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Hines Global Income Trust Updates NAV and Offering Price Per Share

February 14, 2018

Hines Global Income Trust Updates NAV and Offering Price Per Share

February 14, 2018 | James Sprow | Blue Vault

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Hines Global Income Trust, Inc. (formerly known as Hines Global REIT II, Inc.) filed a supplement to its December 2017 Prospectus to update the offering price and transaction price for each class of its common stock as of March 1, 2018, and to disclose the calculation of its January 31, 2018, net asset value (“NAV”) per share.

The updated NAV per share as of January 31, 2018, is $9.78, up from $9.69 as of August 31, 2017, an increase of approximately one percent. The December 31, 2016 estimated NAV was $9.65. The valuations of the REIT’s real properties as of January 31, 2018, were reviewed by Altus Group, Inc., an independent valuation firm. Altus concluded that the new NAV per share was reasonable.

The offering price per share was set at $10.13 for Class T and Class S shares and $9.78 for Class D and Class I shares as of March 1, 2018. The transaction price for each share class is $9.78 as of March 1, 2018.

The estimated value of the REIT’s real estate investments increased from $17.03 per share as of August 31, 2017 to $19.22 per share as of January 31, 2018. In October 2017, the REIT acquired Queen’s Court, a student housing property in Reading, England, for $65.3 million which explains roughly $1.60 per share of the increased real estate investment value. The REIT’s debt obligations and other liabilities were estimated at $10.18 per share as of January 31, 2018, up from $8.61 per share as of August 31, 2017, a portion of which is due to financing for the October acquisition.

The REIT’s advisor used key assumptions in valuing the real properties which included exit capitalization rates, discount rates for cash flows and average holding periods.  Each set of assumptions was unique for different properties and property types. On a weighted-average basis, the exit capitalization rate assumption was 6.38%, the discount rate assumption for cash flows was 7.58%, and the average holding period assumption was 10.0 years. The filing also discloses a sensitivity analysis that shows how much the property values would vary with a hypothetical change in exit capitalization rates and discount rates. 

The latest valuation uses lower exit cap rates and discount rates for the REIT’s U.S. office property which made up 20.5% of the property portfolio based on purchase price, and higher rates for its multifamily and retail properties which made up 37.0% of the REIT’s portfolio based on purchase price.

 

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