Investments, Equity Method and Joint Ventures

12 Months Ended

Dec. 31, 2011

Investments, Equity Method and Joint Ventures

Equity Method Investments Disclosure [Text Block]

Note 3 — Investment in Unconsolidated Joint Venture

As of December 31, 2011 we owned 1 commercial property located in Richardson, Texas.  On December 28, 2010, the Company entered into the limited liability company operating agreement of Hartman Richardson Heights Properties LLC (the “Joint Venture”).  The Company made an initial capital contribution to the Joint Venture of $1.915 million representing a 10% interest in the Joint Venture.  Hartman Short Term Income Properties XIX, Inc. (“Hartman XIX”), the other member of the Joint Venture, is a REIT that is managed by affiliates of the Company’s manager and real property manager.  As of December 31, 2010 Hartman XIX made capital contributions totaling $17.235 million to the Joint Venture representing a 90% interest therein.

On April 19, 2011 the Board of Directors of the Company authorized the Company’s officers to consider and execute a series of related transactions to acquire up to all of the limited liability company interest of Hartman XIX in the Joint Venture.  The Company was not obligated to acquire any specific portion of the Hartman XIX joint venture interest.  Each prospective acquisition was subject to management’s discretion and the Company’s financial position and liquidity.

      On April 20, 2011 the Company acquired an additional 15% limited liability company interest in the Joint Venture from Hartman XIX for $2,872,500 cash.  On May 27, 2011 the Company acquired an additional 4% limited liability company interest in the Joint Venture from Hartman XIX for $766,000 cash.  On June 30, 2011 the Company acquired an additional 2% limited liability company interest in the Joint Venture from Hartman XIX for $383,000 cash.  On July 20, 2011 the Company acquired an additional 4% limited liability company interest in the Joint Venture from Hartman XIX for $766,000 cash.  On August 12, 2011 the Company acquired an additional 7% limited liability company interest in the Joint Venture from Hartman XIX for $1,340,500 cash. On September 13, 2011 the Company acquired an additional 7% limited liability company interest in the Joint Venture from Hartman XIX for $1,340,500 cash.  The source of the cash used to acquire the interest of Hartman XIX in the Joint Venture was proceeds from the current public offering of the Company’s common shares.

        On October 31, 2011 the Joint Venture distributed a note receivable by the Joint Venture from Hartman XIX to Hartman XIX as a reduction in equity capital attributable to Hartman XIX.  The Company acquired the remaining equity interest of Hartman XIX in the Joint Venture for $16,500 cash.  As of November 1, 2011 the Company is the sole member of the Joint Venture. 

       The Company’s equity in earnings of unconsolidated entities from its investment in Richardson Heights Shopping Center was $(39,678) for the ten months ended October 31, 2011 and $1,719 for the year ended December 31, 2010, respectively.

       Included in our 2011 consolidated statement of operations are total revenues of $354,048 and net loss of $260,296 related to the operations of the Richardson Heights property for the period from November 1, 2011 through December 31, 2011.  The table below presents our pro forma total revenues and net loss as if the Richardson Heights property had been acquired on January 1, 2010.  Included in the pro forma net loss adjustments is the elimination of $(39,678) and $1,719 of equity in earnings of unconsolidated joint venture for 2011 and 2010, respectively, because the Richardson Heights property represented the unconsolidated joint veneture which generated this income.

	Pro Forma -Year Ended December 31,
	2011	2010
Total revenues (unaudited)	$        2,140,518	$        2,228,765
Net loss (unaudited)	$        (627,252)	$        (364,362)