Notice and Proxy Statement
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
SCHEDULE
14A
(RULE
14a-101)
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant To Section 14(A) of the Securities
Exchange
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Definitive
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Hartman
Commercial Properties REIT
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HARTMAN
COMMERCIAL PROPERTIES REIT
1450
West Sam Houston Parkway North
Suite
100
Houston,
Texas 77043
May
1, 2006
To
the Shareholders of Hartman Commercial Properties REIT:
You
are cordially invited to attend the 2006 annual meeting of shareholders of
Hartman Commercial Properties REIT, a Maryland real estate investment trust
(the
“Company”), to be held on June 2, 2006, at 3:00 p.m. local time at the
Westheimer Central Plaza, 11200 Westheimer, Suite 205, Houston, Texas
77042.
The
formal business to be conducted at the meeting is described in the notice that
follows this letter. At the annual meeting of shareholders you will be asked
to
elect five individuals to serve on the Company’s Board of Trustees until the
next annual meeting of shareholders and until their successors are duly elected
and qualified.
We
will be available to answer your questions during the meeting and
afterward.
Our
Board of Trustees (the “Board”) recommends that you vote in favor of all of the
nominees for election to our Board at the annual meeting. The accompanying
proxy
statement provides detailed information about the nominees for election to
our
Board.
Whether
or not you plan to attend the annual meeting in person, it is important that
your shares be represented and voted at the meeting. Please date, sign, and
return your proxy card promptly in the enclosed envelope to assure that your
shares will be represented and voted at the annual meeting, even if you cannot
attend. If you attend the annual meeting, you may vote your shares in person
even though you have previously signed and returned your proxy
card.
I
look forward to seeing you on June 2, 2006, at 3:00 p.m.
|
Sincerely,
HARTMAN
COMMERCIAL PROPERTIES REIT
Allen
R. Hartman
Chairman
of the Board, President and Corporate
Secretary
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HARTMAN
COMMERCIAL PROPERTIES REIT
1450
West Sam Houston Parkway North
Suite
100
Houston,
Texas 77043
May
1, 2006
Notice
of Annual Meeting of Shareholders
To
Be Held on June 2, 2006, at 3:00 p.m.
The
annual meeting of shareholders of Hartman Commercial Properties REIT (the
“Company”) will be held at Westheimer Central Plaza, 11200 Westheimer, Suite
205, Houston, Texas 77042, on June 2, 2006, at 3:00 p.m. local time, for the
following purposes:
1. To
elect five individuals to serve on the Board of Trustees until the next annual
meeting of shareholders and until their successors are duly elected and
qualified.
2. To
transact such other business as may properly come before the meeting or any
adjournments or postponements thereof.
The
foregoing items of business are more fully described in the proxy statement
accompanying this notice. Shareholders who owned common shares of beneficial
interest at the close of business on April 1, 2006 are entitled to notice of,
and to vote at, the meeting.
Our
2005 Annual Report on Form 10-K, which is not a part of the proxy soliciting
material, is enclosed.
All
shareholders are cordially invited to attend the meeting in person. However,
to
assure your representation at the meeting, you are urged to vote your shares
by
proxy as soon as possible.
|
By
Order of the Board of Trustees
Allen
R. Hartman
Chairman
of the Board, President and Corporate
Secretary
|
Whether
or not you plan to attend the annual meeting in person, it is important that
your shares be represented and voted at the meeting. Please date, sign, and
return your proxy card promptly in the enclosed envelope to assure that your
shares will be represented and voted at the annual meeting, even if you cannot
attend. If you attend the annual meeting, you may vote your shares in person
even though you have previously signed and returned your proxy card.
HARTMAN
COMMERCIAL PROPERTIES REIT
1450
West Sam Houston Parkway North
Suite
100
Houston,
Texas 77043
PROXY
STATEMENT FOR THE 2006 ANNUAL MEETING OF SHAREHOLDERS
General
This
proxy statement and the enclosed proxy card are furnished on behalf of the
Board
of Trustees (the “Board”) of Hartman Commercial Properties REIT, a Maryland real
estate investment trust, (referred to herein as the “Company,” “we,” “us” and
“our”) for use at the 2006 annual meeting of shareholders (the “Annual
Meeting”), to be held at Westheimer Central Plaza, 11200 Westheimer, Suite 205,
Houston, Texas, on June
2, 2006, at 3:00 p.m.,
central daylight time.
At
the Annual Meeting you will be asked to elect five individuals to serve on
the
Company’s Board until the next annual meeting of shareholders and until their
successors are duly elected and qualified.
Our
principal executive offices are located at 1450 West Sam Houston Parkway N.,
Suite 100, Houston, Texas 77043. Our principal executive office telephone number
is (713) 467-2222 and our fax number is (713) 973-8912.
Mailing
of the Proxy Materials
These
proxy solicitation materials, together with an accompanying copy of the
Company’s 2005 Annual Report on Form 10-K, are being sent or given to all
shareholders entitled to vote at the Annual Meeting by mail, commencing on
or
about May 1, 2006.
The
Securities and Exchange Commission (the “SEC”) has adopted rules that permit
companies and intermediaries such as brokers to satisfy delivery requirements
for proxy statements with respect to two or more shareholders sharing the same
address by delivering a single proxy statement addressed to those shareholders.
This process, which is commonly referred to as “householding,” potentially
provides extra convenience for shareholders and cost savings for
companies.
The
Company and some brokers may be householding our proxy materials by delivering
a
single proxy statement and annual report to multiple shareholders sharing an
address unless contrary instructions have been received from the affected
shareholders. Once you have received notice from your broker or us that they
or
we will be householding materials to your address, householding will continue
until you are notified otherwise or until you revoke your consent. If at any
time you no longer wish to participate in householding and would prefer to
receive a separate proxy statement, or if you are receiving multiple copies
of
the proxy statement and wish to receive only one, please notify your broker
if
your shares are held in a brokerage account or us if you hold registered shares.
You can notify us by sending a written request to the Corporate Secretary,
1450
West Sam Houston Parkway N., Suite 100, Houston, Texas 77043.
Record
Date and Shares Outstanding
Shareholders
who owned our common shares of beneficial interest at the close of business
on
April 1, 2006, referred to in this proxy statement as the record date, are
entitled to notice of, and to vote at, the Annual Meeting. As of the close
of
business on April 1, 2006, we had 9,476,788 common shares of beneficial interest
issued and outstanding. Each common share of beneficial interest is entitled
to
one vote.
