Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 25, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Current Fiscal Year End Date | --12-31 | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 000-53912 | ||
Entity Registrant Name | HARTMAN SHORT TERM INCOME PROPERTIES XX, INC. | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Address, Address Line One | 2909 Hillcroft | ||
Entity Address, Address Line Two | Suite 420 | ||
Entity Address, City or Town | Houston | ||
Entity Address, State or Province | TX | ||
Entity Tax Identification Number | 26-3455189 | ||
Entity Address, Postal Zip Code | 77057 | ||
City Area Code | 713 | ||
Local Phone Number | 467-2222 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding (in shares) | 35,110,421 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001446687 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Auditor Information [Abstract] | |
Auditor Name | Weaver and Tidwell, L.L.P |
Auditor Location | Houston, Texas |
Auditor Firm ID | 410 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Real estate assets, at cost | $ 620,585 | $ 607,669 |
Accumulated depreciation and amortization | (173,040) | (146,314) |
Total real estate assets, net | 447,545 | 461,355 |
Cash and cash equivalents | 285 | 0 |
Restricted cash | 18,972 | 24,176 |
Accrued rent and accounts receivable, net | 13,238 | 12,199 |
Notes receivable - related party | 1,726 | 1,726 |
Deferred leasing commission costs, net | 10,487 | 10,840 |
Goodwill | 250 | 250 |
Prepaid expenses and other assets | 2,100 | 1,478 |
Real estate held for development | 10,403 | 10,294 |
Due from related parties | 115 | 1,061 |
Investment in affiliate | 201 | 201 |
Total assets | 505,322 | 523,580 |
Liabilities: | ||
Notes payable, net | 303,777 | 300,990 |
Accounts payable and accrued expenses | 38,471 | 29,133 |
Tenants' security deposits | 5,756 | 5,315 |
Total liabilities | 348,004 | 335,438 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 200,000,000 convertible, non-voting shares authorized, 1,000 shares issued and outstanding at December 31, 2021 and 2020, respectively | 0 | 0 |
Common stock, $0.001 par value, 750,000,000 authorized, 35,110,421 shares and 35,318,862 shares issued and outstanding at December 31, 2021 and 2020, respectively | 35 | 35 |
Additional paid-in capital | 297,335 | 299,375 |
Accumulated distributions and net loss | (162,355) | (135,633) |
Total stockholders' equity | 135,015 | 163,777 |
Noncontrolling interests in subsidiary | 22,303 | 24,365 |
Total equity | 157,318 | 188,142 |
Total liabilities and equity | $ 505,322 | $ 523,580 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Convertible, non-voting shares authorized (in shares) | 200,000,000 | 200,000,000 |
Preferred stock, shares issued (in shares) | 1,000 | 1,000 |
Preferred stock, shares outstanding (in shares) | 1,000 | 1,000 |
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, shares issued (in shares) | 35,110,421 | 35,318,862 |
Common stock, shares outstanding (in shares) | 35,110,421 | 35,318,862 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | ||
Rental revenues | $ 71,693,000 | $ 73,660,000 |
Tenant reimbursements and other revenues | 15,501,000 | 13,656,000 |
Management and advisory income | 4,964,000 | 1,885,000 |
Total revenues | 92,158,000 | 89,201,000 |
Expenses (income) | ||
Property operating expenses | 31,117,000 | 25,848,000 |
Organization and offering costs | 103,000 | 261,000 |
Asset management fees | 0 | 880,000 |
Real estate taxes and insurance | 13,952,000 | 14,305,000 |
Depreciation and amortization | 26,726,000 | 29,496,000 |
Provision for impairment | 0 | 5,406,000 |
Management and advisory expenses | 11,751,000 | 8,854,000 |
General and administrative | 13,163,000 | 6,373,000 |
Interest expense | 8,454,000 | 9,929,000 |
Interest and dividend income | (175,000) | (1,141,000) |
Total expenses, net | 105,091,000 | 100,211,000 |
Net loss | (12,933,000) | (11,010,000) |
Net (loss) income attributable to noncontrolling interests | (597,000) | 2,155,000 |
Net loss attributable to common stockholders | (12,336,000) | (13,165,000) |
Net loss attributable to common stockholders | $ (12,336,000) | $ (13,165,000) |
Net loss attributable to common stockholders per share, basic (in USD per share) | $ (0.35) | $ (0.50) |
Net loss attributable to common stockholders per share, diluted (in USD per share) | $ (0.35) | $ (0.50) |
Weighted average number of common shares outstanding, basic (in shares) | 35,202 | 26,235 |
Weighted average number of common shares outstanding, diluted (in shares) | 35,202 | 26,235 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Distributions and Net Loss | Total Stockholders' Equity | Noncontrolling Interests |
Shares outstanding, beginning balance (in shares) at Dec. 31, 2019 | 1,000 | 18,418,000 | |||||
Stockholders' equity, beginning balance at Dec. 31, 2019 | $ 228,807 | $ 0 | $ 18 | $ 174,019 | $ (105,605) | $ 68,432 | $ 160,375 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock in connection with the Mergers (in shares) | 16,870,000 | ||||||
Issuance of common stock in connection with the Mergers | (24,794) | $ 17 | 125,016 | 125,033 | (149,827) | ||
Issuance of partnership units in connection with the Mergers | 16,410 | 16,410 | |||||
Issuance of common shares (in shares) | 30,000 | ||||||
Issuance of common shares | 340 | 340 | 340 | ||||
Dividends and distributions (cash) | (21,611) | (16,863) | (16,863) | (4,748) | |||
Net (loss) income | (11,010) | (13,165) | (13,165) | 2,155 | |||
Shares outstanding, ending balance (in shares) at Dec. 31, 2020 | 1,000 | 35,318,000 | |||||
Stockholders' equity, ending balance at Dec. 31, 2020 | 188,142 | $ 0 | $ 35 | 299,375 | (135,633) | 163,777 | 24,365 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common shares pursuant to stock based compensation (in shares) | 41,000 | ||||||
Issuance of common shares pursuant to stock based compensation | 461 | 461 | 461 | ||||
Redemptions of common shares (in shares) | (248,000) | ||||||
Redemptions of common shares | (2,501) | (2,501) | (2,501) | ||||
Dividends and distributions (cash) | (15,851) | (14,386) | (14,386) | (1,465) | |||
Net (loss) income | (12,933) | (12,336) | (12,336) | (597) | |||
Shares outstanding, ending balance (in shares) at Dec. 31, 2021 | 1,000 | 35,111,000 | |||||
Stockholders' equity, ending balance at Dec. 31, 2021 | $ 157,318 | $ 0 | $ 35 | $ 297,335 | $ (162,355) | $ 135,015 | $ 22,303 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (12,933,000) | $ (11,010,000) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Stock based compensation | 667,000 | 561,000 |
Depreciation and amortization | 26,726,000 | 29,496,000 |
Provision for impairment | 0 | 5,406,000 |
Deferred loan and lease commission costs amortization | 2,477,000 | 2,476,000 |
Bad debt expense | 397,000 | 2,695,000 |
Defined contribution plan income | (1,011,000) | 0 |
Changes in operating assets and liabilities: | ||
Accrued rent and accounts receivable | (1,436,000) | (3,301,000) |
Deferred leasing commissions costs | (1,194,000) | (1,534,000) |
Prepaid expenses and other assets | (265,000) | (653,000) |
Accounts payable and accrued expenses | 10,713,000 | (1,627,000) |
Due to/from related parties | (3,189,000) | 608,000 |
Tenants' security deposits | 441,000 | 29,000 |
Net cash provided by operating activities | 21,393,000 | 23,146,000 |
Cash flows from investing activities: | ||
Investment in other assets | (357,000) | 0 |
Note receivable - related party | 0 | 751,000 |
Additions to real estate | (13,025,000) | (15,053,000) |
Net cash used in investing activities | (13,382,000) | (14,302,000) |
Cash flows from financing activities: | ||
Distributions to common stockholders | (13,917,000) | (15,761,000) |
Distributions to non-controlling interest | (1,216,000) | (4,748,000) |
Borrowings from an affiliate | 6,208,000 | 9,000,000 |
Repayments under insurance premium finance note | (3,156,000) | (1,924,000) |
Borrowings under insurance premium finance note | 3,019,000 | 2,216,000 |
Repayments under term loan notes | (1,313,000) | (1,380,000) |
Redemptions of common stock | (2,501,000) | 0 |
Payments of deferred loan costs | (54,000) | (50,000) |
Net cash used in financing activities | (12,930,000) | (12,647,000) |
Net change in cash and cash equivalents and restricted cash | (4,919,000) | (3,803,000) |
Cash and cash equivalents and restricted cash, beginning of period | 24,176,000 | 27,979,000 |
Cash and cash equivalents and restricted cash, end of period | 19,257,000 | 24,176,000 |
Supplemental cash flow information: | ||
Cash paid for interest | 6,924,000 | 8,587,000 |
Supplemental disclosures of non-cash activities: | ||
Issuance of common stock in connection with the Mergers | 0 | 182,589,000 |
Issuance of Hartman XX OP units for 70% in Advisors | 0 | 6,525,000 |
Issuance of Hartman XX OP units for HIREIT OP units | 0 | 9,885,000 |
Notes conveyed to settle related party payable to Hartman XXI | 0 | 10,611,000 |
Value of Director's stock compensation shares issued | 461,000 | 488,000 |
Reduction of interest payable from Hartman XXI settlement | 1,151,000 | 0 |
Reduction of due from related parties from Hartman XXI settlement | 4,135,000 | 0 |
Reduction of principal on note payable from affiliate from Hartman XXI settlement | $ 2,984,000 | $ 0 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Jul. 01, 2020 | |
Reduction of interest payable from Hartman XXI settlement | $ 1,151 | $ 0 | |
Reduction of due from related parties from Hartman XXI settlement | 4,135 | 0 | |
Reduction of principal on note payable from affiliate from Hartman XXI settlement | $ 2,984 | $ 0 | |
HIREIT Acquisition | |||
Ownership percentage | 70.00% |
Organization and Business
Organization and Business | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business Hartman Short Term Income Properties XX, Inc. (the “Company”), is a Maryland corporation formed on February 5, 2009. The Company elected to be treated as a real estate investment trust (“REIT”) beginning with the taxable year ended December 31, 2011. As used herein, the "Company," "we," "us," or "our" refer to Hartman Short Term Income Properties XX, Inc. and its consolidated subsidiaries and partnerships, including the Operating Partnership and SPE LLC, except where context requires otherwise. On July 19, 2018, we entered into a limited liability company agreement with our affiliates Hartman Income REIT, Inc. (“HIREIT”), Hartman Short Term Income Properties XIX, Inc. (“Hartman XIX”) and Hartman vREIT XXI, Inc. (“vREIT XXI”) to form Hartman SPE, LLC ("SPE LLC"), a special purpose entity. On October 1, 2018, SPE LLC, as borrower, and Goldman Sachs Mortgage Company entered into a term loan agreement, pursuant to which the lender made a term loan to SPE LLC in the principal amount of $259,000,000. Contemporaneously therewith and together with our affiliates HIREIT, Hartman XIX and vREIT XXI, we contributed a total of 39 commercial real estate properties ("Properties") to SPE, LLC, subject to the then existing mortgage indebtedness encumbering the Properties, in exchange for membership interests in SPE LLC. Proceeds of the Loan were immediately used to extinguish the existing mortgage indebtedness encumbering the Properties. Substantially all of our business is conducted through our wholly owned subsidiary, the Operating Partnership and SPE LLC. Our wholly-owned subsidiary, Hartman XX REIT GP LLC, a Texas limited liability company, is the sole general partner of the Operating Partnership. Our wholly-owned subsidiary, Hartman SPE Management, LLC ("SPE Management") is the manager of SPE LLC. Our single member interests in our limited liability company subsidiaries are owned by the Operating Partnership or its wholly owned subsidiaries. On July 21, 2017, the Company and Hartman XIX, entered into an agreement and plan of merger (the “XIX Merger Agreement”) and (ii) the Company, the Operating Partnership, HIREIT and Hartman Income REIT Operating Partnership LP, the operating partnership of HIREIT, (“HIROP”), entered into an agreement and plan of merger (the “HIREIT Merger Agreement,” and together with the XIX Merger Agreement, the “Merger Agreements”). On May 14, 2020, the Merger Agreements were approved by the respective company shareholders. The effective date of the Mergers for financial reporting is July 1, 2020. Prior to July 1, 2020 and subject to certain restrictions and limitations, Hartman Advisors LLC ("Advisor") was responsible for managing our affairs on a day-to-day basis and for identifying and making acquisitions and investments on our behalf pursuant to an advisory agreement. Management of the Company’s properties and the Properties, is provided pursuant to property management agreements with Hartman Income REIT Management, Inc. (the "Property Manager"), formerly a wholly-owned subsidiary of HIREIT and effective July 1, 2020, our wholly owned subsidiary. Effective with the Mergers and the acquisition of the 70% interest of Advisor not acquired as part of the Mergers, we are a self-advised and self-managed REIT. As of December 31, 2021 and 2020, we owned 44 commercial properties comprising approximately 6.8 million square feet plus four pad sites and two land developments, all located in Texas. As of December 31, 2021 and 2020, we owned 15 properties located in Richardson, Arlington, and Dallas, Texas, 26 properties located in Houston, Texas and three properties located in San Antonio, Texas. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements as of December 31, 2021 and 2020 and for the years then ended have been prepared by the Company in accordance with accounting principles generally accepted in the United States and pursuant to the rules and regulations of the Securities and Exchange Commission, including Form 10-K and Regulation S-K. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments), which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. These consolidated financial statements include the accounts of the Company and its subsidiaries, the Operating Partnership and its subsidiaries, and SPE LLC. All significant intercompany balances and transactions have been eliminated. Restatement of Previously Issued Financial Statements As noted in the Company's Annual Report (Amendment No. 1) on Form 10-K/A, for the year ended December 31, 2020, the Company restated our consolidated statement of cash flows for the year ended December 31, 2020. See Note 3 – Restatement of Consolidated Financial Statements for additional discussion. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents on the accompanying consolidated balance sheets include all cash and liquid investments with maturities of three months or less. Cash and cash equivalents as of December 31, 2021 and 2020 consisted of demand deposits at commercial banks. We maintain accounts which may from time to time exceed federally insured limits. We have not experienced any losses in these accounts and believe that the Company is not exposed to any significant credit risk and regularly monitors the financial stability of these financial institutions. As of December 31, 2021 and 2020, the Company had a bank overdraft at two financial institutions totaling $2,710,000 and $792,000. The overdraft is recorded as a liability in accounts payable and accrued expenses on the consolidated balance sheets. Restricted Cash Restricted cash on the accompanying consolidated balance sheets consists of amounts escrowed for future real estate taxes, insurance, capital expenditures and debt service, as required by certain of our mortgage debt agreements. As of December 31, 2021 and 2020, the Company had a restricted cash balance of $18,972,000 and $24,176,000, respectively. Financial Instruments The accompanying consolidated balance sheets include the following financial instruments: cash and cash equivalents, accrued rent and accounts receivable, accounts payable and accrued expenses and balances due to/due from related parties, as well as related party notes receivable. The Company considers the carrying value of these financial instruments to approximate their respective fair values due to their short-term nature. Disclosure about the fair value of financial instruments is based on relevant information available as of December 31, 2021 and 2020. Revenue Recognition The Company's leases are accounted for as operating leases. Certain leases provide for tenant occupancy during perio ds for which no rent is due and/or for increases or decreases in the minimum lease payments over the terms of the leases. Revenue is recognized on a straight-line basis over the terms of the individual leases. Revenue recognition under a lease begins when the tenant takes possession of or controls the physical use of the leased space. When the Company acquires a property, the term of existing leases is considered to commence as of the acquisition date for the purposes of this calculation. The Company's accrued rents are included in accrued rent and accounts receivable, net. The Company defers the recognition of contingent rental income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved. Cost recoveries from tenants are included in the tenant reimbursement and other revenues line item in the consolidated statements of operations in the period the related costs are incurred. The Company’s revenue is primarily derived from leasing activities, which is specifically excluded from ASC 606, Revenue from Contracts with Customers ("ASC 606"). The Company’s tenant reimbursements and other revenue is comprised of tenant reimbursements for real estate taxes, insurance, common area maintenance, and operating expenses. Reimbursements from real estate taxes and certain other expenses are also excluded from ASC 606. Additionally, the Company’s property dispositions have historically been cash sales with no contingencies and no future involvement in the property. As a result, the new guidance did not have an effect on the Company’s real estate transactions. The Company will account future sales of real estate properties in accordance with requirements of ASC 606. In addition to our leasing income, the Company also earns fee revenues by providing certain management and advisory services to related parties. These fees are accounted for within the scope of ASC 606 and are recorded as management and advisory income on the consolidated statements of operations. These services primarily include asset management and advisory, operating and leasing of properties, and construction management. These services are currently provided under various combinations of advisory agreements, property management agreements, and other service agreements (the "Management Agreements"). The wide variety of duties within the Management Agreements makes determining the performance obligations within the contracts a matter of judgment. We have concluded that each of the separately disclosed fee types in the below table represents a separate performance obligation within the Management Agreements. Fee Performance Obligation Satisfied Timing of Payment Description Property Management Over time Due monthly The Company provides property management services on a contractual basis for owners of and investors in office and retail properties. The Company is compensated for our services through a monthly management fee earned based on a fixed fee. We are also often reimbursed for our administrative and payroll costs directly attributable to the properties under management. Revenue is recognized at the end of each month. Property Leasing and Property Acquisition Services Point in time (upon close of a transaction) Upon completion The Company provides strategic advice and execution for owners, investors, and occupiers of real estate in connection with the leasing of office and retail space. The Company is compensated for our services in the form of a commission and, in some instances may earn various forms of variable incentive consideration. Commission is paid upon the occurrence of certain contractual event. For leases, the Company typically satisfies its performance obligation at a point in time when control is transferred. Revenue is recognized in an amount equal to the fees charged by unaffiliated persons rendering comparable services. For acquisitions, our commission is typically paid at the closing date of sale, which represents transfer of control of services to the customer. Asset Management Over time Due monthly The Company earns asset management advisory fees on a recurring, monthly basis for certain properties. The Company is compensated on a monthly basis based on a fixed percentage of respective asset value. Construction Management Point in time (upon close of project) Upon completion Construction management services are performed on a contractual basis for owners of an investors in office and retail properties. The Company is compensated for its services upon completion of a project, when its performance obligation has been completed. Due to the nature of the services being provided under our Management Agreements, each performance obligation has a variable component. Therefore, when we determine the transaction price for the contracts, we are required to constrain our estimate to an amount that is not probable of significant revenue reversal. For most of these fee types, such as acquisition fees and leasing commissions, compensation only occurs if a transaction takes place and the amount of compensation is dependent upon the terms of the transaction. For our property and asset management fees, due to the large number and broad range of possible consideration amounts, we calculate the amount earned at the end of each month. Real Estate Allocation of Purchase Price of Acquired Assets Upon the acquisition of real properties, it is the Company’s policy to allocate the purchase price of properties to acquired tangible assets, consisting of land and buildings, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, other value of in-place leases and leasehold improvements and value of tenant relationships, based in each case on their fair values. The Company utilizes internal valuation methods to determine the fair values of the tangible assets of an acquired property (which includes land and buildings). The fair values of above-market and below-market in-place lease values, including below-market renewal options for which renewal has been determined to be reasonably assured, are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (a) the contractual amounts to be paid pursuant to the in-place leases and (b) an estimate of fair market lease rates for the corresponding in-place leases and below-market renewal options, which is generally obtained from independent appraisals, measured over a period equal to the remaining non-cancelable term of the lease. The above-market and below-market lease and renewal option values are capitalized as intangible lease assets or liabilities and amortized as an adjustment of rental revenue over the remaining expected terms of the respective leases. The fair values of in-place leases include direct costs associated with obtaining a new tenant, opportunity costs associated with lost