HINES REAL ESTATE INVESTMENT TRUST INC - FORM 8-K - August 5, 2016



UNITED STATES
 
SECURITIES AND EXCHANGE COMMISSION
 
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
 
 
 
Date of Report (Date of Earliest Event Reported):
 
August 1, 2016
 
Hines Real Estate Investment Trust, Inc.
__________________________________________
 (Exact name of registrant as specified in its charter)
 
 
 
 
Maryland
000-50805
20-0138854
____________________
(State or other jurisdiction
_____________
(Commission
______________
(I.R.S. Employer
of incorporation)
File Number)
Identification No.)
 
 
 
2800 Post Oak Blvd, Suite 5000, Houston, Texas
 
77056-6118
_________________________________
(Address of principal executive offices)
 
___________
(Zip Code)
 
 
 
 
 
Registrant’s telephone number, including area code:
 
(888) 220-6121
 
Not Applicable
______________________________________________
Former name or former address, if changed since last report
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.01 Completion of Acquisition or Disposition of Assets.

On August 1, 2016, Hines REIT 2200 Ross Avenue LP, a wholly-owned subsidiary of Hines Real Estate Investment Trust, Inc. (“Hines REIT”) sold JPMorgan Chase Tower to Fortis Property Group, LLC, (the “Purchaser”). JPMorgan Chase Tower is an office building located in Dallas, Texas. The Purchaser is not affiliated with Hines REIT or its affiliates.

The sales price for JPMorgan Chase Tower was approximately $273.0 million, prior to the deduction of transaction costs and certain closing credits and any adjustments for prorations. The net proceeds received by Hines REIT from this sale were $214.1 million after the loan payoff of $48.9 million and credits and closing costs.

Item 9.01 Financial Statements and Exhibits.

(b) Pro Forma Financial Information. The following financial information is submitted at the end of this Current Report on Form 8-K and is filed herewith and incorporated herein by reference:

Hines Real Estate Investment Trust, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2016
Unaudited Pro Forma Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2016 and the Years Ended December 31, 2015, 2014 and 2013
Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements







1


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 
 
HINES REAL ESTATE INVESTMENT TRUST, INC.
 
 
 
 
 
August 5, 2016
 
By:
/s/ J. Shea Morgenroth
 
 
 
 
J. Shea Morgenroth
 
 
 
 
Chief Accounting Officer and Treasurer
 




2



Hines Real Estate Investment Trust, Inc.
Unaudited Pro Forma Condensed Consolidated Financial Statements
 
On August 1, 2016, Hines REIT 2200 Ross Avenue LP, a wholly-owned subsidiary of Hines Real Estate Investment Trust, Inc. (“Hines REIT”) sold JPMorgan Chase Tower, an office building located in Dallas, Texas, to Fortis Property Group, LLC (the “Purchaser”). The sales price for JPMorgan Chase Tower was approximately $273.0 million, prior to the deduction of transaction costs and certain closing credits and any adjustments for prorations. The net proceeds received by Hines from this sale were $214.1 million after the loan payoff of $48.9 million and credits and closing costs. The Purchaser is not affiliated with Hines REIT or its affiliates.
 
The following unaudited pro forma condensed consolidated financial information gives effect to the disposition of JPMorgan Chase Tower, including the receipt of proceeds from the sale.  In our opinion, all material adjustments necessary to reflect the effects of the above transaction have been made.

3


Hines Real Estate Investment Trust, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of March 31, 2016
(In thousands)
The following unaudited Pro Forma Condensed Consolidated Balance Sheet is presented assuming the disposition of JPMorgan Chase Tower had occurred as of March 31, 2016.  This unaudited Pro Forma Condensed Consolidated Balance Sheet should be read in conjunction with our unaudited Pro Forma Condensed Consolidated Statements of Operations appearing herein and our historical financial statements and notes thereto as filed in our quarterly report on Form 10-Q for the three months ended March 31, 2016.  This unaudited Pro Forma Condensed Consolidated Balance Sheet is not necessarily indicative of what our actual financial position would have been had we completed this transaction on March 31, 2016, nor does it purport to represent our future financial position.
 
