Investors of Hartman Income REIT are facing some serious losses. The Hartman vREIT XXI has recently been listed to sell on a secondary exchange at $5.30, almost half of the latest NAV of $10.23 declared by the REIT.
This means investors are at risk of losing almost half the value which they might have believed the investment to have been worth based on the company’s NAV declarations. The listing price is based on information available from the Central Trade and Transfer, a secondary market for non-traded REITs.
These losses may have been avoidable and not the fault of investors. If you invested in Hartman Income REIT, please call us at 1-800-856-3352 for a free consultation and get your free “Non-Traded REIT Investment Loss Recovery Guide.”
Per the details provided on its website, Hartman appears to be running a business of acquiring, owning, managing, and leasing Texas-based properties. These could be light industrial or retail or commercial office or even warehouse properties.
Non-traded REITs are high-risk investments
It is no secret that non-traded REITs like Hartman Income REIT come with a high level of risk.
Why is that so?
As the name suggests, they are non-traded. In other words, they cannot be traded on exchanges like listed securities. This makes them illiquid. An investor may not be able to liquidate with ease should the need arise. As non-traded securities, they are not subject to the same level of regulatory scrutiny as traded securities are, leaving potential areas of risk unexposed.
In order to sell, they often incentivize sales agents with higher commissions. This creates additional drag on their financials.
Finally, though this may not be unique to non-traded REITs, affects them equally, they are also dependent on the health of their client sectors.
Hartman Income REIT Merger talks make valuation murkier
To make the valuation more confusing, it has apparently been decided by the respective boards to merge another Hartman entity, REIT Hartman Short Term Income Properties XX inc., another non-traded REIT, with Hartman vREIT XXI. As is apparent, the surviving entity would be Hartman vREIT XXI, already challenged with loss of value. Investors could be excused for wondering what the real value would be after the merger.
Some might recall that in October 2020, another merger transaction had been done by the group, in which three REITs managed by the group coalesced into one, of which the surviving entity was Hartman Short Term Income Properties XX Inc. It now seems the time has come for this entity too to cease existence.
While strategic mergers between companies are not uncommon and can create value by leveraging complementary strengths in product lines, customer sets, or both, they can also erode value for shareholders if not done right. In addition, while the merged volumes might give the impression of greater interest in the stock, even inflate prices for a bit, shareholders stand to lose if the merger is done at a time of unfavorable economic climate. They could also experience a loss of voting power in a larger entity.
What is Hartman Income REIT? Properties? History?
Hartman was formed in 1983 by leasing business space in Houston tx. Hartman vREIT XXI is a multi-multi-national organization leasing commercial real estate. The company headquartered in Texas is active in real estate investments. Its headquarters are set up in the United States with offices located in Houston and New York.
Hartman’s website states that they provide commercial space for lease with an unparalleled customer experience and individual touch in Texas. They offer exceptional service and help businesses flourish by creating a boutique-style customer experience in impeccably maintained properties. Their properties are energy efficient, inviting, and staffed by a dedicated property management team who is standing by and ready to help with your needs.
Allen Hartman is the President and CEO of Hartman Income REIT Management.
Haselkorn & Thibaut, P.A., is a national investor law firm with locations in New York, Florida, Arizona, Texas & North Carolina. Our firm has been actively involved in investigating securities claims against financial advisors who may have recommended investing in non-traded REITs like Hartman vREIT XXI Inc.
One of the fastest ways for investors to recover losses is through the Financial Industry Regulatory Authority (FINRA) arbitration. The arbitration process is for investors to recover investment losses caused by bad broker/financial advisor actions.
If you have suffered losses investing in a Hartman vREIT XXI or another Hartman REIT, you could take a free consultation from the investment attorneys to pursue a FINRA arbitration claim at 1-800-856-3352.