rentals which are avoided by acquiring an in-place lease, and tenant relationships. Direct costs associated with obtaining a new tenant include commissions, tenant improvements, and other direct costs and are estimated based on independent appraisals and management’s consideration of current market costs to execute a similar lease. These direct costs are included in intangible lease assets and are amortized to expense over the remaining terms of the respective leases. The value of opportunity costs is calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease. Customer relationships are valued based on expected renewal of a lease or the likelihood of obtaining a particular tenant for other locations. These intangibles are included in real estate assets in the consolidated balance sheets and are being amortized to expense over the remaining term of the respective leases. The determination of the fair values of the assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, discount rates and other variables. The use of inaccurate estimates would result in an incorrect assessment of the purchase price allocations, which could impact the amount of the Company’s reported net income (loss). Real Estate Joint Ventures and Partnerships To determine the method of accounting for partially owned real estate joint ventures and partnerships, management determines whether an entity is a variable interest entity ("VIE") and, if so, determines which party is the primary beneficiary by analyzing whether we have both the power to direct the entity’s significant economic activities and the obligation to absorb potentially significant losses or receive potentially significant benefits. Significant judgments and assumptions inherent in this analysis include the design of the entity structure, the nature of the entity’s operations, future cash flow projections, the entity’s financing and capital structure, and contractual relationships and terms. We consolidate a VIE when we have determined that we are the primary beneficiary. Primary risks associated with our involvement with our VIEs include the potential funding of the entities’ debt obligations or making additional contributions to fund the entities’ operations or capital activities. Partially owned, non-variable interest real estate joint ventures and partnerships over which we have a controlling financial interest are consolidated in our consolidated financial statements. In determining if we have a controlling financial interest, we consider factors such as ownership interest, authority to make decisions, kick-out rights and substantive participating rights. Partially owned real estate joint ventures and partnerships where we do not have a controlling financial interest, but have the ability to exercise significant influence, are accounted for using the equity method. Management continually analyzes and assesses reconsideration events, including changes in the factors mentioned above, to determine if the consolidation or equity method treatment remains appropriate. Depreciation and amortization Depreciation is computed using the straight-line method over the estimated useful lives of 5 to 39 years for buildings and improvements. Tenant improvements are depreciated using the straight-line method over the lesser of the life of the improvement or the remaining term of the lease. In-place leases are amortized using the straight-line method over the weighted average years remaining calculated on terms of all of the leases in-place when acquired. Impairment The Company reviews its real estate assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of the assets, including accrued rental income, may not be recoverable through operations. The Company determines whether an impairment in value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), including the estimated residual value of the property, with the carrying cost of the property. If impairment is indicated, a loss will be recorded for the amount by which the carrying value of the property exceeds its fair value. Management has determined that there has been no impairment in the carrying value of the Company’s real estate and other assets as of December 31, 2021. The Company recognize impairment of $5,406,000 for the year ended December 31, 2020. Projections of expected future cash flows require management to estimate future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, discount rates, the number of months it takes to re-lease the property and the number of years the property is held for investment. The use of inaccurate assumptions in the future cash flow analysis would result in an incorrect assessment of the property’s future cash flow and fair value and could result in the overstatement of the carrying value of the Company’s real estate and related intangible assets and net income. Fair Value Measurement Fair value measures are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets. Level 2: Directly or indirectly observable inputs, other than quoted prices in active markets. Level 3: Unobservable inputs in which there is little or no market data, which require a reporting entity to develop its own assumptions. Assets and liabilities measured at fair value are based on one or more of the following valuation techniques: Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Cost approach: Amount required to replace the service capacity of an asset (replacement cost). Income approach: Techniques used to convert future amounts to a single amount based on market expectations (including present-value, option-pricing, and excess-earnings models). The Company’s estimates of fair value were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts. The Company classifies assets and liabilities in the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. Recurring fair value measurements: The carrying values of cash and cash equivalents, restricted cash, accrued rent and accounts receivable, other assets and accounts payable and accrued expenses are reasonable estimates of fair values because of the short maturities of these instruments. For our disclosure of debt instrument fair value in Note 8, we use a discounted cash flow analysis based on borrowing rates currently available to the Company for loans with similar terms and maturities, discounting the future contractual interest and principal payments (categorized within Level 2 of the fair value hierarchy). Nonrecurring fair value measurements: Property Impairments The Company reviews its real estate assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of the assets, including accrued rental income, may not be recoverable through operations. Our estimated fair values are determined by utilizing cash flow models, market capitalization rates and market discount rates, or by obtaining third-party broker valuation estimates, or appraisals (categorized within Level 3 of the fair value hierarchy). Accrued Rent and Accounts Receivable, net Accrued rent and accounts receivable includes base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. An allowance for the uncollectible portion of accrued rent and accounts receivable is determined based upon customer credit-worthiness (including expected recovery of the Company’s claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. Deferred Leasing Commissions Costs, net Leasing commissions are amortized using the straight-line method over the term of the related lease agreements. Goodwill GAAP requires the Company to test goodwill for impairment at least annually or more frequently whenever events or circumstances occur indicating goodwill might be impaired. The Company applies a one-step quantitative assessment to determine if the estimated fair value is less than the carrying amount. If the carrying amount exceeds the estimated fair value, the Company will record a goodwill impairment equal to such excess, not to exceed the total amount of goodwill. No goodwill impairment has been recognized in the accompanying consolidated financial statements. Noncontrolling Interests Noncontrolling interests is the portion of equity in a subsidiary not attributable to a parent. The ownership interests not held by the parent are considered noncontrolling interests. Accordingly, the Company has reported noncontrolling interests in equity on the consolidated balance sheets but separate from the Company's equity. On the consolidated statements of operations, subsidiaries are reported at the consolidated amount, including both the amount attributable to the Company and noncontrolling interests. Stock-Based Compensation The Company follows ASC 718 - Compensation - Stock Compensation, with regard to issuance of stock in payment of services. ASC 718 requires that compensation cost relating to share-based payment transactions be recognized in the consolidated financial statements. The compensation cost is measured based on the estimated grant date fair value, as of the grant date of the Company’s common stock, of the equity or liability instruments issued. Stock-based compensation expense are recorded over the vesting period and is included in general and administrative expense in the accompanying consolidated statements of operations. Income Taxes The Company has elected to be treated as a REIT under the Internal Revenue Code of 1986, as amended, beginning with its taxable year ended December 31, 2011. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of the Company’s annual REIT taxable income to stockholders (which is computed without regard to the dividends-paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, the Company generally will not be subject to federal income tax on income that it distributes as dividends to its stockholders. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost, unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially and adversely affect the Company’s net income and net cash available for distribution to stockholders; however, the Company believes that it is organized and will continue to operate in such a manner as to qualify for treatment as a REIT. For the years ended December 31, 2021 and 2020, the Company incurred a net loss of $12,933,000 and $11,010,000, respectively. The Company formed a taxable REIT subsidiary which may generate future taxable income which may be offset by the net loss carry forward. The Company considers that any deferred tax benefit and corresponding deferred tax asset which may be recorded in light of the net loss carry forward would be properly offset by an equal valuation allowance. Accordingly, no deferred tax benefit or deferred tax asset has been recorded in the consolidated financial statements. The Company is required to recognize in its consolidated financial statements the financial effects of a tax position only if it is determined that it is more likely than not that the tax position will not be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Management has reviewed the Company’s tax positions and is of the opinion that material positions taken by the Company would more likely than not be sustained upon examination. Accordingly, the Company has not recognized a liability related to uncertain tax positions. Income (Loss) Per Share The computations of basic and diluted income (loss) per common share are based upon the weighted average number of common shares outstanding and potentially dilutive securities. The Company’s potentially dilutive securities include preferred shares that are convertible into the Company’s common stock. As of December 31, 2021 and 2020, there were no shares issuable in connection with these potentially dilutive securities. These potentially dilutive securities were excluded from the computations of diluted net income (loss) per share for the years ended December 31, 2021 and 2020 because no shares were issuable. Concentration of Risk The geographic concentration of the Company’s real estate assets makes it susceptible to adverse economic developments in the State of Texas. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, relocation of businesses, increased competition or any other changes, could adversely affect the Company’s operating results and its ability to make distributions to stockholders. Going Concern Evaluation Pursuant to ASC 205-40, “Presentation of Financial Statements – Going Concern,” management is required to evaluate the Company’s ability to continue as a going concern within one year after the date that these consolidated financial statements are issued. The Hartman SPE, LLC loan agreement (the “SASB Loan”) had an initial maturity date of October 9, 2020.The SASB Loan provides for three successive one-year maturity date extensions. On October 9, 2021, SPE LLC executed the second maturity date option to extend the maturity to October 9, 2022. The SASB Loan requires that SPE LLC have a debt yield, as defined, greater than or equal to 12.5%. The second SASB Loan extension was completed on the basis that the debt yield as of June 30, 2021 was 12.9%. Debt yield is calculated by dividing annual net operating income, as defined in the SASB Loan, by debt. The third and final one-year SASB Loan extension is within one year of the issuance of these consolidated financial statements. Uncertainty as to the debt yield calculation as of June 30, 2022 and the Company's ability to exercise the final remaining SASB Loan extension option, require management to conclude, in accordance with guidance provided by ASC 205-40, that there is a substantial doubt about the Company's ability to continue as a going concern within one year of the issuance date of these consolidated financial statements solely on the basis of the uncertainty regarding the loan maturity extension of the SASB Loan. Management believes that SPE LLC will be able to extend the maturity date for the next one year period which will mitigate the maturity date issue. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instrument s — Credit Losses (Topic 326):Measurement of Credit Losses on Financial Instruments . The updated guidance requires measurement and recognition of expected credit losses for financial assets, including trade and other receivables, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This is different from the current guidance as this will require immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets. Generally, the pronouncement requires a modified retrospective method of adoption. This guidance is effective for fiscal years and interim periods within those years beginning after January 2023, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on the consolidated financial statements when adopted. In March 2020, issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . ASU 2020-04 provides optional expedients for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The standard is effective for all entities as of March 12, 2020 through December 31, 2022. An entity can elect to apply the amendments as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to that date that the financial statements are available to be issued. The Company is currently evaluating the impact this guidance will have on the consolidated financial statements when adopted. |
Restatement of Consolidated Fin
Restatement of Consolidated Financial Statements | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Restatement of Consolidated Financial Statements | Restatement of Consolidated Financial Statements Restatement reflected in Form 10-K/A In connection with the preparation of our consolidated quarterly financial statements as of and for the three months ended March 31, 2021, the Company identified a material error in our consolidated statement of cash flows for the year ended December 31, 2020. The restatement was reflected in the Company's Annual Report (Amendment No. 1) on Form 10-K/A for the year ended December 31, 2020. The restatement of our consolidated statement of cash flows for the year ended December 31, 2020 was necessary to reclassify $10,611,000 previously reported as net cash provided by operating activities, which should have been reported as net cash provided by financing activities. The correction changed the amount reported on the operating activities line item captioned "Due to/from related parties" and the financing activities line item captioned "Borrowings from an affiliate." The impact of the restatement on the consolidated financial statements year ended December 31, 2020 is as follows (in thousands): Consolidated Statement of Cash Flows Year ended December 31, 2020 As Previously Reported Restatement Adjustments As Restated Due to/from related parties $ 11,219 $ (10,611) $ 608 Net cash provided by operating activities 33,757 (10,611) 23,146 Borrowing from an affiliate (1,611) 10,611 9,000 Net cash used in financing activities (23,258) 10,611 (12,647) |
Real Estate
Real Estate | 12 Months Ended |
Dec. 31, 2021 | |
Real Estate [Abstract] | |
Real Estate | Real Estate The Company's real estate assets consisted of the following, in thousands: December 31, 2021 2020 Land $ 146,056 $ 146,056 Buildings and improvements 372,868 359,952 In-place lease value intangible 101,661 101,661 620,585 607,669 Less accumulated depreciation and amortization (173,040) (146,314) Total real estate assets, net $ 447,545 $ 461,355 Depreciation expense for the years ended December 31, 2021 and 2020 was $18,588,000 and $18,910,000, respectively. Provision for impairment for the years ended December 31, 2021 and 2020 was $0 and $5,406,000, respectively. The Company identifies and records the value of acquired lease intangibles at the property acquisition date. Such intangibles include the value of acquired in-place leases and above and below-market leases. Acquired lease intangibles are amortized over the leases' remaining terms. With respect to all properties owned by the Company, the Company considers all of the in-place leases to be market rate leases. The amount of total in-place lease intangible asset and the respective accumulated amortization are as follows, in thousands: December 31, 2021 2020 In-place lease value intangible $ 101,661 $ 101,661 Less: In-place leases – accumulated amortization (87,608) (79,470) Acquired lease intangible assets, net $ 14,053 $ 22,191 The estimated aggregate future amortization amounts from acquired lease intangibles are as follows, in thousands: December 31, In-place lease amortization 2022 $ 7,454 2023 5,583 2024 1,016 2025 — 2026 — Total $ 14,053 Amortization expense for the year ended December 31, 2021 and 2020 was $8,138,000 and $10,586,000, respectively. As of December 31, 2021 and 2020, we owned or held a majority interest in 44 commercial properties comprising approximately 6.8 million square feet plus four pad sites and two land developments, all located in Texas. As of December 31, 2021 and 2020, we owned 15 properties located in Richardson, Arlington, and Dallas, Texas, 26 properties located in Houston, Texas and three properties located in San Antonio, Texas. Acquisition fees earned by the Advisor were $0 for both the years ended December 31, 2021 and 2020, respectively. Asset management fees earned by the Advisor for the years ended December 31, 2021 and 2020 were $0 and $880,000, respectively. Asset management fees are captioned as such in the accompanying consolidated statements of operations. Acquisition of Hartman XIX and HIREIT Effective July 1, 2020, in connection with the Mergers, the Company acquired interests in (i) two commercial land developments in progress and (ii) a 26.99% interest in SPE LLC from Hartman XIX. As of the date of the Mergers, there were 5,538,305 shares of Hartman XIX preferred stock and 100 common shares issued and outstanding, which converted to 7,343,511 shares of Company stock, resulting in aggregate merger consideration of $79,480,000. Effective July 1, 2020, in connection with the Mergers, the Company acquired interests in (i) one commercial real estate property, (ii) one pad site development in progress, (iii) a 34.38% member interest in SPE LLC, (iv) the Property Manager and (v) a 30% interest in Advisor from HIREIT. As of the date of the Mergers, there were 12,378,718 shares of HIREIT common stock and 1,214,197 HIROP OP units issued and outstanding, which converted to 9,525,691 shares of Company stock and 913,346 OP units of Hartman XX Operating Partnership units ("XX OP units"), resulting in merger consideration of $112,994,000. Concurrently with the Mergers, the Company acquired the remaining 70% interest in Advisors owned by Allen Hartman in exchange for 602,842 XX OP units with a fair value of $6,525,000. See Note 12 for additional information. Aggregate consideration for HIREIT totals $119,519,000. After consideration of all applicable factors pursuant to ASC 805, the Company is considered the “legal acquirer” because (i) the Company issued common stock to HIREIT and Hartman XIX stockholders, and (ii) the Company’s stockholders immediately preceding the Merger hold the largest portion of the voting rights in the Company immediately after the Merger. The value of the Company’s common shares and Hartman XX Operating Partnership units is presented based on estimated fair value determined by the Company which is $10.82 per common share and OP unit. The following table illustrates the fair value of assets and liabilities of HIREIT and Hartman XIX contributed in the merger on July 1, 2020, as well as the fair value of noncontrolling interest, in thousands: Assets Real estate assets $ 14,543 Cash and cash equivalents, accounts receivable, prepaid expenses and other assets, and due from related parties 5,054 Notes receivable – related party 3,900 Investment in affiliates 201,845 Total assets $ 225,342 Liabilities and noncontrolling interest Notes payable $ 8,100 Accounts payable and accrued expenses, and due to related parties 12,941 Unpaid preferred dividends due to Hartman XIX shareholders 3,868 Acquired noncontrolling interest 1,434 Total liabilities and noncontrolling interest $ 26,343 Net identifiable assets acquired $ 198,999 Total consideration transferred $ 198,999 The purchase price allocation was based on the Company’s assessment of the fair value of the acquired assets and liabilities, as summarized below. Real estate assets – the fair value is based on the independent third party appraisal. The fair value cost of real estate assets added as of July 1, 2020 was segregated and allocated to land, buildings and improvements and in-place lease value intangible. Depreciation and amortization of the real estate assets added on July 1, 2020 commenced as of that date. Cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses and other assets, and due from related parties – recorded at cost basis which approximates fair value. Notes receivable from related parties – recorded at cost basis which approximates fair value. Investment affiliates - Included in investment affiliates is HIREIT and Hartman XIX's investment in SPE, LLC. The fair value is based on the net asset value of SPE LLC of $323,934,000 determined by the Company as of June 30, 2020. Net asset value is based on the estimated fair value of assets less the estimated fair value of liabilities. The Company considers net asset value a reasonable proxy for fair value. Also included in the balance is Hartman XIX's investment in HIREIT. The fair value is based on 347,826 HIREIT common shares time the estimated net asset value of $8.18 per share determined by HIREIT totaling $2,845,000. Remaining investment is recorded at cost which approximates fair value. Notes payabl e – recorded at cost basis which approximates fair value. Accounts payable and accrued expenses, and due to related parties - recorded at cost basis which approximates fair value. Unpaid preferred dividends due to Hartman XIX shareholders - recorded at cost basis which approximates fair value. |