 
As of
 March 31, 2016 (a)
 
Adjustments for
JPMorgan Chase Tower
 
 
Pro Forma
ASSETS
 
 
 
 
 
 
 
Investment property, at cost:
 
 
 
 
 
 
 
Buildings and improvements, net
 
$
1,252,530

 
$
(205,427
)
 
(b)
$
1,047,103

Land
 
437,701

 
(8,768
)
 
(b)
428,933

Total investment property
 
1,690,231

 
(214,195
)
 
 
1,476,036

 
 
 
 
 
 
 
 
Investments in unconsolidated entities
 
97,249

 
—

 
 
97,249

Cash and cash equivalents
 
49,610

 
(2,366
)
 
(c)
47,244

Restricted cash
 
1,281

 
—

 
 
1,281

Distributions receivable
 
1,209

 
—

 
 
1,209

Tenant and other receivables, net
 
43,982

 
(10,879
)
 
(b)
33,103

Intangible lease assets, net
 
115,196

 
(3,726
)
 
(b) 
111,470

Deferred leasing costs, net
 
154,334

 
(46,059
)
 
(b) 
108,275

Deferred financing costs, net
 
416

 
—

 
 
416

Other assets
 
4,411

 
(166
)
 
(b) 
4,245

TOTAL ASSETS
 
$
2,157,919

 
$
(277,391
)
 
 
$
1,880,528

 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Accounts payable and accrued expenses
 
$
56,125

 
$
(4,238
)
 
(b) 
$
51,887

Due to affiliates
 
4,572

 
(8
)
 
(b) 
4,564

Intangible lease liabilities, net
 
28,619

 
(2,406
)
 
(b) 
26,213

Other liabilities
 
16,295

 
(981
)
 
(b) 
15,314

Interest rate swap contracts
 
13,491

 
—

 
 
13,491

Participation interest liability
 
130,386

 
—

 
 
130,386

Distributions payable
 
15,026

 
—

 
 
15,026

Notes payable, net
 
836,583

 
(49,035
)
 
(b) 
787,548

Total liabilities
 
1,101,097

 
(56,668
)
 
 
1,044,429

 
 
 
 
 
 
 
 
Commitments and contingencies
 
—

 
—

 
 
—

 
 
 
 
 
 
 
 
Equity:
 
 
 
 
 
 
 
Preferred shares
 
—

 
—

 
 
—

Common shares
 
223

 
—

 
 
223

Additional paid-in capital
 
2,099,093

 
—

 
 
2,099,093

Accumulated distributions in excess of earnings
 
(1,041,421
)
 
(220,723
)
 
(d)
(1,262,144
)
Accumulated other comprehensive income (loss)
 
(1,073
)
 
—

 
 
(1,073
)
Total stockholders’ equity
 
1,056,822

 
(220,723
)
 
 
836,099

Noncontrolling interests
 
—

 
—

 
 
—

Total equity
 
1,056,822

 
(220,723
)
 
 
836,099

TOTAL LIABILITIES AND EQUITY
 
$
2,157,919

 
$
(277,391
)
 
 
$
1,880,528


See notes to unaudited pro forma condensed consolidated financial statements.

4


Hines Real Estate Investment Trust, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Three Months Ended March 31, 2016
(In thousands, except per share amounts)
 
The following unaudited Pro Forma Condensed Consolidated Statement of Operations is presented assuming the disposition of JPMorgan Chase Tower had occurred as of January 1, 2013.  This unaudited Pro Forma Condensed Consolidated Statement of Operations should be read in conjunction with our unaudited Pro Forma Condensed Consolidated Balance Sheet and our historical financial statements and notes thereto as filed in our quarterly report on Form 10-Q for the three months ended March 31, 2016.  This unaudited Pro Forma Condensed Consolidated Statement of Operations is not necessarily indicative of what our actual results of operations would have been had we completed this transaction on January 1, 2013, nor does it purport to represent our future operations.
 
 
 
Three Months Ended
 March 31, 2016 (a)
 
Adjustments for JPMorgan Chase Tower (b)
 
Pro Forma
Revenues:
 
 

 
 
 
 

Rental revenue
 
$
48,106

 
$
(6,060
)
 
$
42,046

Other revenue
 
4,989

 
(856
)
 
4,133

Total revenues 
 
53,095

 
(6,916
)
 
46,179

Expenses:
 
 
 
 
 
 
Property operating expenses
 
13,764

 
(2,334
)
 
11,430

Real property taxes
 
8,446

 
(1,627
)
 
6,819

Property management fees
 
1,385

 
(166
)
 
1,219

Depreciation and amortization
 
19,593

 
(2,115
)
 
17,478

Acquisition related expenses
 
—

 
—

 
—

Asset management and acquisition fees
 
8,419

 
—

 
8,419

General and administrative
 
1,950

 
(3
)
 
1,947

Total expenses
 
53,557

 
(6,245
)
 
47,312

Operating income (loss)
 
(462
)
 
(671
)
 
(1,133
)
Other income (expenses):
 
