Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 15, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 333-207711 | ||
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 | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding (in shares) | 9,093,363 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001654948 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | Weaver and Tidwell, L.L.P. |
Auditor Location | Houston, Texas |
Auditor Firm ID | 410 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Real estate assets, at cost | $ 84,012,000 | $ 80,674,000 |
Accumulated depreciation and amortization | (16,369,000) | (10,849,000) |
Real estate assets, net | 67,643,000 | 69,825,000 |
Investment in tenancy in common interest, net | 3,386,000 | 3,926,000 |
Total | 71,029,000 | 73,751,000 |
Cash and cash equivalents | 0 | 408,000 |
Restricted cash | 144,000 | 139,000 |
Note receivable - related party | 11,388,000 | 13,400,000 |
Investment in unconsolidated entities | 11,734,000 | 11,734,000 |
Deferred lease commissions, net | 1,799,000 | 760,000 |
Accrued rent and accounts receivable, net | 1,955,000 | 1,849,000 |
Prepaid expenses and other assets | 303,000 | 271,000 |
Acquisition deposits | 125,000 | 125,000 |
Due from related parties | 1,060,000 | 0 |
Total assets | 99,537,000 | 102,437,000 |
Liabilities: | ||
Notes payable, net | 37,655,000 | 35,213,000 |
Accounts payable and accrued expenses | 5,200,000 | 4,109,000 |
Subscriptions for common stock | 0 | 130,000 |
Due to related parties | 0 | 420,000 |
Tenants' security deposits | 728,000 | 577,000 |
Total liabilities | 43,583,000 | 40,449,000 |
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, 2021 and 2020, respectively | 0 | 0 |
Additional paid-in capital | 82,445,000 | 80,519,000 |
Accumulated distributions and net loss | (26,582,000) | (18,620,000) |
Total stockholders' equity | 55,953,000 | 61,987,000 |
Total liabilities and total equity | 99,537,000 | 102,437,000 |
Class A | ||
Stockholders' equity: | ||
Common stock | 85,000 | 83,000 |
Class T | ||
Stockholders' equity: | ||
Common stock | 5,000 | 5,000 |
Class S | ||
Stockholders' equity: | ||
Common stock | 0 | 0 |
Class I | ||
Stockholders' equity: | ||
Common stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 900,000,000 | 900,000,000 |
Preferred stock, par value (in USD 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 USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 270,000,000 | 270,000,000 |
Common stock, shares issued (in shares) | 8,483,580 | 8,342,318 |
Common stock, shares outstanding (in shares) | 8,483,580 | 8,342,318 |
Class T | ||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 70,000,000 | 70,000,000 |
Common stock, shares issued (in shares) | 479,219 | 468,982 |
Common stock, shares outstanding (in shares) | 479,219 | 468,982 |
Class S | ||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 280,000,000 | 280,000,000 |
Common stock, shares issued (in shares) | 19,708 | 0 |
Common stock, shares outstanding (in shares) | 19,708 | 0 |
Class I | ||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 280,000,000 | 280,000,000 |
Common stock, shares issued (in shares) | 22,442 | 0 |
Common stock, shares outstanding (in shares) | 22,442 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | ||
Rental revenues | $ 11,651 | $ 12,073 |
Tenant reimbursements and other revenues | 1,254 | 955 |
Total revenues | 12,905 | 13,028 |
Expenses (income) | ||
Property operating expenses | 5,357 | 4,952 |
Asset management fees | 553 | 553 |
Organization and offering costs | 44 | 395 |
Real estate taxes and insurance | 2,382 | 2,495 |
Depreciation and amortization | 5,520 | 6,158 |
General and administrative | 1,416 | 1,018 |
Interest expense | 1,226 | 1,005 |
Interest and dividend income | (1,927) | (1,546) |
Equity in earnings of equity method investment | 540 | 0 |
Total expenses, net | 15,111 | 15,030 |
Net loss | $ (2,206) | $ (2,002) |
Basic and diluted loss per common share: | ||
Net loss attributable to common stockholders, basic (in usd per share) | $ (0.25) | $ (0.23) |
Net loss attributable to common stockholders, diluted (in usd per share) | $ (0.25) | $ (0.23) |
Weighted average number of shares outstanding, basic (in shares) | 8,950,000 | 8,691,000 |
Weighted average number of shares outstanding, diluted (in shares) | 8,950,000 | 8,691,000 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Distributions and Net Loss |
Shares outstanding, beginning balance (in shares) at Dec. 31, 2019 | 8,512 | |||
Stockholders' equity, beginning balance at Dec. 31, 2019 | $ 66,604 | $ 85 | $ 77,573 | $ (11,054) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common shares (in shares) | 311 | |||
Issuance of common shares | 3,290 | $ 3 | 3,287 | |
Redemption of common shares (in shares) | (12) | |||
Redemption of common shares | (143) | (143) | ||
Selling commissions | (198) | (198) | ||
Dividends and distributions (DRP) | (2,373) | (2,373) | ||
Dividends and distributions (cash) | (3,191) | (3,191) | ||
Net loss | (2,002) | (2,002) | ||
Shares outstanding, ending balance (in shares) at Dec. 31, 2020 | 8,811 | |||
Stockholders' equity, ending balance at Dec. 31, 2020 | 61,987 | $ 88 | 80,519 | (18,620) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common shares (in shares) | 269 | |||
Issuance of common shares | 2,791 | $ 2 | 2,789 | |
Redemption of common shares (in shares) | (75) | |||
Redemption of common shares | (745) | (745) | ||
Selling commissions | (118) | (118) | ||
Dividends and distributions (DRP) | (2,330) | (2,330) | ||
Dividends and distributions (cash) | (3,426) | (3,426) | ||
Net loss | (2,206) | (2,206) | ||
Shares outstanding, ending balance (in shares) at Dec. 31, 2021 | 9,005 | |||
Stockholders' equity, ending balance at Dec. 31, 2021 | $ 55,953 | $ 90 | $ 82,445 | $ (26,582) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (2,206,000) | $ (2,002,000) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Stock based compensation | 100,000 | 65,000 |
Depreciation and amortization | 5,520,000 | 6,158,000 |
Deferred loan and lease commission costs amortization | 430,000 | 291,000 |
Equity in earnings of unconsolidated joint venture | (540,000) | 0 |
Bad debt expense | 36,000 | 75,000 |
Changes in operating assets and liabilities: | ||
Accrued rent and accounts receivable | (1,293,000) | (960,000) |
Deferred leasing commissions | (1,289,000) | (568,000) |
Prepaid expenses and other assets | (32,000) | 175,000 |
Accounts payable and accrued expenses | 502,000 | 6,000 |
Due to /from related parties | 2,655,000 | 970,000 |
Tenants' security deposits | 151,000 | (69,000) |
Net cash provided by operating activities | 5,114,000 | 4,141,000 |
Cash flows from investing activities: | ||
Acquisition deposit | 0 | (125,000) |
Investment in TIC | 0 | (2,076,000) |
Additions to real estate | (3,338,000) | (3,501,000) |
Receipts from notes receivable-related parties | 5,236,000 | 0 |
Payments of notes receivable- related parties | (6,208,000) | (9,000,000) |
Investment in unconsolidated entities | 0 | (3,707,000) |
Net cash used in investing activities | (4,310,000) | (18,409,000) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 461,000 | 1,068,000 |
Payment of redemption of common stock | (745,000) | (143,000) |
Distributions paid in cash | (2,831,000) | (3,180,000) |
Payment of selling commissions | (118,000) | (198,000) |
Borrowings under insurance premium finance note | 445,000 | 0 |
Repayments under insurance premium finance note | (551,000) | 0 |
Deferred loan costs paid | (38,000) | (198,000) |
Subscriptions for common stock | (130,000) | 130,000 |
Proceeds from revolving credit facility | 2,400,000 | 17,400,000 |
Repayments under revolving credit facility | (46,000) | (475,000) |
Repayments on term loan | (54,000) | 0 |
Net cash (used in) provided by financing activities | (1,207,000) | 14,404,000 |
Net (decrease)/ increase in cash and cash equivalents and restricted cash | (403,000) | 136,000 |
Cash and cash equivalents and restricted cash, beginning of period | 547,000 | 411,000 |
Cash and cash equivalents and restricted cash, end of period | 144,000 | 547,000 |
Supplemental cash flow information: | ||
Cash paid for interest | 1,042,000 | 835,000 |
Supplemental disclosures of non-cash activities: | ||
Increase in distributions payable | 595,000 | 49,000 |
Distributions paid in stock | 2,330,000 | 2,324,000 |
Transfer of acquisition deposit to investment in TIC | 0 | 1,850,000 |
Notes received to settle related party receivable from Hartman XX | 0 | 10,611,000 |
Decrease in interest receivable from Hartman XX settlement | 1,151,000 | 0 |
Decrease in due to related parties from Hartman XX settlement | 4,135,000 | 0 |
Decrease in notes receivable from Hartman XX settlement | $ 2,984,000 | $ 0 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2021 | |
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 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. 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. On May 12, 2020, the Company's board of directors authorized the classification and designation of Class I and Class S common stock. As of December 31, 2020, 900,000,000 shares of capital stock are classified as common stock, par value $0.01 per share. 270,000,000 are classified and designated as Class A common stock (“Class A Shares”), 280,000,000 are classified and designated as Class S common stock ("Class S Shares"), 280,000,000 are classified and designated as Class I common stock ("Class I Shares"), and 70,000,000 are classified and designated as Class T Common stock (“Class T Shares”). Effective May 12, 2021, the sale price of our Class A, Class S, Class I and Class T common shares to the public is $11.38, $10.61, $10.23 and $10.89 per share, respectively, representing the net asset value per share as determined by the board of directors plus the applicable sales commissions and managing broker dealer fees. The sale price of all classes of common shares to our shareholders pursuant to the distribution reinvestment plan is $10.23 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 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”). Effective July 1, 2020, the Advisor and the Property Manager are wholly owned subsidiaries of Hartman Short Term Income Properties XX, Inc. 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, 2021, the Company had accepted investors' subscriptions for, and issued 9,004,949 shares, net of redemptions, of its Class A, Class T, Class S, and Class I common stock in its initial public offering, including 697,429 shares issued as stock distributions and pursuant to its distribution reinvestment plan resulting in gross offering proceeds of $88,987,006. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements as of December 31, 2021 and 2020 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 its 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, 2021 and 2020 consisted of demand deposits at commercial banks. As of December 31, 2021, the Company had a bank overdraft of $184,000. The overdraft is recorded as a liability in accounts payable and accrued expenses on the consolidated balance sheets. Restricted Cash Restricted cash on the accompanying consolidated balance sheets consists of amounts escrowed for future real estate taxes, insurance, capital expenditures and debt service, as required by certain mortgage debt agreements. Financial Instruments The accompanying consolidated balance sheets include the following financial instruments: cash and cash equivalents, restricted cash, notes receivable, accrued rent and accounts receivable, accounts payable and accrued expenses, notes payable, net and balance with 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’s revenue is primarily derived from leasing activities, which is specifically excluded from ASC 606 - Revenue from Contracts with Customers ("ASC 606"). The Company’s other revenue is comprised of tenant reimbursements for real estate taxes, insurance, common area maintenance, and operating. Reimbursements from real estate taxes and certain other expenses are also excluded from of ASC 606. Investment in Real Estate Joint Ventures and Partnerships To determine the method of accounting for partially owned real estate joint ventures and partnerships, management determines whether an entity is a VIE and, if so, determines which party is the primary beneficiary by analyzing whether we have both the power to direct the entity’s significant economic activities and the obligation to absorb potentially significant losses or receive potentially significant benefits. Significant judgments and assumptions inherent in this analysis include the design of the entity structure, the nature of the entity’s operations, future cash flow projections, the entity’s financing and capital structure, and contractual relationships and terms. We consolidate a VIE when we have determined that we are the primary beneficiary. Primary risks associated with our involvement with our VIEs include the potential funding of the entities’ debt obligations or making additional contributions to fund the entities’ operations or capital activities. Partially owned, non-variable interest real estate joint ventures and partnerships over which we have a controlling financial interest are consolidated in our consolidated financial statements. In determining if we have a controlling financial interest, we consider factors such as ownership interest, authority to make decisions, kick-out rights and substantive participating rights. Partially owned real estate joint ventures and partnerships where we do not have a controlling financial interest, but have the ability to exercise significant influence, are accounted for using the equity method. Management continually analyzes and assesses reconsideration events, including changes in the factors mentioned above, to determine if the consolidation or equity method treatment remains appropriate. The Company's investments in Hartman SPE, LLC and Hartman XX are accounted for in accordance with accounting standards for equity securities. Management has determined that the Hartman SPE, LLC and Hartman XX investments do not have readily determinable fair values and are recorded at cost minus impairment. The Company's investment in 3100 Weslayan is accounted for as an equity method investment. The Company evaluates its investment in real estate joint ventures and partnerships for impairment each reporting period. The Company evaluates various factors, including operating results of the investee, ability and intent to hold the investment and views on current market and economic conditions, when determining if there is a decline in the investment value. The Company will record an impairment charge if it's determined that a decline in the estimated fair value of an investment below its carrying amount is other than temporary. The ultimate realization is dependent on a number of factors, including the performance of each investment and market conditions. There is no certainty that impairments will not occur in the future if market conditions decline or if management’s plans for these investments change. 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 for buildings and improvements. Tenant improvements are depreciated using the straight-line method over the lesser of the life of the improvement or the remaining term of the lease. In-place leases are amortized using the straight-line method over the weighted average years' remaining calculated on terms of all of the leases in-place when acquired. Impairment The Company reviews its real estate 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, 2021. Projections of expected future cash flows require management to estimate future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, discount rates, the number of months it takes to re-lease the property and the number of years the property is held for investment. The use of inaccurate assumptions in the future cash flow analysis would result in an incorrect assessment of the property’s future cash flow and fair value and could result in the overstatement of the carrying value of the Company’s real estate and related intangible assets and net income. Fair Value Measurement Fair value measures are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets. Level 2: Directly or indirectly observable inputs, other than quoted prices in active markets. Level 3: Unobservable inputs in which there is little or no market data, which require a reporting entity to develop its own assumptions. Assets and liabilities measured at fair value are based on one or more of the following valuation techniques: Market Approach: Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Cost Approach: Amount required to replace the service capacity of an asset (replacement cost). Income Approach: Techniques used to convert future amounts to a single amount based on market expectations (including present-value, option-pricing, and excess-earnings models). The Company’s estimates of fair value were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts. The Company classifies assets and liabilities in the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. Accrued Rent and Accounts Receivable Accrued rent and accounts receivable include 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 creditworthiness (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, 2021 and 2020, the Company had $303,000 and $271,000, respectively in prepaid expense and other assets. Acquisition Deposits Acquisition deposits represent funds in escrow or advanced to a seller of a property which the Company plans to acquire. As of December 31, 2021 and 2020, the Company had acquisition deposits of $125,000 and $125,000, respectively, which are included in the consolidated balance sheets. Organization and Offering Costs As of December 31, 2021, total organization and offering costs incurred for the offering amounted to $8,314,000. 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, 2021 and 2020, such costs totaled $162,000 and $593,000, 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, 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. For the years ended December 31, 2021 and 2020, the Company had net loss of $2,206,000 and $2,002,000, respectively. The Company formed a taxable REIT subsidiary which may generate future taxable income which may be offset by the net loss carry forward. The Company considers that any deferred tax benefit and corresponding deferred tax asset which may be recorded in light of the net loss carry forward would be properly offset by an equal valuation allowance. Accordingly, no deferred tax benefit or deferred tax asset has been recorded in the consolidated financial statements. The Company is required to recognize in its consolidated financial statements the financial effects of a tax position only if it is determined that it is more likely than not that the tax position will not be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Management has reviewed the Company’s tax positions and is of the opinion that material positions taken by the Company would more likely than not be sustained upon examination. Accordingly, the Company has not recognized a liability related to uncertain tax positions as of December 31, 2021 and 2020, 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, 2021 and 2020, 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, 2021 and 2020. 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, relocations 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 who individually comprise more than 10% of the Company’s total rental revenues. One tenant of the Spectrum Building represents 18% and 19% of total annualized rental revenue for the years ended December 31, 2021 and 2020. Going Concern Evaluation Pursuant to ASU 205-40, “Presentation of Financial Statements – Going Concern,” management is required to evaluate the Company’s ability to continue as a going concern within one year after the date that these consolidated financial statements are issued. The Company's has a $20 million revolving credit loan with an extended maturity date of March 27, 2022. The Company has a second $20 million revolving credit loan with a maturity date of March 9, 2023. In order to renew or extend these revolving credit loans, the Company must meet the lender's underwriting criteria at the time of such renewal or extension request. The Company has a $2,482,000 term loan with an extended maturity date of March 14, 2022. In order to further extend the term loan maturity date, the Company must meet the second extension criteria set forth in the term loan agreement. Management has concluded that there is substantial doubt about the Company's ability to continue as a going concern within one year of the issuance date of these consolidated financial statements due to the fact of the uncertainty regarding the loan maturities. Management believes that the Company will be able to extend the maturity date or renew the loans for one year or longer which will mitigate the maturity dates issue within one year of the issuance date of these consolidated financial statements. See Note 15 (Subsequent Events) for additional information regarding loan extensions. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The updated guidance requires measurement and recognition of expected credit losses for financial assets, including trade and other receivables, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This is different from the current guidance as this will require immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets. Generally, the pronouncement requires a modified retrospective method of adoption. This guidance is effective for fiscal years and interim periods within those years beginning after January 2023, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on the consolidated financial statements when adopted. In March 2020, issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . ASU 2020-04 provides optional expedients for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The standard is effective for all entities as of March 12, 2020 through December 31, 2022. An entity can elect to apply the amendments as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to that date that the financial statements are available to be issued. The Company is currently evaluating the impact this guidance will have on the consolidated financial statements when adopted. |
Real Estate
Real Estate | 12 Months Ended |
Dec. 31, 2021 | |
Real Estate [Abstract] | |
