MOSAIC SOUTH TOWER ONLY NOW GOING BY HANOVER HERMANN PARK The 29-story, 394-unit glass apartment building at 5927 Almeda Rd. known as the Mosaic South Tower, and before that the Montage, and before that the south tower of the Mosaic, shall henceforth (or until it sells again, probably) be known as the Hanover Hermann Park. (It’s pictured at right in the above photo.) Last week PGIM, the real estate division of Prudential Financial, bought the building, which fronts Hermann Park and backs up to 288 — along with the retail portion of the building’s gone-condo identical twin immediately to the north, still known not-at-all-confusingly as the Mosaic on Hermann Park. The seller was Winthrop Realty Liquidating Trust, which (in case it’s not obvious from that company’s name) is in the process of selling off every property it owns. In case the name change wouldn’t be enough of a clue, a note sent last week to residents by the seller indicates that the building will now be managed by the Hanover Company. [Previously on Swamplot] Photo: elnina, via Swamplot Flickr pool
Real estate agent Sandra Gunn informs us that the Montage, the second glass Almeda St. tower across from Hermann Park, was foreclosed on yesterday. Originally named Mosaic to match its adjacent twin directly to the north, the Montage has been a rental property since it was completed.
Almost exactly a year ago, the developer of both buildings — a limited partnership between Phillips Development & Realty and Florida Capital Real Estate Group — declared bankruptcy in order to avoid foreclosure on the Mosaic, which at the time was officially a condominium tower. And Florida Capital’s chief operating officer expressed hope that the Montage’s separate $71 million loan with Corus Bankshares could be renegotiated.
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COMMENT OF THE DAY: THE VALUE OF FAILED DEVELOPMENTS “The financial failure of Mosaic is not related to zoning or neighborhood protection. Mosaic represents a massive mixed-use project that will (eventually) fill up and further the civic goals of increasing population density and adding positively to the streetscape. In the mean time, the FDIC and out-of-state investors are paying the property tax bill on units that aren’t occupied by people that would stress our infrastructure. Where’s the downside in that? If the alternative were a vacant lot, Mosaic is far preferable from a civic perspective. . . .” [TheNiche, commenting on Only the Towers Remain Standing: Mosaic and Friends Break the Bank]
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:
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COMMENT OF THE DAY: LIVING THE WILDLIFE AT MOSAIC “It’s a Damn shame about those nesting rare birds but look on the bright side, if these condos keep selling like they have there will only be rare birds living there and trees growing up through the lobby anyway!” [james cianci, commenting on Mosaic Avoids Foreclosure, Files for Bankruptcy]
The developer of the Mosaic highrise overlooking Hermann Park — a limited partnership between Phillips Development & Realty and publicity-shy Florida Capital Real Estate Group — declared bankruptcy earlier this week to avoid foreclosure on a $71 million loan from Chicago lender Corus Bankshares. Florida Capital, originally the equity partner, will be taking over as the general partner.
The bankruptcy covers just the first Mosaic tower. The second tower, rebranded the Montage, has not yet defaulted on its separate $71 million Corus loan.
So how have sales been going at the Mosaic? It depends, the Houston Business Journal‘s Jennifer Dawson learns, who you ask:
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Need a place to crash somewhere in Houston for a short visit — say, a week — but don’t want to stay in a hotel?
Phillips Development & Realty, developers of the Mosaic and freshly rebranded Montage towers across Almeda from Hermann Park, is handling rentals of Mosaic condos owned by investors — as well as rentals of the many units the developer has been unable to unload. Now a source passes on a new rumor to Swamplot: Some of those available rentals may be extremely short-term.
Not a bad idea for a property that’s close to the Med Center! With that rumor, though, come a couple more:
Phillips’s Corporate Leasing Director will be taking over management of the Mosaic’s homeowners association from the company that had been running it since the building opened last year. But Phillips’s new tenure at the HOA may be a short-term one too. Why?
Because Florida Capital Real Estate Partners, the Mosaic’s lender, might just be foreclosing on Phillips’s property soon — both the Mosaic and an apartment complex in Tampa called the Casa Bella. Swamplot’s source also suggests that Camelot Realty Group — the company that’s clearly been very busy handling the Mosaic’s many condo sales — may already have had discussions with Florida Capital about taking over onsite rental duties from Phillips once the foreclosure takes place.
Photo of Mosaic and Montage: Swamplot inbox
The soon-to-be-complete second Mosaic tower on Almeda across from Hermann Park will have a different name, reports Nancy Sarnoff in the Chronicle. It’ll be called the Montage, and all 394 units will be rentals, as predicted.
“The market is not supporting sales in two towers,” said Thomas Cervone of Camelot Realty Group, which was hired over the summer to sell units in the building.
Leasing on the second building will start in January, with the units renting for an average of $2.25 per square foot.
The new name will help distinguish the southern tower from the first one, which apparently also features a large number of rentals, even though it remains officially a condo building.
Photo: Aerial photo of Mosaic from July: Aero Photo
A reader asks:
Has anyone else heard the rumor that Mosaic Hermann Park’s South Tower (already under construction) is going all rental once complete?
It would be kinda cute if the second condo tower did end up switching to apartments, since the first tower went in the opposite direction:
[Phillips Development managing director Donald] Phillips says the company financed the first Mosaic tower as a rental property because that was the only way to secure funding.
“We did whatever we had to do to get the thing built,” he says.
Photo: Aerial photo of Mosaic from June: Aero Photo
Expect to see a lot more, uh . . . interesting advertising for the Mosaic towers on Almeda. Nancy Sarnoff reported in the Chronicle this past weekend that “about 65 units have closed” out of a total 790 in the two towers. The second glass tower is currently under construction at the eastern edge of Hermann Park.
That’s a long way to go, but the path sounds a whole lot steeper when you compare Sarnoff’s report to what Jennifer Dawson reported in the Houston Business Journal last August:
As of last week, 218 condos had sold in the first tower. Units in the second phase won’t go on sale until early next year. Ken Manfredi of Miami-based Developer Sales Group is handling Mosaic’s condo sales.
After the jump: More evocative ad imagery! Plus: the view from above.
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The glass tower is half full: 218 of the 394 units in the first Mosaic tower have been sold, reports the Houston Business Journal. Are those just the north-facing units? Because directly to the south, the second tower is ready for liftoff:
Phillips Development & Realty LLC of Tampa, Fla., which is developing both condominium towers near Hermann Park at a cost of $203 million, secured a $141 million loan from Chicago-based Corus Bankshares Inc. last week to refinance the first building and finance the second one. . . .
Phillips says the company financed the first Mosaic tower as a rental property because that was the only way to secure funding.
Why is it called Mosaic? There are a lot of tiny units in there, 18 to a floor, averaging 980 square feet. They start at $165,000.