Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 31, 2020 | Jun. 30, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K/A | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 333-232308 | ||
Entity Registrant Name | Hartman vREIT XXI, Inc. | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Tax Identification Number | 38-3978914 | ||
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 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 | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 8,619,181 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001654948 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Real estate assets, at cost | $ 77,172,756 | $ 29,674,731 |
Accumulated depreciation and amortization | (4,690,610) | (1,209,392) |
Real estate assets, net | 72,482,146 | 28,465,339 |
Cash and cash equivalents | 132,889 | 5,839,035 |
Restricted cash | 277,579 | 152,900 |
Note receivable - related party | 4,400,000 | 0 |
Investment in unconsolidated entity | 8,026,720 | 8,026,720 |
Escrowed investor proceeds | 90 | 50,790 |
Deferred lease commissions, net | 314,404 | 70,266 |
Accrued rent and accounts receivable, net | 964,021 | 159,102 |
Prepaid expenses and other assets | 573,378 | 289,148 |
Acquisition deposits | 1,850,000 | 110,000 |
Due from related parties | 549,473 | 338,939 |
Total assets | 89,570,700 | 43,502,239 |
Liabilities: | ||
Notes payable, net | 18,317,362 | 14,086,330 |
Accounts payable and accrued expenses | 4,002,308 | 920,922 |
Subscriptions for common stock | 90 | 50,790 |
Tenants’ security deposits | 645,800 | 125,916 |
Total liabilities | 22,965,560 | 15,183,958 |
Commitments and contingencies | ||
Special Limited Partnership Interests | 1,000 | 1,000 |
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively | 0 | 0 |
Additional paid-in capital | 77,572,760 | 34,003,619 |
Accumulated distributions and net loss | (11,053,736) | (5,723,552) |
Total stockholders' equity | 66,604,140 | 28,317,281 |
Total liabilities and equity | 89,570,700 | 43,502,239 |
Class A | ||
Stockholders' equity: | ||
Common stock | 80,573 | 35,917 |
Class T | ||
Stockholders' equity: | ||
Common stock | $ 4,543 | $ 1,297 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Common stock, par value (in dollars per share) | $ 0.01 | |
Common stock, shares authorized (in shares) | 900,000,000 | |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 850,000,000 | 850,000,000 |
Common stock, shares issued (in shares) | 8,057,390 | 3,591,757 |
Common stock, shares outstanding (in shares) | 8,057,390 | 3,591,757 |
Class T | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 454,256 | 129,668 |
Common stock, shares outstanding (in shares) | 454,256 | 129,668 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | ||
Rental revenues | $ 6,765,119 | $ 1,283,177 |
Tenant reimbursements and other revenues | 712,996 | 267,069 |
Total revenues | 7,478,115 | 1,550,246 |
Expenses (income), net | ||
Property operating expenses | 2,852,827 | 487,562 |
Asset management and acquisition fees | 309,006 | 84,721 |
Organization and offering costs | 183,521 | 119,982 |
Real estate taxes and insurance | 1,175,175 | 318,055 |
Depreciation and amortization | 3,481,218 | 806,537 |
General and administrative | 524,711 | 344,673 |
Interest expense, net | 567,725 | 313,075 |
Interest and dividend income | 531,166 | 29,109 |
Total expenses | 8,563,017 | 2,445,496 |
Loss from operations | (1,084,902) | (895,250) |
Equity in loss of unconsolidated entity | 0 | (396,979) |
Net loss | $ (1,084,902) | $ (1,292,229) |
Basic and diluted net loss per common share: | ||
Net loss attributable to common stockholders (in dollars per share) | $ (0.18) | $ (0.48) |
Weighted average number of common shares outstanding, basic and diluted (in shares) | 6,074,548 | 2,716,593 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Total | Common Stock | Additional Paid-in Capital | Accumulated Distributions and Net Loss |
Shares outstanding, beginning balance (in shares) at Dec. 31, 2017 | 1,851,317 | |||
Stockholders' equity, beginning balance at Dec. 31, 2017 | $ 14,342,136 | $ 18,513 | $ 16,713,160 | $ (2,389,537) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common shares (in shares) | 1,879,293 | |||
Issuance of common shares | 18,720,522 | $ 18,793 | 18,701,729 | |
Redemption of common shares (in shares) | (9,185) | |||
Redemption of common shares | (85,510) | $ (92) | (85,418) | |
Selling commissions | (1,325,852) | (1,325,852) | ||
Distribution declared – stock | (2,041,786) | (2,041,786) | ||
Net loss | (1,292,229) | (1,292,229) | ||
Shares outstanding, ending balance (in shares) at Dec. 31, 2018 | 3,721,425 | |||
Stockholders' equity, ending balance at Dec. 31, 2018 | 28,317,281 | $ 37,214 | 34,003,619 | (5,723,552) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common shares (in shares) | 4,802,209 | |||
Issuance of common shares | 47,177,702 | $ 48,022 | 47,129,680 | |
Redemption of common shares (in shares) | (11,988) | |||
Redemption of common shares | (111,248) | $ (120) | (111,128) | |
Selling commissions | (3,449,411) | (3,449,411) | ||
Distribution declared – stock | (4,245,282) | (4,245,282) | ||
Net loss | (1,084,902) | (1,084,902) | ||
Shares outstanding, ending balance (in shares) at Dec. 31, 2019 | 8,511,646 | |||
Stockholders' equity, ending balance at Dec. 31, 2019 | $ 66,604,140 | $ 85,116 | $ 77,572,760 | $ (11,053,736) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (1,084,902) | $ (1,292,229) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation | 29,250 | 25,000 |
Depreciation and amortization | 3,481,218 | 806,537 |
Deferred loan and lease commission costs amortization | 136,199 | 44,525 |
Equity in loss of unconsolidated entities | 0 | 396,979 |
Bad debt provision | 7,130 | 51,873 |
Changes in operating assets and liabilities: | ||
Accrued rent and accounts receivable | (812,049) | (172,782) |
Deferred leasing commissions | (272,393) | (54,562) |
Prepaid expenses and other assets | (415,990) | (19,803) |
Accounts payable and accrued expenses | 1,399,675 | 183,994 |
Due to (from) related parties | (210,534) | (609,469) |
Tenants' security deposits | (15,282) | 1,849 |
Net cash used in operating activities | 2,242,322 | (638,088) |
Cash flows from investing activities: | ||
Additions to real estate | (45,512,410) | (21,608,048) |
Acquisition deposit | (1,740,000) | 40,000 |
Note receivable - related party | (4,400,000) | 0 |
Net cash used in investing activities | (51,652,410) | (21,568,048) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 45,203,004 | 17,345,813 |
Payment of redemption of common stock | (111,248) | (85,510) |
Distributions paid in cash | (1,936,812) | (788,270) |
Payment of selling commissions | (3,449,411) | (1,325,852) |
Deferred loan costs paid | (83,163) | (222,605) |
Escrowed investor proceeds | 50,700 | (16,924) |
Change in subscriptions for common stock | (50,700) | 16,929 |
Proceeds from revolving credit facility | 18,550,100 | 8,268,750 |
Repayments under revolving credit facility | (10,818,849) | 0 |
Proceeds from term loan notes | 0 | 2,520,000 |
Repayments on term loan | (3,525,000) | 0 |
Net cash provided by financing activities | 43,828,621 | 25,712,331 |
Net (decrease) increase in cash and cash equivalents and restricted cash | (5,581,467) | 3,506,195 |
Cash and cash equivalents and restricted cash, beginning of period | 5,991,935 | 2,485,740 |
Cash and cash equivalents and restricted cash, end of period | 410,468 | 5,991,935 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Cash paid for interest | 412,232 | 261,144 |
Increase in distributions payable | 40,570 | 135,537 |
Distributions paid in stock | $ 2,106,458 | $ 1,075,562 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Hartman vREIT XXI, Inc. (the “Company”) is a Maryland corporation formed on September 3, 2015. The Company elected to be treated as a real estate investment trust (“REIT”) beginning with its taxable year ended December 31, 2017. The Company’s fiscal year end is December 31. In its initial public offering, the Company has offered to the public up to $250,000,000 in any combination of shares of Class A and Class T common stock and up to $19,000,000 in shares of Class A and Class T common stock to stockholders pursuant to its distribution reinvestment plan. Class A common stock was offered to the public at an initial price of $10.00 per share and to stockholders at an initial price of $9.50 per share for Class A common stock purchased pursuant to the distribution reinvestment plan. Class T common stock was offered to the public at an initial price of $9.60 per share and to stockholders at an initial price of $9.12 per share for Class T common stock purchased pursuant to the distribution reinvestment plan. Beginning September 7, 2019, the sale price of the Company's Class A and Class T common shares to the public is $13.00 and $12.48 per share, representing the net asset value per share as determined by the board of directors plus applicable sales commissions and managing broker dealer fees. The sale price of Class A and Class T common shares to the Company's shareholders pursuant to the distribution reinvestment plan is $11.70 and $11.23 per share. The Company’s board of directors may, in its sole discretion and from time to time, change the price at which the Company offers shares to the public in the primary offering or pursuant to its distribution reinvestment plan to reflect changes in estimated value per share and other factors that the board of directors deems relevant. The Company's follow-on offering (Registration No. 333-232308) was declared effective by the Securities and Exchange Commission on January 14, 2020. In its follow-on offering, the Company registered $180,000,000 in any combination of shares of Class A and Class T common stock to be offered to the public and $5,000,000 to be offered to shareholders pursuant to the distribution reinvestment plan. The Company’s advisor is Hartman XXI Advisors, LLC (the “Advisor”), a Texas limited liability company and wholly owned subsidiary of Hartman Advisors, LLC. Hartman Income REIT Management, Inc., an affiliate of the Advisor, is the Company’s sponsor and property manager (“Sponsor” and “Property Manager”). Subject to certain restrictions and limitations, the Advisor is responsible for managing the Company’s affairs on a day-to-day basis and for identifying and making acquisitions and investments on behalf of the Company. Substantially all the Company’s business is conducted through Hartman vREIT XXI Operating Partnership, L.P., a Texas limited partnership (the “OP”). The Company is the sole general partner of the OP. The initial limited partners of the OP are Hartman vREIT XXI Holdings LLC, a wholly owned subsidiary of the Company (“XXI Holdings”), and Hartman vREIT XXI SLP LLC (“SLP LLC”), a wholly owned subsidiary of Hartman Advisors, LLC. SLP LLC has invested $1,000 in the OP in exchange for a separate class of limited partnership interests (the “Special Limited Partnership Interests”). As the Company accepts subscriptions for shares, it will transfer substantially all the net proceeds of the Offering to the OP as a capital contribution. The partnership agreement provides that the OP will be operated in a manner that will enable the Company to (1) satisfy the requirements for being classified as a REIT for tax purposes, (2) avoid any federal income or excise tax liability and (3) ensure that the OP will not be classified as a “publicly traded partnership” for purposes of Section 7704 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), which classification could result in the OP being taxed as a corporation, rather than as a partnership. In addition to the administrative and operating costs and expenses incurred by the OP in acquiring and operating real properties, the OP will pay all the Company’s administrative costs and expenses and such expenses will be treated as expenses of the OP. As of December 31, 2019, the Company had accepted investors' subscriptions for, and issued 8,511,646 shares, net of redemptions, of its Class A and T common stock in its initial public offering, including 242,807 shares issued as stock distributions and pursuant to its distribution reinvestment plan resulting in gross offering proceeds of $83,805,002. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 and 2018 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 financial position and operating results for the respective periods. The Company’s consolidated financial statements include the Company’s accounts and the accounts of the OP and XXI Holdings and the subsidiaries over which the Company has control. All intercompany balances and transactions are eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the consolidated 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 All highly liquid investments with original maturities of three months or less are considered to be cash equivalents. Cash and cash equivalents as of December 31, 2019 and 2018 consisted of demand deposits at commercial banks. 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 mortgage debt agreements. 