Real Estate | Real Estate The Company’s real estate assets, net as of December 31, 2021 and 2020 consisted of the following, in thousands: December 31, 2021 2020 Land $ 16,816 $ 16,816 Buildings and improvements 59,719 56,381 In-place lease value intangible 7,477 7,477 84,012 80,674 Less accumulated depreciation and amortization (16,369) (10,849) Total real estate assets, net $ 67,643 $ 69,825 Depreciation expense for the years ended December 31, 2021 and 2020 was $3,825,000 and $3,650,000, respectively. The Company identifies and records the value of acquired lease intangibles at the property acquisition date. Such intangibles include the value of acquired in-place leases and above and below-market leases. Acquired lease intangibles are amortized over the leases' remaining terms. With respect to all properties owned by the Company, the Company considers all of the in-place leases to be market rate leases. The amount of total in-place lease intangible asset and the respective accumulated amortization are as follows, in thousands: December 31, 2021 2020 In-place lease value intangible $ 7,477 $ 7,477 Less: In-place leases – accumulated amortization (6,646) $ (4,951) Acquired lease intangible assets, net $ 831 $ 2,526 The estimated aggregate future amortization amounts from acquired lease intangibles are as follows, thousands: December 31, In-place lease amortization 2022 $ (747) 2023 (84) 2024 — 2025 — 2026 — Thereafter — Total $ (831) Amortization expense for the years ended December 31, 2021 and 2020 was $1,695,000 and $2,508,000 respectively. Acquisition fees incurred were $0 and $168,000 for the years ended in December 31, 2021 and 2020, respectively. Acquisition fees are capitalized and added to the real estate assets, at cost, in the accompanying consolidated balance sheets. Asset management fees incurred were $553,000 and $553,000 for the years ended December 31, 2021 and 2020, respectively. Asset management fees are captioned as such in the accompanying consolidated statements of operations. |
Investment in unconsolidated en
Investment in unconsolidated entities | 12 Months Ended |
Dec. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in unconsolidated entities | Investment in unconsolidated entities 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. ("Hartman XX"). The exchange reduced the Company’s ownership interest in Hartman SPE, LLC from 5.89% to 2.47%. On April 14, 2020, the Company made a tender offer to shareholders of Hartman Income REIT, Inc. ("HIREIT") to acquire up to 500,000 shares of HIREIT common stock at a price of $4.00 per share. On May 1, 2020, the Company extended the term of the tender offer until May 13, 2020 and modified the offer to purchase up 500,000 shares of HIREIT common stock at a price of $5.00 per share. As of September 24, 2020 the Company completed the acquisition of 661,940 HIREIT common shares and 80,000 Hartman Income REIT Operating Partnership ("HIROP") OP units for consideration of $3,709,703. The HIREIT common shares and HIROP OP units acquired were converted to 497,926 Hartman XX common shares and 60,178 Hartman XX Operating Partnership OP units in connection with the merger of those entities. The Company's investment in Hartman SPE, LLC and Hartman XX do not have a readily determinable fair value and are recorded at cost minus impairment. The aggregate carrying amount for the investments is $11,734,000. The Company did not receive any distributions from Hartman SPE, LLC for the year ended December 31, 2021. The Company recognized dividend income of $519,000 and $605,000, respectively from Hartman Short Term Income Properties XX, Inc. for the year ended December 31, 2021 and 2020. |
Accrued Rent and Accounts Recei
Accrued Rent and Accounts Receivables, net | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Accrued Rent and Accounts Receivables, net | Accrued Rent and Accounts Receivable, net Accrued rent and accounts receivable, net, consisted of the following, in thousands: December 31, 2021 2020 Tenant and other receivables $ 321 $ 203 Accrued rent 1,154 829 Accrued interest receivable 663 964 Allowance for doubtful accounts (183) (147) Accrued rent and accounts receivable, net $ 1,955 $ 1,849 As of December 31, 2021 and 2020, the Company had an allowance for uncollectible accounts of $183,000 and $147,000, respectively, related to tenant receivables that the Company has specifically identified as potentially uncollectible based on assessment of each tenant’s creditworthiness. For the years ended December 31, 2021 and 2020, the Company recorded bad debt expense in the amount of $36,000 and $75,000, 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, 2021 | |
Leases [Abstract] | |
Future Minimum Rents | Future Minimum Rents The Company leases the majority of its properties under noncancellable operating leases which provide for minimum base rentals. A summary of minimum future rentals to be received (exclusive of renewals, tenant reimbursements, and contingent rentals) under noncancellable operating leases in existence at December 31, 2021 is as follows, in thousands: December 31, Minimum Future Rents 2022 $ 10,158 2023 9,099 2024 5,869 2025 3,825 2026 2,104 Thereafter 1,338 Total $ 32,393 |
Notes Payable, net
Notes Payable, net | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Notes Payable, net | Notes Payable, netThe following table summarizes the Company's outstanding notes payable, net in thousands: December 31, Property/Facility Current Maturity Rate (1) 2021 2020 Richardson Tech Center (2) March 2022 L + 275 bps $ 2,466 $ 2,520 Master Credit Facility Agreement -EWB (3) March 2022 P - 50 bps 19,954 20,000 Master Credit Facility Agreement - EWB (4) March 2023 P - 50 bps 15,325 12,925 37,745 35,445 Less unamortized deferred loan costs (90) (232) $ 37,655 $ 35,213 (1) One-month LIBOR ("L"); Prime ("P") (2) Payable in monthly installments of interest only until the maturity date. The interest rate for the Richardson Tech Center note as of December 31, 2021 was 3.25%. On March 26, 2021 the Company entered into an amendment with the lender extending the maturity date to March 14, 2022. Principal and interest installments of $12,345 are payable monthly until the amended maturity date. See Note 15 ("Subsequent Events") for additional information. (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, 2021 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, 2021 was 2.75%. The outstanding balance under the MCFA was $19,954,000 as of December 31, 2021 and the amount available to be borrowed was $46,000. See Note 15 ("Subsequent Events") for additional information. (4) On March 10, 2020, the Company entered into a second $20 million master credit facility agreement ("MCFA II") 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 company entered into a joinder and amendment to the MCFA II facility dated March 29, 2021 which added an office property located in Houston, Texas and owned by Hartman Income REIT Property Holdings, LLC, an affiliate of the Company and Hartman XX, to the collateral security for the credit facility. The Company is a guarantor under the MCFA II credit facility. The borrowing base of the facility increased from $13,925,000 to 15,550,000. The credit agreement matures on March 9, 2023. The interest rate as of December 31, 2021 was 2.75%. On March 29, 2021, the MCFA II credit facility was modified to add a collateral property owned by Hartman Income REIT Property Holdings, LLC ("HIRPH"), a wholly owned subsidiary of Hartman XX Operating Partnership, LP. HIRPH was added to the MCFA II credit facility by means of a joinder agreement. The borrowing base of the credit facility increased $1,625,000 as a result of the credit facility modification. The outstanding balance under the MCFA II was $15,325,000 as of December 31, 2021 and the amount available to be borrowed was $225,000. Interest expense for the years ended December 31, 2021 and 2020 was $1,226,000 and $1,005,000, respectively, including $180,000 and $169,000 of deferred loan cost amortization. Unamortized deferred loan costs were $90,000 and $232,000 as of December 31, 2021 and 2020, respectively. Interest expense of $88,000 and $84,000 was payable as of December 31, 2021 and 2020, respectively, and is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets. |
Related Party Arrangements
Related Party Arrangements | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Arrangements | Related Party Arrangements The Advisor is a wholly owned subsidiary of Hartman Advisors, LLC. The Property Manager is Hartman Income REIT Management, Inc., which was a wholly owned by Hartman Income REIT, Inc. Effective July 1, 2020 Hartman Advisors, LLC and Hartman Income REIT Management, Inc. are wholly owned by Hartman Short Term Income Properties XX, Inc. 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 receives 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. Acquisition fees of $0 and $168,000, were earned by the Advisor for the years ended December 31, 2021 and 2020, respectively. 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, 2021 and 2020. 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 Company's Articles of Amendment and Restatement (as amended and restated, 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 pays 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 $6,012,000 and $2,789,000 as of December 31, 2021 and 2020, respectively. The amended maturity date of the note is October 31, 2022. Effective August 4, 2020, the Company transferred the balance due from Hartman Short Term Income Properties XX, Inc. in the amount of $8,200,000 together with additional advances in the amount of $2,412,000 for a total of $10,611,000, to a newly formed taxable REIT subsidiary, Hartman vREIT XXI TRS, Inc. The total amount is represented by two underlying notes from Hartman Retail III Holdings LLC and Hartman Ashford Bayou LLC. Each of the notes receivable bear interest at an annual interest rate of 10%. The outstanding balance of the Hartman Retail III Holdings LLC note is $1,547,000 and $6,782,000 as of December 31, 2021 and 2020, respectively. The amended maturity date of the Hartman Retail III Holdings LLC note is June 30, 2023. The outstanding balance of the Hartman Ashford Bayou LLC note is $3,829,000 as of December 31, 2021 and 2020. The amended maturity date of the Hartman Ashford Bayou LLC note is December 31, 2022. VIEs are defined as entities with a level of invested equity that is not sufficient to fund future operations on a stand-alone basis, or whose equity holders lack certain characteristics of a controlling financial interest. For identified VIEs, an assessment must be made to determine which party to the VIE, if any, has both the power to direct the activities of the VIE that most significantly impacts the performance of the VIE and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company is not deemed to be the primary beneficiary of Hartman Retail III Holdings LLC or Hartman Ashford Bayou LL, each of which qualifies as a VIE. Accordingly, the assets and liabilities and revenues and expenses of Retail III Holdings and Ashford Bayou have not been included in the accompanying consolidated financial statements. For the years ended December 31, 2021 and 2020, the Company incurred property management fees and reimbursable costs of $1,333,000 and $1,323,000 payable to the Property Manager and asset management fees of $553,000 and $553,000 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, 2021 and 2020, the company incurred construction management fees of $140,000 and $264,000, respectively and $1,290,000 and $917,000, 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. On March 11, 2022, the Company agreed to a settlement with Hartman XX, the Advisor, and the Property Manager (collectively the "Settlement Parties") to settle amounts owed by the Company to the Settlement Parties with amounts owed by the Settlement Parties to the Company. The settlement resulted in the reduction of $1,151,000 of interest receivable and reduction of $2,984,000 in principal of the unsecured promissory note receivable from Hartman XX in exchange for the reduction of $4,135,000 in unpaid fees owed to the Settlement Parties. The settlement was effective December 31, 2021. As of December 31, 2021 and 2020, the Company had $0 and $126,000 due to the Advisor, respectively and $0 and $581,000 due from Hartman Short Term Income Properties XX, Inc., respectively and $0 and $1,323,000 due to the Property Manager and $1,060,000 and $448,000 due from other Hartman affiliates. |