Accrued Rent and Accounts Recei
Accrued Rent and Accounts Receivable, net | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Accrued Rent and Accounts Receivable, net | Accrued Rent and Accounts Receivable, net Accrued rent and accounts receivable, net, consisted of the following, in thousands: December 31, 2021 2020 Tenant receivables $ 6,652 $ 6,581 Accrued rent 11,355 10,360 Allowance for uncollectible accounts (4,769) (4,742) Accrued rents and accounts receivable, net $ 13,238 $ 12,199 As of December 31, 2021 and 2020, the Company had an allowance for uncollectible accounts of $4,769,000 and $4,742,000, respectively. For the years ended December 31, 2021 and 2020, the Company recorded bad debt expense of $397,000 and $2,695,000, respectively, related to tenant receivables that we have specifically identified as potentially uncollectible based on the Company’s assessment of each tenant’s credit-worthiness. Bad debt expenses and any related recoveries are included in property operating expenses in the accompanying consolidated statements of operations. |
Deferred Leasing Commission Cos
Deferred Leasing Commission Costs, net | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Deferred Leasing Commission Costs, net | Deferred Leasing Commission Costs, net Costs which have been deferred consist of the following, in thousands: December 31, 2021 2020 Deferred leasing commissions $ 20,347 $ 19,154 Less: accumulated amortization (9,860) (8,314) Deferred leasing commission costs, net $ 10,487 $ 10,840 |
Future Minimum Rents
Future Minimum Rents | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Future Minimum Rents | Future Minimum Rents The Company leases to the majority its tenants under noncancellable operating leases which provide for minimum base rentals. A summary of minimum future rentals to be received (exclusive of renewals, tenant reimbursements, and contingent rentals) under noncancellable operating leases in existence at December 31, 2021 is as follows, in thousands: December 31, Minimum Future Rents 2022 $ 65,456 2023 54,031 2024 41,357 2025 27,427 2026 18,890 Thereafter 29,018 Total $ 236,179 |
Notes Payable, net
Notes Payable, net | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Notes Payable, net | Notes Payable, net The Operating Partnership is a party to four, cross-collateralized, term loan agreements with an insurance company. The term loans are secured by the Richardson Heights Property, the Cooper Street Property, the Bent Tree Green Property and the Mitchelldale Property. The loans require monthly payments of principal and interest due and payable on the first day of each month. Monthly payments are based on a 27-year loan amortization. Each of the loan agreements are subject to customary covenants, representations and warranties which must be maintained during the term of the loan agreements. Each of the loan agreements provides for a fixed interest rate of 4.61%. Each of the loan agreements are secured by a deed of trust, assignment of licenses, permits and contracts, assignment and subordination of the management agreements and assignment of rents. The terms of the security instruments provide for the cross collateralization/cross default of the each of the loans. The outstanding balance of the four loans was $40,724,000 and $42,035,000 as of December 31, 2021 and 2020, respectively. On October 1, 2018, the Company through SPE LLC and Goldman Sachs Mortgage Company entered into a $259,000,000 term loan agreement. The Company together with its affiliates HIREIT, Hartman XIX and vREIT XXI, contributed a total of 39 commercial real estate properties ("Properties") to SPE, LLC, a Delaware limited liability company, subject to the mortgage indebtedness encumbering the Properties, in exchange for membership interests in SPE LLC. The term of the SASB loan is five years, comprised of an initial two-year term with three one-year extension options. Each extension option shall be subject to certain conditions precedent including (i) no default then outstanding, (ii) 30 days prior written notice, (iii) the properties must have a specified in-place net operating income debt yield and (iv) purchase of an interest rate cap as described below for the exercised option term or terms. The outstanding principal of the SASB loan bears interest at the one-month LIBOR rate plus 1.8%. The SASB Loan is subject to an interest rate cap arrangement which caps LIBOR at 3.75% during each term of the SASB Loan. On October 9, 2021, the Company signed a maturity date extension agreement to extend the maturity date for one additional year to October 9, 2022. One option remains to extend for one additional one-year term. Notice to exercise the final one-year maturity extension option is due not less than 30 days nor more than 60 days from the current maturity date. Exercise of each extension option is subject to certain compliance and non-default requirements and a minimum debt yield of greater than or equal to 12.5%. The SASB Loan contains various customary covenants, including but not limited to financial covenants, covenants requiring monthly deposits in respect of certain property costs, such as taxes, insurance, tenant improvements, and leasing commissions, covenants imposing restrictions on indebtedness and liens, and restrictions on investments and participation in other asset disposition, merger or business combination or dissolution transactions. The SASB Loan is secured by, among other things, mortgages on the Properties. The Company, HIREIT and Hartman XIX, entered into a guaranty agreement in favor of the lender, whereby each guarantor unconditionally guaranties the full and timely performance of the obligations set forth in the loan agreement and all other loan documents, including the payment of all indebtedness and obligations due under the loan agreement. As a result of the Mergers, the Company is the sole guarantor. The following is a summary of the mortgage notes payable, in thousands: December 31, Property/Facility Payment (1) Maturity Date Rate 2021 2020 Richardson Heights (2) P&I July 1, 2041 4.61 % $ 16,144 $ 16,690 Cooper Street (2) P&I July 1, 2041 4.61 % 6,995 7,211 Bent Tree Green (2) P&I July 1, 2041 4.61 % 6,995 7,211 Mitchelldale (2) P&I July 1, 2041 4.61 % 10,590 10,923 Hartman SPE LLC (3) IO October 9, 2022 1.91 % 259,000 259,000 Hartman XXI IO October 31, 2022 10.00 % 6,012 2,789 $ 305,736 $ 303,824 Less unamortized deferred loan costs (1,959) (2,834) $ 303,777 $ 300,990 (1) Principal and interest (P&I) or interest only (IO). (2) Each promissory note contains a call option wherein the holder of the promissory note may declare the outstanding balance due and payable on either July 1, 2024, July 1, 2029, July 1, 2034, or July 1, 2039. (3) On October 9, 2021, the Company signed a maturity date extension agreement to extend the maturity date for one additional year to October 9, 2022. One option remains to extend for one additional one-year term. Notice to exercise the next one-year maturity extension option is due not less than 30 days nor more than 60 days from the current maturity date. Exercise of each extension option is subject to certain compliance and non-default requirements and a minimum debt yield of 12.5%. Annual maturities of notes payable as of December 31, 2021 are as follows, in thousands: December 31, Amount Due 2022 $ 266,386 2023 1,439 2024 1,507 2025 1,578 2026 1,652 Thereafter 33,174 Total $ 305,736 The Company’s loan costs are amortized using the straight-line method over the term of the loans, which approximates the interest method. Costs which have been deferred consist of the following, in thousands: December 31, 2021 2020 Deferred loan costs $ 5,399 $ 5,345 Less: deferred loan cost accumulated amortization (3,440) (2,511) Total cost, net of accumulated amortization $ 1,959 $ 2,834 Interest expense incurred for the year ending December 31, 2021 and 2020 was $8,454,000 and $9,929,000, respectively, which includes amortization expense of deferred loan costs. Interest expense of $315,000 and $867,000 was payable as of December 31, 2021 and 2020, respectively, and is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets. On March 29, 2021, Hartman Income REIT Property Holdings, LLC, a wholly owned subsidiary of Hartman XX Operating Partnership, LP, was added, by means of a joinder agreement, to a master credit facility agreement where Hartman vREIT XXI, Inc. is the guarantor. The Company’s Atrium II office property was added to the collateral security for the master credit facility agreement where the borrowing base of the facility increased by $1,625,000. Fair Value of Debt The fair value of the Company’s fixed rate notes payable, variable rate notes payable and secured revolving credit facilities aggregates to $310,271,000 and $315,389,000 as compared to book value of $305,736,000 and $303,824,000 as of December 31, 2021 and 2020, respectively. The fair value of our debt instruments is estimated on a Level 2 basis, as provided by ASC 820, using a discounted cash flow analysis based on the borrowing rates currently available to the Company for loans with similar terms and maturities, discounting the future contractual interest and principal payments. Disclosure about the fair value of notes payable is based on relevant information available as of December 31, 2021 and 2020. |
Loss Per Share
Loss Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per Share Basic (loss) income per share is computed using net (loss) income attributable to common stockholders and the weighted average number of common shares outstanding. Diluted weighted average shares outstanding reflect common shares issuable from the assumed conversion of convertible preferred stock into common shares. Only those items that have a dilutive impact on basic (loss) per share are included in the diluted loss per share. December 31, 2021 2020 Numerator: Net (loss) income attributable to common stockholders (in thousands) $ (12,336) $ (13,165) Denominator: Weighted average number of common shares outstanding, basic and diluted (in thousands) 35,202 26,235 Basic and diluted (loss) income per common share: Net (loss) income attributable to common stockholders per share $ (0.35) $ (0.50) |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Federal income taxes are not provided for because we qualify as a REIT under the provisions of the Internal Revenue Code and because we have distributed and intend to continue to distribute all of our taxable income to our stockholders. Our stockholders include their proportionate taxable income in their individual tax returns. As a REIT, we must distribute at least 90% of our real estate investment trust taxable income to our stockholders and meet certain income sources and investment restriction requirements. In addition, REITs are subject to a number of organizational and operational requirements. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate tax rates. The Company’s federal income tax returns for the years ended December 31, 2015, 2016, 2017, 2018, 2019 and 2020 have not been examined by the Internal Revenue Service. The Company’s federal income tax return for the year ended December 31, 2015 may be examined on or before September 15, 2022. The Company has formed a taxable REIT subsidiary which may generate future taxable income which may be offset by the net loss carry forward. The Company considers that any deferred tax benefit and corresponding deferred tax asset which may be recorded in the light of the net loss carry forward would be properly offset by an equal valuation allowance. Accordingly, no deferred tax benefit or deferred tax asset has been recorded in the consolidated financial statements. The Company is required to recognize in its consolidated financial statements the financial effects of a tax position only if it is determined that it is more likely than not that the tax position will not be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Management has reviewed the Company’s tax positions and is of the opinion that material positions taken by the Company would more likely than not be sustained upon examination. Accordingly, the Company has not recognized a liability related to uncertain tax positions. Taxable income (loss) differs from net income (loss) for financial reporting purposes principally due to differences in the timing of recognition of interest, real estate taxes, depreciation and amortization and rental revenue. For federal income tax purposes, the cash distributed to stockholders was characterized as follows for the years ended December 31: 2021 2020 Ordinary income (unaudited) 40.4 % 35.3 % Return of capital (unaudited) 59.6 % 64.7 % Capital gains distribution (unaudited) — % — % Total 100.0 % 100.0 % A provision for Texas Franchise tax under the Texas Margin Tax Bill in the amount of $857,080 and $192,000 was recorded in the consolidated financial statements for the years ended December 31, 2021 and 2020, respectively, with a corresponding charge to real estate taxes and insurance. |
Real Estate Held for Developmen
Real Estate Held for Development | 12 Months Ended |
Dec. 31, 2021 | |
Real Estate [Abstract] | |
Real Estate Held for Development | Real Estate The Company's real estate assets consisted of the following, in thousands: December 31, 2021 2020 Land $ 146,056 $ 146,056 Buildings and improvements 372,868 359,952 In-place lease value intangible 101,661 101,661 620,585 607,669 Less accumulated depreciation and amortization (173,040) (146,314) Total real estate assets, net $ 447,545 $ 461,355 Depreciation expense for the years ended December 31, 2021 and 2020 was $18,588,000 and $18,910,000, respectively. Provision for impairment for the years ended December 31, 2021 and 2020 was $0 and $5,406,000, respectively. The Company identifies and records the value of acquired lease intangibles at the property acquisition date. Such intangibles include the value of acquired in-place leases and above and below-market leases. Acquired lease intangibles are amortized over the leases' remaining terms. With respect to all properties owned by the Company, the Company considers all of the in-place leases to be market rate leases. The amount of total in-place lease intangible asset and the respective accumulated amortization are as follows, in thousands: December 31, 2021 2020 In-place lease value intangible $ 101,661 $ 101,661 Less: In-place leases – accumulated amortization (87,608) (79,470) Acquired lease intangible assets, net $ 14,053 $ 22,191 The estimated aggregate future amortization amounts from acquired lease intangibles are as follows, in thousands: December 31, In-place lease amortization 2022 $ 7,454 2023 5,583 2024 1,016 2025 — 2026 — Total $ 14,053 Amortization expense for the year ended December 31, 2021 and 2020 was $8,138,000 and $10,586,000, respectively. As of December 31, 2021 and 2020, we owned or held a majority interest in 44 commercial properties comprising approximately 6.8 million square feet plus four pad sites and two land developments, all located in Texas. As of December 31, 2021 and 2020, we owned 15 properties located in Richardson, Arlington, and Dallas, Texas, 26 properties located in Houston, Texas and three properties located in San Antonio, Texas. Acquisition fees earned by the Advisor were $0 for both the years ended December 31, 2021 and 2020, respectively. Asset management fees earned by the Advisor for the years ended December 31, 2021 and 2020 were $0 and $880,000, respectively. Asset management fees are captioned as such in the accompanying consolidated statements of operations. Acquisition of Hartman XIX and HIREIT Effective July 1, 2020, in connection with the Mergers, the Company acquired interests in (i) two commercial land developments in progress and (ii) a 26.99% interest in SPE LLC from Hartman XIX. As of the date of the Mergers, there were 5,538,305 shares of Hartman XIX preferred stock and 100 common shares issued and outstanding, which converted to 7,343,511 shares of Company stock, resulting in aggregate merger consideration of $79,480,000. Effective July 1, 2020, in connection with the Mergers, the Company acquired interests in (i) one commercial real estate property, (ii) one pad site development in progress, (iii) a 34.38% member interest in SPE LLC, (iv) the Property Manager and (v) a 30% interest in Advisor from HIREIT. As of the date of the Mergers, there were 12,378,718 shares of HIREIT common stock and 1,214,197 HIROP OP units issued and outstanding, which converted to 9,525,691 shares of Company stock and 913,346 OP units of Hartman XX Operating Partnership units ("XX OP units"), resulting in merger consideration of $112,994,000. Concurrently with the Mergers, the Company acquired the remaining 70% interest in Advisors owned by Allen Hartman in exchange for 602,842 XX OP units with a fair value of $6,525,000. See Note 12 for additional information. Aggregate consideration for HIREIT totals $119,519,000. After consideration of all applicable factors pursuant to ASC 805, the Company is considered the “legal acquirer” because (i) the Company issued common stock to HIREIT and Hartman XIX stockholders, and (ii) the Company’s stockholders immediately preceding the Merger hold the largest portion of the voting rights in the Company immediately after the Merger. The value of the Company’s common shares and Hartman XX Operating Partnership units is presented based on estimated fair value determined by the Company which is $10.82 per common share and OP unit. The following table illustrates the fair value of assets and liabilities of HIREIT and Hartman XIX contributed in the merger on July 1, 2020, as well as the fair value of noncontrolling interest, in thousands: Assets Real estate assets $ 14,543 Cash and cash equivalents, accounts receivable, prepaid expenses and other assets, and due from related parties 5,054 Notes receivable – related party 3,900 Investment in affiliates 201,845 Total assets $ 225,342 Liabilities and noncontrolling interest Notes payable $ 8,100 Accounts payable and accrued expenses, and due to related parties 12,941 Unpaid preferred dividends due to Hartman XIX shareholders 3,868 Acquired noncontrolling interest 1,434 Total liabilities and noncontrolling interest $ 26,343 Net identifiable assets acquired $ 198,999 Total consideration transferred $ 198,999 The purchase price allocation was based on the Company’s assessment of the fair value of the acquired assets and liabilities, as summarized below. Real estate assets – the fair value is based on the independent third party appraisal. The fair value cost of real estate assets added as of July 1, 2020 was segregated and allocated to land, buildings and improvements and in-place lease value intangible. Depreciation and amortization of the real estate assets added on July 1, 2020 commenced as of that date. Cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses and other assets, and due from related parties – recorded at cost basis which approximates fair value. Notes receivable from related parties – recorded at cost basis which approximates fair value. Investment affiliates - Included in investment affiliates is HIREIT and Hartman XIX's investment in SPE, LLC. The fair value is based on the net asset value of SPE LLC of $323,934,000 determined by the Company as of June 30, 2020. Net asset value is based on the estimated fair value of assets less the estimated fair value of liabilities. The Company considers net asset value a reasonable proxy for fair value. Also included in the balance is Hartman XIX's investment in HIREIT. The fair value is based on 347,826 HIREIT common shares time the estimated net asset value of $8.18 per share determined by HIREIT totaling $2,845,000. Remaining investment is recorded at cost which approximates fair value. Notes payabl e – recorded at cost basis which approximates fair value. Accounts payable and accrued expenses, and due to related parties - recorded at cost basis which approximates fair value. Unpaid preferred dividends due to Hartman XIX shareholders - recorded at cost basis which approximates fair value. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Hartman Advisors LLC ("Advisor"), is a Texas limited liability company. Prior to the Mergers, the Advisor was owned 70% by Allen R. Hartman and his affiliates and 30% by the Property Manager. Effective July 1, 2020, the Company acquired the Advisor's interest of the Property Manager, which was a wholly owned subsidiary of Hartman Income REIT Management, LLC, which was wholly owned by Hartman Income REIT, Inc., as a result of the HIREIT Merger. In a separate transaction, the Company acquired the Advisor's interest held by affiliates of Allen Hartman in exchange for 602,842 Hartman XX Operating Partnership units with a fair value of $6,525,000. The Property Manager was acquired by the Company as a result of the HIREIT Merger. Effective July 1, 2020 the Company is self-advised and self-managed. Advisor is the sole member of Hartman vREIT XXI Advisor, LLC ("XXI Advisor"), which is the advisor for Hartman vREIT XXI, Inc. Hartman vREIT XXI, Inc. ("vREIT XXI") pays acquisition fees and asset management fees to the Advisor in connection with the acquisition of properties and management of the Company. vREIT XXI pays property management and leasing commissions to the Property Manager in connection with the management and leasing of vREIT XXI's properties. Prior to the Mergers, the Company paid acquisition fees and asset management fees to the Advisor in connection with the acquisition of properties and management of the Company. The Company paid property management and leasing commissions to the Property Manager in connection with the management and leasing of the Company’s properties. For the years ended December 31, 2021 and 2020 the Company incurred property management fees and reimbursements of $0 and $4,118,000, respectively, and $0 and $1,534,000, respectively for leasing commissions owed to our Property Manager. The Company incurred asset management fees of $0 and $880,000, respectively owed to Advisor. These fees are monthly fees equal to one-twelfth of 0.75% of the sum of the higher of the cost or value of each asset. The asset management fee will be based only on the portion of the cost or value attributable to the Company’s investment in an asset, if the Company doesn't own all or a majority of an asset. There were no acquisition fees incurred to the Advisor for the years ended December 31, 2021 and 2020. Property management fees and reimbursements are included in property operating expense in the accompanying consolidated statements of operations. Leasing commissions are capitalized in the accompanying consolidated balance sheets. Asset management fees are captioned as such in the accompanying consolidated statements of operations. The Company also pays construction management fees to the Property Manager in connection with the construction management of the Company's properties. As of July 1, 2020, due to the merger of the Property Manager into the Company as part of the HIREIT merger, all construction management fees are now being eliminated beginning with the third quarter of 2020. For the years ended December 31, 2021 and 2020, the Company incurred construction management fees of $0 and $309,000, respectively. Construction management fees are capitalized and included in real estate assets in the consolidated balance sheets. On March 11, 2022, the Company, the Advisor, and the Property Manager (collectively the "Settlement Parties") agreed to a settlement with Hartman vREIT XXI to settle amounts owed by the Settlement Parties to Hartman vREIT XXI with amounts owed by Hartman XXI to the Settlement Parties. The settlement resulted in the reduction of $1,151,000 of interest payable and reduction of $2,984,000 in principal of the unsecured promissory note from Hartman vREIT XXI in exchange for the reduction of $4,135,000 in unpaid advisory and management fees owed from Hartman vREIT XXI. The settlement was effective December 31, 2021. The table below shows the related party balances the Company owes to and is owed by, in thousands: December 31, 2021 2020 Due from (to) vREIT XXI $ — $ 871 Due from (to) other related parties 115 190 $ 115 $ 1,061 Prior to the HIREIT Merger, the Company owned 1,561,523 shares of the common stock of HIREIT which it acquired for cash consideration of $8,978,000. The Company has cancelled the HIREIT shares in connection with the HIREIT Merger effective July 1, 2020. The Company received dividend distributions from HIREIT of $0 and $213,000 for the years ended December 31, 2021 and 2020, respectively, which is included in interest and dividend income in the accompanying consolidated statements of operations. During the fourth quarter of 2019, the Company borrowed under an unsecured promissory note payable to Hartman vREIT XXI, Inc., an affiliate of the Advisor and the Property Manager, in the face amount of $10,000,000. This note payable had an outstanding balance of $6,012,000 and $2,789,000 as of December 31, 2021 and 2020, respectively, which is included in notes payable in the accompanying consolidated balance sheets. Interest has been accrued on the loan amount at an annual rate of 10%. The Company recognized interest expense on the affiliate note in the amount of $624,000 and $505,000 for the years ended December 31, 2021 and 2020, respectively, which is included in interest expense in the accompanying consolidated statements of operations. In May 2016, the Company, through its taxable REIT subsidiary, Hartman TRS, Inc. (“TRS”), loaned $7,231,000 pursuant to a promissory note in the face amount of up to $8,820,000 to Hartman Retail II Holdings Company, Inc. (“Retail II Holdings”), an affiliate of the Advisor and the Property Manager, in connection with the acquisition of a retail shopping center by Hartman Retail II DST, a Delaware statutory trust sponsored by the Property Manager. Pursuant to the terms of the promissory note, TRS will receive a two percent (2)% origination fee of amounts advanced under the promissory note, and interest at ten percent (10)% per annum on the outstanding principal balance. The outstanding principal balance of the promissory note will be repaid as investor funds are raised by Hartman Retail II DST. The maturity date of the promissory note, as amended is December 31, 2022. This note receivable had an outstanding balance of $1,726,000 as of December 31, 2021 and 2020, respectively, which is included in Notes receivable – related party in the accompanying consolidated balance sheets. For the years ended December 31, 2021 and 2020, the Company recognized interest income on this affiliate note in the amount of $173,000 and $174,000, respectively. The Company had a note receivable due from an affiliate, Hartman Short Term Income Properties XIX, Inc. (“Hartman XIX”), of $0 as of December 31, 2021 and 2020. The balance of the note was eliminated on July 1, 2020 in connection with the Hartman XIX Merger. Interest has been accrued on the loan amount at an annual rate of six percent (6%). The Company recognized interest income on the affiliate note in the amount of $0 and $126,000 for the years ended December 31, 2021 and 2020, respectively, which is included in interest and dividend income in the accompanying consolidated statements of operations. In February 2019, the Company through TRS, loaned $6,782,455 pursuant to a promissory note in the face amount of up to $7,500,000 to Hartman Retail III Holdings Company, Inc. (“Retail III Holdings”), an affiliate of the Advisor and the Property Manager, in connection with the acquisition of a retail shopping center by Hartman Retail III DST, a Delaware statutory trust sponsored by the Advisor. Effective August 4, 2020, the Company conveyed this note receivable to Hartman vREIT XXI TRS, Inc. ("vREIT XXI TRS ") in partial satisfaction of financing advances owed by the Company to vREIT XXI. This note receivable had an outstanding balance of $0 as of December 31, 2021 and 2020. Pursuant to the terms of the promissory note, TRS receives a two percent (2%) origination fee of amounts advanced under the promissory note, and interest at ten percent (10%) per annum on the outstanding principal balance. The maturity date of the promissory note, as amended, was February 28, 2021. The Company recognized interest income on this affiliate note in the amount of $0 and $448,000 for the years ended December 31, 2021 and 2020, respectively which is included in interest and dividend income in the accompanying consolidated statements of operations. In March 2019, the Company through TRS, loaned $3,830,000 pursuant to a promissory note in the face amount of $3,500,000 to Hartman Ashford Bayou, LLC (“Ashford Bayou”), an affiliate of the Advisor and the Property Manager, in connection with the acquisition of office building by Ashford Bayou, a wholly owned subsidiary of H artman Total Return, Inc. Effective August 4, 2020, the Company conveyed this note receivable to vREIT XXI TRS in partial satisfaction of financing advances owed by the Company to vREIT XXI. This note receivable had an outstanding balance of $0 as of December 31, 2021 and 2020, respectively. Pursuant to the terms of the promissory note, TRS receives a two percent (2%) origination fee of amounts advanced under the promissory note, and interest at ten percent (10%) per annum on the outstanding principal balance. The Company recognized interest income on this affiliate note in the amount of $0 and $179,000 for the years ended December 31, 2021 and 2020, respectively, which is included in interest and dividend income in the accompanying consolidated statements of operations. “VIEs” are defined as entities with a level of invested equity that is not sufficient to fund future operations on a stand-alone basis, or whose equity holders lack certain characteristics of a controlling financial interest. For identified VIEs, an assessment must be made to determine which party to the VIE, if any, has both the power to direct the activities of the VIE that most significantly impacts the performance of the VIE and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company is not deemed to be the primary beneficiary of Retail II Holdings , Retail III Holdings or Ashford Bayou, each of which qualifies as a VIE. Accordingly, the assets and liabilities and revenues and expenses of Retail II Holdings, Retail III Holdings and Ashford Bayou have not been included in the accompanying consolidated financial statements. The Company is a covenant guarantor for the secured mortgage indebtedness of each of the VIEs in the total amount of $24,748,000 and $24,998,000 as December 31, 2021 and 2020, respectively. The following table reflects the net note receivable asset due to the Company, reflected in the accompanying consolidated balance sheets and the Company's maximum exposure to debt guarantees, in thousands: December 31, 2021 2020 Note receivable, net $ 1,726 $ 1,726 Maximum exposure $ 24,748 $ 24,998 Hartman vREIT XXI owns 1,198,228 shares of the Company's common stock and a 2.47% ownership interest in Hartman SPE, LLC. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Common Stock Shares of common stock entitle the holders to one vote per share on all matters which stockholders are entitled to vote, to receive dividends and other distributions as authorized by the Company’s board of directors in accordance with the Maryland General Corporation Law and to all rights of a stockholder pursuant to the Maryland General Corporation Law. The common stock has no preferences or preemptive, conversion or exchange rights. Under the articles of incorporation, the Company has authority to issue 750,000,000 common shares of beneficial interest, $0.001 par value per share, and 200,000,000 preferred shares of beneficial interest, $0.001 par value per share. Shares of common stock entitle the holders to one vote share on all matters which stockholders are entitled to vote, to receive dividends and other distributions as authorized by the Company's board of directors in accordance with the Maryland General Corporation Law to all rights of a stockholder pursuant to the Maryland General Corporation Law. The Common stock has no preferences or preemptive, conversion or exchange rights. Preferred Stock Under the Company’s articles of incorporation the Company’s board of directors has the authority to issue one or more classes or series of preferred stock, and prior to the issuance of such stock, the board of directors has the power to classify or reclassify, in one or more series, any unissued shares and designate the preferences, rights and privileges of such shares. As of December 31, 2021 and 2020, the Company has 1,000 shares of convertible preferred stock issued and outstanding. Common Stock Issuable Upon Conversion of Convertible Preferred Stock The convertible preferred stock issued to the Advisor will convert to shares of common stock if (1) the Company has made total distributions on then outstanding shares of the Company’s common stock equal to the issue price of those shares plus a 6% cumulative, non-compounded, annual return on the issue price of those outstanding shares, (2) the Company lists its common stock for trading on a national securities exchange if the sum of prior distributions on then outstanding shares of the Company’s common stock plus the aggregate market value of the Company’s common stock (based on the 30-day average closing price) meets the same 6% performance threshold, or (3) the Company’s advisory agreement with Hartman Advisors, LLC expires without renewal or is terminated (other than because of a material breach by the Advisor), and at the time of such expiration or termination the Company is deemed to have met the foregoing 6% performance threshold based on the Company’s enterprise value and prior distributions and, at or subsequent to the expiration or termination, the stockholders actually realize such level of performance upon listing or through total distributions. In general, the convertible stock will convert into shares of common stock with a value equal to 15% of the excess of the Company’s enterprise value plus the aggregate value of distributions paid to date on then outstanding shares of common stock over the aggregate issue price of those outstanding shares plus a 6% cumulative, non-compounded, annual return on the issue price of those outstanding shares. With respect to conversion in connection with the termination of the advisory agreement, this calculation is made at the time of termination even though the actual conversion may occur later, or not at all. Stock-Based Compensation The Company awards shares of restricted common stock to non-employee directors as compensation in part for their service as members of the board of directors of the Company. These shares are fully vested when granted. These shares may not be sold while an independent director is serving on the board of directors. As of December 31, 2021 and 2020 the Company granted 17,889 and 42,964 shares of restricted common stock to independent directors as compensation for services and recognized $200,000 and $538,000 as stock-based compensation expense for each period. On July 28, 2020 the board voted to grant Richard Ruskey, John Ostroot, Jack Tompkins and Jack Cardwell, each being independent directors of the companies involved in the Merger, each to receive $100,000 in restricted shares of the Company upon and as a compensation for closure of the merger. Share based compensation expense is based upon the estimated fair value per share. The Company sponsors a defined contribution pension plan, the Hartman 401(k) Profit Sharing Plan, covering substantially all of its full-time employees who are at least 21 years of age. The Company matches 401(k) cash contributions with Company stock. The Company recognized $467,000 and $199,000 for employee 401(k) matching contributions as stock based compensation for the years ended December 31, 2021 and 2020, respectively. Stock-based compensation expense is included in general and administrative expenses in the accompanying consolidated statements of operations. Distributions The following table reflects the total distributions the Company has paid in cash (in thousands, except per share amounts) and the amount through the distribution reinvestment plan, including paid per common share, in each indicated quarter: Quarter Paid Distributions per Common Share Total Distributions Paid 2021 4 th Quarter $ 0.112 $ 3,927 3 rd Quarter 0.104 3,662 2 nd Quarter 0.092 3,246 1 st Quarter 0.087 3,082 Total $ 0.395 $ 13,917 2020 4 th Quarter $ 0.117 $ 4,141 3 rd Quarter 0.148 5,211 2 nd Quarter 0.175 3,222 1 st Quarter 0.175 3,223 Total $ 0.615 $ 15,797 Mergers On July 21, 2017, we entered into (i) an agreement and plan of merger (the “XIX Merger Agreement”) between us and Short Term Income Properties XIX, Inc. (“Hartman XIX”), and (ii) an agreement and plan of merger (the “HIREIT Merger Agreement,” and together with the XIX Merger Agreement, the “Merger Agreements”) by and among us, our operating partnership, Hartman Income REIT, Inc. (“HIREIT”), and Hartman Income REIT Operating Partnership LP, the operating partnership of HIREIT (“HIREIT Operating Partnership”). On May 14, 2020, the Merger Agreements were approved by the respective company shareholders. The effective date of the Mergers for financial reporting was July 1, 2020. Subject to the terms and conditions of the XIX Merger Agreement, (i) each share of common stock of Hartman XIX (the “XIX Common Stock”) issued and outstanding immediately prior to the Effective Time (as defined in the XIX Merger Agreement) was automatically cancelled and retired and converted into the right to receive 9,171.98 shares of common stock, $0.01 par value per share, of the Company (“Company Common Stock”), (ii) each share of 8% cumulative preferred stock of Hartman XIX issued and outstanding immediately prior to the Effective Time was automatically cancelled and retired and converted into the right to receive 1.238477 shares of Company Common Stock, and (iii) each share of 9% cumulative preferred stock of Hartman XIX issued and outstanding immediately prior to the Effective Time was automatically cancelled and retired and converted into the right to receive 1.238477 shares of Company Common Stock. Subject to the terms and conditions of the HIREIT Merger Agreement, (a) in connection with the HIREIT Merger, (i) each share of common stock of HIREIT (the “HIREIT Common Stock”) issued and outstanding immediately prior to the REIT Merger Effective Time (as defined in the HIREIT Merger Agreement) was automatically cancelled and retired and converted into the right to receive 0.752222 shares of Company Common Stock, and (ii) each share of subordinate common stock of HIREIT was automatically cancelled and retired and converted into the right to receive 0.863235 shares of Company Common Stock, and (b) in connection with the Partnership Merger, each unit of limited partnership interest in HIREIT Operating Partnership (“HIREIT OP Units”) issued and outstanding immediately prior to the Partnership Merger Effective Time (as defined in the HIREIT Merger Agreement) (other than any HIREIT OP Units held by HIREIT) was automatically cancelled and retired and converted into the right to receive 0.752222 shares validly issued, fully paid and non-assessable units of limited partnership interests in Hartman XX Operating Partnership. For financial reporting purposes, the Mergers were treated as effective July 1, 2020. |
Incentive Awards Plan
Incentive Awards Plan | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Incentive Awards Plan | Incentive Awards Plan The Company has adopted an incentive plan (the “Omnibus Stock Incentive Plan” or the “Incentive Plan”) that provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, deferred stock awards, restricted stock awards, dividend equivalent rights and other stock-based awards within the meaning of Internal Revenue Code Section 422, or any combination of the foregoing. The Company has initially reserved 5,000,000 shares of the Company’s common stock for the issuance of awards under the Company’s stock incentive plan, but in no event more than ten (10%) percent of the Company’s issued and outstanding shares. The number of shares reserved under the Company’s stock incentive plan is also subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. Generally, shares that are forfeited or canceled from awards under the Company’s stock incentive plan also will be available for future awards. Incentive Plan compensation expense is included in general and administrative expenses in the accompanying consolidated statements of operations. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation During February 2021, the state of Texas experienced a severe winter storm, unofficially referred to as Winter Storm Uri, which resulted in power outages and electrical grid failures across the state. Wholesale prices for electricity increased significantly during this period. As a result, we experienced a substantial increase in electricity billings for a number of our properties during the month of and after the storm. On May 26, 2021, Summer Energy LLC (“Summer”) filed a lawsuit against Hartman Income REIT Management, Inc. (the “Property Manager”), a wholly owned subsidiary of the Company that manages our properties, in state court in Harris County, Texas. In this lawsuit, Summer seeks to collect approximately $8.4 million from the Property Manager that Summer claims that the Property Manager owes Summer under one or more electricity sales agreements (“Agreements”) related to Winter Storm Uri. Of the approximately $8.4 million claimed in the lawsuit, approximately $7.6 million relates to wholly owned properties of the Company. Under the Agreements, Summer provided electricity to buildings managed by the Property Manager at indexed prices. On March 24, 2022, the court entered a judgment in favor of Summer against the Property Manager in the amount of $7,871,000 plus customary pre- and post-judgment interest and attorney's fees. The Property Manager continues to dispute the amount of liability to Summer and intends to appeal the judgment. The outcome of the pending appeal is subject to significant uncertainty and we cannot provide any assurance that the Property Manager will ultimately prevail. If the Property Manager's liability is upheld for all or a significant portion of the amounts claimed by Summer, the Property Manager will incur a material loss, which will have an adverse effect on our financial condition, ability to meet our other obligations and ability to pay distributions to our stockholders. Even if the Property Manager is ultimately successful in its appeal, it may take considerable time to resolve the matter. The Company has recognized its applicable share of the judgment amount within the Company's consolidated statement of operations. Many of the Company’s leases contain provisions that require tenants to pay their allocable share of operating expenses, including utilities. At this time, the Company is unable to reasonably estimate an amount expected to be recovered from our tenants. Contingencies Events related to the COVID-19 pandemic and the actions taken to contain it have created substantial uncertainty for all businesses, including the Company. The Company’s consolidated financial statements as of and for the year ended December 31, 2021 have been prepared in light of these circumstances. Management has determined that there has been no impairment on real estate assets. For the year ended December 31, 2020, we recorded an impairment of $5,406,000. Circumstances related to the COVID-19 pandemic may result in recording impairments in future periods. Proposed merger with Hartman XXI On November 6, 2020, the board of directors of the Company and the board of directors of Hartman XXI each approved a merger of the Company with and into the Hartman XXI, with Hartman XXI as the surviving company. On January 26, 2021, the respective boards determined to delay the pursuit of the proposed merger transaction. On October 26, 2021, the respective boards determined to proceed with the proposed merger transaction. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan | Defined Contribution PlanThe Company sponsors a defined contribution pension plan, the Hartman 401(k) Profit Sharing Plan, covering substantially all of its full-time employees who are at least 21 years of age. Participants may annually contribute up to 100% of pretax annual compensation and any applicable catch-up contributions, as defined in the plan and subject to deferral limitations as set forth in Section 401(k) of the Internal Revenue Code. Participants may also contribute amounts representing distributions from other qualified benefit or defined contribution plans. The Company may make discretionary matching contributions. For the years ended December 31, 2021 and 2020 the Company matched $467,000 and $199,000 in the form of Company stock, respectively. For the year ended December 31, 2021, the Company recognized $1,011,000 of plan income due to change in estimate in the Company's stock match liability to the plan. The Company had a stock match liability to the plan of $1,613,000 and $2,232,000 as of December 31, 2021 and 2020, respectively. |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events On February 10, 2022, the Company executed a $2,645,000 promissory note with East West Bank, resulting in net proceeds of $2,528,000. The promissory note is secured by the Company's 17 acre development site located in Fort Worth, Texas and has a maturity date of February 25, 2023. The interest rate is WSJ Prime plus 1.0% for an initial rate of 4.25%. Principal and interest in the amount of $225,600, subject to change in the WSJ Prime rate, are due in 12 installments beginning March 25, 2022. On March 24, 2022, the court entered a judgment in favor of Summer against the Property Manager in the amount of $7,871,000 plus customary pre- and post-judgment interest and attorney's fees. The Property Manager continues to dispute the amount of liability to Summer and intends to appeal the judgment. The outcome of the pending appeal is subject to significant uncertainty and we cannot provide any assurance that the Property Manager will ultimately prevail. The Company has recognized its applicable share of the judgment amount, approximately $6,731,000, within the Company's consolidated statement of operations. The Company has also recognized $370,000 of pre-judgment interest and attorney fees. Many of the Company’s leases contain provisions that require tenants to pay their allocable share of operating expenses, including utilities. At this time, the Company is unable to reasonably estimate an amount expected to be recovered from our tenants. |
