Hines is the sponsor of REIT and BDC investment products sold through its broker/dealer affiliate, Hines Securities. Over the last 60 years, Hines built a reputation as one of the world’s leading real estate investment, development and management firms. Hines’ focus on integrity, quality and conservative business practices has helped win the confidence of major corporations, pension funds, insurance companies and other institutional investors seeking diversification with commercial real estate by partnering with Hines or investing in Hines’ private programs. Please note that institutional investors invest on different terms and fee structures than individuals.
Hines observed the accelerating shift of corporations away from defined benefit pension plans toward defined contribution plans that require individuals to assume a greater role in charting the direction of their own investments. The firm entered the retail investment market by sponsoring two non-traded REITs—Hines REIT and Hines Global REIT, now closed to new investors. In 2012 Hines launched HMS Income Fund, a business development company—and launched Hines Global II in 2014 with the ability to invest in a variety of types of real estate investments in the U.S. and abroad.
You should not assume that the experience of Hines will translate into positive results for any investments in which Hines Securities is the dealer/manager.
1Source: Global Investment Managers 2016, Institutional Real Estate, Inc. Used with permission. The ranking is based on the total gross value of real estate assets under management (US$ million as of December 31, 2015).
2As of December 31, 2016. Includes $48.5 billion in assets that Hines manages as a fiduciary, including non-real estate assets, and $48 billion for which Hines provides third-party property management services.
3As of December 31, 2016.
With the exception of the four publicly offered programs noted, Hines’ prior programs were conducted through privately held entities not subject to the up-front commissions, fees and expenses associated with this offering or all of the laws and regulations to which public offerings are subject. A significant portion of the financial results of these programs involve development projects.
Investors are not acquiring an interest in Hines. Investors should not assume that the performance of Hines’ previous programs will be indicative of future results for any investment available through Hines Securities.
Economic conditions had an adverse impact on commercial real estate markets during the global recession. In November 2009, Hines Real Estate Investment Trust, Inc. (“Hines REIT”) suspended its share redemption program, except with respect to redemptions in connection with the death or disability of a stockholder. Beginning on April 1, 2013, the share redemption program was reopened. In connection with Hines REIT’s adoption of the Plan of liquidation and dissolution (the “Plan”), Hines REIT suspended indefinitely its dividend reinvestment plan and its share redemption program, each suspension effective as of June 30, 2016. In addition, Hines REIT ceased paying regular quarterly distributions after the payment of distributions declared for the second quarter of 2016. The Plan received stockholder approval and Hines REIT completed the sale of its real property assets. Hines REIT paid an initial liquidating distribution of $6.20 per share to stockholders and non-controlling interest holders in cash on or around December 23, 2016. The non-controlling interest holders are affiliates of Hines Interests Limited Partnership (“Hines”). In addition to this liquidating distribution, Hines REIT previously paid special distributions to its stockholders and non-controlling interest holders totaling $1.01 per share from July 2011 through April 2013 (which represented a partial return of invested capital). Hines REIT has disclosed that it expects to make an additional liquidating distribution pursuant to the Plan during the first quarter of 2017. Hines REIT has indicated that there can be no assurances as to the timing or amount of any additional liquidating distribution.
In May 2011, November 2012, April 2013, November 2013, December 2014 and September 2015, Hines REIT’s board of directors determined an estimated per share net asset value (“NAV”), of $7.78, $7.61, $6.75, $6.40, $6.50, and $6.65, respectively, each of which was lower than the most recent primary offering price of $10.08 per share. In addition, Hines REIT decreased its distribution rate in July 2010 and further decreased the rate in April 2013.
Hines also sponsored Hines Global REIT, Inc. (“Hines Global I”), which was launched in August 2009. In January 2012, Hines Global I lowered its distribution rate. In January 2013, Hines Global I closed its initial public offering and launched a follow-on offering with a share price of $10.28, a 2.80% increase from the initial public offering price of $10.00. On March 4, 2014, shares of Hines Global I were repriced at $10.40. In both cases, the Hines Global I board of directors determined the new offering price based on third-party appraisals and other factors. Hines Global I determined an estimated per share NAV of $8.78 as of December 31, 2012, an estimated per share NAV of $8.90 as of December 31, 2013, an estimated per share NAV of $9.44 as of December 31, 2014 and an estimated per share NAV of $10.24 as of December 31, 2015. Hines Global I ceased offering primary shares to new investors in April 2014.
Several of Hines’ privately offered programs have experienced adverse economic developments in prior years due to the global financial crisis and deteriorating economic conditions in several European and Latin American countries, Mexico and several U.S. markets. The adverse market conditions may cause these programs to alter their investment strategy, generate returns lower than originally expected, or ultimately incur losses.