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| 8-K - HINES REIT Q3 SHAREHOLDER PRESENTATION - HINES REAL ESTATE INVESTMENT TRUST INC | q3hrpresentation.htm |
Exhibit 99.1
Hines Real Estate Investments, Inc., Member FINRA/SIPC, is the Dealer Manager. 11/11
Hines Real Estate Investment Trust, Inc. (Hines REIT) is closed to new investors.
Hines REIT Update
As of September 30, 2011
Hines REIT Portfolio Summary
as of September 30, 2011
as of September 30, 2011
2
Total Assets:
§57 properties; $3.42 billion1
Total Square Feet:
§Over 26 million
Portfolio Occupancy:
§88%; 3% above the national average
Total Distributions Since Inception:
§$568.4 million
Current Leverage:
§55%
Current Annualized Distribution Rate:
§5.0%2 (30% of the distribution represents a return of invested
shareholder capital)
shareholder capital)
1 Owned directly or indirectly based on estimated aggregate value.
2 Based on $10.08 share price; assumes consistent distribution rate for 12-month period. Hines REIT declared distributions
through the month of December 2011. The distribution, in an amount equal to $0.00138082 per share, per day will be paid in
January 2012 in cash or reinvested in stock for those participating in Hines REIT's dividend reinvestment plan. Of the
amount described above, $0.00041425 of the per share, per day dividend will be designated by the Company as a special
distribution which will be a return of a portion of the shareholders’ invested capital and, as such, will reduce their remaining
investment in the Company. The special distribution represents a portion of the profits from sales of investment property.
The above designations of a portion of the distribution as a special distribution will not impact the tax treatment of the
distributions to our shareholders.
through the month of December 2011. The distribution, in an amount equal to $0.00138082 per share, per day will be paid in
January 2012 in cash or reinvested in stock for those participating in Hines REIT's dividend reinvestment plan. Of the
amount described above, $0.00041425 of the per share, per day dividend will be designated by the Company as a special
distribution which will be a return of a portion of the shareholders’ invested capital and, as such, will reduce their remaining
investment in the Company. The special distribution represents a portion of the profits from sales of investment property.
The above designations of a portion of the distribution as a special distribution will not impact the tax treatment of the
distributions to our shareholders.
Hines REIT Portfolio
as of September 30, 2011
as of September 30, 2011
3
Proactive Leasing Highlights
Chicago, IL
321 North Clark
321 North Clark
•American Bar Association
Professional association
Renewal 200,000 SF through 2024
Professional association
Renewal 200,000 SF through 2024
•Claro Group
Management consulting firm
New lease 26,000 SF through 2019
Management consulting firm
New lease 26,000 SF through 2019
One North Wacker
•Pricewaterhouse Coopers
International accounting firm
Renewal 279,000 SF through 2028
International accounting firm
Renewal 279,000 SF through 2028
Emeryville, CA
2100 Powell St.
2100 Powell St.
•Art.com
Online retailer of wall décor
New lease 48,000 Square Feet (SF)
through 2018
Online retailer of wall décor
New lease 48,000 Square Feet (SF)
through 2018
Houston, TX
Shell Plaza (One and Two)
Shell Plaza (One and Two)
•Shell Corporation
Global energy company
Expansion 1.22 million SF and extension
from 2015 to 2025
Global energy company
Expansion 1.22 million SF and extension
from 2015 to 2025
San Francisco, CA
55 Second Street
55 Second Street
•Buchalter Nemer
Business law firm
New lease 30,000 SF through 2022
Business law firm
New lease 30,000 SF through 2022
Strategic Dispositions
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Atrium on Bay,
Toronto, ON, Canada
§Acquired: Feb. 2007
for $215 million USD
for $215 million USD
§Sold: Jun. 2011
for $353 million USD
for $353 million USD
§Effective ownership
percentage : 100%
percentage : 100%
Brazilian Industrial Parks
Araucaria, Elouveira and
Vinhedo
Vinhedo
§Acquired: Dec.
