POS AM 1 xxipre-eff1toposamno26.htm POS AM Document

As filed with the Securities and Exchange Commission on June 15, 2020


Registration No. 333-232308
  
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 _______________________ 

PRE-EFFECTIVE AMENDMENT NO. 1 TO
POST-EFFECTIVE AMENDMENT NO. 2 TO
FORM S-11

FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF CERTAIN REAL ESTATE COMPANIES
____________________________
 
HARTMAN VREIT XXI, INC.
(Exact name of registrant as specified in its governing instruments
______________________
 
2909 Hillcroft, Suite 420
Houston, Texas 77057
(713) 467-2222
(Address, including zip code, and telephone number, including area code, of the registrant’s principal executive offices
__________________________
 Allen R. Hartman
Chief Executive Officer
HARTMAN VREIT XXI, INC.
2909 Hillcroft, Suite 420
Houston, Texas 77057
(713) 467-2222

(Name, address, including zip code, and telephone number, including area code, of agent for service)
__________________________
Copy to:
Rosemarie A. Thurston
Alston & Bird LLP
1201 West Peachtree Street
Atlanta, Georgia 30309
______________________
 
Approximate date of commencement of proposed sale to the public: As soon as practicable after the effectiveness of the registration statement.

If any of the Securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. [x]

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “small reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]  Accelerated filer [ ]  Non-accelerated filer [ ] (Do not check if smaller reporting company)

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Smaller reporting company [x] Emerging Growth Company [x]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. [x]

CALCULATION OF REGISTRATION FEE

Title of Securities to be RegisteredAmount to be Registered (1)Proposed Maximum Offering Price per ShareProposed Maximum Aggregate Offering Price(2)Amount of Registration Fee (3)
Follow-on offering, common stock, $0.01 par value per share, Class A (10%)1,573,427.00  $11.44  $18,000,000  $1,812.60  
Follow-on offering, common stock, $0.01 par value per share, Class S (40%)6,747,891.00  $10.67  $72,000,000  $7,250.40  
Follow-on offering, common stock, $0.01 par value per share, Class I (40%)6,990,291.00  $10.30  $72,000,000  $7,250.40  
Follow-on offering, common stock, $0.01 par value per share, Class T (10%)1,643,836.00  $10.95  $18,000,000  $1,812.60  
Distribution Reinvestment Plan, common stock, $0.01 par value per share, Class A48,544.00  $10.30  $500,000  $50.35  
Distribution Reinvestment Plan, common stock $0.01 par value per share, Class S194,175.00  $10.30  $2,000,000  $201.40  
Distribution Reinvestment Plan, common stock $0.01 par value per share, Class I194,175.00  $10.30  $2,000,000  $201.40  
Distribution Reinvestment Plan, common stock, $0.01 par value per share, Class T48,544.00  $10.30  $500,000  $50.35  
$185,000,000  $18,629.50  

(1)Assumes all share sold at the maximum offering price (including DRIP shares at the DRIP price) and 10% of the gross offering proceeds are Class A shares, 40% of the gross offering proceeds are Class S shares, 40% of the gross offering proceeds are Class I shares and 10% of the gross offering proceeds are Class T shares.
(2)Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o), promulgated under the Securities Act.
(3) As discussed below, pursuant to Rule 415(a)(6) under the Securities Act, this Amendment carries over approximately $185,000,000 of unsold securities that have been previously registered, with respect to which the registrant paid a filing fee of $27,088.30. The filing fee previously paid with respect to the shares is being carried forward to this Registration Statement. Accordingly, there is no registration fee due in connection with those securities.

Pursuant to Rule 415(a)(6) under the Securities Act, the securities registered pursuant to this Registration Statement include unsold securities previously registered for sale pursuant to the registrant’s registration statement on Form S-11 (File No. 333-207711) initially filed by the registrant on May 30, 2015 (the “Prior Registration Statement”). The Prior Registration Statement registered shares of the registrant’s common stock with a maximum aggregate offering price of $269,000,000 for sale pursuant to the registrant’s follow-on offering and distribution reinvestment plan. Pursuant to the Prior Registration Statement, the registrant reserved the right to reallocate the shares of common stock it was offering between its follow-on offering and the distribution reinvestment plan. As of March 31, 2020, approximately $185,000,000 in shares of common stock registered on the Prior Registration Statement remain unsold. The unsold shares of the registrant’s common stock registered on the Prior Registration Statement (and the associated filing fee previously paid by the registrant) are being carried forward to this Registration Statement. Pursuant to Rule 415(a)(6), the offering of unsold securities under the Prior Registration Statement will be deemed terminated as of the date of effectiveness of this Registration Statement.









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The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission and the applicable state securities commissions is effective. The prospectus is not an offer to sell the securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED June 15, 2020














































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This Post-Effective Amendment No. 2 to Form S-11 consists of the following:

1
The Registrant’s prospectus, dated June 15, 2020, which supersedes and replaces the Registrant’s prospectus dated May 13, 2020 and all supplements thereto.
2
Supplement No. 1, dated June 15, 2020 and included herewith, which will be delivered as an unattached document along with the prospectus.
3PART II, included herewith
4SIGNATURES, included herewith

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Hartman vREIT XXI, Inc.
$185,000,000 Maximum Offering

Hartman vREIT XXI, Inc. (referred to herein as “we,” “us,” “our” or the “company”) is a Maryland corporation formed to acquire, develop and operate a diverse portfolio of value-oriented commercial properties, including office, retail, industrial, and warehouse properties located primarily in Texas. We are externally managed by Hartman XXI Advisors, LLC (“Advisor”), an affiliate of our Sponsor, Hartman Income REIT Management, Inc. We elected to be taxed as a real estate investment trust, or REIT, for federal income tax purposes beginning with our taxable year ending December 31, 2017.
In this follow-on offering we are offering up to $180,000,000 in any combination of four classes of shares of our common stock, designated as Class A shares, Class S shares, Class I shares and Class T shares to the public, which we refer to as the “follow-on offering.” The share classes have different upfront selling commissions and dealer manager fees, and different ongoing distribution fees. Each class will be sold at the then-current offering price including applicable upfront selling commissions and dealer manager fees. Until we commence quarterly valuations, the per share offering price for shares of our common stock will be our most recently determined net asset value ("NAV") per share of $10.30 plus applicable upfront selling commissions and dealer manager fees. Thereafter, we will determine the NAV on a quarterly basis and the offering price per share for each class of our common stock will vary and will generally equal our prior quarter's per share NAV, plus applicable upfront selling commissions and dealer manger fee. We may offer shares at a price that we believe reflects the NAV per share of the stock more appropriately than the prior quarter's NAV per share in cases where we believe there has been a material change (positive or negative) to our NAV per share since the end of the prior quarter. We are also offering up to $5,000,000 in any combination of shares of our common stock to our stockholders pursuant to our distribution reinvestment plan (“DRIP”), at a price that equals the NAV as determined each quarter. We reserve the right to reallocate the shares of common stock we are offering between the follow-on offering and our DRIP.

Our board of directors may, from time to time, in its sole and absolute discretion, change the price at which we offer shares to the public in the follow-on offering or pursuant to our DRIP to reflect changes in our estimated NAV per share, changes in applicable law and other factors that our board of directors deems relevant. If we determine to change the price at which we offer shares, we do not anticipate that we will do so more frequently than quarterly. We intend to update our estimated NAV per share quarterly.

This is a “best efforts” offering, which means that D.H. Hill Securities LLLP, the dealer manager for this offering, will use its best efforts to sell shares, but is not obligated to purchase or sell any specific amount of shares in this offering.

We are an “emerging growth company” under the federal securities laws. This investment involves a high degree of risk. You should only purchase these securities if you can afford a complete loss of your investment. See “Risk Factors” on pages 42-73. These risks include, among others:
We have a limited operating history and there is no assurance that we will be able to successfully achieve our investment objectives.
This is a 'blind pool' offering and we have not identified specific investments to acquire with the proceeds of this offering.
Shares of our common stock are illiquid. No public market currently exists for our shares, and our charter does not require us to liquidate our assets or list our shares on an exchange by any specified date, nor does our charter ever require that we provide a liquidity event for our stockholders. If you purchase shares in this offering, it will be difficult for you to sell your shares, and if you are able to sell your shares, you will likely sell them at a substantial discount.
The offering price and the redemption price may not accurately represent the value of our assets at any given time and
the actual value of your investment may be substantially less. The offering price and redemption price generally will
be based on our most recently disclosed quarterly NAV of of each class of common stock (subject to material changes
noted herein) and will not be based on any trading market. In addition, the offering price and the redemption price will
not represent our enterprise value and may not accurately reflect to the actual prices at which our assets could be
liquidated on any given day, the value a third party would pay for all or substantially all of our shares, or the price at
which our shares would trade on an national stock exchange. Further our board of directors may amend the NAV
procedures from time to time.
There are restrictions and limitations on your ability to have all or a portion of your shares of our common stock repurchased under our share repurchase program, and if you are able to have your shares repurchased pursuant to our share repurchase program, it may be for a price less than the price you paid for the shares and the then current value of the shares.
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The impact of the global pandemic of the novel coronavirus that causes the disease known as coronavirus disease 2019 (“COVID-19”), and the measures taken in response to the pandemic, on the global economy and our real estate tenants;
We are dependent on our Advisor and its affiliates to select investments and conduct our operations and this offering. Adverse changes in the financial condition of our Advisor or our relationship with our Advisor could adversely affect us.
There are substantial conflicts of interest regarding compensation, investment opportunities and management resources among our Advisor, our dealer manager and their affiliates and us. We pay certain fees and expenses to our Advisor and its affiliates as described in detail herein. These fees were not negotiated at arm’s-length and therefore may be higher than fees payable to unaffiliated parties.
We have incurred net losses in each of the years in which we have been in existence. Our losses can be attributed in part, to the initial start-up costs and operating expenses incurred prior to making investments in properties. In addition, depreciation and amortization expenses substantially reduce our income. We cannot assure you that we will be profitable in the future or that we will realize growth in the value of our assets.
This is a “best efforts” offering. If we are unable to raise substantial funds then we may lack diversification in our investments and our ability to achieve our investment objectives could be adversely affected.
We expect to incur debt, which could adversely impact your investment if the value of the property securing the debt falls or if we are forced to refinance the debt during adverse economic conditions.
The amount and timing of distributions we may make is uncertain. Our distributions may exceed our earnings, particularly during the period before we have acquired a substantial portfolio of real estate assets. We have paid distributions from the proceeds of our public offering, and may continue to pay distributions from the proceeds of our offerings or another category of funding that constitutes return of capital.
There is no public trading market for our common stock and repurchase of our shares by us will likely be the only way to dispose of our shares. We are not obligated to repurchase any shares under our share redemption plan and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased. In addition, repurchases may be subject to available liquidity and other significant restrictions. Further, our board of directors may modify, suspend or terminate our share redemption plan. As a result, our shares should be considered as having only limited liquidity and at times may be illiquid.
There are limits on the ownership and transferability of our shares. See “Description of Capital Stock-Restrictions on Ownership and Transfer.”
If we fail to maintain our qualification as a REIT and no relief provisions apply, our NAV and cash available for distribution to our stockholders could materially decrease.


Price to the Public (1)Upfront Selling Commissions(1) (2) Dealer Manager Fees (1)(2)(5)Proceeds to Us, Before Expenses (1)(3)
Maximum follow-on Offering(4)$180,000,000$3,960,000$1,440,000$174,600,000
Class A share, per share$11.44$0.80$0.34$10.30
Class S share, per share$10.67$0.32$0.05$10.30
Class I share, per share$10.30$0.00$0.00  $10.30
Class T shares, per share$10.950.3250.325$10.30
Maximum Distribution Reinvestment Plan$5,000,000$0.00$0.00$5,000,000

(1) Assumes we sell $180,000,000 in shares of our common stock in the follow-on offering and $5,000,000 in shares of our common stock pursuant to our DRIP. The per share offering prices are based on the estimated NAV per share of each class of our common stock as of December 31, 2019, plus applicable upfront selling commissions and dealer manager fees.
(2) The table assumes that all shares are sold in the follow-on offering, with 10% of the gross offering proceeds from the sale of Class A shares, 40% of the gross offering proceeds from the sale of Class S shares, 40% of the gross offering proceeds from the sale of Class I shares and 10% of the gross offering proceeds from the sale of Class T shares. The number of shares of our common stock of each class sold and the relative proportions in which the classes of shares are sold are uncertain and may differ significantly from this assumption. For Class A shares sold in this follow-on offering, investors will pay upfront selling commissions of up to 7.0% of the sales price and dealer manager fees of up to 3.0% of the sales price. For Class S shares sold in this follow-on offering, investors will pay upfront selling commissions of up to 3.0% of the sales price and up to a 0.5% upfront dealer manager fees. For Class I shares, investors will not pay upfront commissions or a dealer manager fee. For Class T shares sold in this follow-on offering,
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we will pay our dealer manager upfront selling commissions of up to 3.0% of the sales price and upfront dealer manager fees of up to 3.0% of the sales price. We will also pay the following selling commissions over time as distribution and shareholder servicing fees to the dealer manager, subject to Financial Industry Regulatory Authority Inc. ("FINRA") limitations on underwriting compensation: (a) for Class S shares only, a distribution and shareholder servicing fee to the Advisor of 0.15% per annum and a participating advisor distribution and shareholder servicing fee of 0.65% per annum and a participating broker dealer distribution and shareholder servicing fee of 0.20% per annum of the aggregate NAV of the Class S shares at the time of purchase, however, with respect to Class S shares sold through certain participating broker dealers, the participating advisor distribution and shareholder servicing fee and the participating broker dealer distribution and shareholder servicing fee may be for other amounts, provided that the sum of such fees will always equal 0.85% per annum of the purchase price of such shares and (b) for Class T shares only, a dealer manager distribution and shareholder servicing fee of 1% per annum of the aggregate NAV of the T share at the time of purchase, in each case payable monthly in arrears as a reduced distribution. We will also pay or reimburse certain organization and offering expenses, including, subject to FINRA limitations on underwriting compensation, certain wholesaling expenses. No selling commissions or dealer manager fees will be paid on shares issued under our DRIP. See also “Plan of Distribution-Dealer Manager and Participating Broker-Dealer Compensation and Terms.”
(3) Proceeds are calculated before reimbursing our Advisor for organization and offering expenses.
(4) We reserve the right to reallocate shares of common stock between our follow-on offering and our DRIP.

(5) Wholesaler fees on Class S and Class I shares are paid by the Advisor and not reimbursed by the Company.

Neither the Securities and Exchange Commission, the Attorney General of the State of New York nor any other state securities regulator has approved or disapproved of our common stock, determined if this prospectus is truthful or complete or passed on or endorsed the merits of this offering. Any representation to the contrary is a criminal offense. The use of forecasts in this offering is prohibited. Any representation to the contrary and any predictions, written or oral, as to the amount or certainty of any present or future cash benefit or tax consequence which may flow from an investment in this program is not permitted.

This investment involves a high degree risk. You should purchase these securities only if you can afford a complete loss of your investment. The use of projections or forecasts in this offering is prohibited. No one is permitted to make any oral or written predictions about the cash benefits or tax consequences you will receive from your investment.



The date of this prospectus is June 15, 2020.
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SUITABILITY STANDARDS

The shares we are offering through this prospectus are suitable only as a long-term investment for persons of adequate financial means and who have no need for liquidity in this investment. Because there is no public market for our shares, you will have difficulty selling your shares. On a limited basis, you may be able to have shares redeemed through our share redemption program, and in the future we may also consider various forms of additional liquidity. You should not buy shares of our common stock if you need to sell them immediately or if you will need to sell them quickly in the future.
In consideration of these factors, we have established suitability standards for investors in this offering and subsequent purchasers of our shares. These suitability standards require that a purchaser of our shares have either:
a net worth (excluding the value of an investor’s home, furnishings and automobiles) of at least $250,000; or
gross annual income of at least $70,000 and a net worth (excluding the value of an investor’s home, furnishings and automobiles) of at least $70,000.
In the case of sales to fiduciary accounts (such as an individual retirement account, or IRA, Keogh plan or pension or profit sharing plan), these suitability standards must be met by the fiduciary account, by the person who directly or indirectly supplied the funds for the purchase of the shares if such person is the fiduciary or by the beneficiary of the account.
In addition to the suitability standards above, which must be satisfied by all investors, the following states have established additional suitability standards applicable to investors in such states:

Alabama—In addition to the general suitability standards, this investment will only be sold to Alabama residents that have a liquid net worth of at least 10 times their investment in this program and its affiliates.

California—A California investor must have a net worth of at least $350,000 or, in the alternative, an annual gross income of at least $70,000 and a net worth of $150,000, and the total investment in our offering may not exceed 10% of the investor's net worth.

Idaho—An Idaho investor must have either (a) $85,000 in annual income and a net worth of $85,000, or (b) a liquid net worth of $300,000. In addition, an Idaho investor’s total investment in us must not exceed 10% of the investor’s liquid net worth. Liquid net worth is defined as the portion of an investor’s total net worth that is comprised of cash, cash equivalents, and readily marketable securities.

Iowa—Iowa investors must (i) have either (a) an annual gross income of at least $100,000 and a net worth of at least $100,000, or (b) a net worth of at least $350,000; and (ii) limit their aggregate investment in this offering and in the securities of other non-publicly traded real estate investment trusts to 10% of such investor’s net worth. Net worth in each case should be determined exclusive of home, auto and home furnishings. Investors who are accredited investors as defined in Regulation D under the Securities Act of 1933, as amended, are not subject to the foregoing investment concentration limit.

Kansas—The Kansas Securities Commissioner recommends that Kansas investor limit the investor’s aggregate investment in this offering and other non-traded real estate investment trusts to not more than 10% of the investor’s liquid net worth. Liquid net worth is defined as the portion of an investor’s total net worth (total assets minus total liabilities) that is comprised of cash, cash equivalents and readily marketable securities.

Kentucky—Kentucky investors may not invest more than 10% of his or her liquid net worth in us or our affiliates’ non-publicly traded real estate investment trusts. Liquid net worth is defined as the portion of an investor’s total net worth that is comprised of cash, cash equivalents and readily marketable securities.

Massachusetts—Massachusetts investors must (i) have either (a) an annual gross income of at least $100,000 and a net worth of at least $100,000, or (b) a net worth of at least $300,000; and (ii) limit their aggregate investment in this offering and in the securities of other illiquid direct participation programs to 10% of such investor’s liquid net worth.

Missouri—A Missouri investor’s investment in us may not exceed 10% of the investor’s liquid net worth.

Nebraska—Nebraska investors must have (i) either (a) an annual gross income of at least $100,000 and a net worth of at least $100,000, or (b) a net worth of at least $300,000; and (ii) Nebraska investors must limit their aggregate investment in this offering and in the securities of other non-publicly traded real estate investment trusts (REITs) to 10% of such investor’s net
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worth. (Net worth in each case should be determined exclusive of home, home furnishings, and automobiles.) Investors who are accredited investors as defined in Regulation D under the Securities Act of 1933, as amended, are not subject to the foregoing investment concentration limit.

New JerseyNew Jersey investors must have either: (a) a minimum liquid net worth of at least $100,000 and a minimum annual gross income of not less than $85,000, or (b) a minimum liquid net worth of $350,000. For these purposes, “liquid net worth” is defined as that portion of net worth (total assets exclusive of home, home furnishings, and automobiles, minus total liabilities) that consists of cash, cash equivalents and readily marketable securities. In addition, a New Jersey investor’s investment in us, our affiliates, and other non-publicly traded direct investment programs (including real estate investment trusts, business development companies, oil and gas programs, equipment leasing programs and commodity pools, but excluding unregistered, federally and state exempt private offerings) may not exceed ten percent (10%) of his or her liquid net worth.

New Mexico—A New Mexico investor’s investment in us, our affiliates, and in other non-traded real estate investment trusts may not exceed 10% of the investor’s liquid net worth.  Liquid net worth is defined as the portion of an investor’s total net worth (defined as total assets minus total liabilities) that consists of cash, cash equivalents, and readily marketable securities.

North Dakota—North Dakota investors must represent that, in addition to the stated net income and net worth standards, they have a net worth of at least ten times their investment in us.

Ohio—It shall be unsuitable for an Ohio investor’s aggregate investment in our shares, securities of our affiliates, and in other non-traded REIT programs to exceed ten percent (10%) of his, her, or its liquid net worth. “Liquid net worth” shall be defined as that portion of net worth (total assets exclusive of follow-on residence, home furnishings, and automobiles minus total liabilities) that is comprised of cash, cash equivalents, and readily marketable securities.

Oregon—An Oregon investor’s maximum investment in us and our affiliates may not exceed 10% of such investor’s liquid net worth. “Liquid net worth” is defined as that portion of an investor’s net worth consisting of cash, cash equivalents and readily marketable securities.

Tennessee—A Tennessee investor’s investment in us may not exceed 10% of the investor’s liquid net worth (exclusive of home, home furnishings and automobiles).

Vermont—In addition to the suitability standards described above, non-accredited Vermont investors may not purchase an amount in this offering that exceeds 10% of the investor’s liquid net worth. For these purposes "liquid net worth" is defined as investor's total assets ( not including home, home furnishings and automobiles) minus total liabilities.

These suitability standards are intended to help ensure that, given the long-term nature of an investment in shares of our stock, our investment objectives and the relative illiquidity of our shares of common stock, shares of our stock are an appropriate investment for persons who become stockholders. Notwithstanding these investor suitability standards, potential investors should note that investing in shares of our common stock involves a high degree of risk and should consider all the information contained in this prospectus, including the “Risk Factors” section contained herein, in determining whether an investment in our common stock is appropriate.
Our Sponsor, Hartman Income REIT Management, and each person selling shares on our behalf must make every reasonable effort to determine that the purchase of shares of our common stock is a suitable and appropriate investment for each investor. In making this determination, our sponsor and the dealer manager will rely upon information provided by the investor to the participating broker-dealer, authorized representative or other person selling shares on our behalf as well as the suitability assessment made by the participating broker-dealer, authorized representative or other person selling shares on our behalf. Before you purchase shares of our common stock, your participating broker-dealer, authorized representative or other person buying shares on your behalf will rely on relevant information provided by you to determine that you:

meet the minimum income and net worth standards established in your state;
are or will be in a financial position appropriate to enable you to realize the potential benefits described in the prospectus; and
are able to bear the economic risk of the investment based on your overall financial situation.

Participating broker-dealers and other representatives are required to maintain for six years records of the information used to determine that an investment in shares of our common stock is suitable and appropriate for a stockholder.
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By signing the subscription agreement required for purchases of our common stock, you represent and warrant to us that you have received a copy of this prospectus and that you meet the net worth and annual gross income requirements described above. These representations and warranties help us to ensure that you are fully informed about an investment in our common stock and that all investors meet our suitability standards. In the event you, another stockholder or a regulatory authority attempt to hold us liable because stockholders did not receive copies of this prospectus or because we failed to adhere to each state’s suitability requirements, we will assert these representations and warranties made by you in any proceeding in which such potential liability is disputed in an attempt to avoid any such liability. By making these representations, you do not waive any rights that you may have under federal or state securities laws.

The minimum purchase for any one class or combination of classes of stock is $10,000, except for IRAs which may purchase a minimum of $5,000. After you have satisfied the applicable minimum purchase requirement, additional purchases must be in increments of $500. In order to satisfy the minimum purchase requirements for retirement plans, unless otherwise prohibited by state law, a husband and wife may jointly contribute funds from their separate IRAs, provided that each such contribution is made in increments of $500. You should note that an investment in shares of our common stock will not, in itself, create a retirement plan and that, in order to create a retirement plan, you must comply with all applicable provisions of the Internal Revenue Code of 1986, as amended, which we refer to as the “Internal Revenue Code.”

Purchases of shares of our common stock pursuant to our DRIP may be in amounts less than set forth above and are not required to be made in increments of $500.

HOW TO SUBSCRIBE
Investors who meet the suitability standards described herein may purchase shares of our common stock. See “Suitability Standards” and “Plan of Distribution.” Investors who want to purchase shares of our common stock should proceed as follows:
Read this entire prospectus and all supplements, if any, accompanying this prospectus.
Complete the execution copy of the subscription agreement. A specimen copy of the subscription agreement is included as Appendix B to this prospectus.
Deliver a check for the full purchase price of the shares being subscribed for along with the completed subscription agreement to your participating broker-dealer or investment advisor. Your check should be made payable to "Hartman vREIT XXI, Inc." Certain dealers who have “net capital” (as defined in the applicable federal securities regulations) of $250,000 or more may instruct their customers to make their checks payable directly to the dealer. In such case, the dealer will issue a check payable to us of the purchase price of your subscription.
By executing the subscription agreement and paying the full purchase price for the shares of our common stock subscribed for, each investor agrees to be bound by all of its terms and attests that it meets the minimum income and net worth suitability standards as stated in the subscription agreement. In addition, each investor agrees to promptly notify us if there are any material changes to such investor’s financial condition.
A sale of our shares may not be completed until at least five business days after the subscriber receives our final prospectus as filed with the SEC. Within ten business days of our receipt of each completed subscription agreement, we will accept or reject the subscription. If we accept the subscription, we will mail a confirmation within three days. If for any reason we reject the subscription, we will promptly return the check and the subscription agreement, without interest or deduction, within ten business days after rejecting it.
An approved trustee must process through, and forward to, us subscriptions made through IRAs, Keogh plans and 401(k) plans. In the case of IRAs, Keogh plans and 401(k) plan stockholders, we will send the confirmation or, upon rejection, refund check to the trustee.
You have the option of placing a transfer on death, or TOD, designation on your shares purchased in this offering. A TOD designation transfers the ownership of the shares to your designated beneficiary upon your death. This designation may only be made by individuals, not entities, who are the sole or joint owners with right to survivorship of the shares. If you would like to place a TOD designation on your shares, you must check the TOD box on the subscription agreement and you must complete and return the TOD form requested from us.
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IMPORTANT INFORMATION ABOUT THIS PROSPECTUS
Please carefully read the information in this prospectus and any accompanying prospectus supplements, which we refer to collectively as the “prospectus.” You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. This prospectus may only be used where it is legal to sell these securities. You should not assume that the information contained in this prospectus is accurate as of any date later than the date hereof or such other dates as are stated herein or as of the respective dates of any documents or other information incorporated herein by reference.
This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or the SEC, using a continuous offering process. Periodically, as we make material investments or have other material developments, we will provide a prospectus supplement that may add, update or change information contained in this prospectus. Any statement that we make in this prospectus will be modified or superseded by any inconsistent statement made by us in a subsequent prospectus supplement. The registration statement we filed with the SEC includes exhibits that provide more detailed descriptions of the matters discussed in this prospectus. You should read this prospectus and the related exhibits filed with the SEC and any prospectus supplement, together with additional information described herein under “Additional Information.”
The words “we,” “us” and “our” refer to Hartman vREIT XXI, Inc., together with its consolidated subsidiaries, including Hartman vREIT XXI Operating Partnership L.P., a Texas limited partnership of which we are the general partner which we refer to herein as the “operating partnership,” unless the context requires otherwise.

Any citations included herein to industry sources are used only to demonstrate third-party support for certain statements made herein to which such citations relate. Information included in such industry sources that do not relate to supporting the related statements made herein are not part of this prospectus and should not be relied upon.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements about our business, including, in particular, statements about our plans, strategies and objectives. You can generally identify forward-looking statements by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue” or other similar words. These statements include our plans and objectives for future operations, including plans and objectives relating to future growth and availability of funds, and are based on current expectations that involve numerous risks and uncertainties. Assumptions relating to these statements involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to accurately predict and many of which are beyond our control. Although we believe the assumptions underlying the forward-looking statements, and the forward-looking statements themselves, are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that these forward-looking statements will prove to be accurate and our actual results, performance and achievements may be materially different from that expressed or implied by these forward-looking statements. In light of the significant uncertainties inherent in these forward looking statements, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans, which we consider to be reasonable, will be achieved.

