Attached files
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| 8-K - HINES REIT Q4 2012 SHAREHOLDER PRESENTATION - HINES REAL ESTATE INVESTMENT TRUST INC | hrq4_2011shpresentation.htm |
Exhibit 99.1
Hines Securities, Inc., Member FINRA/SIPC, is the Dealer Manager. 3/12
Hines Real Estate Investment Trust, Inc. (Hines REIT) is closed to new investors.
Hines REIT Update
As of December 31, 2011
As of December 31, 2011
Hines REIT Overview
§ Commenced capital raising in 2004
§ Raised and invested significant capital in 2006 and 2007
which represented a peak in the overall economic cycle and
real estate cycle
which represented a peak in the overall economic cycle and
real estate cycle
§ In 2008 and 2009, amidst the economic downturn towards the
recession, we experienced significant declines in capital
raising and significant increases in redemption requests
recession, we experienced significant declines in capital
raising and significant increases in redemption requests
§ At the end of 2009, capital raising ceased and we suspended
our redemption plan to prudently preserve liquidity
our redemption plan to prudently preserve liquidity
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Hines REIT Overview
§ Since 2009, the Company has been keenly focused on the
following:
following:
– Leasing: keeping our tenants in occupancy to preserve and maintain
operating income
operating income
– Strategic asset sales: identifying opportunities to sell certain
stabilized assets to harvest liquidity and attractive profits
stabilized assets to harvest liquidity and attractive profits
– Liquidity: ensuring we have sufficient funds to meet liquidity needs for
operating expenses, leasing capital, and debt refinancings, while still
maintaining reasonable levels of distributions to our shareholders
operating expenses, leasing capital, and debt refinancings, while still
maintaining reasonable levels of distributions to our shareholders
§ We continue to be patient and disciplined in managing our
portfolio in order to benefit from the overall economic recovery
and recovery of the U.S. office markets
portfolio in order to benefit from the overall economic recovery
and recovery of the U.S. office markets
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Hines REIT Portfolio Overview
as of December 31, 2011
as of December 31, 2011
§ 57 projects / 22 different geographic markets / U.S. and Brazil
§ Predominately Class A office, industrial and grocery-anchored
retail centers
retail centers
§ Over 26 million square feet / 87% leased / approximately 2%
above the national average
above the national average
§ Latest valuation of portfolio was as of March 2011 resulting in
estimated per share value of $7.78 effective May 2011
estimated per share value of $7.78 effective May 2011
§ Significant cash on hand for near-term liquidity needs resulting
in a strong balance sheet
in a strong balance sheet
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Regional Diversification and Lease Expirations
as of December 31, 2011
as of December 31, 2011
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1Data is based on Hines REIT’s pro-rata share of the estimated aggregate value. 2Data is based on Hines REIT’s
effective ownership in each property and is compiled based on leased square feet.
effective ownership in each property and is compiled based on leased square feet.
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Top 10 Tenants
as of December 31, 2011
as of December 31, 2011
1Based on Hines REIT’s effective ownership in each property and compiled based on leased square feet.
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Top 10 Tenants1
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Shook, Hardy & Bacon LLP
International law firm 2555 Grand 2024 Expiration
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Honeywell International
Engineering services Daytona-Laguna Portfolio & 345 Inverness Drive 2016, 2017 Expirations
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Williams Companies
Integrated natural gas Williams Tower 2018, 2021 Expirations
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Oracle
Multinational technology company 2100 Powell 2013 Expiration
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Raytheon Company
Defense aerospace systems Raytheon/DIRECTV Buildings 2018 Expiration
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Kay Chemical
Private specialty cleaning 4050 & 4055 Corporate Drive 2018 Expiration
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State of California
State government 1515 S. Street 2012, 2018 Expirations
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Norwegian Cruise Line
Cruise line Airport Corporate Center 2019 Expiration
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Microsoft Corporation
Multinational software development Daytona-Laguna Portfolio 2015, 2017 Expirations
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Foley & Lardner
International law firm
321 North Clark 2018 Expiration
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Tenant Industry Diversification1
1Based on Hines REIT’s pro rata share of the leased square feet of each property. 2Other includes Arts/Entertainment, Other
Services, Construction and Retail industries, as well as those accounting for less than 1% of the portfolio.
Services, Construction and Retail industries, as well as those accounting for less than 1% of the portfolio.
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Hines REIT Leasing Update
§ Leasing has been a priority given the challenging economic environment which
had a broad impact on U.S. and International businesses
had a broad impact on U.S. and International businesses
§ Many businesses adversely impacted
– Layoff of employees
– Reduced space needs
– Move to lower quality / less expensive space
– Out of Business or Bankrupt
§ Leased percentage is down slightly from the beginning of the year; remains
above the national average
above the national average
§ During 2011
– Lease renewals for approximately 3.5 million square feet (13% of our gross square footage) to
keep tenants in occupancy and extend the term of their leases
keep tenants in occupancy and extend the term of their leases
– New leases for approximately 1.4 million square feet with new tenants moving into our assets from
other competitive space
other competitive space
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2011 Proactive Leasing Highlights
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Fleetpride Corporation
Early Renewal 200,000 SF
through 2019
through 2019
Shell Plaza (One and Two)
Houston, TX
Shell Corporation
Renewal 1.22 million SF and
extension to 2025
Renewal 1.22 million SF and
extension to 2025
Dune Energy
Renewal 15,000 SF
through 2016
through 2016
2011 Proactive Leasing Highlights
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Williams Tower
Houston, TX
Williams Field Services
Expansion 60,000 SF
through 2018
through 2018
Ryan & Company
Renewal 32,000 SF
Renewal 32,000 SF
through 2019
Rowan Companies, Inc.