Loss Per Share
Loss Per Share | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 2020 Numerator: Net loss attributable to common stockholders (in thousands) $ (2,206) $ (2,002) Denominator: Basic weighted average shares outstanding (in thousands) 8,950 8,691 Basic loss per common share $ (0.25) $ (0.23) |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
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: 2021 2020 Ordinary income (unaudited) 27.2 % 35.7 % Return of capital (unaudited) 72.8 % 64.3 % 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 $63,000 and $62,000 was recorded in the consolidated financial statements for the years ended December 31, 2021 and 2020 respectively, with a corresponding charge to real estate taxes and insurance. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Under the Charter, the Company has the authority to issue 900,000,000 shares of common stock, $0.01 per share par value, and 50,000,000 shares of preferred stock with a par value of $0.01 per share. 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. On May 12, 2020, the board of directors authorized the classification and designation of Class I and Class S common stock. As of December 31, 2021, 900,000,000 shares of capital stock were classified as common stock, par value $0.01 per share, 270,000,000 of which were classified and designated as Class A common stock (“Class A Shares”), 280,000,000 were classified and designated as Class S common stock ("Class S Shares"), 280,000,000 of which were classified as Class I common stock ("Class I Shares"), and 70,000,000 were designated as Class T Common stock (“Class T Shares”). The additional share classes have been included in an amendment to the Company's registration statement and prospectus which was declared effective by the Securities and Exchange Commission on July 27, 2020. Common Stock Shares of all classes of common stock entitle the holders to one vote per share on all matters which stockholders are entitled to vote, to receive dividends and other distributions as authorized by the Company’s board of directors in accordance with the Maryland General Corporation Law and to all rights of a stockholder pursuant to the Maryland General Corporation Law. No classified or designated class of common stock has any preferences or preemptive conversion or exchange rights. 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. 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. As of December 31, 2021, 50,000,000 shares were classified as preferred stock, par value $0.01 per share. 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, 2021 and 2020 the Company granted 9,775 and 6,311 shares, respectively of restricted common stock to independent directors as compensation for services. The Company recognized $100,000 and $65,000 as stock-based compensation expense for the years ended December 31, 2021 and 2020, respectively, based upon the offering price of $10.23 and $10.30, 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, in thousands: Period Cash DRP & Stock Total First Quarter 2021 $ 566 $ 566 $ 1,132 Second Quarter 2021 1,117 578 1,695 Third Quarter 2021 862 581 1,443 Fourth Quarter 2021 (1) 286 605 891 Total $ 2,831 $ 2,330 $ 5,161 First Quarter 2020 $ 771 $ 543 $ 1,314 Second Quarter 2020 790 605 1,395 Third Quarter 2020 798 605 1,403 Fourth Quarter 2020 821 620 1,441 Total $ 3,180 $ 2,373 $ 5,553 |
Incentive Plans
Incentive Plans | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Incentive Plans | Incentive Plans The 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. Awards under the Independent Directors Compensation Plan for the years ended December 31, 2021 and 2020, respectively, consisted of 9,775 and 6,311 restricted, Class A common shares to our independent directors, valued at $10.23 and $10.30 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, 2021 | |
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, 2021 | |
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 During February 2021, the state of Texas experienced a severe winter storm, unofficially referred to as Winter Storm Uri, which resulted in power outages and electrical grid failures across the state. Wholesale prices for electricity increased significantly during this period. As a result, we experienced a substantial increase in electricity charges for some of our properties during the month of and after the storm. On May 26, 2021, Summer Energy LLC (“Summer”) filed a lawsuit against the Property Manager, an affiliate of the Company that manages our properties, in state court in Harris County, Texas. In this lawsuit, Summer seeks to collect approximately $8.4 million from the Property Manager that Summer claims that the Property Manager owes Summer under one or more electricity sales agreements (“Agreements”) related to Winter Storm Uri. Of the approximately $8.4 million claimed in the lawsuit, approximately $0.8 million relates to wholly owned properties of the Company. Under the Agreements, Summer provided electricity to buildings managed by the Property Manager at indexed prices. On March 24, 2022, the court entered a judgment in favor of Summer against the Property Manager in the amount of $7,871,000 plus customary pre- and post-judgment interest and attorney's fees. The Property Manager continues to dispute the amount of liability to Summer and intends to appeal the judgment. The outcome of the pending appeal is subject to significant uncertainty and we cannot provide any assurance that the Property Manager will ultimately prevail. If the Property Manager's liability is upheld for all or a significant portion of the amounts claimed by Summer, the Property Manager will incur a material loss, which will have an adverse effect on our financial condition, ability to meet our other obligations and ability to pay distributions to our stockholders. Even if the Property Manager is ultimately successful in its appeal, it may take considerable time to resolve the matter. The Company has recognized its applicable share of the judgment amount within the Company's consolidated statement of operations. Many of the Company’s leases contain provisions that require tenants to pay their allocable share of operating expenses, including utilities. At this time, the Company is unable to reasonably estimate an amount expected to be recovered from our tenants. Contingencies Recent events related to the COVID-19 pandemic and the actions taken to contain it have created substantial uncertainty for all businesses, including the Company. The Company’s consolidated financial statements as of and for the year ended December 31, 2021 have been prepared in light of these circumstances. Management has determined that there has been no impairment on real estate assets. However, circumstances related to the COVID-19 pandemic may result in recording impairments in future periods. Proposed Merger with Hartman XX On November 6, 2020, the board of directors of the Company and the board of directors of Hartman XX each approved a merger of Hartman XX with and into the Company. On January 26, 2021, the respective boards determined to delay the proposed merger transaction. On October 26, 2021, the respective boards determined to proceed with the proposed merger transaction. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On March 25, 2022, our board directors, including all of our independent directors, determined an estimated net asset value ("NAV") per share of the Company's common stock of $10.17. The sale price of our Class A, Class S, Class I and Class T common shares to the public is $11.31, $10.55, $10.17, and $10.83 per share, respectively, representing the net asset value per share as determined by the board of directors plus the applicable sales commissions and managing broker dealer fees. The sale price of all classes of common shares to our shareholders pursuant to the distribution reinvestment plan is $10.17 per share. Effective March 14, 2022, the Company entered into Loan Modification Agreement No. 2 exercising its second and final extension option of the Richardson Tech Center loan agreement to extend the loan maturity date to March 14, 2023. Under the terms of the amendment, principal and interest installments of $12,345 are payable monthly until the maturity date. On March 18, 2022, the Company entered into an amendment to the master credit facility agreement dated December 27, 2018 with East West Bank. The amendment increased face amount of the master credit facility from $20,000,000 to $35,000,000 and extended the term of the master credit facility to December 27, 2022. The promissory note bears interest at a prime rate, as defined in the master credit agreement less a margin of 0.10%. The prime index rate as of March 18, 2022 was 3.25% for an applicable interest rate of 3.15%. On March 24, 2022, the court entered a judgment in favor of Summer against the Property Manager in the amount of $7,871,000 plus customary pre- and post-judgment interest and attorney's fees. The Property Manager continues to dispute the amount of liability to Summer and intends to appeal the judgment. The outcome of the pending appeal is subject to significant uncertainty and we cannot provide any assurance that the Property Manager will ultimately prevail. The Company has recognized its applicable share of the judgment amount, approximately $750,000, within the Company's consolidated statement of operations. Many of the Company’s leases contain provisions that require tenants to pay their allocable share of operating expenses, including utilities. At this time, the Company is unable to reasonably estimate an amount expected to be recovered from our tenants. |
Schedule III - Real Estate Asse
Schedule III - Real Estate Assets and Accumulated Depreciation | 12 Months Ended |
Dec. 31, 2021 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract] | |