Revoking
Your Proxy
You
may revoke your proxy at any time prior to the date of the Annual Meeting by:
(1) submitting a later-dated proxy card, (2) attending the Annual Meeting
and notifying the election officials at the meeting that you wish to revoke
your
proxy and vote in person, or (3) delivering instructions to the attention of
the
Corporate Secretary at the Company’s principal executive office, 1450 West Sam
Houston Parkway N., Suite 100, Houston, Texas 77043. Any notice of revocation
sent to us must include the shareholder’s name and must be received prior to the
meeting to be effective. Simply attending the Annual Meeting will not, by
itself, revoke your proxy.
How
Your Proxy Will Be Voted
All
shares represented by properly executed proxies received in time for the meeting
will be voted at the meeting in accordance with the instructions marked thereon
or otherwise as provided therein, unless such proxies have previously been
revoked. Unless instructions to the contrary are marked, or if no instructions
are specified, shares represented by proxies will be voted:
· |
FOR
the
election of all of the following nominees to the Company’s Board: Allen R.
Hartman, Terry L. Henderson, Jack L. Mahaffey, Chris A. Minton, and
Chand
Vyas.
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In
addition, if any other matters properly come before the Annual Meeting, it
is
the intention of the persons named in the enclosed proxy card to vote the shares
they represent as directed by the Board. We have not received notice of any
other matters that may properly be presented at the Annual Meeting. If the
Annual Meeting is postponed or adjourned for any reason, at any subsequent
reconvening (within 11 months from the date of this proxy statement) of the
Annual Meeting, all proxies will be voted in the same manner as such proxies
would have been voted at the original convening of the Annual Meeting (except
for any proxies that have theretofore effectively been revoked or
withdrawn).
Quorum
Each
common share of beneficial interest outstanding on the record date is entitled
to one vote. Cumulative voting is not permitted. A quorum, which is fifty
percent (50%) of the outstanding shares as of the record date, or 4,738,394
shares, must be present in order to hold the meeting and to conduct business.
Your shares will be counted as being present at the meeting if you appear in
person at the meeting or if you submit a properly executed proxy card. Votes
against the proposal will be counted both to determine the presence or absence
of a quorum and to determine whether the requisite number of voting shares
has
been obtained.
Voting
Tabulation/Required
Vote
If
a quorum is present, the vote of a majority of the shares represented at the
Annual Meeting in person or by proxy is required for the election of the
trustees. Withheld votes will have the same effect as a vote against the
respective nominee.
Votes
cast by proxy or in person at the meeting will be counted by the persons
appointed by us to act as inspectors of election for the meeting. Broker
non-votes (which are explained below) and shares as to which authority to vote
on any proposal is withheld, are each included in the determination of the
number of shares present and voting at the meeting for purposes of obtaining
a
quorum.
Abstentions
and Broker Non-Votes
A
broker “non-vote” occurs when a nominee holding shares for a beneficial owner
does not vote on a particular proposal because the nominee does not have the
discretionary voting power with respect to that item and has not received
instructions from the beneficial owner. Shares with respect to which abstentions
and broker “non-votes” are recorded, as well as shares as to which proxy
authority has been withheld with respect to any matter, will be counted for
purposes of determining whether a quorum is present at the meeting. With respect
to the election of trustees, abstentions and broker “non-votes” will have the
same effect as a vote against the nominee.
Solicitation
of Proxies
This
solicitation is being made by mail on behalf of our Board, but may also be
made
without additional remuneration by our officers or employees by telephone,
telegraph, facsimile transmission, e-mail or personal interview. We will bear
the expense of the preparation, printing and mailing of the enclosed form of
proxy, notice of Annual Meeting and this proxy statement and any additional
material relating to the meeting that may be furnished to our shareholders
by
our Board subsequent to the furnishing of this proxy statement. We will
reimburse banks and brokers who hold shares in their name or custody, or in
the
name of nominees for others, for their out-of-pocket expenses incurred in
forwarding copies of the proxy materials to those persons for whom they hold
such shares. To obtain the necessary representation of shareholders at the
meeting, supplementary solicitations may be made by mail, telephone or interview
by our officers or employees, without additional compensation, or selected
securities dealers.
PROPOSAL
NO. 1
ELECTION
OF TRUSTEES
The
Board currently consists of five members, three of whom (Jack L. Mahaffey,
Chris
A. Minton, and Chand Vyas) are “independent” as that term is defined under the
Nasdaq listing standards, and such trustees are also “independent” as that term
is defined in the Company’s Amended and Restated Declaration of Trust (the
“Declaration of Trust”). The Board has proposed the following nominees for
election as trustees, each to serve for a term ending at the 2007 Annual Meeting
of Shareholders: Allen R. Hartman, Terry L. Henderson, Jack L. Mahaffey, Chris
A. Minton and Chand Vyas. Each nominee elected as a trustee will continue in
office until his successor has been elected and qualified, or until his earlier
death, resignation or retirement. The persons named in the enclosed proxy intend
to vote the proxy for the election of each of these five nominees, unless you
indicate on the proxy card that your vote should be withheld from any or all
of
the nominees.
Each
nominee named below was elected trustee at the 2005 Annual Meeting, and each
has
consented to serve as a trustee if elected. If any nominee is not able to serve,
proxies will be voted in favor of the remainder of those nominated and may
be
voted for substitute nominees, unless the Board chooses to reduce the number
of
trustees serving on the Board.
The
principal occupation and certain other information about the nominees are set
forth below.
The
Board unanimously recommends a vote FOR the election of these nominees as
trustees.
Allen
R. Hartman,
age 54, has been our president, secretary and chairman of our Board since our
formation in 1998. He is also the sole limited partner of our advisor and
property manager, Hartman Management, L.P. (the “Management Company”), as well
as the president, secretary, sole trustee and sole shareholder of the general
partner of the Management Company. Since 1984, Mr. Hartman, as an individual
general partner, has been the sponsor of 17 private limited and general
partnerships that have invested in commercial real estate in Houston, San
Antonio and Dallas, Texas. Mr. Hartman has over 30 years of experience in the
commercial real estate industry. From 1978 to 1983, Mr. Hartman owned and
operated residential rental properties. From 1972 to 1978, Mr. Hartman worked
as
an independent contractor in the real estate construction industry. In 1978,
Mr.
Hartman formed Hartman Investment Properties (a Texas sole proprietorship)
to
develop, acquire, manage, and lease commercial real estate
ventures.