You should carefully review the “Risk Factors” section of this prospectus for a discussion of the risks and uncertainties that we believe are material to our business, operating results, prospects and financial condition. Except as otherwise required by federal securities laws, we do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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TABLE OF CONTENTS
SUITABILITY STANDARDS8
HOW TO SUBSCRIBE10
IMPORTANT INFORMATION ABOUT THIS PROSPECTUS11
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS11
PROSPECTUS SUMMARY13
RISK FACTORS42
INVESTMENT RISKS42
RISKS RELATED TO CONFLICTS OF INTEREST52
RISKS RELATED TO OUR ORGANIZATIONAL STRUCTURE54
RISKS RELATED TO INVESTMENTS IN REAL ESTATE58
RISKS ASSOCIATED WITH DEBT FINANCING66
FEDERAL INCOME TAX RISKS68
RETIREMENT PLAN RISKS72
ESTIMATED USE OF PROCEEDS74
OUR REAL ESTATE INVESTMENTS78
DILUTION80
MANAGEMENT80
MANAGEMENT COMPENSATION92
STOCK OWNERSHIP101
CONFLICTS OF INTEREST102
INVESTMENT OBJECTIVES, STRATEGY, AND POLICIES109
PRIOR PERFORMANCE SUMMARY119
FEDERAL INCOME TAX CONSIDERATIONS122
ERISA CONSIDERATIONS143
DESCRIPTION OF SHARES146
THE OPERATING PARTNERSHIP AGREEMENT169
PLAN OF DISTRIBUTION172
SUPPLEMENTAL SALES MATERIAL179
LEGAL MATTERS179
EXPERTS179
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE179
WHERE YOU CAN FIND MORE INFORMATION180
APPENDIX AA-1
PRIOR PERFORMANCE TABLESA-1
TABLE IA-2
EXPERIENCE IN RAISING AND INVESTING FUNDSA-2
TABLE IIA-3
COMPENSATION TO SPONSORA-3
TABLE IIIA-4
ANNUAL OPERATING RESULTS OF PRIOR REAL ESTATE PROGRAMSA-4
TABLE IVA-5
RESULTS OF COMPLETED PROGRAMSA-5
FORM OF SUBSCRIPTION AGREEMENTB-1
AMENDED AND RESTATED DISTRIBUTION REINVESTMENT PLANC-1
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS

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PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus. You should read the entire prospectus, including the information set forth in “Risk Factors,” for a more complete understanding of this offering. Except where the context suggests otherwise, the terms “we,” “us” and “our” refer to Hartman vREIT XXI, Inc. and its subsidiaries; “operating partnership” refers to our operating partnership, Hartman vREIT XXI, Operating Partnership L.P.; “Advisor” refers to Hartman XXI Advisors, LLC, our Advisor; “dealer manager” and “D.H. Hill Securities” refers to D.H. Hill Securities LLLP, our managing broker dealer; “property manager” refers to our property manager Hartman Income REIT Management, Inc.; and “Sponsor” refers to Hartman Income REIT Management, Inc., our Sponsor.
Q: What is Hartman vREIT XXI, Inc.?
A: We are a Maryland corporation formed in September 2015. We elected to be taxed as a REIT commencing with our taxable year ending December 31, 2017. We have and intend to continue to acquire, develop and operate a diverse portfolio of value-oriented commercial properties, including office, retail, industrial and warehouse properties, located primarily in Texas. We intend to acquire properties in which there is a significant potential for growth in income and value from re-tenanting, repositioning, redevelopment, and operational enhancements. We believe that real estate, and in particular commercial real estate, provides an excellent investment for those investors looking for diversification, income and wealth preservation and growth in their portfolio. We believe that we have significant experience in acquiring and managing these types of properties, largely through our relationships with our Sponsor and other affiliates. We are considered to be a “blind pool” because, aside from the investments described in this prospectus, we have not identified additional assets to acquire.
Our principal executive office is located at 2909 Hillcroft, Suite 420, Houston, Texas 77057. Our telephone number is (713) 467-2222 or (800) 880-2212. We also maintain an Internet site at http://www.hartmanreits.com where there is additional information about us and our affiliates, provided that the contents of the Internet site are not incorporated by reference in or otherwise as part of this prospectus.
Q: What is a real estate investment trust, or REIT?
A: In general, a REIT is a company that:
combines the capital of many investors to acquire or provide financing for real estate investments;
allows individual investors to invest in a professionally managed, large-scale, diversified real estate portfolio through the purchase of interests in the REIT;
is required to distribute dividends to investors equal to at least 90% of its annual REIT taxable income (computed without regard to the dividends paid deduction and excluding net capital gain); and
avoids the “double taxation” treatment of income that normally results from investments in a corporation because a REIT is not generally subject to federal corporate income taxes on that portion of its income distributed to its stockholders, provided certain income tax requirements are satisfied.
Under the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code, REITs are subject to numerous organizational and operational requirements. If we fail to qualify for taxation as a REIT in any year after electing REIT status, our income will be taxed at regular corporate rates, and we may be precluded from qualifying for treatment as a REIT for the four-year period following our failure to qualify. Even if we qualify as a REIT for federal income tax purposes, we may still be subject to state and local taxes on our income and property and to federal income and excise taxes on our undistributed income.
Q: What is a non-exchange traded, perpetual life REIT?
A:  A non-exchange traded REIT is a REIT whose shares are not listed for trading on a stock exchange or other securities market. We use the term “perpetual-life REIT” to describe an investment vehicle of indefinite duration, whose shares of common stock are intended to be sold by the REIT on a continuous basis at a price generally equal to the REIT’s prior quarter’s NAV per share plus upfront selling commissions and fees. In our perpetual-life structure, the investor may request that we repurchase their shares on a quarterly basis, but we are not obligated to repurchase any shares and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased in any particular month in our discretion. While we may consider a liquidity event at any time in the future, we currently do not intend to undertake such consideration
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until at least 2026, seven years after we the termination of our primary offering, and we are not obligated by our charter or otherwise to effect a liquidity event at any time.

Q: Why are we offering four classes of our common stock and what are the differences between Class A, Class S, Class I and Class T shares common stock?
A: We are offering four classes of our common stock in order to provide investors with more flexibility. Investors can choose to purchase Class A shares, Class S shares, Class I shares or Class T shares (or any combination thereof) in the offering. Each share of our common stock, regardless of class, will be entitled to one vote per share on matters presented to the common stockholders for approval. The differences between each class relate to the fees and selling commissions payable in respect of each class and the differing distribution amounts and expense allocations due to the differing ongoing fees and expenses. The following table summarizes the differences in fees and selling commissions between the classes of our common stock. See “Description of Shares” and “Plan of Distribution” for a discussion of the differences between our Class A, Class S, Class I and Class T shares.
Class A SharesClass S SharesClass I sharesClass T Shares
Follow-on Offering Price
$11.44  $10.67  $10.30  $10.95  
Selling Commissions (per share)
7.0 %3.0 % None   3.0 %
Dealer Manager Fee (per share)
3.0 %0.5 % None   3.0 %
Annual Distribution and Shareholder Servicing Fee
None1.0% (1)None  1.0%(2)
Offering Price Under the DRIP
$10.30  $10.30  $10.30  $10.30  
Redemption Price (per share)(2)
NAV  NAV  NAV  NAV  

1.Each outstanding Class S share sold in the follow-on offering is subject to an annual distribution and shareholder servicing fee for seven (7) years from the date on which such share is issued. The annual distribution and shareholder servicing fee will be equal to a total of 1.0% of the purchase price of the Class S shares payable on a monthly basis in arrears. The annual distribution and shareholder servicing fee will be divided 0.15% to the Advisor, a 0.65 % to the participating advisor and 0.20% to the participating broker dealer however, with respect to Class S shares sold through certain participating broker-dealers, the participating advisor stockholder servicing fee and the participating dealer stockholder servicing fee may be other amounts, provided that the sum of such fees will always equal 0.85% per annum of the purchase price of such shares. Each Class S share will automatically convert without any action on the part of the holder thereof into a Class A share as set out below.
2.Each outstanding Class T share sold in the follow-on offering is subject to an annual distribution and shareholder servicing fee for four years from the date on which such share is issued. The annual distribution and shareholder servicing fee will be equal to 1.0% of the purchase price of the Class T shares, payable on a monthly basis in arrears to the dealer manager. Each Class T share will automatically convert without any action on the part of the holder thereof into a Class A share as set out below.
3.Redemptions at NAV is permitted after shares have been held for at least three years. See "Description of Shares - Share Redemption Program."

Class A Shares
•  A higher front end selling commission, (up to 7.0%) and a dealer manger fee of 3.0%, which are one-time fees charged at the time of purchase of the shares. There are ways to reduce these charges. See "Plan of Distribution" for additional information concerning purchases eligible for reducing selling commissions.
•  No annual distribution and shareholder servicing fees. Distributions paid with respect to Class A shares will be higher than those paid with respect to Class T shares or Class S shares because distributions paid with respect to Class T shares and Class S shares, including those issued pursuant to our DRIP, will be reduced by the payment of the distribution and shareholder servicing fees.
Available through brokerage and transaction based accounts.
Class S shares
•  A lower front end selling commission (up to 3.0%) than Class T or Class A shares, but higher than the commissions on Class I shares (none) and a 0.5% dealer manager fee. This front-end commission is a one-time fee charged at the time of purchase of the shares.
Available through brokerage and transaction-based accounts.
No volume discounts are available.
Class S shares purchased in the follow-on offering will pay an annual distribution and shareholder servicing fee (through a reduced distribution) for each outstanding Class S share for seven (7) years from the date such share is issued or until the Class S shares earlier convert to Class A shares as described in this prospectus. The distribution and shareholder servicing fee for each Class S share consists of a 0.15% per annum distribution and shareholder servicing fee to the Advisor, a 0.65% per annum distribution and shareholder servicing fee paid to the participating advisor and a 0.20% distribution and shareholder servicing fee to the participating broker dealer; however, with respect to Class S
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shares sold through certain participating broker-dealers, the participating advisor stockholder servicing fee and the participating dealer stockholder servicing fee may be other amounts, provided that the sum of such fees will always equal 0.85% per annum of the purchase price of such shares. The distribution and shareholder servicing fees are intended to compensate the Advisor, participating advisors and participating broker-dealers for ongoing services and expenses related to the marketing and shareholder support including, but not limited to, regular communication with stockholders, responding to questions about the investment and general advice concerning the investment and asset allocation. While we expect that the participating broker-dealer of record for a Class A and Class I stockholders may provide some similar services to a Class A or Class I stockholders, they are under no obligation to do so and we will not pay a distribution and shareholder servicing fee for such services. The distribution and shareholder servicing fees paid in respect of Class S shares will be allocated to the Class S shares as a class-specific expense. Even though the annual distribution and shareholder servicing fee will only accrue for Class S shares purchased in the follow-on offering, the fee may impact the NAV of all Class S shares, including those purchased through our DRIP, if the amounts payable as distribution and shareholder servicing fees exceeds the amounts we have available for distributions. The distribution and shareholder servicing fee paid over the anticipated full seven year period would, for example, be equal to $0.75 per Class S share, assuming a per share offering price of $10.95 per Class S share.

Each Class S share will automatically convert without any action on the part of the holder thereof into a Class A share on the last calendar day of the month following the expiration of seven years from the date upon which such Class S share was issued. We will cease paying the distribution and shareholder servicing fee on an outstanding Class S share, and convert such outstanding Class S share to a Class A share, prior to the month following the expiration of seven years of its issuance on the earliest to occur of the following: (i) a listing of the Class A shares on a national securities exchange; (ii) a merger or consolidation of our company with or into another entity or the sale or other disposition of all or substantially all of our assets; (iii) the last calendar day of the month in which we determine that the distribution and shareholder servicing fee paid with respect to the Class S shares held by a stockholder would be in excess of six percent of the total gross purchase price of the Class S shares held by such stockholder (including Class S shares sold pursuant to our DRIP); or (v) the last calendar day of the month in which we determine that the total account-level underwriting compensation from whatever source paid with respect to the Class S shares held by a stockholder, including the aggregate distribution and shareholder servicing fees of the participating advisor and participating broker dealer, equals ten percent of the total gross purchase price at the time of purchase of such Class S shares (including Class S shares sold pursuant to our DRIP). We cannot predict if or when certain of the foregoing events will occur. Our transfer agent (subject to review by our dealer manager) will be responsible for determining when the foregoing underwriting compensation limits have been reached. With respect to the conversion of Class S shares into Class A shares, each Class S share will convert without any action on the part of the holder thereof into a number of Class A shares equal to such Class S share multiplied by a fraction, the numerator of which is the most recent NAV per Class S share and the denominator of which is the most recent NAV per Class A share. Stockholders will receive notice that their Class S shares have been converted into Class A shares in accordance with industry practice at that time, which we expect to be either a transaction confirmation from the transfer agent, notification from the transfer agent or notification from the dealer manager through the next account statement following the conversion.

Available through brokerage and transaction based accounts.

Class I shares
No front end commissions,dealer manager fees nor any distribution and shareholder servicing fees.

No volume discounts available.

Class I shares are only available for purchase in this offering only (1) through fee-based programs, also known as wrap accounts, that provide access to Class I shares, (2) by endowments, foundations, pension funds and other institutional investors, (3) through participating broker-dealers that have alternative fee arrangements with their clients to provide access to Class I shares, (4) through certain registered investment advisers, (5) by our executive officers and directors and their immediate family members, as well as officers and employees of the Advisor or other Hartman affiliates and their immediate family members, and joint venture partners, consultants and other service providers or (6) other categories of investors that we name in an amendment or supplement to this prospectus.



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Class T Shares
Higher front-end selling commissions than the Class S or Class I shares, but lower front end selling commission than Class A shares, with a dealer manager fee of up to 3.0%.

• No volume discounts are available.

Class T shares purchased in the follow-on offering will pay an annual distribution and shareholder servicing fee (through a reduced distribution) for each outstanding Class T share for four years from the date such share is issued or until the Class T shares earlier convert to Class A shares as described in this prospectus. The distribution and shareholder servicing fees are intended to compensate the dealer manager and participating broker-dealers for ongoing services and expenses related to the marketing and shareholder support including, but not limited to, regular communication with stockholders, responding to questions about the investment and general advice concerning the investment and asset allocation. While we expect that the participating broker-dealer of record for a Class A and Class I stockholders may provide some similar services to a Class A stockholder, they are under no obligation to do so and we will not pay a distribution and shareholder servicing fee for such services. The distribution and shareholder servicing fees paid in respect of Class T shares will be allocated to the Class T shares as a class-specific expense. Even though the annual distribution and shareholder servicing fee will only accrue for Class T shares purchased in the follow-on offering, the fee may impact the NAV of all Class T shares, including those purchased through our DRIP if the amounts payable as distribution and shareholder servicing fees exceeds the amounts we have available for distributions.

Each Class T share will automatically convert without any action on the part of the holder thereof into a Class A share on the last calendar day of the month following the fourth anniversary of the date upon which such Class T share was issued. We will cease paying the distribution and shareholder servicing fee on an outstanding Class T share, and convert such outstanding Class T share to a Class A share, prior to the month following the fourth anniversary of its issuance on the earliest to occur of the following: (i) a listing of the Class A shares on a national securities exchange; (ii) a merger or consolidation of our company with or into another entity or the sale or other disposition of all or substantially all of our assets; (iii) the last calendar day of the month in which we determine that the distribution and shareholder servicing fee paid with respect to the Class T shares held by a stockholder would be in excess of four percent of the total gross purchase price of the Class T shares held by such stockholder (including Class T shares sold pursuant to our DRIP); or (v) the last calendar day of the month in which we determine that the total account-level underwriting compensation from whatever source paid with respect to the Class T shares held by a stockholder, including the aggregate distribution and shareholder servicing fees, equals ten percent of the total gross purchase price at the time of purchase of such Class T shares (including Class T shares sold pursuant to our DRIP). We cannot predict if or when certain of the foregoing events will occur. Our transfer agent (subject to review by our dealer manager) will be responsible for determining when the foregoing underwriting compensation limits have been reached. With respect to the conversion of Class T shares into Class A shares, each Class T share will convert without any action on the part of the holder thereof into a number of Class A shares equal to such Class T share multiplied by a fraction, the numerator of which is the most recent NAV per Class T share and the denominator of which is the most recent NAV per Class A share. Stockholders will receive notice that their Class T shares have been converted into Class A shares in accordance with industry practice at that time, which we expect to be either a transaction confirmation from the transfer agent, notification from the transfer agent or notification through the next account statement following the conversion.

The distribution and shareholder servicing fee will be allocated on a class-specific basis. While the per share distribution amount declared on each of our classes of common stock will be the same, we will adjust the final amounts paid for class-specific expenses, which we expect will result in different final distribution amounts for each class of shares. Specifically, we expect to reduce the amount of distributions that would otherwise be paid on Class T shares to account for the ongoing distribution and shareholder servicing fees payable on Class T shares. In addition, as a result of the allocation of class-specific expenses, the Class T shares could have a different NAV per share. If the NAV of our classes are different, then changes to our assets and liabilities that are allocable based on NAV may also be different for each class. Our dealer manager will be responsible for reviewing the information provided by our transfer agent with respect to the amounts paid as distribution and shareholder servicing fees, and will monitor the balances applicable to each Class T share and provide notice to us and to the shareholder as to the status of each Class T share and the conversion of the Class T share into Class A shares.
Available through brokerage and transaction-based accounts.
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In the event of any voluntary or involuntary liquidation, dissolution or winding up of us, or any liquidating distribution of our assets, then such assets, or the proceeds therefrom, will be distributed between the holders of Class A shares and Class T shares ratably in proportion to the respective NAV for each class. Each holder of shares of a particular class of common stock will be entitled to receive, ratably with each other holder of shares of such class, that portion of such aggregate assets available for distribution as the number of outstanding shares of such class held by such holder bears to the total number of outstanding shares of such class then outstanding.

If you are eligible to purchase all four classes of shares, then in most cases you should purchase Class I shares because Class I shares have no upfront selling commissions, dealer manager fees or distribution and shareholder servicing fees, which may reduce the NAV and distributions of the Class T and Class S shares. If you are eligible to purchase Class A, Class S and Class T shares but not Class I shares, in most cases you should purchase Class S shares because Class S shares have lower upfront selling commissions, but will have a distribution and shareholder servicing fee for 5.25 years. If you are investing for the highest distribution, you should purchase Class A or Class I shares, (if eligible to purchase these share classes) because Class A and Class I shares have lower or no upfront commissions and no distribution and shareholder servicing fee deducted from the distributions.

Q: What is the per share purchase price and how was the initial price determined?

A: Each class of shares will be sold at the then-current offering price, which is generally the prior quarter’s NAV per share, plus applicable upfront selling commissions and dealer manager fees. Until we commence quarterly valuations, the per share price for shares of our common stock will be based on our most recently determined NAV per share of $10.30. We expect the NAV per share of each Class A share, Class S share, Class I share and Class T share to be the same, except in the unlikely event that the distribution and shareholder servicing fees payable by us exceed the amount otherwise available for distribution to holders of Class S shares and/or Class T shares in a particular period (prior to the deduction of the shareholder servicing and distribution fees), in which case the excess will be accrued as a reduction to the NAV per share of each Class S share and/or Class T share, as applicable, which would result in the NAV with respect to Class S shares and/or Class T shares being lower than the NAV of the other classes of shares. Although the offering price for shares of our common stock is generally based on the prior quarter’s NAV per share, the NAV per share of such stock as of the date on which your purchase is settled may be significantly different. We may offer shares at a price that we believe reflects the NAV per share of such stock more appropriately than the prior quarter’s NAV per share, including by updating a previously disclosed offering price, in cases where we believe there has been a material change (positive or negative) to our NAV per share since the end of the prior quarter. Each class of shares may have a different NAV per share because commissions, dealer manager fees and stockholder servicing fees differ with respect to each class. (see question "How will your NAV per share be calculated" below)

Q: When will the offering price be available?
A: Generally, beginning with the first full quarter after the inception of this offering, the offering price will be available within 15 calendar days after the last calendar day of each quarter. We will determine our NAV per share for each share class as of the last calendar day of the prior quarter, which will (with the addition of the selling commissions and dealer manager fees applicable to that class) generally be the offering price for the then-current quarter for such share class. However, in certain circumstances, the offering price will not be made available until a later time. We will disclose the transaction price for each month when available on our website at www.hartmanreits.com and in prospectus supplements filed with the SEC.

Q:  How will your NAV per share be calculated?

A: We expect to establish a new NAV per share on a quarterly basis beginning no later than the end of the first full calendar quarter following the commencement of this offering. Until we commence quarterly valuations, the offering price per share will equal our most recently determined NAV per share of $10.30, plus applicable upfront selling commissions and dealer manager fees. We expect the NAV per share of each Class A share, Class S share, Class I share and Class T share to be the same, except in the unlikely event that the distribution and shareholder servicing fees payable by us exceed the amount otherwise available for distribution to holders of Class S shares and/or Class T shares in a particular period (prior to the deduction of the distribution and shareholder servicing fees), in which case the excess will be accrued as a reduction to the NAV per share of each Class S share and/or Class T share, as applicable, which would result in the NAV with respect to Class S shares and/or Class T shares being lower than the NAV of the other classes of shares. Our NAV is calculated quarterly based on the net asset values of our investments (including securities investments), the addition of any other assets (such as cash on hand) and the deduction of any other liabilities. Periodic real property appraisals will serve as the foundation of the board of director’s valuation. The valuations of our properties will be updated at least annually, based on the current market data and other relevant information, with review and confirmation for reasonableness by our Advisor. The Advisor is responsible for reviewing and confirming our NAV, and overseeing the process around the calculation of our NAV. See “Net Asset Value Calculation and Valuation Procedures” for more information regarding the calculation of our NAV per share of each class and how our properties and real estate-related securities will be valued. Once we commence quarterly valuations, we expect that we will publish the NAV per share generally within 15 calendar days following the last calendar day of each month. Promptly following any adjustment to the transaction price per share, we will file a prospectus supplement or post-effective amendment
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to the registration statement with the Securities and Exchange Commission, or the SEC, disclosing the adjusted transaction price and the effective date of such adjusted transaction prices. We also will post the updated information on our website at www.hartmaninvestments.com. The new NAV per share generally will be the new transaction price for each share class plus any upfront selling commissions and dealer manager fees.

Q: What is your investment approach?
A: The cornerstone of our investment strategy is our Advisor’s discipline in acquiring commercial properties that offer a blend of current and potential income based on in place occupancy plus significant potential for growth in income and value from re-tenanting, repositioning, redevelopment, and operational enhancements. We refer to this strategy as “value-oriented” or the “Hartman Advantage.” We rely upon the value-oriented or Hartman Advantage strategy to evaluate numerous potential commercial real estate acquisition and investment opportunities per each completed acquisition or investment.
We have and continue to intend to acquire, develop and operate a diverse portfolio of value-oriented commercial properties, including office, retail industrial and warehouse properties located primarily in Texas. The commercial properties we intend to acquire may be existing income-producing properties, properties developed by an affiliate of our Advisor, newly constructed properties or properties under development or construction. We intend to target properties that are located in high traffic areas, have adequate parking, have good curb appeal, have occupancy rates of at least 50%, and have a diversified tenant mix or a creditworthy single tenant.
We expect that the properties we acquire will generally have a purchase price of between $5 and $15 million. We intend to target office buildings with occupancy rates of at least 50%, a good tenant mix or creditworthy single tenant(s), good access and adequate parking. We will seek to acquire office properties which we believe we can increase in value through aggressive leasing. We intend to target retail properties located in high traffic residential areas with a mix of local, regional and national credit tenants that are leasing between 40,000 and 200,000 square feet. The retail properties we target will also have adequate parking and curb appeal and possess strong mix of other tenants such as restaurants, professional service retailers, beauty salons, clothing retailers and other soft goods retailers. We will seek to acquire light industrial properties in excess of 75,000 square feet, with a diverse tenant mix, which may contain offices, light manufacturing and small warehouse space. We do not intend to target large industrial distribution centers, heavy manufacturing or heavy industrial properties.
We intend to primarily target investments located in Texas, although we may make selective investments in other regions and markets throughout the United States based on our view of existing and future market conditions. We do not intend to make investments in properties located outside of the United States. See the “Investment Objectives, Strategy, and Policies” section of this prospectus for a more complete description of our investment policies and charter-imposed investment restrictions.
Q: Are there any risks involved in an investment in your shares?
A: Investing in shares of our common stock involves a high degree of risk. You should carefully review the “Risk Factors” section of this prospectus, which contains a detailed discussion of the material risks that you should consider before you invest in shares of our common stock. The risks relating to an investment in our shares include the following:
We have a limited operating history and there is no assurance that we will achieve our investment objectives.
Shares of our common stock are illiquid. No public market currently exists for our shares, and our charter does not require us to liquidate our assets or list our shares on an exchange by any specified date, nor does it ever require that we provide a liquidity event for our stockholders. If you purchase shares in this offering, it will be difficult for you to sell your shares, and if you are able to sell your shares, you will likely sell them at a substantial discount.
There are restrictions and limitations on your ability to have all or a portion of your shares of our common stock repurchased under our share repurchase program, and if you are able to have your shares repurchased pursuant to our share repurchase program, it may be for a price less than the price you paid for the shares and the then current value of the shares.
The offering or redemption price may not accurately represent the value of our assets at any given time and the actual value of your investment may be substantially less. The offering and redemption prices generally will be based on our most recently disclosed quarterly NAV of of each class of common stock (subject to material changes noted herein) and will not be based on any trading market. In addition, the offering and redemption prices will not represent our enterprise value and may not accurately reflect to the actual prices at which our assets could be liquidated on any given day, the value a third party would pay for all or substantially all of our shares, or the price at which our shares would trade on an national stock exchange. Further our board of directors may amend the NAV procedures from time to time.
The initial offering price of our shares of common stock for this follow-on offering is based on our estimated NAV per share our common stock as of December 31, 2019 plus the applicable upfront selling commissions and dealer manager
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fees. As and when we continue to raise capital from the sale of shares of common stock in this offering and invest in additional real estate properties, our assets and liabilities, and the estimated NAV per share of our common stock, may vary significantly from their amounts as of December 31, 2019 and from quarter to quarter. The price of our shares will be adjusted quarterly to reflect changes in the estimated value of our assets and the number of shares outstanding, and therefore, future adjustments may result in an offering price lower than the price you paid for your shares.
There is no public trading market for our common stock. and repurchase of our shares by us will likely be the only way to dispose of our shares. We are not obligated to repurchase any shares under our share redemption plan and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased. In addition, repurchases may be subject to available liquidity and other significant restrictions. Further, our board of directors may modify, suspend or terminate our share redemption plan. As a result our shares should be considered as having only limited liquidity and at times may be illiquid.
This is considered to be a “blind pool” offering because you will not have the opportunity to evaluate our future investments prior to purchasing shares of our common stock.
We are dependent on our Advisor and its affiliates to select investments and conduct our operations and this offering. Adverse changes in the financial condition of our Advisor or our relationship with our Advisor could adversely affect us. We are dependent on our dealer manager to promote this offering.
There are substantial conflicts of interest regarding compensation, investment opportunities and management resources among our Advisor, our dealer manager and their affiliates and us. We pay certain fees and expenses to our Advisor and its affiliates as described in detail herein under “Management Compensation Table.” These fees were not negotiated at arm’s-length and therefore may be higher than fees payable to unaffiliated parties.
This is a “best efforts” offering. If we are unable to raise substantial funds then we may lack diversification in our investments and our ability to achieve our investment objectives could be adversely affected.
We have incurred net losses in each of the years in which we have been in existence. Our losses can be attributed in part, to the initial start-up costs and operating expenses incurred prior to making investments in properties. In addition, depreciation and amortization expenses substantially reduce our income. We cannot assure you that we will be profitable in the future or that we will realize growth in the value of our assets.
We expect to incur debt, which could adversely impact your investment if the value of the property securing the debt falls or if we are forced to refinance the debt during adverse economic conditions.
The amount and timing of distributions we may make is uncertain. Our distributions may exceed our earnings, particularly during the period before we have acquired a substantial portfolio of real estate assets. Our distributions may be paid from other sources such as borrowings or offering proceeds or may be paid by the return of capital or the deferral of fees and expense reimbursements by our Advisor, in its sole discretion. Payment of distributions from sources other than our cash flow from operations reduces the funds available to us for investments in properties, which could reduce your overall return. We have not established a limit on the amount of proceeds from this offering that we may use to fund distributions. Therefore, portions of the distributions that we make may represent a return of capital to you, which will lower your tax basis in our shares. We have paid, and may continue to pay, distributions from the proceeds of our offering.
There are limits on the ownership and transferability of our shares. See “Description of Capital Stock-Restrictions on Ownership and Transfer.”
If we fail to maintain our qualification as a REIT, and no relief provisions apply, our NAV and cash available for distribution to our stockholders could materially decrease.

Q: What are your investment objectives?
A: Our principal investment objectives are to:
preserve, protect and return our stockholders’ capital contribution;
pay attractive and stable cash distributions to our stockholders;
realize growth in the value of our investments; and
enable stockholders to realize capital appreciation on their investment through our restricted share redemption plan .
Our charter does not require that we consummate a transaction to provide liquidity to stockholders on any date certain or at all; nor does it require that the the Board of Directors maintain the restricted share redemption program on any particular terms or at all. Therefore, we may continue indefinitely without providing a liquidity event. As a result, you should purchase shares of our common stock only as a long-term investment, and you must be prepared to hold your shares for an indefinite length of
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time. See the “Investment Objectives, Strategy, and Policies” section of this prospectus for a more complete description of our investment policies and charter-imposed investment restrictions.
Q: What is the role of the board of directors?
A: We operate under the direction of our board of directors, the members of which are accountable to us and our stockholders as fiduciaries. We have three members on our board of directors, two of whom are independent of our company, and our Advisor, our Sponsor and their affiliates. Our charter requires that a majority of our directors be independent. Our independent directors are responsible for reviewing the performance of our Advisor and approving the compensation paid to our Advisor and its affiliates. Our directors are elected annually by our stockholders. Our board of directors has established an audit committee. For more information on the members of our board of directors, see “Management.”
Q: Who is your Advisor and what are its responsibilities?
A: Hartman Advisors XXI, LLC is our Advisor and was formed as a Texas limited liability company on September 10, 2015. Our Advisor has limited operating history. Our Advisor is supported by its parent company, Hartman Advisors LLC and our Sponsor and its personnel, in providing services to us. Our Advisor will manage our day-to-day operations and our portfolio of real estate investments, and will provide marketing, investor relations and other administrative services on our behalf. Pursuant to an advisory agreement, our Advisor is responsible for the selection, negotiation, financing, portfolio management and disposition of our investments, subject to the limitations of our charter and the supervision of our board of directors.
Our Advisor performs its duties and responsibilities as our fiduciary under an advisory agreement. Our advisory agreement has a one-year term, subject to renewals by the board of directors for an unlimited number of successive one-year periods.
Q: Has your Advisor make an investment in the Company?
A: Yes. Hartman Advisors LLC, the parent company of our Advisor, owns 22,100 shares of our Class A common stock for which it paid $200,005 in connection with our initial capitalization.
Q: Who will operate and manage the properties acquired?
A: We enter into management agreements with our property manager to provide property management services for the properties we acquire. Our property manager may subcontract with an affiliate or third party to provide day-to-day property management, construction management or other property specific functions, as applicable, for the properties it manages.
Q: What is the experience of your Sponsor?
A:  Our Sponsor, Hartman Income REIT Management, Inc., was formed as a Texas corporation on March 9, 2009. Our Sponsor is controlled by Allen R. Hartman, our chief executive officer and chairman of the board. Our Sponsor is a wholly owned subsidiary of Hartman Income REIT, Inc., a Maryland corporation which Mr. Hartman and his affiliates own approximately 16% of the voting common stock. Our Sponsor has sponsored four privately offered real estate programs and two public non-traded programs since its formation, none of which disclosed a date or time period in which the program might be liquidated and none of which have liquidated. Mr. Hartman and his affiliates have closed more than 90 commercial real estate transactions totaling over $500 million and has extensive experience acquiring, owning, managing and leasing commercial office, retail, light industrial and warehouse real properties. Mr. Hartman has assembled a team of real estate professionals who have been through multiple real estate cycles and have hands-on experience in acquisitions; asset, property and portfolio management; dispositions; development and leasing. Since 1983, Mr. Hartman and his affiliates have:
Sponsored three publicly offered real estate programs (including this offering);
Sponsored 18 privately offered real estate programs;
Sponsored three privately held Delaware Statutory Trusts:
raised over $350 million of equity in publicly and privately offered real estate programs; and
acquired over 90 value-oriented, commercial office, retail, light industrial and warehouse real estate properties.

