Attached files
| file | filename |
|---|---|
| 8-K - BD COMMUNICATION - HINES REAL ESTATE INVESTMENT TRUST INC | bdletter120409.htm |
Exhibit 99.1
Hines
Real Estate Investment Trust, Inc.
Questions
and Answers Regarding the Close of Our Offering and Suspension of Our Share
Redemption Program
December
10, 2009
Why
is Hines Real Estate Investment Trust closing its offering?
Our
highest priority is protecting the value of our shareholders’
investments. The current economic and market environment has put
downward pressure on the value of most investors’ portfolios, and has decreased
the amount of new capital being invested in most sectors, including commercial
real estate. In consideration of these current market conditions and
other factors, our board of directors determined that Hines REIT will not accept
subscriptions for sales of its common shares pursuant to its primary offering
dated after December 31, 2009. We are considering various future
capital raising strategies for Hines REIT in an effort to maximize our
investors’ total returns, and we expect to resume capital raising activities
during 2010 under a new offering. Until further notice, we will
continue to offer shares under our dividend reinvestment plan.
What
is the last date that a shareholder can purchase shares of Hines
REIT?
Other
than pursuant to our dividend reinvestment plan, we will not accept
subscriptions for shares of our common stock that are dated after December 31,
2009. Unless we agree otherwise, all subscription agreements must be
postmarked by that date and received by our transfer agent, DST Systems, Inc.,
430 W. 7th St.,
Kansas City, MO 64105, Attn: Hines REIT.
What
impact does the closing of the primary offering have on Hines REIT’s dividend
reinvestment plan?
The
closing of our primary offering will not have an impact on our dividend
reinvestment plan. You may participate in our dividend reinvestment
plan and elect to have your distributions reinvested in shares of our common
stock at $9.58 per share, as before.
What
impact does the closing of the offering have on Hines REIT’s distribution
policy?
The
closing of our offering does not impact our distribution policy. We
expect that distributions will continue to be paid on a quarterly basis at
amounts our board of directors determines appropriate. Despite the
challenges being experienced in the broader economy and real estate portfolios
in general, we have managed to maintain an attractive distribution rate
throughout 2009 for our shareholders. In addition, our board has
authorized distributions at the same rate through March 31,
2010. However, our board may, in its sole discretion, amend our
distribution policy at any time, and therefore there can be no assurances about
our future distributions and whether we will be able to maintain the current
distribution rate.
What
is the current state of Hines REIT’s real estate portfolio?
We own
direct and indirect investments in a portfolio of 63 properties located in 39
cities representing over 31 million square feet. In spite of the
challenges presented by the current economy and markets, our portfolio was 92%
leased as of September 30, 2009 to a well-diversified tenant base in more
than 20 different industries. The portfolio has minimal
near-term lease expirations, which range from 3.0% to 8.0% of leasable square
feet per year from now through 2011, and we believe this level of expirations is
manageable. In addition, we are fortunate to have minimal debt
maturities in the near term given the current challenges in the financing
markets.
What
is Hines REIT’s current financial position?
We
believe our capital resources and cash flows from our operations are sufficient
to meet the company’s liquidity needs for the foreseeable
future. Hines REIT’s primary liquidity needs include funding of
property-level operating expenses, capital improvements and leasing costs, debt
service, corporate-level general and administrative expenses and
distributions. In light of the close of our offering to new proceeds
(other than proceeds from shares offered through our dividend reinvestment
plan), we acted prudently by suspending our share redemption program (except in
connection with death or disability) in order to maintain liquidity within the
Company for the benefit of our shareholders.
1
Why
is Hines REIT suspending its Share Redemption Program?
Over the
past several quarters, challenging economic conditions and poor investor
sentiment have led many investors to focus on liquidity and
safety. As a result, many investment programs have experienced a
significant increase in requests to redeem securities. Hines REIT
experienced similar circumstances and due to our ability to raise capital and
maintain sufficient liquidity to manage our portfolio, we were able to honor all
shareholder redemption requests received in good order since our
inception.
However,
with the close of our offering to new investment proceeds (other than proceeds
from shares offered through our dividend reinvestment plan), our board of
directors determined it is in our best interests to suspend our share redemption
program until further notice, except with respect to redemption requests made in
connection with the death or disability of a shareholder. We expect
that this will allow us to maintain liquidity within the Company which we
believe will benefit our existing shareholders.
What
impact does closing the offering have on the Hines REIT’s consideration of a
liquidity event?
As stated
in our prior SEC filings, we expect our board of directors may begin to consider
possible exit strategies for all or a portion of our portfolio in approximately
6-10 years. The board's consideration of a potential liquidity event will be
made in light of market conditions and what is in our best interests at that
time.
2