BKM Capital Partners Acquires 401,000-Square-Foot Kent Valley Industrial Portfolio Through BKM Industrial Value Fund III

SEATTLE — BKM Capital Partners has acquired a five-building, 401,000-square-foot multi-tenant light industrial portfolio in the Kent Valley, one of the Pacific Northwest's most active industrial corridors, the firm announced July 14. The assets were acquired on behalf of BKM Industrial Value Fund III, and JLL Capital Markets represented the seller.

The portfolio spans approximately 19 acres of infill industrial space across South King County and is 84% occupied at the time of acquisition. It comprises three distinct components: Southcenter West Business Park, a three-building, 287,000-square-foot campus in Tukwila; Kent Valley Distribution Center III, a 50,450-square-foot facility in Kent; and a 64,000-square-foot facility also located in Kent. Together, the five buildings contain 21 units with a weighted average lease term of 2.9 years, with no more than 26% of net rentable area expiring in any single year.

Portfolio Specifications and Capital Plan

The properties were built between 1973 and 1979 and feature 24-foot clear heights, 90- to 110-foot truck court depths, wet pipe sprinklers, LED lighting, ample parking, and a mix of dock-high and ground-level loading — physical characteristics that BKM cited as difficult to replicate in infill locations.

BKM has allocated approximately $4 million for capital improvements across the portfolio. Planned work includes exterior cosmetic upgrades, fresh paint, landscaping, updated tenant and building signage, parking lot sealing and restriping, targeted roof maintenance, and speculative make-ready improvements intended to support lease-up and improve marketability. The financial terms of the acquisition were not disclosed.

Brett Turner, Senior Managing Director of Acquisitions and Dispositions with BKM, led the acquisition process, with support from Michael Grossner, Senior Director of Acquisitions and Dispositions. Buzz Ellis, Managing Director with JLL, represented the seller.

"The portfolio offers several features that are difficult to replicate in infill locations, like flexible suite sizes, low office finish, and direct access to the region's core transportation network," Turner said. "Combined with a diversified rent roll and a measured rollover schedule, the acquisition gives us multiple ways to create value without depending on a single lease event or tenant outcome."

Kent Valley Location and Infrastructure Access

The Kent Valley submarket serves as a central distribution hub for users serving Seattle, Bellevue, Tacoma, the Port of Seattle, the Port of Tacoma, and Seattle-Tacoma International Airport. The portfolio assets are located near Interstate 5, Interstate 405, SR-167, Boeing Field, and the BNSF Intermodal facility in Tukwila. Southcenter West Business Park sits approximately 3.7 miles from Seattle-Tacoma International Airport, while the Kent assets are within approximately six miles.

The corridor is home to a number of large corporate occupiers, including Amazon, Boeing, Alaska Airlines, Starbucks, Costco, and Blue Origin, according to BKM's announcement.

BKM's Founder, CEO and Chief Investment Officer Brian Malliet acknowledged that near-term market conditions and longer-term fundamentals present differing pictures for the submarket. "Seattle's industrial market is still working through several years of supply pressure and shifting tenant demand, which has resulted in a more attractive entry point," Malliet said. "At the same time, the Kent Valley remains a land-constrained, infrastructure-rich corridor with deep labor access and sustained demand from a diverse set of users across logistics, distribution, aerospace, manufacturing and other services."

Supply Dynamics and Demand Trends

New industrial supply across greater Seattle has slowed considerably. Just two projects totaling 887,000 square feet delivered across the broader market in the first quarter of 2026, according to data cited by BKM from Cushman & Wakefield. With much of the construction pipeline stalled, Cushman & Wakefield expects limited new development to drive absorption of existing vacancy as demand improves.

Demand has been most pronounced at the smaller end of the market. Spaces under 20,000 square feet — the size profile that characterizes much of the Kent Valley portfolio — represent the most competitive segment of the market, according to BKM's announcement.

Sources: BKM Capital Partners