heights, generous truck courts and parking and immediate access to major transportation corridors.
“Given the limited availability of smaller, flexible industrial space in these Houston submarkets and the properties’ strong, diverse tenant base, this portfolio presents an immediate and actionable opportunity to deliver significant value for our investors,” said Brett Turner, senior managing director of acquisitions and dispositions at BKM.
BKM plans to execute a $6.1M capital improvement program to enhance the visual appeal and operational functionality of the assets, with $3.7M going toward exterior upgrades and $2.4M earmarked for tenant improvements. Plans also include converting large suites into smaller units and reducing total office buildout from 44% to 28% of net rentable area.
“We acquired these assets for their clear rent growth potential and strong tenant demand, supported by Houston’s expanding economy and a constrained development pipeline,” said Brian Malliet, founder, CEO and chief investment officer of BKM. “With a weighted average lease term of just over two years, the portfolio gives us flexibility to quickly capture approximately 15% in rent growth across the majority of units.”