Schedule III - Real Estate Assets and Accumulated Depreciation | 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 $ 208 Richardson Tech Center 3/14/2018 1987 $ 1,260 $ 2,999 $ 906 $ 5,165 $ 836 Spectrum Building 12/27/2018 1986 $ 2,631 $ 12,862 $ 1,458 $ 16,951 $ 840 11211 Katy Freeway 1/10/2019 1976 $ 874 $ 2,926 $ 695 $ 4,495 $ 2,936 1400 Broadfield 10/1/2019 1982 $ 2,395 $ 6,208 $ 978 $ 9,581 $ 915 16420 Park Ten 10/1/2019 1982 $ 1,878 $ 5,115 $ 518 $ 7,511 $ 700 7915 FM 1960 10/1/2019 1982 $ 993 $ 2,808 $ 171 $ 3,972 $ 1,040 Timberway II 11/21/2019 1982 $ 2,973 $ 8,029 $ 889 $ 11,891 $ 705 One Park Ten 11/21/2019 1982 $ 769 $ 2,197 $ 109 $ 3,075 $ 542 Two Park Ten 11/21/2019 1982 $ 1,281 $ 3,174 $ 670 $ 5,125 $ 299 Total $ 16,816 $ 50,698 $ 7,478 $ 74,992 $ 9,021 Gross Carrying Amount at December 31, 2021 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 $ 4,587 $ 1,084 $ 7,433 $ (1,915) $ 5,518 Richardson Tech Center $ 1,260 $ 3,835 $ 906 $ 6,001 $ (1,777) $ 4,224 $ 2,466 Spectrum Building $ 2,631 $ 13,702 $ 1,458 $ 17,791 $ (3,473) $ 14,318 11211 Katy Freeway $ 874 $ 5,863 $ 695 $ 7,432 $ (1,647) $ 5,785 1400 Broadfield $ 2,395 $ 7,123 $ 978 $ 10,496 $ (2,083) $ 8,413 16420 Park Ten $ 1,878 $ 5,814 $ 518 $ 8,210 $ (1,458) $ 6,752 7915 FM 1960 $ 993 $ 3,848 $ 171 $ 5,012 $ (882) $ 4,130 Timberway II $ 2,973 $ 8,733 $ 889 $ 12,595 $ (1,819) $ 10,776 One Park Ten $ 769 $ 2,740 $ 109 $ 3,618 $ (405) $ 3,213 Two Park Ten $ 1,281 $ 3,473 $ 670 $ 5,424 $ (910) $ 4,514 Total $ 16,816 $ 59,718 $ 7,478 $ 84,012 $ (16,369) $ 67,643 $ 2,466 (1) Specific encumbrances represent mortgage loans secured by the property indicated. See also Note 7. Years ended December 31, 2021 2020 Gross carrying amount at beginning of period $ 80,674 $ 77,173 Additions during the period: Improvements 3,338 3,501 Gross carrying amount at end of period $ 84,012 $ 80,674 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements as of December 31, 2021 and 2020 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 its 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, 2021 and 2020 consisted of demand deposits at commercial banks. As of December 31, 2021, the Company had a bank overdraft of $184,000. The overdraft is recorded as a liability in accounts payable and accrued expenses on the consolidated balance sheets. |
Restricted Cash | Restricted Cash Restricted cash on the accompanying consolidated balance sheets consists of amounts escrowed for future real estate taxes, insurance, capital expenditures and debt service, as required by certain mortgage debt agreements. |
Financial Instruments | Financial Instruments The accompanying consolidated balance sheets include the following financial instruments: cash and cash equivalents, restricted cash, notes receivable, accrued rent and accounts receivable, accounts payable and accrued expenses, notes payable, net and balance with 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’s revenue is primarily derived from leasing activities, which is specifically excluded from ASC 606 - Revenue from Contracts with Customers ("ASC 606"). The Company’s other revenue is comprised of tenant reimbursements for real estate taxes, insurance, common area maintenance, and operating. Reimbursements from real estate taxes and certain other expenses are also excluded from of ASC 606. |
Investment in Real Estate Joint Ventures and Partnerships | Investment in Real Estate Joint Ventures and Partnerships To determine the method of accounting for partially owned real estate joint ventures and partnerships, management determines whether an entity is a VIE and, if so, determines which party is the primary beneficiary by analyzing whether we have both the power to direct the entity’s significant economic activities and the obligation to absorb potentially significant losses or receive potentially significant benefits. Significant judgments and assumptions inherent in this analysis include the design of the entity structure, the nature of the entity’s operations, future cash flow projections, the entity’s financing and capital structure, and contractual relationships and terms. We consolidate a VIE when we have determined that we are the primary beneficiary. Primary risks associated with our involvement with our VIEs include the potential funding of the entities’ debt obligations or making additional contributions to fund the entities’ operations or capital activities. Partially owned, non-variable interest real estate joint ventures and partnerships over which we have a controlling financial interest are consolidated in our consolidated financial statements. In determining if we have a controlling financial interest, we consider factors such as ownership interest, authority to make decisions, kick-out rights and substantive participating rights. Partially owned real estate joint ventures and partnerships where we do not have a controlling financial interest, but have the ability to exercise significant influence, are accounted for using the equity method. Management continually analyzes and assesses reconsideration events, including changes in the factors mentioned above, to determine if the consolidation or equity method treatment remains appropriate. The Company's investments in Hartman SPE, LLC and Hartman XX are accounted for in accordance with accounting standards for equity securities. Management has determined that the Hartman SPE, LLC and Hartman XX investments do not have readily determinable fair values and are recorded at cost minus impairment. The Company's investment in 3100 Weslayan is accounted for as an equity method investment. |
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 for buildings and improvements. Tenant improvements are depreciated using the straight-line method over the lesser of the life of the improvement or the remaining term of the lease. In-place leases are amortized using the straight-line method over the weighted average years' remaining calculated on terms of all of the leases in-place when acquired. Impairment The Company reviews its real estate 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, 2021. Projections of expected future cash flows require management to estimate future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, discount rates, the number of months it takes to re-lease the property and the number of years the property is held for investment. The use of inaccurate assumptions in the future cash flow analysis would result in an incorrect assessment of the property’s future cash flow and fair value and could result in the overstatement of the carrying value of the Company’s real estate and related intangible assets and net income. |
Fair Value Measurement | Fair Value Measurement Fair value measures are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets. Level 2: Directly or indirectly observable inputs, other than quoted prices in active markets. Level 3: Unobservable inputs in which there is little or no market data, which require a reporting entity to develop its own assumptions. Assets and liabilities measured at fair value are based on one or more of the following valuation techniques: Market Approach: Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Cost Approach: Amount required to replace the service capacity of an asset (replacement cost). Income Approach: Techniques used to convert future amounts to a single amount based on market expectations (including present-value, option-pricing, and excess-earnings models). The Company’s estimates of fair value were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts. The Company classifies assets and liabilities in the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. |
Accrued Rent and Accounts Receivable | Accrued Rent and Accounts Receivable Accrued rent and accounts receivable include 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 creditworthiness (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, 2021 and 2020, the Company had $303,000 and $271,000, respectively in prepaid expense and other assets. Acquisition Deposits |
Organization and Offering Costs | Organization and Offering Costs As of December 31, 2021, total organization and offering costs incurred for the offering amounted to $8,314,000. 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, 2021 and 2020, such costs totaled $162,000 and $593,000, 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, 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. For the years ended December 31, 2021 and 2020, the Company had net loss of $2,206,000 and $2,002,000, respectively. The Company formed a taxable REIT subsidiary which may generate future taxable income which may be offset by the net loss carry forward. The Company considers that any deferred tax benefit and corresponding deferred tax asset which may be recorded in light of the net loss carry forward would be properly offset by an equal valuation allowance. Accordingly, no deferred tax benefit or deferred tax asset has been recorded in the consolidated financial statements. The Company is required to recognize in its consolidated financial statements the financial effects of a tax position only if it is determined that it is more likely than not that the tax position will not be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Management has reviewed the Company’s tax positions and is of the opinion that material positions taken by the Company would more likely than not be sustained upon examination. Accordingly, the Company has not recognized a liability related to uncertain tax positions as of December 31, 2021 and 2020, respectively. |
Loss Per Share | 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, 2021 and 2020, 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, 2021 and 2020. |
Concentration of 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, relocations 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 who individually comprise more than 10% of the Company’s total rental revenues. One tenant of the Spectrum Building represents 18% and 19% of total annualized rental revenue for the years ended December 31, 2021 and 2020. |
Going Concern Evaluation | Going Concern Evaluation Pursuant to ASU 205-40, “Presentation of Financial Statements – Going Concern,” management is required to evaluate the Company’s ability to continue as a going concern within one year after the date that these consolidated financial statements are issued. The Company's has a $20 million revolving credit loan with an extended maturity date of March 27, 2022. The Company has a second $20 million revolving credit loan with a maturity date of March 9, 2023. In order to renew or extend these revolving credit loans, the Company must meet the lender's underwriting criteria at the time of such renewal or extension request. The Company has a $2,482,000 term loan with an extended maturity date of March 14, 2022. In order to further extend the term loan maturity date, the Company must meet the second extension criteria set forth in the term loan agreement. |
