Hines Global REIT Sells The Summit in Bellevue, Washington
December 31, 2019 | James Sprow | Blue Vault
On December 20, 2019, Hines Global REIT Properties, LP, a subsidiary of Hines Global REIT, Inc. sold The Summit to KRE Summit Owner, LLC. The purchaser is not affiliated with Hines Global or its affiliates. The Summit is a 539,576 square foot office property in Bellevue, Washington. It was acquired in March 2015 for approximately $316.5 million. The portfolio comprises two office towers, called Summit I and Summit II, and a development site where a third office building, to be known as Summit III, is being constructed.
The contract sales price for The Summit was approximately $756.0 million, exclusive of transaction costs and closing prorations. Hines Global REIT Properties, LP, is obligated, pursuant to a lease with the tenant at Summit III to continue the development of Summit III after the closing of the sale of The Summit to the purchaser. Hines Interests Limited Partnership (“Hines”), the sponsor of Hines Global, is the development manager for the project. Pursuant to the sale and purchase agreement, in addition to other closing prorations, the purchaser received a credit against the contract sales price for budgeted amounts that have not yet been paid to complete the project. In addition, $7.0 million was withheld from the sales proceeds delivered to Hines Global REIT Properties, LP at closing and placed in an escrow account in order to pay for costs incurred in excess of the project budget and costs associated with the delivery of the project after the target delivery date. Hines Global REIT Properties, LP may be entitled to receive all or a portion of the amount withheld to cover cost overruns and delay costs if there are amounts remaining in the escrow account on the date the project is substantially complete and subject to certain conditions set forth in the purchase agreement.
Hines Global REIT, Inc. is in the Liquidating LifeStage. The REIT had $1.478 billion in book value of its real estate assets as of September 30, 2019.
According to Blue Vault’s Q3 2019 NTR Review:
The Company sold interests in six properties for an aggregate sales price of $1.0 billion during 2017, 20 properties in 2018 for an aggregate sales price of $1.7 billion, and two properties in the first quarter of 2019 for an aggregate sales price of $477.8 million. As of September 30, 2019, the Company owned interests in 12 real estate investments, consisting of the following types of investments:
Domestic office investments (3 investments)
Domestic other investments (4 investments)
International office investments (4 investments)
International other investments (1 investments)
Through November 14, 2019, the Company has paid aggregate return of capital distributions of $4.00 per share to its stockholders, which included $2.83 per share of liquidating distributions pursuant to the Plan of Liquidation.
In February 2019, the Company declared a liquidating distribution of $2.50 per share ($661.0 million in total), to all stockholders of record as of February 13, 2019. This liquidating distribution represented a return of a portion of its stockholders’ invested capital from sales of investment property and, as such, reduced their remaining investment in the Company.
On February 14, 2019, the board of directors determined a NAV of $6.17 as of that date. This per share NAV is lower than the previously determined per share NAV of $9.04 as of December 31, 2017, primarily as a result of the return of invested capital distributions and liquidating distributions declared by the Company in 2018 and 2019, which aggregated to approximately $2.95 per share.
Sources: SEC, Blue Vault
