"The broker called us and said 'this is a deal for you,'"recalls Jay O'Connor, founding partner of Mosaic Residential, whichhas been carving out its niche in Texas metros with value-addacquisitions. The retooling at the 95%-leased Waters ParkApartments, situated on 8.16 acres at 1401 Shady Lane, got underway as soon as the deed changed hands. O'Connor tells GlobeSt.comthat the upside will come from a management change andpost-renovation rent hikes that are projected to be $125 per monthfor each unit. The complex's average monthly rent presently is$672.

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Mosaic Residential slid in its in-house management team toreplace the seller's out-of-state property manager, according toO'Connor. The seller was a limited partnership from Clifton, NJ,which bought the 18-building complex in November 1999 based onTarrant County tax records.

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Built in 1978, Waters Park Apartments abuts a 60-acrefull-service municipal park with a stocked lake and fishing pier.Other park features are lighted jogging trails, sports fields,fitness center, lazy river water park and senior citizens'center.

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O'Connor says Mosaic jumped into a contract due to the asset'slocation beside the park and along a cul de sac, tenants' mix andcondo neighbors selling for $95,000 to $110,000 per unit. "It gaveus a little bit of confidence," he says, adding "it's a greatMid-Cities location."

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Waters Park is a mix of one-, two- and three-bedroom units from700 sf to 1,300 sf. O'Connor says the majority of renovations willbe unit interiors in a floor-to-ceiling makeover. Absolute TurnkeyServices Inc. of Houston is the general contractor.

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O'Connor says the plan is a two- to three-year hold althoughdebt was placed with a five-year term to cover all bases. JamesRichards with Live Oak Capital Ltd. in Houston arranged equityfinancing and worked out loan details with the lender's mortgagebanker, Andy Hill, associate with Capmark Finance Inc. in Houston.O'Connor says renovation capital was provided through Capmark's"mezz mod program" and the acquisition funded in a senior note.Blair Lang with Hunsaker Property Co. in Dallas brokered thedeal.

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