Portfolio managers utilize the expertise of Hines’ real estate professionals that live and work in markets all around the world to identify properties for the portfolio. The teams tap into this knowledge of local real estate trends, economics and demographic conditions as they work together to evaluate the location, condition, income-producing potential, growth potential and tenant quality of each property being considered for acquisition.
Once properties are acquired, the Hines Global REIT management team works with property managers who: actively market to attract quality tenants and keep them satisfied; perform proactive maintenance on properties; and initiate capital improvements with the goal of creating value.
As the portfolio matures, Hines Global REIT managers will team up with Hines’ local market experts to look at trends and market conditions to determine the best possible time to execute a liquidity event. Hines Global REIT expects to consider a liquidity event sometime between the years 2017 and 2019, either through sales of properties or the portfolio, a merger, listing or similar transaction. The Hines Global REIT Board of Directors, or Board, has the sole discretion to consider a liquidity event at any time if it determines such event to be in Hines Global REIT’s best interests. Keep in mind that a liquidity event is not guaranteed and may be postponed.
There is no guarantee that Hines Global REIT will achieve the goals outlined in this approach.
Investors must receive a return3 of invested capital plus an 8.0% cumulative, non-compounded annual pre-tax return before Hines is entitled to recover 15% of the remaining profits. There is no guarantee that investors will receive the returns described herein.
Please note that fees are paid to Hines Global REIT’s advisor, Hines and other affiliates of Hines for services related to, among other things, Hines Global REIT’s public offerings, acquisitions and dispositions of real estate, financings, the conduct of Hines Global REIT’s day-to-day activities and the management of its real estate assets, in addition to the incentive fee described here.
1The Hines Global REIT Board of Directors determines the timing and amount of distributions. There is no guarantee that distributions will be paid or that the distribution rate will be maintained. The availability and timing of distributions we may pay is uncertain and cannot be assured. We have reduced our annualized distribution rate and there can be no assurances that the current distribution rate will be maintained; Our distributions have been paid and may continue to be paid from sources such as proceeds from our debt financings, proceeds from our public offerings, cash advances by our Advisor, Hines Global REIT Advisors LP, cash resulting from a waiver or deferral of fees and/or proceeds from the sale of assets. We have not placed a cap on the amount of our distributions that may be paid from any of these sources. To the extent we pay distributions from sources other than our cash flow from operations, we will have less funds available for the acquisition of properties, and your overall return may be reduced. The use of borrowed funds to pay distributions can result in investment losses or a reduction or suspension of distributions.
2Investors are not acquiring an interest in Hines. There is no guarantee that the experience of Hines will translate into positive results for Hines Global REIT.
3Investors are expected to receive either cash or securities in connection with a liquidity event, the value of which will be deemed to be sufficient to cover a return of invested capital plus an 8% cumulative, non-compounded annual pre-tax return.