HOUSTON – Hines Real Estate Investment Trust, Inc., one of three public non-listed REITs sponsored by Houston-based Hines, will sell seven West Coast office buildings to a Blackstone affiliate for $1.162 billion as part of a plan to liquidate the REIT.
Blackstone is acquiring 3 million SF of Hines REIT office properties including the Howard Hughes Center in Los Angeles; the Daytona Buildings in Redmond, Wash.; the Laguna Buildings in Redmond, Wash; the 5th and Bell building in Seattle; the 2100 Powell building in Emeryville, Calif.; 2851 Junction Avenue building in in San Jose, Calif.; and 1900 and 2000 Alameda in San Mateo, Calif.
Additionally, Hines REIT is currently in the process of selling its interests in and liquidating the remaining assets that comprise its portfolio, including the 1.3 million SF Chase Tower in Dallas, the 321 North Clark building in Chicago and a grocery-anchored retail portfolio located primarily in the southeastern United States.
At the end of the first quarter, Hines REIT owned the 400,000 SF Champions Village retail center at FM 1960 and Champions Forest Drive in Northwest Houston and the 64,000-SF Oak Park Village in San Antonio and other grocery-anchored retail centers.
As a result of the liquidation of the REIT, an estimated net proceeds will be distributed to stockholders of approximately $6.35 to $6.65 per share.
“When we first launched Hines REIT in 2003, it was structured as a perpetual life vehicle, much like many institutional funds,” said Sherri Schugart, president and CEO of Hines REIT. “Impacts from the great recession caused us to close the fund to new investors in 2009, so we began considering other options that could provide the best opportunities for enhancing stockholder value through the following economic recovery.
“By making strategic asset sales and redeploying proceeds into Class A West Coast office properties over the last several years, we’ve been able to add to the overall quality and concentration of our portfolio, sustain attractive distributions to investors, and increase our net asset value per share,” Schugart said. “After our management and Board of Directors considered a variety of strategic alternatives to maximize stockholder value through a liquidity event, we are confident that the plan of liquidation achieves that goal.”
June 30, 2016