With its most recent achievements, the Mosaic earns its place in Houston’s spec-development record books: Last month the 29-story condo tower near Hermann Park — wedged between Almeda and 288 — scored the loan-default trifecta, having notched a bankruptcy, mass foreclosures, and an attendant bank failure to its credit all within a single calendar year.
Chicago’s Corus Bankshares, which held a $71 million loan for the Mosaic, foreclosed on all 271 unsold units (out of 394 total in the building) in September, just days before the bank itself was seized by the FDIC. A few weeks later, the federal agency sold 40 percent of the bank’s real estate loans to a team of private-equity firms calling itself Northwest Investments and led by Starwood Capital Group — for 60 cents on the dollar.
Any further fun at the Mosaic will be courtesy of the FDIC, reports Nancy Sarnoff:
Under the terms of the broader deal, the FDIC will own a 60 percent equity interest in the Corus portfolio, held in a company called Corus Construction Ventures, and provide zero percent financing to the Starwood and the other investors for 50 percent of the purchase price, according to the Starwood investor group.
The FDIC will also provide up to $1 billion for working capital and to fund project completions. Starwood will oversee day-to-day management of the portfolio.
Can the adjacent Montage, the Mosaic’s gone-rental twin, compete in this game of financial derring-do? We’re still waiting for the judges’ verdict. The southern tower had its own separate $71 million loan from Corus, which has not been foreclosed on. Is the Montage part of the Northwest package? It’s not clear yet: The FDIC hasn’t released the complete list of properties covered by the transaction.
- Condo tower’s saga takes another turn [Houston Chronicle]
- Corus Bankshares Inc. on cusp of crisis [Chicago Tribune]
- FDIC sells stake in Corus Bank assets [AP]
- Starwood Group Strikes Deal for Corus Assets [Dealbook]
- Museum District-area condo tower files for bankruptcy [Houston Business Journal]
- Mosaic and Montage coverage [Swamplot]
Photo: Montage of Houston