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                                                                    EXHIBIT 10.2

                               ADVISORY AGREEMENT

THIS ADVISORY AGREEMENT, dated as of ________ ___, 2004, is between HARTMAN
COMMERCIAL PROPERTIES REIT, a Maryland real estate investment trust (the
"Company"), and HARTMAN MANAGEMENT, L.P., a Texas limited partnership (the
"Advisor").

                               W I T N E S S E T H

WHEREAS, the Company has filed with the Securities and Exchange Commission a
Registration Statement on Form S-11 (no. 333-________) (the "Registration
Statement") covering the issuance of common shares of beneficial interest, and
the Company may subsequently issue common shares of beneficial interest
(collectively, the "Shares");

WHEREAS, the Company currently qualifies as a REIT (as defined below), and to
invest its funds in investments permitted by the terms of the Company's
Declaration of Trust and Sections 856 through 860 of the Code (as defined
below);

WHEREAS, the Company desires to continue to avail itself of the experience,
sources of information, advice, assistance and certain facilities available to
the Advisor and to have the Advisor undertake the duties and responsibilities
hereinafter set forth, on behalf of, and subject to the supervision of, the
Board of Trustees of the Company all as provided herein; and

WHEREAS, the Advisor is willing to continue to undertake to render such
services, subject to the supervision of the Board of Trustees, on the terms and
conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
and agreements contained herein, the parties hereto agree as follows:

1. DEFINITIONS. As used in this Amended and Restated Advisory Agreement (the
"Agreement"), the following terms have the definitions hereinafter indicated:

Acquisition Expenses. Any and all expenses incurred by the Company, the Advisor,
or any Affiliate of either in connection with the selection, acquisition or
development of any Property, whether or not acquired, including, without
limitation, legal fees and expenses, travel and communications expenses, costs
of appraisals, nonrefundable option payments on property not acquired,
accounting fees and expenses, and title insurance premiums.

Acquisition Fees. Any and all fees and commissions, exclusive of Acquisition
Expenses, paid by any Person to any other Person (including any fees or
commissions paid by or to any Affiliate of the Company or the Advisor) in
connection with purchase, development or construction of any Property,
including, without limitation, real estate commissions, acquisition fees,
finder's fees, selection fees, nonrecurring management fees, consulting fees,
loan fees, points, or any other fees or commissions of a similar nature.

Advisor. Hartman Management, L.P., a Texas limited partnership, any successor
advisor to the Company, or any Person(s) to which Hartman Management, L.P. or
any successor advisor subcontracts substantially all of its functions.

Affiliate or Affiliated. An Affiliate of another Person includes only the
following: (i) any Person directly

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or indirectly controlling, controlled by, or under common control with such
other Person; (ii) any Person directly or indirectly owning, controlling, or
holding with the power to vote 10% or more of the outstanding voting securities
of such other Person; (iii) any legal entity for which such Person acts as an
executive officer, director, trustee, trust manager, or general partner; (iv)
any Person 10% or more of whose outstanding voting securities are directly or
indirectly owned, controlled, or held, with power to vote, by such other Person;
and (v) any executive officer, director, trustee, trust manager, or general
partner of such other Person. An entity shall not be deemed to control or be
under common control with an Advisor-sponsored program unless (i) the entity
owns 10% or more of the voting equity interests of such program or (ii) a
majority of the board (or equivalent governing body) of such program is
comprised of Affiliates of the entity.

Appraised Value. Value according to an appraisal made by an Independent
Appraiser.

Declaration of Trust. The Declaration of Trust of the Company under Title 2 of
the Corporations and Associations Article of the Annotated Code of Maryland, as
amended from time to time.

Asset Management Fee. The Asset Management Fee payable to the Advisor as defined
in Section 8(a).

Average Invested Assets. For a specified period, the average of the aggregate
book value of the assets of the Company invested, directly or indirectly, in
Properties and Loans secured by real estate before reserves for depreciation or
bad debts or other similar non-cash reserves, computed by taking the average of
such values at the end of each month during such period.

Board of Trustees or Board. The persons holding such office, as of any
particular time, under the Declaration of Trust of the Company, whether they be
the Trustees named therein or additional or successor Trustees.

Bylaws. The bylaws of the Company, as the same are in effect from time to time.

Capped O&O Expenses. All Organizational and Offering Expenses other than selling
commissions and the dealer manager fee as described under "Plan of Distribution"
in the Registration Statement.

Cash from Financings. Net cash proceeds realized by the Company from the
financing of Property or from the refinancing of any Company indebtedness.

Cash from Sales. Net cash proceeds realized by the Company from the sale,
exchange or other disposition of any of its assets after deduction of all
expenses incurred in connection therewith. Cash from Sales shall not include
Cash from Financings.

Cash from Sales and Financings. The total sum of Cash from Sales and Cash from
Financings.

Code. Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Code shall mean
such provision as in effect from time to time, as the same may be amended, and
any successor provision thereto, as interpreted by any applicable regulations as
in effect from time to time.

Company. Hartman Commercial Properties REIT, a real estate investment trust
organized under the laws of the State of Maryland.

Competitive Real Estate Commission. A real estate or brokerage commission for
the purchase or sale of property which is reasonable, customary, and competitive
in light of the size, type, and location of the

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property.

Conflicts Committee. "Conflicts Committee" shall have the meaning set forth in
the Declaration of Trust.

Contract Sales Price. The total consideration received by the Company for the
sale of a Property.

Cumulative Return. For the period for which the calculation is being made, the
percentage resulting from dividing (A) the total Distributions paid on each
Distribution date during such period (without regard to Distributions paid out
of Cash from Sales and Financings), by (B) the product of (i) the average
Invested Capital for such period (calculated on a daily basis), and (ii) the
number of days elapsed during such period.

Declaration of Trust. The Declaration of Trust of the Company under Title 8 of
the Corporations and Associations Article of the Annotated Code of Maryland, as
amended from time to time.

Disposition Fee. The Disposition Fee as defined in Paragraph 8(c).

Distributions. Any distributions of money or other property by the Company to
owners of Shares, including distributions that may constitute a return of
capital for federal income tax purposes.

Gross Asset Value. The amount equal to the aggregate book value of the Company's
assets (other than investments in bank accounts, money market funds or other
current assets), before depreciation, bad debts or other similar non-cash
reserves and without reduction for any debt relating to such assets, at the date
of measurement, except that during such periods in which the Company is
obtaining regular independent valuations of the current value of its net assets
for purposes of enabling fiduciaries of employee benefit plan Shareholders to
comply with applicable Department of Labor reporting requirements, Gross Asset
Value is the greater of (i) the amount determined pursuant to the foregoing or
(ii) the Company's assets' aggregate valuation established by the most recent
such valuation report without reduction for depreciation, bad debts or other
similar non-cash reserves and without reduction for any debt relating to such
assets.

Gross Proceeds. The aggregate purchase price of all Shares sold for the account
of the Company through an Offering, without deduction for Organization and
Offering Expenses. For the purpose of computing Gross Proceeds, the purchase
price of any Share for which reduced selling commissions or dealer manager fees
are paid shall be deemed to be the amount paid by others purchasing Shares in
the Offering who paid such fees; therefore, all purchasers of Shares in the
Offering covered by the Registration Statement shall be deemed to have paid
$10.00 per Share.

Independent Appraiser. A person or entity with no material current or prior
business or personal relationship with the Advisor or the Trustees, who is
engaged to a substantial extent in the business of rendering opinions regarding
the value of assets of the type held by the Company, and who is a qualified
appraiser of real estate as determined by the Board. Membership in a nationally
recognized appraisal society such as the American Institute of Real Estate
Appraisers ("M.A.I.") or the Society of Real Estate Appraisers ("S.R.E.A.")
shall be conclusive evidence of such qualification.

Invested Capital. The amount calculated by multiplying the total number of
Shares purchased by Shareholders by the issue price, reduced by the portion of
any Distribution that is attributable to Net Sales Proceeds and by any amounts
paid by the Company to repurchase Shares pursuant to the Company's plan for
redemption of Shares.

Joint Venture. Any joint venture, limited liability company or other Affiliate
of the Company that owns,

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in whole or in part on behalf of the Company, any Properties.

Listing. The listing of the Shares on a national securities exchange or the
quotation of Shares on the NASDAQ Stock Market.

NASAA Guidelines. The NASAA Statement of Policy Regarding Real Estate Investment
Trusts as in effect on the date hereof.

Net Income. For any period, the total revenues applicable to such period, less
the total expenses applicable to such period excluding additions to reserves for
depreciation, bad debts or other similar non-cash reserves; provided, however,
Net Income for purposes of calculating total allowable Operating Expenses (as
defined herein) shall exclude the gain from the sale of the Company's assets.

Net Sales Proceeds. In the case of a transaction described in clause (i) (A) of
the definition of Sale, the proceeds of any such transaction less the amount of
all real estate commissions and closing costs paid by the Company. In the case
of a transaction described in clause (i) (B) of such definition, Net Sales
Proceeds means the proceeds of any such transaction less the amount of any legal
and other selling expenses incurred in connection with such transaction. In the
case of a transaction described in clause (i) (C) of such definition, Net Sales
Proceeds means the proceeds of any such transaction actually distributed to the
Company from the joint venture. In the case of a transaction described in clause
(ii) of the definition of Sale, Net Sales Proceeds means the proceeds of such
transaction or series of transactions less all amounts generated thereby and
reinvested in one or more Properties within 180 days thereafter and less the
amount of any real estate commissions, closing costs, and legal and other
selling expenses incurred by or allocated to the Company in connection with such
transaction or series of transactions. Net Sales Proceeds shall not include any
reserves established by the Company in its sole discretion.

Offering. Any offering of Shares that is registered with the SEC, excluding
Shares offered under any employee benefit plan.

Operating Expenses. All costs and expenses incurred by the Company, as
determined under generally accepted accounting principles, which in any way are
related to the operation of the Company or to Company business, including fees
paid to the Advisor, but excluding (i) the expenses of raising capital such as
Organization and Offering Expenses, legal, audit, accounting, underwriting,
brokerage, listing, registration, and other fees, printing and other such
expenses and tax incurred in connection with the issuance, distribution,
transfer, registration and Listing of the Shares, (ii) interest payments, (iii)
taxes, (iv) non-cash expenditures such as depreciation, amortization and bad
loan reserves, (v) incentive fees paid in compliance with Section IV.F. of the
NASAA Guidelines and (vi) Acquisition Fees, Acquisition Expenses, real estate
commissions on resale of property, and other expenses connected with the
acquisition, disposition, and ownership of real estate interests, mortgage loans
or other property (such as the costs of foreclosure, insurance premiums, legal
services, maintenance, repair and improvement of property).

Organization and Offering Expenses. All expenses incurred by and to be paid from
the assets of the Company in connection with and in preparing the Company for
registration of and subsequently offering and distributing its Shares to the
public, which may include but are not limited to, total underwriting and
brokerage discounts and commissions (including fees of the underwriters'
attorneys); expenses for printing, engraving and mailing; salaries of employees
while engaged in sales activity; charges of transfer agents, registrars,
trustees, trust managers, escrow holders, depositaries and experts; and expenses
of qualification of the sale of the securities under Federal and State laws,
including taxes and fees, accountants' and attorneys' fees.

