After putting one high-profile deal behind it last week, a local auction house has the sale of its life coming up this week.
Motleys Asset Disposition Group has received the first round of bids for the upcoming auction of the real estate holdings of imprisoned developer Billy Jefferson’s River City Renaissance portfolio.
It’s a massive trove of 29 apartment buildings in the Fan and Museum District with 440 units totaling 405,000 square feet. The properties will be auctioned Dec. 18 to a group of final bidders currently being determined from an initial bidding round that ended on Dec. 10.
Based on the properties’ assessed value at between $30 million and $40 million, Motleys President Mark Motley said it’s potentially the biggest single real estate auction in Richmond’s history.
“This is one of the biggest auctions Richmond has ever seen,” he said.
SVN/Motleys, the company’s commercial real estate arm, is handling the auction. Tim Dudley, a senior advisor with the firm, said it is sorting through the initial bids. He said the company would not disclose how many bids it received in the initial round.
“We’re very happy with the response we got and the multiple parts of the country that we got bids from,” Dudley said.
He said bids came in from around Richmond and out of town and included interested buyers of all sizes. Bidders can make offers on a single building, multiple properties or the portfolio as a whole.
“It’s a little bit of everything,” Dudley said. “It’s people who have individual wants, people who are trying to buy groups (of properties) and larger investment groups trying to buy the entirety.”
The top two-thirds of those initial bidders who are considered qualified will be invited to the final auction on Dec. 18. The auction location has not been disclosed yet, Dudley said, and the bidding room that day will only be open to the qualified final bidders.
In order to be considered a qualified bidder, the interested party has to submit a purchase contract, a wire transferred deposit and must show their ability to close on the deal with a letter of guarantee from a lender or a financial statement with proof of funds.
The sale of the properties was approved by federal bankruptcy court last month.
The court will also have to rule on precisely which parties take priority when the proceeds from the auction are paid out. U.S. Bank holds about $36 million worth of secured mortgages that would have to be paid down before the buildings’ owners would see any money.
Jefferson’s share would be made available to pay down his more than $9 million restitution requirement.
It’ll likely be a nice payday for Motleys as well. Auction firms typically get paid through a premium – often 10 percent – added on to the final sales price. Motleys beat out 15 other auction firms to land the listing, Motley said.
The properties are currently managed by property receiver CompassRock Real Estate, a court-ordered move following Jefferson’s incarceration and the subsequent bankruptcy of River City Renaissance.
Motleys heads toward the Dec. 18 River City Renaissance sale after the successful auction last week of Vauxhall Island, a 2.8-acre island on the James River.
Local nonprofit Enrichmond was the winning bidder in a sealed bid auction for the island that ended Dec. 11.
Patrice Carroll, a real estate advisor with SVN/Motleys who handled the sale of the island, said the contract from Enrichmond has been accepted and closing is expected within 30 days. She would not disclose the sales price until the deed is processed with the city.
“The seller was very pleased and pleased with who purchased it,” Carroll said.
Vauxhall Island sits in the James River next to Mayo Island and immediately west of the 14th Street Bridge. Its lone permanent occupant is a billboard that has the potential to continue to generate revenue.
The property was put up for sale by longtime owners Jess Duboy and his daughter Donna Spurrier, both of whom are in the local advertising industry. Spurrier runs Spurrier Media Group, and Duboy’s founded Duboy Inc.
Carroll said the Motleys reached out various potential buyers including the city of Richmond and wildlife and environmental groups.
Enrichmond is a nonprofit that supports parks and recreation and cultural arts. In addition to grants and donations, its funding comes from a variety of sources, including events it puts on at the 17th Street Farmers Market and support from the City of Richmond.
Enrichmond executive director John Sydnor said the group is not quite ready to discuss its plans for the property.
“We will be discussing our hopes for Vauxhall once the purchase process is completed,” Sydnor said in an email last week after the auction.