Schedule III - Real Estate Asse
Schedule III - Real Estate Assets and Accumulated Depreciation and Amortization | 12 Months Ended |
Dec. 31, 2021 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract] | |
Schedule III - Real Estate Assets and Accumulated Depreciation and Amortization | (Dollars in thousands) Initial Cost to the Company Property Date Acquired Date of Construction Land Building and Improvements In-place lease value intangible Total Post – acquisition Improvements (1) Garden Oaks 10/01/2018 1956 $ 1,770 $ 17,969 $ 1,021 $ 20,760 $ 1,531 Quitman 10/01/2018 1920 3,130 2,389 351 5,870 507 Chelsea Square 10/01/2018 1984 1,570 5,046 494 7,110 493 Mission Centre 10/01/2018 1987 2,020 7,690 890 10,600 318 Regency 10/01/2018 1979 960 819 851 2,630 907 Spring Valley 10/01/2018 1982 3,490 1,064 1,066 5,620 1,531 Northeast Square 10/01/2018 1984 1,300 3,330 280 4,910 221 One Mason 10/01/2018 1983 2,440 9,290 1,130 12,860 251 Tower 10/01/2018 1981 2,750 2,584 1,336 6,670 1,624 Preserve 10/01/2018 1970 9,730 9,085 3,485 22,300 2,092 Westheimer 10/01/2018 1983 3,800 12,416 2,284 18,500 2,038 Walzem Plaza 10/01/2018 1981 3,900 10,660 1,840 16,400 1,229 11811 North Freeway 10/01/2018 1982 1,980 1,037 2,473 5,490 809 Atrium I 10/01/2018 1980 2,540 716 1,494 4,750 871 Atrium II 07/01/2020 1980 958 1,345 1,264 3,567 2,582 North Central Plaza 10/01/2018 1982 2,330 14,511 2,959 19,800 2,155 3100 Timmons 10/01/2018 1975 10,330 3,543 1,427 15,300 1,516 Central Park 10/01/2018 1984 730 2,851 989 4,570 268 601 Sawyer 10/01/2018 1982 3,360 12,796 1,144 17,300 1,782 Prestonwood 10/01/2018 1999 7,410 13,895 1,695 23,000 299 Harwin 10/01/2018 1992 1,960 3,041 279 5,280 (187) Fondren 10/01/2018 2004 1,650 7,326 1,004 9,980 375 Cornerstone 10/01/2018 1984 1,110 1,620 920 3,650 564 Northchase 10/01/2018 1984 1,700 5,821 1,549 9,070 1,235 616 FM 1960 10/01/2018 1983 1,510 8,931 1,269 11,710 (3,139) Gateway 10/01/2018 1983 3,510 22,182 3,408 29,100 1,002 Promenade 10/01/2018 1973-1979 5,750 12,671 1,579 20,000 685 400 North Belt 05/08/2015 1982 2,538 3,800 3,812 10,150 3,025 Commerce Plaza Hillcrest 05/01/2015 1977 6,500 1,031 3,869 11,400 3,038 Corporate Park Place 08/24/2015 1980 2,375 5,215 1,910 9,500 1,625 Skymark Tower 09/02/2015 1985 2,212 4,404 2,230 8,846 2,567 Ashford Crossing 07/31/2015 1983 2,650 4,240 3,710 10,600 2,766 Energy Plaza 12/30/2014 1983 4,403 6,840 6,367 17,610 4,247 Westway 06/01/2016 2001 5,410 11,276 4,950 21,636 798 Three Forest Plaza 12/22/2016 1983 8,910 18,186 8,558 35,654 4,471 Parkway Plaza I & II 03/15/2013 1982 2,373 4,765 2,352 9,490 3,712 Gulf Plaza 03/11/2014 1979-1980 3,488 6,005 4,457 13,950 1,781 Timbercreek 12/30/2014 1984 724 962 1,211 2,897 909 Copperfield 12/30/2014 1986 605 760 1,054 2,419 706 One Technology 11/10/2015 1984 4,894 8,558 6,123 19,575 1,974 Richardson Heights 12/28/2010 1958-1962 4,788 10,890 3,472 19,150 7,409 Bent Tree Green 10/16/2012 1983 3,003 6,272 2,740 12,015 3,905 Cooper Street 05/11/2012 1992 2,653 5,768 2,192 10,613 630 Mitchelldale Business Park 06/13/2014 1977 4,794 9,816 4,565 19,175 3,787 Total $ 146,008 $ 303,416 $ 102,053 $ 551,477 $ 70,909 SCHEDULE III - REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION DECEMBER 31, 2021 (Dollars in thousands) Gross Carrying Amount at December 31, 2021 Property Land Building and Improvements (1) In-place lease value intangible (1) Total Accumulated Depreciation & Amortization Net Book Carrying Value Encumbrances Garden Oaks $ 1,770 $ 19,500 $ 1,021 $ 22,291 $ (2,742) $ 19,549 Quitman 3,130 2,895 351 6,376 (470) 5,906 Chelsea Square 1,570 5,538 494 7,602 (986) 6,616 Mission Centre 2,020 8,008 890 10,918 (1,713) 9,205 Regency 960 1,726 852 3,538 (1,043) 2,495 Spring Valley 3,490 2,595 1,066 7,151 (1,868) 5,283 Northeast Square 1,300 3,551 280 5,131 (628) 4,503 One Mason 2,440 9,541 1,130 13,111 (1,900) 11,211 Tower 2,750 4,208 1,335 8,293 (1,725) 6,568 Preserve 9,730 11,177 3,485 24,392 (4,407) 19,985 Westheimer 3,800 14,454 2,284 20,538 (3,671) 16,867 Walzem Plaza 3,900 11,889 1,840 17,629 (3,389) 14,240 11811 N Freeway 1,980 1,846 2,473 6,299 (2,381) 3,918 Atrium I 2,540 1,587 1,494 5,621 (1,603) 4,018 Atrium II 1,006 3,927 1,264 6,197 (802) 5,395 North Central 2,330 16,666 2,959 21,955 (4,292) 17,663 3100 Timmons 10,330 5,059 1,428 16,817 (1,977) 14,840 Central Park 730 3,119 989 4,838 (1,245) 3,593 601 Sawyer 3,360 14,578 1,144 19,082 (2,363) 16,719 Prestonwood 7,410 14,194 1,695 23,299 (2,829) 20,470 Harwin 1,960 2,853 279 5,092 (606) 4,486 Fondren 1,650 7,701 1,005 10,356 (2,042) 8,314 Cornerstone 1,110 2,184 920 4,214 (1,118) 3,096 Northchase 1,700 7,056 1,549 10,305 (2,190) 8,115 616 FM 1960 1,510 5,792 941 8,243 (1,758) 6,485 Gateway 3,510 23,184 3,343 30,037 (4,797) 25,240 Promenade 5,750 13,356 1,578 20,684 (2,881) 17,803 400 North Belt 2,538 6,825 3,812 13,175 (6,779) 6,396 Commerce Plaza 6,500 4,069 3,869 14,438 (6,294) 8,144 Corporate Park 2,375 6,840 1,910 11,125 (3,871) 7,254 Skymark Tower 2,212 6,971 2,230 11,413 (4,363) 7,050 Ashford Crossing 2,650 7,006 3,710 13,366 (6,263) 7,103 Energy Plaza 4,403 11,087 6,367 21,857 (9,445) 12,412 Westway 5,410 12,075 4,951 22,436 (7,415) 15,021 Three Forest 8,913 22,658 8,557 40,128 (14,185) 25,943 Parkway Plaza 2,372 8,477 2,352 13,201 (5,941) 7,260 Gulf Plaza 3,487 7,786 4,457 15,730 (6,616) 9,114 Timbercreek 724 1,871 1,211 3,806 (1,956) 1,850 Copperfield 605 1,466 1,054 3,125 (1,635) 1,490 One Technology 4,893 10,532 6,123 21,548 (9,318) 12,230 Richardson Heights 4,788 18,300 3,472 26,560 (10,675) 15,885 16,144 Bent Tree Green 3,003 10,177 2,740 15,920 (7,128) 8,792 6,995 Cooper Street 2,653 6,399 2,192 11,244 (4,553) 6,691 6,995 Mitchelldale 4,794 13,603 4,565 22,962 (9,216) 13,746 10,591 Corporate Adjustments (2) — (1,458) — (1,458) 39 (1,419) Total $ 146,056 $ 372,868 $ 101,661 $ 620,585 $ (173,040) $ 447,545 $ 40,725 (1) Amounts include impact of impairments taken in prior periods (2) Amounts consists of elimination of intercompany construction development fees charged by construction manager to real estate assets. The aggregate cost of real estate for federal income tax purposes was $625,991 (unaudited) as of December 31, 2021. SCHEDULE III - REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION DECEMBER 31, 2021 Summary of activity for real estate assets for the years ended December 31, 2021 and 2020, in thousands: Years ended December 31, 2021 2020 Balance at beginning of period $ 607,669 $ 593,457 Additions during the period: Acquisitions — 5,316 Improvements 12,916 14,302 620,585 613,075 Provision for impairment — 5,406 Balance at end of period $ 620,585 $ 607,669 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements as of December 31, 2021 and 2020 and for the years then ended have been prepared by the Company in accordance with accounting principles generally accepted in the United States and pursuant to the rules and regulations of the Securities and Exchange Commission, including Form 10-K and Regulation S-K. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments), which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. |
Consolidation | These consolidated financial statements include the accounts of the Company and its subsidiaries, the Operating Partnership and its subsidiaries, and SPE LLC. All significant intercompany balances and transactions have been eliminated. |
Restatement of Previously Issued Financial Statements | Restatement of Previously Issued Financial StatementsAs noted in the Company's Annual Report (Amendment No. 1) on Form 10-K/A, for the year ended December 31, 2020, the Company restated our consolidated statement of cash flows for the year ended December 31, 2020. See Note 3 – Restatement of Consolidated Financial Statements for additional discussion. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Restricted Cash | Restricted Cash Restricted cash on the accompanying consolidated balance sheets consists of amounts escrowed for future real estate taxes, insurance, capital expenditures and debt service, as required by certain of our mortgage debt |
Financial Instruments | Financial Instruments The accompanying consolidated balance sheets include the following financial instruments: cash and cash equivalents, accrued rent and accounts receivable, accounts payable and accrued expenses and balances due to/due from related parties, as well as related party notes receivable. The Company considers the carrying value of these financial instruments to approximate their respective fair values due to their short-term nature. Disclosure about the fair value of financial instruments is based on relevant information available as of December 31, 2021 and 2020. |
Revenue Recognition | Revenue Recognition The Company's leases are accounted for as operating leases. Certain leases provide for tenant occupancy during perio ds for which no rent is due and/or for increases or decreases in the minimum lease payments over the terms of the leases. Revenue is recognized on a straight-line basis over the terms of the individual leases. Revenue recognition under a lease begins when the tenant takes possession of or controls the physical use of the leased space. When the Company acquires a property, the term of existing leases is considered to commence as of the acquisition date for the purposes of this calculation. The Company's accrued rents are included in accrued rent and accounts receivable, net. The Company defers the recognition of contingent rental income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved. Cost recoveries from tenants are included in the tenant reimbursement and other revenues line item in the consolidated statements of operations in the period the related costs are incurred. The Company’s revenue is primarily derived from leasing activities, which is specifically excluded from ASC 606, Revenue from Contracts with Customers ("ASC 606"). The Company’s tenant reimbursements and other revenue is comprised of tenant reimbursements for real estate taxes, insurance, common area maintenance, and operating expenses. Reimbursements from real estate taxes and certain other expenses are also excluded from ASC 606. Additionally, the Company’s property dispositions have historically been cash sales with no contingencies and no future involvement in the property. As a result, the new guidance did not have an effect on the Company’s real estate transactions. The Company will account future sales of real estate properties in accordance with requirements of ASC 606. In addition to our leasing income, the Company also earns fee revenues by providing certain management and advisory services to related parties. These fees are accounted for within the scope of ASC 606 and are recorded as management and advisory income on the consolidated statements of operations. These services primarily include asset management and advisory, operating and leasing of properties, and construction management. These services are currently provided under various combinations of advisory agreements, property management agreements, and other service agreements (the "Management Agreements"). The wide variety of duties within the Management Agreements makes determining the performance obligations within the contracts a matter of judgment. We have concluded that each of the separately disclosed fee types in the below table represents a separate performance obligation within the Management Agreements. Fee Performance Obligation Satisfied Timing of Payment Description Property Management Over time Due monthly The Company provides property management services on a contractual basis for owners of and investors in office and retail properties. The Company is compensated for our services through a monthly management fee earned based on a fixed fee. We are also often reimbursed for our administrative and payroll costs directly attributable to the properties under management. Revenue is recognized at the end of each month. Property Leasing and Property Acquisition Services Point in time (upon close of a transaction) Upon completion The Company provides strategic advice and execution for owners, investors, and occupiers of real estate in connection with the leasing of office and retail space. The Company is compensated for our services in the form of a commission and, in some instances may earn various forms of variable incentive consideration. Commission is paid upon the occurrence of certain contractual event. For leases, the Company typically satisfies its performance obligation at a point in time when control is transferred. Revenue is recognized in an amount equal to the fees charged by unaffiliated persons rendering comparable services. For acquisitions, our commission is typically paid at the closing date of sale, which represents transfer of control of services to the customer. Asset Management Over time Due monthly The Company earns asset management advisory fees on a recurring, monthly basis for certain properties. The Company is compensated on a monthly basis based on a fixed percentage of respective asset value. Construction Management Point in time (upon close of project) Upon completion Construction management services are performed on a contractual basis for owners of an investors in office and retail properties. The Company is compensated for its services upon completion of a project, when its performance obligation has been completed. Due to the nature of the services being provided under our Management Agreements, each performance obligation has a variable component. Therefore, when we determine the transaction price for the contracts, we are required to constrain our estimate to an amount that is not probable of significant revenue reversal. For most of these fee types, such as acquisition fees and leasing commissions, compensation only occurs if a transaction takes place and the amount of compensation is dependent upon the terms of the transaction. For our property and asset management fees, due to the large number and broad range of possible consideration amounts, we calculate the amount earned at the end of each month. |
Real Estate | Real Estate Allocation of Purchase Price of Acquired Assets Upon the acquisition of real properties, it is the Company’s policy to allocate the purchase price of properties to acquired tangible assets, consisting of land and buildings, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, other value of in-place leases and leasehold improvements and value of tenant relationships, based in each case on their fair values. The Company utilizes internal valuation methods to determine the fair values of the tangible assets of an acquired property (which includes land and buildings). The fair values of above-market and below-market in-place lease values, including below-market renewal options for which renewal has been determined to be reasonably assured, are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (a) the contractual amounts to be paid pursuant to the in-place leases and (b) an estimate of fair market lease rates for the corresponding in-place leases and below-market renewal options, which is generally obtained from independent appraisals, measured over a period equal to the remaining non-cancelable term of the lease. The above-market and below-market lease and renewal option values are capitalized as intangible lease assets or liabilities and amortized as an adjustment of rental revenue over the remaining expected terms of the respective leases. The fair values of in-place leases include direct costs associated with obtaining a new tenant, opportunity costs associated with lost rentals which are avoided by acquiring an in-place lease, and tenant relationships. Direct costs associated with obtaining a new tenant include commissions, tenant improvements, and other direct costs and are estimated based on independent appraisals and management’s consideration of current market costs to execute a similar lease. These direct costs are included in intangible lease assets and are amortized to expense over the remaining terms of the respective leases. The value of opportunity costs is calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease. Customer relationships are valued based on expected renewal of a lease or the likelihood of obtaining a particular tenant for other locations. These intangibles are included in real estate assets in the consolidated balance sheets and are being amortized to expense over the remaining term of the respective leases. The determination of the fair values of the assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, discount rates and other variables. The use of inaccurate estimates would result in an incorrect assessment of the purchase price allocations, which could impact the amount of the Company’s reported net income (loss). Real Estate Joint Ventures and Partnerships To determine the method of accounting for partially owned real estate joint ventures and partnerships, management determines whether an entity is a variable interest entity ("VIE") and, if so, determines which party is the primary beneficiary by analyzing whether we have both the power to direct the entity’s significant economic activities and the obligation to absorb potentially significant losses or receive potentially significant benefits. Significant judgments and assumptions inherent in this analysis include the design of the entity structure, the nature of the entity’s operations, future cash flow projections, the entity’s financing and capital structure, and contractual relationships and terms. We consolidate a VIE when we have determined that we are the primary beneficiary. Primary risks associated with our involvement with our VIEs include the potential funding of the entities’ debt obligations or making additional contributions to fund the entities’ operations or capital activities. Partially owned, non-variable interest real estate joint ventures and partnerships over which we have a controlling financial interest are consolidated in our consolidated financial statements. In determining if we have a controlling financial interest, we consider factors such as ownership interest, authority to make decisions, kick-out rights and substantive participating rights. Partially owned real estate joint ventures and partnerships where we do not have a controlling financial interest, but have the ability to exercise significant influence, are accounted for using the equity method. Management continually analyzes and assesses reconsideration events, including changes in the factors mentioned above, to determine if the consolidation or equity method treatment remains appropriate. Depreciation and amortization Depreciation is computed using the straight-line method over the estimated useful lives of 5 to 39 years for buildings and improvements. Tenant improvements are depreciated using the straight-line method over the lesser of the life of the improvement or the remaining term of the lease. In-place leases are amortized using the straight-line method over the weighted average years remaining calculated on terms of all of the leases in-place when acquired. Impairment The Company reviews its real estate assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of the assets, including accrued rental income, may not be recoverable through operations. The Company determines whether an impairment in value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), including the estimated residual value of the property, with the carrying cost of the property. If impairment is indicated, a loss will be recorded for the amount by which the carrying value of the property exceeds its fair value. Management has determined that there has been no impairment in the carrying value of the Company’s real estate and other assets as of December 31, 2021. The Company recognize impairment of $5,406,000 for the year ended December 31, 2020. Projections of expected future cash flows require management to estimate future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, discount rates, the number of months it takes to re-lease the property and the number of years the property is held for investment. The use of inaccurate assumptions in the future cash flow analysis would result in an incorrect assessment of the property’s future cash flow and fair value and could result in the overstatement of the carrying value of the Company’s real estate and related intangible assets and net income. |
Fair Value Measurement | Fair Value Measurement Fair value measures are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets. Level 2: Directly or indirectly observable inputs, other than quoted prices in active markets. Level 3: Unobservable inputs in which there is little or no market data, which require a reporting entity to develop its own assumptions. Assets and liabilities measured at fair value are based on one or more of the following valuation techniques: Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Cost approach: Amount required to replace the service capacity of an asset (replacement cost). Income approach: Techniques used to convert future amounts to a single amount based on market expectations (including present-value, option-pricing, and excess-earnings models). The Company’s estimates of fair value were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts. The Company classifies assets and liabilities in the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. Recurring fair value measurements: The carrying values of cash and cash equivalents, restricted cash, accrued rent and accounts receivable, other assets and accounts payable and accrued expenses are reasonable estimates of fair values because of the short maturities of these instruments. For our disclosure of debt instrument fair value in Note 8, we use a discounted cash flow analysis based on borrowing rates currently available to the Company for loans with similar terms and maturities, discounting the future contractual interest and principal payments (categorized within Level 2 of the fair value hierarchy). Nonrecurring fair value measurements: Property Impairments The Company reviews its real estate assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of the assets, including accrued rental income, may not be recoverable through operations. Our estimated fair values are determined by utilizing cash flow models, market capitalization rates and market discount rates, or by obtaining third-party broker valuation estimates, or appraisals (categorized within Level 3 of the fair value hierarchy). |