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Partnership. Hartman REIT Operating Partnership, L.P., a Texas limited
partnership formed to own and operate properties on behalf of the Company.

Person. An individual, corporation, partnership, estate, trust (including a
trust qualified under Section 401(a) or 501(c) (17) of the Code), a portion of a
trust permanently set aside for or to be used exclusively for the purposes
described in Section 642(c) of the Code, association, private foundation within
the meaning of Section 509(a) of the Code, joint stock company or other entity,
or any government or any agency or political subdivision thereof, and also
includes a group as that term is used for purposes of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended.

Property or Properties. Any real property or properties transferred or conveyed
to the Company or the Partnership, either directly or indirectly.

Property Manager. Any entity that has been retained to perform and carry out at
one or more of the Properties property management services, excluding persons,
entities or independent contractors retained or hired to perform facility
management or other services or tasks at a particular Property, the costs for
which are passed through to and ultimately paid by the tenant at such Property.

REIT. A "real estate investment trust" under Sections 856 through 860 of the
Code.

Sale or Sales. (i) Any transaction or series of transactions whereby: (A) the
Company or the Partnership sells, grants, transfers, conveys, or relinquishes
its ownership of any Property or portion thereof, including the lease of any
Property consisting of the building only, and including any event with respect
to any Property which gives rise to a significant amount of insurance proceeds
or condemnation awards; (B) the Company or the Partnership sells, grants,
transfers, conveys, or relinquishes its ownership of all or substantially all of
the interest of the Company or the Partnership in any joint venture in which it
is a co-venturer or partner; or (C) any joint venture in which the Company or
the Partnership as a co-venturer or partner sells, grants, transfers, conveys,
or relinquishes its ownership of any Property or portion thereof, including any
event with respect to any Property which gives rise to insurance claims or
condemnation awards, but (ii) not including any transaction or series of
transactions specified in clause (i) (A), (i) (B), or (i) (C) above in which the
proceeds of such transaction or series of transactions are reinvested in one or
more Properties within 180 days thereafter.

Shares. "Shares" has the meaning set forth in the preamble.

Shareholders. The registered holders of the Shares.

Shareholders' 7% Return. As of each date, an aggregate amount equal to an 7%
Cumulative Return.

Subordinated Incentive Fee. The fee payable to the Advisor under certain
circumstances if the Shares are listed on a national securities exchange or
over-the-counter market as defined in Paragraph 8(e).

Subordinated Performance Fee Due Upon Termination. A fee equal to (1) 15% of the
amount, if any, by which (a) the Appraised Value of the Company's Properties at
the Termination Date, less amounts of all indebtedness secured by the Company's
Properties, plus total Distributions through the Termination Date exceeds (b)
the sum of Invested Capital, plus Distributions attributable to Net Sales
Proceeds, plus total Distributions required to be made to the Shareholders in
order to pay the Shareholders' 7% Return from inception through the termination
date less (2) any prior payment to the Advisor of a Subordinated Share of Net
Sales Proceeds.

Subordinated Share of Net Sales Proceeds. The Subordinated Share of Net Sales
Proceeds as defined in

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Paragraph 8(d).

Termination Date. The date of termination of the Agreement.

Trustee. A member of the Board of Trustees of the Company.

Vacant Property. A Property that has been economically vacant for (i) the period
from acquisition until the applicable measurement date, if less than six months
or (ii) at least six months as of the applicable date of measurement.

2%/25% Guidelines. The requirement pursuant to the NASAA Guidelines that, in any
12-month period, total Operating Expenses not exceed the greater of 2% of the
Company's Average Invested Assets during such 12-month period or 25% of the
Company's Net Income over the same 12-month period.

2. APPOINTMENT. The Company hereby appoints the Advisor to serve as its advisor
and asset manager on the terms and conditions set forth in this Agreement, and
the Advisor hereby accepts such appointment.

3. DUTIES AND AUTHORITY OF THE ADVISOR. The Advisor undertakes to use its
reasonable efforts (1) to present to the Company potential investment
opportunities to provide a continuing and suitable investment program consistent
with (i) the investment objectives and policies of the Company as determined and
adopted from time to time by the Board and (ii) the investment allocation method
described at Section 11(b) of this agreement and (2) to manage, administer,
promote, maintain, and improve the Properties on an overall portfolio basis in a
diligent manner. The services of the Advisor are to be of scope and quality not
less than those generally performed by professional asset managers of other
similar property portfolios. The Advisor shall make available the full benefit
of the judgment, experience and advice of the members of the Advisor's
organization and staff with respect to the duties it will perform under this
Agreement. The Advisor shall also obtain Property Managers, which may include
Affiliates of the Advisor, to manage, promote, and lease the Properties. To
facilitate the Advisor's performance of these undertakings, but subject to the
restrictions included in Paragraphs 4 and 7 and to the continuing and exclusive
authority of the Board over the management of the Company and the Partnership,
the Company hereby delegates to the Advisor the authority to, and the Advisor
hereby agrees to, either directly or by engaging an Affiliate:

(a) serve as the Company's investment and financial advisor and provide research
and economic and statistical data in connection with the Company's assets and
investment policies;

(b) provide the daily management of the Company and perform and supervise the
various administrative functions reasonably necessary for the management of the
Company;

(c) maintain and preserve the books and records of the Company, including a
stock ledger reflecting a record of the Shareholders and their ownership of the
Company's Shares and acting as transfer agent for the Company's Shares and
maintaining the accounting and other record-keeping functions at the Property
and Company levels;

(d) investigate, select, and, on behalf of the Company, engage and conduct
business with such Persons as the Advisor deems necessary to the proper
performance of its obligations hereunder, including but not limited to
consultants, accountants, correspondents, lenders, technical advisors,
attorneys, brokers, underwriters, corporate fiduciaries, escrow agents,
depositaries, custodians, agents for collection, insurers, insurance agents,
banks, builders, developers, property owners, mortgagors, and any and all agents
for any of the foregoing, including Affiliates of the Advisor, and Persons
acting in any other capacity deemed by the Advisor necessary or desirable for
the performance of any of the foregoing services, including but

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not' limited to entering into contracts in the name of the Company with any of
the foregoing;

(e) consult with the officers and the Board of the Company and assist the Board
in the formulation and implementation of the Company's financial policies, and,
as necessary, furnish the Board with advice and recommendations with respect to
the making of investments consistent with the investment objectives and policies
of the Company and in connection with any borrowings proposed to be undertaken
by the Company;

(f) oversee the performance by the Property Managers of their duties, including
collection and proper deposits of rental payments and payment of Property
expenses and maintenance;

(g) conduct periodic on-site property visits to some or all (as the Advisor
deems reasonably necessary) of the Properties to inspect the physical condition
of the Properties and to evaluate the performance of the related Property
Manager of its duties;

(h) review, analyze and comment upon the operating budgets, capital budgets and
leasing plans prepared and submitted by each Property Manager and aggregate
these property budgets into the Company's overall budget;

(i) review and analyze on-going financial information pertaining to each
Property and the overall portfolio of Properties;

(j) formulate and oversee the implementation of strategies for the
administration, promotion, management, operation, maintenance, improvement,
financing and refinancing, marketing, leasing, and disposition of Properties on
an overall portfolio basis;

(k) subject to the provisions of Paragraphs 3(l) and 4 hereof, (i) locate,
analyze and select potential investments in Properties, (ii) structure and
negotiate the terms and conditions of transactions pursuant to which investment
in Properties will be made; (iii) make investments in Properties on behalf of
the Company or the Partnership in compliance with the investment objectives and
policies of the Company; (iv) arrange for financing and refinancing and make
other changes in the asset or capital structure of, and dispose of, reinvest the
proceeds from the sale of, or otherwise deal with the investments in, Property;
(v) enter into leases and service contracts for Property, including oversight of
Affiliated companies that perform property management services for the Company;
(vi) oversee non-affiliated property managers and other non-affiliated Persons
who perform services for the Company; and (vii) to the extent necessary, perform
all other operational functions for the maintenance and administration of such
Property;

(l) obtain the prior approval of the Board for any and all investments in
Properties (as well as any financing acquired by the Company or the Partnership
in connection with such investment);

(m) if a transaction requires approval by the Board of Trustees, deliver to the
Board of Trustees all documents required by them to properly evaluate the
proposed investment in the Property;

(n) negotiate on behalf of the Company with banks or lenders for loans to be
made to the Company, and negotiate on behalf of the Company with investment
banking firms and broker-dealers or negotiate private sales of Shares and other
securities or obtain loans for the Company, but in no event in such a way so
that the Advisor shall be acting as broker-dealer or underwriter; and provided,
further, that any fees and costs payable to third parties incurred by the
Advisor in connection with the foregoing shall be the responsibility of the
Company;

(o) obtain reports (which may be prepared by the Advisor or its Affiliates),
where appropriate, concerning

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the value of investments or contemplated investments of the Company in
Properties;

(p) from time to time, or at any time reasonably requested by the Board, provide
information or make reports to the Board related to its performance of services
to the Company under this Agreement;

(q) from time to time, or at any time reasonably requested by the Board, make
reports to the Board of the investment opportunities it has presented to other
Advisor-sponsored programs or that it has pursued directly or through an
Affiliate;

(r) provide the Company with all necessary cash management services;

(s) deliver to or maintain on behalf of the Company copies of all appraisals
obtained in connection with the investments in Properties;

(t) notify the Board of all proposed material transactions before they are
completed; and

(u) do all things necessary to assure its ability to render the services
described in this Agreement.

4. MODIFICATION OR REVOCATION OF AUTHORITY OF ADVISOR. The Board may, at any
time upon the giving of notice to the Advisor, modify or revoke the authority or
approvals set forth in Paragraph 3, provided however, that such modification or
revocation shall be effective upon receipt by the Advisor and shall not be
applicable to investment transactions to which the Advisor has committed the
Company prior to the date of receipt by the Advisor of such notification.

5. BANK ACCOUNTS. The Advisor may establish and maintain one or more bank
accounts in its own name for the account of the Company or in the name of the
Company and may collect and deposit into any such account or accounts, and
disburse from any such account or accounts, any money on behalf of the Company,
under such terms and conditions as the Board may approve, provided that no funds
shall be commingled with the funds of the Advisor; and the Advisor shall from
time to time render appropriate accountings of such collections and payments to
the Board and to the auditors of the Company.

6. RECORDS; ACCESS. The Advisor shall maintain appropriate records of all its
activities hereunder and make such records available for inspection by the Board
and by counsel, auditors and authorized agents of the Company, at any time or
from time to time during normal business hours. The Advisor shall at all
reasonable times have access to the books and records of the Company.

