Hines Global Income Trust Buys Chicago Office Property in 1031 Exchange Transaction
Hines Global Income Trust Inc., a publicly registered non-traded real estate investment trust, has purchased 1315 N. North Branch in Chicago.
Hines Global Income Trust Inc., a publicly registered non-traded real estate investment trust, has purchased 1315 N. North Branch, a fully-leased, 157,500-square-foot creative office building in the Goose Island submarket of Chicago. The purchase price was approximately $47 million, excluding transaction and closing costs.
According to a filing with the Securities and Exchange Commission, the acquisition was structured as a reverse 1031 exchange, “in an effort to increase the tax efficiency of a planned disposition of another property.”
Section 1031 of the Internal Revenue Code allows for the deferral of capital gains taxes on investment property sales by reinvesting the proceeds into a similar investment property within a specified time frame.
Accordingly, the legal title to 1315 N. North Branch is currently held by an exchange administrator and will transfer to the REIT when the reverse 1031 exchange is complete, or August 17, 2022 (180 days from the acquisition date).
1315 N. North Branch is a recently renovated urban infill building located on three acres and leased to six tenants. The building’s industrial design has lofted ceilings, skylights and divided-light windows, as well as a fitness center and lockers, a golf simulator, outdoor patios and decks, and heated indoor parking. Each of the suites has its own entrance and “identity,” the company said. Hines noted the property has “attracted tenants from a diverse set of industries” including financial services, design, and logistics.
Janice Walker, chief operating officer of Hines Global Income Trust said, “We are seeing compelling investments in the differentiated office space. 1315 N. North Branch affords the fund an opportunity to acquire a creative office product with exceptional building attributes in a dynamic location. The maturation of the submarket offers exposure to a micro-location positioned for continued growth and demand.”
Hines Global Income Trust’s portfolio is diversified by geography and real estate sectors, with a focus on “stable assets with strong long-term income potential.” The REIT’s portfolio is nearly two thirds weighted toward the industrial and living sectors and is valued at $2.9 billion.
In other news, Hines Global Income Trust recently purchased Liberty Station, a low-rise, four-building office campus located in San Diego, for $120 million, as reported by The DI Wire last month. The REIT also declared its monthly net asset value per share for January 2022.
Hines Global Income Trust, which oversees a $2.87 billion real estate portfolio, launched its initial offering in August 2014. From inception through May 13, 2021, the REIT raised approximately $1.9 billion in investor equity in its public offerings and distribution reinvestment plan. Its second follow-on offering launched at the beginning of June 2021 and has raised $497.3 million as of February 11, 2022.
