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| 8-K - 8-K HINES GLOBAL 10A3 PROFORMAS - HGR Liquidating Trust | a10a32012proformas.htm |
HINES GLOBAL REIT, INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Hines Global REIT, Inc. (“Hines Global”) and, together with Hines Global REIT Properties, LP (the “Operating Partnership”), (the “Company”) made the following acquisitions since January 1, 2012:
Property Name | Date of Acquisition | Net Purchase Price |
Poland Logistics Portfolio | March 29, 2012 & October 10, 2012 | $157.2 million |
144 Montague | April 16, 2012 | $91.3 million |
100 Brookes Street | July 13, 2012 | $67.6 million |
Minneapolis Retail Center | August 1, 2012 & December 26, 2012 | $130.6 million |
550 Terry Francois | August 31, 2012 | $180.0 million |
Mercedes-Benz Bank | February 7, 2013 | $70.3 million |
465 Victoria | February 28, 2013 | $91.2 million |
One West Ferry Circus | February 28, 2013 | $124.0 million |
Riverside Center | March 27, 2013 | $197.3 million |
New City | March 28, 2013 | $162.8 million |
On February 7, 2013, a subsidiary of Hines Global acquired Mercedes-Benz Bank Building, an office building located in Stuttgart, Germany. The building consists of 263,038 square feet of rentable area that is 100% leased. The purchase price for the Mercedes-Benz Bank Building was €51.9 million (approximately $70.3 million based on a rate of $1.35 per Euro as of the transaction date), exclusive of transaction costs and working capital reserves. Hines Global funded the acquisition with available cash and a €34.7 million (approximately $47.0 million based on a rate of $1.35 per Euro as of the transaction date) mortgage loan with Landesbank Baden-Württemberg that matures on December 31, 2019. The mortgage loan has a floating interest rate of EURIBOR plus 1.56% and had an interest rate of 1.79% as of the date of acquisition.
On February 28, 2013, a subsidiary of Hines Global acquired 465 Victoria, an office project located in Sydney, Australia. The building consists of 171,352 square feet of rentable area that is 97% leased. The purchase price for 465 Victoria was 88.7 million AUD (approximately $91.2 million based on a rate of $1.03 per AUD as of the transaction date). Hines Global funded this acquisition using cash on hand and $54.7 million of proceeds from a facility agreement with Credit Agricole CIB Australia Limited. The facility provides for a maximum borrowing amount of 55.2 million AUD (approximately $56.8 million based on a rate of $1.03 per AUD as of the transaction date) and requires interest on the BBSY screen rate plus 2.05% and had an interest rate of 5.07% as of the date of acquisition. The facility matures on February 28, 2016.
On February 28, 2013, a subsidiary of Hines Global acquired One Westferry Circus, an office building located in London, England. One Westferry Circus consists of 219,889 square feet of rentable area that is 97% leased. The contract purchase price for One Westferry Circus was £82.0 million (approximately $124.0 million assuming a rate of $1.51 per GBP based on the transaction date), exclusive of transaction costs and working capital reserves. This acquisition was funded with available cash and proceeds from our revolving credit facility.
On March 27, 2013, a subsidiary of Hines Global acquired Riverside Center, an office complex located in a suburb of Boston, Massachusetts. Riverside Center consists of 509,702 square feet that is 98% leased. The contract purchase price of Riverside Center was $197.3 million, exclusive of transaction costs and working capital reserves. The acquisition was funded with proceeds from our revolving credit facility and proceeds from a bridge loan.
On March 28, 2013, a subsidiary of Hines Global acquired New City, an office complex located in Warsaw, Poland. New City consists of 481,070 square feet of rentable area that is 100% leased. The purchase price for New City was €127.0 million (approximately $162.8 million based on a rate of $1.28 per Euro as of the contract date), exclusive of transaction costs and working capital reserves. The acquisition was funded with proceeds from our revolving credit facility and a credit facility with ING Bank ŚSląaski S.A. and ING Bank NV. The investment facility has a maximum borrowing amount of €83.2 million (approximately $106.5 million based on a rate of 1.28 per Euro as of the contract date), requires interest based on EURIBOR plus 2.80% and matures on March 28, 2018.
