BKM Capital Partners, the fledgling Irvine, California-based private equity real estate firm, has attracted John Mack, the former chairman and chief executive officer of Morgan Stanley, to its board of advisors, PERE can reveal.
The seal of approval undoubtedly will raise the profile of the newcomer company, which is in the middle of raising its first commingled fund. That vehicle, BKM Industrial Value Fund I, is targeting $200 million in commitments and is scheduled to close in June.
Mack, who first joined Morgan Stanley in 1972 and finally quit at the end of 2011 after two stints at the bank, is one of five new additions to the company. Paul Dolinoy and Jeff Gehl also have joined the board of advisors, having previously served as the former president of Equitable Real Estate Investment Management and managing principal and co-founder of RCP Advisors, respectively.
Meanwhile, Michael Hernstad and Charlie Ittner have been hired as executives. Hernstad was formerly at Colony Capital, where he was director of finance and accounting, and Ittner was formerly director of investor relations at private equity firm Platinum Equity. Both companies are based in California, where BKM also is headquartered.
BKM is a fund manager and operator platform founded just last year to invest in value-added, multi-tenant industrial real estate in the Western US. It is the real estate arm of The Niru Group, which is a private investment management firm of entrepreneur Nima Taghavi, whose Crave Entertainment Group entered the video game business in the early 1990s and grew to become the largest privately held video game group in the US. BKM was co-founded by Brian Malliet, who sold his previous venture, BKM Development, to Voit Real Estate Services in 2009.
In a statement, Malliet said the “prominence of its advisory board members in their respective fields” showed its investment strategy and model were “resonating” with people who had “seen it all and accomplished incredible things in their careers.”
Among the firm’s investments so far are Hayden Island Business Park in Portland, Oregon; Patrick Commerce Center in Las Vegas; and Black Canyon Business Park in Phoenix. Hayden Island is a 98,516-square-foot property that BKM acquired with 84 percent occupancy leased at rents 40 percent below current market rates. Patrick Commerce Center is a 223,009-square-foot industrial business park where occupancy had dropped to 55 percent in a market in which the vacancy rate trends towards 11 percent. The 219,410-square-foot Black Canyon Business Park lost its two main tenants within a few months of one another, dropping occupancy from 95 percent to 34 percent before BKM stepped in as a buyer.