Hanover Hermann Park: Multifamily At 5927 Almeda Rd.

[TexasVines]

Mosaic's developer files Chapter 11 protection

The developer of the Mosaic condominium tower on the edge of Hermann Park has filed for bankruptcy protection, another sign that the national recession and credit crunch is affecting the Houston real estate market.

The developer, 5925 Almeda North Tower LP, made the Chapter 11 filing in U.S. Bankruptcy Court for the Southern District of Texas on Monday. Assets were listed at $85 million and debts at almost $52 million.

The Mosaic project was announced in 2005 and twin towers were developed at the 5925 Almeda site.

The second tower, which is not part of the bankruptcy, is still under construction. It was recently renamed Montage and the units there will be rented as apartments.

full article

wow one has to wonder how one tower being bankrupt and one tower not will work.....can't be good though for some reason I think the non-renatl one being the bankrupt one is better than the other way around

[JWW]

wow one has to wonder how one tower being bankrupt and one tower not will work.....can't be good though for some reason I think the non-renatl one being the bankrupt one is better than the other way around

Anyone familiar with bankruptcy (if the lender, and I guess that's the takout/permanent lender on the first building and that the construction loan was taken out already?, takes ownership of the Mosaic condo building) know what happens here with the communal areas shared by both buildings? (parking, pool, workout room, etc)???

[liammclaren]

No wonder. I just can't imagine paying that much plus .39 cents a month per square foot maintinence. The people who buy these things must be financial imbeciles. Even if you are super rich why would you just throw money away for no reason? You can get a townhouse in the same area for half the price per square foot with a lower maintinence fee, a private garage and it doesn't take an elevator ride to get outside.

When I first moved to Houston I looked at getting into a high-rise and just couldn't make financial sense out of it. Who buys these things?

Couldn't agree more. I've never understood why some people think it's "upscale" to live in a filing cabinet. But hey, more power to them.

[houston-development]

gee, what a shocker...

/ sarcasm

this is a great thread with a lot of information and insight, especially in hindsight.

anyways, some of the questions:

wow one has to wonder how one tower being bankrupt and one tower not will work.....can't be good though for some reason I think the non-renatl one being the bankrupt one is better than the other way around

its because the 2nd tower hasnt had time to default and im pretty sure the two towers are in technically different partnerships. glad to see gables came in for management, though.

Anyone familiar with bankruptcy (if the lender, and I guess that's the takout/permanent lender on the first building and that the construction loan was taken out already?, takes ownership of the Mosaic condo building) know what happens here with the communal areas shared by both buildings? (parking, pool, workout room, etc)???

depends on the condo docs and potential title issues. its safe to assume both towers have a legal right to all shared amenities.

hypothetically speaking, there could be potential issues down the road. keep in mind that this is a worst case scenario.. for example, another completely unrealted party comes in and purchases one of the towers. say one of the amenities (ie coffee bar, exercise room, etc) are located only inside the other tower. they may attempt to revise legal requirements in which its exclusive only to that tower.

again, worst case.. even though worse things could happen but lets not think about that.

[Gooch]

Just tacky, or getting desperate? Shoulda put up the phone number too...

[WesternGulf]

^^LOL! Both!

[citizen4rmptown]

i like that you cant tell that one is still under construction, well a little, from the park

Edited March 17, 2009 by citizen4rmptown

[rsb320]

These buildings appear to be standing guard over the park.

[Urbannizer]

Here's a view of downtown from one of the towers.

]

flickr leadingmodels

[Gary]

Here's one I took a number of months ago.

[houstonranger]

wow, amazing view!

[TheNiche]

Here's a view of downtown from one of the towers.

About a year and a half back I was lucky enough to experience the view from one of the penthouses at night. This was before the unit was built out, so there weren't any light fixtures (at all!) to create reflections on the interior side of the floor-to-ceiling glass curtain wall. I stood right up close to it, enveloped by darkness, and experienced a sensation of hovering in thin air without feeling unsafe or in any way fearful of wind or gravity. And as rush hour traffic began to die down, the opposing rivers of light began to flow freely beneath me on 288. And the refineries in the distance were visible and were flaring something undoubtedly very toxic, yet breathtaking to behold. It was as though the city was alive, and as though I could observe its heart beat, its pulse, and every aspect of its being. I could observe the lit up downtown area as its brain, and the TMC as its liver. I watched this omnipotently, from above.