The unaudited pro forma consolidated balance sheet assumes that the acquisition of Mercedes-Benz Bank occurred on December 31, 2012 and the unaudited pro forma consolidated statements of operations assume that all acquisitions described above occurred on January 1, 2012. However, there are no pro forma adjustments for 465 Victoria, One West Ferry Circus, Riverside Center or New City included in the unaudited pro forma consolidated financial statements since the financial statements are not currently required to be filed for these recent acquisitions.
In management's opinion, all adjustments necessary to reflect the effects of these acquisitions have been made. The unaudited pro forma consolidated statements of operations are not necessarily indicative of what actual results of operations would have been had the Company made these acquisitions on the first day of the period presented, nor does it purport to represent the results of operations for future periods.
HINES GLOBAL REIT, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
As of December 31, 2012
(In thousands, except per share amounts)
December 31, 2012 | Adjustments | Pro Forma | ||||||||||||||
ASSETS | ||||||||||||||||
Investment property, net | $ | 1,482,478 | $ | 58,179 | (a) | $ | 1,540,657 | |||||||||
Investment in unconsolidated entities | 3,573 | — | 3,573 | |||||||||||||
Cash and cash equivalents | 97,398 | (23,129 | ) | (d) | 74,269 | |||||||||||
Restricted cash | 7,457 | — | 7,457 | |||||||||||||
Derivative Instruments | 790 | — | 790 | |||||||||||||
Tenant and other receivables | 33,615 | — | 33,615 | |||||||||||||
Intangible lease assets, net | 385,532 | 10,374 | (a) | 395,906 | ||||||||||||
Deferred leasing costs, net | 7,850 | — | 7,850 | |||||||||||||
Deferred financing costs, net | 10,927 | 331 | (d) | 11,258 | ||||||||||||
Real estate loans receivable | 34,701 | — | 34,701 | |||||||||||||
Other assets | 14,251 | — | 14,251 | |||||||||||||
Total assets | $ | 2,078,572 | $ | 45,755 | $ | 2,124,327 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||
Liabilities: | ||||||||||||||||
Accounts payable and accrued expenses | $ | 35,889 | $ | 5,043 | (b) | $ | 40,932 | |||||||||
Due to affiliates | 10,198 | 1,577 | (c) | 11,775 | ||||||||||||
Intangible lease liabilities, net | 27,183 | — | 27,183 | |||||||||||||
Other liabilities | 18,472 | — | 18,472 | |||||||||||||
Derivative instruments | 15,453 | — | 15,453 | |||||||||||||
Distributions payable | 8,777 | — | 8,777 | |||||||||||||
Notes payable to affiliates | 28,535 | — | 28,535 | |||||||||||||
Notes payable | 829,795 | 45,755 | (d) | 875,550 | ||||||||||||
Total liabilities | 974,302 | 52,375 | 1,026,677 | |||||||||||||
Commitments and Contingencies | — | — | — | |||||||||||||
Equity: | ||||||||||||||||
Stockholders' equity: | ||||||||||||||||
Preferred shares, $.001 par value; 500,000 preferred shares authorized, none issued or outstanding as of June 30, 2012 | — | — | — | |||||||||||||
Common shares, $.001 par value; 1,500,000 common shares authorized, 148,889 common shares issued and outstanding as of December 31, 2012 | 149 | — | 149 | |||||||||||||
Additional paid-in capital | 1,189,739 | — | 1,189,739 | |||||||||||||
Accumulated deficit | (117,369 | ) | (6,620 | ) | (b) (c) | (123,989 | ) | |||||||||
Accumulated other comprehensive income (loss) | (8,612 | ) | — | (8,612 | ) | |||||||||||
Total stockholders' equity | 1,063,907 | (6,620 | ) | 1,057,287 | ||||||||||||
Noncontrolling interests | 40,363 | — | 40,363 | |||||||||||||
Total equity | 1,104,270 | (6,620 | ) | 1,097,650 | ||||||||||||
Total liabilities and equity | $ | 2,078,572 | $ | 45,755 | $ | 2,124,327 | ||||||||||
See notes to unaudited pro forma consolidated balance sheet and notes to unaudited pro forma consolidated financial statements.
