Hartman
Commercial Properties REIT | |||||||||
(Exact
Name of Registrant as Specified in Its
Charter) |
Maryland |
000-50256 |
76-0594970 |
(State
or other jurisdiction of incorporation
or
organization) |
(Commission
File Number) |
(I.R.S.
Employer
Identification
No.) |
1450
West Sam Houston Parkway North, Suite 100
Houston,
Texas 77043 | |||||||||
(Address
of principal executive offices) | |||||||||
(Zip
Code) | |||||||||
(713)
467-2222 | |||||||||
(Registrant’s
telephone number, including area code) | |||||||||
(Former
name or former address, if changed since last
report) |
¨ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425) |
¨ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12) |
¨ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
¨ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Total Leverage
Ratio |
LIBOR
Margin |
Alternative Base
Rate
Margin |
Less
than 60% but greater than
or
equal to 50% |
2.40% |
1.15% |
Less
than 50% but greater than
or
equal to 45% |
2.15% |
1.025% |
Less
than 45% |
1.90% |
1.00% |
· |
The
Company will provide a negative pledge on the borrowing base pool and may
not provide a negative pledge of the borrowing base pool to any other
lender. |
· |
The
properties must be free of all liens, unless otherwise
permitted. |
· |
All
eligible properties must be retail, office/warehouse, or office
properties, must be free and clear of material environmental concerns and
must be in good repair. |
· |
The
aggregate physical occupancy of the borrowing base pool must remain above
80% at all times. |
· |
No
property may comprise more than 15% of the value of the borrowing base
pool with the exception of Corporate Park Northwest, which is allowed into
the borrowing base pool. |
· |
The
borrowing base pool must at all times be comprised of at least 10
properties. |
· |
The
borrowing base pool properties may not contain development or
redevelopment projects. |
· |
The
Company will not permit any liens on the properties in the borrowing base
pool unless otherwise permitted. |
· |
The
ratio of aggregate net operating income from the borrowing base pool to
debt service shall at all time exceed 1.5 to 1.0. For any quarter, debt
service shall be equal to the average loan balance for the past quarter
times an interest rate which is the greater of a) the then current annual
yield on 10 year United States Treasury notes over 25 years plus 2%, b) a
6.5% constant, or c) the actual interest rate for the
facility. |
· |
The
ratio of the value of the borrowing base pool to total funded loan balance
must always exceed 1.67 to 1.00. The value of the borrowing base pool is
defined as aggregate net operating income for the preceding four quarters,
less a $.15 per square foot per annum capital expenditure reserve, divided
by a 9.25% capitalization rate. |
· |
The
Company will not permit its total indebtedness to exceed 60% of the fair
market value of its real estate assets at the end of any quarter. Total
indebtedness |
· |
The
ratio of consolidated rolling four-quarter earnings before interest,
income tax, deprecation and amortization expenses for such quarter to
total interest expense, including capitalized interest, shall not be less
than 2.0 to 1.0. |
· |
The
ratio of consolidated earnings before interest, income tax, deprecation
and amortization expenses for such quarter to total interest expense,
including capitalized interest, principal amortization, capital
expenditures and preferred stock dividends shall not be less than 1.5 to
1.0. Capital expenditures shall be deemed to be $.15 per square foot per
annum. |
· |
The
ratio of secured debt to fair market value of real estate assets shall not
be greater than 40%. |
· |
The
ratio of declared dividends to funds from operations shall not be greater
than 95%. |
· |
The
ratio of development assets to fair market value of real estate assets
shall not be greater than 20%. |
· |
The
Company must maintain its status as a real estate investment trust for
income tax purposes. |
· |
Total
other investments shall not exceed 30% of total asset value. Other
investments shall include investments in joint ventures, unimproved land,
marketable securities and mortgage notes receivable. Additionally, the
preceding investment categories shall not comprise greater than 30%, 15%,
10% and 20%, respectively, of total other
investments. |
· |
Within
six months of closing, the Company must hedge all variable rate debt above
$40 million until the point at which the ratio of variable rate debt to
fixed rate debt is 50% of total debt. Thereafter, the Company must
maintain such hedges during any period in which variable rate debt exceeds
50% of total debt. |
HARTMAN COMMERCIAL PROPERTIES REIT | ||
|
|
|
Dated: June 3, 2005 | By: | /s/ Terry L. Henderson |
Name: Terry L. Henderson | ||
Title: Chief Financial Officer |