BKM Capital Partners Sells Sorrento Mesa Industrial Property for $14.25M, Realizing 122% Value Gain
BKM Capital Partners completed the disposition of Sorrento Commerce Park, a 35,294-square-foot multi-tenant light industrial property located at 9210–9220 Waples Street in San Diego's Sorrento Mesa submarket, for $14.25 million in March 2023. The sale equates to approximately $403.70 per square foot and represented a 122% increase in value over BKM's acquisition price.
The firm disclosed the transaction details in a Q1 2026 case study published March 16, 2026, offering a retrospective look at the value-add execution strategy deployed at the property over the hold period.
Industrial Real Estate Acquisition and Value-Add Strategy
BKM Capital Partners acquired the property identifying it as an underinvested asset in one of Southern California's most supply-constrained industrial corridors. Prior ownership had operated under a cash-flow strategy that limited reinvestment and modernization, according to the firm's case study.
Following the real estate acquisition, BKM deployed a $1.02 million capital improvement program. The program included $611,000 in tenant improvements, $105,000 in speculative tenant improvements to modernize vacant suites, $143,000 in HVAC system replacements, $25,000 in parking lot upgrades, and $140,000 in exterior cosmetic enhancements — including paint, signage, landscaping, and building addressing along Mira Mesa Boulevard.
Interior upgrades featured polished concrete landings, carpet tiles, accent walls, and exposed hard-duct HVAC installations. Exterior improvements were designed to enhance visibility along Mira Mesa Boulevard, one of the area's primary east–west corridors connecting Interstate 805 and Interstate 15.
Financial Results at Disposition
BKM reported a 90% increase in net operating income between 2019, when the property became fully operational under its ownership, and the March 2023 sale. The firm said NOI performance exceeded underwriting for the final eight consecutive quarters of operations.
In-place rents grew 94% over the hold period, rising from an average of $0.83 per square foot at acquisition to $1.80 per square foot at disposition. The property averaged 91% occupancy during the hold and exited at 100% occupancy.
BKM executed 10 lease transactions during the hold, rolling 90% of the total suites at the property. The firm executed 21,627 square feet of rollovers across seven suites since acquisition, which equates to approximately 61% of net rentable area. The total number of units was increased to 11 from nine at acquisition.
Annual mark-to-market increases on lease expirations averaged 30% between 2019 and the first quarter of 2023. The mark-to-market potential at disposition had narrowed to 8.3%, down from 39% at acquisition — a figure BKM cited as evidence of its success in bringing leases to market rates over the hold period.
Sorrento Mesa Market Dynamics
Sorrento Commerce Park is situated within Sorrento Mesa, a submarket BKM described as positioned at the heart of San Diego's advanced manufacturing and technology-centric industries. The submarket has recorded zero industrial deliveries under 200,000 square feet over the past 10 years, a supply constraint the firm said eliminates competitive pressure for small- and mid-bay product.
Leasing activity in the submarket has rebounded following periods of inactivity, reaching 189,752 square feet over the past 12 months — the highest volume recorded in two years, according to BKM's case study. Leases for spaces under 10,000 square feet dominated total leasing activity in the greater San Diego region in 2025, capturing 80% of total leases signed — the highest share in over five years.
The submarket benefits from proximity to the U.S.–Mexico border, which the firm said supports long-term regional economic activity and cross-border logistics demand. San Diego's role as a major tourism destination and its highly educated, largely affluent workforce — supported by major industries including technology, healthcare, and finance — were also cited as favorable market fundamentals.
At acquisition, the property housed tenants across seven different industry sectors. No single tenant or industry occupied more than 30% of net rentable area, a diversification profile BKM said reduces exposure to credit risk even within a smaller park.
BKM Capital Partners Portfolio Context
The Q1 2026 case study release comes approximately three years after the March 2023 disposition and highlights the firm's value-add execution track record. The buyer and broker representation in the transaction were not disclosed in the source materials.