Q: Does your Sponsor also sponsor any other public, non-listed REITs or other investment programs?
A: As described in the section of this prospectus entitled “Prior Performance Summary,” affiliates of our Advisor have sponsored or co-sponsored six other real estate programs (collectively, “Hartman Programs”). One of the Hartman Programs is
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Hartman Short Term Income Properties XX, Inc., or “Hartman XX”, a public, non-traded REIT which terminated its public offering of shares in March 2016. Hartman XX has a similar investment strategy and investment objectives to our own, and as a result we may compete with Hartman XX for investment opportunities. We and our Advisor have developed procedures to resolve potential conflicts of interest in the allocation of investment opportunities between us and affiliates, including Hartman XX.
As of the date of this prospectus, three of the seven Hartman Programs are currently raising funds. Only two of the programs are currently seeking acquisitions for investment.
As the date of this prospectus, our other publicly-registered program Hartman XX has no remaining offering proceeds available for investment. As a result, any additional investment funds will need to come from a new private or public offering of securities, additional borrowing, or from the proceeds of a sale of one or more of its assets. As set out in the section of this prospectus titled “Certain Conflict Resolution Measures-Resolution of Potential Conflicts of Interest in Allocation of Investment Opportunities,” our Advisor does not anticipate any investment opportunity conflict between Hartman XX and this offering after due consideration is given to the investment objectives of each program, the cash requirements of each program, the diversification of each program’s portfolio, the anticipated cash flow of the property, the income tax effect of the acquisition, the size of the investment, the amount of funds available to each program and the length of time such funds are available for investment. If all of these factors are substantially similar between two or more programs of our Sponsor or its affiliates, our Advisor will first offer to us those properties in which the purchase price is less than $15 million and those whose purchase price is $15 million or more would be offered first to other Hartman programs. Hartman XX may however, change its investment policies or objectives and as a result may compete with us for certain investment opportunities.
As of the date of this prospectus, Hartman has launched a new private placement product called Hartman Total Return, LLC. Hartman Total Return, Inc. is currently raising funds and has an investment strategy similar (but not exactly the same) to ours. As set out in the section of this prospectus titled “Certain Conflict Resolution Measures-Resolution of Potential Conflicts of Interest in Allocation of Investment Opportunities,” our Advisor does not anticipate any investment opportunity conflict between Hartman Total Return Inc. and this offering after due consideration is given to the investment objectives of each program, the cash requirements of each program, the diversification of each program’s portfolio, the anticipated cash flow of the property, the income tax effect of the acquisition, the size of the investment, the amount of funds available to each program and the length of time such funds are available for investment. We do not anticipate that a conflict in the allocation of investments between this investment and Hartman Total Return, Inc. because investments in Hartman Total Return, Inc. are to be commercial properties that have a lower occupancy and/or offer higher upside potential than properties purchased by us.
See “Conflicts of Interest-Our Affiliates’ Interests in Other Real Estate Programs” for additional discussion of Hartman XX. Hartman Total Return, Inc. and other programs sponsored by our Sponsor.
Q: Will you use leverage?
A: We intend to finance a portion of the purchase price of our investments by borrowing funds on either a secured or on an unsecured basis, such as a line of credit. Although there is no limit in our charter on the amount we can borrow to acquire a single real estate investment, we are prohibited by our charter from incurring debt financing such that our borrowings would be in excess of 300% of the value of our net assets. “Net assets” for purposes of this calculation is defined to be our total assets (other than intangibles), valued at cost prior to deducting depreciation, reserves for bad debts or other non-cash reserves, less total liabilities. Additionally, our board of directors has adopted a policy to generally limit our aggregate borrowings to approximately 50% of the aggregate value of our real property assets unless substantial justification exists that borrowing a greater amount is in our best interests. This policy limitation, however, does not apply to individual real property assets and only will apply once we have ceased raising capital under this or any subsequent offering and invested substantially all of our capital. As a result, we expect to borrow more than 50% of the contract purchase price of one or more of the real property assets we acquire to the extent our board of directors determines that borrowing these amounts is prudent.
Q: How will you structure the ownership and operation of your assets?
A: We plan to own substantially all of our assets and to conduct our operations through our operating partnership, Hartman vREIT XXI Operating Partnership L.P. We are the sole general partner of our operating partnership. As the sole general partner of our operating partnership, we have the exclusive power to manage and conduct the business of our operating partnership. Our wholly owned subsidiary, Hartman vREIT XXI Holdings, LLC, which we refer to as our “limited partner,” and Hartman vREIT XXI SLP, LLC, which we refer to as the “special interest limited partner,” are the initial limited partners of our operating partnership. We refer to partnership interests and special partnership interests in our operating partnership, respectively, as “limited partnership interests” and “special limited partnership interests.” We will present our financial
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statements on a consolidated basis with our operating partnership. Because we plan to conduct substantially all of our operations through our operating partnership, we are organized in what is referred to as an “UPREIT” structure (as defined below).
Q: What is an “UPREIT”?
A: UPREIT stands for “Umbrella Partnership Real Estate Investment Trust.” An UPREIT is a REIT that holds all or substantially all of its properties through a partnership in which the REIT holds a general partner or limited partner interest, approximately equal to the value of capital raised by the REIT through sales of its capital stock.
Using an UPREIT structure may give us an advantage in acquiring properties from persons who may not otherwise sell their properties because of unfavorable tax results. Generally, a sale of property directly to a REIT is a taxable transaction to the selling property owner. In an UPREIT structure, a seller of a property who desires to defer taxable gain on the sale of its property may transfer the property to the UPREIT’s operating partnership in exchange for limited partnership units in the operating partnership and defer taxation of gain until the seller later sells its limited partnership interests or exchanges its limited partnership interests for shares of the common stock of the REIT.
Q: What is an “emerging growth company” and what is its impact on us?
A: We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and as a result we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies.
Section 107 of the JOBS Act provides that an emerging growth company can use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This permits an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. This election is irrevocable.
An emerging growth company is not required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and is eligible for certain reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. However, because we are not a large accelerated filer or an accelerated filer under Section 12b-2 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and will not be for so long as our shares of common stock are not traded on a securities exchange, we are not subject to auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002. In addition, so long as we are externally managed by our Advisor, we do not expect to be subject to executive compensation disclosure requirements or be required to seek stockholder approval of executive compensation or “golden parachute” compensation arrangements pursuant to the Exchange Act.
We will remain an “emerging growth company” for up to five years, although we will lose that status on the earliest of (1) the last day of the fiscal year in which our annual gross revenues exceed $1 billion, (2) the date upon which we have issued more than $1 billion in non-convertible debt during the preceding three-year period or (3) the date on which we are deemed to be a “large accelerated filer” as defined under Rule 12b-2 under the Exchange Act..
We do not believe that being an emerging growth company will have a significant impact on our business or this offering. As stated above, we have elected to opt out of the extended transition period for complying with new or revised accounting standards available to emerging growth companies. Also, because we are not a large accelerated filer or an accelerated filer under Section 12b-2 of the Exchange Act, and will not be for so long as shares of our common stock are not traded on a securities exchange, we will not be subject to auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 even once we are no longer an emerging growth company. In addition, so long as we are externally managed by our Advisor and we do not directly compensate our executive officers, or reimburse our Advisor or its affiliates for the salaries, bonuses, benefits and severance payments for any persons who also serve as one of our executive officers or as an executive officer of our Advisor, we do not expect to include disclosures relating to executive compensation in our periodic reports or proxy statements and, as a result, do not expect to be required to seek stockholder approval of executive compensation and golden parachute compensation arrangements pursuant to Section 14A(a) and (b) of the Exchange Act.
Q: What conflicts of interest will your Advisor face?
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A: Our Advisor and its affiliates, including our executive officers, our non-independent directors and our key real estate professionals, may experience conflicts of interest in connection with the management of our business and the other businesses of our Sponsor, including with Hartman XX, a public, non-listed REIT also sponsored by our Sponsor with a similar investment strategy to our own and Hartman Total Return, Inc., a private, non-listed REIT also sponsored by our Sponsor, which has slightly different investment strategy. Some conflicts of interest will face include the following:
the directors, officers and key personnel of our Advisor must allocate their time between advising us and managing our Sponsor’s and our other affiliates’ businesses and the other real estate projects and business activities in which they may be involved, including Hartman XX and Hartman Total Return, Inc ;
the compensation payable by us to our Advisor and other affiliates may not be on terms that would result from arm’s-length negotiations between unaffiliated parties, and fees such as the acquisition fees and investment management fees payable to our Advisor are based upon the cost of assets we acquire and are generally payable regardless of the performance of the investments we make, and thus may create an incentive for the Advisor to accept a higher purchase price for assets or to purchase assets that may not otherwise be in our best interest;
the property management fees payable to our property manager will generally be payable regardless of the quality of services provided to us;
our property manager is an affiliate of our Advisor and, as a result, may benefit from our Advisor’s determination to retain our assets while our stockholders may be better served by the sale or disposition of our assets;
the real estate professionals acting on behalf of our Advisor must determine which investment opportunities to recommend to us and other entities affiliated with our Sponsor, including Hartman XX and Hartman Total Return, Inc, which could reduce the number of potential investments presented to us; and
other real estate programs sponsored by our Sponsor and offered through our dealer manager, may conduct offerings concurrently with this offering, and our Sponsor and dealer manager will face potential conflicts of interest arising from competition among us and these other programs for investors and investment capital.

See the “Conflicts of Interest” section of this prospectus for a detailed discussion of the various conflicts of interest relating to an investment in our shares, as well as the procedures that we have established to mitigate certain of these potential conflicts.
Q: What is the ownership structure of the company and the affiliated entities that perform services for the company?
A: The following chart shows our current ownership structure and our relationship with our Sponsor, our Advisor and their respective affiliates as of March 1, 2020:
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Q: What fees do you pay to the Advisor and its affiliates?

A: We have no paid employees. Our Advisor and its affiliates will manage our day-to-day affairs. The following table summarizes all of the compensation and fees we will pay to our Advisor and its affiliates and our dealer manager, including amounts to reimburse their costs in providing services. These fees can be increased without shareholder consent. For a more detailed discussion of compensation, see the table included in the “Management Compensation” section of this prospectus, including the footnotes thereto. The selling commissions and dealer manager fee may vary for different categories of purchasers. See the “Plan of Distribution” section of this prospectus for a more detailed discussion of the selling commissions and fees we will pay. Unless otherwise specifically noted, the table below assumes that we sell the maximum amount of $180,000,000 in shares in our follow-on offering and no shares pursuant to our DRIP, 10% of the shares sold in this offering are Class A shares, 40% are Class S shares, 40% are Class I shares and 10% are Class T shares and we sell all shares at the highest possible selling commissions and dealer manager fees and there are no discounts in the price per share. We will cease paying all underwriting compensation related to this offering, including selling commissions, the dealer manager fee, the distribution and shareholder servicing fees and any other underwriting compensation payable from whatever source, when total underwriting compensation paid with respect to this offering equals 10% or more of the gross proceeds from the follow-on offering.
Compensation/ Reimbursement and Recipient

Description and Method of Computation
Estimated 
Maximum
Dollar Amount
Organization and Offering Stage
Selling Commissions – Dealer Manager
We will pay selling commissions of up to 7.0% of gross offering proceeds from the sale of Class A shares in the follow-on offering, selling commissions of up to 3.0% of gross offering proceeds from the sale of Class S shares and up to 3.0% of the gross offering proceeds from the sale of Class T shares. No selling commissions are paid on Class I shares. All or a portion of selling commissions may be re-allowed to participating broker-dealers. We will not pay selling commissions with respect to shares of any class sold pursuant to our DRIP.

The actual amount will depend on the number of Class A, Class S, Class I and Class T shares are sold and the price of each Class A, Class S, Class I and Class T share. Aggregate upfront selling commissions will equal approximately $1,260,000 for Class A shares, $2,160,000 for Class S shares and $— for Class I shares and $540,000 for Class T shares, based upon the assumptions set forth in the introductory paragraph above.
Dealer Manager Fee – Dealer Manager
We will pay a dealer manager fee of up to 3.0% of gross offering proceeds from the sale of Class A and Class T shares and a 0.5% dealer manager fee from the sale of Class S shares in the follow-on offering. Our dealer manager may re-allow all or a portion of the dealer manager fee to participating broker-dealers. We will not pay a dealer manager fee on gross offering proceeds from the sale of Class I shares in the follow-on offering. We will not pay dealer manager fees in connection with shares of any class sold pursuant to our DRIP.
The actual amount will depend on the number of Class A, Class S, Class I and Class T shares are sold and the price of each Class A, Class S, Class I and Class T share. Aggregate upfront dealer manager fees will equal approximately $540,000 for Class A shares, $360,000 for Class S shares, $0 for Class I shares and $540,000 for Class T shares, shares based upon the assumptions set forth in the introductory paragraph above
Distribution and Shareholder Servicing Fee – Advisor, participating advisor and participating broker dealer
Annual fee that accrues daily with respect to our Class S and Class T shares. We will begin accruing and paying the distribution and shareholder servicing fee during our organization and offering stage, once we have outstanding Class S and/or Class T shares. The distribution and shareholder servicing fee will continue to be paid during our operational stage. See “Operational Stage – Distribution and Shareholder Servicing Fee – Dealer Manager” below for details regarding the payment of the distribution and shareholder servicing fee.
See “Operational Stage – Distribution and Shareholder Servicing Fee – Dealer Manager” and Operational Stage-Distribution and Shareholder Servicing Fee- Advisor" below for details regarding the estimated amount of the distribution and shareholder servicing fee.
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Reimbursement of Other Organization and Offering Expenses –Advisor and its affiliates



We will reimburse our Advisor and its affiliates for organization and offering expenses (other than the selling commissions, dealer manager fees and distribution and shareholder servicing fees) incurred on our behalf, but only to the extent that such reimbursements would not cause the selling commissions, dealer manager fees, distribution and shareholder servicing fees and other organization and offering expenses borne by us to exceed 15% of the gross offering proceeds from the sale of shares in this offering as of the date of reimbursement. If we raise the maximum offering amount, we expect that organization and offering expenses (other than the selling commissions, dealer manager fees and distribution and shareholder servicing fees) will be approximately 1.5% of the gross offering proceeds.
$2,700,000
Operational Stage
Acquisition and Advisory Fees –Advisor or its affiliates
We will pay our Advisor or its affiliates 2.5% of the cost of each investment we acquire, which includes the amount actually paid or allocated to fund the purchase, development, construction or improvement of each investment, including acquisition expenses and any debt attributable to each investment.
$4,297,500 (assuming no debt financing to purchase assets) $17,190,000 (assuming debt financing equal to 75% of the aggregate value of our real property assets) (based on net proceeds as determined in the chart on page 5, less 1.5% reimbursement of other Organizational and Offering Expenses multiplied by 2.5%)
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Distribution and Shareholder Servicing Fee-Dealer Manager- Class T sharesAnnual fee for each outstanding Class T share purchased in our follow-on offering for four years from the date such share is issued equal to 1.0% of the share purchase price per share for Class T shares. The distribution and shareholder servicing fee will accrue daily based on the number of Class T shares outstanding on each day that were sold in the follow-on offering within the previous four years of such date. We will pay a distribution and shareholder servicing fee with respect to Class T shares sold under our DRIP, and the expense of the distribution and shareholder servicing fee payable with respect to Class T shares sold in our follow-on offering will be allocated among all Class T shares, including those sold under our DRIP. We pay the distribution and shareholder servicing fee monthly in arrears. Our dealer manager may reallow the distribution and shareholder servicing fee to participating broker-dealers. Each Class T share will automatically convert without any action on the part of the holder thereof into a Class A share on the last calendar day of the month following the fourth anniversary of the date upon which such Class T share was issued. We will cease paying the distribution and shareholder servicing fee on an outstanding Class T share, and convert such outstanding Class T share to a Class A share, prior to the fourth anniversary of its issuance on the earliest to occur of the following: (i) a listing of the Class A shares on a national securities exchange; (ii) a merger or consolidation of our company with or into another entity or the sale or other disposition of all or substantially all of our assets; (iii) the last calendar day of the month in which we determine that the distribution and shareholder servicing fee paid with respect to the Class T shares held by a stockholder would be in excess of four percent of the total gross purchase price of the Class T shares held by such stockholder (including Class T shares sold pursuant to our DRIP); or (iv) the last calendar day of the month in which we determine that the total account-level underwriting compensation from whatever source paid with respect to the Class T shares held by a stockholder, including the aggregate distribution and shareholder servicing fees, equals ten percent of the total gross purchase price at the time of purchase of such Class T shares (including Class T shares sold pursuant to our DRIP). We cannot predict if or when certain of the foregoing events will occur.$0.1095 annually per Class T share based on an offering price of $10.95 per Class T shares.
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Distribution and Shareholder Servicing Fees-Advisor- Class S sharesAnnual fee for each outstanding Class S share purchased in our follow-on offering for seven years from the date such share is issued equal to 0.15% of the share purchase price per share for Class S shares. The distribution and shareholder servicing fee will accrue daily based on the number of Class S shares outstanding on each day that were sold in the follow-on offering within the previous seven years of such date. We pay the distribution and shareholder servicing fee monthly in arrears. Each Class S share will automatically convert without any action on the part of the holder thereof into a Class A share on the last calendar day of the month following the seven year anniversary of the date upon which such Class S share was issued. We will cease paying the distribution and shareholder servicing fee on an outstanding Class S share to the Advisor and convert such outstanding Class S share to a Class A share, prior to the seven year anniversary of its issuance on the earliest to occur of the following: (i) a listing of the Class A shares on a national securities exchange; (ii) a merger or consolidation of our company with or into another entity or the sale or other disposition of all or substantially all of our assets; (iii) the last calendar day of the month in which we determine that the total distribution and shareholder servicing fee paid to the participating advisor and participating broker dealer with respect to the Class S shares held by a stockholder would be in excess of 6% of the total gross purchase price of the Class S shares held by such stockholder; or (iv) the last calendar day of the month in which we determine that the total account-level underwriting compensation from whatever source paid with respect to the Class S shares held by a stockholder, including the aggregate distribution and shareholder servicing fees, equals 10% of the total gross purchase price at the time of purchase of such Class S shares. We cannot predict if or when certain of the foregoing events will occur.$0.1067 annually per Class S share based on an offering price of $10.67 per Class S shares.
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Distribution and Shareholder Servicing Fees-participating advisors and participating broker dealers- Class S sharesAnnual fee for each outstanding Class S share purchased in our follow-on offering for seven years from the date such share is issued equal to 0.20% of the share purchase price per share for Class S shares to the participating advisor and 0.65% to the participating broker dealer. The distribution and shareholder servicing fee will accrue daily based on the number of Class S shares outstanding on each day that were sold in the follow-on offering within the previous seven years of such date. We pay the distribution and shareholder servicing fee monthly in arrears. Each Class S share will automatically convert without any action on the part of the holder thereof into a Class A share on the last calendar day of the month following the seven year anniversary of the date upon which such Class S share was issued. We will cease paying the distribution and shareholder servicing fee on an outstanding Class S share, and convert such outstanding Class S share to a Class A share, prior to the seven year anniversary of its issuance on the earliest to occur of the following: (i) a listing of the Class A shares on a national securities exchange; (ii) a merger or consolidation of our company with or into another entity or the sale or other disposition of all or substantially all of our assets; (iii) the last calendar day of the month in which we determine that the total distribution and shareholder servicing fee paid with respect to the Class S shares held by a stockholder would be in excess of 6% of the total gross purchase price of the Class S shares held by such stockholder; or (iv) the last calendar day of the month in which we determine that the total account-level underwriting compensation from whatever source paid with respect to the Class S shares held by a stockholder, including the aggregate distribution and shareholder servicing fees, equals 10% of the total gross purchase price at the time of purchase of such Class S shares. We cannot predict if or when certain of the foregoing events will occur.
Acquisition Expenses –Advisor or its affiliates
In addition to the acquisition fees payable to our Advisor and its affiliates, we will reimburse our Advisor and its affiliates for all actual expenses incurred in connection with the acquisition or development of a property, whether or not the asset is ultimately acquired by us, including, but not limited to, legal fees and expenses, travel and communications expenses, costs of appraisals, nonrefundable option payments on property not acquired, accounting fees and expenses, brokerage or finder’s fees, title insurance, premium expenses and other closing costs. In no event will the total of all acquisition fees (including debt financing fees) and acquisition expenses relating to the purchase of an investment exceed 6.0% of the contract purchase price of the investment, unless such excess is approved by a majority of our board of directors, including a majority of our independent directors.
Actual amounts are dependent upon the amount of any debt obtained and therefore cannot be determined at the present time.
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Debt Financing Fee –Advisor or its affiliates
We will pay our Advisor or its affiliates a debt financing fee equal to 1.0% of the amount available under any loan or line of credit originated or assumed, directly or indirectly, in connection with the acquisition, development, construction, improvement of properties or other permitted investments, which will be in addition to the acquisition fee paid to our Advisor . Our Advisor will use some or all of this entire amount to reimburse third parties with whom it subcontracts to coordinate financing for us.
Actual amounts are dependent upon the amount of any debt obtained and therefore cannot be determined at the present time.
Development Fee – Property Manager

If our property manager provides development services, we will pay our property manager a development fee in an amount that is usual and customary for comparable services rendered to similar projects in the geographic market of the project; provided, however, that we will only pay a development fee if a majority of our board of directors, including a majority of our independent directors, determines that such development fee is fair and reasonable and on terms and conditions not less favorable than those available from unaffiliated third parties.
Actual amounts are dependent upon usual and customary development fees for specific projects and therefore the amount cannot be determined at the present time

Property Management and Leasing Fees – Property Manager

We will pay our property manager property management fees equal to 5.0% of the Effective Gross Revenues (as defined below) of retail, industrial and warehouse properties under management. We will pay our property manager property management fees equal to (i) 4.0% of the Effective Gross Revenues of office properties under management with less than 100,000 square feet or with gross annual revenues under $1,000,000 and (ii) 3.0% of the Effective Gross Revenues of office properties under management with more than 100,000 square feet and/or gross annual revenues of $1,000,000 or more.  “Effective Gross Revenues” for these purposes means all payments actually collected from tenants and occupants of properties under management, exclusive of (i) security and deposits (unless and until such deposits have been applied to the payment of current or past due rent) and (ii) payments received from tenants in reimbursement of expenses of repairing damage caused by tenants.  In the event that we contract directly with a third-party property manager to manage a property, we will pay our property manager an oversight fee equal to 1.0% of the gross revenues of the property.  In no event will we pay both a property management fee and an oversight fee to our property manager with respect to any particular property.
In addition to the property management fees or oversight fees, if our property manager provides leasing services with respect to a property, we will pay our property manager leasing fees in an amount equal to the leasing fees charged by unaffiliated persons rendering comparable services in the same geographic location of the applicable property; provided, that such fees shall only be paid if a majority of our board of directors, including a majority of our independent directors, determines that such fees are fair and reasonable in relation to the services being performed.
Our property manager may subcontract the performance of its property management and leasing duties to third parties and our property manager will pay a portion of its property management, oversight or leasing fees, as applicable, to any third parties with whom it subcontracts.

Actual amounts are dependent upon gross revenues of specific properties and actual management fees or property management fees and customary leasing fees and therefore cannot be determined at the present time.
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We will reimburse the costs and expenses incurred by our property manager on our behalf, including the wages and salaries and other employee-related expenses of all employees of our property manager or its subcontractors who are engaged in the operation, management, maintenance or access control of our properties, including taxes, insurance and benefits relating to such employees, and travel and other out-of-pocket expenses that are directly related to the management of specific properties.  Furthermore, other charges, including fees and expenses of third-party professionals and consultants, will be reimbursed, subject to the limitations on fees and reimbursements contained in our charter.
Construction Management Fee — Property Manager
If our property manager provides construction management services related to the improvement or finishing of tenant space in our real estate properties, we will pay our property manager a construction management fee in an amount that is usual and customary for comparable services rendered to similar projects in the geographic market of the project; provided, however, that we will only pay a construction management fee if a majority of our board of directors, including a majority of our independent directors, determines that such construction management fee is fair and reasonable and on terms and conditions not less favorable than those available from unaffiliated third parties.
Actual amounts are dependent on amounts spent on future tenant improvements and cannot be determined at this time.
Asset Management Fee –Advisor or its affiliates
We will pay our Advisor or its affiliates a monthly fee equal to one-twelfth of 0.75% of the higher of (i) the cost or (ii) the value of each property we acquire. For these purposes, the cost of a property will equal the amount actually paid or budgeted (excluding acquisition fees and expenses) in respect of the purchase, development, construction or improvement of the property, including the amount of any debt attributable to the asset (including debt encumbering the asset after its acquisition), and the value of a property will be the value established by the most recent independent valuation report with respect to such property, if any, without reduction for depreciation, bad debts or other non-cash reserves.  The asset management fee will be based only on the portion of the cost or value attributable to our investment in an asset if we do not own all of the asset.
Actual amounts are dependent upon aggregate asset value and therefore cannot be determined at the present time.
Operating Expenses –Advisor
We will reimburse our Advisor for all actual expenses paid or incurred by our Advisor in connection with the services provided to us, including our allocable share of the Advisor’s overhead, such as rent, personnel costs, utilities and IT costs; provided, however, that we will not reimburse our Advisor or its affiliates for employee costs in connection with services for which our Advisor or its affiliates receive acquisition, disposition, debt financing, or asset management fees or for the personnel costs our Advisor pays with respect to persons who serve as our executive officers.





Actual amounts are dependent upon expenses paid or incurred and the limitations on total operating expenses set forth in our charter, and therefore cannot be determined at the present time
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Liquidation Stage
Disposition Fee —Advisor or affiliates
If our Advisor or affiliate provides a substantial amount of services, as determined by our independent directors, in connection with the sale of one or more assets, it will receive a disposition fee equal to the lesser of: (A) one-half of the brokerage commission paid or (B) 3.0% of the sales price of each property sold; provided, however, in no event may the aggregate of the disposition fees paid to our property manager and any real estate commissions paid to unaffiliated third parties exceed the lesser of the competitive real estate commission or an amount equal to 6.0% of the contract sales price. With respect to a property held in a joint venture, the foregoing commission will be reduced to a percentage of such amount reflecting our economic interest in the joint venture.
Actual amounts are dependent upon the sales price of specific investments and therefore cannot be determined at the present time.
Special Limited Partnership Interest — Hartman vREIT XXI SLP, LLCThe holder of the special limited partnership interests, Hartman vREIT XXI SLP, LLC, a wholly-owned subsidiary of the parent company of our Advisor, was issued the special limited partnership interests upon its initial investment of $1,000 in our operating partnership. The holder of special limited partnership interests will be entitled to receive distributions equal to 15.0% of our sales proceeds from the disposition of assets, but only after our stockholders have received, in the aggregate, cumulative distributions equal to their total invested capital plus a 6.0% cumulative, non-compounded annual pre-tax return on such aggregated invested capital. In addition, the special limited partnership interest holder is entitled to a payment upon the redemption of its special limited partnership interests. The special limited partnership interests will be redeemed upon: (1) the listing of our common stock on a national securities exchange; (2) the occurrence of certain events that result in the termination or non-renewal of our advisory agreement other than by us for “cause” (as defined in our advisory agreement); or (3) the termination of our advisory agreement by us for cause. In the event of the listing of our shares of common stock or a termination of the advisory agreement other than by us for cause, the special limited partnership interests will be redeemed for an aggregate amount equal to the amount that the holder of the special limited partnership interests would have been entitled to receive, as described above, if our operating partnership had disposed of all of its assets at their fair market value and all liabilities of our operating partnership had been satisfied in full according to their terms as of the date of the event triggering redemption. Payment of the redemption price to the holder of the special limited partnership interests will be paid, at the holder’s discretion, in the form of (i) limited partnership interests in our operating partnership, (ii) shares of our Class A common stock, or (iii) a non-interest bearing promissory note. If the event triggering the redemption is a listing of our shares on a national securities exchange only, the fair market value of the assets of our operating partnership will be calculated taking into account the average share price of our shares for a specified period. If the event triggering the redemption is an underwritten public offering of our shares, the fair market value will take into account the valuation of the shares as determined by the initial public offering price in such offering, If the triggering event of the redemption is the termination or non-renewal
Actual amounts depend on future liquidity events, and therefore cannot be determined at this time.
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of our advisory agreement other than by us for cause for any other reason, the fair market value of the assets of our operating partnership will be calculated based on an appraisal or valuation of our assets. In the event of the termination or nonrenewal of our advisory agreement by us for cause, all of the special limited partnership interests will be redeemed by our operating partnership for the aggregate price of $1.

Q: How does the payment of fees and expenses affect my invested capital?
A: We will pay selling commissions and dealer manager fees in connection with this offering. In addition, we will reimburse our Advisor for organizational and offering expenses and we will pay our Advisor and its affiliate’s acquisition, disposition, debt financing and other fees for services provided to us, as described in this prospectus. In addition, we will pay our property manager property management and other fees. The payment of these fees and expenses will reduce the funds available to us for investment in real estate assets. The payment of fees and expenses will also reduce the book value of your shares of common stock. However, you will not be required to pay any additional amounts in connection with the fees and expenses described in this prospectus.
Q: How many real estate investments do you currently own?
A: We currently own ten properties and a 2.47% joint venture interest in a real estate special purpose entity which owns 39 properties. We own 700,302 common shares of an affiliate, Hartman Short Term Income Properties XX, Inc. which we received effective March 1, 2019 in connection with an exchange of 3.42% or our previous 5.89% membership interest in Hartman SPE LLC.
For additional information regarding our current investments, see the section of this prospectus entitled “Our Real Estate Investments.” Because we have acquired only a limited number of assets thus far and we have not yet identified any specific additional assets to acquire, we are still considered to be a “blind pool.” We intend to continue to acquire, develop and own a diversified portfolio of value-oriented commercial properties located primarily in Texas. We will describe material changes to our portfolio, including significant property acquisitions and dispositions, by means of supplements to this prospectus.
Q: How have your investments performed?

