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EX-10 - Hartman vREIT XXI, Inc.exhibit101membershipinterest.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 8-K

CURRENT REPORT


Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934


Date of Report (Date of earliest event reported): April 11, 2017


HARTMAN vREIT XXI, INC.

(Exact name of registrant as specified in its charter)


Maryland

 

333-207711

 

38-3978914

(State or other jurisdiction of

incorporation or organization)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

 

 

 

 

               2909 Hillcroft, Suite 420, Houston, Texas

 

77057

                 (Address of principal executive offices)

 

(Zip Code)

 

Registrant's telephone number, including area code: (713) 467-2222


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

 

  

o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  

o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

o

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR  240.14d-2(b))

 

 

o

Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR  240.13e-4(c)) 






Item 1.01   Entry into a Material Definitive Agreement.


Joint Venture Investment


On April 11, 2017, Hartman vREIT XXI, Inc. (the “Company”) entered into a membership interest purchase agreement with Hartman XX Limited Partnership (“Hartman XX LP”), the operating partnership of Hartman Short Term Income Properties XX, Inc., an affiliate of the Company.


Pursuant to the terms of a membership interest purchase agreement between the Company and Hartman XX LP, the Company may acquire up to $10,000,000 of the membership interest of Hartman XX LP in Hartman Three Forest Plaza, LLC (“Three Forest Plaza LLC”).


On April 11, 2017, the Company acquired 160,000 membership units for $1,600,000 representing a 4.48745% interest in Three Forest Plaza LLC.  The Company paid for the membership units acquired with proceeds from the Company’s public offering.


The material items of the joint venture agreement regarding described herein are qualified in their entirety by the agreement attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.


On December 22, 2016, Hartman XX LP through, a wholly-owned subsidiary, Three Forest Plaza LLC, acquired a fee simple interest in a 19-story suburban office building comprising approximately 366,549 square feet and located in Dallas, Texas.  The property is commonly referred to as Three Forest Plaza.


Three Forest Plaza was built in 1983.  As of March 31, 2017, Three Forest Plaza was 76% occupied by 42 tenants, including three roof-top tenants.


Three Forest Plaza was acquired by Three Forest Plaza LLC from Massachusetts Mutual Life Insurance Company for a purchase price, as amended, of $35,655,000, exclusive of closing costs.  Three Forest Plaza LLC financed the payment of the purchase price for the Three Forest Plaza property with proceeds from the public offering of Hartman Short Term Income Properties XX, Inc. and mortgage loan proceeds from a bank.


An acquisition fee of approximately $891,375 was earned by Hartman Advisors LLC, our affiliated external advisor, in connection with the purchase of Three Forest Plaza.


One tenant currently occupies more than 10% of Three Forest Plaza.  Weaver and Tidwell, LLP occupies approximately 51,947 square feet or 22.9% of the rentable square feet at the Three Forest Plaza property.  Together with Weaver and Tidwell, LLP, QRX Medical Management, Huselton, Morgan & Maultsby, PC, US Oncology, Inc. and Beaird Harris & Co., PC, occupy approximately 126,184 square feet or 49.4% of the rentable square feet of the Three Forest Plaza property. The following table sets forth additional information regarding the five largest tenants of Three Forest Plaza as of March 31, 2017:






Tenant



Base Rent


Rentable SF

Initial Lease

Date


Year

Expiring

Weaver and Tidwell, LLP

$   1,210,950

51,947

09/2008

2018

QRX Medical Management, LLC

502,879

27,555

11/2014

2025

Huselton, Morgan & Maultsby, PC

395,181

20,799

11/2010

2021

US Oncology, Inc.

264,264

13,552

10/2014

2018

Beaird Harris & Co., PC

236,183

12,331

06/2012

2023

 

$    2,609,457

126,184

 

 


The following table reflects lease expirations at the Three Forest Plaza property over the next ten years:

 

 


Gross Leasable Area

Annualized Base Rent as January 1, 2017



Year


No. of Leases Expiring


Approximate Square Feet

Percent of Total Occupied


Amount


Percent of Total

2017

7

16,897

6.2%

$          330,901

6.3%

2018

10

104,081

38.2%

2,275,744

43.0%

2019

5

13,028

4.8%

258,634

4.9%

2020

3

5,895

2.2%

113,550

2.1%

2021

5

36,346

13.4%

645,913

12.2%

2022

3

18,377

6.7%

322,969

6.1%

2023

4

26,745

9.8%

501,442

9.5%

2024

1

13,323

4.9%

233,152

4.4%

2025

2

31,053

11.5%

574,140

10.9%

2026

-

-

-%

-

-%

Total

40

265,745

97.7%

$       5,256,445

99.4%


The Three Forest Plaza property faces competition from similar multitenant office properties located in and around the Dallas, Texas area.

 

Management currently has no material plans for capital improvements or renovations at the Three Forest Plaza property and believes that the Three Forest Plaza property is suitable for its intended purpose and adequately covered by insurance. For the fiscal year ended December 31, 2016, the Three Forest Plaza property paid real estate taxes of $817,500.

 

Item 9.01   Financial Statements and Exhibits.


(d) Exhibits


Exhibit

 

Description

10.1

 

Membership Interest Purchase agreement dated April 11, 2017 by and between Hartman XX Limited Partnership and Hartman vREIT XXI, Inc.




SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


  

HARTMAN vREIT XXI, INC.

 

(Registrant)

Date: April 11, 2017

By:  

/s/ Louis T. Fox, III

  

Louis T. Fox, III

  

Chief Financial Officer





EXHIBIT INDEX


Exhibit

 

Description

10.1

 

Membership Interest Purchase agreement dated April 11, 2017 by and between Hartman XX Limited Partnership and Hartman vREIT XXI, Inc.