Terry
L. Henderson,
age 55, has been our Chief Financial Officer and a member of our Board since
April 27, 2005. Mr. Henderson has been the Chief Financial Officer of the
Management Company since 2003. Mr. Henderson is a Certified Public Accountant
and a member of various professional CPA organizations. He holds a Bachelor
of
Business Administration in Accounting from Texas Tech University. Prior to
joining the Management Company, Mr. Henderson was the Chief Financial Officer
for Senterra Real Estate Group in Houston, Texas from 1990 to 2003.
Chand
Vyas,
age 61, has been a member of our Board since 2002. Mr. Vyas is the Founder,
Chairman and Chief Executive Officer of Mobile Armor, a leading provider of
next
generation Enterprise Mobile Data Security (EMDS) headquartered in Saint Louis,
Missouri. From 1982 until 1998, Mr. Vyas served in various senior management
roles including the Chief Executive officer of Ziegler Coal Holding Company,
where he led a buyout of Ziegler from its parent company, Houston Natural gas,
in 1985. In subsequent years, under Mr. Vyas’ leadership, Ziegler grew
substantially through acquisitions, including the purchase of Old Ben Coal
from
British Petroleum, as well as Shell Mining Company from Shell Oil. Ziegler
Coal
Holding Company went public in 1994 with the largest initial public offering
underwritten during that year’s third quarter. Mr. Vyas has been featured in
many local and national publications including Barrons, Forbes and The Chief
Executive magazine. He has been a speaker on local and national television
channels and has been a speaker at the conference of the New York Society of
Analysts.
Jack
L. Mahaffey,
age 74, has been a member of our Board since 2000. Mr. Mahaffey served as the
President of Shell Mining Co. from 1984 until 1991. Since his retirement in
1991, Mr. Mahaffey has managed his personal investments. Mr. Mahaffey graduated
from Ohio State University with a B.S. and M.S. in Petroleum Engineering and
served in the United States Air Force. He is a former board member of the
National Coal Association and the National Coal Council.
Chris
A. Minton,
age 69, has been a member of our Board since 2000. Mr. Minton was employed
by
Lockheed Martin for 35 years and was Vice-President of Lockheed’s Technology
Services Group from 1993 until 1995. While employed at Lockheed, he supervised
the business operations of six operating companies that employed over 30,000
people. Since his retirement from Lockheed in 1995, Mr. Minton has managed
his
personal investments and served as a consultant to a privately held aircraft
mechanics school and to a Lockheed Martin subsidiary company. Mr. Minton
graduated from Villanova University with a Bachelors Degree, and he is a
licensed CPA (retired status) in the State of Texas. He has been awarded the
Gold Knight of Management award for achievements as a professional manager
by
the National Management Association.
CORPORATE
GOVERNANCE
Board
Meetings and Committees
During
the fiscal year ended December 31, 2005, the Board met 4 times. All of the
Company’s trustees attended at least 75% of the aggregate number of Board
meetings and the meetings of each committee of the Board on which they served.
Our independent trustees also meet regularly without non-independent trustees
and management present. All trustees are invited and encouraged to attend the
Annual Meeting. In general, all trustees attend the Annual Meeting unless they
are unable to do so due to unavoidable commitments or intervening events. All
of
the incumbent trustees attended the 2005 Annual Meeting.
Our
entire Board considers all major decisions concerning our business, including
any property acquisitions. Our Board has also established committees so that
certain functions can be addressed in more depth than may be possible at a
full
Board meeting. The Board has established the permanent committees described
below, each composed solely of independent trustees:
Audit
Committee.
The Audit Committee consists of Chris A. Minton, Jack L. Mahaffey and Chand
Vyas. Our Board has determined that Chris A. Minton, chairman and a certified
public accountant, is an “audit committee financial expert,” as defined by the
rules of the SEC. The Audit Committee’s primary functions are to assist the
Board in fulfilling its oversight responsibilities by reviewing the financial
information to be provided to the shareholders and others, overseeing and
evaluating the system of internal controls which management has established,
and
supervising the audit and financial reporting process (including direct
responsibility for the appointment, compensation and oversight of the
independent registered public accounting firm engaged to perform the annual
audit and quarterly reviews with respect to the Company’s financial statements).
The Audit Committee has adopted a written charter approved by the Board, which
can be found on our website at www.hartmanmgmt.com.
The information contained on our web site is not, and should not be considered
to be, a part of this proxy statement. Each of the members of the Audit
Committee satisfies the independence requirements of the Nasdaq listing
standards and applicable SEC rules, and such members are also “independent” as
that term is defined in the Company’s Declaration of Trust. During the fiscal
year ended December 31, 2005, the Audit Committee met 4 times.
Nominating
and Corporate Governance Committee. In
November 2005, the Board established a Nominating and Corporate Governance
Committee to, among other things, identify individuals qualified to be trustees.
Prior to the establishment of the Committee, the full Board fulfilled the
responsibilities described below. In addition to identifying trustee nominees,
the Nominating and Corporate Governance Committee monitors the implementation
of
corporate governance guidelines and oversees the evaluation of the Board and
management of the Company. The current Nominating and Corporate Governance
Committee members are Chris Minton, Jack L. Mahaffey and Chand Vyas, with Mr.
Vyas serving as chairman. Each of the members of the Nominating and Corporate
Governance Committee is “independent” as determined under the Nasdaq listing
standards and applicable SEC rules, and under the independence standards
prescribed by the Company’s Declaration of Trust. The
Nominating and Corporate Governance Committee has adopted a written charter
approved by the Board, which can be found on our website at
www.hartmanmgmt.com. Due to its recent formation, the Nominating and
Corporate Governance Committee did not meet during 2005, but will assume its
responsibilities for the 2006 fiscal year.
In
addition to the factors considered by the Nominating and Corporate Governance
Committee as described below, the Company’s Declaration of Trust requires that
each trustee have relevant experience demonstrating the knowledge and
experience required to successfully acquire and manage the type of assets being
acquired by the Company, including but not limited to relevant real estate
experience. Once our Nominating and Corporate Governance Committee has
identified a possible nominee (whether through a recommendation from a
shareholder or otherwise), it makes an initial determination as to whether
to
conduct a full evaluation of the candidate. The preliminary determination is
based primarily on the need for additional Board members to fill vacancies,
expand the size of the Board or obtain representation in market areas without
Board representation and the likelihood that the candidate can satisfy the
evaluation factors described below. If the Nominating and Corporate Governance
Committee determines that additional consideration is warranted, the Board
may
gather additional information about the candidate’s background, qualifications
and experience, as well as willingness to serve. The Nominating and Corporate
Governance Committee then evaluates such qualifications of the prospective
nominee, including but not limited to achievement, relevant experience,
independence and integrity. In connection with this evaluation, the Committee
may interview the candidate in person or by telephone. After completing its
evaluation, the Committee makes a recommendation to the full Board as to the
persons who should be nominated by the Board, and the Board determines the
nominees after considering the recommendation and report of the Nominating
and
Corporate Governance Committee. To date, the Committee has not paid a fee to
any
third party to assist in the process of identifying or evaluating trustee
candidates.
