HOUSTON — Hines REIT Inc., one of three public non-listed REITs sponsored by investment firm Hines, has approved a liquidation plan in which Hines REIT will sell seven West Coast office assets to an affiliate of Blackstone Real Estate Partners VIII — a transaction valued at $1.1 billion.
The portfolio totals approximately 3 million square feet, and includes Howard Hughes Center Los Angeles; Daytona Buildings in Redmond, Wash.; Laguna Buildings in Redmond, Wash.; 5th and Bell in Seattle; 2100 Powell in Emeryville, Calif.; 2851 Junction Ave. in San Jose, Calif.; and 1900 and 2000 Alameda in San Mateo, Calif.
Hines REIT is currently in the process of liquidating the remaining assets that comprise its portfolio that includes the Chase Tower in Dallas and 321 North Clark in Chicago, along with a grocery-anchored retail portfolio located primarily in the Southeast.
“When we first launched Hines REIT in 2003, it was structured as a perpetual life vehicle, much like many institutional funds,” says 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,” adds Schugart. “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.”
The liquidation and dissolution plan is still subject to stockholder approval.
The Eastdil Secured group of Wells Fargo Securities LLC acted as financial advisor to Hines REIT. Robert A. Stanger & Co. Inc. provided financial advisory services to the board of directors in connection with the transaction.
Hines REIT was formed to invest in and own interests in real estate. In total, Hines REIT acquired interests in 66 properties, representing approximately 33 million square feet, since its inception and has sold its interests in 42 of those properties as of June 30, 2016.
Hines is a privately owned global real estate investment firm founded in 1957. The firm’s current property and asset management portfolio includes 457 properties, representing over 193 million square feet.
— Christina Cannon