Hartman Short Term Income Properties XX Announces $11.16 NAV
December 15, 2020
On December 10, 2020, the board of directors of Hartman Short Term Income Properties XX, Inc., including all independent directors determined an estimated net asset value (“NAV”) per share of common stock of $11.16 per share as of September 30, 2020.
In determining the estimated NAV per share, the board relied upon information contained in a report, or the valuation report, provided by the advisor, the recommendation of the audit committee of the board and the board’s experience with, and knowledge of, the real property and other assets as of September 30, 2020. The objective of the board in determining the estimated NAV per share of the common stock was to arrive at a value, based on recent, available data, that the board believed was reasonable based on methods that it deemed appropriate after consultation with the advisor and the audit committee. In preparing the valuation report, the advisor relied in part on valuations of commercial real estate properties provided by LaPorte CPAs and Business Advisors, which the REIT refers to herein as the Valuation Expert. To calculate the estimated NAV per share in the Valuation Report, the advisor used a methodology pursuant to the provisions of Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, issued by the Institute for Portfolio Alternatives in April 2013. The Valuation Expert did not determine the NAV of the Company’s common shares.
The Company is providing the estimated NAV per share to assist broker dealers and stockholders in evaluating the Company and to assist broker dealers in meeting their ongoing customer account statement reporting obligations under the current rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”).
The estimated NAV per share is based on (x) the estimated value of the Company’s assets less the estimated value of the Company’s liabilities divided by (y) the number of outstanding shares of the Company’s common stock, all as of September 30, 2020. The Company intends to determine NAV on a quarterly basis, or otherwise in the sole discretion of the board, which value may be substantially different than the NAV determined as of September 30, 2020.
Investors are cautioned that the market for commercial real estate can fluctuate quickly and substantially and values of the Company’s assets and liabilities are expected to change in the future. As of September 30, 2020, the valuation date, real estate and real estate related assets of the Company consisted of 44 owned properties, four pad sites, two land developments and a controlling limited liability company interest in an affiliate. On May 14, 2020, the shareholders of the Company and the shareholders of each of its affiliates Hartman Income REIT, Inc. (“HIREIT”) and Hartman Short Term Income Properties XIX, Inc. (“Hartman XIX”) approved merger agreements pursuant to which HIREIT and Hartman XIX merged with and into the Company. The effective date of the mergers was July 1, 2020.
Investments in real estate
As of September 30, 2020, the REIT owned 44 commercial properties comprising approximately 6.8 million square feet located in San Antonio, Richardson and Houston, Texas; including a 36.16% interest in an affiliate special purpose entity which owns office, retail and light industrial properties in Texas, plus four pad sites and two land developments.
The Valuation Expert determined an estimated fair value of each of the real estate assets owned by the Company and the affiliate of the Company in which the Company has an interest. The real estate valuations were based on property level historical and budgeted operating and occupancy information provided by the REIT and the advisor. The Valuation Expert did not conduct inspections of the real properties.
Other Assets and Liabilities
The board of directors determined that the estimated valuation of the Company’s other assets and liabilities, consisting of cash and cash equivalents; accounts receivable; prepaid expenses and other assets; due related parties, net; accounts receivable and accrued expenses; and tenant security deposits, was equal to the fair value of such assets as of September 30, 2020 due to their short maturities.
Notes Payable
The board of directors determined that book value and fair value of notes payable are equal as of September 30, 2020.
Source: SEC