7. LIMITATIONS ON ACTIVITIES. Anything else in this Agreement to the contrary
notwithstanding, the Advisor shall refrain from taking any action which, in its
sole judgment made in good faith, would (a) adversely affect the status of the
Company as a REIT, (b) subject the Company to regulation under the Investment
Company Act of 1940, as amended, (c) violate any law, rule, regulation or
statement of policy of any governmental body or agency having jurisdiction over
the Company, its Shares or its other securities, or (d) the Declaration of Trust
or Bylaws, except if such action shall be ordered by the Board, in which case
the Advisor shall notify promptly the Board of the Advisor's judgment of the
potential impact of such action and shall refrain from taking such action until
it receives further clarification or instructions from the Board. In such event
the Advisor shall have no liability for acting in accordance with the specific
instructions of the Board so given. Notwithstanding the foregoing, the Advisor,
its directors, officers, employees and Shareholders, and Shareholders, directors
and officers of the Advisor's Affiliates shall not be liable to the Company or
to the Board or Shareholders for any act or omission by the Advisor, its
directors, officers or employees, or Shareholders, directors or officers of the
Advisor's Affiliates except as provided in Paragraphs 17 and 18 of this
Agreement.

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8. FEES.

(a) Asset Management Fee. Commencing on the date hereof, the Advisor shall be
paid for the asset management services included in the services described in
Section 3 a quarterly fee (the "Asset Management 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 Asset Management Fee may or may not be taken, in whole or
in part as to any quarter, in the sole discretion of the Advisor. All or any
portion of the Asset Management Fee not taken as to any quarter shall be
deferred without interest and may be taken in such other quarter as the Advisor
shall determine.

(b) Acquisition Fees. The Advisor may receive, as compensation for services
rendered in connection with the investigation, selection and acquisition (by
purchase, investment or exchange) of Properties, Acquisition Fees in an amount
equal to 2.0% of Gross Proceeds, payable by the Company upon the Company's
receipt of Gross Proceeds; provided that upon termination of this Agreement, the
Advisor will be obligated to reimburse the Company for any Acquisition Fee that
has not been allocated to the purchase price of Company Properties as provided
for in the Declaration of Trust.

(c) Disposition Fee. If the Advisor or an Affiliate provides a substantial
amount of the services (as determined by the Conflicts Committee) in connection
with the Sale of one or more Properties, the Advisor or such Affiliate shall
receive at closing a Disposition Fee equal to 1.0% of the sales price of such
Property or Properties; provided, however, that no Disposition Fee shall be
payable to the Advisor for Property Sales if such Sales involve the Company
selling all or substantially all of its Properties in one or more transactions
designed to effectuate a business combination transaction (as opposed to a
Company liquidation, in which case the Disposition Fee would be payable if the
Advisor or an Affiliate provides a substantial amount of services as provided
above). Any Disposition Fee payable under this section may be paid in addition
to real estate commissions paid to non-Affiliates, provided that the total real
estate commissions (including such Disposition Fee) paid to all Persons by the
Company for each Property shall not exceed an amount equal to the lesser of (i)
6.0% of the aggregate Contract Sales Price of each Property or (ii) the
Competitive Real Estate Commission for each Property.

(d) Subordinated Share of Net Sales Proceeds. The Subordinated Share of Net
Sales Proceeds shall be payable to the Advisor in an amount equal to 15% of Net
Sales Proceeds remaining after the Shareholders have received Distributions
equal to the sum of the Shareholders' 7% Return and 100% of Invested Capital.
Following Listing, no Subordinated Share of Net Sales Proceeds will be paid to
the Advisor.

(e) Subordinated Incentive Fee. Upon Listing, the Advisor shall be entitled to
the Subordinated Incentive Fee in an amount equal to 15.0% of the amount by
which (i) the market value of the outstanding Shares of the Company, measured by
taking the average closing price or average of bid and asked price, as the case
may be, over a period of 30 days during which the Shares are traded, with such
period beginning 180 days after Listing (the "Market Value"), plus the total of
all Distributions paid to Shareholders from the Company's inception until the
date that Market Value is determined, exceeds (ii) the sum of (A) 100% of
Invested Capital and (B) the total Distributions required to be paid to the
Shareholders in order to pay the Shareholders' 7% Return from inception through
the date Market Value is determined. The Company shall have the option to pay
such fee in the form of cash, Shares, a promissory note or any combination of
the foregoing. The Subordinated Incentive Fee will be reduced by the amount of
any prior payment to the Advisor of a Subordinated Share of Net Sales Proceeds.
In the event the Subordinated Incentive Fee is paid to the Advisor following
Listing, no other performance fee will be paid to the Advisor.

(f) Changes to Fee Structure. In the event of Listing, the Company and the
Advisor shall negotiate in good faith to establish a fee structure appropriate
for a perpetual-life entity.

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9. EXPENSES.

(a) Reimbursable Expenses. In addition to the compensation paid to the Advisor
pursuant to Paragraph 8 hereof, the Company shall pay directly or reimburse the
Advisor for all of the expenses paid or incurred by the Advisor (to the extent
not reimbursable by another party, such as the dealer manager) in connection
with the services it provides to the Company pursuant to this Agreement,
including, but not limited to:

(i) the Organization and Offering Expenses; provided, however, that within 60
days after the end of the month in which an Offering terminates, the Advisor
shall reimburse the Company to the extent (i) Capped O&O Expenses borne by the
Company exceed 2.5% of the Gross Proceeds raised in a completed offering and
(ii) Organization and Offering Expenses borne by the Company exceed 15% of the
Gross Proceeds raised in a completed Offering;

(ii) Acquisition Fees and Acquisition Expenses payable to unaffiliated Persons
incurred in connection with the selection and acquisition of Properties;

(iii) the actual cost of goods and services used by the Company and obtained
from entities not affiliated with the Advisor;

(iv) interest and other costs for borrowed money, including discounts, points
and other similar fees;

(v) taxes and assessments on income or Property and taxes as an expense of doing
business;

(vi) costs associated with insurance required in connection with the business of
the Company or by the Board;

(vii) expenses of managing and operating Properties owned by the Company,
whether payable to an Affiliate of the Company or a non-affiliated Person;

(viii) all expenses in connection with payments to the Board and meetings of the
Board and Shareholders;

(ix) expenses associated with Listing or with the issuance and distribution of
securities other than the Shares, such as selling commissions and fees,
advertising expenses, taxes, legal and accounting fees, listing and registration
fees;

(x) expenses connected with payments of Distributions in cash or otherwise made
or caused to be made by the Company to the Shareholders;

(xi) expenses of organizing, redomesticating, merging, liquidating or dissolving
the Company or of amending the Declaration of Trust or the Bylaws;

(xii) expenses of maintaining communications with Shareholders, including the
cost of preparation, printing, and mailing annual reports and other Share holder
reports, proxy statements and other reports required by governmental entities;

(xiii) administrative service expenses, including all costs and expenses
incurred by Advisor in fulfilling its duties hereunder. Such costs and expenses
may include reasonable wages and salaries and other employee-related expenses of
all employees of Advisor who are engaged in the management, administration,
operations, and marketing of the Company, including taxes, insurance and
benefits relating to such employees, and legal, travel and other out-of-pocket
expenses which are directly related to their services provided hereunder; and

                                      -10-
<PAGE>

(xiv) audit, accounting and legal fees.

No reimbursement shall be made for costs of personnel of the Advisor or its
Affiliates to the extent that such personnel perform services in connection with
services for which the Advisor receives the Acquisition Fee or the Disposition
Fee.

(b) Other Services. Should the Board request that the Advisor or any director,
officer or employee thereof render services for the Company other than set forth
in Paragraph 3, such services shall be separately compensated at such rates and
in such amounts as are agreed by the Advisor and the Conflicts Committee,
subject to the limitations contained in the Declaration of Trust, and shall not
be deemed to be services pursuant to the terms of this Agreement.

(c) Timing of and Limitations on Reimbursements.

(i) Expenses incurred by the Advisor on behalf of the Company and payable
pursuant to this Paragraph 9 shall be reimbursed no less than quarterly to the
Advisor. The Advisor shall prepare a statement documenting the expenses of the
Company during each quarter, and shall deliver such statement to the Company
within 45 days after the end of each quarter.

(ii) Notwithstanding anything else in this Section 9 to the contrary, the
expenses enumerated in this Section 9 shall not become reimbursable to the
Advisor unless and until the Company has raised $2,000,000 in an Offering.

(iii) The Company shall not reimburse the Advisor at the end of any fiscal
quarter Operating Expenses that, in the four consecutive fiscal quarters then
ended (the "Expense Year") exceed (the "Excess Amount") the greater of 2% of
Average Invested Assets or 25% of Net Income (the "2%/25% Guidelines") for such
year unless the Conflicts Committee determines that such excess was justified,
based on unusual and nonrecurring factors which the Conflicts Committee deems
sufficient. If the Conflicts Committee does not approve such excess as being so
justified, any Excess Amount paid to the Advisor during a fiscal quarter shall
be repaid to the Company. If the Conflicts Committee determines such excess was
justified, then within 60 days after the end of any fiscal quarter of the
Company for which total reimbursed Operating Expenses for the Expense Year
exceed the 2%/25% Guidelines, the Advisor, at the direction of the Conflicts
Committee, shall send to the Shareholders a written disclosure of such fact,
together with an explanation of the factors the Conflicts Committee considered
in determining that such excess expenses were justified. The Company will ensure
that such determination will be reflected in the minutes of the meetings of the
Board of Trustees. The Company will not reimburse the Advisor or its Affiliates
for services for which the Advisor or its Affiliates are entitled to
compensation in the form of a separate fee. All figures used in the foregoing
computation shall be determined in accordance with generally accepted accounting
principles applied on a consistent basis.

10. OTHER ACTIVITIES OF THE ADVISOR.

(a) General. Nothing herein contained shall prevent the Advisor from engaging in
other activities, including, without limitation, the rendering of advice to
other Persons (including other REITs) and the management of other programs
advised, sponsored or organized by the Advisor or its Affiliates; nor shall this
Agreement limit or restrict the right of any director, officer, employee, or
shareholder of the Advisor or its Affiliates to engage in any other business or
to render services of any kind to any other partnership, corporation, firm,
individual, trust or association. The Advisor may, with respect to any
investment in which the Company is a participant, also render advice and service
to each and every other participant therein. The Advisor shall report to the
Board the existence of any condition or circumstance, existing or

                                      -11-
<PAGE>

anticipated, of which it has knowledge, which creates or could create a conflict
of interest between the Advisor's obligations to the Company and its obligations
to or its interest in any other partnership, corporation, firm, individual,
trust or association.