Recent Accounting Pronouncements / Recently Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The updated guidance requires measurement and recognition of expected credit losses for financial assets, including trade and other receivables, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This is different from the current guidance as this will require immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets. Generally, the pronouncement requires a modified retrospective method of adoption. This guidance is effective for fiscal years and interim periods within those years beginning after January 2023, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on the consolidated financial statements when adopted. In March 2020, issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . ASU 2020-04 provides optional expedients for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The standard is effective for all entities as of March 12, 2020 through December 31, 2022. An entity can elect to apply the amendments as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to that date that the financial statements are available to be issued. The Company is currently evaluating the impact this guidance will have on the consolidated financial statements when adopted. |
Real Estate (Tables)
Real Estate (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Real Estate [Abstract] | |
Schedule of Real Estate Assets, Net | The Company’s real estate assets, net as of December 31, 2021 and 2020 consisted of the following, in thousands: December 31, 2021 2020 Land $ 16,816 $ 16,816 Buildings and improvements 59,719 56,381 In-place lease value intangible 7,477 7,477 84,012 80,674 Less accumulated depreciation and amortization (16,369) (10,849) Total real estate assets, net $ 67,643 $ 69,825 |
Schedule of Total In-place Lease Intangible Assets and Accumulated Amortization | The amount of total in-place lease intangible asset and the respective accumulated amortization are as follows, in thousands: December 31, 2021 2020 In-place lease value intangible $ 7,477 $ 7,477 Less: In-place leases – accumulated amortization (6,646) $ (4,951) Acquired lease intangible assets, net $ 831 $ 2,526 |
Schedule of Aggregate Future Amortization Amounts From Acquired Lease Intangibles | The estimated aggregate future amortization amounts from acquired lease intangibles are as follows, thousands: December 31, In-place lease amortization 2022 $ (747) 2023 (84) 2024 — 2025 — 2026 — Thereafter — Total $ (831) |
Accrued Rent and Accounts Rec_2
Accrued Rent and Accounts Receivables, net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Accrued Rent and Receivables, Net | Accrued rent and accounts receivable, net, consisted of the following, in thousands: December 31, 2021 2020 Tenant and other receivables $ 321 $ 203 Accrued rent 1,154 829 Accrued interest receivable 663 964 Allowance for doubtful accounts (183) (147) Accrued rent and accounts receivable, net $ 1,955 $ 1,849 |
Future Minimum Rents (Tables)
Future Minimum Rents (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Lessor, Operating Lease, Payment to be Received, Fiscal Year Maturity | A summary of minimum future rentals to be received (exclusive of renewals, tenant reimbursements, and contingent rentals) under noncancellable operating leases in existence at December 31, 2021 is as follows, in thousands: December 31, Minimum Future Rents 2022 $ 10,158 2023 9,099 2024 5,869 2025 3,825 2026 2,104 Thereafter 1,338 Total $ 32,393 |
Notes Payable, net (Tables)
Notes Payable, net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Summary of Notes Payable | The following table summarizes the Company's outstanding notes payable, net in thousands: December 31, Property/Facility Current Maturity Rate (1) 2021 2020 Richardson Tech Center (2) March 2022 L + 275 bps $ 2,466 $ 2,520 Master Credit Facility Agreement -EWB (3) March 2022 P - 50 bps 19,954 20,000 Master Credit Facility Agreement - EWB (4) March 2023 P - 50 bps 15,325 12,925 37,745 35,445 Less unamortized deferred loan costs (90) (232) $ 37,655 $ 35,213 (1) One-month LIBOR ("L"); Prime ("P") (2) Payable in monthly installments of interest only until the maturity date. The interest rate for the Richardson Tech Center note as of December 31, 2021 was 3.25%. On March 26, 2021 the Company entered into an amendment with the lender extending the maturity date to March 14, 2022. Principal and interest installments of $12,345 are payable monthly until the amended maturity date. See Note 15 ("Subsequent Events") for additional information. (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, 2021 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, 2021 was 2.75%. The outstanding balance under the MCFA was $19,954,000 as of December 31, 2021 and the amount available to be borrowed was $46,000. See Note 15 ("Subsequent Events") for additional information. (4) On March 10, 2020, the Company entered into a second $20 million master credit facility agreement ("MCFA II") 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 company entered into a joinder and amendment to the MCFA II facility dated March 29, 2021 which added an office property located in Houston, Texas and owned by Hartman Income REIT Property Holdings, LLC, an affiliate of the Company and Hartman XX, to the collateral security for the credit facility. The Company is a guarantor under the MCFA II credit facility. The borrowing base of the facility increased from $13,925,000 to 15,550,000. The credit agreement matures on March 9, 2023. The interest rate as of December 31, 2021 was 2.75%. |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 2020 Numerator: Net loss attributable to common stockholders (in thousands) $ (2,206) $ (2,002) Denominator: Basic weighted average shares outstanding (in thousands) 8,950 8,691 Basic loss per common share $ (0.25) $ (0.23) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Cash Distribution Percentage | For Federal income tax purposes, the cash distributed to stockholders was characterized as follows for the years ended December 31: 2021 2020 Ordinary income (unaudited) 27.2 % 35.7 % Return of capital (unaudited) 72.8 % 64.3 % Capital gains distribution ( unaudited) — % — % Total 100.0 % 100.0 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Schedule of Distributions Paid in Cash and Issued in Shares of Common Stock | The following table reflects total distributions paid in cash and issued in shares of our common stock for the periods indicated, in thousands: Period Cash DRP & Stock Total First Quarter 2021 $ 566 $ 566 $ 1,132 Second Quarter 2021 1,117 578 1,695 Third Quarter 2021 862 581 1,443 Fourth Quarter 2021 (1) 286 605 891 Total $ 2,831 $ 2,330 $ 5,161 First Quarter 2020 $ 771 $ 543 $ 1,314 Second Quarter 2020 790 605 1,395 Third Quarter 2020 798 605 1,403 Fourth Quarter 2020 821 620 1,441 Total $ 3,180 $ 2,373 $ 5,553 |
Organization (Details)
Organization (Details) - USD ($) | Jan. 14, 2020 | Sep. 30, 2015 | Sep. 03, 2015 | Dec. 31, 2021 | Dec. 31, 2020 | May 12, 2021 |
Class of Stock [Line Items] | ||||||
Common stock, shares authorized (in shares) | 900,000,000 | 900,000,000 | ||||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | ||||
Special limited partnership interests | $ 1,000 | $ 1,000 | ||||
Gross offering proceeds | $ 461,000 | $ 1,068,000 | ||||
Class A | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares authorized (in shares) | 270,000,000 | 270,000,000 | ||||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | ||||
Class S | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares authorized (in shares) | 280,000,000 | 280,000,000 | ||||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | ||||
Class I | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares authorized (in shares) | 280,000,000 | 280,000,000 | ||||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | ||||
Class T | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares authorized (in shares) | 70,000,000 | 70,000,000 | ||||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | ||||
IPO | ||||||
Class of Stock [Line Items] | ||||||
Follow-on offering to shareholders | $ 19,000,000 | |||||
Gross offering proceeds | $ 88,987,006 | |||||
IPO | Class A | ||||||
Class of Stock [Line Items] | ||||||
Cash received from common shares sold | $ 250,000,000 | |||||
Follow-On Offering | ||||||
Class of Stock [Line Items] | ||||||
Follow-on offering to shareholders | $ 5,000,000 | |||||
Follow-on offering to public | $ 180,000,000 | |||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Cash received from common shares sold | $ 200,005 | |||||
Offering price per share to public (in USD per share) | $ 9.05 | |||||
Price per share for common stock pursuant to the distribution reinvestment plan (in USD per share) | $ 10.23 | |||||
Issuance of common shares (in shares) | 269,000 | 311,000 | ||||
Common Stock | Class A | ||||||
Class of Stock [Line Items] | ||||||
Offering price per share to public (in USD per share) | 11.38 | |||||
Common Stock | Class S | ||||||
Class of Stock [Line Items] | ||||||
Offering price per share to public (in USD per share) | 10.61 | |||||
Common Stock | Class I | ||||||
Class of Stock [Line Items] | ||||||
Offering price per share to public (in USD per share) | 10.23 | |||||
Common Stock | Class T | ||||||
Class of Stock [Line Items] | ||||||
Offering price per share to public (in USD per share) | $ 10.89 | |||||
Common Stock | IPO | ||||||
Class of Stock [Line Items] | ||||||
Issuance of common shares (in shares) | 9,004,949 | |||||
Shares issued as stock distributions (in shares) | 697,429 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 12 Months Ended | |
Dec. 31, 2021USD ($)financialInstitutionshares | Dec. 31, 2020USD ($)shares | |
Schedule of Equity Method Investments [Line Items] | ||
Bank overdraft | $ 184,000 | |
Impairment of real estate | 0 | |
Prepaid expenses and other assets | 303,000 | $ 271,000 |
Acquisition deposit | $ 125,000 | 125,000 |
Offering costs, maximum percentage of aggregate gross proceeds from sale | 15.00% | |
Organization and offering costs incurred | $ 8,314,000 | |
Organization and offering costs | 162,000 | 593,000 |
Net loss | 2,206,000 | 2,002,000 |
Deferred tax benefit | 0 | 0 |
Deferred tax assets | $ 0 | $ 0 |
Antidilutive securities (in shares) | shares | 0 | 0 |
Number of financial institutions | financialInstitution | 1 | |
Loss on deposits | $ 0 | |
Mortgage Agreement, Collateralized By Village Pointe SC Property | Mortgages | ||
Schedule of Equity Method Investments [Line Items] | ||
Debt face amount | 2,482,000 | |
Revolving Credit Facility | East West Bank Master Credit Facility Agreement | ||
Schedule of Equity Method Investments [Line Items] | ||
Maximum borrowing capacity | $ 20,000,000 | |
Minimum | ||
Schedule of Equity Method Investments [Line Items] | ||
Useful life | 5 years | |
Maximum | ||
Schedule of Equity Method Investments [Line Items] | ||
Useful life | 39 years | |
Revenue | Customer Concentration Risk | Spectrum Building | ||
Schedule of Equity Method Investments [Line Items] | ||
Concentration risk percentage | 18.00% | 19.00% |
Real Estate - Real Estate Asset
Real Estate - Real Estate Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Real Estate [Abstract] | ||
Land | $ 16,816 | $ 16,816 |
Buildings and improvements | 59,719 | 56,381 |
In-place lease value intangible | 7,477 | 7,477 |
Real estate assets, at cost | 84,012 | 80,674 |
Less accumulated depreciation and amortization | (16,369) | (10,849) |
Real estate assets, net | $ 67,643 | $ 69,825 |
Real Estate - Narrative (Detail
Real Estate - Narrative (Details) $ in Thousands | Dec. 29, 2020USD ($)ft² | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Finite-Lived Intangible Assets [Line Items] | |||