Notes to Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 2012
Adjustments
(a) | To record the pro forma effect of the Company's acquisition of Mercedes-Benz Bank, assuming it had occurred on December 31, 2012. Investment property and intangible lease assets were recorded at fair value. Pro forma adjustments related to these amounts are preliminary and subject to change. |
(b) | To record the pro forma effect of the Company's acquisition expenses related to the acquisition of Mercedes-Benz Bank. |
(c) | To record the pro forma effect of the Company's 2.25% acquisition fee related to the acquisition of Mercedes-Benz Bank. |
(d) | The Mercedes-Benz Bank acquisition was funded using proceeds from the Company's current public offering and related mortgage financing. |
HINES GLOBAL REIT, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2012
(In thousands, except per share amounts)
Year Ended December 31, 2012 | Adjustments | Pro Forma | ||||||||||
Revenues: | ||||||||||||
Rental revenue | $ | 174,794 | $ | 39,263 | (a) | $ | 214,057 | |||||
Other revenue | 12,446 | 2,155 | (a) | 14,601 | ||||||||
Total revenues | 187,240 | 41,418 | 228,658 | |||||||||
Expenses: | ||||||||||||
Property operating expenses | 40,511 | 6,552 | (a) | 47,063 | ||||||||
Real property taxes | 16,576 | 4,307 | (a) | 20,883 | ||||||||
Property management fees | 3,952 | 1,407 | (a) | 5,359 | ||||||||
Depreciation and amortization | 84,747 | 18,722 | (a) | 103,469 | ||||||||
Acquisition related expenses | 12,633 | (12,485 | ) | (b) | 148 | |||||||
Asset management and acquisition fees | 22,006 | (16,064 | ) | (c) | 5,942 | |||||||
General and administrative expenses | 3,590 | — | 3,590 | |||||||||
Total expenses | 184,015 | 2,439 | 186,454 | |||||||||
Income (loss) before other income (expenses) and benefit (provision) for income taxes | 3,225 | 38,979 | 42,204 | |||||||||
Other income (expenses): | ||||||||||||
Gain (loss) on derivative instruments | 1,398 | — | 1,398 | |||||||||
Other gains (losses) | 672 | — | 672 | |||||||||
Interest expense | (37,915 | ) | (9,717 | ) | (d) | (47,632 | ) | |||||
Interest income | 227 | 31 | (a) | 258 | ||||||||
Income (loss) before benefit (provision) for income taxes | (32,393 | ) | 29,293 | (3,100 | ) | |||||||
Benefit (provision) for income taxes | (1,147 | ) | — | (1,147 | ) | |||||||
Net income (loss) | (33,540 | ) | 29,293 | (4,247 | ) | |||||||
Net (income) loss attributable to noncontrolling interests | (939 | ) | — | (939 | ) | |||||||
Net income (loss) attributable to common stockholders | $ | (34,479 | ) | $ | 29,293 | $ | (5,186 | ) | ||||
Basic and diluted income (loss) per common share: | $ | (0.30 | ) | $ | (0.05 | ) | ||||||
Weighted average number common shares outstanding | 113,578 | — | 113,578 | |||||||||
See notes to unaudited pro forma consolidated statement of operations and notes to unaudited pro forma consolidated financial statements.