(b) Policy with Respect to Allocation of Investment Opportunities. Before the
Advisor presents an investment opportunity that would in its judgment be
suitable for the Company to another Advisor-sponsored program, the Advisor shall
determine in its sole discretion that the investment opportunity is more
suitable for such other program than for the Company based on factors such as
the following: the investment objectives and criteria of each program; the cash
requirements and anticipated cash flow of each program; the size of the
investment opportunity; the effect of the acquisition on diversification of each
program's investments by type of commercial property, geographic area and tenant
base; the estimated income tax effects of the purchase on each entity; the
policies of each program relating to leverage; the funds of each entity
available for investment and the length of time such funds have been available
for investment. In the event that an investment opportunity becomes available
that is, in the sole discretion of the Advisor, equally suitable for both the
Company and another Advisor-sponsored program, then the Advisor may offer the
other program the investment opportunity if it has had the longest period of
time elapse since it was offered an investment opportunity. The Advisor will use
its reasonable efforts to fairly allocate investment opportunities in accordance
with such allocation method and will promptly disclose any material deviation
from such policy or the establishment of a new policy, which shall be allowed
provided (1) the Board is provided with notice of such policy at least 60 days
prior to such policy becoming effective and (2) such policy provides for the
reasonable allocation of investment opportunities among such programs. The
Advisor shall provide the Conflicts Committee with any information reasonably
requested so that the Conflicts Committee can insure that the allocation of
investment opportunities is applied fairly. Nothing herein shall be deemed to
prevent the Advisor or an Affiliate from pursuing an investment opportunity
directly rather than offering it to the Company or another Advisor-sponsored
program so long as the Advisor is fulfilling its obligation to present a
continuing and suitable investment program to the Company which is consistent
with the investment policies and objectives of the Company.

11. RELATIONSHIP OF ADVISOR AND COMPANY. The Company and the Advisor are not
partners or joint venturers with each other, and nothing in this Agreement shall
be construed to make them such partners or joint venturers or impose any
liability as such on either of them.

12. REPRESENTATIONS AND WARRANTIES.

(a) OF THE COMPANY. To induce the Advisor to enter into this Agreement, the
Company hereby represents and warrants that:

(i) The Company is a real estate investment trust, duly organized, validly
existing and in good standing under the laws of the State of Maryland with all
requisite corporate power and authority and all material licenses, permits and
authorizations necessary to carry out the transactions contemplated by this
Agreement.

(ii) The Company's execution, delivery and performance of this Agreement has
been duly authorized. This Agreement constitutes the valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms. The Company's execution and delivery of this Agreement and its
fulfillment of and compliance with the respective terms hereof do not and will
not (i) conflict with or result in a breach of the terms, conditions or
provisions of, (ii) constitute a default under, (iii) result in the creation of
any lien, security interest, charge or encumbrance upon the assets of the
Company pursuant to, (iv) give any third party the right to modify, terminate or
accelerate any obligation under, (v) result in a violation of or (vi) require
any authorization, consent, approval, exception or other action by or notice to

                                      -12-
<PAGE>

any court or administrative or governmental body pursuant to, the Declaration of
Trust or Bylaws or any law, statute, rule or regulation to which the Company is
subject, or any agreement, instrument, order, judgment or decree by which the
Company is bound, in any such case in a manner that would have a material
adverse effect on the ability of the Company to perform any of its obligations
under this Agreement.

(b) OF THE ADVISOR. To induce Company to enter into this Agreement, the Advisor
represents and warrants that:

(i) The Advisor is a limited partnership, duly organized, validly existing and
in good standing under the laws of the State of Texas with all requisite
corporate power and authority and all material licenses, permits and
authorizations necessary to carry out the transactions contemplated by this
Agreement.

(ii) The Advisor's execution, delivery and performance of this Agreement has
been duly authorized. This Agreement constitutes a valid and binding obligation
of the Advisor, enforceable against the Advisor in accordance with its terms.
The Advisor's execution and delivery of this Agreement and its fulfillment of
and compliance with the respective terms hereof do not and will not (i) conflict
with or result in a breach of the terms, conditions or provisions of, (ii)
constitute a default under, (iii) result in the creation of any lien, security
interest, charge or encumbrance upon the Advisor's assets pursuant to, (iv) give
any third party the right to modify, terminate or accelerate any obligation
under, (v) result in a violation of or (vi) require any authorization, consent,
approval, exemption or other action by or notice to any court or administrative
or governmental body pursuant to, the Advisor's limited partnership agreement,
or any law, statute, rule or regulation to which the Advisor is subject, or any
agreement, instrument, order, judgment or decree by which the Advisor is bound,
in any such case in a manner that would have a material adverse effect on the
ability of the Advisor to perform any of its obligations under this Agreement.

(iii) The Advisor has received copies of the Declaration of Trust, Bylaws, and
the Registration Statement and of the Partnership's limited partnership
agreement and is familiar with the terms thereof, including without limitation
the investment limitations included therein. Advisor warrants that it will use
reasonable care to avoid any act or omission that would conflict with the terms
of the Declaration of Trust, Bylaws, the Registration Statement, or the
Partnership's limited partnership agreement in the absence of the express
direction of the Conflicts Committee.

13. TERM; TERMINATION OF AGREEMENT. This Agreement shall continue in force until
the first anniversary of the date hereof, subject to an unlimited number of
successive one-year renewals upon mutual consent of the parties. The Company,
acting through the Board, will evaluate the performance of the Advisor annually
before renewing the Agreement, and each such renewal shall be for a term of no
more than one year.

14. TERMINATION BY EITHER PARTY . This Agreement may be terminated upon 60 days
written notice without cause or penalty, by either party (by majority of the
Conflicts Committee or a majority of the Board of Trustees of the Advisor, as
the case may be). The provisions of Sections 1, 6, 7, and 16 through 27 survive
termination of this Agreement.

15. ASSIGNMENT TO AN AFFILIATE. This Agreement may be assigned by the Advisor to
an Affiliate with the approval of a majority of the Conflicts Committee. The
Advisor may assign any rights to receive fees or other payments under this
Agreement without obtaining the approval of the Board. This Agreement shall not
be assigned by the Company without the consent of the Advisor, except in the
case of an assignment by the Company to a corporation or other organization
which is a successor to all of the assets, rights and obligations of the
Company, in which case such successor organization shall be bound hereunder and
by

                                      -13-
<PAGE>

the terms of said assignment in the same manner as the Company is bound by this
Agreement.

16. PAYMENTS TO AND DUTIES OF ADVISOR UPON TERMINATION. Payments to the Advisor
pursuant to this Section 16 shall be subject to the 2%/25% Guidelines to the
extent applicable.

(a) After the Termination Date, the Advisor shall not be entitled to
compensation for further services hereunder except it shall be entitled to
receive from the Company within 30 days after the effective date of such
termination the following:

(i) all unpaid reimbursements of expenses and all earned but unpaid fees payable
to the Advisor prior to termination of this Agreement; and

(ii) the Subordinated Performance Fee Due Upon Termination, provided that no
Subordinated Performance Fee Due Upon Termination will be paid if the Company
has paid or is obligated to pay the Subordinated Incentive Fee.

(b) The Advisor shall promptly upon termination:

(i) pay over to the Company all money collected and held for the account of the
Company pursuant to this Agreement, after deducting any accrued compensation and
reimbursement for its expenses to which it is then entitled;

(ii) deliver to the Board a full accounting, including a statement showing all
payments collected by it and a statement of all money held by it, covering the
period following the date of the last accounting furnished to the Board;

(iii) deliver to the Board all assets, including Properties, and documents of
the Company then in the custody of the Advisor; and

(iv) cooperate with the Company to provide an orderly management transition.

17. INDEMNIFICATION BY THE COMPANY. The Company shall indemnify and hold
harmless the Advisor and its Affiliates, including their respective officers,
directors, partners and employees, from all liability, claims, damages or losses
arising in the performance of their duties hereunder, and related expenses,
including reasonable attorneys' fees, to the extent such liability, claims,
damages or losses and related expenses are not fully reimbursed by insurance,
subject to any limitations imposed by the laws of the State of Maryland or the
Declaration of Trust. Notwithstanding the foregoing, the Advisor shall not be
entitled to indemnification or be held harmless pursuant to this Paragraph 17
for any activity which the Advisor shall be required to indemnify or hold
harmless the Company pursuant to Paragraph 18. Any indemnification of the
Advisor may be made only out of the net assets of the Company and not from
Shareholders.

18. INDEMNIFICATION BY ADVISOR. The Advisor shall indemnify and hold harmless
the Company from contract or other liability, claims, damages, taxes or losses
and related expenses including attorneys' fees, to the extent that such
liability, claims, damages, taxes or losses and related expenses are not fully
reimbursed by insurance and are incurred by reason of the Advisor's bad faith,
fraud, willful misfeasance, misconduct, or reckless disregard of its duties.

19. NOTICES. Any notice, report or other communication required or permitted to
be given hereunder shall be in writing unless some other method of giving such
notice, report or other communication is required by the Declaration of Trust,
the Bylaws, or accepted by the party to whom it is given, and shall be given

                                      -14-
<PAGE>

by being delivered by hand or by overnight mail or other overnight delivery
service to the addresses set forth herein:

<TABLE>
<S>                                 <C>
To the Board and to the Company:    Hartman Commercial Properties REIT
                                    1450 West Sam Houston Parkway, North, Suite 100
                                    Houston, Texas  77043

To the Advisor:                     Hartman Management, L.P.
                                    1450 West Sam Houston Parkway, North, Suite 100
                                    Houston, Texas  77043
</TABLE>

Either party may at any time give notice in writing to the other party of a
change in its address for the purposes of this Paragraph 19.

20. MODIFICATION. This Agreement shall not be changed, modified, terminated, or
discharged, in whole or in part, except by an instrument in writing signed by
both parties hereto, or their respective successors or assignees.

21. SEVERABILITY. The provisions of this Agreement are independent of and
severable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.

22. CONSTRUCTION. The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of Texas.

23. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof. This Agreement may not be modified or
amended other than by an agreement in writing.

24. INDULGENCES, NOT WAIVERS. Neither the failure nor any delay on the part of a
party to exercise any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of
the same or of any other right, remedy, power or privilege, nor shall any waiver
of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence. No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.

25. GENDER. Words used herein regardless of the number and gender specifically
used, shall be deemed and construed to include any other number, singular or
plural, and any other gender, masculine, feminine or neuter, as the context
requires.

26. TITLES NOT TO AFFECT INTERPRETATION. The titles of paragraphs and
subparagraphs contained in this Agreement are for convenience only, and they
neither form a part of this Agreement nor are they to be used in the
construction or interpretation hereof.

27. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of

                                      -15-
<PAGE>

which shall be deemed to be an original as against any party whose signature
appears thereon, and all of which shall together constitute one and the same
instrument. This Agreement shall become binding when the counterparts hereof,
taken together, bear the signatures of all of the parties reflected hereon as
the signatories.

                        [Signatures appear on next page.]

                                      -16-
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Advisory Agreement as
of the date and year first above written.

HARTMAN COMMERCIAL PROPERTIES REIT

By: ____________________________________
Name: __________________________________
Title: _________________________________

HARTMAN MANAGEMENT, L.P.

By: ____________________________________
Name: __________________________________
Title: _________________________________

                                      -17-<PAGE>

                                                                    EXHIBIT 10.3

               AMENDED AND RESTATED PROPERTY MANAGEMENT AGREEMENT

         This AMENDED AND RESTATED PROPERTY MANAGEMENT AGREEMENT (this
"Management Agreement") is made and entered into as of the ___ day of ________,
2004, by and among HARTMAN COMMERCIAL PROPERTIES REIT, a Maryland real estate
investment trust ("Hartman REIT"), HARTMAN REIT OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership (sometimes referred to herein as "Hartman OP" or
"Owner"), and HARTMAN MANAGEMENT, L.P., Texas limited partnership (the
"Manager").

