The boards of Hartman Short Term Income Properties XX Inc. and Hartman vREIT XXI Inc., two affiliated publicly registered non-traded real estate investment trusts, have voted to merge Hartman XX into Hartman vREIT XXI, with Hartman vREIT XXI as the surviving company. The news follows a separate recent merger transaction of three Hartman REITs, where Hartman XX was the surviving entity.
“The merger of these two publicly registered non-traded REITs will create a significantly larger base of assets and synergies that will increase shareholder value for both companies and move all of the Hartman publicly registered programs to a perpetual REIT model, where shareholders can redeem their shares at NAV and also allow us to offer multiple options and share classes for new investors,” said Al Hartman, chief executive officer of both companies.
The REITs anticipate a stock-for-stock consideration, but terms of the merger are still in negotiations and are expected to be reached in the next few months as new net asset values are calculated for each company.
An S-4 proxy and registration statement will be filed with the SEC and a shareholder vote is tentatively scheduled during the late second quarter or third quarter of 2021, depending on federal and state regulatory approvals.
Late last month, Hartman Income REIT (HI-REIT), Hartman Short Term Income Properties XIX Inc. (Hartman XIX) merged into Hartman XX, with a combined asset value of approximately $655 million.
Pursuant to the mergers, each issued and outstanding share of Hartman XIX common stock was converted into the right to receive 9,171.98 shares of Hartman XX common stock. Each share of Hartman XIX preferred stock was converted into the right to receive 1.238477 shares of Hartman XX common stock.
Each share of HI-REIT common stock was converted into the right to receive 0.752222 shares of Hartman XX common stock. Each share of HI-REIT subordinated stock was converted into the right to receive 0.752222 shares of Hartman XX common stock.
Hartman acquires, owns, manages, and leases commercial office, retail, light industrial and warehouse properties located in Texas. Since 1983, the firm and its affiliated entities have sponsored 23 programs and acquired interests in more than 100 real assets totaling approximately $800 million as of December 31, 2019.
Hartman vREIT XXI broke escrow on December 1, 2016 and, as of the second quarter of 2020, raised nearly $85.7 million in investor equity. The company owns a portfolio of 10 properties purchased for $56.4 million and contributed $8 million to an unconsolidated real estate joint venture with Hartman XX Limited Partnership.