| The Federal Deposit Insurance Corporation (FDIC) | | | | that not many people want to buy into a foreclosed |
| has just taken over the famed downtown Houston | | | | property. |
| condo Mosaic, along with several investors, including | | | | David Regenbaum of Association Management, the |
| Starwood Capital Group. | | | | property owner’ association management team, |
| As an intriguing part of Houston real estate, the | | | | doesn’t see anything changing for the residents |
| Mosaic condos are luxurious and refined, and generally | | | | of the building. In fact, he sees a well-capitalized |
| sell for about $300 per square foot. However, this | | | | owner only making things better for the residents of |
| stunning tower, which overlooks Hermann Park, has | | | | the Mosaic. |
| been seized by the FDIC after being foreclosed on | | | | He feels that the new owner will have the funding |
| by the lender. | | | | necessary to pay any deficits and assessments on |
| FIDC and Investor Owned | | | | the property, thereby solving many of the difficulties |
| All unsold units of this downtown Houston condo | | | | that the property has experienced over the last, |
| building are now the property of the FDIC and | | | | several months. |
| several investors, who agreed to purchase an | | | | What Happened? |
| interest in the lender’s assets. The lender’s | | | | As the real estate market began to tumble last year, |
| assets include more than 100 properties across the | | | | many of the condo buildings throughout the country |
| nation, and are valued at more than $4.5 billion. Most | | | | began to suffer, mainly because many of the |
| of the properties owned by the lender are of the | | | | nation’s lenders cut way back on condo lending. |
| condominium variety, similar to the Mosaic. | | | | This, of course, led to vacant units that the building |
| Choice Condominiums is managing and selling the | | | | developers simply could not sell. |
| unsold condominiums of the Mosaic. The consortium, | | | | Because of the downward spiral of the downtown |
| which consists of the FDIC and the investor group, is | | | | Houston condo market, Mosaic’s developer |
| now in charge of determining the value of each unit | | | | renamed the second tower and turned it into rental |
| and how it will move each property. However, | | | | units. |
| because the property already has a substantial | | | | Many saw the sheer size of the Mosaic as |
| amount of cash, the investors won’t need to sell | | | | problematic, as there were nearly 800 units to be |
| the properties for well below their appraised values. | | | | filled. As a result, the partnership failed and filed for |
| In other words, don’t expect any condo | | | | Chapter 11 bankruptcy protection in January. At that |
| liquidations to take place at the Mosaic. | | | | time, the developer was in default on a $76 million |
| Building Changes – What to Expect | | | | construction loan. |
| It is reported that most of the residents of the | | | | Even though many hoped that the terms of the loan |
| Mosaic have not seen any changes to their building, | | | | could be renegotiated, this downtown Houston condo |
| even as the lender seized the property. Because of | | | | property was eventually foreclosed on in September. |
| this, the Mosaic is still a highly sought-after downtown | | | | Now, the FDIC owns 60 percent of the property, |
| Houston condo building. | | | | and will provide zero percent financing to the |
| The 29-story Mosaic tower, however, still has its | | | | investors for 50 percent of the purchase price of the |
| problems. Many of the residents of the building may | | | | property. |
| have difficulty selling their homes, due to the fact | | | | |