         WHEREAS, Hartman OP was organized to acquire, own, operate, lease and
manage real estate properties on behalf of Hartman REIT; and

         WHEREAS, Hartman OP and Manager previously entered into that certain
Property and Partnership Management Agreement dated as of January 28, 1999 (the
"Original Management Agreement"); and

         WHEREAS, Hartman REIT intends to raise money from the sale of its
common shares of beneficial interest to be used, net of payment of certain
offering costs and expenses, for investment in the acquisition or construction
of income-producing real estate and other real estate-related investments
(including the making or purchase of mortgage loans), some or all of which are
to be acquired and held by Owner (as hereinafter defined) on behalf of Hartman
REIT; and

         WHEREAS, Owner intends to continue to retain Manager to manage and
coordinate the leasing of certain of the real estate properties acquired by
Owner under the terms and conditions set forth in this Management Agreement; and

         WHEREAS, the parties desire to amend and restate the Original
Management Agreement in its entirety in accordance with the terms and provisions
hereof;

         NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, do
hereby agree, as follows:

                                    ARTICLE I

                                   DEFINITIONS

         Except as otherwise specified or as the context may otherwise require,
the following terms have the respective meanings set forth below for all
purposes of this Management Agreement, and the definitions of such terms are
equally applicable both to the singular and plural forms thereof:

1.1      "Affiliate" means, with respect to any Person, (i) any Person directly
or indirectly owning, controlling or holding, with the power to vote, 10% or
more of the outstanding voting securities of such other Person; (ii) any Person
10% or more of whose outstanding voting securities are directly or indirectly
owned, controlled or held, with the power to vote, by such other Person; (iii)
any Person directly or indirectly controlling, controlled by or under common
control with such other Person; (iv) any executive officer, director, trustee,
trust manager, or general partner of such other Person; and (v) any legal entity
for which such Person acts as an executive officer, director, trustee, trust
manager, or general partner.

<PAGE>

1.2      "Gross Revenues" means all amounts actually collected as rents or other
charges for the use and occupancy of the Properties, but shall exclude interest
and other investment income of Owner and proceeds received by Owner for a sale,
exchange, condemnation, eminent domain taking, casualty or other disposition of
assets of Owner.

1.3      "Improvements" means buildings, structures, equipment from time to time
located on the Properties and all parking and common areas located on the
Properties.

1.4      "Intellectual Property Rights" means all rights, titles and interests,
whether foreign or domestic, in and to any and all trade secrets, confidential
information rights, patents, invention rights, copyrights, service marks,
trademarks, know-how, or similar intellectual property rights and all
applications and rights to apply for such rights, as well as any and all moral
rights, rights of privacy, publicity and similar rights and license rights of
any type under the laws or regulations of any governmental, regulatory, or
judicial authority, foreign or domestic and all renewals and extensions thereof.

1.5      "Lease" means, unless the context otherwise requires, any lease or
sublease made by Owner as landlord or by its predecessor.

1.6      "Management Fees" has the meaning set forth in Section 5.1 hereof.

1.7      "Owner" means Hartman REIT, Hartman OP and any joint venture, limited
liability company or other Affiliate of Hartman REIT or Hartman OP that owns, in
whole or in part, on behalf of Hartman REIT, any Properties.

1.8      "Person" means an individual, corporation, association, business trust,
estate, trust, partnership, limited liability company or other legal entity.

1.9      "Properties" means all real estate properties owned by Owner and all
tracts as yet unspecified but to be acquired by Owner containing
income-producing improvements or on which Owner will construct income-producing
improvements.

1.10     "Proprietary Property" means all modeling algorithms, tools, computer
programs, know-how, methodologies, processes, technologies, ideas, concepts,
skills, routines, subroutines, operating instructions and other materials and
aides used in performing the duties set forth in Article 2 that relate to
management advice, services and techniques regarding current and potential
Properties, and all modifications, enhancements and derivative works of the
foregoing.

                                   ARTICLE II

                APPOINTMENT OF MANAGER; SERVICES TO BE PERFORMED

2.1      Appointment of Manager. Owner hereby engages and retains Manager as the
manager and as tenant coordinating agent of the Properties, and Manager hereby
accepts such appointment on the terms and conditions hereinafter set forth; it
being understood that this Management Agreement shall cause Manager to be, at
law, Owner's agent upon the terms contained herein.

2.2      General Duties. Manager shall devote its best efforts to performing its
duties hereunder to manage, operate, maintain and lease the Properties in a
diligent, careful and vigilant manner. The services of Manager are to be of
scope and quality not less than those generally performed by professional
property managers of other similar properties in the area. Manager shall make
available to Owner the full

                                      -2-
<PAGE>

benefit of the judgment, experience and advice of the members of Manager's
organization and staff with respect to the policies to be pursued by Owner
relating to the operation and leasing of the Properties.

2.3      Specific Duties. Manager's duties include the following:

                  (a)      Lease Obligations. Manager shall perform all duties
         of the landlord under all Leases insofar as such duties relate to
         operation, maintenance, and day-to-day management. Manager shall also
         provide or cause to be provided, at Owner's expense, all services
         normally provided to tenants of like premises, including where
         applicable and without limitation, gas, electricity or other utilities
         required to be furnished to tenants under Leases, normal repairs and
         maintenance, and cleaning, and janitorial service. Manager shall
         arrange for and supervise the performance of all installations and
         improvements in space leased to any tenant that are either expressly
         required under the terms of the lease of such space or that are
         customarily provided to tenants.

                  (b)      Maintenance. Manager shall cause the Properties to be
         maintained in the same manner as similar properties in the area.
         Manager's duties and supervision in this respect shall include, without
         limitation, cleaning of the interior and the exterior of the
         Improvements and the public common areas on the Properties and the
         making and supervision of repair, alterations, and decoration of the
         Improvements, subject to and in strict compliance with this Management
         Agreement and the Leases. Construction activities undertaken by
         Manager, if any, will be limited to activities related to the
         management, operation, maintenance, and leasing of the Property (e.g.,
         repairs, renovations, and leasehold improvements).

                  (c)      Leasing Functions. Manager shall coordinate the
         leasing of the Properties and shall negotiate and use its best efforts
         to secure executed Leases from qualified tenants, and to execute same
         on behalf of Owner, if requested, for available space in the
         Properties, such Leases to be in form and on terms approved by Owner
         and Manager, and to bring about complete leasing of the Properties.
         Manager shall be responsible for the hiring of all leasing agents, as
         necessary for the leasing of the Properties, and to otherwise oversee
         and manage the leasing process on behalf of Owner.

                  (d)      Notice of Violations. Manager shall forward to Owner
         promptly upon receipt all notices of violation or other notices from
         any governmental authority, and board of fire underwriters or any
         insurance company, and shall make such recommendations regarding
         compliance with such notice as shall be appropriate.

                  (e)      Personnel. Any personnel hired by Manager to
         maintain, operate and lease the Property shall be the employees or
         independent contractors of Manager and not of Owner of such Property,
         Hartman OP or Hartman REIT. Manager shall use due care in the selection
         and supervision of such employees or independent contractors. Manager
         shall be responsible for the preparation of and shall timely file all
         payroll tax reports and timely make payments of all withholding and
         other payroll taxes with respect to each employee.

                  (f)      Utilities and Supplies. Manager shall enter into or
         renew contracts for electricity, gas, steam, landscaping, fuel, oil,
         maintenance and other services as are customarily furnished or rendered
         in connection with the operation of similar rental property in the
         area.

                  (g)      Expenses. Manager shall analyze all bills received
         for services, work and supplies in connection with maintaining and
         operating the Properties, pay all such bills when due, and, if
         requested by Owner, pay, when due, utility and water charges, sewer
         rent and assessments,

                                      -3-
<PAGE>

         and any other amount payable in respect to the Properties. All bills
         shall be paid by Manager within the time required to obtain discounts,
         if any. Owner may from time to time request that Manager forward
         certain bills to Owner promptly after receipt, and Manager shall comply
         with any such request. Manager shall pay all bills, assessments, real
         property taxes, insurance premiums and any other amount payable in
         respect to the Properties out of the Account (as hereinafter defined).
         All expenses shall be billed at net cost (i.e., less all rebates,
         commissions, discounts and allowances, however designed).

                  (h)      Monies Collected. Manager shall timely collect all
         rent and other monies, in the form of a check or money order, from
         tenants and any sums otherwise due Owner with respect to the Properties
         in the ordinary course of business. Owner authorizes Manager to
         request, demand, collect and provide receipt for all such rent and
         other monies and to institute legal proceedings in the name of Owner
         for the collection thereof and for the dispossession of any tenant in
         default under its Lease.

                  (i)      Banking Accommodations. Manager shall establish and
         maintain a separate checking account (the "Account") for funds relating
         to the Properties. All monies deposited from time to time in the
         Account shall be deemed to be trust funds and shall be and remain the
         property of Owner and shall be withdrawn and disbursed by Manager for
         the account of Owner only as expressly permitted by this Management
         Agreement for the purposes of performing the obligations of Manager
         hereunder. No monies collected by Manager on Owner's behalf shall be
         commingled with funds of Manager. The Account shall be maintained, and
         monies shall be deposited therein and withdrawn therefrom, in
         accordance with the following:

                      (i)    All sums received from rents and other income from
                             the Properties shall be promptly deposited by
                             Manager in the Account. Manager shall have the
                             right to designate two or more persons who shall be
                             authorized to draw against the Account, but only
                             for purposes authorized by this Management
                             Agreement.

                      (ii)   All sums due to Manager hereunder, whether for
                             compensation, reimbursement for expenditures, or
                             otherwise, as herein provided, shall be a charge
                             against the operating revenues of the Properties
                             and shall be paid and/or withdrawn by Manager from
                             the Account prior to the making of any other
                             disbursements therefrom.

                      (iii)  By the 15th day after the end of each month,
                             Manager shall forward to Owner all monies contained
                             in the Account other than a reserve of $5,000 and
                             any other amounts otherwise provided in the budget,
                             which shall remain in the Account.

                  (j)      Ownership Agreements. Manager has received copies of
         (and will be provided with copies of future) the Declaration of Trust,
         Agreements of Limited Partnership, Joint Venture Partnership Agreements
         and Operating Agreements, each as may be amended from time to time, of
         Owner, as applicable (the "Ownership Agreements") and is familiar with
         the terms thereof. Manager shall use reasonable care to avoid any act
         or omission that, in the performance of its duties hereunder, shall in
         any way conflict with the terms of Ownership Agreements.

                  (k)      Signs. Manager shall place and remove, or cause to be
         placed and removed, such signs upon the Properties as Manager deems
         appropriate, subject, however, to the terms and conditions of the
         Leases and to any applicable ordinances and regulations.

                                      -4-
<PAGE>

2.4      Approval of Leases, Contracts, Etc. In fulfilling its duties to Owner,
Manager may and hereby is authorized to enter into any leases, contracts or
agreements on behalf of Owner in the ordinary course of the management,
operation, maintenance and leasing of the Property.

