Hines Global REIT Announces New Estimated NAV of $10.03
March 1, 2017 | by James Sprow | Blue Vault
In order to assist broker dealers that participated in the public offerings of Hines Global REIT, Inc. (the “Company”) in meeting their customer account statement reporting obligations under NASD Conduct Rule 2340, on February 27, 2017, the Company’s board of directors determined a new estimated per share net asset value (“NAV”) of the Company’s common stock of $10.03 as of December 31, 2016. This new estimated per share NAV represents a 2.0% decrease over the previously determined estimated per share NAV of $10.24 as of December 31, 2015. The new estimated per share NAV was determined utilizing the guidelines established by IPA Practice Guideline 2013-01 – “Valuation of Publicly Registered, Non-Listed REITs” issued April 29, 2013, except that it includes the estimate of closing costs that the Company would expect to incur related to a future potential liquidity event.
The Company engaged Cushman & Wakefield, Inc., an independent third party real estate advisory and consulting firm, to provide appraised values of the Company’s domestic real estate property investments as of December 31, 2016. Additionally, the Company engaged Knight Frank, LLP, or Knight Frank, an independent third party real estate advisory and consulting services firm, to provide appraised values of the Company’s international real estate investments as of December 31, 2016. The Company also engaged Jones Lang LaSalle, an independent third party real estate advisory and consulting services firm, to perform valuations of the Company’s debt obligations as of December 31, 2016.
Additionally, the Company engaged Altus Group U.S. Inc., or Altus, to review the appraisals provided by Cushman and Knight Frank and to assess the reasonableness of the Company’s new estimated per share NAV. Altus concluded that the new estimated per share NAV determined by the Company’s board of directors was reasonable.
The aggregate value of the Company’s real estate property investments as of December 31, 2016 was $5.1 billion, including amounts attributable to noncontrolling interests, which represents a 1.1% net decrease when compared to the previously determined value of the Company’s assets as of December 31, 2015 (including adjustments for properties acquired during 2016 and the effect of properties disposed of during 2016). This 1.1% net decrease resulted from 2.5% appreciation in the aggregate values of the Company’s real estate property investments as offset by 3.6% dilution resulting from the devaluation of foreign currencies against the U.S. dollar.
The aggregate value of the Company’s real estate property investments as of December 31, 2016 also represented a 9.4% increase compared to the net purchase price of the real estate property investments of $4.7 billion, excluding closing costs, transaction fees and additional capital investments since acquisition.
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