After two years on the market, the 32,000-square-foot former headquarters and laboratory of Commonwealth Biotechnologies sold for $3.8 million in a court-ordered auction.
The auction drew interest from some big names in real estate, including Markel|Eagle Partners — the private equity arm of Markel Ventures and Eagle Construction — and FD Stonewater, a Northern Virginia investment and development firm.
The winning bid on the property, which sits on four acres at 601 Biotech Drive in Midlothian, was from Bostwick Laboratories, an Innsbrook-based medical testing firm that already owns the tenant of the building. That tenant is AIBiotech, which Bostwick bought from Commonwealth Biotech in 2009.
Although the buyer wasn’t exactly a surprise, Bostwick was forced into a bidding battle.
Locally-based Real Estate Value Advisors, a private real estate investment fund, showed up at the auction ready with cash.
REVA has been eying the building for months. It had made a stalking horse bid this year of $4.22 million but eventually backed out after it couldn’t secure financing. The building was most recently listed at $5.7 million. It was originally listed about two years ago at $6.43 million.
This latest auction had a starting bid of $3 million, and REVA made the first move, according to Steve Sadler, who runs REVA and is managing director of its REVA Catalyst Fund.
Sadler and David Bostwick, founder of Bostwick Laboratories, made counter offers for three hours until the price peaked at about $3.8 million.
“He has a lot of good reasons to the buy the building,” Sadler said of Bostwick. “It makes perfect sense. The only surprise was that anyone showed up to bid against him.”
CBI, which was founded in 1992 and went public in 1997, went bankrupt in January after years of losses. Its only remaining assets have been its real estate holdings and its status as a public company.
Once the federal bankruptcy judge gives a stamp of approval on the sale to Bostwick, which is expected Wednesday, CBI will be one step closer toward its goal of becoming a debt-free, publicly traded shell company. It 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.
CBI will use the proceeds of the sale to pay $2.43 million to BB&T, which still holds the first lien on the Biotech Drive property, according to court records. There is also about $500,000 worth of liens against it from several New York-based capital firms.
The auction was at the offices of Tavenner & Beran, the law firm that represented CBI in its bankruptcy.
CB Richard Ellis has been working for the bankruptcy court to list and help sell the property.
Michael Schwartz is a BizSense reporter. Please send news tips to [email protected]