2.5      Accounting, Records and Reports.

                  (a)      Records. Manager shall maintain all office records
         and books of account and shall record therein, and keep copies of, each
         invoice received from services, work and supplies ordered in connection
         with the maintenance and operation of the Properties. Such records
         shall be maintained on a double entry basis. Owner and persons
         designated by Owner shall at all reasonable time have access to and the
         right to audit and make independent examinations of such records, books
         and accounts and all vouchers, files and all other material pertaining
         to the Properties and this Management Agreement, all of which Manager
         agrees to keep safe, available and separate from any records not
         pertaining to the Properties, at a place recommended by Manager and
         approved by Owner.

                  (b)      Monthly Reports. On or before the 15th day after the
         end of each month during the term of this Management Agreement, Manager
         shall prepare and submit to Owner the following reports and statements:

                      (i)    rental collection record;

                      (ii)   monthly operating statement;

                      (iii)  copy of cash disbursements ledger entries for such
                             period, if requested;

                      (iv)   copy of cash receipts ledger entries for such
                             period, if requested;

                      (v)    the original copies of all contracts entered into
                             by Manager on behalf of Owner during such period,
                             if requested; and

                      (vi)   copy of ledger entries for such period relating to
                             security deposits maintained by Manager, if
                             requested.

                  (c)      Budgets and Leasing Plans. Not later than November 15
         of each calendar year, Manager shall prepare and submit to Owner for
         its approval an operating budget and a marketing and leasing plan on
         each Property for the calendar year immediately following such
         submission. In connection with any acquisition of a Property by Owner,
         Manager shall prepare a budget and marketing and leasing plan for the
         remainder of the calendar year. The budget and marketing and leasing
         plan shall be in the form of the budget and plan approved by Owner
         prior to the date thereof. As often as reasonably necessary during the
         period covered by any such budget, Manager may submit to Owner for its
         approval an updated budget or plan incorporating such changes as shall
         be necessary to reflect cost over-runs and the like during such period.
         If Owner does not disapprove any such budget within 30 days after
         receipt thereof by Owner, such budget shall be deemed approved. If
         Owner shall disapprove any such budget or plan, it shall so notify
         Manager within said 30-day period and explain the reasons therefor. If
         Owner disapproves of any budget or plan, Manager shall submit a revised
         budget or plan, as applicable, within 10 (ten) days of receipt of the
         notice of disapproval, and Owner shall have 10 (ten) days to provide
         notice to Manager if it disapproves of any such revised budget or plan.
         Manager will not incur any costs other than those estimated in any
         budget except for:

                                      -5-
<PAGE>

                      (i)    tenant improvements and real estate commissions
                             required under a Lease;

                      (ii)   maintenance or repair costs under $5,000 per
                             Property;

                      (iii)  costs incurred in emergency situations in which
                             action is immediately necessary for the
                             preservation or safety of the Property, or for the
                             safety of occupants or other persons (or to avoid
                             the suspension of any necessary service of the
                             Property);

                      (iv)   expenditures for real estate taxes and assessment;
                             and

                      (v)    maintenance supplies calling for an aggregate
                             purchase price less than $25,000 per annum for all
                             Properties.

         Budgets prepared by Manager shall be for planning and informational
         purposes only, and Manager shall have no liability to Owner for any
         failure to meet any such budget. However, Manager will use its best
         efforts to operate within the approved budget.

                  (d)      Legal Requirements. Manager shall execute and file
         when due all forms, reports, and returns required by law relating to
         the employment of its personnel. Manager shall be responsible for
         notifying Owner in the event it receives notice that any Improvement on
         a Property or any equipment therein does not comply with the
         requirements of any statute, ordinance, law or regulation of any
         governmental body or of any public authority or official thereof having
         or claiming to have jurisdiction thereover. Manager shall promptly
         forward to Owner any complaints, warnings, notices or summonses
         received by it relating to such matters. Owner represents that to the
         best of its knowledge each of its Properties and any equipment thereon
         will upon acquisition by Owner comply with all such requirements. Owner
         authorizes Manager to disclose the ownership of the Property by Owner
         to any such officials. Owner agrees to indemnify, protect, defend, save
         and hold Manager and its stockholders, officers, directors, employees,
         managers, successors and assigns (collectively, the "Indemnified
         Parties") harmless of and from any and all Losses (as defined in
         Section 3.5(a) hereof) that may be imposed on them or any or all of
         them by reason of the failure of Owner to correct any present or future
         violation or alleged violation of any and all present or future laws,
         ordinances, statutes, or regulations of any public authority or
         official thereof, having or claiming to have jurisdiction thereover, of
         which it has actual notice.

                                   ARTICLE III

           AUTHORITY GRANTED TO MANAGER AND CERTAIN OWNER OBLIGATIONS

3.1      Authority As To Tenants, Etc. Owner agrees and does hereby give Manager
the following exclusive authority and powers (all of which shall be exercised
either in the name of Manager, as Manager for Owner, or in the name or Owner
entered into by Manager as Owner's authorized agent, and Owner shall assume all
expenses in connection with such matters):

                  (a)      to advertise each Property or any part thereof and to
         display signs thereon, as permitted by law;

                  (b)      to lease the Properties to tenants;

                                      -6-
<PAGE>

                  (c)      to pay all expenses of leasing such Property,
         including but not limited to, newspaper and other advertising, signage,
         banners, brochures, referral commissions, leasing commissions, finder's
         fees and salaries, bonuses and other compensation of leasing personnel
         responsible for the leasing of the Property;

                  (d)      to cause references of prospective tenants to be
         investigated, it being understood and agreed by the parties hereto that
         Manager does not guarantee the creditworthiness or collectibility of
         accounts receivable from tenants, users or lessees; and to negotiate
         new Leases and renewals and cancellations of existing Leases that shall
         be subject to Manager obtaining Owner's approval;

                  (e)      to collect from tenants all or any of the following:
         a late rent administrative charge, a non-negotiable check charge,
         credit report fee, a subleasing administrative charge and/or broker's
         commission; and Manager need not account for such charges and/or
         commission to Owner;

                  (f)      to terminate tenancies and to sign and serve in the
         name of Owner of each Property such notices as are deemed necessary by
         Manager;

                      (i)    to institute and prosecute actions to evict tenants
                             and to recover possession of the Property or
                             portions thereof;

                      (ii)   with Owner's authorization, to sue for and in the
                             name of Owner and recover rent and other sums due;
                             and to settle, compromise, and release such actions
                             or suits, or reinstate such tenancies. All expenses
                             of litigation including, but not limited to,
                             attorneys' fees, filing fees, and court costs that
                             Manager shall incur in connection with the
                             collecting of rent and other sums, or to recover
                             possession of any Property or any portion thereof,
                             shall be deemed to be an operational expense of the
                             Property. Manager and Owner shall concur on the
                             selection of the attorneys to handle such
                             litigation.

3.2      Operational Authority. Owner agrees and does hereby give Manager the
following exclusive authority and powers (all of which shall be exercised either
in the name of Manager, as Manager for Owner, or in the name or Owner entered
into by Manager as Owner's authorized agent, and Owner shall assume all expenses
in connection with such matters):

                  (a)      to hire, supervise, discharge, and pay all labor
         required for the operation and maintenance of each Property including
         but not limited to on-site personnel, managers, assistant managers,
         leasing consultants, engineers, janitors, maintenance supervisors and
         other employees required for the operation and maintenance of the
         Property, including personnel spending a portion of their working hours
         (to be charged on a pro rata basis) at the Property. All expenses of
         such employment shall be deemed operational expenses of the Property.

                  (b)      to make or cause to be made all ordinary repairs and
         replacements necessary to preserve each Property in its present
         condition and for the operating efficiency thereof and all alterations
         required to comply with lease requirements, and to decorate the
         Property;

                  (c)      to negotiate and enter into, as Manager of the
         Property, contracts for all items on budgets that have been approved by
         Owner, any emergency services or repairs for items not exceeding
         $5,000, appropriate service agreements and labor agreements for normal
         operation of the Property, which have terms not to exceed three years,
         and agreements for all budgeted

                                      -7-
<PAGE>

         maintenance, minor alterations, and utility services, including, but
         not limited to, electricity, gas, fuel, water, telephone, window
         washing, scavenger service, landscaping, snow removal, pest
         exterminating, decorating and legal services in connection with the
         Leases and service agreements relating to the Property, and other
         services or such of them as Manager may consider appropriate; and

                  (d)      to purchase supplies and pay all bills.

Manager shall use its best efforts to obtain the foregoing services and
utilities for the Property under terms that are as cost-effective and otherwise
favorable to Manager as possible for the quality of services and utilities
required. Owner hereby appoints Manager as Owner's authorized Manager for the
purpose of executing, as Manager for said Owner, all such contracts. In
addition, Owner agrees to specifically assume in writing all obligations under
all such contracts so entered into by Manager, on behalf of Owner of the
Property, upon the termination of this Agreement, and Owner shall indemnify,
protect, save, defend and hold Manager and the other Indemnified Parties
harmless from and against any and all Losses resulting from, arising out of or
in any way related to such contracts and that relate to or concern matters
occurring after termination of this Agreement, but excluding matters arising out
of Manager's willful misconduct, gross negligence and/or unlawful acts. Manager
shall secure the approval of, and execution of appropriate contracts by, Owner
for any non-budgeted and non-emergency/contingency capital items, alterations or
other expenditures in excess of $5,000 for any one item, securing for each item
at least three written bids, if practicable, or providing evidence satisfactory
to Owner that the contract amount is lower than industry standard pricing, from
responsible contractors. Manager shall have the right from time to time during
the term hereof, to contract with and make purchases from Affiliates of Manager,
provided that contract rates and prices are competitive with other available
sources. Manager may at any time and from time to time request and receive the
prior written authorization of Owner of the Property of any one or more
purchases or other expenditures, notwithstanding that Manager may otherwise be
authorized hereunder to make such purchases or expenditures.

3.3      Rent and Other Collections. Owner agrees and does hereby give Manager
the exclusive authority and powers (all of which shall be exercised either in
the name of Manager, as Manager for Owner, or in the name or Owner entered into
by Manager as Owner's authorized agent, and Owner shall assume all expenses in
connection with such matters) to collect rents and/or assessments and other
items, including but not limited to tenant payments for real estate taxes,
property liability and other insurance, damages and repairs, common area
maintenance, tax reduction fees and all other tenant reimbursements,
administrative charges, proceeds of rental interruption insurance, parking fees,
income from coin operated machines and other miscellaneous income, due or to
become due and give receipts therefor and to deposit all such Gross Revenue
collected hereunder in the Account. Manager may endorse any and all checks
received in connection with the operation of any Property and drawn to the order
of Owner, and Owner shall, upon request, furnish Manager's depository with an
appropriate authorization for Manager to make such endorsement. Manager shall
also have the exclusive authority to collect and handle tenants' security
deposits, including the right to apply such security deposits to unpaid rent,
and to comply, on behalf of Owner of the Property, with applicable state or
local laws concerning security deposits and interest thereon, if any. Manager
shall not be required to advance any monies for the care or management of any
Property. Owner agrees to advance all monies necessary therefor. If Manager
shall elect to advance any money in connection with a Property, Owner agrees to
reimburse Manager forthwith and hereby authorizes Manager to deduct such
advances from any monies due Owner. In connection with any insured losses or
damages relating to any Property, Manager shall have the exclusive authority to
handle all steps necessary regarding any such claim; provided that Manager will
not make any adjustments or settlements in excess of $10,000 without Owner's
prior written consent.

