Abe Bhimani, a partner with Mosaic Residential tells GlobeSt.com that the 95%-occupied asset at 601 N. Park Blvd. is a well-performing asset. The upside, he notes, will involve bumping the rents.
"There are lots of people out there saying the value-add product is going away, but it's working well for us," he comments. "All seven of our properties are either renovated or under renovation. We're currently increasing rents on them." Bhimani notes that before renovation, rents tend to be between 15% and 20% below the standard market rate.
The complex, situated on 12 acres, was built in 1986 and has one-, two-, and three-bedroom units. Unit sizes range from 606 square feet to 1,244 square feet, while current rents are between $660 and $1,099 a month. Mosaic Residential assumed the existing $10.3 million Fannie Mae loan, which is serviced by Deutsche Bank. The loan expires in 2016 and carries a 5.93% interest rate. Marcus & Millichap Real Estate Investment Services Balthrope Group in Dallas represented the San Antonio, TX seller.
Bhimani says Mosaic Residential will continue acquiring well-located assets in strong school districts. The other requirement is that the assets be in areas within a one-mile radius of a high median household income, he says.
Nor is the company limiting itself to Texas. "We think now is the time to get into Phoenix," Bhimani comments. Though experts believe asset values in Phoenix haven't bottomed out just yet, Bhimani says it's the right time for Mosaic Residential to make a move to own in the desert.
"If we buy now, even if the bottom is six months from now, we can hold through that," he comments. "We think there are some very good opportunities out there."
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