A: We believe this question is best answered with a summary presentation of our selected financial data. The following selected financial data should be read in conjunction with our consolidated financial statements and the notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020; our Annual Report on Form 10-K/A for the year ended December 31, 2019, and our Annual Report on Form 10-K for the year ended December 31, 2018, which are incorporated by reference into this prospectus. Our historical results are not necessarily indicative of results for any future period.
As of March 31,As of December 31,
Balance Sheet Data (in thousands)2020201920182017
Total real estate assets, at cost$77,840  $77,173  $29,675  $7,261  
Total real estate assets, net$71,687  $72,482  $28,465  $6,858  
Total assets$93,215  $89,571  $43,502  $18,287  
Notes payable, net$24,269  $18,317  $14,086  $3,480  
Total liabilities$27,265  $22,966  $15,184  $3,944  
Total special limited partnership interests$ $ $ $ 
Total stockholders’ equity$65,949  $66,604  $28,317  $14,342  

For the three months endedFor the year ended December 31,
Operating Data (in thousands except share data)March 31, 2020201920182017
Total revenues$3,369  $7,478  $1,550  $918  
Equity in loss of unconsolidated entity$—  $—  $(397) $(270.901) 
Net loss(438) $(1,085) $(1,292) $(1,538) 
Net loss per common share - basic and diluted$(0.05) $(0.18) $(0.48) $(1.44) 
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For the three months endedFor the year ended December 31,
Other Data (in thousands)March 31, 2020201920182017
Cash flow (used in) provided by
Operating activities$(1,184) $2,242  $(638) $(1,134) 
Investing activities$(4,479) $(51,652) $(21,568) $(11,095) 
Financing activities$5,840  $43,829  $25,712  $14,563  
Distributions paid in cash$(771) $(1,937) $(788) $(321) 
Distributions declared for common shares (1)$(1,364) $(4,245) $(2,042) $(795) 
Weighted average number of common shares outstanding, basic and diluted8,567  6,075  2,717  1,069  
FFO (2)$1,160  $2,956  $913  $(350) 
MFFO (2)$1,176  $3,140  $1,033  $724  

(1) We paid our first monthly distribution payment in January 2017. See “Distribution Policy” in our Annual Report on Form 10-K/A for the year ended December 31, 2019.

(2) GAAP basis accounting for real estate utilizes historical cost accounting and assumes real estate values diminish over time. In an effort to overcome the difference between real estate values and historical cost accounting for real estate assets, the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT, established the measurement tool of funds from operations (“FFO”). Since its introduction, FFO has become a widely used non-GAAP financial measure among REITs. Additionally, we use modified funds from operations (“MFFO”) as defined by the Institute for Portfolio Alternatives as a supplemental measure to evaluate our operating performance. MFFO is based on FFO but includes certain adjustments we believe are necessary due to changes in accounting and reporting under GAAP since the establishment of FFO. Neither FFO nor MFFO should be considered as alternatives to net loss or other measurements under GAAP as indicators of our operating performance, nor should they be considered as alternatives to cash flow from operating activities or other measurements under GAAP as indicators of liquidity. For additional information on how we calculate FFO and MFFO and a reconciliation of FFO and MFFO to net loss, see our Annual Report on Form 10-K, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Funds From Operations and Modified Funds From Operations.”

Q: Will you acquire properties or other assets in joint ventures?
A: We have and may continue to acquire properties and other investments through joint ventures in order to diversify our portfolio by investment size, investment type or investment risk. In determining whether to invest in a particular joint venture, our Advisor will evaluate the real estate assets that such joint venture owns or is being formed to own under the same criteria as our other investments. We may enter into joint ventures with affiliates of our Advisor or with third parties. For additional information regarding our current investments, see the section of this prospectus entitled “Our Real Estate Investments.”
Q: If I buy shares, will I receive distributions and how often?
A: Our board of directors has authorized and declared distributions based on daily record dates, and we expect to aggregate and pay these distributions on a monthly basis. By “daily record dates,” we mean that distributions will be calculated based on common stock holders of record as of the close of business each day in the monthly period. Therefore, assuming we declare daily distributions during the period in which you own shares of our common stock, your distributions will begin to accrue on the date we accept your subscription for shares of our common stock, which is subject to, among other things, your meeting the applicable suitability requirements for this offering. We have not established a minimum distribution level, and our charter does not require that we make distributions to our stockholders.
Our board of directors’ discretion as to the payment of distributions will be directed, in substantial part, by its determination to cause us to comply with the REIT requirements. To maintain our qualification as a REIT, we will be required to make aggregate annual distributions to our common stock holders of at least 90% of our REIT taxable income (computed without regard to the dividends paid deduction and excluding net capital gain). Our board of directors may authorize distributions in excess of those required for us to maintain REIT status depending on our financial condition and such other factors as our board of directors deems relevant.
Our board of directors considers many factors before authorizing a cash distribution, including current and projected cash flow from operations, capital expenditure needs, general financial conditions and REIT qualification requirements. We expect
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to have little, if any, cash flow from operations available for cash distributions until we make substantial investments. It is therefore likely that, at least during the early stages of our development, and from time to time during our operational stage, our board will authorize and we will declare cash distributions that will be paid in advance of our receipt of cash flow that we expect to receive during a later period. In these instances where we do not have sufficient cash flow to cover our distributions, we expect to use the proceeds from this offering, the proceeds from the issuance of securities in the future or proceeds from borrowings to pay distributions. We may borrow funds, issue new securities or sell assets to make distributions, all or a portion of which could be deemed a return of capital. We may also fund distributions from third-party borrowings or from advances from our Advisor or Sponsor or from our Advisor’s deferral of its fees, although we have no present intent to do so. If we fund cash distributions from borrowings, sales of assets or the net proceeds from this offering, we will have fewer funds available for the acquisition of assets and your overall return may be reduced. Further, to the extent cash distributions are in excess of our current and accumulated earnings and profits, a stockholder’s basis in our stock will be reduced and, to the extent distributions exceed a stockholder’s basis, the stockholder may recognize capital gain. Our organizational documents do not limit the amount of distributions we can fund from sources other than from our current and accumulated earnings and profits.
Our board of directors may authorize and we may declare distributions to be paid in our common stock, in addition to or in place of some or all of our cash distributions for any particular period.
Our board of directors first declared and authorized cash and stock distributions to our stockholders on December 1, 2016, and we paid our first distribution on January, 20, 2017. We have paid distributions in each month thereafter, but there is no guarantee that such payments will continue into the future. For additional information regarding our distributions see the section of the prospectus entitled “Description of Shares-Distributions.”
Q: May I reinvest my distributions in additional shares?
A: Yes. You may participate in our DRIP and elect to have the cash distributions you receive reinvested in additional shares of the same class of common stock that you own, at a price equal to the NAV of the shares, initially $10.30 for each share class. Going forward, we will offer shares to our stockholders pursuant to our DRIP at a price equal to the most recently determined estimated NAV per share for our common stock. We intend to determine an updated estimated NAV per share quarterly every year , or more frequently, in the sole discretion of our board of directors, and intend to disclose that updated estimated NAV per share in our annual report on Form 10-K or a current report on Form 8-K that we file with the SEC. There are no upfront selling commissions or dealer manager fees when purchasing shares under our DRIP; however, distribution and shareholder servicing fees will be paid as applicable. Our DRIP may also be amended, suspended or terminated by our board of directors in its discretion upon at least 30 days’ prior written notice. Please see “Description of Capital Stock-Distribution Reinvestment Plan” for more information regarding our DRIP.
If you participate in our DRIP, you will be treated for federal income tax purposes as if you received a distribution (taxable as described in the following Q&A) in an amount equal to the value of the additional shares you receive, so that you may have a tax liability that you will have to fund from other sources.
Q: Will the distributions I receive be taxable as ordinary income?
A: The federal income tax treatment of distributions that you receive, including cash distributions that are reinvested pursuant to our distribution reinvestment plan, depends upon the extent to which they are paid from current or accumulated earnings and profits and, accordingly, treated as dividends and upon whether any portion of such distributions are designated as “qualified dividend income” or capital gain dividends, both of which are taxed at capital gains rates. Distributions from REITs that are treated as dividends but are not designated as “qualified dividend income” or capital gain dividends are treated as ordinary income and are not eligible to be taxed at the lower capital gains rates applicable to individuals for “qualified dividend income” from taxable corporations. For taxable years beginning after December 31, 2017 and before January 1, 2026, distributions from REITs that are treated as dividends but are not designated as “qualified dividend income” or capital gain dividends are taxed as ordinary income but are eligible for a deduction of up to 20% of the amount of the dividend in the case of U.S. non-corporate stockholders.
In certain circumstances, we may designate a portion of our distributions as qualified dividend income, e.g., if we receive qualified dividend income, but we do not expect to designate a substantial portion of our distributions as qualified dividend income. In addition, we may designate a portion of distributions as capital gain dividends taxable at capital gain rates to the extent we recognize net capital gains from sales of assets. A portion of your distributions may be considered return of capital for tax purposes. These amounts will not be subject to tax but will instead reduce the tax basis of your investment. This, in effect, defers a portion of your tax until your shares are redeemed, you sell your shares or we are liquidated, at which time you
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generally will be taxed at capital gains rates. Because each investor’s tax position is different, you should consult with your tax advisor. See “Federal Income Tax Considerations.”
Q: Will I receive a stock certificate?
A: No. You will not receive a stock certificate unless expressly authorized by our board of directors. All shares of our common stock are issued in book-entry form only. The use of book-entry registration protects against loss, theft or destruction of stock certificates and reduces offering costs.
Q: How will you use the proceeds raised in this offering?
A: We intend to use substantially all of the net proceeds from our offering to acquire, develop and own a diversified portfolio of value-oriented commercial properties, including office, retail industrial and warehouse properties located primarily in Texas. These properties may be existing properties, income producing properties developed by an affiliate of our Sponsor, newly constructed properties, or properties consisting of undeveloped raw land or properties otherwise under development or construction. For more information regarding the use of proceeds, see “Estimated Use of Proceeds.”
Q: What kind of offering is this?
In this follow-on offering we are offering up to $180,000,000 in any combination of four classes of shares of our common stock, Class A shares, Class S shares, Class I shares and Class T shares to the public, which we refer to as the “follow-on offering,” at a price per share of $10.30 plus applicable upfront selling commissions and dealer manager fees. The four share classes have different upfront selling commissions and different ongoing stockholder servicing fees. We are also offering up to $5,000,000 in any combination of shares of our common stock to our stockholders pursuant to our distribution reinvestment plan (“DRIP”), at a price equal to the current NAV per share. We reserve the right to reallocate the shares of common stock we are offering between the classes of stock of the follow-on offering and our DRIP.

Our board of directors may, from time to time, in its sole and absolute discretion, change the price at which we offer shares to the public in the follow-on offering or pursuant to our DRIP to reflect changes in our estimated NAV per share, changes in applicable law and other factors that our board of directors deems relevant. If we determine to change the price at which we offer shares, we do not anticipate that we will do so more frequently than quarterly. We intend to update our estimated NAV per share at least quarterly.
Q: How does a “best efforts” offering work?
A: When shares of common stock are offered to the public on a “best efforts” basis, the broker-dealers participating in the offering are only required to use their best efforts to sell the shares of our common stock and therefore do not have a firm commitment or obligation to purchase any of the shares of our common stock. As a result, no specified dollar amount is guaranteed to be raised.

Q: Have you conducted any prior offerings?

A: We commenced an initial public offering of our common stock on June 24, 2016. As of March 31, 2020, we had accepted investors’ subscriptions for, and issued, 8,161,936 shares, net of redemptions, of our Class A common stock and 457,245 shares, net of redemptions, of our Class T common stock in our initial public offering, including 408,282 Class A shares and 18,227 Class T shares issued pursuant to our DRIP, resulting in aggregate gross offering proceeds of $84,967,000.

Q: How long will this offering last?
A: We may continue to offer shares of our common stock in this offering until January 14, 2023 (three years from the date of the commencement of this offering). Under rules promulgated by the SEC, in some circumstances in which we are pursuing the registration of shares of our common stock in a follow-on public offering, we could continue the follow-on offering until as late as July 14, 2023 (up to an additional 180 days). In many states, we will need to renew the registration statement or file a new registration statement to continue this offering beyond one year from the date of this prospectus. We may terminate this offering at any time.


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Q: How is an investment in shares of your common stock different from listed REITs?
A: An investment in shares of our common stock generally differs from an investment in listed REITs in a number of ways, including:
• Shares of listed REITs are priced by the trading market, which is influenced generally by numerous factors, not all of which are related to the underlying value of the entity’s real estate assets and liabilities. The estimated value of our real estate assets and liabilities will be used to determine our NAV rather than the trading market.
• An investment in our shares has limited or no liquidity and our share repurchase plan may be modified, suspended or terminated. In contrast, an investment in a listed REIT is a liquid investment, as shares can be sold on an exchange at any time.
• Listed REITs are often self-managed, whereas our investment operations are managed by our Advisor.
• Unlike the offering of a listed REIT, this offering has been registered in every state in which we are offering and selling shares. As a result, we include certain limits in our governing documents that are not typically provided for in the charter of a listed REIT. For example, our charter limits the fees we may pay to our Advisor and its affiliates, limits our ability to make certain investments, limits the aggregate amount we may borrow, requires our independent directors to approve certain actions and restricts our ability to indemnify our directors, our Advisor and its affiliates. A listed REIT does not typically provide for these restrictions within its charter. A listed REIT is, however, subject to the governance requirements of the exchange on which its stock is traded, including requirements relating to its board of directors, audit committee, independent director oversight of executive compensation and the director nomination process, code of conduct, shareholder meetings, related party transactions, shareholder approvals, and voting rights. Although we expect to follow many of these same governance guidelines, there is no requirement that we do so.
Q: Who can buy shares?
A: An investment in our shares of common stock is only suitable for persons who have adequate financial means and who will not need immediate liquidity from their investment. In general, you may buy shares of our common stock pursuant to this prospectus provided that you have either (1) a net worth of at least $70,000 and an annual gross income of at least $70,000 or (2) a net worth of at least $250,000. For the purpose of determining suitability, net worth does not include an investor’s home, home furnishings or personal automobiles. These minimum net worth and investment levels may be higher in certain states. See the section of this prospectus titled “Suitability Standards.”
Our Advisor and its affiliates and our directors and executive officers may purchase shares of our common stock. The sales commissions and dealer manager fees that are payable by other investors in this offering may be reduced or waived for our affiliates.
Q: Who might benefit from an investment in our shares?
A: An investment in our shares of common stock may be beneficial for you if you meet the minimum suitability standards described in this prospectus, seek to diversify your personal portfolio with a real estate-based investment, seek to preserve capital, seek to receive current income, seek to obtain the benefits of potential long-term capital appreciation, and are able to hold your investment for a time period consistent with our liquidity strategy. On the other hand, we caution persons who require immediate liquidity or guaranteed income, or who seek a short-term investment, that an investment in our shares of common stock will not meet those needs.
Q: Is there any minimum investment required?
A: Yes. We require a minimum investment of at least $10,000 ($5,000 for IRA and other ERISA plans). After you have satisfied the minimum investment requirement, any additional purchases must be in increments of at least $500. The investment minimum for subsequent purchases does not apply to shares purchased pursuant to our DRIP.
Q: Are there any special restrictions on the ownership or transfer of shares?
A: Yes. Our charter contains restrictions which prohibit the ownership of more than 9.8% in value of the aggregate of our outstanding shares of capital stock (which includes common stock and preferred stock we may issue) and more than 9.8% in value or number of shares, whichever is more restrictive, of the aggregate of our then outstanding common stock, unless
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exempted (prospectively or retroactively) by our board of directors. This prohibition may discourage large investors from purchasing our shares and may limit your ability to transfer your shares. To comply with tax rules applicable to REITs, we will require our record holders to provide us with detailed information regarding the beneficial ownership of our shares on an annual basis. These restrictions are designed to enable us to comply with ownership restrictions imposed on REITs by the Internal Revenue Code. Our Board has granted one exemption from this requirement to an outside director of one of our Affiliates. See the section of this prospectus titled “Description of Capital Stock-Restriction on Ownership of Shares of Capital Stock.”
Q: Are there any special considerations that apply to employee benefit plans subject to ERISA or other retirement plans that are investing in shares?
A: Yes. The section of this prospectus titled “ERISA Considerations” describes the effect the purchase of shares will have on benefit plan investors, such as individual retirement accounts and retirement plans subject to the Employee Retirement Income Security Act of 1974, as amended, or ERISA, or the Internal Revenue Code. ERISA is a federal law that regulates the operation of certain tax-advantaged retirement plans. Any retirement plan trustee or individual considering purchasing shares for a retirement plan or an individual retirement account should carefully read this section of the prospectus. See “Risk Factors-Retirement Plan Risks” and “Certain ERISA Considerations.”
Q: May I make an investment through my IRA, SEP or other tax-deferred account?
A; Yes. You may make an investment through your individual retirement account, or IRA, a simplified employee pension, or SEP plan or other tax-deferred account. In making these investment decisions, you should consult with your own counsel and consider, at a minimum, (i) whether the investment is in accordance with the documents and instruments governing your IRA, plan or other account, (ii) whether the investment satisfies the fiduciary requirements associated with your IRA, plan or other account, (iii) whether the investment will generate UBTI to your IRA, plan or other account, (iv) whether there is sufficient liquidity for such investment under your IRA, plan or other account, (v) the need to value the assets of your IRA, plan or other account annually or more frequently, and (vi) whether the investment would constitute a prohibited transaction under applicable law.
Q: How do I subscribe for shares?
A: If you choose to purchase shares in this offering, you will need to complete and sign a subscription agreement (in the form attached to this prospectus as an appendix) and pay for the shares at the time of your subscription. See the section of this prospectus titled “How to Subscribe."
Q: If I buy shares in this offering, how may I later sell them?
A: Our common stock is currently not listed on a national securities exchange and we will not seek to list our common stock unless and until such time as our board of directors determines that the listing of our common stock would be in the best interests of our stockholders. As a result, if you wish to sell your shares, you may not be able to do so promptly, or at all, or you may only be able to sell them at a substantial discount from the price you paid. In general, however, you may sell your shares to any buyer that meets the applicable suitability standards unless such sale would cause the buyer to own more than 9.8% of the aggregate of the value of our then outstanding shares of capital stock (which includes common stock, any preferred stock and convertible stock we may issue) or more than 9.8% of the value or number of shares, whichever is more restrictive, of the aggregate of our then outstanding shares of common stock. See “Suitability Standards” and “Description of Shares-Restriction on Ownership of Shares of Capital Stock.”
In order to provide stockholders with the benefit of limited liquidity, our board of directors has adopted a share redemption program that enables our stockholders to sell their shares back to us after they have held them for at least three years, subject to significant conditions and limitations. The terms of our share redemption program are more flexible in cases involving the death or disability of a stockholder.
Redemptions of shares of our common stock, when requested, are at our sole discretion and generally will be made quarterly. We will limit the number of shares redeemed during any quarter to 1.25% and to 5.0% in any calendar year of the number of shares of our common stock outstanding on December 31 of the previous calendar year. Due to these limitations, we cannot guarantee that we will be able to accommodate all redemption requests.
We will redeem shares pursuant to our share redemption program of our common stock held for at least three years at a price equal to the then-current estimated NAV per share for the applicable share class, as determined by our board of directors.
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We will redeem shares of our common stock at the purchase price of the shares, in the event of the death or qualified disability of a stockholder within three years of purchase of the shares. Redemptions of shares held for three years or more for the death or qualified disability of a stockholder will be redeemed as we would any other redemption request.
The share redemption program will immediately terminate if our shares are listed on any national securities exchange. In addition, our board of directors may suspend (in whole or in part) the share redemption program at any time and from time to time upon notice to our stockholders and amend or terminate the share redemption program at any time upon 30 days’ prior written notice to our stockholders. Further, our board of directors reserves the right, in its sole discretion, to reject any requests for redemptions. For additional information on our share redemption program, see the section of this prospectus titled “Description of Shares-Share Redemption Program.”
Q:  Will you provide stockholders with information concerning the estimated value of their shares of common stock?
A: Yes. On May 12, 2020, our board of directors, including all of our independent directors, determined an estimated NAV per share of our common stock. Investors are cautioned that the market for commercial real estate can fluctuate quickly and substantially, and values of our assets and liabilities are expected to change in the future. Investors should also consider that we are still raising capital in this offering and at December 31, 2019, we owned a limited number of properties. As and when we continue to raise capital from the sale of shares of common stock in this offering and invest in additional real estate properties, our assets and liabilities, and the NAV per share of our common stock, will vary significantly from the estimated NAV of each class of our common stock as of December 31, 2019. We intend to determine an updated estimated NAV per share quarterly on or about the last day of the calendar quarter, or more frequently, in the sole discretion of our board of directors, and intend to disclose that updated estimated NAV per share in our annual report on Form 10-K or a current report on Form 8-K that we file with the SEC.
We expect the NAV per share of each Class A share, Class S share, Class I share and Class T share to be the same, except in the unlikely event that the distribution fees payable by us exceed the amount otherwise available for distribution to holders of Class S shares and/or Class T shares in a particular period (prior to the deduction of the shareholder servicing and distribution fees), in which case the excess will be accrued as a reduction to the NAV per share of each Class S share and/or Class T share, as applicable, which would result in the NAV with respect to Class S shares and/or Class T shares being lower than the NAV of the other classes of shares.
The purchase and repurchase price for shares of our common stock are generally based on our prior quarter's NAV and are not based on any public trading market. While there will be independent valuations of our properties from time to time, the valuation of properties is inherently subjective and our NAV may not accurately reflect the actual price at which our properties could be liquidated on any given day.
For a detailed discussion of our board’s determination of the estimated NAV per share of each class of our common stock, see “Description of Shares-Determination of Net Asset Value Per Share.”

Q: When will the company seek to provide its stockholders with a liquidity event?
A: We may provide our stockholders with a liquidity event or events by pursuing one or some combination of the following: listing our shares for trading on a national securities exchange; liquidating all, or substantially all, of our assets and distributing the net proceeds to our stockholders; or a sale or merger of our company. In addition to such liquidity events, our board may also consider pursuing various other liquidity strategies, including adopting a more expansive share redemption program (subject to the restrictions of applicable federal securities laws) or engaging in a tender offer, to accommodate those stockholders who desire to liquidate their investment in us. We expect that our board will evaluate such events within three to seven years after we terminate this offering, subject to then prevailing market conditions.
If we elect to liquidate our assets, we would begin an orderly sale of our properties and other assets. The precise timing of such sales will depend on the prevailing real estate and financial markets, the economic conditions in the areas where our properties are located and the federal income tax consequences to our stockholders. In making the decision to liquidate our assets, apply for listing of our shares or pursue other liquidity strategies, our directors will try to determine which option will result in greater value for stockholders as well as satisfy the liquidity needs of our stockholders.
There is no requirement that we provide a liquidity event for our stockholders within a certain time frame, or at all.
Q: Are there any Investment Company Act considerations?
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A: We intend to engage primarily in the business of investing in real estate and to conduct our operations so that neither we nor any of our subsidiaries is required to register as an investment company under the Investment Company Act. A company is an “investment company” under the Investment Company Act:
  under Section 3(a)(1)(A), if it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or
  under Section 3(a)(1)(C), if it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns, or proposes to acquire, “investment securities” having a value exceeding 40% of the value of its total assets (exclusive of government securities and cash items) on an unconsolidated basis, which we refer to as the “40% test.” The term “investment securities” generally includes all securities except U.S. government securities and securities of majority-owned subsidiaries that are not themselves investment companies and are not relying on the exemption from the definition of investment company under Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act.
We intend to acquire real estate and real estate-related assets directly, primarily by acquiring fee interests in real property. We may also invest in real property indirectly through investments in joint venture entities, including joint venture entities in which we do not own a controlling interest and joint venture entities. We plan to conduct our businesses primarily through our operating partnership, a majority-owned subsidiary, and expect to establish other direct or indirect majority-owned subsidiaries to hold particular assets.
We intend to conduct our operations so that we and most, if not all, of our wholly and majority-owned subsidiaries will comply with the 40% test. We will continuously monitor our holdings on an ongoing basis to determine compliance with this test. We expect that most, if not all, of our wholly owned and majority-owned subsidiaries will not be relying on exemptions under either Section 3(c)(1) or 3(c)(7) of the Investment Company Act. Consequently, interests in these subsidiaries (which are expected to constitute a substantial majority of our assets) generally will not constitute “investment securities.” Accordingly, we believe that we and most, if not all, of our wholly and majority-owned subsidiaries will not be considered investment companies under Section 3(a)(1)(C) of the Investment Company Act.
In addition, we believe that neither we nor any of our wholly or majority-owned subsidiaries will be considered an investment company under Section 3(a)(1)(A) of the Investment Company Act because they will not engage primarily or hold themselves out as being engaged primarily in the business of investing, reinvesting or trading in securities. Rather, we and our subsidiaries will be primarily engaged in non-investment company businesses related to real estate. Consequently, we expect to be able to conduct our subsidiaries’ respective operations such that none of them will be required to register as an investment company under the Investment Company Act.
If we or any of our wholly or majority-owned subsidiaries would ever inadvertently fall within one of the definitions of “investment company,” we intend to rely on the exemption provided by Section 3(c)(5)(C) of the Investment Company Act, which is available for entities “primarily engaged in the business of purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” The SEC staff has taken the position that this exemption, in addition to prohibiting the issuance of certain types of securities, generally requires that at least 55% of an entity’s assets must be comprised of mortgages and other liens on and interests in real estate, also known as “qualifying assets,” and at least another 25% of the entity’s assets must be comprised of additional qualifying assets or a broader category of assets that we refer to as “real estate-related assets” under the Investment Company Act (and no more than 20% of the entity’s assets may be comprised of miscellaneous assets).
We will classify our assets for purposes of our 3(c)(5)(C) exemption based upon no-action positions taken by the SEC staff and interpretive guidance provided by the SEC and its staff. These no-action positions are based on specific factual situations that may be substantially different from the factual situations we may face, and a number of these no-action positions were issued more than twenty years ago. No assurance can be given that the SEC or its staff will concur with our classification of our assets. In addition, the SEC or its staff may, in the future, issue further guidance that may require us to re-classify our assets for purposes of the Investment Company Act. If we are required to re-classify our assets, we may no longer be in compliance with the exemption from the definition of an investment company provided by Section 3(c)(5)(C) of the Investment Company Act.
For purposes of determining whether we satisfy the 55%/25% test, based on certain no-action letters issued by the SEC staff, we intend to classify our fee interests in real property, held by us directly or through our wholly owned or majority-owned subsidiaries, as qualifying assets. In addition, based on no-action letters issued by the SEC staff, we will treat our investments in any joint ventures that in turn invest in qualifying assets such as real property as qualifying assets, but only if we are active in the management and operation of the joint venture and have the right to approve major decisions by the joint venture; otherwise, they will be classified as real estate-related assets. We will not participate in joint ventures in which we do not have
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or share control to the extent that we believe such participation would potentially threaten our status as a non-investment company exempt from the Investment Company Act. We expect that no less than 55% of our assets will consist of investments in real property, including any joint ventures that we control or in which we share control.
Qualifying for an exemption from registration under the Investment Company Act will limit our ability to make certain investments. For example, these restrictions may limit our and our subsidiaries’ ability to invest directly in mortgage-backed securities that represent less than the entire ownership in a pool of mortgage loans, debt and equity tranches of securitizations and certain asset-backed securities, non-controlling equity interests in real estate companies or in assets not related to real estate.
Although we intend to monitor our portfolio, there can be no assurance that we will be able to maintain this exemption from registration.
A change in the value of any of our assets could negatively affect our ability to maintain our exemption from regulation under the Investment Company Act. To maintain compliance with the Section 3(c)(5)(C) exemption, we may be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. In addition, we may have to acquire additional assets that we might not otherwise have acquired or may have to forego opportunities to acquire assets that we would otherwise want to acquire and would be important to our investment strategy.
To the extent that the SEC or its staff provides more specific guidance regarding any of the matters bearing upon the definition of investment company and the exemptions to that definition, we may be required to adjust our strategy accordingly. Any additional guidance from the SEC or its staff could provide additional flexibility to us, or it could further inhibit our ability to pursue the strategies we have chosen.
If we are required to register as an investment company under the Investment Company Act, we would become subject to substantial regulation with respect to our capital structure (including our ability to use borrowings), management, operations, transactions with affiliated persons (as defined in the Investment Company Act), and portfolio composition, including disclosure requirements and restrictions with respect to diversification and industry concentration, and other matters. Compliance with the Investment Company Act would, accordingly, limit our ability to make certain investments and require us to significantly restructure our business plan. For additional discussion of the risks that we would face if we were required to register as an investment company under the Investment Company Act, see “Risk Factors-Risks Related to This Offering and Our Organizational Structure-Your investment return may be reduced if we are required to register as an investment company under the Investment Company Act.”
Q: Will I be notified of how my investment is doing?
A: Yes, we will provide periodic updates on the performance of your investment in us, including:
an annual report;
supplements to the prospectus, provided periodically; and
three quarterly financial reports.
Depending on legal requirements, we may post this information on our website, www.hartmanreits.com, or provide this information to you via U.S. mail or other courier, electronic delivery, or some combination of the foregoing. Information about us will also be available on the SEC’s website at www.sec.gov.

Q: When will I get my detailed tax information?
A: Your Form 1099-DIV tax information, if required, will be mailed by January 31 of each year.