Depreciation expense | $ 3,825 | $ 3,650 | |
Amortization expense | 1,695 | 2,508 | |
Asset management fees | 553 | 553 | |
Equity in earnings of equity method investment | (540) | 0 | |
Hartman Village Pointe LLC | Acquisition Fees | |||
Finite-Lived Intangible Assets [Line Items] | |||
Acquisition fees | 0 | $ 168 | |
3100 Weslayan | |||
Finite-Lived Intangible Assets [Line Items] | |||
Ownership interest acquired | 83.00% | ||
Area of real estate property (in square feet) | ft² | 78,289 | ||
Ownership interest remaining with acquiree | 17.00% | ||
Payments to acquire asset | $ 3,758 | ||
Weslayan TIC Loan Agreement | Secured Debt | Financial Guarantee | |||
Finite-Lived Intangible Assets [Line Items] | |||
Outstanding principal balance | $ 3,912 | ||
Current interest rate | 466.00% |
Real Estate - In-Place Lease In
Real Estate - In-Place Lease Intangible Assets and Accumulated Amortization (Details) - In-place leases - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
In-place lease value intangible | $ 7,477 | $ 7,477 |
Less: In-place leases – accumulated amortization | (6,646) | (4,951) |
Total | $ 831 | $ 2,526 |
Real Estate - Future Amortizati
Real Estate - Future Amortization From Acquired Lease Intangibles (Details) - In-place leases - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
2022 | $ (747) | |
2023 | (84) | |
2024 | 0 | |
2025 | 0 | |
2026 | 0 | |
Thereafter | 0 | |
Total | $ (831) | $ (2,526) |
Investment in unconsolidated _2
Investment in unconsolidated entities (Details) - USD ($) | Sep. 24, 2020 | Jul. 01, 2020 | Mar. 01, 2019 | Feb. 28, 2019 | Sep. 30, 2015 | Dec. 31, 2021 | Dec. 31, 2020 | May 01, 2020 | Apr. 14, 2020 |
Schedule of Equity Method Investments [Line Items] | |||||||||
Number of common shares sold (in shares) | 22,100 | ||||||||
Proceeds from sale of stock | $ 3,709,703 | ||||||||
Investment carrying amount | $ 11,734,000 | ||||||||
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 | $ 519,000 | $ 605,000 | |||||||
Common Stock | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Offering price per share to public (in USD per share) | $ 9.05 | ||||||||
Hartman SPE, LLC | Variable Interest Entity, Not Primary Beneficiary | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Ownership percentage disposed of | 3.42% | ||||||||
Ownership interest percentage | 2.47% | 5.89% | |||||||
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 Income REIT Management Inc | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Number of common shares sold (in shares) | 661,940 | ||||||||
Hartman Income REIT Management Inc | Common Stock | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Shares purchased | 500,000 | 500,000 | |||||||
Offering price per share to public (in USD per share) | $ 5 | $ 4 | |||||||
Hartman Income REIT Management Inc | Common Stock | Hartman Short Term Income Properties XX Inc | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Number of shares converted | 497,926 | ||||||||
Hartman Income REIT Operating Partnership | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Number of common shares sold (in shares) | 80,000 | ||||||||
Hartman Income REIT Operating Partnership | Common Stock | Hartman Short Term Income Properties XX Inc | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Number of shares converted | 60,178 |
Accrued Rent and Accounts Rec_3
Accrued Rent and Accounts Receivables, net (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Receivables [Abstract] | ||
Tenant and other receivables | $ 321 | $ 203 |
Accrued interest receivable | 1,154 | 829 |
Accrued interest receivable | 663 | 964 |
Allowance for doubtful accounts | (183) | (147) |
Accrued rent and accounts receivable, net | $ 1,955 | $ 1,849 |
Accrued Rent and Accounts Rec_4
Accrued Rent and Accounts Receivables, net - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Receivables [Abstract] | ||
Allowance for uncollectible accounts | $ 183 | $ 147 |
Bad debt expense | $ 36 | $ 75 |
Future Minimum Rents (Details)
Future Minimum Rents (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Leases [Abstract] | |
2022 | $ 10,158 |
2023 | 9,099 |
2024 | 5,869 |
2025 | 3,825 |
2026 | 2,104 |
Thereafter | 1,338 |
Total | $ 32,393 |
Notes Payable, net - Outstandin
Notes Payable, net - Outstanding Notes Payable (Details) - USD ($) | Mar. 14, 2022 | Mar. 26, 2021 | Dec. 31, 2021 | Mar. 29, 2022 | Mar. 18, 2022 | Dec. 31, 2020 | Mar. 10, 2020 |
Debt Instrument [Line Items] | |||||||
Long-term debt, gross | $ 37,745,000 | $ 35,445,000 | |||||
Less unamortized deferred loan costs | (90,000) | (232,000) | |||||
Long-term debt | 37,655,000 | 35,213,000 | |||||
Mortgage Agreement, Collateralized By Village Pointe SC Property | Mortgages | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, gross | $ 2,466,000 | 2,520,000 | |||||
Mortgage Agreement, Collateralized By Village Pointe SC Property | Mortgages | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.75% | ||||||
Mortgage Agreement Collateralized By Richardson Tech Center Property | Mortgages | |||||||
Debt Instrument [Line Items] | |||||||
Debt interest rate during the period | 3.25% | ||||||
Monthly instalments payable under amendment | $ 12,345 | ||||||
Mortgage Agreement Collateralized By Richardson Tech Center Property | Mortgages | Subsequent Event | |||||||
Debt Instrument [Line Items] | |||||||
Monthly instalments payable under amendment | $ 12,345 | ||||||
East West Bank Master Credit Facility Agreement | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 20,000,000 | ||||||
Interest rate for MCFA | 2.75% | ||||||
Line of credit facility, remaining borrowing capacity | $ 46,000 | ||||||
East West Bank Master Credit Facility Agreement | Revolving Credit Facility | Subsequent Event | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 35,000,000 | ||||||
East West Bank Master Credit Facility Agreement | Line of Credit | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, gross | $ 19,954,000 | 20,000,000 | |||||
East West Bank Master Credit Facility Agreement | Line of Credit | Revolving Credit Facility | Prime Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | (0.50%) | ||||||
East West Bank Master Credit Facility Agreement II | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 20,000,000 | ||||||
Interest rate for MCFA | 2.75% | ||||||
Line of credit facility, remaining borrowing capacity | $ 225,000 | ||||||
East West Bank Master Credit Facility Agreement II | Revolving Credit Facility | Subsequent Event | |||||||
Debt Instrument [Line Items] | |||||||
Increase in credit facility, modification | $ 1,625,000 | ||||||
East West Bank Master Credit Facility Agreement II | Line of Credit | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, gross | $ 15,325,000 | $ 12,925,000 | |||||
Outstanding balance on line of credit | 13,925,000 | ||||||
New borrowing base | $ 15,550,000 | ||||||
East West Bank Master Credit Facility Agreement II | Line of Credit | Revolving Credit Facility | Prime Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | (0.50%) |
Notes Payable, net - Additional
Notes Payable, net - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Disclosure [Abstract] | ||
Interest expense | $ 1,226 | $ 1,005 |
Deferred loan cost amortization | 180 | 169 |
Unamortized deferred loan costs | 90 | 232 |
Interest payable | $ 88 | $ 84 |
Related Party Arrangements (Det
Related Party Arrangements (Details) - USD ($) | Mar. 11, 2022 | Aug. 04, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 01, 2019 |
Related Party Transaction [Line Items] | |||||
Special limited partnership interests | $ 1,000 | $ 1,000 | |||
Acquisition fee, percent | 2.50% | ||||
Note receivable - related party | $ 11,388,000 | 13,400,000 | |||
Notes received to settle related party receivable from Hartman XX | 0 | 10,611,000 | |||
Decrease in interest receivable from Hartman XX settlement | 1,151,000 | 0 | |||
Due to related parties | 0 | 420,000 | |||
Due from related parties | 1,060,000 | 0 | |||
Subsequent Event | |||||
Related Party Transaction [Line Items] | |||||
Decrease in interest receivable from Hartman XX settlement | $ 1,151,000 | ||||
Decrease in notes receivable from Hartman XX settlement | 2,984,000 | ||||
Decrease in due to related parties from Hartman XX settlement | $ 4,135,000 | ||||
Unsecured Promissory Note | |||||
Related Party Transaction [Line Items] | |||||
Note receivable - related party | $ 8,200,000 | 6,012,000 | 2,789,000 | $ 10,000,000 | |
Note receivable, interest rate | 10.00% | 10.00% | |||
Additional advances | $ 2,412,000 | ||||
Notes received to settle related party receivable from Hartman XX | $ 10,611,000 | ||||
Unsecured Promissory Note | Hartman Retail III Holdings LLC Note | |||||
Related Party Transaction [Line Items] | |||||
Intercompany notes receivable, gross | 1,547,000 | 6,782,000 | |||
Unsecured Promissory Note | Hartman Ashford Bayou LLC Note | |||||
Related Party Transaction [Line Items] | |||||
Intercompany notes receivable, gross | 3,829,000 | 3,829,000 | |||
Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Due from related parties | $ 1,060,000 | 448,000,000 | |||
Hartman Advisors LLC (Advisor) | Subsidiaries | |||||
Related Party Transaction [Line Items] | |||||
Maximum reimbursement as a percent of offering proceeds | 15.00% | ||||
Hartman Advisors LLC (Advisor) | Subsidiaries | |||||
Related Party Transaction [Line Items] | |||||
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, percentage | 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 | $ 0 | 581,000,000 | |||
Hartman Advisors LLC (Advisor) | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 0 | 126,000,000 | |||
Hartman Advisors LLC (Advisor) | Affiliated Entity | Property Management Fee | |||||
Related Party Transaction [Line Items] | |||||
Property managements fees and reimbursable costs | 553,000 | 553,000 | |||
Property Manager | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | $ 0 | 1,323,000,000 | |||
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 | $ 1,333,000 | 1,323,000 | |||
Property Manager | Affiliated Entity | Construction Management Fee | |||||
Related Party Transaction [Line Items] | |||||
Construction management fees and leasing commissions | 140,000 | 264,000 | |||
Property Manager | Affiliated Entity | Leasing Commissions | |||||
Related Party Transaction [Line Items] | |||||
Construction management fees and leasing commissions | $ 1,290,000 | 917,000 | |||
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% | ||||
Hartman Village Pointe LLC | Acquisition Fees | |||||
Related Party Transaction [Line Items] | |||||
Acquisition fees | $ 0 | $ 168,000 |
Loss Per Share (Details)
Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | ||
Net loss attributable to common stockholders (in thousands) | $ (2,206) | $ (2,002) |
Net loss attributable to common stockholders (in thousands) | $ (2,206) | $ (2,002) |
Denominator: | ||
Weighted average number of shares outstanding, basic (in shares) | 8,950,000 | 8,691,000 |
Weighted average number of shares outstanding, diluted (in shares) | 8,950,000 | 8,691,000 |
Basic and diluted ( loss) income per common share: | ||
Net loss attributable to common stockholders, basic (in usd per share) | $ (0.25) | $ (0.23) |
