The local investment fund that had made a $4 million bid on the last remaining asset of a bankrupt local firm has backed out of the deal.
Richmond-based Real Estate Value Advisors and its REVA Catalyst Fund, which made the stalking horse bid for the former headquarters of Commonwealth Biotechnologies, pulled out before last week’s scheduled auction because it couldn’t secure financing.
“We went through the due diligence process and were having some challenges. Our lender pulled out,” said Steve Sadler, who runs Real Estate Value Advisors and who is managing director of the REVA Catalyst Fund.
Commonwealth Biotechnologies, which consists of nothing more than its real estate holdings and its status as a public company, filed for Chapter 11 bankruptcy protection in January.
Real Estate Value Advisors bid $4.22 million for the defunct company’s 32,000-square-foot laboratory facility at 601 Biotech Drive just off Midlothian Turnpike. It has been on the market for a couple of years. The lab sits on 4.5 acres and was most recently listed at $5.7 million. It was originally listed about two years ago at $6.43 million.
“We had a lender lined up,” Sadler said, but it pulled out in part because of concerns over the how long the property’s tenant might stay in the space and questions about the company that owns the tenant.
What makes the Biotech Drive property attractive is that tenant, a company called AIBiotech. It is a division of Innsbrook-based Bostwick Laboratories. Bostwick purchased the AIBiotech assets from Commonwealth Biotech back in 2009.
Sadler has said he’s confident AIBiotech will stay for at least the three and half years remaining on its lease. But Bostwick hadn’t been particularly communicative about its plans for the future, he said.
“It’s a tough market in general, and that deal has some issues,” Sadler said.
An auction for the property was scheduled for July 15, where Real Estate Value Advisors’ stalking horse $4.22 million bid was to be the benchmark for other parties that might take a crack at buying the space at the court-ordered auction.
But with no stalking horse, the auction was called off, Sadler said.
Sadler said his company will wait to see if a new auction will be scheduled, although he won’t likely make another lead bid.
“We’ll wait and see what, if anything, comes up next, and we’ll show up at the auction,” he said.
The REVA fund is a private placement fund that was launched in 2009 and is open only to accredited investors. It invests in real estate that it thinks has ownership problems, and Commonwealth Biotech fit that criterion.
The company was founded in 1992 and went public in 1997. After years of losses, it decided become a debt-free, publicly traded shell company that could then be combined with another company looking to go public through a reverse merger: a cheaper and faster way of going public than an IPO.
Wink Ewing, a broker at CB Richard Ellis, has been working to help sell the Biotech Drive property.
The first lien holder on the property is BB&T, which Commonwealth Biotech still owes $2.43 million. There is also about $500,000 worth of liens against it from several New York-based capital firms.
Michael Schwartz is a BizSense reporter. Please send news tips to [email protected].
The local investment fund that had made a $4 million bid on the last remaining asset of a bankrupt local firm has backed out of the deal.
Richmond-based Real Estate Value Advisors and its REVA Catalyst Fund, which made the stalking horse bid for the former headquarters of Commonwealth Biotechnologies, pulled out before last week’s scheduled auction because it couldn’t secure financing.
“We went through the due diligence process and were having some challenges. Our lender pulled out,” said Steve Sadler, who runs Real Estate Value Advisors and who is managing director of the REVA Catalyst Fund.
Commonwealth Biotechnologies, which consists of nothing more than its real estate holdings and its status as a public company, filed for Chapter 11 bankruptcy protection in January.
Real Estate Value Advisors bid $4.22 million for the defunct company’s 32,000-square-foot laboratory facility at 601 Biotech Drive just off Midlothian Turnpike. It has been on the market for a couple of years. The lab sits on 4.5 acres and was most recently listed at $5.7 million. It was originally listed about two years ago at $6.43 million.
“We had a lender lined up,” Sadler said, but it pulled out in part because of concerns over the how long the property’s tenant might stay in the space and questions about the company that owns the tenant.
What makes the Biotech Drive property attractive is that tenant, a company called AIBiotech. It is a division of Innsbrook-based Bostwick Laboratories. Bostwick purchased the AIBiotech assets from Commonwealth Biotech back in 2009.
Sadler has said he’s confident AIBiotech will stay for at least the three and half years remaining on its lease. But Bostwick hadn’t been particularly communicative about its plans for the future, he said.
“It’s a tough market in general, and that deal has some issues,” Sadler said.
An auction for the property was scheduled for July 15, where Real Estate Value Advisors’ stalking horse $4.22 million bid was to be the benchmark for other parties that might take a crack at buying the space at the court-ordered auction.
But with no stalking horse, the auction was called off, Sadler said.
Sadler said his company will wait to see if a new auction will be scheduled, although he won’t likely make another lead bid.
“We’ll wait and see what, if anything, comes up next, and we’ll show up at the auction,” he said.
The REVA fund is a private placement fund that was launched in 2009 and is open only to accredited investors. It invests in real estate that it thinks has ownership problems, and Commonwealth Biotech fit that criterion.
The company was founded in 1992 and went public in 1997. After years of losses, it decided become a debt-free, publicly traded shell company that could then be combined with another company looking to go public through a reverse merger: a cheaper and faster way of going public than an IPO.
Wink Ewing, a broker at CB Richard Ellis, has been working to help sell the Biotech Drive property.
The first lien holder on the property is BB&T, which Commonwealth Biotech still owes $2.43 million. There is also about $500,000 worth of liens against it from several New York-based capital firms.
Michael Schwartz is a BizSense reporter. Please send news tips to [email protected].