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, notes payable, net and due from (to) related parties. The Company considers the carrying value, other than notes payable, net, to approximate the fair value of these financial instruments based on the short duration between origination of the instruments and their expected realization. Based on borrowing rates currently available to the Company for loans with similar terms, the carrying value of its notes payable approximates fair value. Revenue Recognition The Company’s leases are accounted for as operating leases. Certain leases provide for tenant occupancy during periods 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, on the accompanying consolidated balance sheets. The Company will defer the recognition of contingent rental income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved. Additionally, 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 adopted ASU 2014-09, "Revenue from Contracts with Customers," (“ASU 2014-09”) which amends the guidance for revenue recognition to eliminate the industry-specific revenue recognition guidance and replace it with a principle based approach for determining revenue recognition. The Company adopted ASU 2014-09 effective January 1, 2018 using the modified retrospective approach and the adoption of this guidance did not have a material impact on the consolidated financial statements. The Company’s revenue is primarily derived from leasing activities, which is specifically excluded from ASU 2014-09. The Company’s 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 of ASU 2014-09. Investment in Unconsolidated Entities On October 1, 2018, Hartman Three Forest Plaza LLC, a joint venture between the Company and Hartman XX Operating Partnership ("XX OP"), the operating partnership of Hartman Short Term Income Properties XX, Inc. ("Hartman XX"), contributed the Three Forest Plaza property to Hartman SPE, LLC, a special purpose entity formed for the purpose of refinancing certain indebtedness of Hartman Short Term Income Properties XX, Inc., Hartman Short Term Income Properties XIX, Inc. and Hartman Income REIT, Inc. The Company received a 5.89% membership interest in Hartman SPE, LLC in exchange for its 48.8% minority interest in Three Forest Plaza LLC. Effective March 1, 2019, the Company's board of directors approved the exchange of 3.42% of the Company's 5.89% ownership interest in Hartman SPE, LLC for 700,302 shares of common stock of Hartman XX. The exchange reduced the Company’s ownership interest in Hartman SPE, LLC from 5.89% to 2.47%. The Company's investment in Hartman SPE, LLC and Hartman XX is stated at cost and accounted for under the cost method. Real Estate Allocation of Purchase Price of Acquired Assets Acquisitions of integrated assets and activities that do not meet the definition of a business are accounted for as asset acquisitions. The Company believes most of its future acquisitions of operating properties will qualify as asset acquisitions. Third party transaction costs, including acquisition fees paid to Advisor, associated with asset acquisitions will be capitalized while internal acquisition costs will continue to be expensed as incurred. Upon acquisition, the purchase price of properties is allocated to the tangible assets acquired, consisting of land, buildings and improvements, any assumed debt and asset retirement obligations, if any, based on their relative fair values. Acquisition costs, including acquisition fees paid to our advisor, are capitalized as part of the purchase price. Land and building and improvement fair values are derived based upon the Company’s estimate of fair value after giving effect to estimated replacement cost less depreciation or estimates of the relative fair value of these assets using discounted cash flow analyses or similar methods. 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 income 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 Company determines the fair value of any assumed debt by calculating the net present value of the scheduled mortgage payments using interest rates for debt with similar terms and remaining maturities that the Company believes it could obtain at the date of acquisition. Any difference between the fair value and stated value of the assumed debt is recorded as a discount or premium and amortized over the remaining life of the loan as interest expense. In allocating the purchase price of each of the Company’s acquired or purchased properties, the Company makes assumptions and uses various estimates, including, but not limited to, the estimated useful lives of the assets, the cost of replacing certain assets and discount rates used to determine present values. The Company uses Level 3 inputs to estimate fair value of the acquired properties. Many of these estimates are obtained from independent third-party appraisals. However, the Company is responsible for the source and use of these estimates. These estimates require judgment and are subject to being imprecise; accordingly, if different estimates and assumptions were derived, the valuation of the various categories of the Company’s properties or related intangibles could in turn result in a difference in the depreciation or amortization expense recorded in the Company’s consolidated financial statements. These variances could be material to the Company’s results of operations and financial condition. Depreciation and amortization Depreciation is computed using the straight-line method over the estimated useful lives of 5 years to 39 years years for buildings and improvements. Tenant improvements are amortized 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 and other 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, 2019. 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 inappropriate 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. Accrued Rent and Accounts Receivable Included in accrued rent and accounts receivable are 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 our claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. Prepaid expenses and other assets Prepaid expenses and other assets include prepaid insurance, subscription receivable and miscellaneous other assets and prepayments. As of December 31, 2019 and 2018, the Company had $573,378 and $289,148, respectively in prepaid expense and other assets. Acquisition Deposits Acquisition deposits is the money that the Company advances to the seller on a purchase of a property. As of December 31, 2019 and 2018, the Company had acquisition deposits of $1,850,000 and $110,000, respectively, which are included in the consolidated balance sheets. Organization and Offering Costs As of December 31, 2019, total organization and offering costs incurred for the offering amounted to $1,377,924. The total organizational and offering costs incurred by the Company (including selling commissions, dealer manager fees and all other underwriting compensation) will not exceed 15% of the aggregate gross proceeds from the sale of the shares of common stock sold in the Offering. Organization costs, when recorded by the Company, are expensed as incurred, and offering costs, which include selling commissions, dealer manager fees and all other underwriting compensation, are deferred and charged to stockholders’ equity as such amounts are reimbursed or paid by the Advisor, the dealer manager or their affiliates from gross offering proceeds. For the years ended December 31, 2019 and 2018, such costs totaled $183,521 and $119,982, respectively. Income Taxes The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code, commencing in the taxable year ended December 31, 2018. If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes its REIT taxable income to its stockholders, so long as it distributes at least 90 percent of its REIT taxable income (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.) REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. Prior to qualifying to be taxed as a REIT, the Company is subject to normal federal and state corporation income taxes. For the years ended December 31, 2019 and 2018, the Company incurred a net loss of $1,084,902 and $1,292,229, respectively. The Company does not anticipate forming any taxable REIT subsidiaries or otherwise generating 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 in that no future taxable income is expected. 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 as of December 31, 2019 and 2018, respectively. Loss Per Share The computations of 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 special limited partnership interests - see Note 13. As of December 31, 2019 and 2018, there were no common shares issuable in connection with these potentially dilutive securities. These potentially dilutive securities were excluded from the computations of diluted net loss per share for the years ended December 31, 2019 and 2018 because no shares were issuable. Concentration of Risk The Company maintains cash accounts in one U.S. financial institution. The terms of the Company's deposits are on demand to minimize risk. The balances of the Company's depository accounts may exceed the federally insured limits. No losses have been incurred in connection with these deposits. 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. Major tenants are defined as those tenants which individually comprise more than 10% of the Company’s total rental revenues. One tenant of the Spectrum Building represents 19% of total annualized rental revenue for the year ended December 31, 2019. There were no major tenants for the same period ended December 31, 2018. Reclassification Certain items in the comparative consolidated financial statements have been reclassified to conform to the presentation adopted in the current period. Restricted cash reporting line was added on the face of the consolidated balance sheets. The balance currently reported as restricted cash was reported previously in the prepaid expenses and other assets. Recently Adopted Accounting Pronouncements On January 1, 2019, the Company adopted Accounting Standards Update ("ASU") 2016-02, "Leases," which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for in the same manner as operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. In connection with the new revenue guidance (ASC 606), the new revenue standard will apply to other components of revenue deemed to be non-lease components. Under the new guidance, we will continue to recognize the lease components of lease revenue on a straight-line basis over our respective lease terms as we do under prior guidance. However, we would recognize the non-lease components under the new revenue guidance as the related services are delivered. As a result, the total revenue recognized over time would not differ under the new guidance. This does not result in a difference from how the Company has historically recognized revenue for these lease and non-lease components. Additionally, ASU 2016-02 requires that lessees and lessors capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. Under ASU 2016-02, allocated payroll costs and other costs that are incurred regardless of whether the lease is obtained will no longer be capitalized as initial direct costs and instead will be expensed as incurred. This does not result in a difference from how the Company has historically recognized lease acquisition costs. The adoption of ASU 2016-02 had no material impact on the consolidated financial statements. On January 1, 2019, the Company adopted ASU 2018-07, "Improvements to Non-employee Stock-Based Payment Accounting." The updated guidance simplifies aspects of share-based compensation issued to non-employees by making the guidance consistent with the accounting for employee share-based compensation. The adoption of this guidance had no material impact on the consolidated financial statements. On January 1, 2018, the Company adopted the new accounting standard codified in Accounting Standards Codification (“ASC”) 606 - Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASC 606 replaces most existing revenue recognition guidance under GAAP. The standard permits the use of either the retrospective or cumulative effect transition method. Certain contracts with customers, principally lease contracts, are not within the scope of the new guidance. The Company has elected to use the modified retrospective method. The adoption of ASC 606 has no impact on the Company’s consolidated financial statements on adoption at January 1, 2018. On January 1, 2018, the Company adopted ASU No. 2016-01, Recognition and Measurement of Financial Assets and Liabilities, issued by the Financial Accounting Standards Board (“FASB”), which enhances the reporting requirements surrounding the measurement of financial instruments and requires equity securities to be measured at fair value with changes in the fair value recognized through net income for the period. The adoption of ASU No. 2016-01 has no material effect on our consolidated financial position or our consolidated results of operations. On January 1, 2018, the Company adopted ASU No. 2016-17, Interest Held Through Related Parties That Are Under Common Control, issued by the FASB, which amends the accounting guidance when determining the treatment of certain VIE’s to include the interest of related parties under common control in a VIE when considering whether or not the reporting entity is the primary beneficiary of the VIE when considering consolidation. The adoption of ASU No. 2016-17 had no material effect on the consolidated financial position or consolidated results of operations. On January 1, 2018, the Company adopted ASU No. 2016-18, “Classification of Restricted Cash,”issued by the FASB, which addresses the Statement of Cash Flow classification and presentation of restricted cash transactions. The standard permits the use of either the retrospective or cumulative effect transition method. The Company has elected to use the retrospective method. The adoption of ASU No. 2016-18 had no material effect on the Company’s consolidated financial position or consolidated results of operations. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, “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. On November 15, 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326): Effective Dates, which amended mandatory effective dates. ASU No. 2016-13 is now effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact this guidance will have on our financial statements when adopted. |
Real Estate
Real Estate | 12 Months Ended |
Dec. 31, 2019 | |
Real Estate [Abstract] | |
