Dear Hartman Team Members,
As one-year ends, the idea of a new year inspires me to reflect. The Christmas season allowed us to turn our focus to Christ and share the gifts and blessings of our lives with others. As we ring in a new year, I celebrate the many events and records that will forever be remembered in our company’s history.
This year our leasing team was able to set an all-time company record and (at the time of writing this) will get very close to 1M square feet in new leases, boosting our occupancy over our budgeted 83.5%. The team worked days, nights, weekends, and even holidays to accomplish this tremendous feat. The construction team completed a record number of over 300 newly made ready suites and the marketing team increased the number of leads generated by 3x on a YOY basis, also a new company record. Seeing our teams come together to empower one another is why we consistently outperformed expectations and came out on top this year.
It is important to note that leasing activities have been so particularly strong this year that we have spent over $7.5m on tenant improvement dollars, far exceeding our budget of $1.8m. This has been a good problem to have but it caused a chronic shortage of cash flow in 2021. However, it is our anticipation that this issue will be resolved through portfolio refinancing efforts in the next 90 days. So, with the wind in our sails going into 2022, I am confident that we will be even better positioned to accommodate additional growth in our portfolio occupancy!
Our stellar leasing activity has kept property management on its toes all year long. The team recorded an all-time achievement of excellence scoring 60 on their Net Promoter Survey from tenants. This survey shows us that our tenants feel loyalty to the Hartman brand and would recommend us to their peers. With sights on a new record next year, the team continues to be successful in driving renewals and retention by being hyper-focused on the tenant’s experience and demonstrating what it means to provide the white-glove service our company is known for.
For 2021, I also want to recognize a team that grew exponentially; our Capital Markets Group nearly doubled in size after launching a new family office and institutional investment capital channels. The CMG team’s expertise and drive led us to fully subscribe to our third DST offering, raising $7.8m from accredited investors. Supporting their initiatives, the FINCOM team enhanced investor returns this year by producing over $1.2M in property tax refunds and are readying two of our funds for refinancing in the new year.
The good news continues; Hartman was nominated and named a top Texas commercial real estate company this year. Our marketing team landed us awards for the Best Technology Pivot and Best COVID Plan from REJournals and REDnews for our clean air and tenant outreach initiatives. We also gained recognition from the Houston Business Journal for Fastest growing Houston Middle Market company. The team also developed and launched a new brand for our small office space offering, BIZSUITES.
My final thanks are to each of you individually for your personal contributions to our Benevolence Fund. A number of you, instead of collecting your PTO buyouts, chose to contribute your balance to our Benevolence Fund. The Fund was established to assist in charity work and support team members during financial hardships. Your selflessness is incredible!
I cannot praise you all high enough; the Hartman team is relentless in keeping its commitments. Thank you again for a record-setting year. Now, let us roll this momentum into 2022 and continue toward our goal of $2bn in assets by 2025. Glory be to God, and Happy New Year!
“Commit to the Lord whatever you do, and he will establish your plans.” – Proverbs 16:3
Sincerely,
Al Hartman
