Things are looking up for high-rise twins on park – Houston Chronicle
The Mosaic on Hermann Park has new life.
After going into foreclosure more than a year ago, the two-tower 790-unit residential high-rise overlooking Hermann Park has new owners, the private- public partnership of ST Residential and the Federal Deposit Insurance Corp.
The Mosaic is launching its new marketing efforts with an invitation-only viewing party tonight.
ST Residential, a Chicago-based real estate company, has found opportunity in the real estate downturn.
The company acquired a number of upscale high-rises that had gone through foreclosure, which gave them a negative reputation in the marketplace, said Wade Hundley, CEO of ST Residential.
His company's goal is to make them appealing again by adding stylish upgrades and convincing prospective buyers and renters that the new property owners are financially stable. The north Mosaic tower is condos for purchase and the south tower has apartments for rent.
The Mosaic has completed a $3 million renovation on its interior. The upgrade includes a remodeled 24-hour fitness center, a new swimming pool deck with two fire pits, a new theater room and a contemporary-styled sales center.
A grocery store/cafe Nature's Market will open in retail space on the street level in a few weeks, and the Mosaic is negotiating with restaurants and a dry cleaners for street level retail, Hundley said.
Along with promoting the Mosaic's renovation, ST Residential stresses the property's financial stability, said Hundley, who noted that the company's partners control $100 billion in assets and the property is backed by the FDIC.
ST Residential's investors include the private equity group TPG and Starwood Capital, whose CEO is hotel magnate Barry Sternlicht, creator of the W Hotel chain.
When ST Residential took over the Mosaic, it had a 30 percent occupancy rate for the apartment tower, while 5 percent of the condo units had been sold, Hundley said. Now the rental tower is 71 percent leased, and the sale tower is 15 percent sold, he said.
"It's got some momentum," he said.
Dallas-based Premier Communities Management Co. is the property manager, and Atlanta-based Marketing Directors is in charge of selling and renting.
Condominium units range from about $160,00 to $487,000, and rental units are from about $1,340 to $4,060, not including penthouses.
A company such as ST Residential can take over a foreclosed project for a discounted price, recover as much value as possible for the lender, sell the units at market price and make a nice return, said Dan Fasulo, managing director of Manhattan-based Real Capital Analytics, a real estate research and consulting firm.
"The Mosaic is a gorgeous property," Fasulo said. "This one looks like it could turn out to be a home run."
Laurie Null, CEO of the Personette Group, a Houston-based high-rise sales and marketing company, believes the Mosaic has a solid future, but it may take about three years to fill the condo tower because it has so many units.
The amenities at the Mosaic are resort class, she said.
"It's what you'd see at South Beach. They had to build a lot of units to support that level of amenities," she said. The Personette Group previously did marketing for the Mosaic.
Having one tower for sale and one for rent is potentially a challenge, because condo owners may not want to share amenities with renters, she said.
"That can be overcome if the Mosaic leases to high-end clientele," she said.
"The place is spotless, and the staff is very polished," said Sharon Seline-Wright, an associate at Better Homes and Gardens Anderson Properties who has shown clients the property.
The Mosaic was originally developed by Florida-based Phillips Development & Realty as a condo high-rise. The north tower opened in 2007, followed by the south tower in 2009. One tower foreclosed in late 2009, and the other tower foreclosed a few months later.
Around that time, ST Residential acquired 101 distressed assets nationwide from the FDIC for $2.7 billion. From those assets, ST Residential owns 37 properties, including the Mosaic towers.
ST Residential paid about 60 cents on the dollar for the assets, Hundley said.
Rick Wilson, a home builder, began renting at the Mosaic in August after he and his wife moved here from Calgary, Alberta.
The Mosaic is similar to living in a hotel, he said.
"They have concierge service and a business center downstairs where you can meet clients," Wilson said.
"I like the security, and the rents are decent," he said. The one drawback is a lack of sufficient storage space on site, said Wilson, who uses a self-storage facility.
"I like being near the Museum District and being across the street from Hermann Park," he said. "I'm a golfer."
Over time, the Mosaic may turn the apartment tower into a second condo tower, Hundley said.
david.kaplan@chron.com

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