Real Estate | Real EstateThe Company’s real estate assets, net as of December 31, 2019 and 2018 consisted of the following: December 31, 2019 2018 Land $ 16,815,968 $ 5,653,373 Buildings and improvements 52,880,016 20,572,620 In-place lease value intangible 7,476,772 3,448,738 77,172,756 29,674,731 Less accumulated depreciation and amortization (4,690,610) (1,209,392) Total real estate assets, net $ 72,482,146 $ 28,465,339 Depreciation expense for the years ended December 31, 2019 and 2018 was $1,790,022 and $339,053, 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, 2019 2018 In-place lease value intangible $ 7,476,772 $ 3,448,738 Less: In-place leases – accumulated amortization (2,442,913) (751,717) Acquired lease intangible assets, net $ 5,033,858 $ 2,697,021 The estimated aggregate future amortization amounts from acquired lease intangibles are as follows: December 31, In-place lease amortization 2020 $ (2,551,421) 2021 (1,647,533) 2022 (747,107) 2023 (87,797) 2024 — Thereafter — Total $ (5,033,858) Amortization expense for the years ended December 31, 2019 and 2018 was $1,691,196 and $467,484 respectively. Acquisition fees incurred were $1,127,500 and $539,438 for the years ended December 31, 2019 and 2018, respectively. The acquisition fee has been capitalized and added to the real estate assets, at cost, in the accompanying consolidated balance sheets. Asset management fees incurred were $309,006 and $84,721 for the years ended December 31, 2019 and 2018, respectively. Asset management fees are captioned as such in the accompanying consolidated statements of operations. On November 21, 2019, the Company acquired a fee simple interest in two properties located in Houston, Texas: the first, two three-story office buildings comprising approximately 91,215 rentable square feet, each building commonly referred to as Park Ten I and II and collectively as Park Ten Place; the second, a three-story office building comprising approximately 130,828 square feet, commonly referred to as Timberway. The properties were acquired from an unrelated third party for a purchase price of $19,600,000, exclusive of closing costs. The Company financed the acquisitions of Park Ten Place and Timberway with proceeds from the Company’s public offering and funds available under the Company's master credit facility. An acquisition fee of approximately $490,000 was earned by Advisor in connection with the acquisition of Park Ten Place and Timberway. The following table summarizes the fair value of the assets acquired and the liabilities assumed based upon the Company’s purchase price allocation of the Park Ten place and Timberway: Assets acquired: Real estate assets $ 20,090,000 Total assets 20,090,000 Liabilities assumed: Real estate property taxes $ (505,908) Escrow-TI-LC $ (406,274) Prepaid rents $ (45,504) Security deposits (196,284) Total liabilities assumed (1,153,970) Fair value of net assets acquired $ 18,936,030 On October 1, 2019, the Company acquired a fee simple interest in three properties located in Houston, Texas: the first, a six-story office building comprising approximately 102,893 square feet, commonly referred to as the 1400 Broadfield Building; the second, a five-story office building comprising approximately 83,760 square feet, commonly referred to as the 16420 Park Ten Building; and the third, a three-story office building comprising approximately 67,581 square feet, commonly referred to as the 7915 FM 1960 Building. The properties were acquired from an unrelated third party, for a purchase price of $20,550,000, exclusive of closing costs. The Company financed the acquisition of the three properties with proceeds from the Company’s public offering. An acquisition fee of approximately $513,750 was earned by Advisor in connection with the acquisition of 1400 Broadfield, 16420 Park Ten and 7915 FM 1960. The following table summarizes the fair value of the assets acquired and the liabilities assumed based upon the Company’s purchase price allocation of the 1400 Broadfield, 16420 Park Ten and 7915 FM 1960: Assets acquired: Real estate assets $ 21,063,750 Total assets 21,063,750 Liabilities assumed: Real estate Property Taxes $ (459,648) Prepaid rents $ (17,149) Security deposits (285,423) Total liabilities assumed (762,220) Fair value of net assets acquired $ 20,301,530 On January 10, 2019, the Company acquired a fee simple interest in an office building containing approximately 78,922 square feet of office space located in Houston, Texas. The property is commonly known as 11211 Katy Freeway. The 11211 Katy Freeway was acquired from an unrelated third-party seller, for a purchase price, as amended, of $4,370,786, exclusive of closing costs. The Company financed the acquisition of 11211 Katy Freeway with proceeds from the Company’s public offering and loan proceeds from the Company's master credit facility. An acquisition fee of approximately $123,750 was earned by Hartman XXI Advisors LLC in connection with the purchase of 11211 Katy Freeway. The following table summarizes the fair value of the assets acquired and the liabilities assumed based upon the Company’s purchase price allocation of the 11211 Katy Freeway property acquisition: Assets acquired: Real estate assets $ 4,494,536 Total assets 4,494,536 Liabilities assumed: Prepaid rents $ (15,966) Security deposits (53,459) Total liabilities assumed (69,425) Fair value of net assets acquired $ 4,425,111 On March 14, 2018, the Company, through Hartman Richardson Tech Center, LLC, a wholly-owned subsidiary of the OP, acquired a fee simple interest in a four building, multi-tenant flex/R&D property containing approximately 96,660 square feet of office space and located in Richardson, Texas. The property is commonly known as Richardson Tech. An acquisition fee of approximately $126,000 was earned by Hartman XXI Advisors LLC in connection with the purchase of Richardson Tech Center. Richardson Tech was acquired from an unrelated third-party seller, for a purchase price, as amended, of $5,040,000, exclusive of closing costs. The Company financed the payment of the purchase price for Richardson Tech with proceeds from the Offering and $2,520,000 mortgage loan proceeds from a bank. The following table summarizes the fair value of the assets acquired and the liabilities assumed based upon the Company’s purchase price allocations of the Richardson Tech property acquisition: Assets acquired: Real estate assets $ 5,166,000 Total assets 5,166,000 Liabilities assumed: Security deposits $ (45,650) Total liabilities assumed (45,650) Fair value of net assets acquired $ 5,120,350 On December 27, 2018, the Company, through Hartman Spectrum, LLC, a wholly-owned subsidiary of the OP, acquired a fee simple interest in an office building containing approximately 175,390 square feet of office space and located in San Antonio, Texas. The property is commonly known as the Spectrum Building. An acquisition fee of approximately $413,438 was earned by Hartman XXI Advisors LLC in connection with the purchase of Spectrum Building. The Spectrum Building was acquired from Pace-Spectrum, LLC, an unrelated third party, for a purchase price, including a buyers auction premium, of $16,537,500, exclusive of closing costs. Hartman Spectrum LLC financed the payment of the purchase price for the Spectrum Building with proceeds from the Company’s public offering and loan proceeds from a bank. Assets acquired: Real estate assets $ 16,950,938 Total assets 16,950,938 Liabilities assumed: Accounts payable and accrued expenses $ (194,826) Security deposits (26,209) Total liabilities assumed (221,035) Fair value of net assets acquired $ 16,729,903 The following unaudited pro forma consolidated financial information for the years ended December 31, 2019 and 2018 is presented as if the Company acquired Spectrum, 11211 Katy Freeway, 1400 Broadfield, 16420 Park Ten, 7915 FM 1960, Park Ten Place and Timberway on January 1, 2018. This information is not necessarily indicative of what the actual results of operations would have been had the Company completed the acquisitions of Spectrum, 11211 Katy Freeway, 1400 Broadfield, 16420 Park Ten, 7915 FM 1960, Park Ten Place and Timberway on January 1, 2018, nor does it support or represent the Company’s future operations (in thousands): Years Ended December 31 2019 (unaudited) 2018 (unaudited) Revenue $ 12,389 $ 13,937 Net loss $ (2,148) $ (2,208) |
Investment in Unconsolidated En
Investment in Unconsolidated Entities | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in unconsolidated entities | Investment in unconsolidated entities The Company owned an approximate 48.80% equity interest in Hartman Three Forest Plaza LLC in 2018. The Company’s investment in Hartman Three Forest Plaza LLC was accounted for under the equity method. Equity in losses of the unconsolidated entity was $396,979 related to Three Forest Plaza LLC for the year ended December 31, 2018. Equity in losses of unconsolidated entity is captioned as such in the accompanying consolidated statements of operations. On October 1, 2018, Three Forest Plaza LLC contributed the Three Forest Plaza property to Hartman SPE, LLC, a special purpose entity formed for the purpose of refinancing certain indebtedness of Hartman Short Term Income Properties XX, Inc, Hartman Short Term Income Properties XIX, Inc and Hartman Income REIT, Inc. The Company received a 5.89% membership interest in Hartman SPE, LLC in exchange for its 48.8% minority interest in Three Forest Plaza, LLC. Effective March 1, 2019, the Company's board of directors approved the exchange of 3.42% of the Company's 5.89% ownership interest in Hartman SPE, LLC for 700,302 shares of common stock of Hartman Short Term Income Properties XX, Inc. The exchange reduced the Company’s ownership interest in Hartman SPE, LLC from 5.89% to 2.47%. The Company's investment in Hartman SPE, LLC is accounted for under the cost method. The Company's investment in Hartman Short Term Income Properties XX, Inc. is stated at cost and accounted for under the cost method. The Company did not receive any distributions from Hartman SPE, LLC for the year ended December 31, 2019. The Company recognized dividend income of $408,507 f rom Hartman Short Term Income Properties XX, Inc. for the year ended December 31, 2019 |
Accrued Rent and Accounts Recei
Accrued Rent and Accounts Receivables, net | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Accrued Rent and Accounts Receivables, net | Accrued Rent and Accounts Receivable, net Accrued rent and accounts receivable, net, consisted of the following: December 31, 2019 2018 Tenant receivables $ 713,645 $ 71,955 Accrued rent 322,136 151,777 Allowance for uncollectible accounts (71,760) (64,630) Accrued rents and accounts receivable, net $ 964,021 $ 159,102 As of December 31, 2019 and 2018, the Company had an allowance for uncollectible accounts of $71,760 and $64,630, respectively, related to tenant receivables that the Company has specifically identified as potentially uncollectible based on assessment of each tenant’s credit-worthiness. For the years ended December 31, 2019 and 2018, the Company recorded bad debt expense in the amount of $7,130 and $51,873, respectively. Bad debt expense and any related recoveries are included in property operating expenses in the accompanying consolidated statements of operations. |
Future Minimum Rents
Future Minimum Rents | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Future Minimum Rents | Future Minimum Rents The Company leases the majority of its properties under noncancelable 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 noncancelable operating leases in existence at December 31, 2019 is as follows: December 31, Minimum Future Rents 2020 $ 11,324,941 2021 9,614,223 2022 6,236,771 2023 4,972,174 2024 3,009,124 Thereafter 1,916,991 Total $ 37,074,224 |
Notes Payable, net
Notes Payable, net | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable, net | Notes Payable, net The following table summarizes the Company's outstanding notes payable as December 31, 2019 and 2018: December 31, Property/Facility Current Maturity Rate (1) 2019 2018 Village Pointe (2) December 2019 L + 275 bps $ — $ 3,525,000 Richardson Tech Center (2) March 2021 L + 275 bps 2,520,000 2,520,000 Master Credit Facility Agreement - EWB (3) December 2021 P - 50 bps 16,000,000 8,268,750 18,520,000 14,313,750 Less unamortized deferred loan costs (202,638) (227,420) $ 18,317,362 $ 14,086,330 (1) One-month LIBOR ("L"); Prime ("P") (2) Payable in monthly installments of interest only until the maturity date. The Village Pointe note was paid in full on December 31, 2019. The interest rate for the Richardson Tech Center note as of December 31, 2019 was 4.55%. (3) The Company is a party to a $20 million master credit facility agreement ("MCFA") with East West Bank. The borrowing base of the MCFA may be adjusted from time to time subject to the lender’s underwriting with respect to real property collateral which secure the amount available to be borrowed. As of December 31, 2019 the MCFA is secured by the Spectrum Building, the 11211 Katy Freeway Building, the 1400 Broadfield Building, the 16420 Park Ten Building and the 7915 FM 1960 Building. The interest rate as of December 31, 2019 was 4.25%. The outstanding balance under the MCFA was $16,000,000 as of December 31, 2019 and the amount available to be borrowed was $4,000,000. The Company was in compliance with all loan covenants as of December 31, 2019. Interest expense for the years ended December 31, 2019 and 2018 was $567,725 and $313,075, respectively, including $107,945 and $44,839 of deferred loan cost amortization. Unamortized deferred loan costs were $202,638 and $227,420 as of December 31, 2019 and 2018, respectively. Interest expense of $61,262 and $13,714 was payable as of December 31, 2019 and 2018, respectively, and is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets. |
Related Party Arrangements
Related Party Arrangements | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Arrangements | Related Party Arrangements The Advisor is a wholly owned subsidiary of Hartman Advisors LLC, a Texas limited liability company owned 70% by Allen R. Hartman individually and 30% by the Property Manager. The Property Manager is a wholly owned subsidiary of Hartman Income REIT Management, LLC, which is wholly owned by Hartman Income REIT, Inc. and Subsidiaries of which approximately 16% of the voting stock is owned by Allen R. Hartman who is the Chief Executive Officer and Chairman of the Board of Directors. The Advisor and certain affiliates of the Advisor will receive fees and compensation in connection with the Offering, and the acquisition, management and sale of the Company’s real estate investments. In addition, in exchange for $1,000, the OP has issued the Advisor a separate, special limited partnership interest, in the form of Special Limited Partnership Interests. See Note 13 (“Special Limited Partnership Interest”) below. The Advisor will receive reimbursement for organizational and offering expenses incurred on the Company’s behalf, but only to the extent that such reimbursements do not exceed actual expenses incurred by the Advisor and would not cause the cumulative selling commission, the dealer manager fee and other organization and offering expenses borne by the Company to exceed 15% of gross offering proceeds from the sale of shares in the Offering. The Advisor, or its affiliates, will receive an acquisition fee equal to 2.5% of the cost of each investment the Company acquires, which includes the amount actually paid or allocated to fund the purchase, development, construction or improvement of each investment, including acquisition expenses and any debt attributable to each investment. The Advisor earned from the Company acquisition fees of $1,127,500 and $539,438, respectively, for the years ended December 31, 2019 and 2018. The Advisor, or its affiliates, will receive a debt financing fee equal to 1.0% of the amount available under any loan or line of credit originated or assumed, directly or indirectly, in connection with the acquisition, development, construction, improvement of properties or other permitted investments, which will be in addition to the acquisition fee paid to the Advisor. No debt financing fees were earned by Advisor for the years ended December 31, 2019 and 2018. The Company pays the Property Manager, an affiliate of the Advisor, property management fees equal to 3% of the effective gross revenues of the managed property. The Company pays and expects to pay the Property Manager leasing fees in an amount equal to the leasing fees charged by unaffiliated persons rendering comparable services in the same geographic location of the applicable property, provided that such fees will only be paid if a majority of the Company’s board of directors, including a majority of its independent directors, determines that such fees are fair and reasonable in relation to the services being performed. The Property Manager may subcontract the performance of its property management