Compensation
Committee. In
November 2005, the Board established a Compensation Committee to, among other
things, review and approve annually the corporate goals and objectives relevant
to the chief executive officer of the Company, other officers of the Company,
and the Board and to evaluate performance in light of these goals and
objectives. The Compensation Committee also recommends the compensation levels
(including salary and awards of long-term incentive compensation, pursuant
to
both cash incentive plans and stock-based plans) for the chief executive
officer, all other officers and the Board. The current Compensation Committee
members are Chris Minton, Jack L. Mahaffey and Chand Vyas, with Mr. Mahaffey
serving as chairman. Each of the members of the Compensation Committee is
“independent” as determined under the Nasdaq listing standards and applicable
SEC rules, and under the independence standards prescribed by the Company’s
Declaration of Trust. Due to its recent formation, the Compensation Committee
did not meet during 2005, but will assume its responsibilities for the 2006
fiscal year.
Conflicts
Committee.
The Conflicts Committee consists of Jack L. Mahaffey and Chand Vyas. The
Conflicts Committee’s primary functions are to review specific matters that the
Board believes may involve conflicts of interest. The Conflicts Committee also
determines if the resolution of the conflict of interest is fair and reasonable
to us. Each of the members of the Conflicts Committee is “independent” as
determined under the Nasdaq listing standards and the independence standards
prescribed by the Company’s Declaration of Trust. During 2005, the Conflicts
Committee met 4 times.
Code
of Ethics
Our
Board has adopted a Code of Business Conduct Policy that is applicable to all
members of our Board, our executive officers and our employees. We have posted
the policy on our website, at www.hartmanmgmt.com. If, in the future, we amend,
modify or waive a provision in the Code of Business Conduct Policy, we may,
rather than filing a Current Report on Form 8-K, satisfy the disclosure
requirement by posting such information on our website as
necessary.
Communication
with the Board
We
have established procedures for shareholders or other interested parties to
communicate directly with our Board. Such parties can contact the Board by
mail
at: Chairperson of the Hartman Commercial Properties REIT Audit Committee,
1450
West Sam Houston Parkway North, Suite 100, Houston, Texas 77043. The Chairman
of
the Audit Committee will review all communications made by this means and
forward such communication to the Board or to any individual trustee to whom
the
communication is addressed, unless the communication is unduly hostile,
threatening or similarly inappropriate, in which case the communication will
be
discarded.
Trustee
Compensation
We
pay our independent trustees an annual fee of $10,000, for attendance at Board
committee meetings once per quarter and for attendance at meetings of the
independent Board members, plus $1,000 for each Board meeting attended. Although
we have not granted any awards under our equity compensation plans to any of
our
trustees, we may also grant options to purchase common shares or other incentive
awards to members of the Board. All trustees are reimbursed for reasonable
out-of-pocket expenses incurred in connection with attendance at meetings of
the
Board. Trustees who are not independent do not receive any separate compensation
for services rendered as a trustee.
Executive
Officers
Allen
R. Hartman and Terry L. Henderson currently serve as our executive officers.
Mr.
Hartman currently serves as our President and Secretary, while Mr. Henderson
currently serves as our Chief Financial Officer. For more information regarding
Mr. Hartman and Mr. Henderson, please see their biographies above.
Executive
Compensation
Our
executive officers do not receive compensation directly from us for services
rendered to us. Our executive officers are also officers of the Management
Company, which conducts our operations, and our executive officers are
compensated by the Management Company and its affiliates, in part, for their
services to us. A description of the fees and compensation that we pay to the
Management Company and its affiliates may be found in the “Certain Transactions”
section below.
Equity
Compensation Plan Information as of December 31, 2005
The
Company has adopted an Employee and Trust Manager Incentive Share Plan (the
“Incentive Share Plan”) to
(i) furnish incentives to individuals chosen to receive share-based awards
because they are considered capable of improving operations and increasing
profits; (ii) encourage selected persons to accept or continue employment with
the Company; and (iii) increase the interest of employees and Trustees in the
Company’s welfare through their participation and influence on the growth in
value of the common shares. The class of eligible persons that can receive
grants of incentive awards under the Incentive Share Plan consists of key
employees, trustees, non-employee trustees, members of the Management Company
and consultants as determined by the Compensation Committee of the Board. The
total number of common shares that may be issued under the Incentive Share
Plan
is an amount of shares equal to 5% of the outstanding shares on a fully diluted
basis, not to exceed 5,000,000 shares. As of December 31, 2005, no options
or
awards to purchase common shares had been granted under the Incentive Share
Plan.
The
following shares have been authorized for issuance under Incentive Share
Plan:
Plan
Category
|
|
Number
of securities to be issued upon exercise of outstanding options,
warrants
and rights
|
|
Weighted-average
exercise price of outstanding options, warrants and
rights
|
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
|
|
(a)
|
|
(b)
|
|
(c)
|
Equity
compensation plans approved by security holders
|
|
–
|
|
–
|
|
–
|
Equity
compensation plans not approved by security holders
|
|
–
|
|
─
|
|
445,682*
|
Total
|
|
─
|
|
─
|
|
445,682
|
|
|
|
|
|
|
|
*Equals
5% of the outstanding shares on a fully diluted basis as of December 31, 2005,
subject to a maximum of 5,000,000 shares
Compensation
Committee Interlocks and Insider Participation
As
of December 31, 2005, the Compensation Committee consisted of Mr. Mahaffey,
as
Chairman, Mr. Minton and Mr. Vyas. None of the current members of the
Compensation Committee is or was an officer or employee of the Company. During
2005, none of the Company’s executive officers served as a director or member of
the compensation committee of any other entity whose executive officers served
on the Company’s Board or Compensation Committee.
SHAREHOLDER
PROPOSALS
Procedures
for Submitting Shareholder Proposals
In
the event any shareholder wishes to present a proposal at the 2007 Annual
Meeting of Shareholders, the proposal must be received by the Company on or
before January 1, 2007 to be considered for inclusion in the Company’s proxy
materials for such meeting. Such proposal should be sent to the Company,
Attention: Corporate Secretary, 1450 West Sam Houston Parkway North, Suite
100,
Houston, Texas 77043. Such proposal must comply with applicable requirements
of
Rule 14a-8 promulgated under the Securities Exchange Act of 1934 and our Bylaws.