Who can help answer my questions about this offering?
If you have more questions about this offering, or if you would like additional copies of this prospectus, you should contact your registered representative or contact:
Hartman vREIT XXI, Inc.
2909 Hillcroft, Suite 420
Houston, Texas 77057
(713) 467-2222
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RISK FACTORS

An investment in our common stock involves substantial risks and uncertainties. You should carefully consider the following risk factors in conjunction with the other information contained in this prospectus before purchasing our shares. The risks discussed in this prospectus could adversely affect our business, operating results, prospects and financial condition. This could cause the value of our common stock to decline and could cause you to lose all or part of your investment. The risks and uncertainties described below are not the only ones we face but do represent those risks and uncertainties that we believe are material to us. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also harm our business.
Investment Risks
Shares of our common stock are illiquid. No public market currently exists for our shares, and our charter does not require us to liquidate our assets or list our shares on an exchange by any specified date, nor does it ever require that we provide a liquidity event for our stockholders. If you purchase shares in this offering, it will be difficult for you to sell your shares, and if you are able to sell your shares, you will likely sell them at a substantial discount.
There is no current public market for our shares, and our charter does not require us to seek stockholder approval to liquidate our assets or list our shares on an exchange by any specified date. Our charter limits your ability to transfer or sell your shares unless the prospective stockholder meets the applicable suitability and minimum purchase standards. Our charter also prohibits the ownership of more than 9.8% in value of our outstanding capital stock or 9.8% in number of shares of our outstanding common stock unless exempted prospectively or retroactively by our board of directors. These restrictions may inhibit large investors from desiring to purchase your shares. Moreover, our share redemption program includes numerous restrictions that limit your ability to sell your shares to us, and our board of directors may amend, suspend or terminate our share redemption program without stockholder approval upon 30 days’ written prior notice. We describe these restrictions in the section of this prospectus titled “Description of Shares—Share Redemption Program.” It will be difficult for you to sell your shares promptly or at all. If you are able to sell your shares, you will likely have to sell them at a substantial discount to their public offering price. You should purchase our shares only as a long-term investment because of their illiquid nature.
Because this is a “blind-pool” offering, you will not have the opportunity to evaluate our investments before we make them, which makes your investment more speculative.
As of the date hereof, we have acquired an interest in four commercial real estate properties and a joint venture interest in an affiliate special purpose entity, the consideration for which was our interest in a joint venture with an affiliate. Because we have not yet identified other investments that we may make, we are not able to provide you with any information to assist you in evaluating the merits of any specific additional properties or other investments that we may acquire. We will seek to invest substantially all of the offering proceeds available for investment from this offering, after the payment of fees and expenses, in the acquisition of or investment in interests in real estate properties and real estate-related assets. However, because you will be unable to evaluate the economic merit of specific real estate assets before we invest in them, you will have to rely entirely on the ability of our Advisor and board of directors to select suitable and successful investment opportunities. These factors increase the risk that your investment may not generate positive returns.
The offering price of our shares in this follow-on offering is based on the NAV of our shares as of December 31, 2019, as determined by our board of directors; the actual value of our shares may be substantially less than the purchase price in this offering.
We established the offering price of our Class A and Class T shares in this offering based on the NAV of our shares as of December 31, 2019, as determined by our board of directors plus the commissions and dealer manager fees. We expect the NAV per share of each Class A share, Class S share, Class I share and Class T share to be the same, except in the unlikely event that the distribution fees payable by us exceed the amount otherwise available for distribution to holders of Class S shares and/or Class T shares in a particular period (prior to the deduction of the shareholder servicing and distribution fees), in which case the excess will be accrued as a reduction to the NAV per share of each Class S share and/or Class T share, as applicable, which would result in the NAV with respect to Class S shares and/or Class T shares being lower than the NAV of the other classes of shares. We estimated the offering price of our Class S and Class T shares based on the NAV of the Class A shares as of December 31, 2019 and added the applicable commissions and fees to each class to determine the initial offering price of each class. We determined that the NAV of the Class I shares should be equal to the NAV of the Class A shares, as neither Class has any ongoing distribution and shareholder servicing fees. However, these prices are likely to be higher than the proceeds that an investor would receive upon liquidation or a resale of his or her
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shares if they were to be listed on an exchange or actively traded by broker-dealers, especially in light of the upfront fees that we pay in connection with the sale of our shares in this offering and any distribution and shareholder servicing fees required of the Class T shares. Our board of directors may, from time to time, in its sole and absolute discretion, change the price at which we offer shares to the public in this offering or pursuant to our DRIP to reflect changes in our estimated value per share, changes in applicable law and other factors that our board of directors deems relevant.
The NAV of our shares may not accurately reflect the actual price at which our assets could be liquidated on any given day, and the NAV per share may not accurately reflect the amount you would receive for your shares if you determined to sell them. The selling price of your shares, should you attempt to sell them, would likely be less than the NAV of the shares, due to various factors including the lack of liquidity and fluctuation in asset values. For further information, see "Description of Shares- Determination of Net Asset Value Per Share" in this Prospectus.
We have a limited operating history which makes our future performance difficult to predict.
We have a limited operating history and may not be able to achieve our investment objectives. As of the date of this prospectus, we have acquired a limited number of assets. You should not assume that our performance will be similar to the past performance of other real estate investment programs sponsored by our Sponsor or its affiliates. Our lack of an extensive operating history increases the risk and uncertainty that you face in making an investment in our shares.
We have experienced net losses and may experience similar losses in the future.
We have incurred net losses for the period from inception (September 5, 2015) through December 31, 2019. Our net losses can be attributed in part, to the initial start-up costs and operating expenses incurred prior to making investments in properties. In addition, depreciation and amortization expenses substantially reduced our income. We cannot assure you that we will be profitable in the future or that we will realize growth in the value of our assets.
Our cash distributions are not guaranteed, may fluctuate and may constitute a return of capital or taxable gain from the sale or exchange of property.
The actual amount and timing of distributions will be determined by our board of directors and typically will depend upon the amount of funds available for distribution, which will depend on items such as current and projected cash requirements and tax considerations. As a result, our distribution rate and payment frequency may vary from time to time. Our long-term strategy is to fund the payment of monthly distributions to our stockholders entirely from our funds from operations. However, during the early stages of our operations, we may need to borrow funds, request that our Advisor in its discretion, defer its receipt of fees and reimbursements of expenses or, to the extent necessary, utilize offering proceeds in order to make cash distributions. Accordingly, the amount of distributions paid at any given time may not reflect current cash flow from operations.
If we make distributions from sources other than our cash flow from operations, we will have fewer funds available for the acquisition of properties, your overall return may be reduced and the value of a share of our common stock may be diluted.
Our organizational documents permit us to make distributions from any source, including net proceeds from our public offerings, borrowings, advances from our sponsor or Advisor and the deferral of fees and expense reimbursements by our Advisor, in its sole discretion. If our cash flow from operations is insufficient to cover our distributions, we expect to use the proceeds from this offering, the proceeds from the issuance of securities in the future, the proceeds from borrowings or the waiver or deferral of fees otherwise owed to our Advisor to pay distributions. We have, and may continue to, fund distributions from the net proceeds from our offering or sources other than cash flow from operations, which may constitute a return of capital. We have not established a limit on the amount of offering proceeds, or other sources other than cash flow from operations, which we may use to fund distributions. If we fund distributions from borrowings, sales of properties or the net proceeds from this offering, we will have fewer funds available for the acquisition of assets resulting in potentially fewer investments, less diversification of our portfolio and a reduced overall return to you. In addition the value of your investment in shares of our common stock may be diluted because funds that would otherwise be available to make investments would be diverted to fund distributions. Further, to the extent distributions exceed our current and accumulated earnings and profits, a stockholder’s basis in our stock will be reduced and, to the extent distributions exceed a stockholder’s basis, the stockholder may recognize capital gain.

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If we do not raise substantial funds, we will be limited in the number and type of investments we may make, and the value of your investment in us will fluctuate with the performance of the specific properties we acquire.
This offering is being made on a “best efforts” basis, whereby the broker-dealers participating in the offering are only required to use their best efforts to sell shares of our common stock and have no firm commitment or obligation to sell any number or dollar amount of shares of our common stock or purchase any shares of our common stock. The amount of proceeds we raise in this offering may be substantially less than the amount we would need to achieve a broadly diversified property portfolio. If we are unable to raise substantially more than the minimum offering amount, we will make fewer investments resulting in less diversification in terms of the location, number and size of investments that we make. In that case, the likelihood that any single asset’s performance would materially reduce our overall profitability will increase. We are not limited in the number or size of our investments or the percentage of net proceeds we may dedicate to a single investment. In addition, any inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, and our net income and the distributions we make to stockholders would be reduced.
Our ability to raise funds may be adversely affected if any of our affiliated programs engage in a liquidity event and list their shares on a public stock exchange.
Our ability to raise substantially more than the minimum offering amount may also be negatively affected by a potential liquidity event and listing of the shares on a national securities exchange of any of our affiliated entities as disclosed in their offering documents. Investors may view the ability to readily liquidate their investment in the listed company, or the larger size of the merged company to be an advantage when comparing investments in Hartman-sponsored programs, since the companies use similar investment objectives and personnel. This could negatively affect the amount of funds we are able to raise now or in the future. Further, the listed price of securities in our affiliate merged company will fluctuate with the market for those securities. Since the listed company has similar management and similar investment objectives, with a difference in liquidity options for investors and a larger size providing greater diversification of properties that can be purchased or sold, some investors may view that company as a more advantageous investment for their portfolios. A price for those shares less than the selling price of the shares of this company could negatively affect our ability to attract that capital that would otherwise be invested in our company as investors seek a lower share price for similar investments.
Because we are dependent upon our Advisor and its affiliates to conduct our operations, any adverse changes in the financial health of our Advisor or its affiliates or our relationship with them could hinder our operating performance and the return on our stockholders’ investment.
We are dependent on our Advisor to manage our operations and our portfolio of real estate assets. Our Advisor has a limited operating history and it will depend largely upon the fees that it will receive from us in connection with the purchase, management and sale of assets, as well as fees it collects from other affiliates, to conduct its operations. Any adverse changes in the financial condition of our Advisor or our relationship with our Advisor could hinder its ability to successfully manage our operations and our portfolio of investments.
Our ability to achieve our investment objectives and to conduct our operations is dependent upon the performance of our Advisor. Our Advisor’s business is sensitive to trends in the general economy, as well as the commercial real estate and credit markets. To the extent that any decline in our Advisor’s revenues and operating results impacts the financial condition and performance of our Advisor, our results of operations and financial condition could also suffer.
Terminating our Advisor will result in less funds available for distributions or investing in properties because it will trigger a significant one-time payment to the holder of the special limited partnership interests.

Terminating our Advisor will trigger the redemption of the special limited partnership interests in our operating partnership held by Hartman vREIT XXI SLP LLC, a wholly owned subsidiary of the parent company of our Advisor, for a redemption price payable in the form of a promissory note, shares of our common stock, or limited partnership units in our operating partnership. This means that less cash would be available for distributions or to acquire properties, and may act as a deterrent to the termination of the Advisor.
Our ability to implement our investment strategy is dependent, in part, upon the ability of our dealer manager to successfully conduct this offering, which makes an investment in us more speculative.
D.H. Hill Securities LLLP is the dealer manager for this offering. The success of this offering, and our ability to implement our business strategy, is dependent upon the ability of our dealer manager to build and maintain a network of
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broker-dealers to sell our shares to their clients. If our dealer manager is not successful in establishing, operating and managing this network of broker-dealers for this offering, our ability to raise proceeds through this offering will be limited and we may not have adequate capital to implement our investment strategy. If we are unsuccessful in implementing our investment strategy, you could lose all or a part of your investment.
If we are unable to find suitable investments or we experience delays in doing so, we may not be able to achieve our investment objectives or pay distributions.
Our ability to achieve our investment objectives and to pay distributions depends upon the performance of our Advisor in the acquisition of our investments, including the determination of any financing arrangements. Competition from other entities may reduce the number of suitable investment opportunities offered to us or increase the bargaining power of sellers of the types of properties we seek to purchase. Additionally, disruptions and dislocations in the credit markets may materially impact the cost and availability of debt to finance real estate acquisitions, which is a key component of our acquisition strategy. A lack of available debt could result in a further reduction of suitable investment opportunities and create a competitive advantage to other entities that have greater financial resources than we do. We are also subject to competition in seeking to originate and purchase commercial real estate debt investments. We can give no assurance that our Advisor will be successful in obtaining suitable investments on financially attractive terms or that, if our Advisor makes investments on our behalf, our objectives will be achieved. If we, through our Advisor, are unable to find suitable investments promptly upon receipt of our offering proceeds, we will hold the proceeds from this offering in an interest-bearing account or invest the proceeds in short-term assets. If we would continue to be unsuccessful in locating suitable investments, we may ultimately decide to liquidate. In the event we are unable to timely locate suitable investments, we may be unable or limited in our ability to pay distributions and we may not be able to meet our investment objectives.
If we raise substantial offering proceeds in a short period of time, we may not be able to invest all of the net offering proceeds promptly, which may cause our distributions and your investment returns to be lower than they otherwise would be.
We could suffer from delays in locating suitable investments. The more money we raise in this offering, the more difficult it will be to invest the net offering proceeds promptly. Therefore, the large size of this offering increases the risk of delays in investing our net offering proceeds. Our reliance on our Advisor to locate suitable investments for us at times when the management of our Advisor may be simultaneously seeking to locate suitable investments for other affiliated programs could also delay the investment of the proceeds of this offering. Delays we encounter in the selection, acquisition and development of income-producing properties would likely limit our ability to pay distributions to our stockholders and reduce our stockholders’ overall returns.
We have disclosed an estimated NAV per share of our Class A and Class T common shares as of December 31, 2019. The estimated NAV per share we disclose in the future may vary significantly from the values as of December 31, 2019 as we purchase additional assets and raise additional capital from the sale of our shares. The estimated NAV per share values that we disclose may not be an accurate reflection of the fair value of our assets and liabilities and likely will not represent the amount of net proceeds that would result if we were liquidated.
Our board of directors has determined an estimated NAV per share of our Class A and Class T common stock of $10.30 as of December 31, 2019. The estimated NAV per share was 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 Class A and Class T common stock, all as of December 31, 2019. Class S and Class I shares are based on the NAV of the Class a shares as of December 31, 2019 as if those shares classes were in existence on December 31, 2019. The offering price of our shares of common stock in this offering is based on such determination. The objective of our board of directors in determining the estimated NAV per share of our common stock was to arrive at a value, based on the most recent data available, that it believed was reasonable based on methodologies that it deemed appropriate after consultation with our Advisor. However, the market for commercial real estate can fluctuate quickly and substantially and values of our assets and liabilities are expected to change in the future as we continue to raise capital and invest in other properties. Future determinations of our estimated NAV per share are likely to vary significantly from the value determined as of December 31, 2019.

As with any valuation method, the methods used to determine the estimated NAV per share of our classes of common stock was based upon a number of assumptions, estimates and judgments that may not be accurate or complete. Our assets have been valued based upon appraisal standards and the values of our assets using these methods are not required to be a reflection of market value under those standards and will not necessarily result in a reflection of fair value under generally accepted accounting principles, or GAAP. Further, different parties using different property-specific and general real estate
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and capital market assumptions, estimates, judgments and standards could derive a different estimated NAV per share, which could be significantly different from the estimated NAV per share determined by our board of directors. The estimated NAV per share of our classes of common stock is not a representation or indication that, among other things: a stockholder would be able to realize the estimated NAV per share if he or she attempts to sell shares; a stockholder would ultimately realize distributions per share equal to the estimated NAV per share upon liquidation of assets and settlement of our liabilities or upon a sale of our company; shares of our common stock would trade at the estimated NAV per share on a national securities exchange; a third party would offer the estimated NAV per share in an arms-length transaction to purchase all or substantially all of our shares of common stock; or the methodologies used to determine the estimated NAV per share would be acceptable to FINRA, ERISA, or other regulatory authorities (including state regulators), with respect to their respective requirements. Further, the estimated NAV per share was calculated as of a specific time and the value of our shares will fluctuate over time as a result of, among other things, future acquisitions or dispositions of assets, developments related to individual assets and changes in the real estate and capital markets.

We expect the NAV per share of each Class A share, Class S share, Class I share and Class T share to be the same, except in the unlikely event that the distribution fees payable by us exceed the amount otherwise available for distribution to holders of Class S shares and/or Class T shares in a particular period (prior to the deduction of the shareholder servicing and distribution fees), in which case the excess will be accrued as a reduction to the NAV per share of each Class S share and/or Class T share, as applicable, which would result in the NAV with respect to Class S shares and/or Class T shares being lower than the NAV of the other classes of shares.

For a detailed discussion of how the estimated NAV per share of our common stock as of December 31, 2019 was determined, see “Description of Shares-Determination of Net Asset Value Per Share.”

Because the price our stockholders will pay for shares in this offering is based on the estimated NAV per share of each
class of our common stock (plus applicable upfront selling commissions and dealer manager fees), stockholders may pay
more than realizable value when they purchase shares or receive less than realizable value for their investment when selling
their shares.

Valuations and appraisals of our properties and real estate-related securities are estimates of fair value and may not necessarily correspond to realizable value.

For the purposes of calculating our quarterly NAV, our properties will generally initially be valued at cost, which we expect to represent fair value at that time. Thereafter, valuations of properties will be determined by the Advisor based in part on appraisals of each of our properties by one or more independent third-party appraisal firms and reviewed by our independent valuation advisor at least once per year in accordance with valuation guidelines approved by our board of directors. The Advisor will also conduct a quarterly valuation of our properties that will be reviewed and confirmed for reasonableness by our independent valuation advisor. Although quarterly valuations of each of our real properties will be reviewed and confirmed for reasonableness by our independent valuation advisor, such valuations are based on asset and portfolio level information provided by the Advisor, including historical operating revenues and expenses of the properties, lease agreements on the properties, revenues and expenses of the properties, information regarding recent or planned capital expenditures and any other information relevant to valuing the real estate property, which information will not be independently verified by our independent valuation advisor.

Within the parameters of our valuation guidelines, the valuation methodologies used to value our properties will involve subjective judgments and projections and may not be accurate. Valuation methodologies will also involve assumptions and opinions about future events, which may or may not turn out to be correct. Valuations and appraisals of our properties and real estate-related securities will be only estimates of fair value. Ultimate realization of the value of an asset depends to a great extent on economic, market and other conditions beyond our control and the control of the Adviser and our independent valuation adviser. Further, valuations do not necessarily represent the price at which an asset would sell, since market prices of assets can only be determined by negotiation between a willing buyer and seller. As such, the carrying value of an asset may not reflect the price at which the asset could be sold in the market, and the difference between carrying value and the ultimate sales price could be material. In addition, accurate valuations are more difficult to obtain in times of low transaction volume because there are fewer market transactions that can be considered in the context of the appraisal. There will be no retroactive adjustment in the valuation of such assets, the offering price of our shares of common stock, the price we paid to repurchase shares of our common stock or NAV-based fees we paid to the Advisor and the Dealer Manager to the extent such valuations prove to not accurately reflect the realizable value of our assets. Because the price you will pay for shares of our common stock in this offering, and the price at which your shares may be repurchased by us pursuant to our share repurchase plan are generally based on our prior quarter’s NAV per share, you may pay more than realizable value or receive less than realizable value for your investment.

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Our NAV is not subject to GAAP, will not be independently audited and will involve subjective judgments by the parties involved in valuing our assets and liabilities.

Our valuation procedures and our NAV are not subject to GAAP and will not be subject to independent audit. Our NAV may differ from equity (net assets) reflected on our audited financial statements, even if we are required to adopt a fair value basis of accounting for GAAP financial statement purposes. Additionally, we are dependent on our Advisor to be reasonably aware of material events specific to our properties (such as tenant disputes, damage, litigation and environmental issues) that may cause the value of a property to change materially so that the information may be reflected in the calculation of our NAV. In addition, the implementation and coordination of our valuation procedures include certain subjective judgments of our Advisor, such as whether the board of directors should be notified of events specific to our properties that could affect their valuations, as to whether adjustments to asset and liability valuations are appropriate. Accordingly, you must rely entirely on our board of directors to adopt appropriate valuation procedures and on the other parties we engage in order to arrive at our NAV, which may not correspond to realizable value upon a sale of our assets.

Our board of directors, including a majority of our independent directors, may adopt changes to the valuation procedures.

Each year our board of directors, including a majority of our independent directors, will review the appropriateness of our valuation procedures and may, at any time, adopt changes to the valuation procedures. For example, if we acquire real property assets as a portfolio, we may pay a premium over the amount that we would pay for the assets individually. Other public REITs may use different methodologies or assumptions to determine their NAV. As a result, it is important that you pay particular attention to the specific methodologies and assumptions we use to calculate our NAV. Our board of directors may change these or other aspects of our valuation procedures, which changes may have an adverse effect on our NAV and our transaction prices. See “Net Asset Value Calculation and Valuation Procedures” for more details regarding our valuation methodologies, assumptions and procedures.

Our NAV per share may materially change if the valuations of our properties materially change from prior valuations or the actual operating results materially differ from what we originally budgeted.

It is possible that the annual appraisals of our properties may not be spread evenly throughout the year and may differ from the most recent valuation. As such, when these appraisals are reflected in our valuation of our real estate portfolio, there may be a material change in our NAV per share for each class of our common stock. Property valuation changes can occur for a variety reasons, such as local real estate market conditions, the financial condition of our tenants, or lease expirations. For example, we will regularly face lease expirations across our portfolio, and as we move further away from lease commencement toward the end of a lease term, the valuation of the underlying property will be expected to drop depending on the likelihood of a renewal or a new lease on similar terms. Such a valuation drop can be particularly significant when closer to a lease expiration, especially for single tenant buildings or where an individual tenant occupies a large portion of a building. We are at the greatest risk of these valuation changes during periods in which we have a large number of lease expirations as well as when the lease of a significant tenant is closer to expiration. In addition, actual operating results may differ from what we originally budgeted, which may cause a material increase or decrease in the NAV per share amounts. We accrue estimated income and expenses on a quarterly basis based on annual budgets as adjusted from time to time to reflect changes in the business throughout the year. On a periodic basis, we adjust the income and expense accruals we estimated to reflect the income and expenses actually earned and incurred. We will not retroactively adjust the NAV per share of each class for any adjustments. Therefore, because actual results from operations may be better or worse than what we previously budgeted, the adjustment to reflect actual operating results may cause the NAV per share for each class of our common stock to increase or decrease.

It may be difficult to reflect, fully and accurately, material events that may impact our quarterly NAV.

Our Advisor’s determination of our quarterly NAV per share will be based in part on appraisals of each of our properties provided annually by independent third-party appraisal firms in individual appraisal reports reviewed by our board of directors. As a result, our published NAV per share in any quarter month may not fully reflect any or all changes in value that may have occurred since the most recent appraisal. Our Advisor will review appraisal reports and monitor our properties and is responsible for notifying our board of directors of the occurrence of any property-specific or market-driven event it believes may cause a material valuation change in the real estate valuation, but it may be difficult to reflect fully and accurately rapidly changing market conditions or material events that may impact the value of our properties or liabilities between valuations, or to obtain quickly complete information regarding any such events. For example, an unexpected termination or renewal of a material lease, a material increase or decrease in vacancies or an unanticipated structural or environmental event at a property may cause the value of a property to change materially, yet obtaining sufficient relevant information after the occurrence has come to light and/or analyzing fully the financial impact of such an
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event may be difficult to do and may require some time. As a result, the NAV per share may not reflect a material event until such time as sufficient information is available and analyzed, and the financial impact is fully evaluated, such that our NAV may be appropriately adjusted in accordance with our valuation guidelines. Depending on the circumstance, the resulting potential disparity in our NAV may be in favor of either stockholders who repurchase their shares, or stockholders who buy new shares, or existing stockholders.

The value of a share of our common stock may be diluted if we pay a stock dividend.
Our board of directors may authorize and has previously declared stock dividends. Our board authorized a stock dividend and investors who purchase shares early in the offering received more shares for the same cash investment than investors who purchase later in the offering as a result of the stock dividend. Because they own more shares, upon a sale or liquidation of the company, these early investors will receive more sales proceeds or liquidating distributions relative to their invested capital compared to later investors. Furthermore, unless our assets appreciate in an amount sufficient to offset the dilutive effect of the prior stock dividends, the value per share for later investors purchasing our stock will be below the value per share of earlier investors.
Operational risks, including the risk of cyber attacks, may disrupt our businesses, result in losses or limit our growth.
We rely heavily on our and our Sponsor’s financial, accounting, treasury, communications and other data processing systems. Such systems may fail to operate properly or become disabled as a result of tampering or a breach of the network security systems or otherwise. In addition, such systems are from time to time subject to cyber attacks which may continue to increase in sophistication and frequency in the future. Attacks on our Sponsor and its affiliates and their portfolio companies’ and service providers’ systems could involve, and in some instances have in the past involved, attempts that are intended to obtain unauthorized access to our proprietary information or personal identifying information of our stockholders, destroy data or disable, degrade or sabotage our systems, including through the introduction of computer viruses and other malicious code.
Cyber security incidents and cyber-attacks have been occurring globally at a more frequent and severe level and will likely continue to increase in frequency in the future. Our Sponsor and its affiliates and their portfolio entities’ and service providers’ information and technology systems may be vulnerable to damage or interruption from cyber security breaches, computer viruses or other malicious code, network failures, computer and telecommunication failures, infiltration by unauthorized persons and other security breaches, usage errors by their respective professionals or service providers, power, communications or other service outages and catastrophic events such as fires, tornadoes, floods, hurricanes and earthquakes. Cyber attacks and other security threats could originate from a wide variety of sources, including cyber criminals, nation state hackers, hacktivists and other outside parties. There has been an increase in the frequency and sophistication of the cyber and security threats our sponsor faces, with attacks ranging from those common to businesses generally to those that are more advanced and persistent. As a result, our Sponsor may face a heightened risk of a security breach or disruption with respect to this information. If successful, these types of attacks on our sponsor’s network or other systems could have a material adverse effect on our business and results of operations, due to, among other things, the loss of investor or proprietary data, interruptions or delays in the operation of our business and damage to our reputation. There can be no assurance that measures our sponsor takes to ensure the integrity of its systems will provide protection, especially because cyber attack techniques used change frequently or are not recognized until successful.
Although our Sponsor has implemented, and portfolio entities and service providers may implement, various measures to manage risks relating to these types of events, such systems could prove to be inadequate and, if compromised, could become inoperable for extended periods of time, cease to function properly or fail to adequately secure private information. Our Sponsor does not control the cyber security plans and systems put in place by third party service providers, and such third party service providers may have limited indemnification obligations to our Sponsor, us and/or a portfolio entity, each of whom could be negatively impacted as a result.
Breaches such as those involving covertly introduced malware, impersonation of authorized users and industrial or other espionage may not be identified even with sophisticated prevention and detection systems, potentially resulting in further harm and preventing them from being addressed appropriately. The failure of these systems and/or of disaster recovery plans for any reason could cause significant interruptions in our, our Sponsor’s its affiliates’ and/or a portfolio entities’ operations and result in a failure to maintain the security, confidentiality or privacy of sensitive data, including personal information relating to shareholders, material nonpublic information and the intellectual property and trade secrets and other sensitive information in the possession of our Sponsor and/or portfolio entities. We, our Sponsor and/or a portfolio company/entity could be required to make a significant investment to remedy the effects of any such failures, harm to their reputations, legal claims that they and their respective affiliates may be subjected to, regulatory action or
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enforcement arising out of applicable privacy and other laws, adverse publicity and other events that may affect their business and financial performance.
In addition, our Sponsor operates in businesses that are highly dependent on information systems and technology. The costs related to cyber or other security threats or disruptions may not be fully insured or indemnified by other means. In addition, cybersecurity has become a top priority for regulators around the world. Many jurisdictions in which our sponsor operates have laws and regulations relating to data privacy, cybersecurity and protection of personal information. Some jurisdictions have also enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal data. Breaches in security could potentially jeopardize our Sponsor, its employees’ or our investors’ or counterparties’ confidential and other information processed and stored in, and transmitted through our Sponsor’s computer systems and networks, or otherwise cause interruptions or malfunctions in its, its employees’, our investors’, our counterparties’ or third parties’ operations, which could result in significant losses, increased costs, disruption of our Sponsor’s business, liability to our investors and other counterparties, regulatory intervention or reputational damage. Furthermore, if our Sponsor fails to comply with the relevant laws and regulations, it could result in regulatory investigations and penalties, which could lead to negative publicity and may cause our investors to lose confidence in the effectiveness of our or our Sponsor’s security measures.
Finally, we depend on our Sponsor’s headquarters in Houston, Texas, where most of our sponsor’s personnel are located, for the continued operation of our business. A disaster or a disruption in the infrastructure that supports our business, including a disruption involving electronic communications or other services used by us or third parties with whom we conduct business, or directly affecting our headquarters, could have a material adverse impact on our ability to continue to operate our business without interruption. Our Sponsor’s disaster recovery programs may not be sufficient to mitigate the harm that may result from such a disaster or disruption. In addition, insurance and other safeguards might only partially reimburse us for our losses, if at all.
The adoption by the SEC of Regulation Best Interest (BI) under the Securities Exchange Act of 1934 may make it harder for us to raise funds in the broker dealer community by imposing new standards on broker dealers that may discourage investments in commission-based products, such as an investment in our Class A, S or T shares.
The SEC adopted Regulation Best Interest on June 5, 2019 that requires broker dealers to only recommend financial products to their customers that are in their customers' best interests and to clearly identify any potential conflicts of interest and financial incentives the broker dealer may have with those products. It requires broker dealers to modify their policies and procedures reasonably designed to achieve compliance with Regulation BI. The regulation was effective September 10, 2019 and broker dealers have until June 30, 2020 to bring their processes and procedures in line with the regulation, however, there are at least two lawsuits seeking to halt the implementation of Regulation BI so the implementation of Regulation BI may be delayed beyond the dates noted. Previously, broker dealers were required to determine that a product was suitable for the investor and there was a distinction between brokerage salespersons in the business of selling products and investment advisors in the business of providing financial advice. It is possible that some broker dealers will be less likely to recommend commission-based products to their clients, regardless of whether the investment makes sense for the investor. This will make it harder for us to raise funds through our Class A, S or T shares and limit sales only to our Class I shares, which have no commissions, dealer manager fees or distribution and shareholder servicing fees, but may incur a fee based on the value of the investor's total investment.
Future interest rate increases in response to inflation may inhibit our ability to conduct our business and acquire or dispose of real property or real estate-related debt investments at attractive prices and your overall return may be reduced.
We will be exposed to inflation risk with respect to income from any long-term leases on real property and from related real estate debt investments as these may constitute a source of our cash flows from operations. High inflation may in the future tighten credit and increase prices. Further, if interest rates rise, such as during an inflationary period, the cost of acquisition capital to purchasers may also rise, which could adversely impact our ability to dispose of our assets at attractive sales prices. Should we be required to acquire, hold or dispose of our assets during a period of inflation, our overall return may be reduced.
We may change our targeted investments, our policies and our operations without stockholder consent.
Although we expect to invest in office, retail, industrial, and warehouse properties located primarily in Texas, we may also invest in other real estate asset classes located throughout the United States. Except as described in this prospectus, we are not restricted as to the percentage of our offering proceeds that may be invested in properties as compared with the
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percentage of our proceeds that we may invest in other investments, each of which may be leveraged and will have differing risks and profit potential. Further, we are not limited with respect to the percentage of our offering proceeds that may be invested in any one investment. The greater the percentage of our offering proceeds invested in one asset, the greater the potential adverse effect on us if that asset is unprofitable.
We may make adjustments to our target portfolio based on real estate market conditions and investment opportunities, and we may change our targeted investments and investment guidelines at any time without the consent of our stockholders, which could result in our making investments that are different from, and possibly riskier than, the investments described in this prospectus. A change in our targeted investments or investment guidelines could adversely affect the value of our common stock and our ability to make distributions to you.
Our board of directors may change our investment policies generally and at the individual investment level without stockholder approval, which could alter the nature of your investment.
Our charter requires that our independent directors review our investment policies at least annually to determine that the policies we are following are in the best interests of the stockholders. In addition to our investment policies, we also may change our stated strategy for any particular investment. These policies may change over time. The methods of implementing our investment policies also may vary, as new investment techniques are developed. Our investment policies, the methods for their implementation, and our other strategies, policies and procedures may be altered by our board of directors without the approval of our stockholders except to the extent that the policies are set forth in our charter. As a result, the nature of your investment could change without your consent.

