Mosaic uses its network to consistently monitor the market and identify significant development and investment opportunities within the residential and hospitality sectors as they arise. Often these opportunities are sourced from banks and other institutions (funds, corporates) on a distressed basis and thus can be acquired economically but must generally be secured swiftly as interest can be high. For this reason Mosaic will typically approach potential investors & JV partners initially with a pre-negotiation IM (Investment Memorandum). Once sufficient initial interest is confirmed (non-binding) Mosaic will seek to secure the asset(s) for a period of Due Diligence (30-90 days) during which the following is considered:
a) Legal DD Report on the site to identify any potential issues with existing debts, taxes, charges and encumbrances, supply of utilities (sewage, electricity & water), urban planning parameters and consider the implications of any nearby future planned development.
b) Architect Pre-Project Assessment to study and confirm the applicable urban planning parameters and assess the ability to implement the proposed project on the site including the required number of units and other required facilities.
c) Project Management DD Report An initial report from the project manager to confirm that the proposed project is feasible and that there are no practical limitations to the delivery of the project as proposed.
d) Market Study to clearly identify current and future competing supply and buyer dynamics to ensure that the proposed project is correctly positioned to achieve the desired market absorption and to model Project unit pricing and rate of sale as accurately as possible.
e) Construction Assessment to identify any potential construction issues with the proposed Project and ensure that assumed construction budget is sufficient to deliver the required Project with tolerances.
f) Geotechnical and Topographical site studies (if required) to confirm that the proposed site is suitable and that there are no physical issues or potential hidden additional costs with developing the proposed project on the site.
g) Operator Performance / Operational Projections (Hospitality assets). A study into the operational performance of the asset to understand if and how this may be able to be improved with a change of operator or improvements (refurb) to the underlying asset.
The above DD information is then combined to create an updated Project Assessment and Financial Analysis. This is then considered in association with the investor or JV Partner and a final decision made to proceed or reject the opportunity.