Hines Global REIT II Files $2 Billion Follow-On Offering, Plans to Restructure and Reduce Fees
Hines Global REIT II, a publicly registered non-traded real estate investment trust, filed a registration statement with the Securities and Exchange Commission for a $2 billion follow-on offering with four new share classes of commons stock and $500 million distribution reinvestment plan shares. The current primary offering is scheduled to close on September 30th.
Hines Global REIT II plans to restructure as a perpetual life REIT with monthly NAV per share valuations. The follow-on offering, once declared effective by the SEC, will include lower broker-dealer fees and expenses, the elimination of acquisition and disposition fees, and an enhanced share redemption program to increase liquidity for shareholders.
The company plans to offer four new share classes, including Class T, Class S, Class D, and Class I shares and intends to use the proceeds to invest in a diversified portfolio of commercial real estate properties and other real estate investments in the United States and internationally.
Class T shares will be priced for $10.00 each and include a 3 percent selling commission, a 1 percent annual stockholder servicing fee, and a 0.5 percent dealer manager fee to Hines Securities Inc.
Class S shares will be priced for $10.00 each and include a 3.5 percent selling commission, a 1 percent annual stockholder servicing fee, and no dealer manager fees.
Class D shares will be priced at $9.65 each and include a 0.25 percent annual stockholder servicing fee, but no selling commission or dealer manager fee.
Class I shares are also priced at $9.65 and have no selling commission, dealer manager fee, or stockholder servicing fee.
Class T and Class S shares are available through brokerage and transaction-based accounts, Class D shares are generally available through fee-based programs, and Class I shares are generally purchased by institutional investors.
Class T, Class S, and Class D shares have a minimum initial investment of $2,500, while Class I shares have a minimum investment of $1 million.
The outstanding Class A, Class T, Class I, and Class J shares will be redesignated as Class AX, Class TX, Class IX, and Class JX shares, respectively. On October 3rd, the REIT plans to launch a tender offer of Class A, Class T, and Class I shares following the announcement its new per share net asset value.
The share redemption program will also be amended to include all share classes and the distribution reinvestment plan will convert into an automatic enrollment plan.
Hines Global REIT II was declared effective in August 2014 and raised $357 million in investor equity, as of the second quarter of 2017. The company owns a portfolio of seven properties with a total acquisition cost of approximately $614.7 million, according to Summit Investment Research.
