Hines Global REIT Sells San Francisco Office Building for $342.5 Million
February 7, 2019 | James Sprow | Blue Vault
On February 4, 2019, a subsidiary of Hines Global REIT, Inc. sold 550 Terry Francois to a wholly-owned subsidiary of The Gap, Inc. 550 Terry Francois is a six-story, Class A office building in San Francisco, California. The Purchaser is not affiliated with Hines Global or its affiliates.
The contract sales price for 550 Terry Francois was approximately $342.5 million, exclusive of transaction costs and closing prorations. The REIT purchased the property in August 2012 for $180.0 million.
As previously disclosed in filings made by the Company with the SEC, with the approval of its stockholders in July 2018, the Company adopted a plan of liquidation and dissolution. Pursuant to the plan, the Board has authorized the Company to declare a liquidating distribution on the Company's common stock, in an amount per share equal to $2.50, payable to the Company’s stockholders of record at the close of business on February 13, 2019. This liquidating distribution will be paid in cash on February 15, 2019, and will be designated by the Company as a return of a portion of the stockholders’ invested capital and, as such, will reduce the stockholders’ remaining investment in the Company.
After this liquidating distribution is paid on February 15, 2019, the Company will have made aggregate special distributions, return of invested capital distributions and liquidating distributions of approximately $4.00 per share between January 2018 and February 2019, which are comprised of:
1. $1.05 per share special distribution paid on January 2, 2018;
2. $0.12 per share return of invested capital distributions, consisting of $0.02 per share of each of the monthly distributions paid from February 2018 through July 2018, which were designated by the Company as a return of a portion of stockholders’ invested capital;
3. approximately $0.33 per share of liquidating distributions, consisting of the monthly distributions paid from August 2018 through January 2019, which were designated by the Company as a return of a portion of the stockholders’ invested capital; and
4. $2.50 per share liquidating distribution to be paid on February 15, 2019, to stockholders of record as of February 13, 2019.
On February 6, 2019, the Company distributed an email to financial advisors with clients that are stockholders of the Company, regarding the February 2019 liquidating distribution described above.
Since July 2018 the REIT has sold 21 properties in the portfolio. One or more additional liquidating distributions are expected to be made after the sale of the remaining 12 properties in the portfolio. A shareholder letter detailing the amount of the liquidating distribution declared and the new NAV will be mailed to shareholders around February 19, 2019.
Hines Global REIT, Inc. commenced its initial public offering in August 2009 and raised an estimated $2.737 billion, including DRIP proceeds, before closing the offering in April 2014. The REIT was paying distributions at the rate of 6.50% based upon the initial offering price of $10.00 per share (and excluding special distributions) through Q3 2018.
Sources: SEC, S&P Global Market Intelligence
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