We are not required to include shareholder proposals in our proxy materials
unless the conditions specified in such rule are met.
In
the event any shareholder wishes to present a proposal at the 2007 Annual
Meeting of Shareholders that is not intended to be considered for inclusion
in
the proxy statement for our 2007 Annual Meeting of Shareholders, such
shareholder must have given timely notice. To be timely the proposal or
nomination must be submitted in accordance with provisions of our Bylaws which
currently provide that, in order for a shareholder to bring any business or
nominations before the annual meeting of shareholders, certain conditions set
forth in Article II, Section 12 of our Bylaws must be complied with. These
conditions include, but are not limited to, delivery of notice to the Company
not less than 90 days nor more than 120 days prior to the first anniversary
of
the date of mailing of the notice for the previous year’s annual meeting.
However, if the date of mailing of the notice for the annual meeting is advanced
or delayed by more than 30 days from the first anniversary of the date of
mailing of the notice for the previous year’s annual meeting, notice by the
shareholder must be given not earlier than the 120th day prior to the date
of
mailing of the notice for the meeting and not later than 5:00 p.m., Central
Time, on the later of (i) the 90th day prior to the date of mailing of the
notice for the meeting or (ii) the tenth day following the day on which public
announcement of the date of mailing of the notice for the meeting is made.
Our
Corporate Secretary will provide a copy of our Bylaws upon written request
and
without charge.
In
accordance with the foregoing, if any shareholder notifies the Company after
January 31, 2007 of his or her intent to present a proposal at the Company’s
2007 Annual Meeting of Shareholders, such proposal will be considered “untimely”
under our Bylaws, and may be excluded from consideration at the annual meeting
or, if considered, holders of proxies solicited by the Company’s Board for the
annual meeting will have the right to exercise their discretionary voting
authority with respect to any such proposal, without the Company having included
information regarding such proposal in the Company’s proxy
materials.
Shareholder
Nominations for Trustee
The
Nominating and Corporate Governance Committee will consider for recommendation
to the Board suggestions made by shareholders for individuals to be considered
as potential nominees for trustee that comply with the following procedures:
any
such recommendation should be made in writing to Hartman Commercial Properties
REIT, 1450 West Sam Houston Parkway North, Suite 100, Houston, Texas, 77043,
Attention: Corporate Secretary, and must be received no later than January
1,
2007, in order to be considered for inclusion in the Company’s proxy materials
for the 2007 Annual Meeting, or January 31, 2007 if not to be considered for
inclusion in the Company’s proxy materials for the 2007 Annual Meeting. The
recommendation must include the information specified in the Company’s Bylaws,
including the following:
· |
the
shareholder’s name and address and the beneficial owner, if any, on whose
behalf the nomination is proposed;
|
· |
the
class and number of shares of the Company which are owned beneficially
and
of record by such shareholder and such beneficial
owner;
|
· |
the
name, age, business address and residence address of such
nominee;
|
· |
the
class and number of shares of the Company which are owned beneficially
and
of record by such nominee; and
|
· |
all
other information regarding the nominee that would be required to
be
included in the Company’s proxy statement by applicable SEC rules,
including the nominee’s business experience for the past five years and
any other directorships held by the
nominee.
|
The
Board does not intend to alter the manner in which it evaluates candidates
based
on whether or not the candidate was recommended by a shareholder.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The
Audit Committee has selected, and the Board has ratified, Pannell Kerr Forster
of Texas, P.C., as the Company’s independent registered public accounting firm
for the fiscal year ending December 31, 2006. The Company does not expect a
representative from this firm to attend the Annual Meeting and, accordingly,
no
such representative is expected to make any statement or to be available to
respond to questions at the Annual Meeting.
Audit
and Non-Audit Fees
The
following table presents fees for professional audit services rendered by
Pannell Kerr Forster of Texas, P.C., our independent registered public
accounting firm, for the audit of our annual financial statements for the
years
ended December 31, 2005, and December 31, 2004, and fees billed for other
services rendered by Pannell Kerr Forster of Texas, P.C. for those
periods:
|
|
2005
|
|
2004
|
|
Audit
Fees (1)
|
|
$
|
168,556
|
|
$
|
119,655
|
|
Audit-Related
Fees (2)
|
|
|
58,384
|
|
|
51,298
|
|
Tax
Fees (3)
|
|
|
40,600
|
|
|
26,978
|
|
All
Other Fees
|
|
|
—
|
|
|
—
|
|
TOTAL
FEES
|
|
$
|
267,540
|
|
$
|
197,931
|
|
______________________
|
(1) |
Audit
fees consisted of professional services performed in connection with
the
audit of our annual financial statements and review of financial
statements included in our Forms 10-Q and Forms
10-K.
|
|
(2) |
Audit-related
fees consisted of professional services performed in connection with
a
review of our financial statements and other financial data, which
were
included in our Registration Statement on Form S-11.
|
|
(3) |
Tax
fees consisted principally of assistance with matters related to
tax
compliance, tax planning and tax
advice.
|
The
Audit Committee of the Board has considered the audit and non-audit services
rendered by Pannell Kerr Forster of Texas, P.C. and has determined that the
provision of these services is compatible with maintaining the independence
of
Pannell Kerr Forster of Texas, P.C.
Pre-Approval
Policies and Procedures
The
Audit Committee has adopted a policy that it is required to approve all services
(audit and/or non-audit) to be performed by the independent registered public
accounting firm to assure that the provision of such services does not impair
such firm’s independence. All services, engagement terms, conditions and fees,
as well as changes in such terms, conditions and fees must be approved by the
Audit Committee in advance. The Audit Committee will annually review and approve
services that may be provided by the independent auditor during the next year
and will revise the list of approved services from time to time based on
subsequent determinations. The Audit Committee believes that the independent
registered public accounting firm can provide tax services to the Company such
as tax compliance, tax planning and tax advice without impairing such auditor’s
independence and that such tax services do not constitute prohibited services
pursuant to the SEC and/or Nasdaq rules. The authority to approve services
may
be delegated by the Audit Committee to one or more of its members, but may
not
be delegated to management. If authority to approve services has been delegated
to an Audit Committee member, any such approval of services must be reported
to
the Audit Committee at its next scheduled meeting. All audit and non-audit
services rendered by the independent registered public accounting firm during
2005 and 2004 were pre-approved by the Audit Committee.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table shows, as of April 1, 2006, the amount of our common shares
beneficially owned (unless otherwise indicated) by (1) any person who is known
by us to be the beneficial owner of more than 5% of the outstanding shares
of
common shares, (2) our trustees, (3) our executive officers, and (4) all of
our
trustees and executive officers as a group. The table also shows this ownership
information regarding outstanding units of Hartman REIT Operating Partnership,
L.P. (the “Operating Partnership”), which are convertible into our common shares
of beneficial interest on a one-for-one basis (“OP Units”). The table assumes
that all outstanding OP Units have been converted into common shares. As of
April 1, 2006, we had 9,474,788 common shares outstanding and 14,923,637 OP
Units outstanding.
