Downtown-based HDL is hoping to rent out space in its headquarters building.
Local blood testing firm Health Diagnostic Laboratory got the blessing of federal bankruptcy court Thursday to continue pursuit of a deal that would allow VCU to lease space in the company’s downtown headquarters.
HDL, which is working its way through Chapter 11 bankruptcy and potentially toward a sale of the company, had asked for court permission to amend its lease for its 737 N. Fifth St. complex and reduce the amount of space it rents in the building by 45,000 square feet.
Court documents show that VCU aims to take over the space and move in by Nov. 1. The university has not said how the space would be used and said it does not comment on pending real estate matters.
HDL spokesman Doug Sbertoli said in an email that negotiations between the two sides are ongoing.
“The VCU term sheet to lease space in the building HDL occupies is non-binding and subject to further discussions and approvals by both VCU and HDL,” he said.
He added that they are working to expedite the process and that HDL is “willing to engage in similar dialogue with other third parties as a contingency if the arrangement as currently contemplated does not move forward.”
Leasing out the space would allow HDL to continue to trim expenses by saving $1.5 million annually on rent and utilities. Court records show that rent for the 45,000 square feet comes to about $91,000 per month.
HDL built its $100 million, 283,000-square-foot headquarters in the Virginia Biotechnology Park in two phases, the first of which was completed in early 2012. The project was finished in June 2014.
It was erected during a period of rapid growth at HDL, when continued increases in testing volume and employee headcount seemed a no-brainer. The recent excess space in the complex is in part a result of extra equipment sales and several rounds of layoffs. That downsizing followed a drop-off in volume after HDL did away with fees that it once paid to doctors to use its tests, a practice that faced scrutiny from a now resolved federal investigation and subsequent media coverage of its troubles. The company said recently it has 645 employees, down from more than 800 at its peak.
Biotech 8 LLC owns the property, and HDL owns 58.9 percent of Biotech 8. Local real estate firm Lingerfelt Commonwealth Partners, which helped develop the massive lab facility, owns the remaining portion of the LLC.
Fulton Bank is the lender on the building. The bank initially objected to parts of HDL’s motion to amend the lease, but those objections were resolved prior to Thursday’s hearing.
Sbertoli previously said the company currently uses more than 100,000 square feet of the complex.
Also at Thursday’s hearing, discussions of HDL’s continued access to cash collateral from its main lender BB&T were delayed to July 30. BB&T has previously argued against HDL’s use of the cash. The bank’s efforts in May to cut the lab company off from its line of credit played a large part in the bankruptcy filing.
The company continues to hunt for a buyer through a court-approved auction process that’s expected to be completed in September.
Downtown-based HDL is hoping to rent out space in its headquarters building.
Local blood testing firm Health Diagnostic Laboratory got the blessing of federal bankruptcy court Thursday to continue pursuit of a deal that would allow VCU to lease space in the company’s downtown headquarters.
HDL, which is working its way through Chapter 11 bankruptcy and potentially toward a sale of the company, had asked for court permission to amend its lease for its 737 N. Fifth St. complex and reduce the amount of space it rents in the building by 45,000 square feet.
Court documents show that VCU aims to take over the space and move in by Nov. 1. The university has not said how the space would be used and said it does not comment on pending real estate matters.
HDL spokesman Doug Sbertoli said in an email that negotiations between the two sides are ongoing.
“The VCU term sheet to lease space in the building HDL occupies is non-binding and subject to further discussions and approvals by both VCU and HDL,” he said.
He added that they are working to expedite the process and that HDL is “willing to engage in similar dialogue with other third parties as a contingency if the arrangement as currently contemplated does not move forward.”
Leasing out the space would allow HDL to continue to trim expenses by saving $1.5 million annually on rent and utilities. Court records show that rent for the 45,000 square feet comes to about $91,000 per month.
HDL built its $100 million, 283,000-square-foot headquarters in the Virginia Biotechnology Park in two phases, the first of which was completed in early 2012. The project was finished in June 2014.
It was erected during a period of rapid growth at HDL, when continued increases in testing volume and employee headcount seemed a no-brainer. The recent excess space in the complex is in part a result of extra equipment sales and several rounds of layoffs. That downsizing followed a drop-off in volume after HDL did away with fees that it once paid to doctors to use its tests, a practice that faced scrutiny from a now resolved federal investigation and subsequent media coverage of its troubles. The company said recently it has 645 employees, down from more than 800 at its peak.
Biotech 8 LLC owns the property, and HDL owns 58.9 percent of Biotech 8. Local real estate firm Lingerfelt Commonwealth Partners, which helped develop the massive lab facility, owns the remaining portion of the LLC.
Fulton Bank is the lender on the building. The bank initially objected to parts of HDL’s motion to amend the lease, but those objections were resolved prior to Thursday’s hearing.
Sbertoli previously said the company currently uses more than 100,000 square feet of the complex.
Also at Thursday’s hearing, discussions of HDL’s continued access to cash collateral from its main lender BB&T were delayed to July 30. BB&T has previously argued against HDL’s use of the cash. The bank’s efforts in May to cut the lab company off from its line of credit played a large part in the bankruptcy filing.
The company continues to hunt for a buyer through a court-approved auction process that’s expected to be completed in September.