 1717 Independence |
The Houston-based value-add buyer tells GlobeSt.com that the plan is to pump another $4,500 to $5,500 per unit into the just-bought 208-unit complexes at 1717 Independence Pkwy. and 2821 Townbluff Dr. The complexes, situated about one mile apart, have been renamed Cornerstone Ranch and Laurel Ridge Apartments, formerly Prairie Place and Briardale, respectively.
"It's our goal to take them to a strong B plus in an A location," says Jay O'Connor, a Mosaic partner. Both complexes have frontage along one of the city's primary arteries, Independence Parkway.
Mosaic's partners, which include Bob Weber, Abe Himani and Velissa Parmer, will deploy most of the cap-ex into the 1970s- and 1980s-era interiors. Weber explains the work on the units, now under way, will be done on a "force-turn basis," meaning residents must take an upgraded apartment or move. Post-renovation monthly rents are expected to go up at least $75 to $100 per unit. The 89%-leased Cornerstone's average rent is $680 per month for one- and two-bedroom units averaging 753 sf. Laurel Ridge, resting at 95% occupancy, has a $655 average monthly rent for its one- and two-bedroom mix, which averages 812 sf.
The partners' value-add plan calls for 2.5 to three-year holds. "Obviously in doing that timeframe, we have to be pretty aggressive in getting our renovations started on Day 1," O'Connor says. Mosaic Management Co., led by Parmer, has moved into position to begin the repositioning plans.
 Cornerstone Ranch |
In addition to traditional value-add criteria, Himani says Mosaic's push to buy the assets was due to locations in a strong school district and the median annual household income of $60,000 to $65,000. "We look at many deals on a daily basis, but many would not make the cut on our business model," he says.
Mosaic expects to churn out eight to 10 deals per year in Dallas/Fort Worth, zeroing in on under-managed or renovation-needy assets in areas with strong school districts and median incomes exceeding $60,000. The partners say a recently renovated Hall Financial Group property is under contract as are a 167-unit complex in Austin and 259-unit asset in Houston.
 2821 Townbluff Dr. |
Weber says the deals closed with three-year, variable rate loans from Baltimore-based Legg Mason Inc. He adds that the interest-only payments were secured "at or slightly below market spreads." James Richards of Live Oak Capital Ltd. in Houston arranged the financing, winning approval within 10 days of the application date. "We were able to keep to the agreed timeline even with the capital markets," Weber stresses, "and at the agreed prices. We're not re-traders."
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