Accrued Rent and Accounts Receivable, net | Accrued Rent and Accounts Receivable, net Accrued rent and accounts receivable includes base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. An allowance for the uncollectible portion of accrued rent and accounts receivable is determined based upon customer credit-worthiness (including expected recovery of the Company’s claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. |
Deferred Leasing Commission Costs, net | Deferred Leasing Commissions Costs, net Leasing commissions are amortized using the straight-line method over the term of the related lease agreements. |
Goodwill | Goodwill GAAP requires the Company to test goodwill for impairment at least annually or more frequently whenever events or circumstances occur indicating goodwill might be impaired. The Company applies a one-step quantitative assessment to determine if the estimated fair value is less than the carrying amount. If the carrying amount exceeds the estimated fair value, the Company will record a goodwill impairment equal to such excess, not to exceed the total amount of goodwill. No goodwill impairment has been recognized in the accompanying consolidated financial statements. |
Noncontrolling Interests | Noncontrolling InterestsNoncontrolling interests is the portion of equity in a subsidiary not attributable to a parent. The ownership interests not held by the parent are considered noncontrolling interests. Accordingly, the Company has reported noncontrolling interests in equity on the consolidated balance sheets but separate from the Company's equity. On the consolidated statements of operations, subsidiaries are reported at the consolidated amount, including both the amount attributable to the Company and noncontrolling interests. |
Stock-Based Compensation | Stock-Based CompensationThe Company follows ASC 718 - Compensation - Stock Compensation, with regard to issuance of stock in payment of services. ASC 718 requires that compensation cost relating to share-based payment transactions be recognized in the consolidated financial statements. The compensation cost is measured based on the estimated grant date fair value, as of the grant date of the Company’s common stock, of the equity or liability instruments issued. Stock-based compensation expense are recorded over the vesting period and is included in general and administrative expense in the accompanying consolidated statements of operations. |
Income Taxes | Income Taxes The Company has elected to be treated as a REIT under the Internal Revenue Code of 1986, as amended, beginning with its taxable year ended December 31, 2011. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of the Company’s annual REIT taxable income to stockholders (which is computed without regard to the dividends-paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, the Company generally will not be subject to federal income tax on income that it distributes as dividends to its stockholders. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost, unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially and adversely affect the Company’s net income and net cash available for distribution to stockholders; however, the Company believes that it is organized and will continue to operate in such a manner as to qualify for treatment as a REIT. For the years ended December 31, 2021 and 2020, the Company incurred a net loss of $12,933,000 and $11,010,000, respectively. The Company formed a taxable REIT subsidiary which may generate future taxable income which may be offset by the net loss carry forward. The Company considers that any deferred tax benefit and corresponding deferred tax asset which may be recorded in light of the net loss carry forward would be properly offset by an equal valuation allowance. Accordingly, no deferred tax benefit or deferred tax asset has been recorded in the consolidated financial statements. The Company is required to recognize in its consolidated financial statements the financial effects of a tax position only if it is determined that it is more likely than not that the tax position will not be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Management has reviewed the Company’s tax positions and is of the opinion that material positions taken by the Company would more likely than not be sustained upon examination. Accordingly, the Company has not recognized a liability related to uncertain tax positions. |
Income (Loss) Per Share | Income (Loss) Per Share |
Concentration of Risk | Concentration of Risk The geographic concentration of the Company’s real estate assets makes it susceptible to adverse economic developments in the State of Texas. Any adverse economic or real estate developments in these markets, such as |
Going Concern Evaluation | Going Concern Evaluation Pursuant to ASC 205-40, “Presentation of Financial Statements – Going Concern,” management is required to evaluate the Company’s ability to continue as a going concern within one year after the date that these consolidated financial statements are issued. The Hartman SPE, LLC loan agreement (the “SASB Loan”) had an initial maturity date of October 9, 2020.The SASB Loan provides for three successive one-year maturity date extensions. On October 9, 2021, SPE LLC executed the second maturity date option to extend the maturity to October 9, 2022. The SASB Loan requires that SPE LLC have a debt yield, as defined, greater than or equal to 12.5%. The second SASB Loan extension was completed on the basis that the debt yield as of June 30, 2021 was 12.9%. Debt yield is calculated by dividing annual net operating income, as defined in the SASB Loan, by debt. The third and final one-year SASB Loan extension is within one year of the issuance of these consolidated financial statements. Uncertainty as to the debt yield calculation as of June 30, 2022 and the Company's ability to exercise the final remaining SASB Loan extension option, require management to conclude, in accordance with guidance provided by ASC 205-40, that there is a substantial doubt about the Company's ability to continue as a going concern within one year of the issuance date of these consolidated financial statements solely on the basis of the uncertainty regarding the loan maturity extension of the SASB Loan. Management believes that SPE LLC will be able to extend the maturity date for the next one year period which will mitigate the maturity date issue. |
Recently Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instrument s — Credit Losses (Topic 326):Measurement of Credit Losses on Financial Instruments . The updated guidance requires measurement and recognition of expected credit losses for financial assets, including trade and other receivables, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This is different from the current guidance as this will require immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets. Generally, the pronouncement requires a modified retrospective method of adoption. This guidance is effective for fiscal years and interim periods within those years beginning after January 2023, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on the consolidated financial statements when adopted. In March 2020, issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . ASU 2020-04 provides optional expedients for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The standard is effective for all entities as of March 12, 2020 through December 31, 2022. An entity can elect to apply the amendments as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to that date that the financial statements are available to be issued. The Company is currently evaluating the impact this guidance will have on the consolidated financial statements when adopted. |
Restatement of Consolidated F_2
Restatement of Consolidated Financial Statements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The impact of the restatement on the consolidated financial statements year ended December 31, 2020 is as follows (in thousands): Consolidated Statement of Cash Flows Year ended December 31, 2020 As Previously Reported Restatement Adjustments As Restated Due to/from related parties $ 11,219 $ (10,611) $ 608 Net cash provided by operating activities 33,757 (10,611) 23,146 Borrowing from an affiliate (1,611) 10,611 9,000 Net cash used in financing activities (23,258) 10,611 (12,647) |
Real Estate (Tables)
Real Estate (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Real Estate [Abstract] | |
Schedule of Real Estate Assets | The Company's real estate assets consisted of the following, in thousands: December 31, 2021 2020 Land $ 146,056 $ 146,056 Buildings and improvements 372,868 359,952 In-place lease value intangible 101,661 101,661 620,585 607,669 Less accumulated depreciation and amortization (173,040) (146,314) Total real estate assets, net $ 447,545 $ 461,355 |
Schedule of Total In-place Lease Intangible Assets and Accumulated Amortization | The amount of total in-place lease intangible asset and the respective accumulated amortization are as follows, in thousands: December 31, 2021 2020 In-place lease value intangible $ 101,661 $ 101,661 Less: In-place leases – accumulated amortization (87,608) (79,470) Acquired lease intangible assets, net $ 14,053 $ 22,191 |
Schedule of Aggregate Future Amortization Amounts From Acquired Lease Intangibles | The estimated aggregate future amortization amounts from acquired lease intangibles are as follows, in thousands: December 31, In-place lease amortization 2022 $ 7,454 2023 5,583 2024 1,016 2025 — 2026 — Total $ 14,053 |
Schedule of the Fair Value of Assets and Liabilities in Acquisition | The following table illustrates the fair value of assets and liabilities of HIREIT and Hartman XIX contributed in the merger on July 1, 2020, as well as the fair value of noncontrolling interest, in thousands: Assets Real estate assets $ 14,543 Cash and cash equivalents, accounts receivable, prepaid expenses and other assets, and due from related parties 5,054 Notes receivable – related party 3,900 Investment in affiliates 201,845 Total assets $ 225,342 Liabilities and noncontrolling interest Notes payable $ 8,100 Accounts payable and accrued expenses, and due to related parties 12,941 Unpaid preferred dividends due to Hartman XIX shareholders 3,868 Acquired noncontrolling interest 1,434 Total liabilities and noncontrolling interest $ 26,343 Net identifiable assets acquired $ 198,999 Total consideration transferred $ 198,999 |
Accrued Rent and Accounts Rec_2
Accrued Rent and Accounts Receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Accrued Rent and Accounts Receivable, net | Accrued rent and accounts receivable, net, consisted of the following, in thousands: December 31, 2021 2020 Tenant receivables $ 6,652 $ 6,581 Accrued rent 11,355 10,360 Allowance for uncollectible accounts (4,769) (4,742) Accrued rents and accounts receivable, net $ 13,238 $ 12,199 |
Deferred Leasing Commission C_2
Deferred Leasing Commission Costs, net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Deferred Leasing Commission Costs, net | Costs which have been deferred consist of the following, in thousands: December 31, 2021 2020 Deferred leasing commissions $ 20,347 $ 19,154 Less: accumulated amortization (9,860) (8,314) Deferred leasing commission costs, net $ 10,487 $ 10,840 |
Future Minimum Rents (Tables)
Future Minimum Rents (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Lessor, Operating Lease, Payments to be Received, Maturity | A summary of minimum future rentals to be received (exclusive of renewals, tenant reimbursements, and contingent rentals) under noncancellable operating leases in existence at December 31, 2021 is as follows, in thousands: December 31, Minimum Future Rents 2022 $ 65,456 2023 54,031 2024 41,357 2025 27,427 2026 18,890 Thereafter 29,018 Total $ 236,179 |
Notes Payable, net (Tables)
Notes Payable, net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Mortgage Notes Payable | The following is a summary of the mortgage notes payable, in thousands: December 31, Property/Facility Payment (1) Maturity Date Rate 2021 2020 Richardson Heights (2) P&I July 1, 2041 4.61 % $ 16,144 $ 16,690 Cooper Street (2) P&I July 1, 2041 4.61 % 6,995 7,211 Bent Tree Green (2) P&I July 1, 2041 4.61 % 6,995 7,211 Mitchelldale (2) P&I July 1, 2041 4.61 % 10,590 10,923 Hartman SPE LLC (3) IO October 9, 2022 1.91 % 259,000 259,000 Hartman XXI IO October 31, 2022 10.00 % 6,012 2,789 $ 305,736 $ 303,824 Less unamortized deferred loan costs (1,959) (2,834) $ 303,777 $ 300,990 (1) Principal and interest (P&I) or interest only (IO). (2) Each promissory note contains a call option wherein the holder of the promissory note may declare the outstanding balance due and payable on either July 1, 2024, July 1, 2029, July 1, 2034, or July 1, 2039. (3) On October 9, 2021, the Company signed a maturity date extension agreement to extend the maturity date for one additional year to October 9, 2022. One option remains to extend for one additional one-year term. Notice to exercise the next one-year maturity extension option is due not less than 30 days nor more than 60 days from the current maturity date. Exercise of each extension option is subject to certain compliance and non-default requirements and a minimum debt yield of 12.5%. |
Annual Maturities of Notes | Annual maturities of notes payable as of December 31, 2021 are as follows, in thousands: December 31, Amount Due 2022 $ 266,386 2023 1,439 2024 1,507 2025 1,578 2026 1,652 Thereafter 33,174 Total $ 305,736 |
Amortized Loan Costs | The Company’s loan costs are amortized using the straight-line method over the term of the loans, which approximates the interest method. Costs which have been deferred consist of the following, in thousands: December 31, 2021 2020 Deferred loan costs $ 5,399 $ 5,345 Less: deferred loan cost accumulated amortization (3,440) (2,511) Total cost, net of accumulated amortization $ 1,959 $ 2,834 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | Only those items that have a dilutive impact on basic (loss) per share are included in the diluted loss per share. December 31, 2021 2020 Numerator: Net (loss) income attributable to common stockholders (in thousands) $ (12,336) $ (13,165) Denominator: Weighted average number of common shares outstanding, basic and diluted (in thousands) 35,202 26,235 Basic and diluted (loss) income per common share: Net (loss) income attributable to common stockholders per share $ (0.35) $ (0.50) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Cash Distribution Percentage | For federal income tax purposes, the cash distributed to stockholders was characterized as follows for the years ended December 31: 2021 2020 Ordinary income (unaudited) 40.4 % 35.3 % Return of capital (unaudited) 59.6 % 64.7 % Capital gains distribution (unaudited) — % — % Total 100.0 % 100.0 % |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The table below shows the related party balances the Company owes to and is owed by, in thousands: December 31, 2021 2020 Due from (to) vREIT XXI $ — $ 871 Due from (to) other related parties 115 190 $ 115 $ 1,061 The following table reflects the net note receivable asset due to the Company, reflected in the accompanying consolidated balance sheets and the Company's maximum exposure to debt guarantees, in thousands: December 31, 2021 2020 Note receivable, net $ 1,726 $ 1,726 Maximum exposure $ 24,748 $ 24,998 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Distributions Paid in Cash and Through Distribution Reinvestment Plan | The following table reflects the total distributions the Company has paid in cash (in thousands, except per share amounts) and the amount through the distribution reinvestment plan, including paid per common share, in each indicated quarter: Quarter Paid Distributions per Common Share Total Distributions Paid 2021 4 th Quarter $ 0.112 $ 3,927 3 rd Quarter 0.104 3,662 2 nd Quarter 0.092 3,246 1 st Quarter 0.087 3,082 Total $ 0.395 $ 13,917 2020 4 th Quarter $ 0.117 $ 4,141 3 rd Quarter 0.148 5,211 2 nd Quarter 0.175 3,222 1 st Quarter 0.175 3,223 Total $ 0.615 $ 15,797 |
Organization and Business (Deta
Organization and Business (Details) ft² in Millions | Dec. 31, 2021property | Dec. 31, 2021padSite | Dec. 31, 2021landDevelopment | Dec. 31, 2021ft² | Dec. 31, 2020property | Dec. 31, 2020padSite | Dec. 31, 2020landDevelopment | Dec. 31, 2020ft² | Jul. 01, 2020 | Oct. 01, 2018USD ($)property |
Schedule of Equity Method Investments [Line Items] | ||||||||||
Number of real estate properties | 39 | |||||||||
Area of real estate | ft² | 6.8 | |||||||||
Advisor | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Ownership percentage acquired | 70.00% | |||||||||
Texas | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Number of real estate properties | 4 | 2 | 4 | 2 | ||||||
Commercial properties | 44 | 44 | ||||||||
Area of real estate | ft² | 6.8 | |||||||||
Richardson, Arlington and Dallas, Texas | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Number of real estate properties | 15 | 15 | ||||||||
Houston, Texas | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Number of real estate properties | 26 | 26 | ||||||||
San Antonio, Texas | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Number of real estate properties | 3 | 3 | ||||||||
Hartman SPE, LLC | Variable Interest Entity, Primary Beneficiary | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Number of real estate properties | 39 | |||||||||
Notes Payable to Banks | Hartman SPE, LLC | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Debt instrument, face amount | $ | $ 259,000,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | Oct. 09, 2021extension | Oct. 01, 2018extensionOption | Dec. 31, 2021USD ($)propertyextensionshares | Dec. 31, 2020USD ($)shares | Jun. 30, 2021 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Bank overdraft | $ 2,710,000 | $ 792,000 | |||
Restricted cash | 18,972,000 | 24,176,000 | |||
Provision for impairment | 0 | 5,406,000 | |||
Goodwill impairment | 0 | 0 | |||
Net (loss) income | $ (12,933,000) | $ (11,010,000) | |||
Antidilutive securities (in shares) | shares | 0 | 0 | |||
SPE Loan | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Number of extensions | property | 3 | ||||
Debt instrument, term, extension period | 1 year | ||||
Minimum debt yield | 12.50% | 12.90% | |||
Notes Payable to Banks | Hartman SPE, LLC | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Number of extensions | 1 | 3 | 1 | ||
Buildings and Improvements | Minimum | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Useful life | 5 years | ||||
Buildings and Improvements | Maximum | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Useful life | 39 years |
Restatement of Consolidated F_3
Restatement of Consolidated Financial Statements - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided by operating activities | $ 21,393 | $ 23,146 |
Net cash used in financing activities | $ (12,930) | (12,647) |
Revision of Prior Period, Error Correction, Adjustment | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided by operating activities | (10,611) | |
Net cash used in financing activities | $ 10,611 |
Restatement of Consolidated F_4
Restatement of Consolidated Financial Statements - Schedule of Effect of Restatement on Quarterly Financial Statements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Due to/from related parties | $ 608 | |
Net cash provided by operating activities | $ 21,393 | 23,146 |
Borrowings from an affiliate | 6,208 | 9,000 |
Net cash used in financing activities | $ (12,930) | (12,647) |
As Previously Reported | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Due to/from related parties | 11,219 | |
Net cash provided by operating activities | 33,757 | |
Borrowings from an affiliate | (1,611) | |
Net cash used in financing activities | (23,258) | |
Restatement Adjustments | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Due to/from related parties | (10,611) | |
Net cash provided by operating activities | (10,611) | |
Borrowings from an affiliate | 10,611 | |
Net cash used in financing activities | $ 10,611 |
Real Estate - Real Estate Asset
Real Estate - Real Estate Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Real Estate [Abstract] | ||
Land | $ 146,056 | $ 146,056 |
Buildings and improvements | 372,868 | 359,952 |
In-place lease value intangible | 101,661 | 101,661 |
Total gross real estate assets | 620,585 | 607,669 |
Less accumulated depreciation and amortization | (173,040) | (146,314) |
Total real estate assets, net | $ 447,545 | $ 461,355 |
Real Estate - Additional Inform
Real Estate - Additional Information (Details) $ / shares in Units, ft² in Millions | Jul. 01, 2020USD ($)shares | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2021shares | Dec. 31, 2021 | Dec. 31, 2021property | Dec. 31, 2021padSite | Dec. 31, 2021landDevelopment | Dec. 31, 2021ft² | Dec. 31, 2020shares | Dec. 31, 2020property | Dec. 31, 2020padSite | Dec. 31, 2020landDevelopment | Dec. 31, 2020ft² | Jul. 01, 2020shares | Jul. 01, 2020 | Jul. 01, 2020padSite | Jul. 01, 2020commercialLandDevelopment | Jul. 01, 2020$ / shares | Jun. 30, 2020USD ($)$ / sharesshares | Oct. 01, 2018property |
Related Party Transaction [Line Items] | |||||||||||||||||||||
Depreciation expense | $ | $ 18,588,000 | $ 18,910,000 | |||||||||||||||||||
Provision for impairment | $ | 0 | 5,406,000 | |||||||||||||||||||
Amortization expense | $ | 8,138,000 | 10,586,000 | |||||||||||||||||||
Area of real estate | ft² | 6.8 | ||||||||||||||||||||
Number of real estate properties | property | 39 | ||||||||||||||||||||
Acquisition fees | $ | 0 | 0 | |||||||||||||||||||
Asset management fees to advisor | $ | 0 | 880,000 | |||||||||||||||||||
Preferred stock, shares issued (in shares) | 1,000 | 1,000 | |||||||||||||||||||
Preferred stock, shares outstanding (in shares) | 1,000 | 1,000 | |||||||||||||||||||
Common stock, shares issued (in shares) | 35,110,421 | 35,318,862 | |||||||||||||||||||
Common stock, shares outstanding (in shares) | 35,110,421 | 35,318,862 | |||||||||||||||||||
Investment in affiliate | $ | $ 201,000 | $ 201,000 | |||||||||||||||||||
Hartman SPE, LLC | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Net asset value | $ | $ 323,934,000 | ||||||||||||||||||||
HIREIT | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Common stock, shares issued (in shares) | 347,826 | ||||||||||||||||||||
Investment in affiliate | $ | $ 2,845,000 | ||||||||||||||||||||
