Hines REIT Completes $1.2 Billion Sale of Office Assets to Blackstone Affiliate
Hines Real Estate Investment Trust, Inc., a publicly registered non-traded REIT, completed the sale of seven West Coast office assets to an affiliate of Blackstone Real Estate Partners VIII for $1.16 billion. Shareholders approved the board-recommended plan to liquidate and dissolve Hines REIT during its annual shareholder meeting on November 7th, as reported by The DI Wire.
“The sale of seven of our West Coast office assets to a Blackstone affiliate was a significant and positive transaction and a result of our focus on maximizing the assets’ appeal to the institutional market and providing Hines REIT’s investors with an attractive outcome,” said Sherri Schugart, president and CEO of Hines REIT. “The vast majority of our investors will have experienced a positive return on their investment in Hines REIT given the cash distributions we have paid through the years combined with capital we expect to return to investors as a result of this liquidity event and capital we have returned in previous years.”
Hines REIT currently expects to initially distribute a significant portion of the net proceeds from the completed asset sales to its shareholders before the end of this year and to have one or more additional liquidating distributions to its shareholders during the first quarter of 2017, after all remaining business activities are concluded.
Hines REIT presently expects that the aggregate liquidating distributions to its shareholders will be within the range of $6.35 to $6.65 per share. In addition to these liquidating distributions, Hines REIT previously paid special distributions totaling $1.01 per share from July 2011 through April 2013, which were designated as a partial return of invested capital to shareholders.
So far in 2016, Hines REIT has sold 22 of its directly owned properties for $2.3 billion, before transaction costs and retirement of debt. In addition, during that same time period, the Hines US Core Office Fund LP, in which Hines REIT owns a 28.8 percent LP interest, sold four of its properties for $762.7 million, before transaction costs and retirement of debt. Hines REIT is in the process of liquidating the few remaining assets it owns directly and through its interest in Hines US Core Office Fund LP and currently anticipates those sales will be completed before year end.
Hines REIT was formed in August 2003 and has acquired interests in 66 properties, representing approximately 33 million square feet, since its inception and has sold its interests in 63 of those properties. The REIT, which invests in commercial real estate with a focus on office properties, has raised $2.3 billion in investor equity prior to closing its offering. Shares were originally priced between $10.00 and $10.40 each. Hines REIT was the first of three non-traded REITs sponsored by the international real estate firm.