After
the conclusion of the on-going best-efforts offering (the “Offering”), assuming
all 10,000,000 shares offered by the prospectus to the public and all 1,000,000
shares offered under our dividend reinvestment plan are sold, 18,010,146 common
shares would be outstanding. The information presented in the table below
represents security ownership data as of April 1, 2006, and does not reflect
any
changes that may be caused by the Offering after such date.
|
|
Number
of Common Shares
Beneficially
Owned(1)(2)
|
|
Percent
|
|
Name
of Beneficial Owner(3)
|
|
Actual
|
|
Assuming
Conversion
of
All
OP Units
|
|
Actual
|
|
Assuming
Conversion
of
All
OP Units
|
|
Allen
R. Hartman(4)(5)
|
|
|
270,003.42
|
|
|
2,561,862.61
|
|
|
2.85
|
%
|
|
21.77
|
%
|
Terry
L. Henderson
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Jack
L. Mahaffey
|
|
|
72,730.50
|
|
|
104,673.18
|
|
|
*
|
|
|
1.10
|
|
Chris
A. Minton (6)
|
|
|
44,671.74
|
|
|
74,902.52
|
|
|
*
|
|
|
*
|
|
Chand
Vyas
|
|
|
142,857.00
|
|
|
142,857.00
|
|
|
1.51
|
|
|
1.51
|
|
All
trustees and executive officers as a Group (5 persons)
|
|
|
530,262.66
|
|
|
2,884,295.31
|
|
|
5.60
|
|
|
24.38
|
%
|
________________
(1) |
Beneficial
ownership is determined in accordance with the rules of the SEC that
deem
shares to be beneficially owned by any person or group who has or
shares
voting and investment power with respect to such shares. Actual amounts
do
not take into account OP Units held by the named person that are
exchangeable for our common shares. Percentage ownership assuming
conversion of OP Units assumes only the named person has converted
his OP
Units for our shares and does not give effect to any conversion of
OP
Units by any other person.
|
(2) |
Assumes
the shareholders listed do not purchase any additional shares in
the
Offering.
|
(3) |
Each
person listed has an address in care of Hartman Commercial Properties
REIT, 1450 West Sam Houston Parkway North, Suite 100, Houston, Texas
77043.
|
(4) |
Includes
Hartman Partnership, L.P. (198,935.515 common shares and 489,183.74
OP
Units), Hartman Partnership XII, L.P. (70,597.63 OP Units) and Hartman
Partnership XV, LLC (47.14 OP Units), all entities controlled by
Mr.
Hartman.
|
(5) |
Includes
1,231,393.58 OP Units owned by Houston R.E. Income Properties XIV,
LP. Mr.
Hartman does not own any limited partner interests in this partnership,
however, Mr. Hartman owns 100% of the equity of the general partner
of
this partnership. As a result, Mr. Hartman may be deemed to be the
beneficial owner of the securities held by this partnership. Mr.
Hartman
disclaims beneficial ownership of these OP Units and, for the purposes
of
this table, all common shares into which such OP Units are
convertible.
|
(6) |
Includes
41,356.74 common shares and 30,230.78 OP Units owned by Mr. Minton’s wife
for which Mr. Minton shares voting and dispositive power, and 3,315
common
shares owned by Minton Enterprises, Inc., an entity controlled by
Mr.
Minton.
|
SECTION
16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
As
required by Section 16(a) of the Securities Exchange Act of 1934, the Company’s
trustees and executive officers, and persons that beneficially own more than
10%
of the Company’s common shares, are required to report periodically their
ownership of the Company’s common shares and any changes in ownership to the
Securities and Exchange Commission. Officers, trustees and greater than
10% shareholders are also required to furnish the Company with copies of
all Section 16(a) reports they file. Based solely on a review of
Forms 3, 4, and 5 and any representations made to the Company, it appears that
all such required reports for these persons were filed in a timely fashion
during the 2005 fiscal year.
WHERE
YOU CAN FIND MORE INFORMATION
We
file annual, quarterly and special reports, proxy statements and other
information with the SEC. You can read and copy any materials that we file
with
the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580,
Washington, D.C. 20549; the SEC’s regional offices located at 233 Broadway,
Suite 1300, New York, New York 10279; and at 500 West Madison Street, Chicago,
Illinois 60661. You can obtain information about the operation of the
Commission’s Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC
also maintains a Web site that contains information we file electronically
with
the SEC, which you can access over the Internet at http://www.sec.gov.
Copies of these materials may also be obtained by mail from the Public Reference
Section of the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549 at
prescribed rates. Copies of materials that we have filed with the SEC also
may
be accessed through the Investor Relations section of our Internet web site
at
http://www.hartmanmgmt.com.
The information contained on our website is not, and should not be considered
to
be, a part of this proxy statement.
Copies
of this proxy statement and our most recent annual and quarterly reports filed
with the SEC on Form 10-K and Form 10-Q, respectively, also are available to
shareholders at no charge upon request directed as follows:
|
Hartman
Commercial Properties REIT
Attention:
Allen R. Hartman, Corporate Secretary
1450
West Sam Houston Parkway N., Suite 100
Houston,
Texas 77043
|
AUDIT
COMMITTEE REPORT
The
Audit Committee reviews the Company’s financial reporting process on behalf of
the Board. Management has the primary responsibility for the financial
statements and the reporting process, including the system of internal
controls.
In
this context, the Audit Committee has met and held discussions with management
and Pannell Kerr Forster of Texas, P.C., the Company’s independent registered
public accounting firm (“PKF”), regarding the fair and complete presentation of
the Company’s results. The Audit Committee has discussed significant accounting
policies applied by the Company in its financial statements, as well as
alternative treatments. Management represented to the Audit Committee that
the
Company’s consolidated financial statements were prepared in accordance with
U.S. generally accepted accounting principles, and the Audit Committee has
reviewed and discussed the consolidated financial statements with management
and
PKF. The Audit Committee discussed with PKF matters required to be discussed
by
Statement on Auditing Standards No. 61 (Communication With Audit Committees).