2008 for $115
2008 for $115
§Sold: Jan. 2010 and
Apr. 2010 for $141 million
Apr. 2010 for $141 million
§Effective ownership
percentage: 100%
percentage: 100%
600 Lexington,
New York, NY
§Acquired: Feb. 2004
for $92 million
for $92 million
§Sold: May 2010 for
$193 million
$193 million
§Effective ownership
percentage : 11.67%
percentage : 11.67%
Land Parcel Adjacent to
Williams Tower
Houston, TX
Williams Tower
Houston, TX
§Acquired: May 2008
§Sold: Sept. 2010
generating net proceeds of
$12 million
generating net proceeds of
$12 million
§Effective ownership
percentage : 100%
percentage : 100%
Three First National
Chicago, IL
§Acquired: Mar. 2005
for $245 million USD
for $245 million USD
§Sold: Aug. 2011
for $344 million USD
for $344 million USD
§Effective ownership
percentage : 18%
percentage : 18%
Strategic Dispositions
§ Asset sales have enabled us to capture
significant gains
significant gains
• Six assets owned directly or indirectly have been sold
since January 1, 2010 totaling $270.6 million of net
sales proceeds
since January 1, 2010 totaling $270.6 million of net
sales proceeds
§ From January 1, 2011 through September 30,
2011, we have reduced our debt balance by
$182.9 million and reduced our leverage on real
estate assets by approximately 4%
2011, we have reduced our debt balance by
$182.9 million and reduced our leverage on real
estate assets by approximately 4%
5
Diversification: Tenant, Industry and
Lease Expiration
Lease Expiration
1 Data is based on Hines REIT’s effective ownership in each property and is compiled based on leased square feet.
2 Represents all of the tenant industry mix categories that comprise less than 2% of the portfolio.
Tenant Industry Diversification1
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1. Shook, Hardy & Bacon LLP
International Law Firm
2555 Grand
International Law Firm
2555 Grand
2. Williams Companies
Integrated Natural Gas Company
Williams Tower
Integrated Natural Gas Company
Williams Tower
3. Raytheon Company
Defense Aerospace Systems
Company
Raytheon/DIRECTV Buildings
Defense Aerospace Systems
Company
Raytheon/DIRECTV Buildings
4. State of California
State Government
1515 S. Street
State Government
1515 S. Street
5. Microsoft Corporation
Public Multinational Corporation
Daytona-Laguna Portfolio
Public Multinational Corporation
Daytona-Laguna Portfolio
2
Top 10 Tenants1
6. Honeywell International
Engineering Services Conglomerate
Daytona-Laguna Portfolio
345 Inverness Drive
Engineering Services Conglomerate
Daytona-Laguna Portfolio
345 Inverness Drive
7. Oracle
Multinational Computer
Technology Company
2100 Powell
Multinational Computer
Technology Company
2100 Powell
8. Kay Chemical
Private Specialty Cleaning Company
4050 & 4055 Corporate Drive
Private Specialty Cleaning Company
4050 & 4055 Corporate Drive
9. Norwegian Cruise Lines
Cruise Line
Airport Corporate Center
Cruise Line
Airport Corporate Center
10. Foley & Lardner
Global Law Firm
321 North Clark
Global Law Firm
321 North Clark
Diversification: Asset Type, Geography and
Tenant Credit Quality
Tenant Credit Quality
2 Based on square footage
3 Based on estimated aggregate value
4 Represents all of the cities that comprise less than 1% of the total portfolio.
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Debt Maturity Chart
as of September 30, 2011
as of September 30, 2011
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Portfolio Average Weighted Interest Rate: 5.64%
Distribution History
We funded our cash distributions with cash flows from operating activities, distributions received from our unconsolidated investments, proceeds from
the sales of our real estate investments and cash generated during prior periods. Based on $10.08 share price; assumes consistent distribution rate for
12-month period. Hines REIT declared distributions through the month of December 2011. The distribution, in an amount equal to $0.00138082 per
share, per day will be paid in January 2012 in cash or reinvested in stock for those participating in Hines REIT's dividend reinvestment plan. Of the
amount described above, $0.00041425 of the per share, per day dividend will be designated by the Company as a special distribution which will be a
return of a portion of the shareholders’ invested capital and, as such, will reduce their remaining investment in the Company. The special distribution
represents a portion of the profits from sales of investment property. The above designations of a portion of the distribution as a special distribution
will not impact the tax treatment of the distributions to our shareholders.
the sales of our real estate investments and cash generated during prior periods. Based on $10.08 share price; assumes consistent distribution rate for
12-month period. Hines REIT declared distributions through the month of December 2011. The distribution, in an amount equal to $0.00138082 per
share, per day will be paid in January 2012 in cash or reinvested in stock for those participating in Hines REIT's dividend reinvestment plan. Of the
amount described above, $0.00041425 of the per share, per day dividend will be designated by the Company as a special distribution which will be a
return of a portion of the shareholders’ invested capital and, as such, will reduce their remaining investment in the Company. The special distribution
represents a portion of the profits from sales of investment property. The above designations of a portion of the distribution as a special distribution
will not impact the tax treatment of the distributions to our shareholders.
9
Hines REIT Exit Strategy
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§ Overall goal is to maximize returns to investors
§ Exit strategy may include the targeted sale of individual
or groups of assets
or groups of assets
§ May also consider a sale, merger or listing on a
national exchange
national exchange
§ Will continue to identify opportunities for strategic asset sales
Current Priorities & Focus
11
§ Alignment of interests
• Hines has approximately $100 million invested in Hines REIT
• Hines waived 1/3 of its cash asset management fees from
July 2011 through December 2012 to enhance the
Company’s cash flows
July 2011 through December 2012 to enhance the
Company’s cash flows
§ Fee waiver is projected to total over $7.5 million
§ Our near-term priorities consist of:
• Leasing of existing assets in our portfolio
• Strategic asset sales
• Managing liquidity and maximizing distributions
to shareholders
to shareholders
Current Priorities & Focus
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§ Our long-term priorities consist of:
• Evaluating potential exit strategies
• Managing our debt maturities
§ These priorities are designed to assist us in maximizing
shareholder returns over the long term and returning
shareholder capital
shareholder returns over the long term and returning
shareholder capital
Hines Real Estate Investments, Inc., Member FINRA/SIPC, is the Dealer Manager. 11/11
Hines Real Estate Investment Trust, Inc. (Hines REIT) is closed to new investors.
Thank You
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