HOUSTON, Nov. 15, 2006 (PRIMEZONE) -- HCP REIT (Hartman Commercial Properties), which owns and manages 37 commercial properties in Texas, today announced that its syndicate of lenders led by KeyBank, one of the nation's largest bank-based financial services companies, has temporarily waived on an expedited basis covenant defaults under its line of credit. The covenant defaults, which were non-financial in nature, occurred when the independent trustees terminated HCP REIT's management and advisory relationship with Hartman Management LP, and removed Allen Hartman as chairman and CEO. On Oct. 2nd HCP REIT filed suit against Allen Hartman and Hartman Management for breach of fiduciary duty and breach of contract, among other matters, citing conflicts of interests and other unresolved issues.
In granting the waiver, KeyBank cited its long-time relationship with HCP REIT's new chairman and interim CEO, James C. Mastandrea, beginning soon after Mastandrea was appointed as CEO/Chairman to First Union Real Estate Investment Trust REIT in 1994.
KeyBank Senior Vice President Bob Avil said, "We have a long time relationship with Jim. His vast experience in commercial real estate, financial markets and running a public real estate company enhances our comfort with the leadership at and our relationship with HCP REIT."
Mr. Avil added, "At First Union, Jim strategically utilized the company's credit facility, in which we participated, to improve its asset base and profitability."
Mastandrea strengthened First Union's capital position with the credit facility and through multiple public offerings, including offerings of convertible preferred and common stock. Within five years, First Union's portfolio of properties had grown in value to more than $1 billion from less than $300 million. First Union's stock price rose simultaneously from $6 in 1994, with approximately 19 million common shares outstanding, to $16.75 per share, by December 1997, with 40 million common shares.
Avil said: "Jim did a great job at First Union calling on all sources of capital to present a well structured balance sheet, and a platform to execute a business plan. We look forward to continuing our relationship with Jim at HCP REIT and working with him to execute the REIT's plan to transform into a self-managed platform, reposition its assets, and profitably grow its portfolio."
KeyBank, the 15th largest bank in the country, has branches in 13 states, including Texas.
ABOUT HCP REIT (HARTMAN COMMERCIAL PROPERTIES). HCP REIT, Houston, is a "value added" public, non-traded REIT, which is internally managed, and owns, leases, and manages 37 commercial properties in Texas. Its mission is to create value by buying "C" and "B" class commercial properties and/or underdeveloped properties and capitalizing on their potential through redevelopment strategies, responsive to local market conditions, with its leasing, managing and developing expertise. For more information go to http://www.hcpreit.com or call 713.827.9595.
Forward-Looking Statements
This report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. The information in this news release includes certain forward-looking statements that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements as to the future performance of the company. Although the company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, successful performance of internal plans, product development acceptance, and the impact of competitive services and pricing and general economic risks and uncertainties.