In
addition, the Audit Committee has discussed with PKF its independence from
the
Company and the Company’s management, including the matters in the written
disclosures and letter which the Audit Committee has received from PKF in
accordance with the requirements of the Independence Standards Board Standard
No. 1 (Independence Discussions With Audit Committees). The Audit Committee
also
has considered whether PKF’s provision of non-audit services to the Company is
compatible with the auditor’s independence. The Audit Committee has concluded
that PKF is independent from the Company and the Company’s management.
The
Audit Committee discussed with PKF the overall scope and plans for its audit.
The Audit Committee meets with PKF, with and without management present, to
discuss the results of its examination, the evaluation of the Company’s internal
controls, and the overall quality of the Company’s financial reporting. The
Audit Committee also discussed with PKF certain matters involving the operation
of the Company’s internal controls that PKF considers to be two material
weaknesses. The Audit Committee and management are in the process of
implementing changes to respond to these matters as well as evaluating,
documenting and testing the Company’s internal controls in anticipation of the
Company’s required compliance with Section 404 of the Sarbanes-Oxley Act of
2002. The Audit Committee has recommended that the Company engage an external
consultant to assist management in establishing and maintaining adequate
controls and remediating the identified material weaknesses.
In
reliance on the reviews and discussions referred to above, the Audit Committee
recommended to the Board, and the Board approved, that the audited financial
statements be included in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2005, for filing with the SEC. The Audit Committee has
selected, and the Board has ratified, the selection of the Company’s independent
registered public accounting firm. The following independent trustees, who
constitute the Audit Committee, provide the foregoing report.
|
Chris
A. Minton
Jack
L. Mahaffey
Chand
Vyas
|
The
foregoing report shall not be deemed incorporated by reference by any general
statement incorporating by reference this proxy statement into any filing under
the Securities Act of 1933, as amended, or under the Securities Exchange Act
of
1934, as amended, except to the extent that we specifically incorporate this
information by reference, and shall not otherwise be deemed filed under such
Acts.
BOARD
OF TRUSTEES’ REPORT ON EXECUTIVE COMPENSATION
As
discussed above in this proxy statement, the Company’s Board appointed a
Compensation Committee in November 2005. Prior to the creation of the
Compensation Committee, the full Board handled compensation matters and the
full
Board provides this report.
The
Company does not have any direct employees, and the Company’s executive officers
are not compensated directly by the Company. The Company’s operations are
conducted by the Management Company and its affiliates. A description of the
fees and compensation that the Company pays to the Management Company and its
affiliates is found in the “Certain Transactions” section below.
To
date, no equity compensation awards have been made under the Company’s Employee
and Trust Manager Incentive Share Plan. Any future awards under such plan would
be subject to approval by vote of the Company’s Compensation Committee.
|
Allen
R. Hartman
Terry
L. Henderson
Jack
L. Mahaffey
Chris
A. Minton
Chand
Vyas
|
The
foregoing report shall not be deemed incorporated by reference by any general
statement incorporating by reference this proxy statement into any filing under
the Securities Act of 1933, as amended, or under the Securities Exchange Act
of
1934, as amended, except to the extent that we specifically incorporate this
information by reference, and shall not otherwise be deemed filed under such
Acts.
CERTAIN
TRANSACTIONS
The
current terms of the compensation and fees that we pay to our affiliates, as
well as certain other transactions with our affiliates, are as
follows:
The
Company’s day-to-day operations are strategically directed by the Board and
implemented through the Management Company. The Company owns substantially
all
of its real estate properties through its Operating Partnership. Allen R.
Hartman is the Company’s Chairman of the Board, President and Corporate
Secretary, and also is the sole owner of the Management Company. Mr. Hartman
was
owed $47,478 and $47,386 in dividends payable on his common shares of beneficial
interest in the Company at December 31, 2005 and 2004, respectively. Mr.
Hartman
owned 3.0%, 3.9% and 3.4% of the issued and outstanding common shares of
beneficial interest of the Company as of December 31, 2005, 2004 and 2003,
respectively. Terry L. Henderson, Chief Financial Officer and a trustee of
the
Company, also serves as Chief Financial Officer of the Management
Company
Under
the property management agreement effective September 1, 2004, the Company
pays
the Management Company the following amounts:
· |
property
management fees in an amount not to exceed the fees customarily charged
in
arm’s length transactions by others rendering similar services in the
same
geographic area for similar properties as determined by a survey
of
brokers and agents in such area; generally, the Company expects these
fees
to be between approximately two and four percent (2.0%-4.0%) of gross
revenues for the management of commercial office buildings and
approximately five percent (5.0%) of gross revenues for the management
of
retail and office-warehouse
properties;
|
· |
for
the leasing of properties, a separate fee for the leases of new tenants
and renewals of leases with existing tenants in a amount not to exceed
the
fee customarily charged in arm’s length transactions by others rendering
similar services in the same geographic area for similar properties
as
determined by a survey of brokers and agents in such areas;
and
|
· |
except
as otherwise specifically provided, all costs and expenses incurred
by the
Management Company in fulfilling its duties for the account of and
on
behalf of the Company; such costs and expenses shall include the
wages and
salaries and other employee-related expenses of all on-site and off-site
employees of the Management Company who are engaged in the operation,
management, maintenance and leasing or access control of the Company’s
properties, including taxes, insurance and benefits relating to such
employees, and legal, travel and other out-of-pocket expenses that
are
directly related to the management of specific
properties.
|
Under
an advisory agreement effective September 1, 2004, the Company pays the
Management Company for asset management services a quarterly fee in an amount
equal to one-fourth of 0.25% of the gross asset value calculated on the last
day
of each preceding quarter.
The
Company incurred total management, partnership and asset management fees payable
to the Management Company of $1,405,587, $1,339,822 and $1,232,127 for the
years
ended December 31, 2005, 2004 and 2003, respectively, of which $111,286 and
$54,331 were payable at December 31, 2005 and 2004, respectively. The fees
payable to the Management Company under the new agreements effective September
1, 2004 were not intended to be significantly different from those that would
have been payable under the previous agreement. Upon actual calculation, the
asset management fee under the new agreement was significantly higher. The
Management Company waived the excess of the fee for the period September 1,
2004
through December 31, 2005, in perpetuity.
