Dear Hartman Team Members,
We are at the end of the first quarter of 2022, and we have surpassed our expectations and budgets. We are thriving as a Level 5 company, and it is shown by the results produced in all aspects of the organization.
As I mentioned last month, we are steadily moving closer to merging our publicly registered, non-traded REITs, Hartman Short-Term Income Properties XX (Hartman XX) and Hartman vREIT XXI (Hartman XXI). The independent boards of both have agreed to a merger of the funds.
Hartman XX intends to refinance its portfolio in conjunction with the proposed merger. We will be able to refinance our current, variable-rate debt structure into a fixed-rate debt instrument. This will lock our interest rate and debt payments moving forward in what we believe will be a rising interest rate environment for the foreseeable future.
Hartman will also be able to free up capital to finance ongoing building improvements and leasing expenditures, ultimately driving occupancy, growth, and value to our investors. Lastly, the refinancing of Hartman XX will allow the fund to address both the short and long-term liquidity needs of its investors. The loan is expected to close in June.
The Capital Markets Group, FINCOM, and our Legal team are in the final stage of opening a new investment product, The Capital Fund. This fund will provide capital for our next 1031 DST fund.
Our leasing team ended February with 35 new leases and 43,000 square feet, totaling over 131,000 square feet in new leases in 2022. Our agents are determined to exceed our budget this year and increase occupancy across our portfolios to 88% by year-end. We are reviewing retention rates and prospective pipelines weekly to ensure our eye is always on the company’s overarching vision.
I want to recognize our Construction Team working diligently in tough market conditions as they have 90 made-ready suites in queue throughout our portfolio, and 60 of those are currently under construction. As these suites are completed, our leasing team is leasing them up and ultimately driving value to our investors. The devotion of their teamwork and dedication is a prime example of the diligence of our team members working towards the same goals and visions.
I want to thank the Marketing Team for all their work in my nomination for the 2021 RedNews Texas CRE Icon Award. I have been blessed to have had a long and fruitful career in commercial real estate and even more thrilling has been working with you all. It is an honor to work with such a talented team!
In March, Lisa, Margaret, and I traveled to the Museum of the Bible with the Lumina Movement Gathering, an organization started by Steve Green, CEO of the Hobby Lobby family of companies. The event included a faith-oriented tour through the Museum of the Bible and facilitated conversations on ways the next generation can be impacted for Christ. The event was attended by influential Christian people throughout the country.
I want to thank you all for the kind birthday wishes this week. It is an honor to celebrate with all of you! As I have said so many times before, we have the best team EVER, and I think we keep getting better each year.
“The Lord bless you and keep you; the Lord make his face shine on you and be gracious to you; the Lord turn his face towards you and give you peace.” – Numbers 6:24-26