HIREIT | Common Stock | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Net asset value (in USD per share) | $ / shares | $ 8.18 | ||||||||||||||||||||
HIREIT Acquisition | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Number of real estate properties | 1 | 1 | 2 | ||||||||||||||||||
Merger considerations | $ | $ 79,480,000 | ||||||||||||||||||||
Ownership percentage | 70.00% | ||||||||||||||||||||
Shares acquired (in shares) | 602,842 | ||||||||||||||||||||
Value of shares acquired | $ | $ 6,525,000 | ||||||||||||||||||||
HIREIT Acquisition | Hartman SPE, LLC | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Ownership percentage | 34.38% | ||||||||||||||||||||
HIREIT Acquisition | Advisor | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Ownership percentage | 30.00% | ||||||||||||||||||||
Merger considerations | $ | 119,519,000 | ||||||||||||||||||||
HIREIT Acquisition | Allen R Hartman | Chief Executive Officer | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Ownership percentage | 70.00% | 70.00% | |||||||||||||||||||
HIREIT Acquisition | Common Stock | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Shares issued (in shares) | 9,525,691 | ||||||||||||||||||||
HIREIT Acquisition | HIREIT | Common Stock | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Shares issued (in shares) | 12,378,718 | ||||||||||||||||||||
Shares outstanding (in shares) | 12,378,718 | ||||||||||||||||||||
HIREIT Acquisition | HIROP | OP Unit | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Shares issued (in shares) | 1,214,197 | ||||||||||||||||||||
Shares outstanding (in shares) | 1,214,197 | ||||||||||||||||||||
HIREIT Acquisition | Hartman XX | OP Unit | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Shares issued (in shares) | 913,346 | ||||||||||||||||||||
Hartman XIX | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Number of real estate properties | commercialLandDevelopment | 1 | ||||||||||||||||||||
Merger considerations | $ | $ 112,994,000 | ||||||||||||||||||||
Acquisition share price (in USD per share) | $ / shares | $ 10.82 | ||||||||||||||||||||
Hartman XIX | Hartman SPE, LLC | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Ownership percentage | 26.99% | ||||||||||||||||||||
Hartman XIX | Common Stock | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Shares issued (in shares) | 7,343,511 | ||||||||||||||||||||
Hartman XIX | Hartman XIX | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Preferred stock, shares issued (in shares) | 5,538,305 | ||||||||||||||||||||
Preferred stock, shares outstanding (in shares) | 5,538,305 | ||||||||||||||||||||
Common stock, shares issued (in shares) | 100 | ||||||||||||||||||||
Common stock, shares outstanding (in shares) | 100 | ||||||||||||||||||||
Texas | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Commercial properties | property | 44 | 44 | |||||||||||||||||||
Area of real estate | ft² | 6.8 | ||||||||||||||||||||
Number of real estate properties | 4 | 2 | 4 | 2 | |||||||||||||||||
Richardson, Arlington and Dallas, Texas | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Number of real estate properties | property | 15 | 15 | |||||||||||||||||||
Houston, Texas | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Number of real estate properties | property | 26 | 26 | |||||||||||||||||||
San Antonio, Texas | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Number of real estate properties | property | 3 | 3 |
Real Estate - In-Place Lease In
Real Estate - In-Place Lease Intangible Assets and Accumulated Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Real Estate [Abstract] | ||
In-place lease value intangible | $ 101,661 | $ 101,661 |
Less: In-place leases – accumulated amortization | (87,608) | (79,470) |
Acquired lease intangible assets, net | $ 14,053 | $ 22,191 |
Real Estate - Future Amortizati
Real Estate - Future Amortization From Acquired Lease Intangibles (Details) - In-place leases $ in Thousands | Dec. 31, 2021USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
2022 | $ 7,454 |
2023 | 5,583 |
2024 | 1,016 |
2025 | 0 |
2026 | 0 |
Total | $ 14,053 |
Real Estate - Acquisition Asset
Real Estate - Acquisition Assets and Liabilities (Details) - Hartman XIX $ in Thousands | Jul. 01, 2020USD ($) |
Business Acquisition [Line Items] | |
Real estate assets | $ 14,543 |
Cash and cash equivalents, accounts receivable, prepaid expenses and other assets, and due from related parties | 5,054 |
Notes receivable – related party | 3,900 |
Investment in affiliates | 201,845 |
Total assets | 225,342 |
Notes payable | 8,100 |
Accounts payable and accrued expenses, and due to related parties | 12,941 |
Unpaid preferred dividends due to Hartman XIX shareholders | 3,868 |
Acquired noncontrolling interest | 1,434 |
Total liabilities and noncontrolling interest | 26,343 |
Net identifiable assets acquired | 198,999 |
Total consideration transferred | $ 198,999 |
Accrued Rent and Accounts Rec_3
Accrued Rent and Accounts Receivable, net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Receivables [Abstract] | ||
Tenant receivables | $ 6,652 | $ 6,581 |
Accrued rent | 11,355 | 10,360 |
Allowance for uncollectible accounts | (4,769) | (4,742) |
Accrued rents and accounts receivable, net | 13,238 | 12,199 |
Bad debt expense | $ 397 | $ 2,695 |
Accrued Rent and Accounts Rec_4
Accrued Rent and Accounts Receivable, net - Additional (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Receivables [Abstract] | ||
Allowance for uncollectible accounts | $ 4,769 | $ 4,742 |
Deferred Leasing Commission C_3
Deferred Leasing Commission Costs, net (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Deferred leasing commissions | $ 20,347 | $ 19,154 |
Less: accumulated amortization | (9,860) | (8,314) |
Deferred leasing commission costs, net | $ 10,487 | $ 10,840 |
Future Minimum Rents (Details)
Future Minimum Rents (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Leases [Abstract] | |
2022 | $ 65,456 |
2023 | 54,031 |
2024 | 41,357 |
2025 | 27,427 |
2026 | 18,890 |
Thereafter | 29,018 |
Total | $ 236,179 |
Notes Payable, net - Additional
Notes Payable, net - Additional Information (Details) | Oct. 09, 2021extensionday | Oct. 01, 2018USD ($)propertyextensionOption | Dec. 31, 2021USD ($)dayloanextension | Dec. 31, 2020USD ($) | Mar. 29, 2022USD ($) |
Debt Instrument [Line Items] | |||||
Number of term loans outstanding | loan | 4 | ||||
Outstanding balance | $ 305,736,000 | $ 303,824,000 | |||
Number of real estate properties | property | 39 | ||||
Interest expense incurred | 8,454,000 | 9,929,000 | |||
Interest expense payable | 315,000 | 867,000 | |||
Hartman SPE, LLC | |||||
Debt Instrument [Line Items] | |||||
Outstanding balance | $ 259,000,000 | 259,000,000 | |||
Minimum debt yield | 12.50% | 12.50% | |||
East West Bank Master Credit Facility Agreement II | Subsequent Event | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Increase in borrowing capacity | $ 1,625,000 | ||||
Secured Debt | Richardson Heights, Cooper Street, Bent Tree Green And Mitchelldale Property Loans | |||||
Debt Instrument [Line Items] | |||||
Number of term loans outstanding | loan | 4 | ||||
Amortization term | 27 years | ||||
Fixed interest rate | 4.61% | ||||
Outstanding balance | $ 40,724,000 | 42,035,000 | |||
Hartman SPE, LLC | Notes Payable to Banks | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 259,000,000 | ||||
Term of debt instrument | 5 years | ||||
Initial term of debt instrument | 2 years | ||||
Number of extensions | 1 | 3 | 1 | ||
Debt instrument, extension term | 1 year | 1 year | 1 year | ||
Hartman SPE, LLC | LIBOR | Notes Payable to Banks | |||||
Debt Instrument [Line Items] | |||||
Variable rate spread | 1.80% | ||||
Maximum | Hartman SPE, LLC | Notes Payable to Banks | |||||
Debt Instrument [Line Items] | |||||
Extension term in days | day | 60 | 60 | |||
Maximum | Hartman SPE, LLC | LIBOR | Notes Payable to Banks | |||||
Debt Instrument [Line Items] | |||||
Variable rate spread | 3.75% | ||||
Minimum | Hartman SPE, LLC | Notes Payable to Banks | |||||
Debt Instrument [Line Items] | |||||
Extension term in days | day | 30 | 30 | |||
Fair Value | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, fair value disclosure | $ 310,271,000 | 315,389,000 | |||
Book Value | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, fair value disclosure | $ 305,736,000 | $ 303,824,000 |
Notes Payable, net - Summary of
Notes Payable, net - Summary of Mortgage Notes Payable (Details) $ in Thousands | Oct. 09, 2021extensionday | Oct. 01, 2018extensionOption | Dec. 31, 2021USD ($)dayextension | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 305,736 | $ 303,824 | ||
Less unamortized deferred loan costs | (1,959) | (2,834) | ||
Total | $ 303,777 | 300,990 | ||
Notes Payable to Banks | Hartman SPE, LLC | ||||
Debt Instrument [Line Items] | ||||
Number of extensions | 1 | 3 | 1 | |
Debt instrument, extension term | 1 year | 1 year | 1 year | |
Notes Payable to Banks | Hartman SPE, LLC | Minimum | ||||
Debt Instrument [Line Items] | ||||
Extension term in days | day | 30 | 30 | ||
Notes Payable to Banks | Hartman SPE, LLC | Maximum | ||||
Debt Instrument [Line Items] | ||||
Extension term in days | day | 60 | 60 | ||
Richardson Heights | ||||
Debt Instrument [Line Items] | ||||
Rate | 4.61% | |||
Long-term debt, gross | $ 16,144 | 16,690 | ||
Cooper Street | ||||
Debt Instrument [Line Items] | ||||
Rate | 4.61% | |||
Long-term debt, gross | $ 6,995 | 7,211 | ||
Bent Tree Green | ||||
Debt Instrument [Line Items] | ||||
Rate | 4.61% | |||
Long-term debt, gross | $ 6,995 | 7,211 | ||
Mitchelldale | ||||
Debt Instrument [Line Items] | ||||
Rate | 4.61% | |||
Long-term debt, gross | $ 10,590 | 10,923 | ||
Hartman SPE, LLC | ||||
Debt Instrument [Line Items] | ||||
Rate | 1.91% | |||
Long-term debt, gross | $ 259,000 | 259,000 | ||
Minimum debt yield | 12.50% | 12.50% | ||
Hartman XXI | ||||
Debt Instrument [Line Items] | ||||
Rate | 10.00% | |||
Long-term debt, gross | $ 6,012 | $ 2,789 |
Notes Payable, net - Annual Mat
Notes Payable, net - Annual Maturities of Notes Payable (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
2022 | $ 266,386 | |
2023 | 1,439 | |
2024 | 1,507 | |
2025 | 1,578 | |
2026 | 1,652 | |
Thereafter | 33,174 | |
Total | $ 305,736 | $ 303,824 |
Notes Payable, net - Amortizati
Notes Payable, net - Amortization of Loan Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
Deferred loan costs | $ 5,399 | $ 5,345 |
Less: deferred loan cost accumulated amortization | (3,440) | (2,511) |
Total cost, net of accumulated amortization | $ 1,959 | $ 2,834 |
Loss Per Share (Details)
Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | ||
Net (loss) income attributable to common stockholders | $ (12,336) | $ (13,165) |
Net (loss) income attributable to common stockholders | $ (12,336) | $ (13,165) |
Denominator: | ||
Weighted average number of common shares outstanding, basic (in shares) | 35,202 | 26,235 |
Weighted average number of common shares outstanding, diluted (in shares) | 35,202 | 26,235 |
Basic and diluted (loss) income per common share: | ||
Net loss attributable to common stockholders per share, basic (in USD per share) | $ (0.35) | $ (0.50) |
Net loss attributable to common stockholders per share, diluted (in USD per share) | $ (0.35) | $ (0.50) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Ordinary income (unaudited) | 40.40% | 35.30% |
Return of capital (unaudited) | 59.60% | 64.70% |
Capital gains distribution (unaudited) | 0.00% | 0.00% |
Total | 100.00% | 100.00% |
Provision for Texas franchise tax | $ 857,080 | $ 192,000 |
Real Estate Held for Developm_2
Real Estate Held for Development (Details) ft² in Millions | Dec. 31, 2021apadSite | Dec. 31, 2020ft² | Jul. 01, 2020padSite | Jul. 01, 2020commercialLandDevelopment | Oct. 01, 2018property |
Real Estate [Line Items] | |||||
Area of real estate | ft² | 6.8 | ||||
Number of real estate properties | property | 39 | ||||
HIREIT Acquisition | |||||
Real Estate [Line Items] | |||||
Number of real estate properties | 1 | 1 | 2 | ||
Fort Worth, Texas | |||||
Real Estate [Line Items] | |||||
Area of real estate | 17 | ||||
Grand Prairie, Texas | |||||
Real Estate [Line Items] | |||||
Area of real estate | 10 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | Mar. 11, 2022 | Jul. 01, 2020 | May 17, 2016 | Feb. 28, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Related Party Transaction [Line Items] | ||||||||
Reduction of interest payable from Hartman XXI settlement | $ 1,151,000 | $ 0 | ||||||
Reduction of principal on note payable from affiliate from Hartman XXI settlement | 2,984,000 | 0 | ||||||
Reduction of due from related parties from Hartman XXI settlement | 4,135,000 | 0 | ||||||
Long-term debt, gross | 305,736,000 | 303,824,000 | ||||||
Subsequent Event | ||||||||
Related Party Transaction [Line Items] | ||||||||
Reduction of interest payable from Hartman XXI settlement | $ 1,151,000 | |||||||
Reduction of principal on note payable from affiliate from Hartman XXI settlement | 2,984,000 | |||||||
Reduction of due from related parties from Hartman XXI settlement | $ 4,135,000 | |||||||
HIREIT Acquisition | ||||||||
Related Party Transaction [Line Items] | ||||||||
Ownership percentage | 70.00% | |||||||
Shares acquired (in shares) | 602,842 | |||||||
Value of shares acquired | $ 6,525,000 | |||||||
Variable Interest Entity, Primary Beneficiary | ||||||||
Related Party Transaction [Line Items] | ||||||||
Maximum exposure | $ 24,748,000 | 24,998,000 | ||||||
Allen R Hartman | Chief Executive Officer | HIREIT Acquisition | ||||||||
Related Party Transaction [Line Items] | ||||||||
Ownership percentage | 70.00% | 70.00% | ||||||
Property Manager | Affiliated Entity | HIREIT Acquisition | ||||||||
Related Party Transaction [Line Items] | ||||||||
Ownership percentage | 30.00% | |||||||
Texas Limited Liability Company | Affiliated Entity | Asset Management Fees Payable | ||||||||
Related Party Transaction [Line Items] | ||||||||
Property management fees and reimbursements | $ 0 | 4,118,000 | ||||||
Payments for leasing commissions | 0 | 1,534,000 | ||||||
Asset management fees | $ 0 | 880,000 | ||||||
Percentage of monthly asset costs due to related parties | 0.0625% | |||||||
Texas Limited Liability Company | Affiliated Entity | Construction Management Fees Payable | ||||||||
Related Party Transaction [Line Items] | ||||||||
Asset management fees | $ 0 | 309,000 | ||||||
Hartman Income REIT, Inc. | Affiliated Entity | Dividend Distributions | ||||||||
Related Party Transaction [Line Items] | ||||||||
Amounts of transaction with related party | 0 | 213,000 | ||||||
Hartman vREIT XXI | ||||||||
Related Party Transaction [Line Items] | ||||||||
Long-term debt, gross | $ 6,012,000 | 2,789,000 | ||||||
Hartman vREIT XXI | Affiliated Entity | Loan From Related Party To Company | ||||||||
Related Party Transaction [Line Items] | ||||||||
Note payable to related party | $ 10,000,000 | |||||||
Debt instrument, stated interest rate | 10.00% | |||||||
Interest expense, related party | $ 624,000 | 505,000 | ||||||
Hartman TRS, Inc. | Affiliated Entity | Loan From Company To Related Party Hartman Retail II Holdings Co | ||||||||
Related Party Transaction [Line Items] | ||||||||
Note receivable, related parties | $ 7,231,000 | 1,726,000 | 1,726,000 | |||||
Loans receivable, face amount | $ 8,820,000 | |||||||
Interest income, related party | 0 | 179,000 | ||||||
Hartman TRS, Inc. | Affiliated Entity | Loan From Company To Related Party | ||||||||
Related Party Transaction [Line Items] | ||||||||
Origination fees, percentage | 2.00% | |||||||
Loans receivable, interest rate | 10.00% | |||||||
Hartman TRS, Inc. | Affiliated Entity | Loan From Company To Related Party Hartman Ashford Bayou, LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Note receivable, related parties | 0 | 0 | $ 3,830,000 | |||||
Loans receivable, face amount | $ 3,500,000 | |||||||
Origination fees, percentage | 2.00% | |||||||
Loans receivable, interest rate | 10.00% | |||||||
Interest income, related party | 173,000 | 174,000 | ||||||
Hartman TRS, Inc. | Affiliated Entity | Loan From Company To Related Party Hartman Retail III Holdings Co | ||||||||
Related Party Transaction [Line Items] | ||||||||
Note receivable, related parties | $ 6,782,455 | |||||||
Loans receivable, face amount | $ 7,500,000 | |||||||
Interest income, related party | 0 | 126,000 | ||||||
Hartman Short Term Income Properties XIX, Inc. | Affiliated Entity | Loan From Company To Related Party Hartman Retail II Holdings Co | ||||||||
Related Party Transaction [Line Items] | ||||||||
Note receivable, related parties | $ 0 | 0 | ||||||
Hartman Short Term Income Properties XIX, Inc. | Affiliated Entity | Loan From Company To Related Party | ||||||||
Related Party Transaction [Line Items] | ||||||||
Loans receivable, interest rate | 6.00% | |||||||
Interest income, related party | $ 0 | 448,000 | ||||||
Hartman Short Term Income Properties XIX, Inc. | Affiliated Entity | Loan From Company To Related Party Hartman Retail III Holdings Co | ||||||||
Related Party Transaction [Line Items] | ||||||||
Note receivable, related parties | $ 0 | $ 0 | ||||||
Hartman Retail III Holdings Company, Inc. | Affiliated Entity | Loan From Company To Related Party Hartman Retail III Holdings Co | ||||||||
Related Party Transaction [Line Items] | ||||||||
Loans receivable, interest rate | 10.00% | |||||||
Related party origination fee percentage of amounts advanced | 2.00% | |||||||
Common Stock | Hartman SPE, LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Shares issued in exchange for ownership (in shares) | 1,198,228 | |||||||
Ownership percentage | 2.47% | |||||||
Common Stock | Hartman Income REIT, Inc. | Affiliated Entity | Acquisition Of Related Party Stock | HIREIT Acquisition | ||||||||
Related Party Transaction [Line Items] | ||||||||
Shares acquired (in shares) | 1,561,523 | |||||||
Value of shares acquired | $ 8,978,000 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transactions (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | ||
Due to/from related parties | $ 608 | |
Variable Interest Entity, Primary Beneficiary | ||
Related Party Transaction [Line Items] | ||
Note receivable, net | $ 1,726 | 1,726 |
Maximum exposure | 24,748 | 24,998 |
Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Due to/from related parties | 115 | 1,061 |
Hartman vREIT XXI | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Due to/from related parties | 0 | 871 |
Other Related Party | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Due to/from related parties | $ 115 | $ 190 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) $ / shares in Units, $ in Thousands | Jul. 21, 2017$ / shares | Dec. 31, 2021USD ($)vote$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Jul. 28, 2020USD ($) |
Class of Stock [Line Items] | ||||
Number of shareholder votes per share | vote | 1 | |||
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 | ||
Common stock, par value (in USD per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Convertible, non-voting shares authorized (in shares) | 200,000,000 | 200,000,000 | ||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Preferred stock, shares issued (in shares) | 1,000 | 1,000 | ||
Preferred stock, shares outstanding (in shares) | 1,000 | 1,000 | ||
Contribution match value | $ | $ 467 | $ 199 | ||
Richard Ruskey | ||||
Class of Stock [Line Items] | ||||
Value of restricted shares granted as compensation for merger | $ | $ 100 | |||
John Ostroot | ||||
Class of Stock [Line Items] | ||||
Value of restricted shares granted as compensation for merger | $ | 100 | |||
Jack Tompkins | ||||
Class of Stock [Line Items] | ||||
Value of restricted shares granted as compensation for merger | $ | 100 | |||
Chad Cardwell | ||||
Class of Stock [Line Items] | ||||
Value of restricted shares granted as compensation for merger | $ | $ 100 | |||
XIX Merger Agreement | ||||
Class of Stock [Line Items] | ||||
Common stock, par value (in USD per share) | $ / shares | $ 0.01 | |||
Conversion rate | 9,171.98 | |||
HIREIT Merger | ||||
Class of Stock [Line Items] | ||||
Conversion rate | 0.752222 | |||
HIREIT Merger | Subordinated Common Stock | ||||
Class of Stock [Line Items] | ||||
Conversion rate | 0.863235 | |||
HIREIT Merger | Common Stock | ||||
Class of Stock [Line Items] | ||||
Conversion rate | 0.752222 | |||
Convertible Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Preferred stock, shares issued (in shares) | 1,000 | 1,000 | ||
Preferred stock, shares outstanding (in shares) | 1,000 | 1,000 | ||
Cumulative, non-compounded annual rate of return | 6.00% | |||
Conversion terms, performance threshold | 6.00% | |||
Conversion terms, percentage of excess enterprise value | 15.00% | |||
8% Cumulative Preferred Stock | XIX Merger Agreement | ||||
Class of Stock [Line Items] | ||||
Conversion rate | 1.238477 | |||
Preferred stock dividend rate | 8.00% | |||
9% Cumulative Preferred Stock | XIX Merger Agreement | ||||
Class of Stock [Line Items] | ||||
Conversion rate | 1.238477 | |||
Preferred stock dividend rate | 9.00% | |||
Restricted Stock | ||||
Class of Stock [Line Items] | ||||
Number of shares granted (in shares) | 17,889 | 42,964 | ||
Stock-based compensation expense | $ | $ 200 | $ 538 |
Stockholders' Equity - Distribu
Stockholders' Equity - Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | ||||||||||
Distributions (in USD per share) | $ 0.112 | $ 0.104 | $ 0.092 | $ 0.087 | $ 0.117 | $ 0.148 | $ 0.175 | $ 0.175 | $ 0.395 | $ 0.615 |
Total Distributions Paid | $ 3,927 | $ 3,662 | $ 3,246 | $ 3,082 | $ 4,141 | $ 5,211 | $ 3,222 | $ 3,223 | $ 13,917 | $ 15,797 |
Incentive Awards Plan (Details)
Incentive Awards Plan (Details) | 12 Months Ended |
Dec. 31, 2021shares | |
Share-based Payment Arrangement [Abstract] | |
Shares reserve for issuance (in shares) | 5,000,000 |
Percentage of outstanding stock maximum | 10.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Mar. 24, 2022 | May 26, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Loss Contingencies [Line Items] | ||||
Provision for impairment | $ 0 | $ 5,406,000 | ||
Subsequent Event | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, damages awarded in settlement | $ 7,871,000 | |||
Pending Litigation | ||||
Loss Contingencies [Line Items] | ||||
Amount sought by plaintiff in litigation | $ 8,400,000 | |||
Litigation amount sought related to wholly owned properties of the company | $ 7,600,000 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | ||
Contribution match value | $ 467 | $ 199 |
Defined contribution plan, income | 1,011 | 0 |
Stock matching liability | $ 1,613 | $ 2,232 |
Subsequent events (Details)
Subsequent events (Details) ft² in Millions | Mar. 24, 2022USD ($) | Feb. 10, 2022USD ($)installment | Dec. 31, 2021USD ($)a | Dec. 31, 2020USD ($)ft² |
Subsequent Event [Line Items] | ||||
Long-term debt, gross | $ 305,736,000 | $ 303,824,000 | ||
Area of real estate | ft² | 6.8 | |||
Fort Worth, Texas | ||||
Subsequent Event [Line Items] | ||||
Area of real estate | a | 17 | |||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Loss contingency, damages awarded in settlement | $ 7,871,000 | |||
Judgement loss against entity | 6,731,000 | |||