 
 
 
 
 
Gain (loss) on derivative instruments, net
 
3,957

 
—

 
3,957

Equity in earnings (losses) of unconsolidated entities, net
 
16,347

 
—

 
16,347

Gain (loss) on sale of real estate investments
 
2

 
—

 
2

Interest expense
 
(8,639
)
 
539

 
(8,100
)
Interest income
 
26

 
(2
)
 
24

Income (loss) from continuing operations before benefit (provision) for income taxes
 
11,231

 
(134
)
 
11,097

Benefit (provision) for income taxes
 
(39
)
 
25

 
(14
)
Income (loss) from continuing operations
 
$
11,192

 
$
(109
)
 
$
11,083

Income (loss) from continuing operations per common share
 
$
0.05

 
 
 
$
0.05

Weighted average number common shares outstanding
 
222,106

 
 
 
222,106

 
See notes to unaudited pro forma condensed consolidated financial statements.

5


Hines Real Estate Investment Trust, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2015
(In thousands, except per share amounts)
 
The following unaudited Pro Forma Condensed Consolidated Statement of Operations is presented assuming the disposition of JPMorgan Chase Tower had occurred as of January 1, 2013.  This unaudited Pro Forma Condensed Consolidated Statement of Operations should be read in conjunction with our unaudited Pro Forma Condensed Consolidated Balance Sheet and our historical financial statements and notes thereto as filed in our annual report on Form 10-K for the year ended December 31, 2015.  This unaudited Pro Forma Condensed Consolidated Statement of Operations is not necessarily indicative of what our actual results of operations would have been had we completed this transaction on January 1, 2013, nor does it purport to represent our future operations.
 
 
 
Year Ended December 31, 2015 (a)
 
Adjustments for
JPMorgan Chase Tower
(b)
 
Adjustments for 2555 Grand (c)
 
Pro Forma
Revenues:
 
 

 
 
 
 
 
 

Rental revenue
 
$
198,684

 
$
(28,088
)
 
$
(9,945
)
 
$
160,651

Other revenue
 
20,105

 
(3,696
)
 
(546
)
 
15,863

Total revenues 
 
218,789

 
(31,784
)
 
(10,491
)
 
176,514

Expenses:
 
 
 
 
 
 
 
 
Property operating expenses
 
59,996

 
(10,663
)
 
(2,675
)
 
46,658

Real property taxes
 
30,931

 
(5,514
)
 
(641
)
 
24,776

Property management fees
 
5,683

 
(849
)
 
(242
)
 
4,592

Depreciation and amortization
 
87,923

 
(9,716
)
 
(2,459
)
 
75,748

Acquisition related expense
 
505

 
—

 
—

 
505

Asset management and acquisition fees
 
36,576

 
—

 
—

 
36,576

General and administrative
 
6,635

 
(3
)
 
—

 
6,632

Impairment losses
 
19,663

 
(11,865
)
 
—

 
7,798

Total expenses
 
247,912

 
(38,610
)
 
(6,017
)
 
203,285

Operating income (loss)
 
(29,123
)
 
6,826

 
(4,474
)
 
(26,771
)
Other income (expenses):
 
 
 
 
 
 
 
 
Gain (loss) on derivative instruments, net
 
16,945

 
—

 
—

 
16,945

Gain (loss) on settlement of derivative instruments
 
—

 
—

 
—

 
—

Gain (loss) on sale or dissolution of unconsolidated joint venture
 
—

 
—

 
—

 
—

Equity in earnings (losses) of unconsolidated entities, net
 
43,267

 
—

 
—

 
43,267

Gain (loss) on sale of real estate investments
 
50,144

 
—

 
(20,747
)
 
29,397

Interest expense
 
(37,684
)
 
4,415

 
—

 
(33,269
)
Interest income
 
46

 
(2
)
 
(1
)
 
43

Income (loss) from continuing operations before benefit (provision) for income taxes
 
43,595

 
11,239

 
(25,222
)
 
29,612

Benefit (provision) for income taxes
 
(225
)
 
186

 
—

 
(39
)
Income (loss) from continuing operations
 
$
43,370

 
$
11,425

 
$
(25,222
)
 
$
29,573

Income (loss) from continuing operations per common share
 
$
0.19

 
 
 
 
 
$
0.13

Weighted average number common shares outstanding
 
223,369

 
 
 
 
 
223,369


 See notes to unaudited pro forma condensed consolidated financial statements.

