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Hartman vREIT XXI Suspends Investor Distributions

Close-up of a shocked man's hand holding an empty wallet without banknotes. the man is bankrupt. problems with finances

Hartman vREIT XXI Inc., a non-traded real estate investment trust sponsored by Hartman Income REIT Management Inc., announced that the company has indefinitely suspended investor distributions.

In a letter to stockholders, the company said that it has historically delivered a 6% return to its investors. However, Hartman reports that with rapid upward pressure on interest rates over the past twelve months, it’s weighted average interest rate now equals approximately 7.3%, more than double from January 2022, and their total monthly debt service obligation has more than tripled.

“While our revenue has increased, we do not anticipate a meaningful decline in interest rates for the 2023 calendar year,” Allen R. Hartman, executive chairman and chief executive officer, said in a letter to shareholders. “Because of that, it is not anticipated that [Hartman vREIT] XXI will be able to pay a distribution for the foreseeable future as we navigate these market conditions.”

Hartman says the board of directors and management will continuously evaluate the company’s financial condition and the economic environment to determine an appropriate time for the reinstatement of distributions to stockholders.

As The DI Wire previously reported in December 2022, Hartman suspended the company’s share redemption program and prior to that, announced its management’s “substantial doubt about the company’s ability to continue as a going concern.”

Hartman vREIT XXI invests in “value-oriented” commercial properties, including office, retail, industrial and warehouse properties. The REIT broke escrow on Dec. 1, 2016, and raised nearly $91.6 million in investor equity since inception, as of Sept. 30, 2022.

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