We will pay substantial fees and expenses to our Advisor and its affiliates. These fees were not negotiated at arm’s length, may be higher than fees payable to unaffiliated third parties, and may reduce cash available for investment.
A portion of the offering price from the sale of our shares and part of the distribution and shareholder servicing fees for the Class S shares will be used to pay fees and expenses to our Advisor and its affiliates. These fees were not negotiated at arm’s length and may be higher than fees payable to unaffiliated third parties. In addition, because the full offering price paid by stockholders will not be invested in assets. Stockholders will only receive a full return of their invested capital if we either (1) sell our assets or our company for a sufficient amount in excess of the original purchase price of our assets or (2) the market value of our company after we list our shares of common stock on a national securities exchange is substantially in excess of the original purchase price of our assets.
We will reimburse our Advisor for amounts it pays in connection with the acquisition or development of a property whether or not we ultimately acquire the asset.
We rely on our Advisor to locate and acquire properties on our behalf. To the extent that we reimburse our Advisor for expenses incurred and a property is not acquired, there will be less funds available for investment in other properties. The failure to close on an acquisition of a property will mean that expenses have been incurred without the ability to recoup those expenses from the operation of the property and could reduce the distributions you may receive.
You are limited in your ability to sell your shares of common stock pursuant to our share redemption program. We may choose to repurchase fewer shares than have been requested to be repurchased, in our discretion at any time, and the amount of shares we may repurchase is subject to caps. Further, our board of directors may modify, suspend or terminate our share repurchase plan if it deems such action to be in our best interest and the best interest of our stockholders.
Our share redemption program may provide you with a limited opportunity to have your shares of common stock redeemed by us at the then current NAV per share of the shares if the shares have been held for at least three years or a price equal to the purchase price of the shares of our common stock being redeemed for shares held for less than three years if the redemption is due to the death or disability of the stockholder.  We anticipate that shares of our common stock may be redeemed on a quarterly basis. However, our share redemption program contains certain restrictions and limitations, including those relating to the number of shares of our common stock that we can redeem at any given time and limiting the redemption price. Specifically, the number of shares that may be redeemed is limited to no more than (1) 1.25% per calendar quarter and up to 5.0% of the number of shares of our common stock outstanding as of December 31st of the prior Calendar year.
We may choose to repurchase fewer shares than have been requested in any particular quarter to be repurchased under our share redemption program, or none at all, in our discretion at any time. We may repurchase fewer shares than have
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been requested to be repurchased due to lack of readily available funds because of adverse market conditions beyond our control, the need to maintain liquidity for our operations or because we have determined that investing in real property or other illiquid investments is a better use of our capital than repurchasing our shares.
In addition, our board of directors reserves the right to amend, suspend or terminate the share redemption program at any time upon 30 days’ notice without stockholder. Therefore, you may not have the opportunity to make a redemption request prior to a potential termination of the share redemption program and you may not be able to sell any of your shares of common stock back to us pursuant to our share redemption program. Moreover, if you do sell your shares of common stock back to us pursuant to the share redemption program, you may not receive the same price you paid for any shares of our common stock being redeemed.
Investors who invest in us at the beginning of this offering may realize a lower rate of return than later investors.
There can be no assurances as to when we will begin to generate sufficient cash flow to fully fund the payment of distributions. As a result, investors who invest in us before we generate significant cash flow may realize a lower rate of return than later investors. We expect to have little cash flow from operations available for distribution until we make substantial investments. In addition, to the extent our investments are in properties that have significant capital requirements, our ability to make distributions may be negatively impacted, especially during our early periods of operation. Therefore, until such time as we have sufficient cash flow from operations to fully fund the payment of distributions, some or all of our distributions will be paid from other sources, such as from the proceeds of our public offerings, cash advances to us by our Advisor, cash resulting from a waiver of fees by our Advisor, and borrowings.
Additionally, the subsequent sale of shares by us at a price that is less than the amount of proceeds received by us in previous sales will result in a dilution of the ownership percentage and the NAV of the shares of investors who have invested earlier than an investor who invests later in the offering.
If we internalize our management functions, your interest in us could be diluted and we could incur other significant costs associated with being self-managed.
Our board of directors may decide in the future to internalize our management functions. If we do so, we may elect to negotiate to acquire our Advisor’s assets and personnel. At this time, we cannot anticipate the form or amount of consideration or other terms relating to any such acquisition. Such consideration could take many forms, including cash payments, promissory notes and shares of our common stock. The payment of such consideration could result in dilution of your interests as a stockholder and could reduce the earnings per share and funds from operations per share attributable to your investment.
Additionally, while we would no longer bear the costs of the various fees and expenses we pay to our Advisor under the advisory agreement, our direct expenses would include general and administrative costs, including legal, accounting and other expenses related to corporate governance, SEC reporting and compliance. We would also be required to employ personnel and would be subject to potential liabilities commonly faced by employers, such as workers disability and compensation claims, potential labor disputes and other employee-related liabilities and grievances as well as incur the compensation and benefits costs of our officers and other employees and consultants that we now expect will be paid by our Advisor or its affiliates. We may issue equity awards to officers, employees and consultants, which awards would decrease net income and funds from operations and may further dilute your investment. We cannot reasonably estimate the amount of fees to our Advisor we would save or the costs we would incur if we became self-managed. If the expenses we assume as a result of an internalization are higher than the expenses we avoid paying to our Advisor, our earnings per share and funds from operations per share would be lower as a result of the internalization than it otherwise would have been, potentially decreasing the amount of funds available to distribute to our stockholders and the value of our shares.
If we internalize our management functions, we could have difficulty integrating these functions as a stand-alone entity. Currently, our Advisor and its affiliates perform asset management and general and administrative functions, including accounting and financial reporting, for multiple entities. These personnel have a great deal of know-how and experience which provides us with economies of scale. We may fail to properly identify the appropriate mix of personnel and capital needs to operate as a stand-alone entity. An inability to manage an internalization transaction effectively could thus result in our incurring excess costs and suffering deficiencies in our disclosure controls and procedures or our internal control over financial reporting. Such deficiencies could cause us to incur additional costs, and our management’s attention could be diverted from most effectively managing our real estate assets. In recent years, internalization transactions have been the subject of stockholder litigation. Stockholder litigation can be costly and time-consuming, and there can be no assurance that any litigation expenses we might incur would not be significant or that the outcome of litigation would be
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favorable to us. Any amounts we are required to expend in defending against such litigation would reduce the amount of funds available for investment by us in properties or other investments and the amount of funds available for distributions to stockholders.
If we were to internalize our management or if another investment program, whether sponsored by our Sponsor or otherwise, hires the employees of our Advisor in connection with its own internalization transaction or otherwise, our ability to conduct our business may be adversely affected.
We rely on persons employed by affiliates and the parent company of our Advisor to manage our day-to-day operations. If we were to effectuate an internalization of our Advisor, we may not be able to retain all of the employees of the parent or affiliates of our Advisor or to maintain a relationship with our Sponsor. In addition, some of the employees of our parent advisor and affiliates provide services to one or more other investment programs, including Hartman XX. These programs or third parties may decide to retain some or all of parent advisor’s key employees in the future. If this occurs, these programs could hire certain of the persons currently employed by our parent company and its affiliates who are most familiar with our business and operations, thereby potentially adversely impacting our business.
If we are unable to obtain funding for future capital needs, cash distributions to our stockholders could be reduced and the value of our investments could decline.
If we need additional capital in the future to improve or maintain our properties or for any other reason, we may have to obtain financing from sources beyond our cash flow from operations, such as borrowings, sales of assets or future equity offerings. These sources of funding may not be available on attractive terms or at all. If we cannot procure additional funding for capital improvements, our investments may generate lower cash flows or decline in value, or both, which would limit our ability to make distributions to you and could reduce the value of your investment.
Because our charter does not require our listing or liquidation by a specified date, you should only purchase our shares as a long-term investment and investors should be prepared to hold them for an indefinite period of time.
In the future, our board of directors may consider alternatives to our share redemption program for providing liquidity to our stockholders, which we refer to as a liquidity event. A liquidity event may include the sale of our assets, a sale or merger of our company or a listing of our shares on a national securities exchange, The timing of any such event will significantly depend upon economic and market conditions after the completion of our offering stage. Because our charter does not require us to pursue a liquidity event by a specified date, or at all, you should only purchase our shares as a long-term investment and investors should be prepared to hold them for an indefinite period of time.
Risks Related to Conflicts of Interest
Our Advisor, our dealer manager and their affiliates, including all of our executive officers, some of our directors and other key real estate professionals will face conflicts of interest caused by their compensation arrangements with us, which could result in actions that are not in the long-term best interests of our stockholders.
Our Advisor and its affiliates will receive substantial fees from us. These fees could influence our Advisor’s advice to us as well as the judgment of other affiliates of our Advisor. Among other matters, these compensation arrangements could affect their judgment with respect to:
the continuation, renewal or enforcement of our agreements with our Advisor and its affiliates, including the advisory agreement and the property management agreements we expect to enter into with our property manager;
offerings of equity by us, which will likely entitle our Advisor to increased acquisition, asset management and disposition fees;
acquisitions of properties, which entitle our Advisor to acquisition and asset management fees, and, in the case of acquisitions or investments from programs sponsored by our Sponsor or its affiliates, might entitle affiliates of our Advisor to disposition fees in connection with its services for the seller;
borrowings to acquire properties and other investments, which will increase the acquisition, debt financing and asset management fees payable to our Advisor;
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whether and when we seek to list our common stock on a national securities exchange, which listing could entitle the holder of the special limited partnership interests to have its interests in our operating partnership redeemed; and
whether and when we seek to sell the company or its assets, which sale could entitle our Advisor to disposition fees.
The asset management fees our Advisor receives in connection with the acquisition and management of our assets are based on the cost of the investment, and not based on the value of the investment or the quality of the services rendered to us. This may influence our Advisor to recommend riskier transactions to us. Our Advisor will have considerable discretion with respect to the terms and timing of acquisition, disposition and leasing transactions. In evaluating investments and other management strategies, the opportunity to earn these fees may lead our Advisor to place undue emphasis on criteria relating to its compensation at the expense of other criteria, such as the preservation of capital, to achieve higher short-term compensation. Payment of fees and expenses to our Advisor and our dealer manager will reduce the cash available for distribution and will increase the risk that you will not be able to recover the amount of your investment in our shares.
We may compete with affiliates of our Sponsor, including Hartman XX and Hartman Total Return, Inc., for opportunities to acquire or sell investments, which may have an adverse impact on our operations.
We may compete with affiliates of our Sponsor, including Hartman XX and Hartman Total Return Inc., for opportunities to acquire or sell properties. We may also buy or sell properties at the same time as affiliates of our Sponsor. In this regard, there is a risk that our Sponsor will select for us investments that provide lower returns to us than investments purchased by its affiliates. Certain of our affiliates own or manage properties in geographical areas in which we expect to own multiple properties. As a result of our potential competition with affiliates of our Sponsor, certain investment opportunities that would otherwise be available to us may not in fact be available. This competition may also result in conflicts of interest that are not resolved in our favor.
Our Advisor will face conflicts of interest relating to joint ventures that we may form with its affiliates, which conflicts could result in a disproportionate benefit to the other venture partners at our expense.
If approved by our independent directors, we may enter into joint venture agreements with other programs sponsored by our Sponsor or its affiliates for the acquisition, development or improvement of properties or other investments. Our Advisor and the advisors to other Hartman-sponsored programs have the same executive officers and key employees; and these persons will face conflicts of interest in determining which Hartman-sponsored program should enter into any particular joint venture agreement. These persons may also face a conflict in structuring the terms of the relationship between our interests and the interests of the Hartman-affiliated co-venturer and in managing the joint venture. Any joint venture agreement or transaction between us and a Hartman-affiliated co-venturer will not have the benefit of arm’s-length negotiation of the type normally conducted between unrelated co-venturers. The Hartman-affiliated co-venturer may have economic or business interests or goals that are or may become inconsistent with our business interests or goals. These co-venturers may thus be either to our and your benefit or detriment. We acquired our first property through a joint venture with one of our affiliates, Hartman XX LP, which was later exchanged for a minority interest in an affiliated special purpose entity which owns 39 properties. For additional information regarding our current investments, see the section of this prospectus entitled “Our Real Estate Investments.”
Our Advisor, the real estate professionals assembled by Our Advisor and its affiliates and officers will face competing demands relating to their time, and this may cause our operations and your investment to suffer.
We rely on the parent company to our Advisor, the real estate professionals our Advisor has assembled and their affiliates and officers for the day-to-day operation of our business. Our Advisor, its real estate professionals and affiliates, including our officers, have interests in other programs sponsored by our Sponsor and its affiliates and engage in other business activities. As a result of their interests in such other programs and the fact that they have engaged in and they will continue to engage in other business activities, they will face conflicts of interest in allocating their time among us, our Advisor and such other programs and other business activities in which they are involved. Should our Advisor breach its fiduciary duty to us and our stockholders by inappropriately devoting insufficient time or resources to our business due to
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the competing demands of other programs, our operations, the returns on our investments, and therefore our profitability, may suffer.
Our executive officers and some of our directors face conflicts of interest related to their positions with our Advisor and its affiliates, which could hinder our ability to implement our business strategy and to generate returns to you.
Our executive officers and some of our directors are also executive officers, directors, managers and/or key professionals of our Advisor and other entities affiliated with our Sponsor, including Hartman XX. Their loyalties to these other entities could result in actions or inactions that breach their fiduciary duties to us and are detrimental to our business, which could harm the implementation of our business strategy and our investment and leasing opportunities. If we do not successfully implement our business strategy, we may be unable to generate the cash needed to make distributions to you and to maintain or increase the value of our assets.
Because other real estate programs sponsored by our Sponsor and offered through our dealer manager may conduct offerings concurrently with this offering, our Sponsor and dealer manager will face potential conflicts of interest arising from competition among us and these other programs for investors and investment capital, and such conflicts may not be resolved in our favor.
Other future programs that our Sponsor may decide to sponsor may seek to raise capital through public or private offerings conducted concurrently with this offering. D.H. Hill, our dealer manager, may also seek to raise capital through public or private offerings in non-affiliated companies. As a result, our Sponsor and our dealer manager may face conflicts of interest arising from potential competition with these other programs for investors and investment opportunities. If the fees that we pay to the dealer manager are lower than those paid by such other affiliates or other programs, or if investors have a greater appetite for their shares than our shares, our dealer manager may be incentivized to sell more shares of such other affiliates or other programs and thus may devote greater attention and resources to their selling efforts than to selling our shares. Our Sponsor generally seeks to avoid simultaneous public offerings by programs that have a substantially similar mix of investment characteristics, including targeted investment types and key investment objectives. Nevertheless, there may be periods during which one or more programs sponsored by our Sponsor will be raising capital and which might compete with us for investment capital. Such conflicts may not be resolved in our favor and our stockholders will not have the opportunity to evaluate the manner in which these conflicts of interest are resolved before or after making their investment in our shares.
Risks Related to Our Organizational Structure
Our rights and the rights of our stockholders to recover claims against our directors and officers are limited, which could reduce your and our recovery against them if they negligently cause us to incur losses.
Maryland law provides that a director will not have any liability as a director so long as he or she performs his or her duties in accordance with the applicable standard of conduct. In addition, our charter provides that, subject to the applicable limitations set forth therein or under Maryland law, no director or officer will be liable to us or our stockholders for monetary damages. Our charter also provides that we will generally indemnify and advance expenses to our directors, our officers, our Advisor and its affiliates for losses they may incur by reason of their service in those capacities subject to any limitations under Maryland law or in our charter. Moreover, we may enter into separate indemnification agreements with each of our directors and executive officers. As a result, we and our stockholders may have more limited rights against these persons than might otherwise exist under common law. In addition, we may be obligated to fund the defense costs incurred by these persons in some cases. However, our charter provides that we may not indemnify our directors, our Advisor and its affiliates for loss or liability suffered by them or hold our directors or our Advisor and its affiliates harmless for loss or liability suffered by us unless they have determined that the course of conduct that caused the loss or liability was in our best interests, they were acting on our behalf or performing services for us, the liability was not the result of negligence or misconduct by our non-independent directors, our Advisor and its affiliates or gross negligence or willful misconduct by our independent directors, and the indemnification or obligation to hold harmless is recoverable only out of our net assets, including the proceeds of insurance, and not from the stockholders. See “Management—Limited Liability and Indemnification of Directors, Officers and Others.”
Our charter limits the number of shares a person may own, which may discourage a takeover that could otherwise result in a premium price to our stockholders.
Our charter, with certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. Our charter restricts the direct or indirect ownership by one person or entity to no
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more than 9.8% of the value of the aggregate of our then outstanding shares of capital stock (which includes common stock and any preferred stock or convertible stock we may issue) and no more than 9.8% of the value or number of shares, whichever is more restrictive, of the aggregate of our then outstanding common stock unless exempted (prospectively or retroactively) by our board of directors. These restrictions may discourage a change of control of us and may deter individuals or entities from making tender offers for shares of our common stock on terms that might be financially attractive to stockholders or which may cause a change in our management. In addition to deterring potential transactions that may be favorable to our stockholders, these provisions may also decrease your ability to sell your shares of our common stock.
We may issue preferred stock, convertible stock or other classes of common stock, which issuance could adversely affect the holders of our common stock issued pursuant to this offering.
Investors in this offering do not have preemptive rights to any shares issued by us in the future. We may issue, without stockholder approval, preferred stock, convertible stock or other classes of common stock with rights that could dilute the value of your shares of common stock. However, the issuance of preferred stock or convertible stock must be approved by a majority of our independent directors not otherwise interested in the transaction, who will have access, at our expense, to our legal counsel or to independent legal counsel. The issuance of preferred stock or other classes of common stock could increase the number of stockholders entitled to distributions without simultaneously increasing the size of our asset base.
Our charter authorizes us to issue 950,000,000 shares of capital stock, consisting of (i) 900,000,000 shares of capital stock are classified as common stock, par value $0.01 per share, 90,000,000 of which are classified and designated as Class A common stock (“Class A Shares”), 360,000,000 are classified and designated as Class S common stock ("Class S Shares"), 360,000,000 of which are classified as Class I common stock ("Class I Shares"), and 90,000,000 are designated as Class T Common stock (“Class T Shares”), and (ii) 50,000,000 shares which are classified as preferred stock, par value $0.01 per share. Our board of directors, with the approval of a majority of the entire board of directors and without any action by our stockholders, may amend our charter from time to time to increase or decrease the aggregate number of authorized shares of capital stock or the number of authorized shares of capital stock of any class or series. If we ever create and issue preferred stock or convertible stock with a distribution preference over common stock, payment of any distribution preferences of outstanding preferred stock or convertible stock would reduce the amount of funds available for the payment of distributions on our common stock. Further, holders of preferred stock are normally entitled to receive a preference payment in the event we liquidate, dissolve or wind up before any payment is made to our common stock holders, likely reducing the amount common stock holders would otherwise receive upon such an occurrence. In addition, under certain circumstances, the issuance of preferred stock or a separate class or series of common stock may render more difficult or tend to discourage a merger, tender offer or proxy contest, the assumption of control by a holder of a large block of our securities and the removal of incumbent management.
Our UPREIT structure may result in potential conflicts of interest with limited partners in our operating partnership whose interests may not be aligned with those of our stockholders.
We are structured as an “UPREIT,” which stands for “umbrella partnership real estate investment trust.” We use the UPREIT structure because a contribution of property directly to us is generally a taxable transaction to the contributing property owner. In the UPREIT structure, a contributor of a property who desires to defer taxable gain on the transfer of a property may transfer the property to our operating partnership in exchange for limited partnership interests and defer taxation of gain until the contributor later disposes of his or her limited partnership interests. We believe that using an UPREIT structure gives us an advantage in acquiring desired properties from persons who may not otherwise sell their properties because of unfavorable tax results.
Our operating partnership may issue limited partner interests in connection with certain transactions. Limited partners in our operating partnership have the right to vote on certain amendments to the operating partnership agreement, as well as on certain other matters. Persons holding such voting rights may exercise them in a manner that conflicts with the interests of our stockholders. As general partner of our operating partnership, we are obligated to act in a manner that is in the best interest of all partners of our operating partnership. Circumstances may arise in the future when the interests of limited partners in our operating partnership may conflict with the interests of our stockholders. These conflicts may be resolved in a manner stockholders do not believe are in their best interest.
In addition, the special limited partnership interest holder is an affiliate of our Advisor and, as the special limited partner in our operating partnership, may be entitled to: (1) receive certain distributions upon the disposition of certain of our operating partnership’s assets; or (2) a one-time payment in the form of cash, interests in our operating partnership or shares in connection with the redemption of the special limited partnership interests upon the occurrence of a listing of our
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shares on a national stock exchange or certain events that result in the termination or non-renewal of our advisory agreement. The special limited partnership interest holder will only become entitled to the compensation after stockholders have received, in the aggregate, cumulative distributions equal to their invested capital plus a 6.0% cumulative, non-compounded annual pre-tax return on such invested capital. This potential obligation to make substantial payments to the holder of the special limited partnership interests would reduce the overall return to stockholders to the extent such return exceeds 6.0%.
You will have limited control over changes in our policies and operations, which increases the uncertainty and risks you face as a stockholder.
Our board of directors determines our major policies, including our policies regarding financing, growth, debt capitalization, REIT qualification and distributions. Our board of directors may amend or revise these and other policies without a vote of our stockholders. Under Maryland General Corporation Law and our charter, our stockholders have a right to vote only on limited matters. Our board’s broad discretion in setting policies and our stockholders’ inability to exert control over those policies increases the uncertainty and risks you face as a stockholder.
Your investment return may be reduced if we are required to register as an investment company under the Investment Company Act; if we are subject to registration under the Investment Company Act, we will not be able to continue our business.
We intend to continue to conduct our operations so that neither we, nor our operating partnership nor the subsidiaries of our operating partnership are investment companies under the Investment Company Act. However, there can be no assurance that we and our subsidiaries will be able to successfully avoid operating as an investment company.
A change in the value of any of our assets could negatively affect our ability to maintain our exemption from regulation under the Investment Company Act. To maintain compliance with the applicable exemption under the Investment Company Act, we may be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. In addition, we may have to acquire additional assets that we might not otherwise have acquired or may have to forego opportunities to acquire assets that we would otherwise want to acquire and would be important to our investment strategy.
If we were required to register as an investment company but failed to do so, we would become subject to substantial regulation with respect to our capital structure (including our ability to use borrowings), management, operations, transactions with affiliated persons (as defined in the Investment Company Act), and portfolio composition, including disclosure requirements and restrictions with respect to diversification and industry concentration, and other matters. Compliance with the Investment Company Act would, accordingly, limit our ability to make certain investments and require us to significantly restructure our business plan, which could materially adversely affect our NAV and our ability to pay distributions to our stockholders. For more information on issues related to compliance with the Investment Company Act of 1940, see “Investment Strategy, Objectives and Policies - Investment Company Act Considerations.”
Although we have opted out of certain anti-takeover provisions of Maryland law, our board of directors could opt into these protections in the future, which may make it more difficult for us to be acquired and may prevent stockholders from receiving a premium price for their stock in connection with a business combination.
Under Maryland law, “business combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, share exchange, or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested stockholder is defined as:
any person who beneficially owns 10% or more of the voting power of the then outstanding voting stock of the corporation; or
an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding voting stock of the corporation.
Another anti-takeover statute under Maryland law, the Control Share Acquisition Act, provides that the holders of “control shares” of a Maryland corporation acquired in a “control share acquisition” have no voting rights with respect to
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such control shares, except to the extent approved a vote of two-thirds of the votes entitled to vote generally in the election of directors, excluding votes cast by the acquirer, by officers or by directors who are employees of the corporation. Should our board of directors opt into these provisions of Maryland Law in the future, it may discourage offers from third parties to acquire us and increase the difficulty of consummating any offer. For a more detailed discussion of the Maryland laws governing business combinations and control share acquisitions, see the sections of this prospectus captioned “Description of Shares-Business Combinations” and “Description of Shares–Control Share Acquisitions.”
We may become subject to certain other anti-takeover provisions of Maryland law that would make it harder for stockholders to change the composition of our board of directors and may prevent stockholders from receiving a premium price for their shares in connection with an unsolicited takeover.
Subtitle 8 of Title 3 of the Maryland General Corporation Law, or the MGCL, Subtitle 8, permits the board of directors of a Maryland corporation that has a class of securities registered under the Exchange Act and that has at least three independent directors, to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in its charter or bylaws, to certain additional anti-takeover provisions, which would allow for, among other things, the classification of our board without stockholder approval and the imposition of a two-thirds vote requirement for removing a director; and require that vacancies on the board of directors be filled only by the remaining directors and (if the board is classified) for the remainder of the full term of the class of directors in which the vacancy occurred, and a majority vote for the calling of a stockholder-requested special meeting of stockholders. We have elected by a provision in our charter that, at such time, if ever, as we are eligible to make a Subtitle 8 election, vacancies on our board may be filled only by the remaining directors and for the remainder of the full term of the directorship in which the vacancy occurred. We have not elected to be subject to the other provisions of Subtitle 8, and as discussed above, to do so we must have a class of equity securities registered under the Exchange Act and at least three independent directors. While we have met the first of these requirements, we have only two independent directors at this time, and we have no current plan to add a third, although that may change. Accordingly, our board of directors may in the future elect, at such time as we are eligible to make a Subtitle 8 election and without stockholder approval, to classify our board or to become subject to any of the other provisions of Subtitle 8. Any of these provisions could make it more difficult and more time consuming for stockholders to change the composition of our board of directors and could prevent stockholders from receiving a premium price for their shares in connection with an unsolicited takeover. See the section of this prospectus captioned “Description of Shares—Subtitle 8”
Our charter includes an anti-takeover provision that may discourage a stockholder from launching a tender offer for our shares.
Our charter provides that any tender offer made by a stockholder, including any “mini-tender” offer, must comply with most of the provisions of Regulation 14D of the Exchange Act. The offering stockholder must provide our company notice of such tender offer at least ten business days before initiating the tender offer. If the offering stockholder does not comply with these requirements, our company will have the right to redeem that stockholder’s shares and any shares acquired in such tender offer. In addition, the non-complying stockholder shall be responsible for all of our company’s expenses in connection with that stockholder’s noncompliance. This provision of our charter may discourage a stockholder from initiating a tender offer for our shares and prevent you from receiving a premium price for your shares in such a transaction.
We are not required to comply with certain reporting requirements, including those relating to auditor’s attestation reports on the effectiveness of our system of internal control over financial reporting, accounting standards and disclosure about our executive compensation, that apply to other public companies.

The JOBS Act contains provisions that, among other things, relax certain reporting requirements for emerging growth companies, including certain requirements relating to accounting standards and compensation disclosure. We are classified as an emerging growth company. For as long as we are an emerging growth company, which may be up to five full fiscal years, unlike other public companies, we are not required to (1) provide an auditor’s attestation report on the effectiveness of our system of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (2) comply with any new or revised financial accounting standards applicable to public companies until such standards are also applicable to private companies under Section 102(b)(1) of the JOBS Act, (3) comply with any new requirements adopted by the Public Company Accounting Oversight Board (“PCAOB”) requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (4) comply with any new audit rules adopted by the PCAOB after April 5, 2012 unless the SEC determines otherwise, (5) provide certain disclosure regarding executive compensation required of larger public companies or (6) hold stockholder advisory votes on executive compensation.
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Once we are no longer an emerging growth company, so long as our shares of common stock are not traded on a securities exchange, we will be deemed to be a “non-accelerated filer” under the Exchange Act, and as a non-accelerated filer, we will be exempt from compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. In addition, so long as we are externally managed by the Adviser and we do not directly compensate our executive officers, or reimburse the Adviser or its affiliates for salaries, bonuses, benefits and severance payments for persons who also serve as one of our executive officers or as an executive officer of the Adviser, we do not have any executive compensation, making the exemptions listed in (5) and (6) above generally inapplicable.

We cannot predict if investors will find our common stock less attractive because we choose to rely on any of the exemptions discussed above.

As noted above, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards that have different effective dates for public and private companies until such time as those standards apply to private companies. We have elected to opt out of this transition period, and will therefore comply with new or revised accounting standards on the applicable dates on which the adoption of these standards is required for non-emerging growth companies. This election is irrevocable.

Risks Related to Investments in Real Estate
A decrease in demand for office or retail space may have a material adverse effect on our financial condition and results of operations.
We expect that our portfolio of properties will consist primarily of office, retail, industrial, and warehouse properties. A decrease in the demand for office or retail space may have a greater adverse effect on our business and financial condition than if we owned a more diversified real estate portfolio. If parts of our properties are leased within a particular sector, a significant downturn in that sector in which the tenants’ businesses operate would adversely affect our results of operations.
Economic and regulatory changes that impact the real estate market generally may decrease the value of our investments and weaken our operating results.
The properties we acquire and their performance are subject to the risks typically associated with real estate, including:
downturns in national, regional and local economic conditions;
competition;
adverse local conditions, such as oversupply or reduction in demand and changes in real estate zoning laws that may reduce the desirability of real estate in an area;
vacancies, changes in market rental rates and the need to periodically repair, renovate and re-let space;
changes in the supply of or the demand for similar or competing properties in an area;
changes in interest rates and the availability of permanent mortgage financing, which may render the sale of a property or loan difficult or unattractive;
changes in governmental regulations, including those involving tax, real estate usage, environmental and zoning laws; and
periods of high interest rates and tight money supply.
Any of the above factors, or a combination thereof, could result in a decrease in the value of our investments, which would have an adverse effect on our results of operations, reduce the cash available for distributions and the return on your investment.