and leasing duties to third parties and the Property Manager will pay a portion of its property management fee to the third parties with whom it subcontracts for these services. The Company will reimburse the costs and expenses incurred by the Property Manager on the Company’s behalf, including the wages and salaries and other employee-related expenses of all employees of the Property Manager or its subcontractors who are engaged in the operation, management, maintenance or access control of our properties, including taxes, insurance and benefits relating to such employees, and travel and other out-of-pocket expenses that are directly related to the management of specific properties. Other charges, including fees and expenses of third-party professionals and consultants, will be reimbursed, subject to the limitations on fees and reimbursements contained in the Charter. If the Property Manager provides construction management services related to the improvement or finishing of tenant space in the Company’s real estate properties, the Company will pay the Property Manager a construction management fee in an amount that is usual and customary for comparable services rendered to similar projects in the geographic market of the project; provided, however, that the Company will only pay a construction management fee if a majority of the Company’s board of directors, including a majority of its independent directors, determines that such construction management fee is fair and reasonable and on terms and conditions not less favorable than those available from unaffiliated third parties. The Company pays the Advisor a monthly asset management fee equal to one-twelfth of 0.75% of the higher of (i) the cost or (ii) the value of all real estate investments the Company acquires. If Advisor or affiliate provides a substantial amount of services, as determined by the Company’s independent directors, in connection with the sale of one or more assets, the Company will pay the Advisor a disposition fee equal to (1) in the case of the sale of real property, the lesser of: (A) one-half of the aggregate brokerage commission paid (including the disposition fee) or, if none is paid, the amount that customarily would be paid, or (B) 3% of the sales price of each property sold, and (2) in the case of the sale of any asset other than real property, 3% of the sales price of such asset. The Company will reimburse the Advisor for all expenses paid or incurred by the Advisor in connection with the services provided to the Company, subject to the limitation that, commencing four fiscal quarters after the Company’s acquisition of its first asset, the Company will not reimburse the Advisor for any amount by which its operating expenses (including the asset management fee) at the end of the four preceding fiscal quarters exceeds the greater of: (1) 2% of the Company’s average invested assets (as defined in the Charter), or (2) 25% of the Company’s net income determined without reduction for any additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of the Company’s assets for that period. Notwithstanding the above, the Company may reimburse the Advisor for expenses in excess of this limitation if a majority of the Company’s independent directors determines that such excess expenses are justified based on unusual and non-recurring factors. On November 1, 2019, the Company issued an unsecured promissory note to Hartman XX, an affiliate of the Advisor and the Property Manager, in the face amount of $10,000,000 with an interest rate of 10% annually. The outstanding balance of the note is $4,400,000 as of December 31, 2019. The maturity date of the note is October 31, 2021. For the years ended December 31, 2019 and 2018, the Company incurred property management fees and reimbursable costs of $725,476 and $145,873 payable to the Property Manager and asset management fees of $309,006 and $84,721 payable to the Advisor. Property management fees and reimbursable costs paid to the Property Manager are included in property operating expenses in the accompanying consolidated statements of operations. Asset management fees paid to the Advisor are included in asset management fees in the accompanying consolidated statements of operations. The Company pays construction management fees and leasing commissions to the Property Manager in connection with the construction management and leasing of the Company's properties. For the years December 31, 2019 and 2018, the company incurred construction management fees of $90,695 and $9,371, respectively and $272,393 and $54,562, respectively, for leasing commissions. Construction management fees are capitalized and included in real estate in the consolidated balance sheets. Leasing commissions are capitalized and reported net of the amortized amount in the balance sheets. As of December 31, 2019, the Company had $105,899 due to the Advisor and $417,287 due from Hartman Short Term Income Properties XX, Inc. and $238,084 due from other Hartman affiliates. As of December 31, 2018, the Company had $31,892 due to the Advisor and $509,852 due from Hartman Short Term Income Properties XX, Inc. and $139,021 due to other Hartman affiliates. Mr. Jack Cardwell, an independent director, and his affiliates, own 489,982 Class A common shares in the Company as of December 31, 2019 representing approximately 5.76% of the Company’s issued and outstanding shares. |
Loss Per Share
Loss Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per Share Basic loss per share is computed using net loss attributable to common stockholders and the weighted average number of common shares outstanding. December 31, 2019 2018 Numerator: Net loss attributable to common stockholders $ (1,084,902) $ (1,292,229) Denominator: Weighted average common shares outstanding 6,074,548 2,716,593 Basic and diluted loss per common share: Net loss attributable to common stockholders $ (0.18) $ (0.48) |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code, commencing in the taxable year ended December 31, 2017. If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes its REIT taxable income to its stockholders, so long as it distributes at least 90 percent of its REIT taxable income (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.) REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. Prior to qualifying to be taxed as a REIT, the Company is subject to normal federal and state corporation income taxes. 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: 2019 2018 Ordinary income (unaudited) 52.4 % — % Return of capital (unaudited) 47.6 % 100.0 % 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 $32,512 and $12,178 was recorded in the consolidated financial statements for the years ended December 31, 2019 and 2018 respectively, with a corresponding charge to real estate taxes and insurance. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ EquityUnder the Company’s Articles of Amendment and Restatement (as amended and restated, the “Charter”), the Company has the authority to issue 900,000,000 shares of common stock, $0.01 per share par value, classified and designated as 850,000,000 shares of Class A common stock, 50,000,000 shares of Class T common stock, and 50,000,000 shares of preferred stock with a par value of $0.01 per share. On September 30, 2015, the Company sold 22,100 shares of common stock to Hartman Advisors, LLC at a purchase price of $9.05 per share for an aggregate purchase price of $200,005, which was paid in cash. The Company’s board of directors is authorized to amend the Charter, without the approval of the Company’s stockholders, to increase the aggregate number of authorized shares of capital stock or the number of shares of any class or series that the Company has authority to issue. Common Stock Shares of Class A and Class T 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. Neither Class A or Class T common stock have any preferences or preemptive conversion or exchange rights. Preferred Stock The board of directors, with the approval of a majority of the entire board of directors and without any action by the stockholders, may amend the charter from time to time to increase or decrease the aggregate number of authorized shares of capital stock or the number of authorized shares of capital stock of any class or series. If the Company were to create and issue preferred stock or convertible stock with a distribution preference over common stock, payment of any distribution preferences of outstanding preferred stock or convertible stock would reduce the amount of funds available for the payment of distributions on our common stock. Further, holders of preferred stock are normally entitled to receive a preference payment in the event we liquidate, dissolve or wind up before any payment is made to our common stockholders, likely reducing the amount common stockholders would otherwise receive upon such an occurrence. In addition, under certain circumstances, the issuance of preferred stock or a separate class or series of common stock may render more difficult or tend to discourage a merger, tender offer or proxy contest, the assumption of control by a holder of a large block of our securities and the removal of incumbent management. Stock-Based Compensation The Company awards vested restricted common shares 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. For the years ended December 31, 2019 and 2018 the Company granted 2,500 and 2,500 shares, respectively of restricted common stock to independent directors as compensation for services. The Company recognized $29,250 and $25,000 as stock-based compensation expense for the years ended December 31, 2019 and 2018, respectively, based upon the offering price of $11.70 and $10.00 , respectively per common share. Distributions The following table reflects total distributions paid in cash and issued in shares of our common stock for the periods indicated: Period Cash DRP & Stock Total First Quarter 2019 $ 304,955 $ 388,228 $ 693,183 Second Quarter 2019 387,574 484,395 871,969 Third Quarter 2019 498,717 645,844 1,144,561 Fourth Quarter 2019 745,566 628,561 1,374,127 Total $ 1,936,812 $ 2,147,028 $ 4,083,840 First Quarter 2018 $ 153,832 $ 192,202 $ 346,034 Second Quarter 2018 182,226 245,363 427,589 Third Quarter 2018 215,317 293,079 508,396 Fourth Quarter 2018 236,895 344,918 581,813 Total $ 788,270 $ 1,075,562 $ 1,863,832 |
Incentive Plans
Incentive Plans | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Incentive Plans | Incentive PlansThe Company has adopted a long-term incentive plan (the “Incentive Award Plan”) that provides for the grant of equity awards to employees, directors and consultants and those of the Company’s affiliates. The Incentive Award Plan authorizes the granting of restricted stock, stock options, stock appreciation rights, restricted or deferred stock units, dividend equivalents, other stock-based awards and cash-based awards to directors, officers, employees and consultants of the Company and the Company’s affiliates’ selected by the board of directors for participation in the Incentive Award Plan. Stock options and shares of restricted common stock granted under the Incentive Award Plan will not, in the aggregate, exceed an amount equal to 5.0% of the outstanding shares of the Company’s common stock on the date of grant or award of any such stock options or shares of restricted stock. Stock options may not have an exercise price that is less than the fair market value of a share of the Company’s common stock on the date of grant. Shares of common stock will be authorized and reserved for issuance under the Incentive Award Plan. The Company has adopted an independent directors’ compensation plan (the “Independent Directors Compensation Plan”) pursuant to which each of the Company’s independent directors will be entitled, subject to the plan’s conditions and restrictions, to receive an initial grant of 3,000 shares of restricted stock when the Company raises the minimum offering amount of $1,000,000 in the Offering. Each new independent director that subsequently joins the Company’s board of directors will receive a grant of 3,000 shares of restricted stock upon his or her election to the Company’s board of directors. The shares of restricted common stock granted to independent directors fully vest upon the completion of the annual term for which the director was elected. Subject to certain conditions, the non-vested shares of restricted stock granted pursuant to the Independent Directors Compensation Plan will become fully vested on the earlier to occur of (1) the termination of the independent director’s service as a director due to his or her death or disability, or (2) a change in control of the Company. No awards have been granted under the Incentive Award Plan as of December 31, 2019. Awards under the Independent Directors Compensation Plan for the years ended December 31, 2019 and 2018, respectively, consisted of 2,500 and 2,500 restricted, Class A common shares to our independent directors, valued at $11.70 and $10.00 per share based on the Offering price. The stock-based compensation expense is included in general and administrative expense in the accompanying consolidated statements of operations. |
Special Limited Partnership Int
