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Written by 10:03 am Blog, Current Investigations

Hartman Short Term Income Properties XX Suspends Distributions

Hartman Short Term Income Properties XX

Hartman Short Term Income Properties XX, Inc. Recovery of Investment Losses 

Are you concerned about your investment losses in Hartman Short Term Income Properties XX? If so, the securities attorneys at the White Law Group may be able to help you by filing a FINRA Dispute Resolution Claim against the brokerage firm that sold you the investment. 

Hartman Short Term Income Properties XX, Inc., a non-traded REIT, based in Houston, Texas, reportedly owns 44 commercial properties. This includes 29 office properties, 12 multi-tenant retail, 3 industrial/flex properties and 2 plots of land held for sale. 

According to filings with the SEC, Hartman reported that its board of directors suspended distributions to common stockholders temporarily to focus on strengthening its balance sheet and preserving cash. The company reported it would like to swap out certain floating rate debts for fixed rate debts. 

The company reported in its Form 10-Q for the period ending March 31, 2022,   “Uncertainty as to the debt yield calculation as of June 30, 2022 and the Company’s ability to exercise the next remaining (loan extension option), require management to conclude, in accordance with guidance provided by ASU 2014-15, that there is substantial doubt about the Company’s ability to continue as a going concern within one year of the issuance of the (March 31, 2022 financial statements) solely on the basis of the uncertainty regarding the loan maturity extension.”   

The company previously paid distributions to common stockholders of $0.70 per share in 2019 (7.00% based on the original $10.00 per share offering price), $0.58 in 2020 (5.8%), and $0.40 (4.0%) in 2021, according to an article in FactRight. The company reportedly made a $0.11 distribution to common stockholders in the first quarter of 2022 and estimated its NAV per share at $12.08 as of December 31, 2021.  

FactRight also reported that Hartman XX holds an interest in a SPE (Single Purpose Entity) with other affiliates (including Hartman vREIT XXI, Inc.) to which it contributed 39 properties. The SPE reportedly had outstanding debts of $259 million as of March 31, 2022. 

 The SPE received a one-year extension on a loan with an original maturity date of October 9, 2021 and has two additional single-year extensions available provided certain debt yield covenants are met. Hartman XX reported that the debt yield must be greater than 12.50% in order to extend. The company reported that the debt yield was 12.9% as of June 30, 2021, according to FactRight. 

The company reportedly is looking to possibly consolidate with affiliates including Hartman vREIT XXI, Inc. and a prospective internalization of the respective REIT’s external advisor. Hartman XX previously absorbed another affiliated REIT, Hartman Short Term Income Properties XIX, Inc., in 2020. (See: Hartman REITs Net Asset Values Decline Prior to Merger) 

How to Recover Investment Losses 

The White Law Group is investigating potential securities fraud claims on behalf of investors involving broker-dealers recommendation that investors purchase risky non-traded REIT investments, including Hartman Short Term Income Properties XX. 

FINRA continues to monitor the sale of REITs, in particular, the ways in which broker/dealers marketed and sold the products to investors. In many cases, and notwithstanding the risk of REIT investments, broker-dealers marketed these investments as safe and secure. 

REITs typically pay a high commission – often as much as 15% which often explains the stockbroker’s motivation in recommending the REIT investment to the investor. 

To determine whether you may be able to recover investment losses incurred as a result of your purchase of a risky REIT investment, please contact The White Law Group at 888-637-5510. 

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington. 

For more information on The White Law Group, please visit our website at https://www.whitesecuritieslaw.com. 

  

  

  

 

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