Net loss attributable to common stockholders, diluted (in usd per share) | $ (0.25) | $ (0.23) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Ordinary income (unaudited) | 27.20% | 35.70% |
Return of capital (unaudited) | 72.80% | 64.30% |
Capital gains distribution (unaudited) | 0.00% | 0.00% |
Total | 100.00% | 100.00% |
Texas franchise tax expense | $ 63 | $ 62 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) | Sep. 30, 2015USD ($)$ / sharesshares | Dec. 31, 2021USD ($)vote$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | May 12, 2021$ / shares |
Class of Stock [Line Items] | ||||
Common stock, shares authorized (in shares) | shares | 900,000,000 | 900,000,000 | ||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | ||
Preferred stock, shares authorized (in shares) | shares | 50,000,000 | 50,000,000 | ||
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 | ||
Number of votes per share | vote | 1 | |||
Number of common shares sold (in shares) | shares | 22,100 | |||
Share-based compensation expense | $ | $ 100,000 | $ 65,000 | ||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Sale of common stock, price per share (in USD per share) | $ 9.05 | |||
Cash received from common shares sold | $ | $ 200,005 | |||
Common Stock | Restricted Stock | ||||
Class of Stock [Line Items] | ||||
Restricted common stock granted (in shares) | shares | 9,775 | 6,311 | ||
Offering price per common share (in USD per share) | $ 10.23 | $ 10.3 | ||
Class A | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized (in shares) | shares | 270,000,000 | 270,000,000 | ||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | ||
Class A | Common Stock | ||||
Class of Stock [Line Items] | ||||
Sale of common stock, price per share (in USD per share) | $ 11.38 | |||
Class T | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized (in shares) | shares | 70,000,000 | 70,000,000 | ||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | ||
Class T | Common Stock | ||||
Class of Stock [Line Items] | ||||
Sale of common stock, price per share (in USD per share) | 10.89 | |||
Class S | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized (in shares) | shares | 280,000,000 | 280,000,000 | ||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | ||
Class S | Common Stock | ||||
Class of Stock [Line Items] | ||||
Sale of common stock, price per share (in USD per share) | 10.61 | |||
Class I | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized (in shares) | shares | 280,000,000 | 280,000,000 | ||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | ||
Class I | Common Stock | ||||
Class of Stock [Line Items] | ||||
Sale of common stock, price per share (in USD per share) | $ 10.23 |
Stockholders' Equity - Dividend
Stockholders' Equity - Dividend distributions (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | ||||||||||
Cash | $ 286 | $ 862 | $ 1,117 | $ 566 | $ 821 | $ 798 | $ 790 | $ 771 | $ 2,831 | $ 3,180 |
DRP & Stock | 605 | 581 | 578 | 566 | 620 | 605 | 605 | 543 | 2,330 | 2,373 |
Dividends | $ 891 | $ 1,443 | $ 1,695 | $ 1,132 | $ 1,441 | $ 1,403 | $ 1,395 | $ 1,314 | $ 5,161 | $ 5,553 |
Incentive Plans (Details)
Incentive Plans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
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 upon election, shares per individual | 3,000 | |
Offering amount required for issuance of initial grant | $ 1,000,000 | |
Restricted Stock | Common Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares granted (in shares) | 9,775 | 6,311 |
Offering price per share (in USD per share) | $ 10.23 | $ 10.3 |
Special Limited Partnership I_2
Special Limited Partnership Interest (Details) | 12 Months Ended |
Dec. 31, 2021$ / 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 USD per share) | $ 1 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Mar. 24, 2022 | May 26, 2021 | Dec. 31, 2021 |
Loss Contingencies [Line Items] | |||
Impairment of real estate | $ 0 | ||
Subsequent Event | |||
Loss Contingencies [Line Items] | |||
Loss contingency, damages awarded in settlement | $ 7,871,000 | ||
Pending Litigation | |||
Loss Contingencies [Line Items] | |||
Amount sought by plaintiff in litigation | $ 8,400,000 | ||
Litigation amount sought related to wholly owned properties of the company | $ 800,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Mar. 24, 2022 | Mar. 18, 2022 | Mar. 14, 2022 | Mar. 26, 2021 | Mar. 25, 2022 | Dec. 31, 2021 | May 12, 2021 | Sep. 30, 2015 |
Mortgage Agreement Collateralized By Richardson Tech Center Property | Mortgages | ||||||||
Subsequent Event [Line Items] | ||||||||
Monthly instalments payable under amendment | $ 12,345 | |||||||
East West Bank Master Credit Facility Agreement | Revolving Credit Facility | ||||||||
Subsequent Event [Line Items] | ||||||||
Maximum borrowing capacity | $ 20,000,000 | |||||||
Applicable interest rate | 2.75% | |||||||
Common Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Price per share for common stock pursuant to the distribution reinvestment plan (in USD per share) | $ 10.23 | |||||||
Offering price per share to public (in USD per share) | $ 9.05 | |||||||
Class A | Common Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Offering price per share to public (in USD per share) | 11.38 | |||||||
Class S | Common Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Offering price per share to public (in USD per share) | 10.61 | |||||||
Class I | Common Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Offering price per share to public (in USD per share) | 10.23 | |||||||
Class T | Common Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Offering price per share to public (in USD per share) | $ 10.89 | |||||||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Loss contingency, damages awarded in settlement | $ 7,871,000 | |||||||
Loss related to litigation | $ 750,000 | |||||||
Subsequent Event | Secured Promissory Notes | Prime Rate | ||||||||
Subsequent Event [Line Items] | ||||||||
Basis spread on variable rate | (0.10%) | |||||||
Applicable interest rate | 3.15% | |||||||
Subsequent Event | Mortgage Agreement Collateralized By Richardson Tech Center Property | Mortgages | ||||||||
Subsequent Event [Line Items] | ||||||||
Monthly instalments payable under amendment | $ 12,345 | |||||||
Subsequent Event | East West Bank Master Credit Facility Agreement | Revolving Credit Facility | ||||||||
Subsequent Event [Line Items] | ||||||||
Maximum borrowing capacity | $ 35,000,000 | |||||||
Subsequent Event | Common Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Price per share for common stock pursuant to the distribution reinvestment plan (in USD per share) | $ 10.17 | |||||||
Subsequent Event | Class A | ||||||||
Subsequent Event [Line Items] | ||||||||
Offering price per share to public (in USD per share) | 11.31 | |||||||
Subsequent Event | Class S | ||||||||
Subsequent Event [Line Items] | ||||||||
Offering price per share to public (in USD per share) | 10.55 | |||||||
Subsequent Event | Class I | ||||||||
Subsequent Event [Line Items] | ||||||||
Offering price per share to public (in USD per share) | 10.17 | |||||||
Subsequent Event | Class T | ||||||||
Subsequent Event [Line Items] | ||||||||
Offering price per share to public (in USD per share) | $ 10.83 |
Schedule III - Real Estate As_2
Schedule III - Real Estate Assets and Accumulated Depreciation (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Initial Cost to the Company | |||
Land | $ 16,816 | ||
Building and Improvements | 50,698 | ||
In-place lease value intangible | 7,478 | ||
Total | 74,992 | ||
Post – acquisition Improvements | 9,021 | ||
Gross Carrying Amount | |||
Land | 16,816 | ||
Building and Improvements | 59,718 | ||
In-place lease value intangible | 7,478 | ||
Total | 84,012 | $ 80,674 | $ 77,173 |
Accumulated Depreciation and Amortization | (16,369) | ||
Net Book Carrying Value | 67,643 | ||
Encumbrances | 2,466 | ||
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 | 208 | ||
Gross Carrying Amount | |||
Land | 1,762 | ||
Building and Improvements | 4,587 | ||
In-place lease value intangible | 1,084 | ||
Total | 7,433 | ||
Accumulated Depreciation and Amortization | (1,915) | ||
Net Book Carrying Value | 5,518 | ||
Richardson Tech Center | |||
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 | 836 | ||
Gross Carrying Amount | |||
Land | 1,260 | ||
Building and Improvements | 3,835 | ||
In-place lease value intangible | 906 | ||
Total | 6,001 | ||
Accumulated Depreciation and Amortization | (1,777) | ||
Net Book Carrying Value | 4,224 | ||
Encumbrances | 2,466 | ||
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 | 840 | ||
Gross Carrying Amount | |||
Land | 2,631 | ||
Building and Improvements | 13,702 | ||
In-place lease value intangible | 1,458 | ||
Total | 17,791 | ||
Accumulated Depreciation and Amortization | (3,473) | ||
Net Book Carrying Value | 14,318 | ||
11211 Katy Freeway | |||
Initial Cost to the Company | |||
Land | 874 | ||
Building and Improvements | 2,926 | ||
In-place lease value intangible | 695 | ||
Total | 4,495 | ||
Post – acquisition Improvements | 2,936 | ||
Gross Carrying Amount | |||
Land | 874 | ||
Building and Improvements | 5,863 | ||
In-place lease value intangible | 695 | ||
Total | 7,432 | ||
Accumulated Depreciation and Amortization | (1,647) | ||
Net Book Carrying Value | 5,785 | ||
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 | 915 | ||
Gross Carrying Amount | |||
Land | 2,395 | ||
Building and Improvements | 7,123 | ||
In-place lease value intangible | 978 | ||
Total | 10,496 | ||
Accumulated Depreciation and Amortization | (2,083) | ||
Net Book Carrying Value | 8,413 | ||
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 | 700 | ||
Gross Carrying Amount | |||
Land | 1,878 | ||
Building and Improvements | 5,814 | ||
In-place lease value intangible | 518 | ||
Total | 8,210 | ||
Accumulated Depreciation and Amortization | (1,458) | ||
Net Book Carrying Value | 6,752 | ||
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 | 1,040 | ||
Gross Carrying Amount | |||
Land | 993 | ||
Building and Improvements | 3,848 | ||
In-place lease value intangible | 171 | ||
Total | 5,012 | ||
Accumulated Depreciation and Amortization | (882) | ||
Net Book Carrying Value | 4,130 | ||
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 | 705 | ||
Gross Carrying Amount | |||
Land | 2,973 | ||
Building and Improvements | 8,733 | ||
In-place lease value intangible | 889 | ||
Total | 12,595 | ||
Accumulated Depreciation and Amortization | (1,819) | ||
Net Book Carrying Value | 10,776 | ||
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 | 542 | ||
Gross Carrying Amount | |||
Land | 769 | ||
Building and Improvements | 2,740 | ||
In-place lease value intangible | 109 | ||
Total | 3,618 | ||
Accumulated Depreciation and Amortization | (405) | ||
Net Book Carrying Value | 3,213 | ||
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 | 299 | ||
Gross Carrying Amount | |||
Land | 1,281 | ||
Building and Improvements | 3,473 | ||
In-place lease value intangible | 670 | ||
Total | 5,424 | ||
Accumulated Depreciation and Amortization | (910) | ||
Net Book Carrying Value | $ 4,514 |
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, 2021 | Dec. 31, 2020 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | $ 80,674 | $ 77,173 |
Improvements | 3,338 | 3,501 |
Balance at end of period | $ 84,012 | $ 80,674 |