[lockmat]

About a year and a half back I was lucky enough to experience the view from one of the penthouses at night. This was before the unit was built out, so there weren't any light fixtures (at all!) to create reflections on the interior side of the floor-to-ceiling glass curtain wall. I stood right up close to it, enveloped by darkness, and experienced a sensation of hovering in thin air without feeling unsafe or in any way fearful of wind or gravity. And as rush hour traffic began to die down, the opposing rivers of light began to flow freely beneath me on 288. And the refineries in the distance were visible and were flaring something undoubtedly very toxic, yet breathtaking to behold. It was as though the city was alive, and as though I could observe its heart beat, its pulse, and every aspect of its being. I could observe the lit up downtown area as its brain, and the TMC as its liver. I watched this omnipotently, from above.

Thanks Eddie:

It's a hot night. The mind races. You think about your knife; the only friend who hasn't betrayed you, the only friend who won't be dead by sun up. Sleep tight, mates, in your quilted Chambray nightshirts.

[houstonranger]

About a year and a half back I was lucky enough to experience the view from one of the penthouses at night. This was before the unit was built out, so there weren't any light fixtures (at all!) to create reflections on the interior side of the floor-to-ceiling glass curtain wall. I stood right up close to it, enveloped by darkness, and experienced a sensation of hovering in thin air without feeling unsafe or in any way fearful of wind or gravity. And as rush hour traffic began to die down, the opposing rivers of light began to flow freely beneath me on 288. And the refineries in the distance were visible and were flaring something undoubtedly very toxic, yet breathtaking to behold. It was as though the city was alive, and as though I could observe its heart beat, its pulse, and every aspect of its being. I could observe the lit up downtown area as its brain, and the TMC as its liver. I watched this omnipotently, from above.

Wow Niche; you should sell this prose to Moasic to their marketing team!

It is a cool view though, I would love to live there, at least for a while.

[sifuwong]

I'm curious about how much these condos are going for? What about fees? Thanks.

http://www.mosaic-houston.com/floorplans.htm

[sevfiv]

HAR has fifteen unites listed, the cheapest at $179,962 with $260/month fees and the most expensive at $610,000 with $653/month fees.

[lockmat]

HAR has fifteen unites listed, the cheapest at $179,962 with $260/month fees and the most expensive at $610,000 with $653/month fees.

I'm not a condo expert, but why are the monthly fees different?

[HoustonMidtown]

I'm not a condo expert, but why are the monthly fees different?

They are usually based on how many sq feet the unit is - the smaller the condo, the lower the fees

[diggity]

The Mosaic's woes continue:

Chron Article

[samagon]

The Mosaic's woes continue:

Chron Article

Not sure if this is the article you were linking or not, but that one was dead when I clicked.

http://www.chron.com/disp/story.mpl/business/realestate/6720224.html

[diggity]

bump bump bump....another one bites the dust

My link

[lockmat]

Just curious, did the 1st floor spaced ever get leased out?

[lockmat]

Good news:

The Mosaic, the two-tower 790-unit residential high rise overlooking Hermann Park, will soon have its first retail tenant. It's a natural foods grocery store and sandwich shop called Nature's Market.

With a targeted opening date of Feb. 23, Nature's Market will be a "small urban bodega,"

The store will feature sandwiches, frozen yogurt, fresh-squeezed juices and a tea bar. Nature's Market will also carry dry goods and produce and sell beer and wine. The 2,500 square foot corner store has a patio with WiFi.

Located at 5927 Almeda, the Mosaic has 20,000 square feet of street-level retail space.

http://blogs.chron.com/primeproperty/2011/02/austinstyle_bodega_moves_into.html

Only 17,500 sqaure feet to go!

[ricco67]

Good news:

http://blogs.chron.c...moves_into.html

Only 17,500 sqaure feet to go!

I think that should do well. If they advertise properly, they would probably get quite a bit of traffic from the nearby apartment complexes.

[roadrunner]

I think that should do well. If they advertise properly, they would probably get quite a bit of traffic from the nearby apartment complexes.

This will be an interesting test for the Almeda market. There are a surpisingly large amount of young professionals who live along that corridor in those apartment complexes. It's a relatively untapped market. If this does well I think we'll see more business take a chance down the street.

I know people whisper that Almeda is the "next Washington", and I don't think that's going to happen, but I wouldn't be surprised if it becomes a more active strip in the next 10 years.

[Lotus]

I have faith that these towers will one day become desirable residential icons, although I've read some anecdotes that they are somewhat cheaply built. The overall vision was correct but the timing wasn't. Too bad the creators won't enjoy the fruits.

[TheNiche]

The overall vision was correct but the timing wasn't. Too bad the creators won't enjoy the fruits.