                                      -8-
<PAGE>

3.4      Payment of Expenses. Owner agrees and does hereby give Manager the
exclusive authority and power (all of which shall be exercised either in the
name of Manager, as Manager for Owner, or in the name or Owner entered into by
Manager as Owner's authorized agent, and Owner shall assume all expenses in
connection with such matters) to pay all expenses of the Property from the Gross
Revenue collected in accordance with Section 3.3 above, from the Account. It is
understood that the Gross Revenue will be used first to pay the compensation to
Manager as contained in Article 5 below, then operational expenses and then any
mortgage indebtedness, including real estate tax and insurance impounds, but
only as directed by Owner in writing and only if sufficient Gross Revenue is
available for such payments. Nothing in this Agreement shall be interpreted in
such a manner as to obligate Manager to pay from Gross Revenue, any expenses
incurred by Owner prior to the commencement of this Agreement, except to the
extent Owner advances additional funds to pay such expenses.

3.5      Certain Owner Indemnification Obligations.

                  (a)      On Termination. In the event this Agreement is
         terminated for any reason prior to the expiration of its original term
         or any renewal term, Owner shall indemnify, protect, defend, save and
         hold Manager and all of the other Indemnified Parties harmless from and
         against any and all claims, causes of action, demands, suits,
         proceedings, loss, judgments, damage, awards, liens, fines, costs,
         attorney's fees and expenses, of every kind and nature whatsoever
         (collectively, "Losses"), that may be imposed on or incurred by Manager
         by reason of the willful misconduct, gross negligence and/or unlawful
         acts (such unlawfulness having been adjudicated by a court of proper
         jurisdiction) of Owner.

                  (b)      Property Damage, Etc. Owner agrees to indemnify,
         defend, protect, save and hold Manager and all of the other Indemnified
         Parties harmless from any and all Losses in connection with or in any
         way related to the Property and from liability for damage to the
         Property and injuries to or death of any person whomsoever, and damage
         to property; provided, however, that such indemnification shall not
         extend to any such Losses arising out of the willful misconduct, gross
         negligence and/or unlawful acts (such unlawfulness having been
         adjudicated by a court of proper jurisdiction) of Manager or any of the
         other Indemnified Parties. Manager shall not be liable for any error of
         judgment or for any mistake of fact or law, or for any thing that it
         may do or refrain from doing, except in cases of willful misconduct,
         gross negligence and/or unlawful acts (such unlawfulness having been
         adjudicated by a court of proper jurisdiction).

3.6      Environmental Matters. Owner hereby warrants and represents to Manager
that to the best of Owner's knowledge, no Property, upon acquisition by Owner,
nor any part thereof, will be used to treat, deposit, store, dispose of or place
any hazardous substance that may subject Manager to liability or claims under
the Comprehensive Environmental Response, Compensation and Liability Act of 1980
(42 U.S.C.A. Section 9607) or any constitutional provision, statute, ordinance,
law, or regulation of any governmental body or of any order or ruling of any
public authority or official thereof, having or claiming to have jurisdiction
thereover. Furthermore, Owner agrees to indemnify, protect, defend, save and
hold Manager and all of the other Indemnified Parties from any and all Losses
involving, concerning or in any way related to any past, current or future
allegations regarding treatment, depositing, storage, disposal or placement by
any party other than Manager of hazardous substances on the Property.

3.7      Legal Status of Properties. Owner represents that to the best of its
knowledge each Property and any equipment thereon, when acquired by Owner, will
comply with all legal requirements and authorizes Manager to disclose the
identity of the Owner of the Property to any such officials and agrees to
indemnify, protect, defend, save and hold Manager and the other Indemnified
Parties harmless of and from any and all Losses that may be imposed on them or
any of them by reason of the failure of Owner to correct any present or future
violation or alleged violation of any and all present or future laws,

                                      -9-
<PAGE>

ordinances, statutes, or regulations of any public authority or official
thereof, having or claiming to have jurisdiction thereover, of which it has
actual notice. In the event it is alleged or charged that any Improvement or any
equipment on a Property or any act or failure to act by Owner with respect to
the Property or the sale, rental, or other disposition thereof fails to comply
with, or is in violation of, any of the requirements of any constitutional
provision, statute, ordinance, law, or regulation of any governmental body or
any order or ruling of any public authority or official thereof having or
claiming to have jurisdiction thereover, and Manager, in its sole and absolute
discretion, considers that the action or position of Owner, with respect thereto
may result in damage or liability to Manager, Manager shall have the right to
cancel this Agreement at any time by written notice to Owner of its election so
to do, which cancellation shall be effective upon the service of such notice.
Such cancellation shall not release the indemnities of Owner set forth in this
Agreement and shall not terminate any liability or obligation of Owner to
Manager for any payment, reimbursement, or other sum of money then due and
payable to Manager hereunder.

3.8      Extraordinary Payments. Owner agrees to give adequate advance written
notice to Manager if Owner desires that Manager make any extraordinary payment,
out of Gross Revenue, to the extent funds are available after the payment of
Manager's compensation as provided for herein and all operational expenses, of
mortgage indebtedness, general taxes, special assessments, or fire, boiler or
any other insurance premiums.

                                   ARTICLE IV

                                    EXPENSES

4.1      Owner's Expenses. Except as otherwise specifically provided, all costs
and expenses incurred hereunder by Manager in fulfilling its duties to Owner
shall be for the account of and on behalf of Owner. Such costs and expenses
shall include the wages and salaries and other employee-related expenses of all
on-site and off-site employees of Manager who are engaged in the operation,
management, maintenance and leasing or access control of the 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. All costs and expenses for which Owner is
responsible under this Management Agreement shall be paid by Manager out of the
Account. In the event the Account does not contain sufficient funds to pay all
said expenses, Owner shall fund all sums necessary to meet such additional costs
and expenses.

4.2      Manager's Expenses. Manager shall, out of its own funds, pay all of its
general overhead and administrative expenses.

                                    ARTICLE V

                             MANAGER'S COMPENSATION

5.1      Management Fees. Commencing on the date hereof, Owner shall pay Manager
property management and leasing 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 (the "Management Fees"). The
Management Fees shall be calculated on a monthly basis from the rental income
received from the Properties over the term of this Management Agreement.
Generally, Owner and Manager expect 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 industrial properties. Manager's compensation under
this Section 5.1 shall apply to all renewals,

                                      -10-
<PAGE>

extensions or expansions of Leases that Manager has originally negotiated. In
the event Manager assists with planning and coordinating the construction of any
tenant-paid finish-out or improvements, Manager shall be entitled to receive
from any such tenant an amount equal to not greater than five percent (5.0%) of
the cost of such tenant improvements.

5.2      Leasing Fees. In addition to the compensation paid to Manager under
Section 5.1 above, for the leasing of the properties, Manager shall be entitled
to receive a separate fee for the Leases of new tenants and renewals of Leases
with existing tenants in an 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 area.

5.3      Audit Adjustment. If any audit of the records, books or accounts
relating to the Properties discloses an overpayment or underpayment of
Management Fees, Owner or Manager shall promptly pay to the other party the
amount of such overpayment or underpayment, as the case may be. If such audit
discloses an overpayment of Management Fees for any fiscal year of more than the
correct Management Fees for such fiscal year, Manager shall bear the cost of
such audit.

                                   ARTICLE VI

                          INSURANCE AND INDEMNIFICATION

6.1      Insurance to be Carried.

                  (a)      Manager shall obtain and keep in full force and
         effect insurance on the Properties against such hazards as Owner and
         Manager shall deem appropriate, but in any event insurance sufficient
         to comply with the Leases and Ownership Agreements shall be maintained.
         All liability policies shall provide sufficient insurance satisfactory
         to both Owner and Manager and shall contain waivers of subrogation for
         the benefit of Manager.

                  (b)      Manager shall obtain and keep in full force and
         effect, in accordance with the laws of the state in which each Property
         is located, employer's liability insurance applicable to and covering
         all employees of Manager at the Properties and all persons engaged in
         the performance of any work required hereunder, and Manager shall
         furnish Owner certificates of insurers naming Owner as a co-insured and
         evidencing that such insurance is in effect. If any work under this
         Management Agreement is subcontracted as permitted herein, Manager
         shall include in each subcontract a provision that the subcontractor
         shall also furnish Owner with such a certificate.

6.2      Insurance Expenses. Premiums and other expenses of such insurance, as
well as any applicable payments in respect of deductibles shall be borne by
Owner.

6.3      Cooperation with Insurers. Manager shall cooperate with and provide
reasonable access to the Properties to representatives of insurance companies
and insurance brokers or agents with respect to insurance that is in effect or
for which application has been made. Manager shall use its best efforts to
comply with all requirements of insurers.

6.4      Accidents and Claims. Manager shall promptly investigate and shall
report in detail to Owner all accidents, claims for damage relating to
Ownership, operation or maintenance of the Properties, and any damage or
destruction to the Properties and the estimated costs of repair thereof, and
shall prepare for approval by Owner all reports required by an insurance company
in connection with any such accident, claim, damage, or destruction. Such
reports shall be given to Owner promptly, and any report not so

                                      -11-
<PAGE>

given within 10 (ten) days after the occurrence of any such accident, claim,
damage or destruction shall be noted in the monthly operating statement
delivered to Owner pursuant to Section 2.5(b). Manager is authorized to settle
any claim against an insurance company arising out of any policy and, in
connection with such claim, to execute proofs of loss and adjustments of loss
and to collect and receipt for loss proceeds.

6.5      Indemnification. Manager shall hold Owner harmless from and indemnify
and defend Owner against any and all claims or liability for any injury or
damage to any person or property whatsoever for which Manager is responsible
occurring in, on, or about the Properties, including, without limitation, the
Improvements when such injury or damage shall be caused by the negligence of
Manager, its agents, servants, or employees, except to the extent that Owner
recovers insurance proceeds with respect to such matter. Owner will indemnify
and hold Manager harmless against all liability for injury to persons and damage
to property caused by Owner's negligence and which did not result from the
negligence of misconduct of Manager, except to the extent Manager recovers
insurance proceeds with respect to such matter.