Special Limited Partnership Interest | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Special Limited Partnership Interest | Special Limited Partnership InterestPursuant to the limited partnership agreement for the OP, SLP LLC, the holder of the Special Limited Partnership Interest, will be entitled to receive distributions equal to 15.0% of the OP’s net sales proceeds from the disposition of assets, but only after the Company’s stockholders have received, in the aggregate, cumulative distributions equal to their total invested capital plus a 6.0% cumulative, non-compounded annual pre-tax return on such aggregated invested capital. In addition, the holder or the Special Limited Partnership Interest is entitled to receive a payment upon the redemption of the Special Limited Partnership Interests. Pursuant to the limited partnership agreement for the OP, the Special Limited Partnership Interests will be redeemed upon: (1) the listing of the Company’s common stock on a national securities exchange; (2) the occurrence of certain events that result in the termination or non-renewal of the Company’s advisory agreement with the Advisor (“Advisory Agreement”) other than by the Company for “cause” (as defined in the Advisory Agreement); or (3) the termination of the Advisory Agreement by the Company for cause. In the event of the listing of the Company’s shares of common stock or a termination of the Advisory Agreement other than by the Company for cause, the Special Limited Partnership Interests will be redeemed for an aggregate amount equal to the amount that the holder of the Special Limited Partnership Interests would have been entitled to receive, as described above, if the OP had disposed of all of its assets at their fair market value and all liabilities of the OP had been satisfied in full according to their terms as of the date of the event triggering the redemption. Payment of the redemption price to the holder of the Special Limited Partnership Interests will be paid, at the holder’s discretion, in the form of (i) limited partnership interests in the OP, (ii) shares of the Company’s common stock, or (iii) a non-interest bearing promissory note. If the event triggering the redemption is a listing of the Company’s shares on a national securities exchange only, the fair market value of the assets of the OP will be calculated taking into account the average share price of the Company’s shares for a specified period. If the event triggering the redemption is an underwritten public offering of the Company’s shares, the fair market value will take into account the valuation of the shares as determined by the initial public offering price in such offering. If the triggering event of the redemption is the termination or non-renewal of the Advisory Agreement other than by the Company for cause for any other reason, the fair market value of the assets of the OP will be calculated based on an appraisal or valuation of the Company’s assets. In the event of the termination or non-renewal of the Advisory Agreement by the Company for cause, all of the Special Limited Partnership Interests will be redeemed by the OP for the aggregate price of $1. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Economic Dependency The Company is dependent on the Sponsor and the Advisor for certain services that are essential to the Company, including the identification, evaluation, negotiation, purchase and disposition of properties, management of the daily operations of the Company’s real estate portfolio, and other general and administrative responsibilities. In the event that these companies are unable to provide the respective services, the Company will be required to obtain such services from other providers. Litigation The Company is subject to various claims and legal actions that arise in the ordinary course of business. Management of the Company believes that the final disposition of such matters will not have a material adverse effect on the financial position of the Company. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On August 13, 2019, the Company entered into a purchase agreement to acquire a 42.63227 tenant in common interest in 3100 Weslayan, located in Houston, Texas. The Company has agreed to pay $3,576,620, including assumption of $1,751,620 in mortgage indebtedness. On November 27, 2019, the Company funded $1,740,000 as an acquisition deposit. The Company anticipates the closing of the acquisition in the second quarter of 2020. On March 12, 2020, the Company established a second $20 million revolving credit agreement with East West Bank. The Village Pointe and Accesso Portfolio properties are collateral security for the credit facility. The initial loan availability under the credit agreement is $13,925,000. The credit agreement matures on March 9, 2023. |
Schedule III - Real Estate Asse
Schedule III - Real Estate Assets and Accumulated Depreciation | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract] | |
Schedule III - Real Estate Assets and Accumulated Depreciation | Initial Cost to the Company Property Date Acquired Date of Construction Land Building and Improvements In-place lease value intangible Total Post – acquisition Improvements Village Pointe 2/8/2017 1982 $ 1,762 $ 4,380 $ 1,084 $ 7,226 $ 130 Richardson Tech Center 3/14/2018 1987 $ 1,260 $ 2,999 $ 906 $ 5,165 $ 433 Spectrum Building 12/27/2018 1986 $ 2,631 $ 12,862 $ 1,458 $ 16,951 $ 257 11211 Katy Freeway 1/10/2019 1976 $ 874 $ 2,926 $ 694 $ 4,494 $ 1,191 1400 Broadfield 10/1/2019 1982 $ 2,395 $ 6,208 $ 978 $ 9,581 $ 27 16420 Park Ten 10/1/2019 1982 $ 1,878 $ 5,115 $ 518 $ 7,511 $ 35 7915 FM 1960 10/1/2019 1982 $ 993 $ 2,808 $ 171 $ 3,972 $ 95 Timberway II 11/21/2019 1982 $ 2,973 $ 8,029 $ 889 $ 11,891 $ — One Park Ten 11/21/2019 1982 $ 769 $ 2,197 $ 109 $ 3,075 $ — Two Park Ten 11/21/2019 1982 $ 1,281 $ 3,174 $ 670 $ 5,125 $ 14 Total $ 16,816 $ 50,698 $ 7,477 $ 74,991 $ 2,182 Gross Carrying Amount at December 31, 2019 Property Land Building and Improvements In-place lease value intangible Total Accumulated Depreciation and Amortization Net Book Carrying Value Encumbrances (1) Village Pointe $ 1,762 $ 4,510 $ 1,084 $ 7,356 $ (1,311) $ 6,045 Richardson Tech Center $ 1,260 $ 3,433 $ 906 $ 5,599 $ (866) $ 4,733 $ 2,520 Spectrum Building $ 2,631 $ 13,119 $ 1,458 $ 17,208 $ (1,184) $ 16,024 11211 Katy Freeway $ 874 $ 4,117 $ 694 $ 5,685 $ (663) $ 5,022 1400 Broadfield $ 2,395 $ 6,235 $ 978 $ 9,608 $ (216) $ 9,392 16420 Park Ten $ 1,878 $ 5,149 $ 518 $ 7,545 $ (149) $ 7,396 7915 FM 1960 $ 993 $ 2,903 $ 171 $ 4,067 $ (91) $ 3,976 Timberway II $ 2,973 $ 8,029 $ 889 $ 11,891 $ (89) $ 11,802 One Park Ten $ 769 $ 2,198 $ 109 $ 3,076 $ (76) $ 3,000 Two Park Ten $ 1,281 $ 3,187 $ 670 $ 5,138 $ (46) $ 5,092 Total $ 16,816 $ 52,880 $ 7,477 $ 77,173 $ (4,691) $ 72,482 $ 2,520 (1) Specific encumbrances represent mortgage loans secured by the property indicated. See also Note 7. Years ended December 31, 2019 2018 Balance at beginning of period $ 29,674 $ 7,261 Additions during the period: Acquisitions 45,649 21,991 Improvements 1,850 422 Balance at end of period $ 77,173 $ 29,674 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements as of December 31, 2019 and 2018 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 financial position and operating results for the respective periods. |
Consolidation | The Company’s consolidated financial statements include the Company’s accounts and the accounts of the OP and XXI Holdings and the subsidiaries over which the Company has control. All intercompany balances and transactions are eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the consolidated 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 All highly liquid investments with original maturities of three months or less are considered to be cash equivalents. Cash and cash equivalents as of December 31, 2019 and 2018 consisted of demand deposits at commercial banks. |
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 mortgage debt agreements. |
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, notes payable, net and due from (to) related parties. The Company considers the carrying value, other than notes payable, net, to approximate the fair value of these financial instruments based on the short duration between origination of the instruments and their expected realization. Based on borrowing rates currently available to the Company for loans with similar terms, the carrying value of its notes payable approximates fair value. |
Revenue Recognition | Revenue Recognition The Company’s leases are accounted for as operating leases. Certain leases provide for tenant occupancy during periods 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, on the accompanying consolidated balance sheets. The Company will defer the recognition of contingent rental income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved. Additionally, 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 adopted ASU 2014-09, "Revenue from Contracts with Customers," (“ASU 2014-09”) which amends the guidance for revenue recognition to eliminate the industry-specific revenue recognition guidance and replace it with a principle based approach for determining revenue recognition. The Company adopted ASU 2014-09 effective January 1, 2018 using the modified retrospective approach and the adoption of this guidance did not have a material impact on the consolidated financial statements. The Company’s revenue is primarily derived from leasing activities, which is specifically excluded from ASU |
Investment in Unconsolidated Entities | Investment in Unconsolidated Entities On October 1, 2018, Hartman Three Forest Plaza LLC, a joint venture between the Company and Hartman XX Operating Partnership ("XX OP"), the operating partnership of Hartman Short Term Income Properties XX, Inc. ("Hartman XX"), contributed the Three Forest Plaza property to Hartman SPE, LLC, a special purpose entity formed for the purpose of refinancing certain indebtedness of Hartman Short Term Income Properties XX, Inc., Hartman Short Term Income Properties XIX, Inc. and Hartman Income REIT, Inc. The Company received a 5.89% membership interest in Hartman SPE, LLC in exchange for its 48.8% minority interest in Three Forest Plaza LLC. Effective March 1, 2019, the Company's board of directors approved the exchange of 3.42% of the Company's 5.89% ownership interest in Hartman SPE, LLC for 700,302 shares of common stock of Hartman XX. The exchange reduced the Company’s ownership interest in Hartman SPE, LLC from 5.89% to 2.47%. The Company's investment in Hartman SPE, LLC and Hartman XX is stated at cost and accounted for under the cost method. |
Real Estate | Real Estate Allocation of Purchase Price of Acquired Assets Acquisitions of integrated assets and activities that do not meet the definition of a business are accounted for as asset acquisitions. The Company believes most of its future acquisitions of operating properties will qualify as asset acquisitions. Third party transaction costs, including acquisition fees paid to Advisor, associated with asset acquisitions will be capitalized while internal acquisition costs will continue to be expensed as incurred. Upon acquisition, the purchase price of properties is allocated to the tangible assets acquired, consisting of land, buildings and improvements, any assumed debt and asset retirement obligations, if any, based on their relative fair values. Acquisition costs, including acquisition fees paid to our advisor, are capitalized as part of the purchase price. Land and building and improvement fair values are derived based upon the Company’s estimate of fair value after giving effect to estimated replacement cost less depreciation or estimates of the relative fair value of these assets using discounted cash flow analyses or similar methods. 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 income 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 Company determines the fair value of any assumed debt by calculating the net present value of the scheduled mortgage payments using interest rates for debt with similar terms and remaining maturities that the Company believes it could obtain at the date of acquisition. Any difference between the fair value and stated value of the assumed debt is recorded as a discount or premium and amortized over the remaining life of the loan as interest expense. In allocating the purchase price of each of the Company’s acquired or purchased properties, the Company makes assumptions and uses various estimates, including, but not limited to, the estimated useful lives of the assets, the cost of replacing certain assets and discount rates used to determine present values. The Company uses Level 3 inputs to estimate fair value of the acquired properties. Many of these estimates are obtained from independent third-party appraisals. However, the Company is responsible for the source and use of these estimates. These estimates require judgment and are subject to being imprecise; accordingly, if different estimates and assumptions were derived, the valuation of the various categories of the Company’s properties or related intangibles could in turn result in a difference in the depreciation or amortization expense recorded in the Company’s consolidated financial statements. These variances could be material to the Company’s results of operations and financial condition. Depreciation and amortization Depreciation is computed using the straight-line method over the estimated useful lives of 5 years to 39 years years for buildings and improvements. Tenant improvements are amortized 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 and other 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, 2019. 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 inappropriate 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). |
Accrued Rent and Accounts Receivable | Accrued Rent and Accounts Receivable Included in accrued rent and accounts receivable are 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 our claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. Prepaid expenses and other assets Prepaid expenses and other assets include prepaid insurance, subscription receivable and miscellaneous other assets and prepayments. As of December 31, 2019 and 2018, the Company had $573,378 and $289,148, respectively in prepaid expense and other assets. Acquisition Deposits Acquisition deposits is the money that the Company advances to the seller on a purchase of a property. As of December 31, 2019 and 2018, the Company had acquisition deposits of $1,850,000 and $110,000, respectively, which are included in the consolidated balance sheets. |
Organization and Offering Costs | Organization and Offering Costs As of December 31, 2019, total organization and offering costs incurred for the offering amounted to $1,377,924. The total organizational and offering costs incurred by the Company (including selling commissions, dealer manager fees and all other underwriting compensation) will not exceed 15% of the aggregate gross proceeds from the sale of the shares of common stock sold in the Offering. Organization costs, when recorded by the Company, are expensed as incurred, and offering costs, which include selling commissions, dealer manager fees and all other underwriting compensation, are deferred and charged to stockholders’ equity as such amounts are reimbursed or paid by the Advisor, the dealer manager or their affiliates from gross offering proceeds. For the years ended December 31, 2019 and 2018, such costs totaled $183,521 and $119,982, respectively. |
Income Taxes | Income Taxes The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code, commencing in the taxable year ended December 31, 2018. If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes its REIT taxable income to its stockholders, so long as it distributes at least 90 percent of its REIT taxable income (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.) REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. Prior to qualifying to be taxed as a REIT, the Company is subject to normal federal and state corporation income taxes. For the years ended December 31, 2019 and 2018, the Company incurred a net loss of $1,084,902 and $1,292,229, respectively. The Company does not anticipate forming any taxable REIT subsidiaries or otherwise generating 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 in that no future taxable income is expected. Accordingly, no deferred tax benefit or deferred tax asset has been recorded in the consolidated financial statements. |
