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BEDFORD, TX-Renamed to Waters Park Apartments, a 168-unit value-add in the suburbs has been sold to a back-up buyer who picked up the play when a contract fell out last fall. Houston-based Mosaic Residential is investing $6 million into the acquisition and renovation of the class B complex, formerly Park Lake Apartments.

“The broker called us and said ‘this is a deal for you,’” recalls Jay O’Connor, founding partner of Mosaic Residential, which has been carving out its niche in Texas metros with value-add acquisitions. The retooling at the 95%-leased Waters Park Apartments, situated on 8.16 acres at 1401 Shady Lane, got under way as soon as the deed changed hands. O’Connor tells GlobeSt.com that the upside will come from a management change and post-renovation rent hikes that are projected to be $125 per month for each unit. The complex’s average monthly rent presently is $672.

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

Built in 1978, Waters Park Apartments abuts a 60-acre full-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.

O’Connor says Mosaic jumped into a contract due to the asset’s location beside the park and along a cul de sac, tenants’ mix and condo neighbors selling for $95,000 to $110,000 per unit. “It gave us a little bit of confidence,” he says, adding “it’s a great Mid-Cities location.”

Waters Park is a mix of one-, two- and three-bedroom units from 700 sf to 1,300 sf. O’Connor says the majority of renovations will be unit interiors in a floor-to-ceiling makeover. Absolute Turnkey Services Inc. of Houston is the general contractor.

O’Connor says the plan is a two- to three-year hold although debt was placed with a five-year term to cover all bases. James Richards with Live Oak Capital Ltd. in Houston arranged equity financing and worked out loan details with the lender’s mortgage banker, 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 the deal.

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