6


Hines Real Estate Investment Trust, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2014
(In thousands, except per share amounts)
 
The following unaudited Pro Forma Condensed Consolidated Statement of Operations is presented assuming the disposition of JPMorgan Chase Tower had occurred as of January 1, 2013.  This unaudited Pro Forma Condensed Consolidated Statement of Operations should be read in conjunction with our unaudited Pro Forma Condensed Consolidated Balance Sheet and our historical financial statements and notes thereto as filed in our annual report on Form 10-K for the year ended December 31, 2014.  This unaudited Pro Forma Condensed Consolidated Statement of Operations is not necessarily indicative of what our actual results of operations would have been had we completed this transaction on January 1, 2013, nor does it purport to represent our future operations.
 
 
 
Year Ended December 31, 2014(a)
 
Adjustments for
JPMorgan Chase Tower
(b)
 
Adjustments for 2555 Grand (c)
 
Adjustments for Airport Corporate Center (d)
 
Pro Forma
Revenues:
 
 

 
 
 
 
 
 
 
 

Rental revenue
 
$
219,435

 
$
(33,222
)
 
$
(18,414
)
 
$
(13,151
)
 
$
154,648

Other revenue
 
16,588

 
(3,429
)
 
(941
)
 
(596
)
 
11,622

Total revenues 
 
236,023

 
(36,651
)
 
(19,355
)
 
(13,747
)
 
166,270

Expenses:
 
 
 
 
 
 
 
 
 
 
Property operating expenses
 
69,372

 
(10,273
)
 
(4,676
)
 
(7,789
)
 
46,634

Real property taxes
 
31,713

 
(5,493
)
 
(1,153
)
 
(1,758
)
 
23,309

Property management fees
 
5,943

 
(881
)
 
(462
)
 
(379
)
 
4,221

Depreciation and amortization
 
95,827

 
(13,037
)
 
(4,528
)
 
(2,679
)
 
75,583

Acquisition related expense
 
375

 
—

 
—

 
—

 
375

Asset management and acquisition fees
 
37,042

 
—

 
—

 
—

 
37,042

General and administrative
 
6,950

 
(3
)
 
—

 
—

 
6,947

Impairment losses
 
3,314

 
—

 
—

 
—

 
3,314

Total expenses
 
250,536

 
(29,687
)
 
(10,819
)
 
(12,605
)
 
197,425

Operating income (loss)
 
(14,513
)
 
(6,964
)
 
(8,536
)
 
(1,142
)
 
(31,155
)
Other income (expenses):
 
 
 
 
 
 
 
 
 
 
Gain (loss) on derivative instruments, net
 
33,258

 
—

 
—

 
—

 
33,258

Gain (loss) on settlement of derivative instruments
 
(12,334
)
 
—

 
—

 
—

 
(12,334
)
Gain (loss) on sale or dissolution of unconsolidated joint venture
 
13,381

 
—

 
—

 
—

 
13,381

Equity in earnings (losses) of unconsolidated entities, net
 
56,936

 
—

 
—

 
—

 
56,936

Gain (loss) on sale of real estate investments
 
18,525

 
—

 
—

 
(9,032
)
 
9,493

Interest expense
 
(47,352
)
 
4,464

 
—

 
3,252

 
(39,636
)
Interest income
 
655

 
(1
)
 
(1
)
 
(26
)
 
627

Income (loss) from continuing operations before benefit (provision) for income taxes
 
48,556

 
(2,501
)
 
(8,537
)
 
(6,948
)
 
30,570

Benefit (provision) for income taxes
 
(310
)
 
229

 
—

 
—

 
(81
)
Income (loss) from continuing operations
 
$
48,246

 
$
(2,272
)
 
$
(8,537
)
 
$
(6,948
)
 
$
30,489

Income (loss) from continuing operations per common share
 
$
0.21

 
 
 
 
 
 
 
$
0.13

Weighted average number common shares outstanding
 
226,412

 
 
 
 
 
 
 
226,412


 See notes to unaudited pro forma condensed consolidated financial statements.

7


Hines Real Estate Investment Trust, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2013
(In thousands, except per share amounts)
 
The following unaudited Pro Forma Condensed Consolidated Statement of Operations is presented assuming the disposition of JPMorgan Chase Tower had occurred as of January 1, 2013.  This unaudited Pro Forma Condensed Consolidated Statement of Operations should be read in conjunction with our unaudited Pro Forma Condensed Consolidated Balance Sheet and our historical financial statements and notes thereto as filed in our annual report on Form 10-K for the year ended December 31, 2013.  This unaudited Pro Forma Condensed Consolidated Statement of Operations is not necessarily indicative of what our actual results of operations would have been had we completed this transaction on January 1, 2013, nor does it purport to represent our future operations.
  