Loss Per Share | Loss Per Share |
Concentration Risk | Concentration of Risk The Company maintains cash accounts in one U.S. financial institution. The terms of the Company's deposits are on demand to minimize risk. The balances of the Company's depository accounts may exceed the federally insured limits. No losses have been incurred in connection with these deposits. 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. |
Reclassifications | Reclassification Certain items in the comparative consolidated financial statements have been reclassified to conform to the presentation adopted in the current period. Restricted cash reporting line was added on the face of the consolidated balance sheets. The balance currently reported as restricted cash was reported previously in the prepaid expenses and other assets. |
Recent Accounting Pronouncements / Recently Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements On January 1, 2019, the Company adopted Accounting Standards Update ("ASU") 2016-02, "Leases," which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for in the same manner as operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. In connection with the new revenue guidance (ASC 606), the new revenue standard will apply to other components of revenue deemed to be non-lease components. Under the new guidance, we will continue to recognize the lease components of lease revenue on a straight-line basis over our respective lease terms as we do under prior guidance. However, we would recognize the non-lease components under the new revenue guidance as the related services are delivered. As a result, the total revenue recognized over time would not differ under the new guidance. This does not result in a difference from how the Company has historically recognized revenue for these lease and non-lease components. Additionally, ASU 2016-02 requires that lessees and lessors capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. Under ASU 2016-02, allocated payroll costs and other costs that are incurred regardless of whether the lease is obtained will no longer be capitalized as initial direct costs and instead will be expensed as incurred. This does not result in a difference from how the Company has historically recognized lease acquisition costs. The adoption of ASU 2016-02 had no material impact on the consolidated financial statements. On January 1, 2019, the Company adopted ASU 2018-07, "Improvements to Non-employee Stock-Based Payment Accounting." The updated guidance simplifies aspects of share-based compensation issued to non-employees by making the guidance consistent with the accounting for employee share-based compensation. The adoption of this guidance had no material impact on the consolidated financial statements. On January 1, 2018, the Company adopted the new accounting standard codified in Accounting Standards Codification (“ASC”) 606 - Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASC 606 replaces most existing revenue recognition guidance under GAAP. The standard permits the use of either the retrospective or cumulative effect transition method. Certain contracts with customers, principally lease contracts, are not within the scope of the new guidance. The Company has elected to use the modified retrospective method. The adoption of ASC 606 has no impact on the Company’s consolidated financial statements on adoption at January 1, 2018. On January 1, 2018, the Company adopted ASU No. 2016-01, Recognition and Measurement of Financial Assets and Liabilities, issued by the Financial Accounting Standards Board (“FASB”), which enhances the reporting requirements surrounding the measurement of financial instruments and requires equity securities to be measured at fair value with changes in the fair value recognized through net income for the period. The adoption of ASU No. 2016-01 has no material effect on our consolidated financial position or our consolidated results of operations. On January 1, 2018, the Company adopted ASU No. 2016-17, Interest Held Through Related Parties That Are Under Common Control, issued by the FASB, which amends the accounting guidance when determining the treatment of certain VIE’s to include the interest of related parties under common control in a VIE when considering whether or not the reporting entity is the primary beneficiary of the VIE when considering consolidation. The adoption of ASU No. 2016-17 had no material effect on the consolidated financial position or consolidated results of operations. On January 1, 2018, the Company adopted ASU No. 2016-18, “Classification of Restricted Cash,”issued by the FASB, which addresses the Statement of Cash Flow classification and presentation of restricted cash transactions. The standard permits the use of either the retrospective or cumulative effect transition method. The Company has elected to use the retrospective method. The adoption of ASU No. 2016-18 had no material effect on the Company’s consolidated financial position or consolidated results of operations. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, “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. On November 15, 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326): Effective Dates, which amended mandatory effective dates. ASU No. 2016-13 is now effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact this guidance will have on our financial statements when adopted. |
Real Estate (Tables)
Real Estate (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Real Estate [Abstract] | |
Schedule of Real Estate Assets, Net | The Company’s real estate assets, net as of December 31, 2019 and 2018 consisted of the following: December 31, 2019 2018 Land $ 16,815,968 $ 5,653,373 Buildings and improvements 52,880,016 20,572,620 In-place lease value intangible 7,476,772 3,448,738 77,172,756 29,674,731 Less accumulated depreciation and amortization (4,690,610) (1,209,392) Total real estate assets, net $ 72,482,146 $ 28,465,339 As reported Revised Land $ 1,266,560 2,630,873 Buildings and improvements 12,470,886 12,862,042 In-place lease intangible 3,213,492 1,458,023 Total $ 16,950,938 16,950,938 |
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, 2019 2018 In-place lease value intangible $ 7,476,772 $ 3,448,738 Less: In-place leases – accumulated amortization (2,442,913) (751,717) Acquired lease intangible assets, net $ 5,033,858 $ 2,697,021 |
Schedule of Aggregate Future Amortization Amounts From Acquired Lease Intangibles | The estimated aggregate future amortization amounts from acquired lease intangibles are as follows: December 31, In-place lease amortization 2020 $ (2,551,421) 2021 (1,647,533) 2022 (747,107) 2023 (87,797) 2024 — Thereafter — Total $ (5,033,858) |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of the assets acquired and the liabilities assumed based upon the Company’s purchase price allocation of the Park Ten place and Timberway: Assets acquired: Real estate assets $ 20,090,000 Total assets 20,090,000 Liabilities assumed: Real estate property taxes $ (505,908) Escrow-TI-LC $ (406,274) Prepaid rents $ (45,504) Security deposits (196,284) Total liabilities assumed (1,153,970) Fair value of net assets acquired $ 18,936,030 The following table summarizes the fair value of the assets acquired and the liabilities assumed based upon the Company’s purchase price allocation of the 1400 Broadfield, 16420 Park Ten and 7915 FM 1960: Assets acquired: Real estate assets $ 21,063,750 Total assets 21,063,750 Liabilities assumed: Real estate Property Taxes $ (459,648) Prepaid rents $ (17,149) Security deposits (285,423) Total liabilities assumed (762,220) Fair value of net assets acquired $ 20,301,530 The following table summarizes the fair value of the assets acquired and the liabilities assumed based upon the Company’s purchase price allocation of the 11211 Katy Freeway property acquisition: Assets acquired: Real estate assets $ 4,494,536 Total assets 4,494,536 Liabilities assumed: Prepaid rents $ (15,966) Security deposits (53,459) Total liabilities assumed (69,425) Fair value of net assets acquired $ 4,425,111 The following table summarizes the fair value of the assets acquired and the liabilities assumed based upon the Company’s purchase price allocations of the Richardson Tech property acquisition: Assets acquired: Real estate assets $ 5,166,000 Total assets 5,166,000 Liabilities assumed: Security deposits $ (45,650) Total liabilities assumed (45,650) Fair value of net assets acquired $ 5,120,350 Assets acquired: Real estate assets $ 16,950,938 Total assets 16,950,938 Liabilities assumed: Accounts payable and accrued expenses $ (194,826) Security deposits (26,209) Total liabilities assumed (221,035) Fair value of net assets acquired $ 16,729,903 |
Business Acquisition, Pro Forma Information | The following unaudited pro forma consolidated financial information for the years ended December 31, 2019 and 2018 is presented as if the Company acquired Spectrum, 11211 Katy Freeway, 1400 Broadfield, 16420 Park Ten, 7915 FM 1960, Park Ten Place and Timberway on January 1, 2018. This information is not necessarily indicative of what the actual results of operations would have been had the Company completed the acquisitions of Spectrum, 11211 Katy Freeway, 1400 Broadfield, 16420 Park Ten, 7915 FM 1960, Park Ten Place and Timberway on January 1, 2018, nor does it support or represent the Company’s future operations (in thousands): Years Ended December 31 2019 (unaudited) 2018 (unaudited) Revenue $ 12,389 $ 13,937 Net loss $ (2,148) $ (2,208) |
Schedule of Error Corrections and Prior Period Adjustments | Real estate assets reported for the quarterly periods ended March 31, 2019, June 30, 2019 and September 30, 2019, would have been presented as follows if the correction had been recorded in such quarterly period: Quarterly Period ended Year ended March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2018 As reported Revised As reported Revised As reported Revised As reported Revised Land 5,163,217 6,527,530 5,163,217 6,527,530 5,163,217 6,527,530 4,289,060 5,653,373 Building and improvements 23,174,211 23,565,367 23,844,403 24,235,559 24,436,798 24,827,954 20,181,464 20,572,620 In-place lease value intangible 5,898,634 4,143,165 5,898,634 4,143,165 5,898,634 4,143,165 5,204,207 3,448,738 34,236,062 34,236,062 34,906,254 34,906,254 35,498,649 35,498,649 29,674,731 29,674,731 Less accumulated amortization (2,045,840) (1,845,893) (2,962,756) (2,562,862) (3,846,985) (3,247,144) (1,209,392) (1,209,392) Total real estate assets, net 32,190,222 32,390,169 31,943,498 32,343,392 31,651,664 32,251,505 28,465,339 28,465,339 Depreciation and amortization expense and net loss for the quarterly periods ended March 31, 2019, June 30, 2019 and September 30, 2019, would have been presented as follows if the correction had been recorded in such quarterly period: Quarterly Period ended March 31, 2019 June 30, 2019 September 30, 2019 As reported Revised As reported Revised As reported Revised Depreciation and amortization 836,448 636,501 916,916 716,969 884,229 684,282 Net loss (460,922) (260,975) (446,893) (246,946) (539,544) (339,597) Three months ended March 31, 2019 Six months ended June 30, 2019 Nine months ended September 30, 2019 As reported Revised As reported Revised As reported Revised Depreciation and amortization 836,448 636,501 1,753,364 1,353,470 2,637,593 2,037,752 Net loss (460,922) (260,975) (907,815) (507,921) (1,447,359) (847,518) |
Accrued Rent and Accounts Rec_2
Accrued Rent and Accounts Receivables, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Accrued Rent and Receivables, Net | Accrued rent and accounts receivable, net, consisted of the following: December 31, 2019 2018 Tenant receivables $ 713,645 $ 71,955 Accrued rent 322,136 151,777 Allowance for uncollectible accounts (71,760) (64,630) Accrued rents and accounts receivable, net $ 964,021 $ 159,102 |
Future Minimum Rents (Tables)
Future Minimum Rents (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Summary of Minimum Future Rentals to be Received Under Noncancelable Operating Leases | A summary of minimum future rentals to be received (exclusive of renewals, tenant reimbursements, and contingent rentals) under noncancelable operating leases in existence at December 31, 2019 is as follows: December 31, Minimum Future Rents 2020 $ 11,324,941 2021 9,614,223 2022 6,236,771 2023 4,972,174 2024 3,009,124 Thereafter 1,916,991 Total $ 37,074,224 |
Notes Payable, net (Tables)
Notes Payable, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Notes Payable | The following table summarizes the Company's outstanding notes payable as December 31, 2019 and 2018: December 31, Property/Facility Current Maturity Rate (1) 2019 2018 Village Pointe (2) December 2019 L + 275 bps $ — $ 3,525,000 Richardson Tech Center (2) March 2021 L + 275 bps 2,520,000 2,520,000 Master Credit Facility Agreement - EWB (3) December 2021 P - 50 bps 16,000,000 8,268,750 18,520,000 14,313,750 Less unamortized deferred loan costs (202,638) (227,420) $ 18,317,362 $ 14,086,330 (1) One-month LIBOR ("L"); Prime ("P") (2) Payable in monthly installments of interest only until the maturity date. The Village Pointe note was paid in full on December 31, 2019. The interest rate for the Richardson Tech Center note as of December 31, 2019 was 4.55%. |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Basic loss per share is computed using net loss attributable to common stockholders and the weighted average number of common shares outstanding. December 31, 2019 2018 Numerator: Net loss attributable to common stockholders $ (1,084,902) $ (1,292,229) Denominator: Weighted average common shares outstanding 6,074,548 2,716,593 Basic and diluted loss per common share: Net loss attributable to common stockholders $ (0.18) $ (0.48) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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: 2019 2018 Ordinary income (unaudited) 52.4 % — % Return of capital (unaudited) 47.6 % 100.0 % Capital gains distribution (unaudited) — % — % Total 100.0 % 100.0 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Summary of Total Distributions Paid in Cash, Stock and Pursuant to the Distribution Reinvestment Plan | The following table reflects total distributions paid in cash and issued in shares of our common stock for the periods indicated: Period Cash DRP & Stock Total First Quarter 2019 $ 304,955 $ 388,228 $ 693,183 Second Quarter 2019 387,574 484,395 871,969 Third Quarter 2019 498,717 645,844 1,144,561 Fourth Quarter 2019 745,566 628,561 1,374,127 Total $ 1,936,812 $ 2,147,028 $ 4,083,840 First Quarter 2018 $ 153,832 $ 192,202 $ 346,034 Second Quarter 2018 182,226 245,363 427,589 Third Quarter 2018 215,317 293,079 508,396 Fourth Quarter 2018 236,895 344,918 581,813 Total $ 788,270 $ 1,075,562 $ 1,863,832 |
Organization (Details)
Organization (Details) - USD ($) | Jan. 14, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2018 | Sep. 07, 2019 | Sep. 30, 2015 |