Notes to Unaudited Pro Forma Consolidated Statement of Operations for the
Year Ended December 31, 2012
(a) | To record the pro forma effect of the Company's acquisitions of Poland Logistics Portfolio, 144 Montague, 100 Brookes Street, Minneapolis Retail Center, 550 Terry and Mercedes-Benz Bank based on their historical results of operations assuming that the acquisitions had occurred on January 1, 2012. Depreciation and amortization for Mercedes-Benz Bank was calculated based on the fair values of the investment property and intangible lease assets and liabilities, which are preliminary and subject to change. |
(b) | To eliminate the effect of non-recurring acquisition expenses recorded in relation to the Company's acquisitions listed in (a) above. |
(c) | To eliminate the effect of the non-recurring acquisition fees recorded in relation to the Company's acquisitions listed above. No pro forma adjustments were made in relation to the 1.5% asset management fee since all but $5.9 million of asset management fees were waived for the year ended December 31, 2012. |
(d) | To record the pro forma effect of the Company's interest expense assuming that the Company had permanent financing in place as of January 1, 2012 related to its acquisitions of the Poland Logistics Portfolio, 144 Montague, 100 Brookes Street, Minneapolis Retail Center, 550 Terry and Mercedes-Benz Bank. See Note 6 - Debt Financing in the December 31, 2012 10-K for additional information regarding the Company's financing activity. |
HINES GLOBAL REIT, INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(1) Investment Properties Acquired After January 1, 2012
On March 29, 2012, a subsidiary of the Company acquired a portfolio of four logistics facilities in Poland: ProLogis Park Warsaw I, located in Warsaw, Poland; ProLogis Park Warsaw III, located in Warsaw, Poland; ProLogis Park Bedzin I, located in Upper Silesia, Poland; and ProLogis Park Wroclaw II, located in Wroclaw, Poland. The net contract purchase price for these four logistics facilities was €98.6 million (approximately $131.3 million based on a rate of $1.33 per Euro as of the transaction date), exclusive of transaction costs and working capital reserves. On October 10, 2012, a subsidiary of the Company acquired a fifth property, ProLogis Park Sosnowiec, which is referred to as the Sosnowiec Asset. The net contract purchase price was €19.9 million (approximately $25.9 million based on a rate of $1.30 per Euro as of the contract date), exclusive of transaction costs and working capital reserves. The Company refers to all five of these logistics facilities located in Poland, collectively, as the Poland Logistics Portfolio. The Poland Logistics Portfolio properties were constructed between 1995 and 2009 and consist of 2,270,054 square feet of rentable area that is 93% leased to 26 tenants.
On April 16, 2012, a subsidiary of the Company acquired 144 Montague, an office building located in Brisbane, Australia. The net contract purchase price was 88.1 million Australian dollars (“AUD”) (approximately $91.3 million using a rate of $1.04 per AUD as of the transaction date). Hines Global funded the acquisition using proceeds from our current public offering and debt financing.
On July 13, 2012, a subsidiary of the Company acquired 100 Brookes Street, an office building located in Brisbane, Australia. The net purchase price for 100 Brookes Street was 66.5 million AUD ($67.6 million assuming a rate of $1.02 per AUD based on the exchange rate in effect on the transaction date), exclusive of transaction costs, financing fees and working capital reserves. The acquisition was funded using proceeds from the Initial Offering and a 43.2 million AUD ($43.9 million assuming a rate of $1.02 per AUD based on the transaction date) mortgage loan with the Bank of Western Australia Ltd.
On August 1, 2012 and December 27, 2012, a wholly-owned subsidiary of the Company acquired Minneapolis Retail Center, a retail project and the related parking garage located just outside Minneapolis, Minnesota. The net purchase price was $130.6 million dollars, exclusive of transaction costs and working capital reserves. The acquisition was funded using proceeds from the Initial Offering, borrowings under the Revolving Credit Facility and a $65.5 million mortgage loan with Allianz Life Insurance Company of North America.
