Main Street Station property in Breckenridge sells for $5.6M
May 1, 2015
After years of diminishing returns and frustrated tenants, Main Street Station at the base of Peak 9 has a new owner with a new vision for retail on the south edge of Breckenridge.
The property, home to 20 commercial units totaling 34,400 square feet, sold on April 24 for $5.6 million to an investor group led by Brent Martin, an Austin-based real estate manager who lives part time in Breckenridge. It's the second-largest sale in Summit County this year behind a $9.2 million affordable housing complex in Silverthorne sold in March.
Main Street Station's previous owner was First Allied Corporation, a New York-based management firm that purchased the complex from original developer Jack Wolfe in 2004. The firm owns shopping complexes in 22 states across the country, primarily in large, bustling metro areas like Denver and Chicago.
By 2014, First Allied lost the property to foreclosure, due in large part to haphazard management and tensions between the landlord and tenants, Wolfe said. The firm wouldn't return phone calls for weeks at a time, and when tenants struggled through the thick of the 2008 recession, they saw little support from the East Coast landlord.
"You have to treat your tenants like they're customers," said Wolfe, who also owns a commercial real estate firm, Wolfe and Company in Breckenridge. "They aren't just here to give you rent money. When you're a remote landlord with very little presence, you don't have weekly meetings or walk the property once a day, really become their advocate."
Main Street Station is currently home to 10 retailers and restaurants, or roughly half of its original capacity. That makes it one of the quietest properties in town, despite a prime location near Maggie Pond with constant foot traffic, even during the lean shoulder seasons. The complex has five buildings total, with a sixth building under construction on the far south end.
Above street level, the entire property also holds 190 residential units, split between private condos and vacation rentals like Water House on Main Street, a Wyndham property.
For Wolfe, who has partnered with Martin as the property's managing member — Wolfe will take the lead on attracting tenants — Main Street Station has the potential to become a thriving retail hub. New ownership can tap that potential, particularly when commercial real estate vacancy in town is at a near-record low of 2.25 percent.
"Most investors like to buy real estate that will go up in value," Wolfe said. "Main Street Station makes up a large parentage of the vacancy rate in Breckenridge, so it stands out. But Brent is not swayed by short-term decisions. He's the right owner for the property — it really matters to him how tenants are doing."
BRECK'S FAMILY HUB
When Main Street Station welcomed its first tenants in late 2001, Wolfe wanted to attract businesses with a common theme: family. It was a natural concept for a property that sits below nearly 200 residential units, and the first tenants were built for families: a spa and jewelry store for mom, rental shops for kids, Quandary Grille for après dining.
Yet First Allied did little to maintain family-friendly tenants, Wolfe says, and by 2009 he started actively searching for new developers.
"Over 10 years, it lost its original version," Wolfe said. "It was pretty horrible — we did a good original job with the design and build and leasing, but it wasn't sustained."
Shortly after the 2014 foreclosure, Martin approached Wolfe to manage the property. He entered the real estate market in 2006 after nearly 30 years as bond trader and owner of a money management firm. In the past decade, he's overseen remodels at several multi-family and commercial office properties, including apartment complexes in Houston and a medical office building in Austin.
Main Street Station is Martin's first foray into resort town retail. He was shocked to see half of the commercial units empty and saw it as an opportunity to rehab a promising property.
"I found out it really wasn't a situation of bad real estate — it's prime real estate, in fact," Martin said. "The previous owner was a national firm, with shopping centers in places where you can be an absentee owner and still be successful. Before, the attitude was, 'Either pay your rent or get out,' and when things start going down a bad path it's hard to get back out."
Martin predicts the complete rehab will take about two years. Along with a new tenant philosophy, he also wants to take advantage of the properties sprawling plaza and stage.
"This property didn't get into the ditch overnight, so we realize this is something you have to be committed to in the long haul," Martin said. "It's important to have the right tenant mix, to be involved in the community, to really take advantage of that plaza space."
While Martin finalizes details on the sale, he and Wolfe are searching for new tenants. And they've already found two: Lolo Juice, a brand-new natural juice and healthy food store, and Hub Breckenridge, a technology store currently located on the north end of Main Street.
James Lee, owner of Hub Breckenridge, moved into his current location two years ago. Main Street Station seemed like a perfect fit for his business — a major portion of business comes from travelers who forget electronics at home — but after hearing horror stories from other tenants, he opted for a second-level storefront.
When Hub Breckenridge relocates to Main Street Station, Lee will be on the first floor near Coffee Depot.
"This is an excellent opportunity for us to be on the sidewalk level," Lee said. "This is really what Main Street Station needed, and even the south end of town in general. The new owners are really taking this seriously — they have a mission to make it work, and we want to be part of that revitalization of Main Street Station."