                                   ARTICLE VII

                              TERM AND TERMINATION

7.1      Term. This Agreement shall commence on the date first above written and
shall continue until the seventh (7th) anniversary of such date and thereafter
for successive seven (7) year renewal periods, unless on or before 30 days prior
to the date last above mentioned or on or before 30 days prior to the expiration
of any such renewal period, Manager shall notify Owner in writing that it elects
to terminate this Agreement, in which case this Agreement shall be thereby
terminated on said last mentioned date. In addition, and notwithstanding the
foregoing, Owner may terminate this Agreement at any time upon delivery of
written notice to Manager not less than thirty (30) days prior to the effective
date of termination, in the event of (and only in the event of) a showing by
Owner of willful misconduct, gross negligence, or deliberate malfeasance by
Manager in the performance of Manager's duties hereunder. In addition, either
party may terminate this Agreement immediately upon the occurrence of any of the
following:

                  (a)      A decree or order is rendered by a court having
         jurisdiction (i) adjudging Manager as bankrupt or insolvent, or (ii)
         approving as properly filed a petition seeking reorganization,
         readjustment, arrangement, composition or similar relief for Manager
         under the federal bankruptcy laws or any similar applicable law or
         practice, or (iii) appointing a receiver or liquidator or trustee or
         assignee in bankruptcy or insolvency of Manager or a substantial part
         of the property of Manager, or for the winding up or liquidation of its
         affairs, or

                  (b)      Manager (i) institutes proceedings to be adjudicated
         a voluntary bankrupt or an insolvent, (ii) consents to the filing of a
         bankruptcy proceeding against it, (iii) files a petition or answer or
         consent seeking reorganization, readjustment, arrangement, composition
         or relief under any similar applicable law or practice, (iv) consents
         to the filing of any such petition, or to the appointment of a receiver
         or liquidator or trustee or assignee in bankruptcy or insolvency for it
         or for a substantial part of its property, (v) makes an assignment for
         the benefit of creditors, (vi) is unable to or admits in writing its
         inability to pay its debts generally as they become due unless such
         inability shall be the fault of the other party, or (vii) takes
         corporate or other action in furtherance of any of the aforesaid
         purposes.

7.2      Manager's Obligations Upon Termination. Upon the termination of this
Management Agreement, Manager shall have the following duties:

                                      -12-
<PAGE>

                  (a)      Manager shall deliver to Owner or its designee, all
         books and records with respect to the Properties.

                  (b)      Manager shall transfer and assign to Owner, or its
         designee, all service contracts and personal property relating to or
         used in the operation and maintenance of the Properties, except
         personal property paid for and owned by Manager. Manager shall also,
         for a period of sixty (60) days immediately following the date of such
         termination, make itself available to consult with and advise Owner, or
         its designee, regarding the operation, maintenance and leasing of the
         Properties.

                  (c)      Manager shall render to Owner an accounting of all
         funds of Owner in its possession and shall deliver to Owner a statement
         of all Management Fees claimed to be due to Manager and shall cause
         funds of Owner held by Manager relating to the Properties to be paid to
         Owner or its designee.

7.3      Owner's Obligations Upon Termination. Owner shall pay or reimburse
Manager for any sums of money due it under this Agreement for services and
expenses prior to termination of this Agreement. All provisions of this
Agreement that require Owner to have insured, or to protect, defend, save, hold
and indemnify or to reimburse Manager shall survive any expiration or
termination of this Agreement and, if Manager is or becomes involved in any
claim, proceeding or litigation by reason of having been Manager of Owner, such
provisions shall apply as if this Agreement were still in effect.

The parties understand and agree that Manager may withhold funds for sixty (60)
days after the end of the month in which this Agreement is terminated to pay
bills previously incurred but not yet invoiced and to close accounts. Should the
funds withheld be insufficient to meet the obligation of Manager to pay bills
previously incurred, Owner will, upon demand, advance sufficient funds to
Manager to ensure fulfillment of Manager's obligation to do so, within ten (10)
days of receipt of notice and an itemization of such unpaid bills.

                                  ARTICLE VIII

                                  MISCELLANEOUS

8.1      Notices. All notices, approvals, consents and other communications
hereunder shall be in writing, and, except when receipt is required to start the
running of a period of time, shall be deemed given when delivered in person or
on the fifth day after its mailing by either party by registered or certified
United States mail, postage prepaid and return receipt requested, to the other
party, at the addresses set forth after their respect name below or at such
different addresses as either party shall have theretofore advised the other
party in writing in accordance with this Section 8.1.

             Owner:      HARTMAN REIT OPERATING PARTNERSHIP, L.P.
                         c/o Hartman Commercial Properties REIT
                         1450 West Sam Houston Parkway, North, Suite 100
                         Houston, Texas 77043
                         Attention: Chief Financial Officer

             Manager:    HARTMAN MANAGEMENT, L.P.
                         1450 West Sam Houston Parkway, North, Suite 100
                         Houston, Texas 77043
                         Attention: Chief Financial Officer

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8.2      Governing Law; Venue. This Management Agreement shall be governed by
and construed in accordance with the laws of the State of Texas, and any action
brought to enforce the agreements made hereunder or any action which arises out
of the relationship created hereunder shall be brought exclusively in Harris
County, Texas.

8.3      Assignment. Manager may delegate partially or in full its duties and
rights under this Management Agreement but only with the prior written consent
of Owner. Owner acknowledges and agrees that any or all of the duties of Manager
as contained herein may be delegated by Manager and performed by a person or
entity ("Submanager") with whom Manager contracts for the purpose of performing
such duties. Owner specifically grants Manager the authority to enter into such
a contract with a Submanager; provided that, unless Owner otherwise agrees in
writing with such Submanager, Owner shall have no liability or responsibility to
any such Submanager for the payment of the Submanager's fee or for reimbursement
to the Submanager of its expenses or to indemnify the Submanager in any manner
for any matter; and provided further that Manager shall require such Submanager
to agree, in the written agreement setting forth the duties and obligations of
such Submanager, to indemnify Owner for all Losses incurred by Owner as a result
of the willful misconduct or gross negligence of the Submanager, except that
such indemnity shall not be required to the extent that Owner recovers issuance
proceeds with respect to such matter. Any contract entered into between Manager
and a Submanager pursuant to this Section 8.3 shall be consistent with the
provisions of this Agreement, except to the extent Owner otherwise specifically
agrees in writing. This Management Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns.

8.4      Third Party Leasing Services. Manager acknowledges that from time to
time Owner may determine that it is in the best interests of Owner to retain a
third party to provide certain leasing services with respect to certain
Properties and to compensate such third party for such leasing services. Upon
the prior written consent of Manager, Owner shall have the authority to enter
into such a contract for leasing services with a third party (a "Third Party
Leasing Agreement"); provided that Manager shall have no liability or
responsibility to Owner for any of the duties and obligations undertaken by such
party, and Owner agrees to indemnify Manager for all Losses incurred by Manager
as a result of acts of such third party pursuant to the Third Party Leasing
Agreement. To the extent that leasing services are specifically required to be
performed by a third party pursuant to such Third Party Leasing Agreement,
Manager shall have no obligation to perform such leasing services and Owner
shall have no obligation to Manager for leasing fees pursuant to Section 5.2
hereof.

8.5      Third Party Management Services. Manager acknowledges that from time to
time Owner may acquire interests in Properties in which Owner does not control
the determination of the party that is engaged to provide property management
and other services to be provided by Manager with respect to all Properties
acquired by Owner hereunder. Upon the prior written consent of Manager, Owner
shall have the authority to acquire such non-controlling interests in Properties
for which a third party provides some or all of the services otherwise required
to be performed by Manager hereunder (a "Third Party Management Agreement");
provided that Manager shall have no liability or responsibility to Owner for any
of the duties and obligations undertaken by such third party, and Owner agrees
to indemnify Manager for all Losses incurred by Manager as a result of the acts
of such third party pursuant to the Third Party Management Agreement. To the
extent that property management and other services are specifically required to
be performed by a third party pursuant to such Third Party Management Agreement,
Manager shall have no obligation to perform such services and Owner shall have
no obligation to Manager for compensation for such services pursuant to Article
V hereof.

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8.6      No Waiver. The failure of Owner to seek redress for violation or to
insist upon the strict performance of any covenant or condition of this
Management Agreement shall not constitute a waiver thereof for the future.

8.7      Amendments. This Management Agreement may be amended only by an
instrument in writing signed by the party against whom enforcement of the
amendment is sought.

8.8      Headings. The headings of the various subdivisions of this Management
Agreement are for reference only and shall not define or limit any of the terms
or provisions hereof.

8.9      Counterparts. This Management Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Management Agreement to produce or account for
more than one such counterpart.

8.10     Entire Agreement. This Management Agreement contains the entire
understanding and all agreements between Owner and Manager respecting the
management of the Properties. There are no representations, agreements,
arrangements or understandings, oral or written, between Owner and Manager
relating to the management of the Properties that are not fully expressed
herein.

8.11     Disputes. If there shall be a dispute between Owner and Manager
relating to this Management Agreement resulting in litigation, the prevailing
party in such litigation shall be entitled to recover from the other party to
such litigation such amount as the court shall fix as reasonable attorneys'
fees.

8.12     Activities of Manager. The obligations of Manager pursuant to the terms
and provisions of this Management Agreement shall not be construed to preclude
Manager from engaging in other activities or business ventures, whether or not
such other activities or ventures are in competition with Owner or the business
of Owner.

8.13     Independent Contractor. Manager and Owner shall not be construed as
joint venturers or partners of each other pursuant to this Management Agreement,
and neither shall have the power to bind or obligate the other except as set
forth herein. In all respects, the status of Manger to Owner under this
Agreement is that of an independent contractor.

8.14     No Third-Party Rights. Nothing expressed or referred to in this
Management Agreement will be construed to give any Person other than the parties
to this Management Agreement any legal or equitable right, remedy or claim under
or with respect to this Management Agreement or any provision of this Management
Agreement, except such rights as shall inure to a successor or permitted
assignee pursuant to Section 8.3.

8.15     Ownership of Proprietary Property. The Manager retains ownership of and
reserves all Intellectual Property Rights in the Proprietary Property. To the
extent that Owner has or obtains any claim to any right, title or interest in
the Proprietary Property, including without limitation in any suggestions,
enhancements or contributions that Owner may provide regarding the Proprietary
Property, Owner hereby assigns and transfers exclusively to the Manager all
right, title and interest, including without limitation all Intellectual
Property Rights, free and clear of any liens, encumbrances or licenses in favor
of Owner or any other party, in and to the Proprietary Property. In addition, at
the Manager's expense, Owner will perform any acts that may be deemed desirable
by the Manager to evidence more fully the transfer of ownership of right, title
and interest in the Proprietary Property to the Manager, including but not
limited to the execution of any instruments or documents now or hereafter
requested by the Manager to perfect, defend or confirm the assignment described
herein, in a form determined by the Manager.

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<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Property Management
Agreement as of the date first above written.

                           HARTMAN COMMERCIAL PROPERTIES REIT

                           By: ________________________________________
                           Name: ______________________________________
                           Title: _____________________________________

                           HARTMAN REIT OPERATING
                            PARTNERSHIP, L.P.

                           By: Hartman Commercial Properties REIT
                               General Partner

                                 By: __________________________________
                                 Name: ________________________________
                                 Title: _______________________________

                           HARTMAN MANAGEMENT, L.P .

                           By: ________________________________________
                           Name: ______________________________________
                           Title: _____________________________________

                                      -16-

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