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Hartman vREIT XXI Issues “Going Concern” Warning

Frayed rope about to break concept for stress, problem, fragility or precarious business situation

In its recently filed quarterly report with the Securities and Exchange Commission, Hartman vREIT XXI Inc., a non-traded real estate investment trust, announced its management’s “substantial doubt about the company’s ability to continue as a going concern.”

The Hartman has two revolving credit loans totaling $55 million that mature in March 2023. The company also has a $2.41 million term loan that is also due to mature in March.

According to the filing, the Hartman REIT’s 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 their third quarter consolidated financial statements due to the fact of the uncertainty regarding the loan maturities.

The company also said in the filing that management believes it will be able to extend the maturity date or renew the loans for one year or longer, which would mitigate the maturity dates issue.

As of the close of the third quarter, Hartman vREIT XXI reported a year-to-date net loss of approximately $1.4 million and bank overdrafts of $407,000.

Hartman vREIT XXI invests in “value-oriented” commercial properties, including office, retail, industrial, and warehouse properties located primarily in Texas, that the company believes have the potential for growth in income and value from re-tenanting, repositioning, redevelopment, and operational enhancements. The REIT broke escrow on Dec. 1, 2016, and had raised nearly $92 million in investor equity since inception, as of Sept. 30, 2020.

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