Judgment interest and attorney fees | $ 370,000 | |||
Subsequent Event | Secured Promissory Notes | East West Bank | ||||
Subsequent Event [Line Items] | ||||
Long-term debt, gross | $ 2,645,000 | |||
Proceeds from loans | $ 2,528,000 | |||
Rate | 4.25% | |||
Principal and interest payment | $ 225,600 | |||
Number of installments | installment | 12 | |||
Subsequent Event | Secured Promissory Notes | Prime rate | East West Bank | ||||
Subsequent Event [Line Items] | ||||
Variable rate spread | 1.00% |
Schedule III - Real Estate As_2
Schedule III - Real Estate Assets and Accumulated Depreciation and Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | $ 146,008 | ||
Building and Improvements | 303,416 | ||
In-place lease value intangible | 102,053 | ||
Total | 551,477 | ||
Post-acquisition Improvements | 70,909 | ||
Gross Carrying Amount | |||
Land | 146,056 | ||
Building and improvements | 372,868 | ||
In-place lease value intangible | 101,661 | ||
Total | 620,585 | $ 607,669 | $ 593,457 |
Accumulated Depreciation & Amortization | 173,040 | ||
Net Book Carrying Value | 447,545 | ||
Encumbrances | 40,725 | ||
Aggregate cost of real estate for federal income tax purposes | 625,991 | ||
Corporate Adjustments | |||
Gross Carrying Amount | |||
Land | 0 | ||
Building and improvements | 1,458 | ||
In-place lease value intangible | 0 | ||
Total | 1,458 | ||
Accumulated Depreciation & Amortization | 39 | ||
Net Book Carrying Value | 1,419 | ||
Encumbrances | |||
Garden Oaks | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 1,770 | ||
Building and Improvements | 17,969 | ||
In-place lease value intangible | 1,021 | ||
Total | 20,760 | ||
Post-acquisition Improvements | 1,531 | ||
Gross Carrying Amount | |||
Land | 1,770 | ||
Building and improvements | 19,500 | ||
In-place lease value intangible | 1,021 | ||
Total | 22,291 | ||
Accumulated Depreciation & Amortization | 2,742 | ||
Net Book Carrying Value | 19,549 | ||
Encumbrances | |||
Quitman | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 3,130 | ||
Building and Improvements | 2,389 | ||
In-place lease value intangible | 351 | ||
Total | 5,870 | ||
Post-acquisition Improvements | 507 | ||
Gross Carrying Amount | |||
Land | 3,130 | ||
Building and improvements | 2,895 | ||
In-place lease value intangible | 351 | ||
Total | 6,376 | ||
Accumulated Depreciation & Amortization | 470 | ||
Net Book Carrying Value | 5,906 | ||
Encumbrances | |||
Chelsea Square | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 1,570 | ||
Building and Improvements | 5,046 | ||
In-place lease value intangible | 494 | ||
Total | 7,110 | ||
Post-acquisition Improvements | 493 | ||
Gross Carrying Amount | |||
Land | 1,570 | ||
Building and improvements | 5,538 | ||
In-place lease value intangible | 494 | ||
Total | 7,602 | ||
Accumulated Depreciation & Amortization | 986 | ||
Net Book Carrying Value | 6,616 | ||
Encumbrances | |||
Mission Centre | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 2,020 | ||
Building and Improvements | 7,690 | ||
In-place lease value intangible | 890 | ||
Total | 10,600 | ||
Post-acquisition Improvements | 318 | ||
Gross Carrying Amount | |||
Land | 2,020 | ||
Building and improvements | 8,008 | ||
In-place lease value intangible | 890 | ||
Total | 10,918 | ||
Accumulated Depreciation & Amortization | 1,713 | ||
Net Book Carrying Value | 9,205 | ||
Encumbrances | |||
Regency | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 960 | ||
Building and Improvements | 819 | ||
In-place lease value intangible | 851 | ||
Total | 2,630 | ||
Post-acquisition Improvements | 907 | ||
Gross Carrying Amount | |||
Land | 960 | ||
Building and improvements | 1,726 | ||
In-place lease value intangible | 852 | ||
Total | 3,538 | ||
Accumulated Depreciation & Amortization | 1,043 | ||
Net Book Carrying Value | 2,495 | ||
Encumbrances | |||
Spring Valley | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 3,490 | ||
Building and Improvements | 1,064 | ||
In-place lease value intangible | 1,066 | ||
Total | 5,620 | ||
Post-acquisition Improvements | 1,531 | ||
Gross Carrying Amount | |||
Land | 3,490 | ||
Building and improvements | 2,595 | ||
In-place lease value intangible | 1,066 | ||
Total | 7,151 | ||
Accumulated Depreciation & Amortization | 1,868 | ||
Net Book Carrying Value | 5,283 | ||
Encumbrances | |||
Northeast Square | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 1,300 | ||
Building and Improvements | 3,330 | ||
In-place lease value intangible | 280 | ||
Total | 4,910 | ||
Post-acquisition Improvements | 221 | ||
Gross Carrying Amount | |||
Land | 1,300 | ||
Building and improvements | 3,551 | ||
In-place lease value intangible | 280 | ||
Total | 5,131 | ||
Accumulated Depreciation & Amortization | 628 | ||
Net Book Carrying Value | 4,503 | ||
Encumbrances | |||
One Mason | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 2,440 | ||
Building and Improvements | 9,290 | ||
In-place lease value intangible | 1,130 | ||
Total | 12,860 | ||
Post-acquisition Improvements | 251 | ||
Gross Carrying Amount | |||
Land | 2,440 | ||
Building and improvements | 9,541 | ||
In-place lease value intangible | 1,130 | ||
Total | 13,111 | ||
Accumulated Depreciation & Amortization | 1,900 | ||
Net Book Carrying Value | 11,211 | ||
Encumbrances | |||
Tower | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 2,750 | ||
Building and Improvements | 2,584 | ||
In-place lease value intangible | 1,336 | ||
Total | 6,670 | ||
Post-acquisition Improvements | 1,624 | ||
Gross Carrying Amount | |||
Land | 2,750 | ||
Building and improvements | 4,208 | ||
In-place lease value intangible | 1,335 | ||
Total | 8,293 | ||
Accumulated Depreciation & Amortization | 1,725 | ||
Net Book Carrying Value | 6,568 | ||
Encumbrances | |||
Preserve | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 9,730 | ||
Building and Improvements | 9,085 | ||
In-place lease value intangible | 3,485 | ||
Total | 22,300 | ||
Post-acquisition Improvements | 2,092 | ||
Gross Carrying Amount | |||
Land | 9,730 | ||
Building and improvements | 11,177 | ||
In-place lease value intangible | 3,485 | ||
Total | 24,392 | ||
Accumulated Depreciation & Amortization | 4,407 | ||
Net Book Carrying Value | 19,985 | ||
Encumbrances | |||
Westheimer | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 3,800 | ||
Building and Improvements | 12,416 | ||
In-place lease value intangible | 2,284 | ||
Total | 18,500 | ||
Post-acquisition Improvements | 2,038 | ||
Gross Carrying Amount | |||
Land | 3,800 | ||
Building and improvements | 14,454 | ||
In-place lease value intangible | 2,284 | ||
Total | 20,538 | ||
Accumulated Depreciation & Amortization | 3,671 | ||
Net Book Carrying Value | 16,867 | ||
Encumbrances | |||
Walzem Plaza | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 3,900 | ||
Building and Improvements | 10,660 | ||
In-place lease value intangible | 1,840 | ||
Total | 16,400 | ||
Post-acquisition Improvements | 1,229 | ||
Gross Carrying Amount | |||
Land | 3,900 | ||
Building and improvements | 11,889 | ||
In-place lease value intangible | 1,840 | ||
Total | 17,629 | ||
Accumulated Depreciation & Amortization | 3,389 | ||
Net Book Carrying Value | 14,240 | ||
Encumbrances | |||
11811 North Freeway | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 1,980 | ||
Building and Improvements | 1,037 | ||
In-place lease value intangible | 2,473 | ||
Total | 5,490 | ||
Post-acquisition Improvements | 809 | ||
Gross Carrying Amount | |||
Land | 1,980 | ||
Building and improvements | 1,846 | ||
In-place lease value intangible | 2,473 | ||
Total | 6,299 | ||
Accumulated Depreciation & Amortization | 2,381 | ||
Net Book Carrying Value | 3,918 | ||
Encumbrances | |||
Atrium I | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 2,540 | ||
Building and Improvements | 716 | ||
In-place lease value intangible | 1,494 | ||
Total | 4,750 | ||
Post-acquisition Improvements | 871 | ||
Gross Carrying Amount | |||
Land | 2,540 | ||
Building and improvements | 1,587 | ||
In-place lease value intangible | 1,494 | ||
Total | 5,621 | ||
Accumulated Depreciation & Amortization | 1,603 | ||
Net Book Carrying Value | 4,018 | ||
Encumbrances | |||
Atrium II | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 958 | ||
Building and Improvements | 1,345 | ||
In-place lease value intangible | 1,264 | ||
Total | 3,567 | ||
Post-acquisition Improvements | 2,582 | ||
Gross Carrying Amount | |||
Land | 1,006 | ||
Building and improvements | 3,927 | ||
In-place lease value intangible | 1,264 | ||
Total | 6,197 | ||
Accumulated Depreciation & Amortization | 802 | ||
Net Book Carrying Value | 5,395 | ||
Encumbrances | |||
North Central Plaza | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 2,330 | ||
Building and Improvements | 14,511 | ||
In-place lease value intangible | 2,959 | ||
Total | 19,800 | ||
Post-acquisition Improvements | 2,155 | ||
Gross Carrying Amount | |||
Land | 2,330 | ||
Building and improvements | 16,666 | ||
In-place lease value intangible | 2,959 | ||
Total | 21,955 | ||
Accumulated Depreciation & Amortization | 4,292 | ||
Net Book Carrying Value | 17,663 | ||
Encumbrances | |||
3100 Timmons | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 10,330 | ||
Building and Improvements | 3,543 | ||
In-place lease value intangible | 1,427 | ||
Total | 15,300 | ||
Post-acquisition Improvements | 1,516 | ||
Gross Carrying Amount | |||
Land | 10,330 | ||
Building and improvements | 5,059 | ||
In-place lease value intangible | 1,428 | ||
Total | 16,817 | ||
Accumulated Depreciation & Amortization | 1,977 | ||
Net Book Carrying Value | 14,840 | ||
Encumbrances | |||
Central Park | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 730 | ||
Building and Improvements | 2,851 | ||
In-place lease value intangible | 989 | ||
Total | 4,570 | ||
Post-acquisition Improvements | 268 | ||
Gross Carrying Amount | |||
Land | 730 | ||
Building and improvements | 3,119 | ||
In-place lease value intangible | 989 | ||
Total | 4,838 | ||
Accumulated Depreciation & Amortization | 1,245 | ||
Net Book Carrying Value | 3,593 | ||
Encumbrances | |||
601 Sawyer | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 3,360 | ||
Building and Improvements | 12,796 | ||
In-place lease value intangible | 1,144 | ||
Total | 17,300 | ||
Post-acquisition Improvements | 1,782 | ||
Gross Carrying Amount | |||
Land | 3,360 | ||
Building and improvements | 14,578 | ||
In-place lease value intangible | 1,144 | ||
Total | 19,082 | ||
Accumulated Depreciation & Amortization | 2,363 | ||
Net Book Carrying Value | 16,719 | ||
Encumbrances | |||
Prestonwood | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 7,410 | ||
Building and Improvements | 13,895 | ||
In-place lease value intangible | 1,695 | ||
Total | 23,000 | ||
Post-acquisition Improvements | 299 | ||
Gross Carrying Amount | |||
Land | 7,410 | ||
Building and improvements | 14,194 | ||
In-place lease value intangible | 1,695 | ||
Total | 23,299 | ||
Accumulated Depreciation & Amortization | 2,829 | ||
Net Book Carrying Value | 20,470 | ||
Encumbrances | |||
Harwin | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 1,960 | ||
Building and Improvements | 3,041 | ||
In-place lease value intangible | 279 | ||
Total | 5,280 | ||
Post-acquisition Improvements | (187) | ||
Gross Carrying Amount | |||
Land | 1,960 | ||
Building and improvements | 2,853 | ||
In-place lease value intangible | 279 | ||
Total | 5,092 | ||
Accumulated Depreciation & Amortization | 606 | ||
Net Book Carrying Value | 4,486 | ||
Encumbrances | |||
Fondren | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 1,650 | ||
Building and Improvements | 7,326 | ||
In-place lease value intangible | 1,004 | ||
Total | 9,980 | ||
Post-acquisition Improvements | 375 | ||
Gross Carrying Amount | |||
Land | 1,650 | ||
Building and improvements | 7,701 | ||
In-place lease value intangible | 1,005 | ||
Total | 10,356 | ||
Accumulated Depreciation & Amortization | 2,042 | ||
Net Book Carrying Value | 8,314 | ||
Encumbrances | |||
Cornerstone | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 1,110 | ||
Building and Improvements | 1,620 | ||
In-place lease value intangible | 920 | ||
Total | 3,650 | ||
Post-acquisition Improvements | 564 | ||
Gross Carrying Amount | |||
Land | 1,110 | ||
Building and improvements | 2,184 | ||
In-place lease value intangible | 920 | ||
Total | 4,214 | ||
Accumulated Depreciation & Amortization | 1,118 | ||
Net Book Carrying Value | 3,096 | ||
Encumbrances | |||
Northchase | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 1,700 | ||
Building and Improvements | 5,821 | ||
In-place lease value intangible | 1,549 | ||
Total | 9,070 | ||
Post-acquisition Improvements | 1,235 | ||
Gross Carrying Amount | |||
Land | 1,700 | ||
Building and improvements | 7,056 | ||
In-place lease value intangible | 1,549 | ||
Total | 10,305 | ||
Accumulated Depreciation & Amortization | 2,190 | ||
Net Book Carrying Value | 8,115 | ||
Encumbrances | |||
616 FM 1960 | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 1,510 | ||
Building and Improvements | 8,931 | ||
In-place lease value intangible | 1,269 | ||
Total | 11,710 | ||
Post-acquisition Improvements | (3,139) | ||
Gross Carrying Amount | |||
Land | 1,510 | ||
Building and improvements | 5,792 | ||
In-place lease value intangible | 941 | ||
Total | 8,243 | ||
Accumulated Depreciation & Amortization | 1,758 | ||
Net Book Carrying Value | 6,485 | ||
Encumbrances | |||
Gateway | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 3,510 | ||
Building and Improvements | 22,182 | ||
In-place lease value intangible | 3,408 | ||
Total | 29,100 | ||
Post-acquisition Improvements | 1,002 | ||
Gross Carrying Amount | |||
Land | 3,510 | ||
Building and improvements | 23,184 | ||
In-place lease value intangible | 3,343 | ||
Total | 30,037 | ||
Accumulated Depreciation & Amortization | 4,797 | ||
Net Book Carrying Value | 25,240 | ||
Encumbrances | |||
Promenade | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 5,750 | ||
Building and Improvements | 12,671 | ||
In-place lease value intangible | 1,579 | ||
Total | 20,000 | ||
Post-acquisition Improvements | 685 | ||
Gross Carrying Amount | |||
Land | 5,750 | ||
Building and improvements | 13,356 | ||
In-place lease value intangible | 1,578 | ||
Total | 20,684 | ||
Accumulated Depreciation & Amortization | 2,881 | ||
Net Book Carrying Value | 17,803 | ||
Encumbrances | |||
400 North Belt | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 2,538 | ||
Building and Improvements | 3,800 | ||
In-place lease value intangible | 3,812 | ||
Total | 10,150 | ||
Post-acquisition Improvements | 3,025 | ||
Gross Carrying Amount | |||
Land | 2,538 | ||
Building and improvements | 6,825 | ||
In-place lease value intangible | 3,812 | ||
Total | 13,175 | ||
Accumulated Depreciation & Amortization | 6,779 | ||
Net Book Carrying Value | 6,396 | ||
Encumbrances | |||
Commerce Plaza Hillcrest | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 6,500 | ||
Building and Improvements | 1,031 | ||
In-place lease value intangible | 3,869 | ||
Total | 11,400 | ||
Post-acquisition Improvements | 3,038 | ||
Gross Carrying Amount | |||
Land | 6,500 | ||
Building and improvements | 4,069 | ||
In-place lease value intangible | 3,869 | ||
Total | 14,438 | ||
Accumulated Depreciation & Amortization | 6,294 | ||
Net Book Carrying Value | 8,144 | ||
Encumbrances | |||
Corporate Park Place | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 2,375 | ||
Building and Improvements | 5,215 | ||
In-place lease value intangible | 1,910 | ||
Total | 9,500 | ||
Post-acquisition Improvements | 1,625 | ||
Gross Carrying Amount | |||
Land | 2,375 | ||
Building and improvements | 6,840 | ||
In-place lease value intangible | 1,910 | ||
Total | 11,125 | ||
Accumulated Depreciation & Amortization | 3,871 | ||
Net Book Carrying Value | 7,254 | ||
Encumbrances | |||
Skymark Tower | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 2,212 | ||
Building and Improvements | 4,404 | ||
In-place lease value intangible | 2,230 | ||
Total | 8,846 | ||
Post-acquisition Improvements | 2,567 | ||
Gross Carrying Amount | |||
Land | 2,212 | ||
Building and improvements | 6,971 | ||
In-place lease value intangible | 2,230 | ||
Total | 11,413 | ||
Accumulated Depreciation & Amortization | 4,363 | ||
Net Book Carrying Value | 7,050 | ||
Encumbrances | |||
Ashford Crossing | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 2,650 | ||
Building and Improvements | 4,240 | ||
In-place lease value intangible | 3,710 | ||
Total | 10,600 | ||
Post-acquisition Improvements | 2,766 | ||
Gross Carrying Amount | |||
Land | 2,650 | ||
Building and improvements | 7,006 | ||
In-place lease value intangible | 3,710 | ||
Total | 13,366 | ||
Accumulated Depreciation & Amortization | 6,263 | ||
Net Book Carrying Value | 7,103 | ||
Encumbrances | |||
Energy Plaza I&II | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 4,403 | ||
Building and Improvements | 6,840 | ||
In-place lease value intangible | 6,367 | ||
Total | 17,610 | ||
Post-acquisition Improvements | 4,247 | ||
Gross Carrying Amount | |||
Land | 4,403 | ||
Building and improvements | 11,087 | ||
In-place lease value intangible | 6,367 | ||
Total | 21,857 | ||
Accumulated Depreciation & Amortization | 9,445 | ||
Net Book Carrying Value | 12,412 | ||
Encumbrances | |||
Westway One | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 5,410 | ||
Building and Improvements | 11,276 | ||
In-place lease value intangible | 4,950 | ||
Total | 21,636 | ||
Post-acquisition Improvements | 798 | ||
Gross Carrying Amount | |||
Land | 5,410 | ||
Building and improvements | 12,075 | ||
In-place lease value intangible | 4,951 | ||
Total | 22,436 | ||
Accumulated Depreciation & Amortization | 7,415 | ||
Net Book Carrying Value | 15,021 | ||
Encumbrances | |||
Three Forest Plaza | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 8,910 | ||
Building and Improvements | 18,186 | ||
In-place lease value intangible | 8,558 | ||
Total | 35,654 | ||
Post-acquisition Improvements | 4,471 | ||
Gross Carrying Amount | |||
Land | 8,913 | ||
Building and improvements | 22,658 | ||
In-place lease value intangible | 8,557 | ||
Total | 40,128 | ||
Accumulated Depreciation & Amortization | 14,185 | ||
Net Book Carrying Value | 25,943 | ||
Encumbrances | |||
Parkway I&II | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 2,373 | ||
Building and Improvements | 4,765 | ||
In-place lease value intangible | 2,352 | ||
Total | 9,490 | ||
Post-acquisition Improvements | 3,712 | ||
Gross Carrying Amount | |||
Land | 2,372 | ||
Building and improvements | 8,477 | ||
In-place lease value intangible | 2,352 | ||
Total | 13,201 | ||
Accumulated Depreciation & Amortization | 5,941 | ||
Net Book Carrying Value | 7,260 | ||
Encumbrances | |||
Gulf Plaza | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 3,488 | ||
Building and Improvements | 6,005 | ||
In-place lease value intangible | 4,457 | ||
Total | 13,950 | ||
Post-acquisition Improvements | 1,781 | ||
Gross Carrying Amount | |||
Land | 3,487 | ||
Building and improvements | 7,786 | ||
In-place lease value intangible | 4,457 | ||
Total | 15,730 | ||
Accumulated Depreciation & Amortization | 6,616 | ||
Net Book Carrying Value | 9,114 | ||
Encumbrances | |||
Timbercreek | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 724 | ||
Building and Improvements | 962 | ||
In-place lease value intangible | 1,211 | ||
Total | 2,897 | ||
Post-acquisition Improvements | 909 | ||
Gross Carrying Amount | |||
Land | 724 | ||
Building and improvements | 1,871 | ||
In-place lease value intangible | 1,211 | ||
Total | 3,806 | ||
Accumulated Depreciation & Amortization | 1,956 | ||
Net Book Carrying Value | 1,850 | ||
Encumbrances | |||
Copperfield | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 605 | ||
Building and Improvements | 760 | ||
In-place lease value intangible | 1,054 | ||
Total | 2,419 | ||
Post-acquisition Improvements | 706 | ||
Gross Carrying Amount | |||
Land | 605 | ||
Building and improvements | 1,466 | ||
In-place lease value intangible | 1,054 | ||
Total | 3,125 | ||
Accumulated Depreciation & Amortization | 1,635 | ||
Net Book Carrying Value | 1,490 | ||
Encumbrances | |||
One Technology Center | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 4,894 | ||
Building and Improvements | 8,558 | ||
In-place lease value intangible | 6,123 | ||
Total | 19,575 | ||
Post-acquisition Improvements | 1,974 | ||
Gross Carrying Amount | |||
Land | 4,893 | ||
Building and improvements | 10,532 | ||
In-place lease value intangible | 6,123 | ||
Total | 21,548 | ||
Accumulated Depreciation & Amortization | 9,318 | ||
Net Book Carrying Value | 12,230 | ||
Encumbrances | |||
Richardson Heights | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 4,788 | ||
Building and Improvements | 10,890 | ||
In-place lease value intangible | 3,472 | ||
Total | 19,150 | ||
Post-acquisition Improvements | 7,409 | ||
Gross Carrying Amount | |||
Land | 4,788 | ||
Building and improvements | 18,300 | ||
In-place lease value intangible | 3,472 | ||
Total | 26,560 | ||
Accumulated Depreciation & Amortization | 10,675 | ||
Net Book Carrying Value | 15,885 | ||
Encumbrances | 16,144 | ||
Bent Tree Green | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 3,003 | ||
Building and Improvements | 6,272 | ||
In-place lease value intangible | 2,740 | ||
Total | 12,015 | ||
Post-acquisition Improvements | 3,905 | ||
Gross Carrying Amount | |||
Land | 3,003 | ||
Building and improvements | 10,177 | ||
In-place lease value intangible | 2,740 | ||
Total | 15,920 | ||
Accumulated Depreciation & Amortization | 7,128 | ||
Net Book Carrying Value | 8,792 | ||
Encumbrances | 6,995 | ||
Cooper Street | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 2,653 | ||
Building and Improvements | 5,768 | ||
In-place lease value intangible | 2,192 | ||
Total | 10,613 | ||
Post-acquisition Improvements | 630 | ||
Gross Carrying Amount | |||
Land | 2,653 | ||
Building and improvements | 6,399 | ||
In-place lease value intangible | 2,192 | ||
Total | 11,244 | ||
Accumulated Depreciation & Amortization | 4,553 | ||
Net Book Carrying Value | 6,691 | ||
Encumbrances | 6,995 | ||
Mitchelldale Business Park | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation, Initial Cost | |||
Land | 4,794 | ||
Building and Improvements | 9,816 | ||
In-place lease value intangible | 4,565 | ||
Total | 19,175 | ||
Post-acquisition Improvements | 3,787 | ||
Gross Carrying Amount | |||
Land | 4,794 | ||
Building and improvements | 13,603 | ||
In-place lease value intangible | 4,565 | ||
Total | 22,962 | ||
Accumulated Depreciation & Amortization | 9,216 | ||
Net Book Carrying Value | 13,746 | ||
Encumbrances | $ 10,591 |
Schedule III - Real Estate As_3
Schedule III - Real Estate Assets and Accumulated Depreciation and Amortization - Summary of Activity of Real Estate Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | $ 607,669,000 | $ 593,457,000 |
Acquisitions | 0 | 5,316,000 |
Improvements | 12,916,000 | 14,302,000 |
Ending balance, before reduction for real estate asset sold | 620,585,000 | 613,075,000 |
Provision for impairment | 0 | 5,406,000 |
Balance at end of period | $ 620,585,000 | $ 607,669,000 |