🚨BKM Capital Partners and Kayne Anderson acquired an industrial portfolio in Phoenix and Tempe for $167.85M, financed by a significant 80% loan-to-value (LTV) mortgage. This aggressive leverage indicates strong lender confidence in Phoenix's industrial market fundamentals, marked by high occupancy and robust small-bay tenant demand. Despite a tightening credit environment, industrial assets in Phoenix continue to attract favorable debt capital.
Sale Price: $167.85M ($188.7/sf)
Financing: $135.43M mortgage (80% LTV)
Occupancy Rate: ~90% at sale
Rent Growth: ~6% annually
Loan Performance: The 80% LTV suggests lenders' confidence despite potential vacancy increases, implying strong DSCR due to stable NOI.
Demand Dynamics: Small-bay industrial spaces show resilience, with low vacancies and stable tenant diversity, supporting solid absorption metrics.
Asset Strategies: Focus is on reconfiguring units and improving facilities, leveraging tenant demand for smaller, flexible spaces.
Capital Markets: Lenders favor industrial over other sectors, with active involvement from banks and CMBS, indicating robust market sentiment.
Industrial sector maintains growth, though rental increases are moderating.
Small-bay assets outperform in lease uptake and stability.
High-leverage financing remains accessible for well-positioned assets.
Spreads may widen but are currently tight against Treasuries.
🛠 Operator’s Lens
Refi: Favorable under high occupancy, but monitor rate impacts.
Value-Add: Leverage capex strategies aligned with tenant preferences.
Development: Stay cautious on speculative builds; focus on phased delivery.
Lender POV: Continue to price risk favorably for stable, leased portfolios.
Monitor Phoenix’s vacancy rates for absorption trends.
Watch for cap rate movements due to interest rate changes.
Continue assessing tenant demand dynamics amid high supply.
rebusinessonline.com — Portfolio Sale Coverage (Oct 2025). crenews.com — Acquisition Details (Oct 2025). azbigmedia.com — Market Analysis (Oct 2025). plantemoran.com — Industrial Market Trends (Oct 2025).