It was a fool's vision from the beginning. Philips had a low basis on the land, and that was the only mechanism to obtain construction financing. Previous condo developers ran into problems when they developed too many at once, and Philips did just that...on a scale unprecedented for Houston, even going back to oil boom days. Worse still, his unit mix was extremely limited. (It's easier to sell 10 1BR, 10 2BR, and 10 3BR than 25 1BR and 15 2BR; and notice that the number of units goes up as the average floor plan gets smaller, for the same enclosed area.) The initial condos delivered at the peak of the Houston market, but pre-sales couldn't convert. If anybody in the multifamily business hadn't already concluded that this project was going to go bust, they figured it out pretty quickly...in spite of attempts by the first of several in a line of contracted listing agents to propogate false market data. The rent vs. own for Mosaic was all out of whack, with extraordinarily high prices per square foot, property taxes, maintanence fees, etc. Owners could never dream of renting out their unit and recouping a decent amount of the cost; but they could surely count on that unsold units would languish on the market for years, with a second tower possibly being built and once again flooding the market for years after that! Where's the value proposition?

Contrast Mosaic with 2727 Kirby, which managed (to my own amazement!) to stay out of foreclosure. 2727 Kirby was well-located on justifiably-expensive dirt in a highly desirable location, included one eighth the number of total units planned to be sold, and included relatively larger units targeting a smaller market, but one for which affordability was less at issue than desirability. 2727 Kirby also suffered from its timing to market and some stiff competition; it didn't perform as well as the original investor (deceased) would have liked. But who needs a vision when you've got good sense?

[Lotus]

It was a fool's vision from the beginning. Philips had a low basis on the land, and that was the only mechanism to obtain construction financing. Previous condo developers ran into problems when they developed too many at once, and Philips did just that...on a scale unprecedented for Houston, even going back to oil boom days. Worse still, his unit mix was extremely limited. (It's easier to sell 10 1BR, 10 2BR, and 10 3BR than 25 1BR and 15 2BR; and notice that the number of units goes up as the average floor plan gets smaller, for the same enclosed area.) The initial condos delivered at the peak of the Houston market, but pre-sales couldn't convert. If anybody in the multifamily business hadn't already concluded that this project was going to go bust, they figured it out pretty quickly...in spite of attempts by the first of several in a line of contracted listing agents to propogate false market data. The rent vs. own for Mosaic was all out of whack, with extraordinarily high prices per square foot, property taxes, maintanence fees, etc. Owners could never dream of renting out their unit and recouping a decent amount of the cost; but they could surely count on that unsold units would languish on the market for years, with a second tower possibly being built and once again flooding the market for years after that! Where's the value proposition?

Contrast Mosaic with 2727 Kirby, which managed (to my own amazement!) to stay out of foreclosure. 2727 Kirby was well-located on justifiably-expensive dirt in a highly desirable location, included one eighth the number of total units planned to be sold, and included relatively larger units targeting a smaller market, but one for which affordability was less at issue than desirability. 2727 Kirby also suffered from its timing to market and some stiff competition; it didn't perform as well as the original investor (deceased) would have liked. But who needs a vision when you've got good sense?

I see. Thanks for the detailed understanding. My version of "correct vision" is one of a layman, a dreamer, taking into account the area's potential, the views, the park, Med Center and the striking architecture. Apparently it sounds as if the professionals involved's collective vision was about as pie-in-the-sky "good sense" as mine.

So we are left with a couple of new towers, all by there lonesome in a part of town that is showing signs of waking from the dead and reincarnating as something entirely different. The value in these units could then rise as well and the towers become what they were originally envisioned as, just 10-20 years later.

[lockmat]

I know people whisper that Almeda is the "next Washington", and I don't think that's going to happen, but I wouldn't be surprised if it becomes a more active strip in the next 10 years.

Really? That area seems too homey to become a Washington type destination. What makes them think that?

[Lotus]

Really? That area seems too homey to become a Washington type destination. What makes them think that?

They said the same thing about Washington. Nothing there but shacks and tracks. All it had going for it was location. Almeda is on "the good side of the tracks", actually the freeway, and is surrounded by money and development. The street is wide and there's really not a "destination" blvd for drinks and eatums anywhere nearby. So, I think that is the standard idea as to why it could become something one day.

The only thing is that Washington evolved naturally with the townhouses coming first, then the retail. Almeda doesn't have a bunch of teardowns in the area allowing townhouses to get built en masse like the Wash area, so that would mean more expensive residential projects, which are far less likely to just start sprouting up in clusters. However, the pattern of retail development doesn't have to be the same for Almeda. They can start by attracting the Med Center-Museum crowd and add the condo towers down the road.

So there, rich developers. We've done all the figuring out for you, now just get to work!