Expansion 10,000 SF
through 2020
through 2020
321 North Clark
Chicago, IL
American Bar Association
Renewal 200,000 SF
through 2024
Renewal 200,000 SF
through 2024
Claro Group
New lease 26,000 SF
through 2019
through 2019
2011 Proactive Leasing Highlights
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Warner Center
Los Angeles, CA
Health Net Inc.
Renewal 334,000 SF through 2021
Renewal 334,000 SF through 2021
One North Wacker
Chicago, IL
PricewaterhouseCoopers, LLP
Renewal 279,000 SF through 2028
Airport Corporate Center
Miami, FL
§United Health Care Services, Inc.
Renewal 23,000 SF through 2013
Renewal 23,000 SF through 2013
§Corporate American Solutions
New lease 16,000 SF through 2019
New lease 16,000 SF through 2019
§Armani & Associati
New lease 10,000 SF through 2017
New lease 10,000 SF through 2017
The KPMG Building
San Francisco, CA
§Buchalter Nemer
New lease 30,000 SF through 2022
New lease 30,000 SF through 2022
§Funzio, Inc.
New lease 20,000 SF through 2015
New lease 20,000 SF through 2015
§RadiumOne
New lease 14,000 SF through 2017
New lease 14,000 SF through 2017
499 Park Avenue
New York, NY
Quadrant Capital Advisors, Inc.
Renewal 11,000 SF through 2022
Renewal 11,000 SF through 2022
Strategic Dispositions
§ Significant capital demand for high quality stabilized assets
§ Certain assets in the portfolio provided Hines REIT the
opportunity to capture significant gains and strengthen the
Company’s liquidity position
opportunity to capture significant gains and strengthen the
Company’s liquidity position
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Strategic Dispositions
One North Wacker
Chicago, IL
Acquired: Mar. 2008
for $540 million
for $540 million
Sold 49% interest in Dec. 2011
for $298.9 million*
for $298.9 million*
Effective ownership: 22%**
*The Core Fund, in which Hines REIT invests, did not recognize a gain or loss on the sale due to the carrying amount of
the noncontrolling interest being adjusted to reflect the change in ownership of One North Wacker. Effective ownership as
of 9/30/11, prior to the sale. **This asset was owned indirectly through the Core Fund.
the noncontrolling interest being adjusted to reflect the change in ownership of One North Wacker. Effective ownership as
of 9/30/11, prior to the sale. **This asset was owned indirectly through the Core Fund.
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Three First National
Chicago, IL
Acquired: Mar. 2005 for
$245 million
$245 million
Sold: Aug. 2011
for $344 million
for $344 million
Effective ownership:18%**
Acquired: Feb. 2004
for $92 million
for $92 million
Sold: May 2010 for
$193 million
$193 million
Effective ownership:11.67%*
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:100%
Strategic Dispositions
*This asset was owned indirectly through the Core Fund.
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Brazilian Industrial Parks
Araucaria, Elouveira and Vinhedo
Acquired: Dec. 2008 for $115
Sold: Jan. 2010 and Apr. 2010 for $141 million
Effective ownership:100%
Land Parcel Adjacent
to Williams Tower
Houston, TX
to Williams Tower
Houston, TX
Acquired: May 2008
Sold: Sept. 2010 generating net
proceeds of $12 million
proceeds of $12 million
Effective ownership:100%
Strategic Dispositions
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Hines REIT Leverage Overview
§ Leverage level as of December 31, 2011 was 55%
§ Consists primarily of asset level fixed rate mortgage loans and a
corporate level revolving credit facility which provides $45 million of
additional liquidity
corporate level revolving credit facility which provides $45 million of
additional liquidity
§ Average weighted interest rate of approximately 5.64%
§ Manageable debt maturities over the next few years
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Debt Maturity Chart
as of December 31, 2011
as of December 31, 2011
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The amounts represented above are the projected loan balances at maturity assuming all required principal and interest
payments are made prior to maturity.
payments are made prior to maturity.
Portfolio Average
Weighted Interest
Rate: 5.64%
Weighted Interest
Rate: 5.64%
Distribution History*
distributions received from our unconsolidated investments, proceeds from the sales of our real estate
investments and cash generated during prior periods.
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Looking Forward: Hines REIT Exit Strategy
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§ Goal: maximize investor returns
§ Possible exit options:
─ Targeted sale of individual or
groups of assets
groups of assets
─ Sale or merger
─ Listing on a national exchange
§ Continue identifying opportunities for
strategic asset sales
strategic asset sales
Alignment of Interest
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Hines’ alignment of interests with investors -
─ Hines has approximately $100 million invested in Hines REIT
─ Continues to earn half of its fees in equity / same as receiving
cash and reinvesting back into Hines REIT
cash and reinvesting back into Hines REIT
─ Waived 1/3 of cash asset management fees
from July 2011 through December 2012 in an effort to
enhance the REIT’s cash flows and distributions to
shareholders
from July 2011 through December 2012 in an effort to
enhance the REIT’s cash flows and distributions to
shareholders
─ Fee waiver is projected to total over $7.5 million
Long Term Priorities
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§ Near-term priorities:
─ Lease-up existing assets
─ Strategic asset sales
─ Manage debt maturities
─ Manage liquidity
─ Maximize distributions to investors
§ Long-term priorities:
─ Evaluate exit strategies
─ Maximize return of capital
─ Maximize total return over the long term
Hines Securities, Inc., Member FINRA/SIPC, is the Dealer Manager. 3/12
Hines Real Estate Investment Trust, Inc. (Hines REIT) is closed to new investors.
Thank You
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