Class of Stock [Line Items] | ||||||
Offering to the public | $ 250,000,000 | |||||
Offering to the public pursuant to distribution reinvestment plan | 19,000,000 | |||||
Special limited partnership interests | 1,000 | $ 1,000 | $ 1,000 | |||
Gross offering proceeds | $ 45,203,004 | $ 17,345,813 | ||||
IPO | ||||||
Class of Stock [Line Items] | ||||||
Gross offering proceeds | $ 83,805,002 | |||||
Follow-On Offering | Subsequent Event | ||||||
Class of Stock [Line Items] | ||||||
Offering To Public for Common Share | $ 180,000,000 | |||||
Common Stock, Value Authorized, Distribution Reinvestment Plan | $ 5,000,000 | |||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Offering price per share (in dollars per share) | $ 9.05 | |||||
Issuance of common shares (in shares) | 4,802,209 | 1,879,293 | ||||
Common Stock | Class A | ||||||
Class of Stock [Line Items] | ||||||
Shares issued as stock distributions (in shares) | 11,315 | |||||
Common Stock | Class T | ||||||
Class of Stock [Line Items] | ||||||
Shares issued as stock distributions (in shares) | 231,492 | |||||
Common Stock | IPO | ||||||
Class of Stock [Line Items] | ||||||
Issuance of common shares (in shares) | 8,511,646 | |||||
Shares issued as stock distributions (in shares) | 242,807 | |||||
Common Stock | IPO | Class A | ||||||
Class of Stock [Line Items] | ||||||
Offering price per share (in dollars per share) | $ 10 | $ 13 | ||||
Price per share for Class A common stock pursuant to the distribution reinvestment plan (in dollars per share) | 9.50 | |||||
Price per share for common stock pursuant to the distribution reinvestment plan (in dollars per share) | 11.70 | |||||
Common Stock | IPO | Class T | ||||||
Class of Stock [Line Items] | ||||||
Offering price per share (in dollars per share) | 9.60 | 12.48 | ||||
Price per share for Class A common stock pursuant to the distribution reinvestment plan (in dollars per share) | $ 9.12 | |||||
Price per share for common stock pursuant to the distribution reinvestment plan (in dollars per share) | $ 11.23 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | Mar. 01, 2019shares | Feb. 28, 2019 | Oct. 01, 2018 | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)financial_institutionshares | Dec. 31, 2018USD ($)shares |
Schedule of Equity Method Investments [Line Items] | ||||||||||
Impairment of real estate | $ 0 | |||||||||
Prepaid expenses and other assets | 573,378 | $ 289,148 | ||||||||
Acquisition deposit | 1,850,000 | 110,000 | ||||||||
Organization and offering costs incurred | 1,377,924 | |||||||||
Organization and offering costs | 183,521 | 119,982 | ||||||||
Net loss | $ 339,597 | $ 246,946 | $ 260,975 | $ 507,921 | $ 847,518 | 1,084,902 | 1,292,229 | |||
Deferred income tax expense (benefit) | 0 | 0 | ||||||||
Deferred tax assets | $ 0 | $ 0 | ||||||||
Antidilutive securities | shares | 0 | 0 | ||||||||
Number of financial institutions | financial_institution | 1 | |||||||||
Loss on deposits | $ 0 | |||||||||
Hartman Three Forest Plaza LLC | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Ownership percentage | 48.80% | |||||||||
Hartman SPE, LLC | Common Stock | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Number of shares received in exchange for ownership interest (in shares) | shares | 700,302 | |||||||||
Proceeds From Sale Of Common Stock | Organization And Offering Costs | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Concentration risk percentage | 15.00% | |||||||||
Revenue | Customer Concentration Risk | Spectrum Building | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Concentration risk percentage | 19.00% | |||||||||
Variable Interest Entity, Not Primary Beneficiary | Hartman SPE, LLC | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Ownership percentage | 2.47% | 5.89% | 5.89% | |||||||
Ownership percentage disposed of | 3.42% |
Real Estate - Real Estate Asset
Real Estate - Real Estate Assets (Details) - USD ($) | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Real Estate [Abstract] | |||||
Land | $ 16,815,968 | $ 6,527,530 | $ 6,527,530 | $ 6,527,530 | $ 5,653,373 |
Buildings and improvements | 52,880,016 | 24,827,954 | 24,235,559 | 23,565,367 | 20,572,620 |
In-place lease value intangible | 7,476,772 | 4,143,165 | 4,143,165 | 4,143,165 | 3,448,738 |
Real Estate Investment Property, at Cost | 77,172,756 | 35,498,649 | 34,906,254 | 34,236,062 | 29,674,731 |
Less accumulated depreciation and amortization | (4,690,610) | (3,247,144) | (2,562,862) | (1,845,893) | (1,209,392) |
Real estate assets, net | $ 72,482,146 | $ 32,251,505 | $ 32,343,392 | $ 32,390,169 | $ 28,465,339 |
Real Estate - Narrative (Detail
Real Estate - Narrative (Details) | Nov. 21, 2019USD ($)ft² | Oct. 01, 2019USD ($)ft² | Jan. 10, 2019USD ($)ft² | Dec. 27, 2018USD ($)ft² | Mar. 14, 2018USD ($)ft² | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Nov. 01, 2019ft² |
Real Estate [Abstract] | ||||||||
Depreciation | $ 1,790,022 | $ 339,053 | ||||||
Amortization | 1,691,196 | 467,484 | ||||||
Asset management fees | 309,006 | 84,721 | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Acquisition fees | $ 1,127,500 | $ 539,438 | ||||||
Mortgages | Mortgage Agreement Collateralized By Richardson Tech Center Property | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Proceeds from issuance of debt | $ 2,520,000 | |||||||
Park Ten Place | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Area of real estate property | ft² | 91,215 | |||||||
Timberway | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Area of real estate property | ft² | 130,828 | |||||||
Park Ten Place and Timberway | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Acquisition fees | $ 490,000 | |||||||
Payments to acquire businesses, gross | $ 19,600,000 | |||||||
1400 Broadfield Building | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Area of real estate property | ft² | 102,893 | |||||||
16420 Park Ten Building | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Area of real estate property | ft² | 83,760 | |||||||
7915 FM 1960 Building | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Area of real estate property | ft² | 67,581 | |||||||
1400 Broadfield, 16420 Park Ten and 7915 FM 1960 | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Acquisition fees | $ 513,750 | |||||||
Payments to acquire businesses, gross | $ 20,550,000 | |||||||
11211 Katy Freeway | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Acquisition fees | $ 123,750 | |||||||
Area of real estate property | ft² | 78,922 | |||||||
Payments to acquire businesses, gross | $ 4,370,786 | |||||||
Richardson Tech | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Acquisition fees | $ 126,000 | |||||||
Area of real estate property | ft² | 96,660 | |||||||
Payments to acquire businesses, gross | $ 5,040,000 | |||||||
Spectrum Building | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Acquisition fees | $ 413,438 | |||||||
Area of real estate property | ft² | 175,390 | |||||||
Payments to acquire businesses, gross | $ 16,537,500 |
Real Estate - In-Place Lease In
Real Estate - In-Place Lease Intangible Assets and Accumulated Amortization (Details) - In-place leases - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
In-place lease value intangible | $ 7,476,772 | $ 3,448,738 |
Less: In-place leases – accumulated amortization | (2,442,913) | (751,717) |
Total | $ 5,033,858 | $ 2,697,021 |
Real Estate - Future Amortizati
Real Estate - Future Amortization From Acquired Lease Intangibles (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
2020 | $ (2,551,421) | |
2021 | (1,647,533) | |
2022 | (747,107) | |
2023 | (87,797) | |
2024 | 0 | |
In-place leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
2020 | (2,551,421) | |
2021 | (1,647,533) | |
2022 | (747,107) | |
2023 | (87,797) | |
2024 | 0 | |
Thereafter | 0 | |
Total | $ (5,033,858) | $ (2,697,021) |
Real Estate - Fair Value of Ass
Real Estate - Fair Value of Assets Acquired and Liabilities Assumed Based Upon Purchase Price Allocation (Details) - USD ($) | Nov. 21, 2019 | Oct. 01, 2019 | Jan. 10, 2019 | Dec. 27, 2018 | Mar. 14, 2018 |
Park Ten Place and Timberway | |||||
Assets acquired: | |||||
Real estate assets | $ 20,090,000 | ||||
Total assets | 20,090,000 | ||||
Liabilities assumed: | |||||
Real estate property taxes | (505,908) | ||||
Escrow-TI-LC | (406,274) | ||||
Prepaid rents | (45,504) | ||||
Security deposits | (196,284) | ||||
Total liabilities assumed | (1,153,970) | ||||
Fair value of net assets acquired | $ 18,936,030 | ||||
1400 Broadfield, 16420 Park Ten and 7915 FM 1960 | |||||
Assets acquired: | |||||
Real estate assets | $ 21,063,750 | ||||
Total assets | 21,063,750 | ||||
Liabilities assumed: | |||||
Real estate property taxes | (459,648) | ||||
Prepaid rents | (17,149) | ||||
Security deposits | (285,423) | ||||
Total liabilities assumed | (762,220) | ||||
Fair value of net assets acquired | $ 20,301,530 | ||||
11211 Katy Freeway | |||||
Assets acquired: | |||||
Real estate assets | $ 4,494,536 | ||||
Total assets | 4,494,536 | ||||
Liabilities assumed: | |||||
Prepaid rents | (15,966) | ||||
Security deposits | (53,459) | ||||
Total liabilities assumed | (69,425) | ||||
Fair value of net assets acquired | $ 4,425,111 | ||||
Richardson Tech | |||||
Assets acquired: | |||||
Real estate assets | $ 5,166,000 | ||||
Total assets | 5,166,000 | ||||
Liabilities assumed: | |||||
Security deposits | (45,650) | ||||
Total liabilities assumed | (45,650) | ||||
Fair value of net assets acquired | $ 5,120,350 | ||||
Spectrum Building | |||||
Assets acquired: | |||||
Real estate assets | $ 16,950,938 | ||||
Total assets | 16,950,938 | ||||
Liabilities assumed: | |||||
Accounts payable and accrued expenses | (194,826) | ||||
Security deposits | (26,209) | ||||
Total liabilities assumed | (221,035) | ||||
Fair value of net assets acquired | $ 16,729,903 |
Real Estate - Pro Forma (Detail
Real Estate - Pro Forma (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Real Estate [Abstract] | ||
Revenue | $ 12,389,000 | $ 13,937,000 |
Net loss | $ (2,148,000) | $ (2,208,000) |
Real Estate - Schedule of Resta
Real Estate - Schedule of Restated Amounts (Details) - USD ($) | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Real Estate [Line Items] | |||||
Land | $ 16,815,968 | $ 6,527,530 | $ 6,527,530 | $ 6,527,530 | $ 5,653,373 |
Buildings and improvements | 52,880,016 | 24,827,954 | 24,235,559 | 23,565,367 | 20,572,620 |
In-place lease value intangible | 7,476,772 | 4,143,165 | 4,143,165 | 4,143,165 | 3,448,738 |
Real estate assets, at cost | 77,172,756 | 35,498,649 | 34,906,254 | 34,236,062 | 29,674,731 |
Less accumulated depreciation and amortization | (4,690,610) | (3,247,144) | (2,562,862) | (1,845,893) | (1,209,392) |
Real estate assets, net | 72,482,146 | 32,251,505 | 32,343,392 | 32,390,169 | 28,465,339 |
Spectrum Building | |||||
Real Estate [Line Items] | |||||
Land | 2,630,873 | ||||
Buildings and improvements | 12,862,042 | ||||
In-place lease value intangible | 1,458,023 | ||||
Real estate assets, at cost | 16,950,938 | ||||
Previously Reported | |||||
Real Estate [Line Items] | |||||
Land | 5,163,217 | 5,163,217 | 5,163,217 | 4,289,060 | |
Buildings and improvements | 24,436,798 | 23,844,403 | 23,174,211 | 20,181,464 | |
In-place lease value intangible | 5,898,634 | 5,898,634 | 5,898,634 | 5,204,207 | |
Real estate assets, at cost | 35,498,649 | 34,906,254 | 34,236,062 | 29,674,731 | |
Less accumulated depreciation and amortization | (3,846,985) | (2,962,756) | (2,045,840) | (1,209,392) | |
Real estate assets, net | $ 31,651,664 | $ 31,943,498 | $ 32,190,222 | $ 28,465,339 | |
Previously Reported | Spectrum Building | |||||
Real Estate [Line Items] | |||||
Land | 1,266,560 | ||||
Buildings and improvements | 12,470,886 | ||||
In-place lease value intangible | 3,213,492 | ||||
Real estate assets, at cost | $ 16,950,938 |
Real Estate - Schedule of Res_2
Real Estate - Schedule of Restated Quarterly Income and Expenses (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Real Estate [Line Items] | |||||||
Depreciation and amortization | $ 684,282 | $ 716,969 | $ 636,501 | $ 1,353,470 | $ 2,037,752 | $ 3,481,218 | $ 806,537 |
Net loss | (339,597) | (246,946) | (260,975) | (507,921) | (847,518) | $ (1,084,902) | $ (1,292,229) |
Previously Reported | |||||||
Real Estate [Line Items] | |||||||
Depreciation and amortization | 884,229 | 916,916 | 836,448 | 1,753,364 | 2,637,593 | ||
Net loss | $ (539,544) | $ (446,893) | $ (460,922) | $ (907,815) | $ (1,447,359) |
Investment in Unconsolidated _2
Investment in Unconsolidated Entities (Details) - USD ($) | Mar. 01, 2019 | Feb. 28, 2019 | Oct. 01, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule of Equity Method Investments [Line Items] | |||||
Equity in loss of unconsolidated entity | $ 0 | $ (396,979) | |||
Affiliated Entity | Dividend Distributions | Hartman SPE, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Amounts of transaction | 0 | ||||
Affiliated Entity | Dividend Distributions | Hartman Short Term Income Properties XX Inc | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Amounts of transaction | $ (408,507) | ||||
Hartman Three Forest Plaza LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 48.80% | ||||
Equity in loss of unconsolidated entity | $ 396,979 | ||||
Hartman SPE, LLC | Common Stock | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Number of shares received in exchange for ownership interest (in shares) | 700,302 | ||||
Hartman SPE, LLC | Variable Interest Entity, Not Primary Beneficiary | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 2.47% | 5.89% | 5.89% | ||
Ownership percentage disposed of | 3.42% |
Accrued Rent and Accounts Rec_3
Accrued Rent and Accounts Receivables, net (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Tenant receivables | $ 713,645 | $ 71,955 |
Accrued rent | 322,136 | 151,777 |
Allowance for uncollectible accounts | (71,760) | (64,630) |
Accrued rents and accounts receivable, net | $ 964,021 | $ 159,102 |
Accrued Rent and Accounts Rec_4
Accrued Rent and Accounts Receivables, net - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Receivables [Abstract] | ||
Allowance for uncollectible accounts | $ 71,760 | $ 64,630 |
Bad debt expense | $ 7,130 | $ 51,873 |
Future Minimum Rents (Details)
Future Minimum Rents (Details) | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 11,324,941 |
2021 | 9,614,223 |
2022 | 6,236,771 |
2023 | 4,972,174 |
2024 | 3,009,124 |
Thereafter | 1,916,991 |
Total | $ 37,074,224 |
Notes Payable, net - Outstandin
Notes Payable, net - Outstanding Notes Payable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 18,520,000 | $ 14,313,750 |
Less unamortized deferred loan costs | (202,638) | (227,420) |
Long-term Debt, Total | 18,317,362 | 14,086,330 |
Mortgage Agreement, Collateralized By Village Pointe SC Property | Mortgages | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 0 | 3,525,000 |