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Global and U.S. market, political and economic conditions may adversely affect our liquidity and financial condition and those of our tenants.
While recent economic data reflects moderate economic growth in the United States, the cost and availability of credit may continue to be adversely affected by governmental budget and global economic factors. Concern about continued stability of the economy and credit markets generally, and the strength of counterparties specifically, has led many lenders and institutional investors to reduce or, in some cases, cease to provide funding to borrowers. Volatility in the U.S. and international capital markets and concern over a return to recessionary conditions in global economies may adversely affect the liquidity and financial condition of our tenants and us. If these market conditions continue, they may limit our ability to timely refinance maturing liabilities and access the capital markets to meet liquidity needs. Further instability in foreign countries caused by political upheaval or real or threatened armed conflicts could adversely affect the U.S. and local economies, trading markets, jobs, interest rates and lending practices and may adversely affect our liquidity and financial condition as well as the ability of our tenants to pay rent.
Market trends and other conditions outside of our control could decrease the value of our investments and weaken our operating results.
Our performance and the value of our portfolio are subject to risks associated with our investments in real estate assets and with trends in the real estate industry. Our economic performance and the value of our investments are subject to the risk that our properties may not generate revenues sufficient to meet our operating expenses or other obligations. A deficiency of this nature would adversely impact our financial condition, results of operations, cash flows and our ability to satisfy our debt service obligations and to pay dividends and distributions to our security holders.
Events and conditions applicable to owners and operators of real estate that are beyond our control and could impact our economic performance and the value of our portfolio may include:
local oversupply or reduction in demand for commercial space of the type we own or are purchasing, which may result in decreasing rental rates and greater concessions to tenants;
inability to collect rent from tenants;
vacancies or inability to rent space on favorable terms or at all;
inability to finance property development and acquisitions on favorable terms or at all;
increased operating costs, including insurance premiums, utilities, and real estate taxes;
costs of complying with changes in governmental regulations;
the relative illiquidity of real estate investments;
changing submarket demographics;
changes in space utilization by our tenants due to technology, economic conditions and business culture;
the development of harmful mold or other airborne toxins or contaminants that could damage our properties or expose us to third-party liabilities; and
property damage resulting from seismic activity, flood, or other natural disasters.
Health concerns arising from the outbreak of a health epidemic or pandemic, including the COVID-19 coronavirus, may have an adverse effect on our business.
Our business could be materially and adversely affected by the outbreak of a health epidemic or pandemic, including the coronavirus, particularly to the extent and degree to which the outbreak affects the U.S., state and local economies. Our revenues consist primarily of rental income and other tenant reimbursements derived from tenants of our commercial real estate properties. The effects of the COVID-19 coronavirus and other adverse public health developments could materially affect the financial viability of our tenants and their ability to pay rent.

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Our operations could be disrupted if any of our employees, employees of our vendors and business partners or employees of our tenants were to contract or be suspected of having any strain of flu or a coronavirus, since this could require us or vendors and business partners and tenants to quarantine some or all of any effected employees and or disinfect affected workspaces. We could be adversely affected if government authorities impose mandatory closures, seek voluntary closures or impose restrictions on the operations of our business and the operations of our tenants’ businesses. Even if such measures are not implemented and a virus or other disease does not spread significantly, the perceived risk of infection or public health risk may adversely affect the business and operating results of our tenants and by extension affect our business and operating and results.

Pandemics or other health crises may adversely affect our tenants’ financial condition and the profitability of our properties.

Our business and the businesses of our tenants could be materially and adversely affected by the risks, or the public perception of the risks, related to a pandemic or other health crisis, such as the recent outbreak of novel coronavirus (COVID-19).

The profitability of our properties depends, in part, on the willingness of customers to visit our tenants’ businesses. The risk, or public perception of the risk, of a pandemic or media coverage of infectious diseases could cause employees or customers to avoid our properties, which could adversely affect foot traffic to our tenants’ businesses and our tenants’ ability to adequately staff their businesses. Such events could adversely impact tenants’ sales and/or cause the temporary closure of our tenants’ businesses, which could severely disrupt their operations and have a material adverse effect on our business, financial condition and results of operations.

An additional downturn in oil demand or continued weakening of the oil and gas markets could adversely affect our financial condition, results of operations, and our ability to borrow funds.
Our investment strategy relies heavily on locating and operating properties in Dallas, Houston and San Antonio. The economies of these cities rely, to a certain extent, on the exploration, production and processing of oil, natural gas and petrochemicals. A prolonged weakening in the price of oil could make oil exploration and related industries unprofitable for certain companies, forcing them out of the business or forcing them to downsize their operations. To the extent that we lease space to oil and gas companies or companies that support the oil and gas industry, our operations could be negatively impacted by the loss of tenants or less demand for space in our buildings. To the extent that competing space could become available as an oil or gas company downsizes, we could face increased competition from owners willing to sublease vacant space.
To the extent that oil producers have borrowed from lending institutions and are no longer able to repay their debt, lending practices in Texas could be negatively impacted, making funds more difficult to borrow or more expensive to borrow.
The loss or downsizing of a significant tenant in a property could adversely affect our financial condition, results of operations, ability to borrow funds and cash flows.
Our financial condition, results of operations, ability to borrow funds, and cash flows would be adversely affected if any of our significant tenants in a property fails to renew its lease, renews its lease on terms less favorable to us, renews for less space due to economic conditions or more efficient use of space or becomes bankrupt or insolvent or otherwise unable to satisfy its lease obligations and we are unable to re-lease the space.
If we enter into long-term leases with our tenants, those leases may not result in fair value over time.
Long-term leases do not allow for significant changes in rental payments and do not expire in the near term. If we do not accurately judge the potential for increases in market rental rates when negotiating these long-term leases, significant increases in future property operating costs could result in receiving less than fair value from these leases. Such circumstances would adversely affect our revenues and funds available for distribution.
Downturn in our tenants’ businesses may reduce our revenues and cash flows.
We expect to derive substantially all of our revenues from continuing operations from rental income and tenant reimbursements. A tenant may experience a downturn in its business or may never generate positive results of operations, which may weaken its financial condition and result in its failure to make timely rental payments or result in defaults under
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our leases. For tenants that operate pursuant to capital investments, an acceleration of losses may result in a faster than expected use of available cash. In the event of default by a tenant, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment.
The bankruptcy or insolvency of a major tenant also may adversely affect the income produced by our properties. If any tenant becomes a debtor in a case under federal bankruptcy law, we cannot evict the tenant solely because of the bankruptcy. In addition, the bankruptcy court might permit the tenant to reject and terminate its lease with us. Our claim against the tenant for unpaid and future rent could be subject to a statutory cap that might be substantially less than the remaining rent actually owed under the lease. Therefore, our claim for unpaid rent would likely not be paid in full. Any losses resulting from the bankruptcy of any of our existing tenants could adversely impact our financial condition, results of operations, cash flows and our ability to satisfy our debt service obligations and to pay dividends and distributions to our security holders.
We are subject to governmental regulations that may affect the renovations to, and use of, our properties.
Our properties are subject to regulation under federal laws, such as the Americans with Disabilities Act of 1990 (the “ADA”), pursuant to which all public accommodations must meet federal requirements related to access and use by disabled persons, and state and local laws addressing earthquake, fire and life safety requirements. Although we believe that our properties will substantially comply with requirements under applicable governmental regulations, it is possible that any of our properties could be audited or investigated for compliance by any regulatory agency. If we were not in compliance with material provisions of the ADA or other regulations affecting our properties, we might be required to take remedial action, which could include making modifications or renovations to properties. Federal, state, or local governments may also enact future laws and regulations that could require us to make significant modifications or renovations to our properties. If we were to incur substantial costs to comply with the ADA or any other regulations, our financial condition, results of operations, cash flows and our ability to satisfy our debt service obligations and to pay dividends and distributions to our security holders could be adversely affected.
We face significant competition, which may decrease the occupancy and rental rates of our properties.
We will compete with developers, owners and operators of office and retail properties and other commercial real estate, many of which own properties similar to the properties that we expect to acquire, in the same submarkets in which our properties are located, but which have lower occupancy rates than our properties. Therefore, our competitors have an incentive to decrease rental rates until their available space is leased. If our competitors offer space at rental rates below the rates currently charged by us for comparable space, we may be pressured to reduce our rental rates below those currently charged in order to retain tenants when our tenant leases expire. As a result, our financial condition, results of operations, cash flow and our ability to satisfy our debt service obligations and to pay dividends and distributions to our security holders may be adversely affected.
In order to maintain the quality of our properties and successfully compete against other properties, we must periodically spend money to maintain, repair and renovate our properties, which reduces our cash flows. If our properties are not as attractive to current and prospective tenants in terms of rent, services, condition, or location as properties owned by our competitors, we could lose tenants or suffer lower rental rates. As a result, we may from time to time be required to make significant capital expenditures to maintain the competitiveness of our properties. There can be no assurances that any such expenditure would result in higher occupancy or higher rental rates, or deter existing tenants from relocating to properties owned by our competitors.
We may be unable to complete acquisitions and successfully operate acquired properties.
Our ability to acquire properties on favorable terms and successfully operate them is subject to various risks, including the following:
we may potentially be unable to acquire a desired property because of competition from other real estate investors with significant capital, including both publicly traded and private REITs, institutional investment funds and other real estate investors;
even if we are able to acquire a desired property, competition from other real estate investors may significantly increase the purchase price;
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even if we enter into agreements for the acquisition of a desired property, we may be unable to complete such acquisitions because they remain subject to customary conditions to closing, including the completion of due diligence investigations to management’s satisfaction;
we may be unable to finance acquisitions on favorable terms or at all;
we may spend more than the budgeted amount in our operations, particular in the making of necessary improvements or renovations to acquired properties;
we may be unable to lease acquired, developed, or redeveloped properties at projected economic lease terms or within budgeted timeframes;
we may acquire properties that are subject to liabilities for which we may have limited or no recourse;
we may be unable to complete an acquisition after making a nonrefundable deposit and incurring certain other acquisition-related costs;
we may not complete or redevelop properties on schedule or within budgeted amounts;
we may expend funds on and devote management’s time to acquisition or redevelopment of properties that we may not complete;
we may encounter delays or refusals in obtaining all necessary zoning, land use, and other required entitlements, and building, occupancy, and other required governmental permits and authorizations;
we may encounter delays, refusals, unforeseen cost increases, and other impairments resulting from third-party litigation; and
we may fail to obtain the financial results expected from properties we acquire or redevelop.
If one or more of these events were to occur in connection with our acquired properties, we could be required to recognize an impairment loss. These events could also have an adverse impact on our financial condition, results of operations, cash flow and our ability to satisfy our debt service obligations and to pay dividends and distributions to our security holders. We acquired our first property through a joint venture with one of our affiliates, Hartman XX LP, and we currently own a minority interest in an affiliated special purpose entity. For additional information regarding our current investments, see the section of this prospectus entitled “Our Real Estate Investments.”
Properties that have significant vacancies could be difficult to sell, which could diminish the return on your investment.
A property may incur vacancies through either the expiration or the continued default of a tenant lease. Long-term vacancies would reduce our revenues and the cash available for distributions. In addition, because the value of a property’s lease has a significant impact on that property’s market value, the resale value of properties with high or prolonged vacancies could suffer, further reducing the value of your investment.
We may own certain properties subject to ground leases and other restrictive agreements that limit our uses of the properties, restrict our ability to sell or otherwise transfer the properties and expose us to the loss of the properties if such agreements are breached by us, terminated or not renewed.
We may acquire properties that we lease individually on a long-term basis. These ground leases and other restrictive agreements may impose significant limitations on our uses of the subject property, restrict our ability to sell or otherwise transfer our interests in the property or restrict our leasing of the property. These restrictions may limit our ability to timely sell or exchange the properties, impair the properties’ value or negatively impact our ability to find suitable tenants for the properties. In addition, if we default under the terms of any particular lease, we may lose the ownership rights to the property subject to the lease. Upon expiration of a lease, we may not be able to renegotiate a new lease on favorable terms, if at all. The loss of the ownership rights to these properties or an increase of rental expense could have an adverse effect on our financial condition, results of operations, cash flow and our ability to satisfy our debt service obligations and to pay dividends and distributions to our security holders.

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Real estate assets are illiquid, and we may not be able to sell our properties when we desire.
Our investments in our properties are relatively illiquid, limiting our ability to sell our properties quickly in response to changes in economic or other conditions. In addition, the Internal Revenue Code generally imposes a 100% prohibited transaction tax on profits derived by REITs from sales of properties held primarily for sale to customers in the ordinary course of business, which effectively limits our ability to sell properties other than on a selected basis. These restrictions on our ability to sell our properties could have an adverse effect on our financial condition, results of operations, cash flow, the quoted trading price of our securities, and our ability to satisfy our debt service obligations and to pay dividends and distributions to our security holders.
Future terrorist activity or engagement in war by the United States may have an adverse effect on our financial condition and operating results.
Terrorist attacks in the United States and other acts of terrorism or war, may result in declining economic activity, which could harm the demand for and the value of our properties. In addition, the public perception that certain locations are at greater risk for attack, such as major airports, ports, and rail facilities, may decrease the demand for and the value of our properties near these sites. A decrease in demand could make it difficult for us to renew or re-lease our properties at these sites at lease rates equal to or above historical rates. Terrorist activities also could directly impact the value of our properties through damage, destruction, or loss, and the availability of insurance for these acts may be less, and cost more, which could adversely affect our financial condition. To the extent that our tenants are impacted by future attacks, their businesses similarly could be adversely affected, including their ability to continue to honor their existing leases.
Terrorist acts and engagement in war by the United States also may adversely affect the markets in which our securities trade and may cause further erosion of business and consumer confidence and spending and may result in increased volatility in national and international financial markets and economies. Any one of these events may cause a decline in the demand for our office leased space, delay the time in which our new or renovated properties reach stabilized occupancy, increase our operating expenses, such as those attributable to increased physical security for our properties, and limit our access to capital or increase our cost of raising capital.
From time to time, we may be involved in legal proceedings, lawsuits and other claims. Unfavorable resolution of litigation matters and disputes could have a material adverse effect on our financial condition.
We may be named as defendants in lawsuits allegedly arising out of our actions or the actions of our operators and tenants. An unfavorable resolution of litigation could have an effect on our financial condition, results of operations, cash flow, our ability to satisfy our debt service obligations and our ability to pay dividends and distributions to our security holders. Regardless of its outcome, litigation may result in substantial costs and expenses and significantly divert the attention of our management. There can be no assurance that we will be able to prevail in, or achieve a favorable settlement of, litigation. In addition, litigation, government proceedings or environmental matters could lead to increased costs or interruption of our normal business operations.
Our joint venture partners could take actions that decrease the value of an investment to us and lower our stockholders’ overall return.
We may enter into joint ventures or other co-ownership arrangements with other Hartman programs or with third parties having investment objectives similar to ours for the acquisition, development or improvement of properties as well as the acquisition of real estate-related investments. We may also purchase and develop properties in joint ventures or in partnerships, co-tenancies or other co-ownership arrangements with the sellers of the properties, affiliates of the sellers, developers or other persons. Such investments may involve risks not otherwise present with other forms of real estate investment, including, for example:

the possibility that our co-venturer, co-tenant or partner in an investment might become bankrupt;

the possibility that a co-venturer, co-tenant or partner in an investment might breach a loan agreement or other agreement or otherwise, by action or inaction, act in a way detrimental to us or the investment;

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that such co-venturer, co-tenant or partner may at any time have economic or business interests or goals that are or that become inconsistent with our business interests or goals;

the possibility that we may incur liabilities as the result of the action taken by our partner or co-investor; or

that such co-venturer, co-tenant or partner may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives, including our policy with respect to qualifying and maintaining our qualification as a REIT.

Any of the above might subject a property to liabilities in excess of those contemplated and thus reduce our returns on that investment and therefore your return on investment.
Because we will rely on our Advisor, its affiliates and third party sub-managers to manage the day-to-day affairs of any properties we may acquire, should the staff of a particular property perform poorly, our operating results for that property will similarly be hindered and our net income may be reduced.
We will depend upon the performance of our property managers to effectively manage our properties and real estate-related assets. In order to increase or maintain adequate occupancy levels, we may have to offer inducements, such as free rent, to compete for tenants. Poor performance by those sales, leasing and other management staff members operating a particular property will necessarily translate into poor results of operations for that particular property. Should our property manager, its affiliates or third party sub-managers fail to identify problems in the day-to-day management of a particular property or fail to take the appropriate corrective action in a timely manner, our operating results may be hindered and our net income reduced.
If we are unable to sell a property for the price, on the terms, or within the time frame we desire, it could limit our ability to pay cash distributions to you.
Many factors that are beyond our control affect the real estate market and could affect our ability to sell properties for the price, on the terms, or within the time frame that we desire. These factors include general economic conditions, the availability of financing, interest rates and other factors, including supply and demand. Because real estate investments are relatively illiquid, we have a limited ability to vary our portfolio in response to changes in economic or other conditions. Further, before we can sell a property on the terms we want, it may be necessary to expend funds to correct defects or to make improvements. However, we can give no assurance that we will have the funds available to correct such defects or to make such improvements. We may be unable to sell our properties at a profit. Our inability to sell properties at the time and on the terms we want could reduce our cash flow and limit our ability to make distributions to you and could reduce the value of your investment.
Government entities and contractors may cause unforeseen delays and increase costs to renovate properties that we may acquire, which may reduce our net income and cash available for distributions to you.
We may seek to or be required to incur substantial capital obligations to renovate or reposition existing properties that we acquire. Our Advisor and its key real estate professionals will do their best to estimate these costs prior to acquisition but may not be able to ascertain all hidden defects or problems. There could be unknown and excessive costs, expenses and delays associated with a property’s renovations and interior and exterior upgrades. We will be subject to risks relating to the uncertainties associated with permits and approvals required by governmental entities, community associations and our construction manager’s ability to control costs and to build in conformity with plans and the established timeframe. We will pay a construction management fee to a construction manager, which may be one of our affiliates, if new capital improvements are required. If we are unable to increase rental rates or sell a property at a price consistent with our underwritten projections due to local market or economic conditions to offset the cost of renovating a property, the return on your investment may suffer.
We may be required to make rent or other concessions and significant capital expenditures to improve our properties in order to retain and attract tenants, which could adversely affect our financial condition, results of operations and cash flow.
In order to retain existing tenants and attract new clients, we may be required to offer substantial rent abatements, tenant improvements and early termination rights or accommodate requests for renovations, build-to-suit remodeling and
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other improvements or provide additional services to our tenants. As a result, we may have to make significant capital or other expenditures in order to retain tenants whose leases expire and to attract new tenants in sufficient numbers, which could adversely affect our results of operations and cash flow. Additionally, if we need to raise capital to make such expenditures and are unable to do so, or such capital is otherwise unavailable, we may be unable to make the required expenditures. This could result in non-renewals by tenants upon expiration of their leases, which could adversely affect our financial condition, results of operations and cash flow.
Costs of responding to both known and previously undetected environmental contamination and hazardous conditions may decrease our cash flows and limit our ability to make distributions.
Real property and the operations conducted on real property are subject to federal, state and local laws and regulations relating to protection of the environment and human health. We could be subject to liability in the form of fines, penalties or damages for noncompliance with these laws and regulations. These laws and regulations generally govern wastewater discharges, air emissions, the operation and removal of underground and above-ground storage tanks, the use, storage, treatment, transportation and disposal of solid and hazardous materials, the remediation of contamination associated with the release or disposal of solid and hazardous materials, the presence of toxic building materials, and other health and safety-related concerns.
Some of these laws and regulations may impose joint and several liability on the tenants, current or previous owners or operators of real property for the costs to investigate or remediate contaminated properties, whether the contamination occurred prior to purchase, or whether the acts causing the contamination were legal. These costs could be substantial. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. Our tenants’ operations, the condition of properties at the time we buy them, operations in the vicinity of our properties, such as the presence of underground storage tanks, or activities of unrelated third parties may affect our properties.
Environmental laws also may impose liens on a property or restrictions on the manner in which a property may be used or businesses may be operated, and these restrictions may require substantial expenditures or prevent us from entering into leases with prospective tenants that may be impacted by such laws. Environmental laws provide for sanctions for noncompliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. Certain environmental laws and common law principles could be used to impose liability for the release of and exposure to hazardous substances, including asbestos-containing materials and lead-based paint. Third parties may seek recovery from real property owners or operators for personal injury or property damage associated with exposure to released hazardous substances.
The presence of hazardous substances, or the failure to properly manage or remediate these substances, may hinder our ability to sell, rent or pledge such property as collateral for future borrowings. Any material expenditures, fines, penalties or damages we must pay will reduce our ability to make distributions and may reduce the value of your investment.
Properties acquired by us may have toxic mold or asbestos that could result in substantial liabilities to us.
Litigation and concern about indoor exposure to certain types of toxic molds and asbestos has been increasing as the public becomes aware that exposure to mold and asbestos can cause a variety of health effects and symptoms, including allergic reactions, cancer and even death. It is impossible to eliminate all mold and mold spores in the indoor environment. There can be no assurance that the properties acquired by us will not contain toxic mold or that buildings containing asbestos encased so as to render the asbestos non-health threatening will remain that way. The difficulty in discovering indoor toxic mold growth could lead to an increased risk of lawsuits by affected persons and the risk that the cost to remediate toxic mold and/or asbestos will exceed the value of the property. There is a risk that we may acquire properties that contain toxic mold and/or asbestos and such properties may negatively affect our performance and your return on investment.
Uninsured losses relating to real property or excessively expensive premiums for insurance coverage could reduce our cash flows and the return on your investment.
There are types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters that are uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments. Insurance risks associated with potential acts of terrorism or catastrophes could sharply increase the premiums we pay for coverage against property and casualty claims. Additionally, mortgage lenders in some cases have begun to insist that commercial property owners purchase coverage
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against terrorism or catastrophes as a condition for providing mortgage loans. Such insurance policies may not be available at reasonable costs, if at all, which could inhibit our ability to finance or refinance our properties. In such instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses. We may not have adequate coverage for such losses. If any of our properties incurs a casualty loss that is not fully insured, the value of our assets will be reduced by any such uninsured loss. In addition, other than any working capital reserve or other reserves we may establish, we have no source of funding to repair or reconstruct any uninsured property. Also, to the extent we must pay unexpectedly large amounts for insurance, we could suffer reduced earnings that would result in lower distributions.
Our properties may be dispersed geographically and across various markets and sectors.
We may acquire and operate properties in different locations throughout Texas and the United States and in different markets and sectors. The success of our properties will depend largely on our ability to hire various managers and service providers in each area, market and sector where the properties are located or situated. It may be more challenging to manage a diverse portfolio. Failure to meet such challenges could reduce the value of your investment.
We may be limited in our ability to diversify our investments, making us more vulnerable economically than if our investments were diversified.
Our ability to diversify our portfolio may be limited both as to the number of investments owned and the geographic regions in which our investments are located. While we seek to diversify our portfolio by geographic location, we focus on our specified target markets that we believe offer the opportunity for attractive returns and, accordingly, our actual investments may result in concentrations in a limited number of geographic regions. As a result, there is an increased likelihood that the performance of any single property, or the economic performance of a particular region in which our properties are located, could materially affect our operating results.
The geographic concentration of our current assets in Texas may cause us to be more susceptible to adverse economic or regulatory developments in Texas and the submarkets within Texas.
The properties in our initial portfolio are located in Dallas/Fort Worth, San Antonio and Houston, Texas. As a result, we are particularly susceptible to adverse economic, real estate or other developments in Texas, such as periods of general or industry slowdowns or recession, business layoffs or downsizing, the relocation of businesses out of Texas and its submarkets, increases in real estate and other taxes and the cost of complying with current or new governmental regulation, as well as an oversupply of or reduced demand for office, retail and industrial properties of the type in which we have, and in which we intend to invest. Any adverse developments in these sub-markets could materially reduce the value of our real estate portfolio and our rental revenues, and thus materially adversely affect our business, results of operations, financial condition and ability to service our debt and make distributions to our stockholders.
Our industrial tenants may be adversely affected by a decline in manufacturing activity in the U.S.
Fluctuations in manufacturing activity in the U.S. may adversely affect our industrial tenants and therefore the demand for and profitability of any industrial properties we acquire. Trade agreements with foreign countries have given employers the option to utilize less expensive foreign manufacturing workers. Outsourcing manufacturing activities could reduce the demand for U.S. workers, thereby reducing the profitability of our industrial tenants and the demand for and profitability of our industrial properties.
Risks Associated with Debt Financing
Our use of debt will reduce cash available for distributions and may expose us to the risk of default under our debt obligations.
Payments of principal and interest on our borrowings may leave us with insufficient cash resources to operate our properties or to pay in cash the distributions necessary to qualify and maintain our REIT qualification. Our level of debt and the limitations imposed by our debt agreements may have substantial consequences, including the following:
we may be unable to refinance our indebtedness at maturity, or the refinancing terms may be less favorable than the terms of our original indebtedness;
cash flows may be insufficient to meet required principal and interest payments;
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we may be forced to dispose of one or more of our properties, possibly on disadvantageous terms;
we may default on our obligations, and the lenders or mortgagees may foreclose on our properties that secure the loans and receive an assignment of rents and leases; and
our default under one mortgage loan could result in a default on other indebtedness with cross default provisions.
If one or more of these events were to occur, our financial condition, results of operations, cash flow and our ability to satisfy our debt service obligations and to pay distributions to our stockholders could be adversely affected.
We may incur mortgage indebtedness and other borrowings, which increases our risk of loss due to foreclosure.
We may obtain lines of credit and long-term financing that may be secured by our properties and other assets. In some instances, we may acquire real properties by financing a portion of the price of the properties and mortgaging or pledging some or all of the properties purchased as security for that debt. We may also incur mortgage debt on properties that we already own in order to obtain funds to acquire additional properties. In addition, we may borrow as necessary or advisable to ensure that we maintain our qualification as a REIT for federal income tax purposes, including borrowings to satisfy the REIT requirement that we distribute at least 90% of our annual REIT taxable income to our stockholders (computed without regard to the dividends paid deduction and excluding net capital gain). We, however, can give you no assurance that we will be able to obtain such borrowings on satisfactory terms.
If we do mortgage a property and there is a shortfall between the cash flow from that property and the cash flow needed to service mortgage debt on that property, then the amount of cash available for distributions to stockholders may be reduced. In addition, incurring mortgage debt increases the risk of loss of a property since defaults on indebtedness secured by a property may result in lenders initiating foreclosure actions. In that case, we could lose the property securing the loan that is in default, reducing the value of your investment. For tax purposes, a foreclosure of any of our properties would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure even though we would not necessarily receive any cash proceeds. We may give full or partial guaranties to lenders of mortgage debt on behalf of the entities that own our properties. When we give a guaranty on behalf of an entity that owns one of our properties, we will be responsible to the lender for satisfaction of the debt if it is not paid by such entity. If any mortgages contain cross-collateralization or cross-default provisions, a default on a single property could affect multiple properties.
We may also obtain recourse debt to finance our acquisitions and meet our REIT distribution requirements. If we have insufficient income to service our recourse debt obligations, our lenders could institute proceedings against us to foreclose upon our assets. If a lender successfully forecloses upon any of our assets, our ability to pay cash distributions to our stockholders will be limited and you could lose all or part of your investment.
High mortgage interest rates may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire, our net income and the amount of cash distributions we can make.
If mortgage debt is unavailable at reasonable interest rates, we may not be able to finance the purchase of properties. If we place mortgage debt on properties, we run the risk of being unable to refinance the properties when the loans become due, or of being unable to refinance on favorable terms. If interest rates are higher when we refinance the properties, our income could be reduced. If any of these events occur, our cash flow would be reduced. This, in turn, would reduce cash available for distribution to you and may hinder our ability to raise more capital by issuing more stock or by borrowing more money.
We may not be able to access financing sources on attractive terms, which could adversely affect our ability to execute our business plan.
We may finance our assets over the long term through a variety of means, including credit facilities and other structured financings. Our ability to execute this strategy will depend on various conditions in the markets for financing in this manner that are beyond our control, including lack of liquidity and greater credit spreads. We cannot be certain that these markets will remain an efficient source of long-term financing for our assets. If our strategy is not viable, we will have to find alternative forms of long-term financing for our assets. This could subject us to more recourse indebtedness and the risk that debt service on less efficient forms of financing would require a larger portion of our cash flows, thereby
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reducing cash available for distribution to our stockholders and funds available for operations, as well as for future business opportunities.
Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions to our stockholders.
When providing financing, a lender may impose restrictions on us that affect our distribution and operating policies and our ability to incur additional debt. Loan documents we enter into may contain covenants that limit our ability to further mortgage the property, discontinue insurance coverage or replace Hartman XXI Advisors, LLC as our advisor. These or other limitations may limit our flexibility and our ability to achieve our operating plans.
Increases in interest rates could increase the amount of our debt payments and limit our ability to pay distributions to our stockholders.
We expect that we will incur indebtedness in the future. Increases in interest rates may increase our interest costs, which would reduce our cash flows and our ability to pay distributions. In addition, if we need to repay existing debt during periods of higher interest rates, we might have to sell one or more of our investments in order to repay the debt, which sale at that time might not permit realization of the maximum return on such investments.
We have broad authority to incur debt, and high debt levels could hinder our ability to make distributions and decrease the value of your investment.
Our charter limits our leverage to 300% of our net assets and our board of directors has adopted a policy that our debt financing will be approximately 50% of the aggregate costs of our investments but we may exceed this limit with the approval of the independent directors of our board of directors. High debt levels would cause us to incur higher interest charges and higher debt service payments and may also be accompanied by restrictive covenants. These factors could limit the amount of cash we have available to distribute and could result in a decline in the value of your investment. See “Investment Objectives and Policies—Borrowing Policies.”
Federal Income Tax Risks
Failure to continue to qualify as a REIT would reduce our net earnings available for investment or distribution.
We have elected to be taxed as a REIT for our taxable year ended December 31, 2017 and will operate in a manner designed to permit us to continue to qualify as a REIT for federal income tax purposes.
Our qualification as a REIT will depend on our ongoing satisfaction of numerous requirements established under highly technical and complex provisions of the Internal Revenue Code for which there are only limited judicial or administrative interpretations and involve the determination of various factual matters and circumstances not entirely within our control. The complexity of these provisions and of the applicable income tax regulations that have been promulgated under the Internal Revenue Code is greater in the case of a REIT that holds its assets through a partnership, as we do. Moreover, no assurance can be given that new legislation, regulations, administrative interpretations or court decisions will not change the tax laws with respect to qualification as a REIT or the federal income tax consequences of that qualification.
If we fail to qualify as a REIT in any taxable year for which we have elected to be taxed as a REIT and do not qualify for certain statutory relief provisions, we would be required to pay U.S. federal income tax (and applicable state and local taxes) on our taxable income, and distributions to our stockholders would not be deductible by us in determining our taxable income. In such a case, we might need to borrow money or sell assets in order to pay our taxes. Our payment of income tax would decrease the amount of our cash available for distribution to our stockholders. Furthermore, we would not be required to distribute substantially all of our net taxable income to our stockholders. In addition, if we fail to qualify as a REIT in any taxable year for which we have elected to be taxed as a REIT, unless we are eligible for certain statutory relief provisions, we could not re-elect to be taxed as a REIT until the fifth calendar year following the year in which we failed to qualify. In addition, although we intend to operate in a manner intended to qualify as a REIT, it is possible that future economic, market, legal, tax or other considerations may cause our board of directors to recommend that we revoke our REIT election.
We believe that our operating partnership will be treated for federal income tax purposes as a partnership and not as an association or as a publicly traded partnership taxable as a corporation. If the Internal Revenue Service were successfully to
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determine that our operating partnership should properly be treated as a corporation, our operating partnership would be required to pay federal income tax at corporate rates on its net income. In addition, we would fail to qualify as a REIT, with the resulting consequences described above.
Legislative, regulatory or administrative changes could adversely affect us or our customers.
Legislative, regulatory or administrative changes could be enacted or promulgated at any time, either prospectively or with retroactive effect, and may adversely affect us and/or our stockholders.
On December 22, 2017, tax legislation commonly referred to as the Tax Cuts and Jobs Act was signed into law. The Tax Cuts and Jobs Act makes significant changes to the U.S. federal income tax rules for taxation of individuals and corporations, generally effective for taxable years beginning after December 31, 2017. Most of the changes applicable to individuals are temporary and apply only to taxable years beginning after December 31, 2017 and before January 1, 2026. The Internal Revenue Service (“IRS”) has issued significant proposed guidance under the Tax Cuts and Jobs Act, but guidance on additional issues, finalization of proposed guidance and possible technical corrections legislation may adversely affect us or our stockholders. In addition, further changes to the tax laws, unrelated to the Tax Cuts and Jobs Act, are possible.
 We urge you to consult with your own tax advisor with respect to the impact of the Tax Cuts and Jobs Act and any other legislative, regulatory or administrative developments and proposals and their potential effect on an investment in shares of our common stock.
To qualify as a REIT we must meet annual distribution requirements, which may result in us distributing amounts that may otherwise be used for our operations.
To qualify as a REIT, we will be required each year to distribute to our stockholders dividends equal to at least 90% of our real estate investment trust taxable income, determined without regard to the dividends-paid deduction and excluding undistributed net capital gains. We will be subject to federal income tax on any undistributed taxable income, including net capital gains, and to a 4% nondeductible excise tax on any amount by which dividends we pay with respect to any calendar year are less than the sum of (1) 85% of our ordinary income, (2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years. These requirements could cause us to distribute amounts that otherwise would be spent on investments in real estate assets, and it is possible that we might be required to borrow funds or sell assets to fund these distributions. If we fund distributions through borrowings, then we will have to repay debt using money we could have otherwise used to acquire properties. If we sell assets or use offering proceeds to pay distributions, we also will have fewer investments. Fewer investments may impact our ability to generate future cash flows from operations and, therefore, reduce your overall return. Although we intend to make distributions sufficient to meet the annual distribution requirements and to avoid corporate income and excise taxes, it is possible that we might not always be able to do so.
We may choose to pay dividends in a combination of cash and our own common stock, in which case stockholders may be required to pay income taxes in excess of the cash dividends they receive.
We may choose to pay dividends in a combination of cash and our own common stock. Under IRS Revenue Procedure 2017-45, as a publicly offered REIT, we may give stockholders a choice, subject to various limits and requirements, of receiving a dividend in cash or in our common stock. As long as at least 20% of the total dividend is available in cash and certain other requirements are satisfied, the IRS will treat the stock distribution as a dividend (to the extent applicable rules treat such distribution as being made out of our earnings and profits). As a result, U.S. stockholders may be required to pay income taxes with respect to such dividends in excess of the cash dividends they receive. In the case of non-U.S. stockholders, we generally will be required to withhold tax with respect to the entire dividend, which withholding tax may exceed the amount of cash such non-U.S. stockholder would otherwise receive.
Ordinary dividends payable by REITs generally do not qualify for capital gain tax rates.
The maximum tax rate applicable to "qualified dividend income" payable to certain non-corporate U.S. stockholders, including individuals, is currently 20%. Dividends paid by REITs, however, are not eligible for the reduced rates. REIT dividends that are not designated as qualified dividend income or capital gain dividends are taxable as ordinary income. However, in taxable years beginning after December 31, 2017 and before January 1, 2026, non-corporate U.S. stockholders are entitled to a deduction of up to 20% of their ordinary REIT dividends, subject to certain limitations. The more favorable rates applicable to regular corporate "qualified dividend income" could cause certain non-corporate investors to perceive
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investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, even taking into account the deduction of up to 20% of “ordinary dividends.
Recharacterization of sale-leaseback transactions may cause us to lose our REIT status.
We may purchase real properties and lease them back to the sellers of such properties. We cannot guarantee that the Internal Revenue Service will not challenge our characterization of any sale-leaseback transactions. In the event that any such sale-leaseback transaction is challenged and recharacterized as a financing transaction or loan for federal income tax purposes, deductions for depreciation and cost recovery relating to such property would be disallowed. If a sale-leaseback transaction were so recharacterized, we might fail to satisfy the REIT qualification “asset tests” or the “gross income tests” and, consequently, lose our REIT status. Alternatively, the amount of our REIT taxable income could be recalculated which might also cause us to fail to meet the distribution requirement for a taxable year.
You may have current tax liability on distributions if you elect to reinvest in shares of our common stock.
If you participate in our distribution reinvestment plan, you will be deemed to have received a cash distribution equal to the fair market value of the stock received pursuant to our distribution reinvestment plan, which will be taxed as a dividend to the extent of our current or accumulated earnings and profits. As a result, unless you are a tax-exempt entity, you may have to use funds from other sources to pay your tax liability on the value of the common stock received.
Restrictions on deduction of all of our interest expense could prevent us from satisfying the REIT distribution requirements and avoiding incurring income or excise taxes.
Under the Tax Cuts and Jobs Act, new rules may limit our ability (and the ability of entities that are not treated as disregarded entities for U.S. federal income tax purposes and in which we hold an interest) to deduct interest expense in taxable years beginning after December 31, 2017. Under amended Section 163(j) of the Code, the deduction for business interest expense may be limited to the amount of the taxpayer’s business interest income plus 30% of the taxpayer’s “adjusted taxable income” unless the taxpayer’s gross receipts do not exceed $25 million per year during the applicable testing period or the taxpayer qualifies to elect and elects to be treated as an “electing real property trade or business.” A taxpayer’s adjusted taxable income will start with its taxable income and add back items of non-business income and expense, business interest income and business interest expense, net operating losses, any deductions for “qualified business income,” and, in taxable years beginning before January 1, 2022, any deductions for depreciation, amortization or depletion. A taxpayer that is exempt from the interest expense limitations as an electing real property trade or business is ineligible for certain expensing benefits and is subject to less favorable depreciation rules for real property. The new rules for business interest expense will apply to us and at the level of each entity in which or through which we invest that is not a disregarded entity for U.S. federal income tax purposes. To the extent that our interest expense is not deductible, our taxable income will be increased, as will our REIT distribution requirements and the amounts we need to distribute to avoid incurring income and excise taxes.
Sales of our properties at gains are potentially subject to the prohibited transaction tax, which could reduce the return on your investment.
Our ability to dispose of property is restricted as a result of our REIT status. Under applicable provisions of the Internal Revenue Code regarding prohibited transactions by REITs, we will be subject to a 100% tax on any gain realized on the sale or other disposition of any property (other than foreclosure property) we own, directly or through a subsidiary entity, including our operating partnership, but excluding our taxable REIT subsidiaries, that is deemed to be inventory or property held primarily for sale to customers in the ordinary course of trade or business unless a safe harbor applies under the Internal Revenue Code. Whether property is inventory or otherwise held primarily for sale to customers in the ordinary course of a trade or business depends on the particular facts and circumstances surrounding each property. We intend to avoid the 100% prohibited transaction tax by (1) conducting activities that may otherwise be considered prohibited transactions through a taxable REIT subsidiary, (2) conducting our operations in such a manner so that no sale or other disposition of an asset we own, directly or through any subsidiary other than a taxable REIT subsidiary, will be treated as a prohibited transaction, or (3) structuring certain dispositions of our properties to comply with certain safe harbors available under the Internal Revenue Code. However, no assurance can be given that any particular property will not be treated as inventory or property held primarily for sale to customers in the ordinary course of a trade or business or that a safe harbor will apply.

