Hines is the sponsor of non-traded REIT investment products sold through Hines Securities. In 1957, Gerald D. Hines founded the firm in Houston as a developer of warehouse, distribution and small office buildings. After building his reputation and establishing his presence, the firm began to focus on developing and financing larger and more complex projects in central business districts during the 1970s and 80s.
As real estate development markets began to soften in the 1990s, Hines focused on acquiring existing office buildings primarily in the U.S. The company strategically expanded internationally, opening its first foreign office in 1991.
Also during the 1990s, Hines began real estate investment programs for some of the world’s largest institutional investors including international banks, life insurance companies, governments and private pension plans.
During the last decade, Hines observed the accelerating shift of corporations away from defined benefit pension plans toward plans with defined contributions. These new plans allow individual investors to assume a greater role in charting the direction of their investments. The company determined that non-traded REITs could provide individual investors with the opportunity to invest in institutional-quality commercial real estate assets. Please note that institutional investors invest on different terms and fee structures than individual investors.
Hines launched HMS Income Fund, a business development company, in 2012. Hines Securities is the dealer manager for the offering.
Today, Hines is run by Jeff Hines, Gerald Hines’ son, and the company is recognized worldwide as a leader in real estate investment, development and property management.
For the 10-year period that ended December 31, 2016, Hines sponsored 24 privately offered programs in which Hines co-invested with various institutional and other third-party investors, as well as three publicly offered investment programs. During this 10-year period, these prior programs:
|Raised $15.9 billion from investors||Had aggregate real estate investments of $19.9 billion|
|Invested in approximately 201 properties
- 78 U.S. properties with a cost of $8.6 billion
- 123 foreign properties with a cost of $7.4 billion
|Sold 134 properties with an aggregate cost basis of $15.7 billion and sales price of $19.9 billion|
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.
1Data from 1957 through December 31, 2016. Our property/asset management portfolio includes 533 properties.
2As of December 31, 2016. Includes $48.5 billion in assets that Hines manages as a fiduciary, including non-real estate assets, and $48 billion for which Hines provides third-party property management services.
3Source: Global Investment Managers 2016, Institutional Real Estate, Inc. Used with permission. The ranking is based on the total gross value of real estate assets under management (US$ million as of December 31, 2015).
4With the exception of the two 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 governing Hines Global REIT II.
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 REIT investment products sponsored by Hines.
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”), a public non-traded REIT sponsored by Hines that is closed to new investors, 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 May 2016, Hines REIT announced that its board of directors voted to suspend indefinitely its dividend reinvestment plan and its share redemption program, each suspension effective as of June 30, 2016. 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. In addition, Hines REIT ceased paying regular quarterly distributions after the payment of distributions declared for the second quarter of 2016 and following Hines REIT’s board of directors’ unanimous approval of a plan of liquidation and dissolution (the “Plan”), pursuant to which Hines REIT will liquidate its assets and dissolve. The Plan received stockholder approval and Hines REIT has completed the sale of its assets and has paid aggregate liquidating distributions pursuant to the Plan of $6.50 per share to its stockholders and non-controlling interest holders. In addition to these liquidating distributions, 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. Such special distributions were designated as a partial return of the stockholders’ invested capital. Hines REIT has established a reserve account from which to pay estimated ongoing expenses of the liquidation and dissolution and has indicated that it does not expect to make additional material liquidating distributions pursuant to the Plan; however, if there are proceeds remaining in the reserve account and reserves are no longer needed, they will be distributed to Hines REIT’s stockholders and non-controlling interest holders. Hines REIT has indicated that there can be no assurances as to the timing or amount of any additional liquidating distributions.
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, an estimated per share NAV of $10.24 as of December 31, 2015, and an estimated per share NAV of $10.03 as of December 31, 2016. 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 recent 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.