How Hartman Responds In A Crisis

April 11, 2011

In the late evening hours between September 12th & 13th, 2008, Hurricane Ike hit Houston and surrounding areas with tremendous force with sustaining winds of 110 mph.   The peak of the storm blew through during the morning hours of Saturday September 13th, and even before the back side of the storm had passed the Houston area, we had personnel deployed at various properties.  Several of our maintenance staff volunteered to stay at individual properties throughout the storm in order to protect those properties. After the storm had moved on, the initial survey of our office buildings was not promising; all properties were without power.  However, power was restored at our Westheimer location within a matter of hours.  Unfortunately, there was significant damage to the roof as almost half of it was missing, exposing the upper floors to extensive water damage. In addition to Westheimer, our corporate headquarters on Hillcroft had some window breakage and water infiltration on the 4th floor, and the basement at one of our Preserve buildings flooded.

Out of this calamity emerged some truly heroic actions by Hartman personnel and sub-contractors.

Within a few hours of the storm’s passing, we had up to 50 workers mobilized at various locations around the city, with the majority of those working at the Westheimer location. Of immediate concern was the roof at Westheimer. Water had flooded the 10th floor of the building which penetrated that floor causing some additional damage to floor # 9. Our staff quickly evaluated the issues and began the process of implementing repairs. By early Saturday afternoon, property management staff had contacted janitorial vendors and water clean-up crews who came to the property and prevented the damage from expanding. The janitorial crew extracted 2 inches of water on Saturday from the 10th floor; however, the roof had not yet been repaired, and it rained several more inches again Saturday night, forcing the same crew to extract another 2 inches of water on Sunday morning.  This janitorial crew pulled in people from other companies, paid them top dollar to work on our properties and had up to 20 people in the building during the week. They were truly the “first responders”, and by supporting us so overwhelmingly and so quickly, they saved us several hundred thousand dollars by extracting water before it had a chance to flow through to other floors and do more damage to the building.

By Saturday night we were in negotiations with 2 national restoration and water extraction companies, Serve Pro and ServiceMaster, and we awarded the contract to Service Master at 8:30am Sunday morning, less than 24 hours after the hurricane had pulverized the area.  We were Service Master’s first hurricane related customer in Houston, a truly amazing feat of quick response and decisive decision making. Timing is so critical in the first hours of a natural disaster because water can damage a building and mold can set in quickly, and to be first in line for clean up and restoration in a city the size of Houston is quite remarkable. Service Master’s crews were on site with their equipment at Westheimer by Sunday afternoon and by Sunday evening the blowers were in full operation, drying the floors.

On Monday morning, just as many of our competitors were beginning to survey damage and assess recovery strategies, we were taking roofing bids and giving the all clear for tenants on floors 1-8 at Westheimer to reoccupy their suites. Although tenants had access to their spaces, we recommended that they wait a day or two until all of the contractors had finished their immediate repair work in the building, and most tenants agreed with that suggestion. By Wednesday, almost all was back to normal at our Westheimer property, and by the end of the week, the 10th floor was clean and dry and the roof repairs had been completed.

Several prospects approached us, and we were happy to give them the safety and support that they came looking for. All were impressed with how well Hartman properties held up during the storm.

This summary of events is symbolic of how we performed portfolio-wide during the very trying circumstances created by Hurricane Ike. Hartman Income REIT employees executed in a similar dynamic manner at properties all across the portfolio. Our quick and decisive actions and the response by our valued contractors saved shareholders significant dollars by attacking problems early and mitigating the damages before they grew significantly worse. This is the kind of management that all companies should provide. No other property management company in Houston that came close to this kind of monumental effort. It was truly exemplary. We sustained $1.6 million dollars in damages and yet were back to providing all services to our tenants within a matter of days as numerous other office buildings in Houston that sustained similar damage were not able to be reopened for months.