1717 Independence

PLANO, TX-In less than 24 hours, Mosaic Residential Inc. has bed down its first deals in North Texas, grabbing a pair of class B complexes from different sellers. Sources confirm that the 436-unit acquisition came within 20% of the $21.4-million aggregate ask.

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

Cornerstone sits on a 13.89-acre tract on the northern end of Independence Parkway. The 10-acre Laurel Ridge is the southern bookend.

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.

The Transwestern Dallas team of senior vice presidents Mark Freeman and Armand Charbonneau marketed both complexes. “We had very strong activity. We did a lot of tours on both of them,” Freeman says, confirming that Mosaic had the highest prices on the table in both cases. Collin County tax records show a limited partnership, led by the Quatrefoil Group Inc. of the Los Angeles area, sold the 23-year-old Cornerstone Apartments after a five-year hold and an Allen, TX partnership sold the 29-year-old Laurel Ridge, which it bought in October 1993.

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.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.