Mortgage Agreement, Collateralized By Village Pointe SC Property | Mortgages | LIBOR | ||
Debt Instrument [Line Items] | ||
Rate | 2.75% | |
Mortgage Agreement Collateralized By Richardson Tech Center Property | Mortgages | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 2,520,000 | 2,520,000 |
Interest rate | 4.55% | |
Mortgage Agreement Collateralized By Richardson Tech Center Property | Mortgages | LIBOR | ||
Debt Instrument [Line Items] | ||
Rate | 2.75% | |
East West Bank Master Credit Facility Agreement | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 20,000,000 | |
Interest rate | 4.25% | |
Line of credit facility, remaining borrowing capacity | $ 4,000,000 | |
East West Bank Master Credit Facility Agreement | Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 16,000,000 | $ 8,268,750 |
East West Bank Master Credit Facility Agreement | Line of Credit | Revolving Credit Facility | Prime Rate | ||
Debt Instrument [Line Items] | ||
Rate | (0.50%) |
Notes Payable, net - Additional
Notes Payable, net - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | ||
Interest expense | $ 567,725 | $ 313,075 |
Deferred loan cost amortization | 107,945 | 44,839 |
Unamortized deferred loan costs | 202,638 | 227,420 |
Interest payable | $ 61,262 | $ 13,714 |
Related Party Arrangements (Det
Related Party Arrangements (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Nov. 01, 2019 | |
Related Party Transaction [Line Items] | |||
Special limited partnership interests | $ 1,000 | $ 1,000 | |
Acquisition fee, percent | 2.50% | ||
Acquisition fees | $ 1,127,500 | 539,438 | |
Note receivable - related party | 4,400,000 | 0 | $ 10,000,000 |
Note receivable, interest rate | 10.00% | ||
Due from related parties | 549,473 | 338,939 | |
Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Due to related parties | 139,021 | ||
Due from related parties | $ 238,084 | ||
Hartman Advisors LLC (Advisor) | Subsidiaries | |||
Related Party Transaction [Line Items] | |||
Maximum reimbursement as a percent of offering proceeds | 15.00% | ||
Reimbursable advisor expense, percentage of average invested assets | 2.00% | ||
Reimbursable advisor expense, percent of ne income not to exceed operating expenses | 25.00% | ||
Hartman Advisors LLC (Advisor) | Subsidiaries | Debt Financing Fee | |||
Related Party Transaction [Line Items] | |||
Debt financing fee | 1.00% | ||
Debt financing fee | $ 0 | 0 | |
Hartman Advisors LLC (Advisor) | Subsidiaries | Sale Of Property | |||
Related Party Transaction [Line Items] | |||
Advisor fee, percent of sales price | 3.00% | ||
Hartman Advisors LLC (Advisor) | Subsidiaries | Sale Of Any Asset Other Than Real Property | |||
Related Party Transaction [Line Items] | |||
Advisor fee, percent of sales price | 3.00% | ||
Hartman Short Term Income Properties XX Inc | Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Due from related parties | $ 417,287 | 509,852 | |
Property Manager | Affiliated Entity | Property Management Fee | |||
Related Party Transaction [Line Items] | |||
Property management fees paid as a percentage of gross revenues | 3.00% | ||
Property managements fees and reimbursable costs | $ 725,476 | 145,873 | |
Property Manager | Affiliated Entity | Construction Management Fee | |||
Related Party Transaction [Line Items] | |||
Construction management fees and leasing commissions | 90,695 | 9,371 | |
Property Manager | Affiliated Entity | Leasing Commissions | |||
Related Party Transaction [Line Items] | |||
Construction management fees and leasing commissions | 272,393 | 54,562 | |
Hartman Advisors LLC (Advisor) | Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Due to related parties | 105,899 | 31,892 | |
Hartman Advisors LLC (Advisor) | Affiliated Entity | Property Management Fee | |||
Related Party Transaction [Line Items] | |||
Property managements fees and reimbursable costs | $ 309,006 | 84,721 | |
Mr. Jack Cardwell | |||
Related Party Transaction [Line Items] | |||
Common stock owned (in shares) | 489,982 | ||
Percent of common stock owned, issued and outstanding | 5.76% | ||
Texas Limited Liability Company | Affiliated Entity | Asset Management Fees Payable | |||
Related Party Transaction [Line Items] | |||
Due to related party, monthly fees, percentage of asset cost or value | 0.0625% | ||
Allen R Hartman | Hartman Income REIT Management Inc | Subsidiaries | |||
Related Party Transaction [Line Items] | |||
Ownership percentage by noncontrolling interest | 16.00% | ||
Allen R Hartman | Hartman Advisors LLC (Advisor) | |||
Related Party Transaction [Line Items] | |||
Ownership percentage | 70.00% | ||
Hartman Income REIT Management Inc | Hartman Advisors LLC (Advisor) | |||
Related Party Transaction [Line Items] | |||
Ownership percentage by noncontrolling interest | 30.00% | ||
Hartman Village Pointe LLC | Acquisition Fees | |||
Related Party Transaction [Line Items] | |||
Acquisition fees | $ 1,127,500 | $ 539,438 |
Loss Per Share (Details)
Loss Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | ||
Net loss attributable to common stockholders | $ (1,084,902) | $ (1,292,229) |
Denominator: | ||
Weighted average common shares outstanding (in shares) | 6,074,548 | 2,716,593 |
Basic and diluted loss per common share: | ||
Net loss attributable to common stockholders (in dollars per share) | $ (0.18) | $ (0.48) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Texas franchise tax expense | $ 32,512 | $ 12,178 |
Ordinary income (unaudited) | 52.40% | 0.00% |
Return of capital (unaudited) | 47.60% | 100.00% |
Capital gains distribution (unaudited) | 0.00% | 0.00% |
Total | 100.00% | 100.00% |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) | Sep. 30, 2015USD ($)$ / sharesshares | Dec. 31, 2019USD ($)vote$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares |
Class of Stock [Line Items] | |||
Common stock, shares authorized (in shares) | shares | 900,000,000 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | ||
Preferred stock, shares authorized (in shares) | shares | 50,000,000 | 50,000,000 | |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |
Share-based compensation expense | $ | $ 29,250 | $ 25,000 | |
Common Stock | |||
Class of Stock [Line Items] | |||
Number of shares sold | shares | 22,100 | ||
Offering price per share (in dollars per share) | $ / shares | $ 9.05 | ||
Cash received from shares sold | $ | $ 200,005 | ||
Common Stock | Restricted Stock | |||
Class of Stock [Line Items] | |||
Number of shares granted (in shares) | shares | 2,500 | 2,500 | |
Offering price per share (in dollars per share) | $ / shares | $ 11.70 | $ 10 | |
Class A | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized (in shares) | shares | 850,000,000 | 850,000,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |
Number of votes per share | vote | 1 | ||
Class T | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized (in shares) | shares | 50,000,000 | 50,000,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |
Number of votes per share | vote | 1 |
Stockholders' Equity - Dividend
Stockholders' Equity - Dividend distributions (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Dividends Payable [Line Items] | ||||||||||
Dividends | $ 1,374,127 | $ 1,144,561 | $ 871,969 | $ 693,183 | $ 581,813 | $ 508,396 | $ 427,589 | $ 346,034 | $ 4,083,840 | $ 1,863,832 |
Cash | ||||||||||
Dividends Payable [Line Items] | ||||||||||
Dividends | 745,566 | 498,717 | 387,574 | 304,955 | 236,895 | 215,317 | 182,226 | 153,832 | 1,936,812 | 788,270 |
DRP & Stock | ||||||||||
Dividends Payable [Line Items] | ||||||||||
Dividends | $ 628,561 | $ 645,844 | $ 484,395 | $ 388,228 | $ 344,918 | $ 293,079 | $ 245,363 | $ 192,202 | $ 2,147,028 | $ 1,075,562 |
Incentive Plans (Details)
Incentive Plans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Incentive Award Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of outstanding stock maximum | 5.00% | |
Independent Directors Compensation Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Initial grant to independent directors (in shares) | 3,000 | |
Offering amount required for issuance of initial grant | $ 1,000,000 | |
Initial grant upon election to board of directors (in shares) | 3,000 | |
Restricted Stock | Common Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares granted (in shares) | 2,500 | 2,500 |
Offering price per share (in dollars per share) | $ 11.70 | $ 10 |
Special Limited Partnership I_2
Special Limited Partnership Interest (Details) | 12 Months Ended |
Dec. 31, 2019$ / shares | |
Equity [Abstract] | |
Distributions as a percent of proceeds from asset dispositions | 15.00% |
Cumulative distribution rate on aggregate invested capital | 6.00% |
Aggregate redemption price if the Advisory Agreement is terminated or not renewed (in dollars per share) | $ 1 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Aug. 13, 2019 | Mar. 12, 2020 | Dec. 31, 2019 | Nov. 27, 2019 | Dec. 31, 2018 |
Subsequent Event [Line Items] | |||||
Acquisition deposit | $ 1,850,000 | $ 110,000 | |||
3100 Weslayan | |||||
Subsequent Event [Line Items] | |||||
Ownership percentage | 4263.227% | ||||
Payments to acquire businesses, gross | $ 3,576,620 | ||||
Debt assumed | $ 1,751,620 | ||||
Acquisition deposit | $ 1,740,000 | ||||
Subsequent Event | East West Bank Master Credit Facility Agreement | |||||
Subsequent Event [Line Items] | |||||
Maximum borrowing capacity | $ 20,000,000 | ||||
Line of credit facility, remaining borrowing capacity | $ 13,925,000 |
Schedule III - Real Estate As_2
Schedule III - Real Estate Assets and Accumulated Depreciation (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Initial Cost to the Company | |||
Land | $ 16,816 | ||
Building and Improvements | 50,698 | ||
In-place lease value intangible | 7,477 | ||
Total | 74,991 | ||
Post – acquisition Improvements | 2,182 | ||
Gross Carrying Amount | |||
Land | 16,816 | ||
Building and Improvements | 52,880 | ||
In-place lease value intangible | 7,477 | ||
Total | 77,173 | $ 29,674 | $ 7,261 |
Accumulated Depreciation & Amortization | (4,691) | ||
Net Book Carrying Value | 72,482 | ||
Encumbrances | 2,520 | ||
Village Pointe | |||
Initial Cost to the Company | |||
Land | 1,762 | ||
Building and Improvements | 4,380 | ||
In-place lease value intangible | 1,084 | ||
Total | 7,226 | ||
Post – acquisition Improvements | 130 | ||
Gross Carrying Amount | |||
Land | 1,762 | ||
Building and Improvements | 4,510 | ||
In-place lease value intangible | 1,084 | ||
Total | 7,356 | ||
Accumulated Depreciation & Amortization | (1,311) | ||
Net Book Carrying Value | 6,045 | ||
Richardson Tech | |||
Initial Cost to the Company | |||
Land | 1,260 | ||
Building and Improvements | 2,999 | ||
In-place lease value intangible | 906 | ||
Total | 5,165 | ||
Post – acquisition Improvements | 433 | ||
Gross Carrying Amount | |||
Land | 1,260 | ||
Building and Improvements | 3,433 | ||
In-place lease value intangible | 906 | ||
Total | 5,599 | ||
Accumulated Depreciation & Amortization | (866) | ||
Net Book Carrying Value | 4,733 | ||
Encumbrances | 2,520 | ||
Spectrum Building | |||
Initial Cost to the Company | |||
Land | 2,631 | ||
Building and Improvements | 12,862 | ||
In-place lease value intangible | 1,458 | ||
Total | 16,951 | ||
Post – acquisition Improvements | 257 | ||
Gross Carrying Amount | |||
Land | 2,631 | ||
Building and Improvements | 13,119 | ||
In-place lease value intangible | 1,458 | ||
Total | 17,208 | ||
Accumulated Depreciation & Amortization | (1,184) | ||
Net Book Carrying Value | 16,024 | ||
11211 Katy Freeway | |||
Initial Cost to the Company | |||
Land | 874 | ||
Building and Improvements | 2,926 | ||
In-place lease value intangible | 694 | ||
Total | 4,494 | ||
Post – acquisition Improvements | 1,191 | ||
Gross Carrying Amount | |||
Land | 874 | ||
Building and Improvements | 4,117 | ||
In-place lease value intangible | 694 | ||
Total | 5,685 | ||
Accumulated Depreciation & Amortization | (663) | ||
Net Book Carrying Value | 5,022 | ||
1400 Broadfield | |||
Initial Cost to the Company | |||
Land | 2,395 | ||
Building and Improvements | 6,208 | ||
In-place lease value intangible | 978 | ||
Total | 9,581 | ||
Post – acquisition Improvements | 27 | ||
Gross Carrying Amount | |||
Land | 2,395 | ||
Building and Improvements | 6,235 | ||
In-place lease value intangible | 978 | ||
Total | 9,608 | ||
Accumulated Depreciation & Amortization | (216) | ||
Net Book Carrying Value | 9,392 | ||
16420 Park Ten | |||
Initial Cost to the Company | |||
Land | 1,878 | ||
Building and Improvements | 5,115 | ||
In-place lease value intangible | 518 | ||
Total | 7,511 | ||
Post – acquisition Improvements | 35 | ||
Gross Carrying Amount | |||
Land | 1,878 | ||
Building and Improvements | 5,149 | ||
In-place lease value intangible | 518 | ||
Total | 7,545 | ||
Accumulated Depreciation & Amortization | (149) | ||
Net Book Carrying Value | 7,396 | ||
7915 FM 1960 | |||
Initial Cost to the Company | |||
Land | 993 | ||
Building and Improvements | 2,808 | ||
In-place lease value intangible | 171 | ||
Total | 3,972 | ||
Post – acquisition Improvements | 95 | ||
Gross Carrying Amount | |||
Land | 993 | ||
Building and Improvements | 2,903 | ||
In-place lease value intangible | 171 | ||
Total | 4,067 | ||
Accumulated Depreciation & Amortization | (91) | ||
Net Book Carrying Value | 3,976 | ||
Timberway II | |||
Initial Cost to the Company | |||
Land | 2,973 | ||
Building and Improvements | 8,029 | ||
In-place lease value intangible | 889 | ||
Total | 11,891 | ||
Post – acquisition Improvements | 0 | ||
Gross Carrying Amount | |||
Land | 2,973 | ||
Building and Improvements | 8,029 | ||
In-place lease value intangible | 889 | ||
Total | 11,891 | ||
Accumulated Depreciation & Amortization | (89) | ||
Net Book Carrying Value | 11,802 | ||
One Park Ten | |||
Initial Cost to the Company | |||
Land | 769 | ||
Building and Improvements | 2,197 | ||
In-place lease value intangible | 109 | ||
Total | 3,075 | ||
Post – acquisition Improvements | 0 | ||
Gross Carrying Amount | |||
Land | 769 | ||
Building and Improvements | 2,198 | ||
In-place lease value intangible | 109 | ||
Total | 3,076 | ||
Accumulated Depreciation & Amortization | (76) | ||
Net Book Carrying Value | 3,000 | ||
Two Park Ten | |||
Initial Cost to the Company | |||
Land | 1,281 | ||
Building and Improvements | 3,174 | ||
In-place lease value intangible | 670 | ||
Total | 5,125 | ||
Post – acquisition Improvements | 14 | ||
Gross Carrying Amount | |||
Land | 1,281 | ||
Building and Improvements | 3,187 | ||
In-place lease value intangible | 670 | ||
Total | 5,138 | ||
Accumulated Depreciation & Amortization | (46) | ||
Net Book Carrying Value | $ 5,092 |
Schedule III - Real Estate As_3
Schedule III - Real Estate Assets and Accumulated Depreciation - Summary of Activity of Real Estate Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | $ 29,674 | $ 7,261 |
Acquisitions | 45,649 | 21,991 |
Improvements | 1,850 | 422 |
Balance at end of period | $ 77,173 | $ 29,674 |