Under
the provisions of the property management agreements, costs incurred by the
Management Company for the management and maintenance of the properties are
reimbursable by us to the Management Company. Such costs include expenses and
costs relating to property management, construction management, maintenance
and
administrative personnel incurred on behalf of our properties; provided,
however, that we will not reimburse the Management Company for its overhead,
including salaries and expenses of centralized employees other than salaries
or
certain property management, construction management, maintenance and
administrative personnel. At December 31, 2005, 2004 and 2003, $51,675, $188,772
and $288,305, respectively, was payable by the Company to the Management Company
related to these reimbursable costs.
In
consideration of leasing the properties, the Company also pays the Management
Company leasing commissions of 6% for leases originated by the Management
Company and 4% for expansions and renewals of existing leases based on Effective
Gross Revenues from the properties as defined in the property management
agreement. The Company incurred total leasing commissions to the Management
Company of, $1,588,018, $952,756 and $978,398 for the years ended December
31,
2005, 2004 and 2003, respectively, of which $78,744 and $232,343 were payable
at
December 31, 2005 and 2004, respectively.
In
connection with our ongoing best-efforts Offering described above under
“Security Ownership of Certain Beneficial Owners and Management,” the Company
reimburses the Management Company up to 2.5% of the gross selling price of
all
common shares sold for organization and offering expenses (excluding selling
commissions and a dealer manager fee) incurred by the Management Company on
behalf of the Company. As of December 31, 2005, an aggregate of $569,423 in
such
expenses reimbursable to the Management Company under this arrangement had
been
incurred pursuant to the Offering.
Also
in connection with the ongoing Offering, the Management Company receives an
acquisition fee equal to 2% of the gross selling price of all common shares
sold
for services in connection with the selection, purchase, development or
construction of properties for the Company. As of December 31, 2005, an
aggregate of $455,538 in acquisition fees payable to the Management Company
had
been incurred pursuant to the terms of this arrangement.
The
Management Company paid the Company $110,042, $106,824 and $106,789 for office
space in 2005, 2004 and 2003, respectively. Such amounts are included in
rental
income in the consolidated statements of income presented in the Company’s
Annual Report on Form 10-K for the year ended December 31,
2005.
In
conjunction with the acquisition of certain properties in prior years, the
Company assumed liabilities payable to the Management Company. The outstanding
balance of $200,415 was paid in full at December 31, 2005. At December 31,
2004
and 2003, $200,415 was payable to the Management Company related to these
liabilities.
Effective
January 2002, Houston R.E. Income Properties XIV, L.P. (“Houston R.E. XIV”)
contributed five properties to the Operating Partnership in exchange for OP
Units. Houston R.E. XIV continued to own two additional properties, one of
which
was contributed to the Operating Partnership in October 2002 in exchange for
OP
Units. All of these properties secured a single loan, which was repaid by the
Company in December 2002. Houston R.E. XIV agreed to pay the Company the portion
of the loan repaid by the Company that was attributable to the last property
held by Houston R.E. XIV. As of December 31, 2005, 2004 and 2003, Houston R.E.
XIV owed the Company $3,493,217, $3,474,616 and $3,657,833, respectively. The
loan is secured by the property and accrues interest at a rate of 2.5% over
LIBOR and is payable upon demand. An affiliate of Mr. Hartman is the general
partner of Houston R.E. XIV.
The
Management Company owed the Company $130,863 and $327,046 as of December 31,
2004 and 2003, respectively, as a result of various transactions undertaken
in
the normal course of business. All of these transactions arose prior to 2000
between the Management Company and the Company or its predecessor entities.
The
outstanding balance of $130,863 was paid in full in January 2005.
OTHER
MATTERS
We
are not aware of any other matter to be presented for action at the Annual
Meeting other than those mentioned in the Notice of Annual Meeting of
Shareholders and referred to in this Proxy Statement.
Whether
or not you plan to attend the Annual Meeting in person, it is important that
your shares be represented and voted at the meeting. Please date, sign, and
return your proxy card promptly in the enclosed envelope to assure that your
shares will be represented and voted at the Annual Meeting, even if you cannot
attend. If you attend the Annual Meeting, you may vote your shares in person
even though you have previously signed and returned your proxy
card.
|
For
the Board of Trustees
|
|
|
|
HARTMAN
COMMERCIAL PROPERTIES REIT
|
|
|
|
|
|
|
|
Allen
R. Hartman
|
|
Chairman
of the Board, President and Corporate
Secretary
|
PROXY
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The
undersigned hereby appoints Allen R. Hartman and Terry L. Henderson, and each
of
them, with full power of substitution, as Proxies, to represent and vote all
the
common shares of beneficial interest of Hartman Commercial Properties REIT
(the
“Company”) held of record by the undersigned on April 1, 2006, at the Annual
Meeting of Shareholders to be held on June 2, 2006, or any adjournment thereof,
as designated hereon and in their discretion as to other matters.
Please
sign exactly as name appears below. When shares are held by joint tenants,
both
should sign. When signing as attorney, as executor, administrator, trustee
or
guardian, please give full title as such. If a corporation, please sign in
full
corporate name by president or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
The
shares represented by this proxy will be voted as directed by the shareholder.
If no direction is given when the duly executed proxy is returned, such shares
will be voted “FOR” all Nominees listed in Proposal 1. The Board is not aware of
any other matter to be brought before the Annual Meeting for a vote of
shareholders. If, however, other matters are properly presented, the proxies
will be voted in accordance with the best judgment of the proxy
holders.
PLEASE
MARK THE FOLLOWING BOX IF YOU PLAN TO ATTEND THE MEETING [ ]
THE
BOARD RECOMMENDS A VOTE “FOR” ALL NOMINEES IN PROPOSAL 1.
1—Election
of the following nominees to the Company’s Board:
[
] FOR
all Nominees listed at right (except as marked to the
contrary)
|
[
] WITHHELD
for all Nominees listed at right
|
Nominees:
Allen
R. Hartman
Terry
L. Henderson
Jack
L. Mahaffey
Chris
A. Minton
Chand
Vyas
|
(Instruction:
To withhold authority to vote for any individual nominee, strike a line through
the nominee’s name above.)
2—Acting
upon any other business which may be properly brought before said meeting or
any
adjournment or adjournments thereof.
|
|
|
PLEASE
MARK YOUR CHOICE LIKE THIS: [X]
|
|
IN
BLUE OR BLACK INK.
|
|
|
Name:
____________________________
|
Dated:
_____________________________________
|
|
|
|
Signature:
__________________________________
|
|
|
|
Signature
if held jointly: _______________________
|
|
|
|
Number
of shares held:
________________________
|
Please
mark, date and sign as your name appears above and return in the enclosed
envelope.