On August 31, 2012, a wholly-owned subsidiary of the Company acquired 550 Terry Francois, a core office building located in San Francisco, California. The net purchase price for 550 Terry Francois was $180.0 million, exclusive of transaction costs and working capital reserves. The acquisition was funded using proceeds from the Initial Offering and borrowings under the Revolving Credit Facility.
On February 7, 2013, a subsidiary of Hines Global acquired Mercedes-Benz Bank Building, an office building located in Stuttgart, Germany. The building consists of 263,038 square feet of rentable area that is 100% leased. The purchase price for the Mercedes-Benz Bank Building was €51.9 million (approximately $70.3 million based on a rate of $1.35 per Euro as of the transaction date), exclusive of transaction costs and working capital reserves. Hines Global funded the acquisition with available cash and a €34.7 million (approximately $47.0 million based on a rate of $1.35 per Euro as of the transaction date) mortgage loan with Landesbank Baden-Württemberg that matures on December 31, 2019. The mortgage loan has a floating interest rate of EURIBOR plus 1.56% and had an interest rate of 1.79% as of the date of acquisition.
On February 28, 2013, a subsidiary of Hines Global acquired 465 Victoria, an office project located in Sydney, Australia. The building consists of 171,352 square feet of rentable area that is 97% leased. The purchase price for 465 Victoria was 88.7 million AUD (approximately $91.2 million based on a rate of $1.03 per AUD as of the transaction date). Hines Global funded this acquisition using cash on hand and $54.7 million of proceeds from a facility agreement with Credit Agricole CIB Australia Limited. The facility provides for a maximum borrowing amount of 55.2 million AUD (approximately $56.8 million based on a rate of $1.03 per AUD as of the transaction date) and requires interest on the BBSY screen rate plus 2.05% and had an interest rate of 5.07% as of the date of acquisition. The facility matures on February 28, 2016.
On February 28, 2013, a subsidiary of Hines Global acquired One Westferry Circus, an office building located in London, England. One Westferry Circus consists of 219,889 square feet of rentable area that is 97% leased. The contract purchase price for One Westferry Circus was £82.0 million (approximately $124.0 million assuming a rate of $1.51 per GBP based on the transaction date), exclusive of transaction costs and working capital reserves. This acquisition was funded with available cash and proceeds from our revolving credit facility.
On March 27, 2013, a subsidiary of Hines Global acquired Riverside Center, an office complex located in a suburb of Boston, Massachusetts. Riverside Center consists of 509,702 square feet that is 98% leased. The contract purchase price of Riverside Center was $197.3 million, exclusive of transaction costs and working capital reserves. The acquisition was funded with proceeds from our revolving credit facility and proceeds from a bridge loan.
On March 28, 2013, a subsidiary of Hines Global acquired New City, an office complex located in Warsaw, Poland. New City consists of 481,070 square feet of rentable area that is 100% leased. The purchase price for New City was €127.0 million (approximately $162.8 million based on a rate of $1.28 per Euro as of the contract date), exclusive of transaction costs and working capital reserves. The acquisition was funded with proceeds from our revolving credit facility and a credit facility with ING Bank ŚSląaski S.A. and ING Bank NV. The investment facility has a maximum borrowing amount of €83.2 million (approximately $106.5 million based on a rate of 1.28 per Euro as of the contract date), requires interest based on EURIBOR plus 2.80% and matures on March 28, 2018.
The unaudited pro forma consolidated balance sheet assumes that the acquisition of Mercedes-Benz Bank occurred on December 31, 2012 and the unaudited pro forma consolidated statements of operations assume that all acquisitions described above occurred on January 1, 2012. However, as described previously, there are no pro forma adjustments for 465 Victoria, One West Ferry Circus, Riverside Center or New City included in the unaudited pro forma consolidated financial statements since the financial statements are not currently required to be filed for these recent acquisitions.