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Distributions to tax-exempt investors may be classified as unrelated business taxable income.
Neither ordinary nor capital gain distributions with respect to our common stock nor gain from the sale of common stock should generally constitute unrelated business taxable income to a tax-exempt investor. However, there are certain exceptions to this rule. In particular:
part of the income and gain recognized by certain qualified pension trusts with respect to our common stock may be treated as unrelated business taxable income if we are a “pension-held REIT,” which should not be the case;

part of the income and gain recognized by a tax-exempt investor with respect to our common stock would constitute unrelated business taxable income if the investor incurs debt to acquire the common stock; and

part or all of the income or gain recognized with respect to our common stock by social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans which are exempt from federal income taxation under Sections 501(c)(7), (9), (17), or (20) of the Internal Revenue Code may be treated as unrelated business taxable income.

Complying with the REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments.
To qualify as a REIT for federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders and the ownership of shares of our common stock. We may be required to make distributions to stockholders at disadvantageous times or when we do not have funds readily available for distribution or liquidate otherwise attractive investment to satisfy the REIT tests. Thus, compliance with the REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.
Liquidation of assets may jeopardize our REIT status.
To qualify as a REIT, we must comply with requirements regarding our assets and our sources of income. If we are compelled to liquidate any investments we make to satisfy our obligations to our lenders, we may be unable to comply with these requirements, ultimately jeopardizing our status as a REIT, or we may be subject to a 100% tax on any resultant gain if we sell assets that are treated as dealer property or inventory.
The failure of a mezzanine loan to qualify as a real estate asset could adversely affect our ability to qualify as a REIT.
We may acquire mezzanine loans. If a mezzanine loan satisfies an Internal Revenue Service safe harbor in Revenue Procedure 2003-65, the mezzanine loan will be treated as a real estate asset for purposes of the REIT asset tests and interest derived from the mezzanine loan will be treated as qualifying mortgage interest for purposes of the REIT 75% gross income test. Although the Revenue Procedure provides a safe harbor on which taxpayers may rely, it does not prescribe rules of substantive tax law. We intend to make investments that comply with the various requirements applicable to our qualification as a REIT. We may, however, acquire mezzanine loans that do not meet all of the requirements of this safe harbor. In the event we own a mezzanine loan that does not meet the safe harbor, the Internal Revenue Service could challenge such loan’s treatment as a real estate asset for purposes of the REIT asset tests and could challenge treatment of interest on such loan as qualifying income for purposes of the 75% gross income test, and, if such a challenge were sustained, we could fail to qualify as a REIT.
Non-U.S. investors may be subject to U.S. federal income tax on the sale of shares of our common stock if we are unable to qualify as a domestically controlled REIT and generally will be subject to U.S. federal income tax on capital gain dividends.
A non-U.S. person disposing of a United States real property interest, or "USRPI", including shares of a U.S. corporation whose assets consist principally of USRPIs, is generally subject to U.S. federal income tax under the Foreign Investment in Real Property Act of 1980, as amended, or FIRTPA, on the gain recognized on such disposition. A non-U.S. stockholder generally would not be subject to U.S. federal income tax, however, on gain from the disposition of stock in a REIT if the REIT is a domestically controlled REIT. A domestically controlled REIT is a REIT in which, at all times during a specified testing period, less than 50% in value of its shares is held directly or indirectly by non-U.S. stockholders.
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We cannot assure you that we will qualify as a domestically controlled REIT. If we were to fail to so qualify, gain realized by a non-U.S. investor on a sale of our common stock would be subject to U.S. federal income tax unless our common stock was traded on an established securities market, which is not currently the case, and the non-U.S. investor did not at any time during a specified testing period directly or indirectly own more than 10% of the value of our outstanding common stock. In addition, if a non-U.S. person receives a dividend that is attributable to gains from our sale of a USRPI, such non-U.S. person generally will be required to report such dividend on a U.S. federal income tax return and pay U.S. federal income tax at regular U.S. federal income tax rates and a 30% branch profits tax in the case of a non-U.S. corporation unless an applicable tax treaty provides an exemption from, or lower rate of, branch profits tax.
Retirement Plan Risks
There are special considerations for pension or profit-sharing or 401(k) plans, health or welfare plans or individual retirement accounts whose assets are being invested in our common stock due to requirements under ERISA and the Internal Revenue Code. Furthermore, a person acting on behalf of a plan not subject to ERISA may be subject to similar penalties under applicable federal, state, local, or non-U.S. law by reason of purchasing our stock.
If you are investing the assets of a pension, profit sharing or 401(k) plan, health or welfare plan, or an IRA, or other plan or arrangement subject to ERISA or Section 4975 of the Internal Revenue Code in us, you should consider:
whether your investment is consistent with your fiduciary and other obligations under ERISA and the Internal Revenue Code;
whether your investment is made in accordance with the documents and instruments governing your plan, IRA or other arrangement, including the investment policy;
whether your investment satisfies the prudence, diversification and other applicable fiduciary requirements in Sections 404(a) of ERISA;
whether your investment will impair the liquidity of the plan, IRA or other arrangement;
whether your investment will produce unrelated business taxable income, or “UBTI,” for the plan or IRA;
whether you will be able to comply with the requirements under ERISA and the Internal Revenue Code to value the assets of the plan or IRA annually;
your need to value the assets of the plan annually and:

whether the investment will constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code.

You should consider whether your investment in us will cause some or all of our assets to be considered assets of an employee benefit plan, IRA, or other arrangement. We do not believe that under ERISA and U.S. Department of Labor regulations currently in effect that our assets would be treated as “plan assets” for purposes of ERISA, although there can be no assurances. However, if our assets were considered to be plan assets, transactions involving our assets would be subject to ERISA and Section 4975 of the Internal Revenue Code and some of the transactions we have entered into with our Advisor and its affiliates could be considered “prohibited transactions,” under ERISA or the Internal Revenue Code. If such transactions were considered “prohibited transactions,” our Advisor and its affiliates could be subject to liabilities and excise taxes or penalties. In addition, our officers and directors, our Advisor and its affiliates could be deemed to be fiduciaries under ERISA, subject to other conditions, restrictions and prohibitions under Part 4 of Title I of ERISA and those serving as fiduciaries of plans investing in us may be considered to have improperly delegated fiduciary duties to us. Additionally, other transactions with “parties-in-interest” or “disqualified persons” with respect to an investing plan might be prohibited under ERISA, the Internal Revenue Code or other governing authority in the case of a government plan. Therefore, we would be operating under a burdensome regulatory regime that could limit or restrict investments we can make or our management of our real estate assets. Even if our assets are not considered to be plan assets, a prohibited transaction could occur if we or any of our affiliates is a fiduciary (within the meaning of ERISA) with respect to an employee benefit plan purchasing shares and, therefore, in the event any such persons are fiduciaries (within the meaning
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of ERISA) of your plan or IRA, you should not purchase shares unless an administrative or statutory exemption applies to your purchase. For a discussion of the considerations associated with an investment in our shares by an employee benefit plan or an IRA, see the section of this prospectus titled “ERISA Considerations.”
Failure to satisfy the fiduciary standards of conduct and other requirements of ERISA, the Internal Revenue Code, or other applicable statutory or common law may result in the imposition of civil (and criminal, if the violation was willful) penalties, and can subject the fiduciary to equitable remedies and/or damages. In addition, if an investment in our common stock constitutes a prohibited transaction under ERISA or the Internal Revenue Code, the fiduciary that authorized or directed the investment may be subject to the imposition of excise taxes with respect to the amount invested. Furthermore, to the extent that the assets of a plan or arrangement not subject to the fiduciary provisions of ERISA (for example, governmental plans, non-electing church plans, and foreign plans) will be used to purchase our stock, such plans should consider the impact of applicable federal, state, local, or non-U.S. law on the decision to make such purchase.

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ESTIMATED USE OF PROCEEDS

The following table sets forth information (shown separately with respect to Class A, S, I, and T shares) about how we intend to use the proceeds raised in this offering assuming we sell: (i) 180,000,000 in shares of our common stock, the maximum offering amount in this offering, and no shares pursuant to our DRIP, assuming that 10% of the shares sold (i.e., $18,000,000) are Class A shares, 40% of the shares sold ($72,000,000) are Class S shares, 40% of the shares sold (i.e.,$72,000,000) are Class I shares and 10% of the shares sold (i.e., $18,000,000) are Class T shares based on an offering price of $11.44 per Class A share, $10.67 per Class S share, $10.30 per class I share and $10.95 per Class T share; and (ii) $90,000,000 in shares of our common stock, the mid-point offering amount in this offering, and no shares pursuant to our DRIP, assuming that 10% of the shares sold (i.e., $9,000,000) are Class A shares, 40% of the shares sold ($36,000,000) are Class S shares, 40% of the shares sold ($36,000,000) are Class I shares and 10% of the shares sold (i.e., $9,000,000) are Class T shares based on an offering price of $11.44 per Class A share, $10.67 per Class S share, $10.30 per Class I share and $10.95 per Class T share. Class A shares will be offered in this offering at a price of $11.44 per share plus commissions and dealer manager fees with discounts available for certain categories of investors. Class S shares will be offered in this offering at a price of $10.67 per share plus commissions with discounts available for certain categories of investors. Class I shares will be offered in this offering at a price of $10.30 per share, with no discounts available and Class T shares will be offered in this offering at a price of $10.95 per share plus commissions and dealer manager fees and there are no discounts available. We are also offering up to $5,000,000 in shares of our common stock pursuant to our DRIP at the most recently determined NAV per Class A,Class S, Class I or Class T share, respectively. We reserve the right to reallocate the shares of common stock we are offering between classes of stock in the primary offering and the DRIP. The actual use of the capital we raise is likely to be different than the figures presented in the table because we may not raise the entire amounts set forth in the table. Raising less than the full $180,000,000 in this offering will alter the amounts of selling commissions, fees and expenses set forth below.
Certain of the amounts set forth below represent our management’s best estimates since they cannot be precisely calculated at this time. The amounts in the tables below assume that the full selling commissions and dealer manager fees, but no distribution and shareholder servicing fees, are paid as applicable on all shares of our common stock offered to the public in this offering. The selling commission and, in some cases, all or a portion of our dealer manager fee, may be reduced or eliminated in connection with certain categories of sales, such as sales for which a volume discount applies. The reduction in these fees will be accompanied by a corresponding reduction in the per share purchase price but will not affect the amounts available to us for investments. After paying the selling commission, the dealer manager fee and our organizational and offering expenses, we will use the net proceeds of the offering to invest in real estate assets and to pay the fees set forth in the tables below. Because amounts in the following tables are estimates, they may not accurately reflect the actual receipt or use of the offering proceeds.
Generally, our policy is to pay distributions from cash flow from operations. However, our board of directors has the authority under our organizational documents, to the extent permitted by Maryland law, to fund distributions from sources such as borrowings, offering proceeds or the deferral of fees and expense reimbursements by our Advisor in its sole discretion. Our organizational documents do not limit the amount of distributions we can fund from sources other than from cash flows from operations, including from offering proceeds. To the extent offering proceeds are used to pay distributions, the amount available for investment will be correspondingly reduced, your overall return may be reduced, our portfolio may be less diversified and the value of a share of our common stock may be diluted. The fees, compensation and expense reimbursements described below payable to our Advisor, our dealer manager and their respective affiliates may increase or decrease during or after this offering.
Before we substantially invest the net proceeds of this offering, our distributions are likely to exceed our funds from operations and may be paid from offering proceeds, borrowings and other sources, without limitation, which would reduce the amount of public offering proceeds available for investment or require us to repay such borrowings, both of which could reduce your overall return.
The following tables present information regarding the use of proceeds raised in this offering utilizing the percentages of the different classes of stock as noted above. Note also that we intend to conduct a continuous offering of an unlimited number of shares of our common stock over an unlimited time period by filing a new registration statement prior to the end of the three-year period described in Rule 415 under the securities Act of 1933, amended; however, in certain states this offering is subject to annual extensions.
Assumes maximum commissions and dealer manager fees allowable; no DRIP shares issued; 10% of the gross offering proceeds are Class A shares, 40% are Class S shares, 40% are Class I shares, and 10% are Class T shares.
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The following table information regarding the estimated use of proceeds raised in this offering with respect to Class A, Class S, Class I and Class T shares combined.

Maximum Offering of $180,000,000 in Class A, S, I & T Shares
Gross Proceeds$180,000,000  100.00 %
Selling Commissions$3,960,000  2.20 %
Dealer Manager Fee1,440,000  0.80 %
Organization and Offering Expense(1)2,700,000  1.50 %
Total Organization and Offering Expenses(2)$8,100,000  4.50 %
Amount of Public Offering Available for Investment $171,900,000  95.50 %
Acquisition Fees (3)4,297,500  2.39 %
Acquisition Expenses (4)810,000  0.45 %
Estimated Net Proceeds Available for Investment (5)$166,792,500  92.66 %

The following table information regarding the estimated use of proceeds raised in this offering with respect to Class A shares.

Maximum Offering of $18,000,000 in Class A Shares
Gross Proceeds$18,000,000  100.00 %
Selling Commissions$1,260,000  7.00 %
Dealer Manager Fee540,000  3.00 %
Organization and Offering Expense(1)270,000  1.50 %
Total Organization and Offering Expenses(2)$2,070,000  11.50 %
Amount of Public Offering Available for Investment$15,930,000  88.50 %
Acquisition Fees (3)398,250  2.21 %
Acquisition Expenses (4)81,000  0.45 %
Estimated Net Proceeds Available for Investment (5)$15,450,750  85.84 %

The following table information regarding the estimated use of proceeds raised in this offering with respect to Class S shares.

Maximum Offering of $72,000,000 in Class S Shares
Gross Proceeds$72,000,000  100.00 %
Selling Commissions$2,160,000  3.00 %
Dealer Manager Fee360,000  0.50 %
Organization and Offering Expense(1)1,080,000  1.50 %
Total Organization and Offering Expenses(2)$3,600,000  5.00 %
Amount of Public Offering Available for Investment$68,400,000  95.00 %
Acquisition Fees (3)1,710,000  2.38 %
Acquisition Expenses (4)324,000  0.45 %
Estimated Net Proceeds Available for Investment (5)$66,366,000  92.17 %

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The following table information regarding the estimated use of proceeds raised in this offering with respect to Class I shares.

Maximum Offering of $72,000,000 in Class I Shares
Gross Proceeds$72,000,000  100.00 %
Selling Commissions$—  — %
Dealer Manager Fee—  — %
Organization and Offering Expense(1)1,080,000  1.50 %
Total Organization and Offering Expenses(2)$1,080,000  1.50 %
Amount of Public Offering Available for Investment$70,920,000  98.50 %
Acquisition Fees (3)1,773,000  2.46 %
Acquisition Expenses (4)324,000  0.45 %
Estimated Net Proceeds Available for Investment (5)$68,823,000  95.59 %

The following table information regarding the estimated use of proceeds raised in this offering with respect to Class T shares.

Maximum Offering of $18,000,000 in Class T Shares
Gross Proceeds$18,000,000  100.00 %
Selling Commissions$540,000  3.00 %
Dealer Manager Fee540,000  3.00 %
Organization and Offering Expense(1)270,000  1.50 %
Total Organization and Offering Expenses(2)$1,350,000  7.50 %
Amount of Public Offering Available for Investment$16,650,000  92.50 %
Acquisition Fees (3)416,250  2.31 %
Acquisition Expenses (4)81,000  0.45 %
Estimated Net Proceeds Available for Investment (5)$16,152,750  89.74 %

The following table presents information regarding the estimated use of proceeds raised in this offering with respect to a $10,000 investment in shares of each of a Class A, Class S, Class I and Class T share.


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Class AClass SClass IClass T
Gross Proceeds$10,000  100.00 %$10,000  100.00 %$10,000  100.00 %$10,000  100.00 %
Selling Commissions700  7.00 %3003.00 %—  — %300  3.00 %
Dealer Manager Fee300  3.00 %50  0.50 %—  — %300  3.00 %
Organization and Offering Expense(1)150  1.50 %1501.50 %1501.50 %1501.50 %
Total Organization and Offering Expenses(2)$1,150  11.50 %$500  5.00 %$150  1.50 %$750  7.50 %
Amount of Public Offering Proceeds Available for Investment$8,850  88.50 %$9,500  95.00 %$9,850  98.50 %$9,250  92.50 %
Acquisition Fees(3)2212.21 %2382.38 %2462.46 %2312.31 %
Acquisition Fees(4)450.45 %450.45 %450.45 %450.45 %
Estimated Net Proceeds Available for Investment(5)$8,584  85.84 %$9,217  92.17 %$9,559  95.59 %$8,974  89.74 %

(1) “Other Organization and Offering Expenses” represent all expenses incurred in connection with our qualification and registration of our shares, including registration fees paid to the SEC, FINRA, and state regulatory authorities, issuer legal expenses, advertising, sales literature, fulfillment, escrow agent, transfer agent, and reimbursements to the dealer manager and selected dealers for reasonable bona fide due diligence expenses incurred, which are supported by a detailed and itemized invoice. Amounts of certain of the “Other Organization and Offering Expenses” are not determinable at this time.
(2) The total underwriting compensation in connection with this offering payable from whatever source, including selling commissions, the dealer manager fee and the distribution and shareholder servicing fee, cannot exceed 10.0% of the gross proceeds of the offering as of the termination of the offering, as required by the rules of FINRA. The non-cash compensation items paid to registered representatives of our dealer manager and the selected dealers will be paid from or reduce the dealer manager fee. Such non-cash compensation items include gifts, business entertainment, sales incentives and training and education meetings, as well as non-transaction-based compensation associated with retailing and wholesaling activities and legal expenses paid to our dealer manager's FINRA counsel. The “Total Organization and Offering Expenses” for both the Class A shares and Class T Shares, including selling commissions, the distribution and shareholder servicing fees, shall be reasonable and shall in no event exceed an amount equal to 15% of the gross proceeds of this offering. In addition, our Advisor will be responsible for other organization and offering expenses in excess of the maximum expense cap.
(3) We will pay to our Advisor acquisition fees in the amount of 2.5% of the cost of each investment we acquire, which includes the amount actually paid or allocated to fund the purchase development, construction or improvement of each investment, including acquisition expenses and any debt attributable to each investment. The presentation in the table is based on the assumption that we will not borrow any funds to make investments.
(4) “Acquisition Expenses” in the table above are expenses related to our selection and acquisition of investments, whether or not the investments are ultimately acquired or originated. These expenses include but are not limited to travel and communications expenses, the cost of appraisals, title insurance, non-refundable option payments on property not acquired, legal fees and expenses, accounting fees and expenses and miscellaneous expenses related to selection, acquisition and origination of investments whether or not ultimately acquired or originated. “Acquisition Expenses” do not include acquisition fees. The presentation in the table is for illustrative purposes and assumes that all investments are purchased on an unlevered basis. The actual amount of acquisition expenses cannot be determined at the present time and will depend on numerous factors, including the amount of our leverage.

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OUR REAL ESTATE INVESTMENTS
Overview

As of March 31, 2020, we owned ten properties: (i) a retail shopping center located in San Antonio, Texas, which we refer to as the Village Pointe Property (ii) a flex/R&D property located in Richardson, Texas, which we refer to as the Richardson Tech Center Property, (iii) an office property located in San Antonio, Texas, which we refer to as the Spectrum Building, (iv) an office property located in Houston, Texas, which we refer to as the 11211 Building, (v) an office property located in Houston, Texas, which we refer to as the 1400 Broadfield, (vi) an office property located in Houston, Texas, which we refer to as the 16420 Park Ten Place, (vii) an office property located in Houston, Texas, which we refer to as the 7915 FM 1960,(viii) an office property located in Houston, Texas, which we refer to as the Timberway II, (ix) an office property located in Houston, Texas, which we refer to as the One Park Ten, and (x) an office property located in Houston, Texas, which we refer to as the Two Park Ten, each of which are discussed further below. In addition, we currently own a 2.47% ownership interest in an affiliated special purpose entity which owns 39 office, retail and light industrial properties located in Houston, Dallas, and San Antonio, Texas, which refer to as the Hartman SPE interest. We also own 700,302 shares of common stock of Hartman Short Term Income Properties, XX, Inc., or Hartman XX, a public, non-listed REIT also sponsored by our Sponsor.

The following table sets forth certain information relating to our properties, by commercial property type, as of March 31, 2020:
Property NameYearSpace TypeGLAPercent OccupiedNo.of TenantsAnnualized Base Rental Revenue (in thousands)Average Base Rental Revenue occupied per SFAcquisition price (in thousands)
Village Pointe1982Retail54,24684 %13$586  $12.80  $7,226  
Richardson Tech 1987Flex/R&D96,66068 %12526  8.025,166  
Spectrum Building1986Office175,39085 %335,598  37.4016,951  
11211 Katy Freeway1976Office78,64263 %45805  16.214,495  
1400 Broadfield1982Office102,89374 %161,603  21.179,582  
16420 Park Ten Place1982Office83,76056 %14970  20.677,510  
7915 FM 19601982Office67,58138 %13454  17.843,972  
Timberway II1982Office130,82869 %211,846  20.3611,890  
One Park Ten1982Office34,08935 %16242  20.543,075  
Two Park Ten1982Office57,12686 %191,076  21.875,125  
Grand Total881,21569 %202  $13,706  $22.45  $74,992  

Significant Tenants

The following table sets forth information about our ten largest tenants as of March 31, 2020:


Tenant Name


Location
Annualized Rental Revenue (in thousands)Percentage of Total Annualized Rental Revenue

Initial Lease Date
Lease Expiration Year
Oracle America, Inc.Spectrum$4,211  30.7 %9/9/201612/9/2021
Enventure Global Technology Inc.Timberway II720  5.3 %11/1/20154/30/2021
Hargrove and Associates, Inc.Two Park Ten