Hines Real Estate Investment Trust Inc. announced it will sell a $1.16 billion portfolio of office properties to feed the appetite of institution investors.
An affiliate of Blackstone Real Estate Partners VIII will pay $1.16 billion for the West Coast properties as part of a liquidation of the REIT.
“When we first launched Hines REIT in 2003, it was structured as a perpetual life vehicle, much like many institutional funds,” said Sherri Schugart, president and CEO of Hines REIT.
“Impacts from the great recession caused us to close the fund to new investors in 2009, so we began considering other options that could provide the best opportunities for enhancing stockholder value through the following economic recovery. By making strategic asset sales and redeploying proceeds into Class A West Coast office properties over the last several years, we’ve been able to add to the overall quality and concentration of our portfolio, sustain attractive distributions to investors, and increase our net asset value per share.
“After our management and Board of Directors considered a variety of strategic alternatives to maximize stockholder value through a liquidity event, we are confident that the plan of liquidation achieves that goal.”
The buildings Hines REIT is selling have about three million square feet of office space and include Howard Hughes Center in Los Angeles and properties in Seattle and Redmond, Washington, and Emeryville and San Jose, California.
Hines REIT, one of three non-listed REITs sponsored by Houston-based Hines, said that its board unanimously approved a liquidation and dissolution to take advantage of strong demand for high-quality assets by institutional buyers.
Hines REIT is currently in the process of selling its interests in and liquidating the remaining assets that comprise its portfolio, including Chase Tower in Dallas, 321 North Clark in Chicago and a grocery-anchored retail portfolio located primarily in the southeastern United States.