Broker Kyle Malnati navigated a divorce, bankruptcy and tens of thousands of dollars in deferred maintenance to get a deal done for his listing in West Wash Park.
“It was for sure more interesting than some of the real estate sales I’ve had,” said Malnati, who works for local shop Kentwood Real Estate.
Late last month, Denver-based Elkco Properties purchased 369-375 S. Pearl St. in West Wash Park for $1.5 million from Malnati’s client, Alland Properties LLC.
The deal works out to $296 a square foot for a 1,600-square-foot house and the vacant 3,400-square-foot retail building next door, which has two units.
“We just plan on fixing them up and renting them,” Elkco CEO Stephen Elken told BusinessDen.
But there’s more to the story than a simple real estate play.
Seller Alland Properties, managed by Andy and Estela Koncsik, purchased the real estate for $450,000 in 2006, public records show. Andy ran a dry cleaning business in one of the retail spaces, and the couple once operated a Mexican restaurant in its other storefront.
But that establishment lasted only a few years, replaced by Finley’s Pub in 2012. Over a decade later, the two were forced to sell the property as part of divorce proceedings, with Malnati appointed by the court to sell it. He put it on the market in August.
The dry cleaner shut down around Labor Day as part of the deal. By late September, Malnati had Elkco under contract.
But the other retail tenant, Finley’s Pub, threatened to throw a wrench in those plans. It filed for bankruptcy, with the broker and his clients finding out only through a Facebook post announcing the bar would soon close.
“We went from receiving some income to no income,” Malanti said. “But the buyer was able to be resilient and find a way to purchase the property.”
That involved the sellers putting up $80,000 in escrow for roof repairs and fixing up the property. The dry cleaning space barely had operable HVAC, having used the dry cleaning equipment to heat the store, he said.
“During the last couple of snowstorms, you can’t see daylight, but there’s a hole in there that’s leaking,” Malnati said of the building’s roof.
It was still a deal that made sense for Elkco, which has its offices six blocks down the road along Logan Street, just before it crosses Interstate 25.
“It’s difficult in today’s market to finance real estate, period. It’s also more difficult to finance vacant real estate. … [The buyer] is incredibly well capitalized and has a great relationship with their bank, and they come with a great amount of trust in the community,” Malnati said.
Elkco, founded in 1985, manages more than 2,000 apartment units and about 1.5 million square feet of retail and mixed-use commercial real estate throughout Colorado, Wyoming, Michigan, Iowa, Nebraska and Missouri, according to its website.
Malnati, too, is well versed in mixed-use real estate, working on both residential and commercial properties. He said the court appointed him as the broker in this sale because of his background in both product types.
“I like to joke that I’m bilingual,” Malnati said. “I like to speak residential and commercial.”
This story was originally published on BusinessDen.
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