 
 
Year Ended December 31, 2013 (a)
 
Adjustments for
JPMorgan Chase Tower
(b)
 
Adjustments for
2555 Grand
(c)
 
Adjustments for
Airport Corporate Center
(d)
 
Pro Forma
Revenues:
 
 

 
 
 
 
 
 
 
 

Rental revenue
 
$
158,819

 
$
(27,831
)
 
$
(17,262
)
 
$
(16,497
)
 
$
97,229

Other revenue
 
9,289

 
(3,133
)
 
(942
)
 
(572
)
 
4,642

Total revenues 
 
168,108

 
(30,964
)
 
(18,204
)
 
(17,069
)
 
101,871

Expenses:
 
 
 
 
 
 
 
 
 
 
Property operating expenses
 
54,429

 
(9,586
)
 
(4,483
)
 
(9,246
)
 
31,114

Real property taxes
 
24,282

 
(5,032
)
 
(178
)
 
(1,794
)
 
17,278

Property management fees
 
4,132

 
(783
)
 
(426
)
 
(468
)
 
2,455

Depreciation and amortization
 
51,262

 
(10,377
)
 
(4,528
)
 
(3,815
)
 
32,542

Acquisition related expense
 
330

 
—

 
—

 
—

 
330

Asset management and acquisition fees
 
27,970

 
—

 
—

 
—

 
27,970

General and administrative
 
7,281

 
(3
)
 
—

 
—

 
7,278

Impairment losses
 
33,878

 
—

 
—

 
(28,995
)
 
4,883

Total expenses
 
203,564

 
(25,781
)
 
(9,615
)
 
(44,318
)
 
123,850

Operating income (loss)
 
(35,456
)
 
(5,183
)
 
(8,589
)
 
27,249

 
(21,979
)
Other income (expenses):
 
 
 
 
 
 
 
 
 
 
Gain (loss) on derivative instruments, net
 
33,559

 
—

 
—

 
—

 
33,559

Gain (loss) on settlement of derivative instruments
 
(5,374
)
 
—

 
—

 
—

 
(5,374
)
Gain (loss) on sale or dissolution of unconsolidated joint venture
 
16,087

 
—

 
—

 
—

 
16,087

Equity in earnings (losses) of unconsolidated entities, net
 
82,468

 
—

 
—

 
—

 
82,468

Gain (loss) on sale of real estate investments
 
—

 
—

 
—

 
—

 
—

Interest expense
 
(47,453
)
 
6,583

 
2,373

 
4,159

 
(34,338
)
Interest income
 
779

 
(3
)
 
—

 
(18
)
 
758

Income (loss) from continuing operations before benefit (provision) for income taxes
 
44,610

 
1,397

 
(6,216
)
 
31,390

 
71,181

Benefit (provision) for income taxes
 
(274
)
 
221

 
—

 
—

 
(53
)
Income (loss) from continuing operations
 
$
44,336

 
$
1,618

 
$
(6,216
)
 
$
31,390

 
$
71,128

Income (loss) from continuing operations per common share
 
$
0.19

 
 
 
 
 
 
 
$
0.31

Weighted average number common shares outstanding
 
231,551

 
 
 
 
 
 
 
231,551


See notes to unaudited pro forma condensed consolidated financial statements.


8


Hines Real Estate Investment Trust, Inc.
Unaudited Notes to Pro Forma Condensed Consolidated Financial Statements

Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2016
a.
Reflects the Company's historical condensed consolidated balance sheet as of March 31, 2016.
b.
Reflects the Company's disposition of JPMorgan Chase Tower. Amounts represent the adjustments necessary to remove the assets and liabilities associated with JPMorgan Chase Tower.
c.
Reflects the proceeds received from the sale of JPMorgan Chase Tower less any cash on hand at JPMorgan Chase Tower as of March 31, 2016.
d.
Reflects the adjustments related to the disposition of JPMorgan Chase Tower and the gain on sale.
 
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Three Months Ended March 31, 2016
a.
Reflects the Company's historical condensed consolidated statement of operations for the three months ended March 31, 2016.
b.
Reflects the Company's disposition of JPMorgan Chase Tower. Amounts represent the adjustments necessary to remove the historical revenues and expenses of JPMorgan Chase Tower, including property operating expenses, property taxes, management fees, depreciation and amortization, general and administrative expenses, interest expense and interest income associated with JPMorgan Chase Tower. Such adjustments exclude the effect of the gain on sale, as this represents a non-recurring transaction.

 Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Year Ended December 31, 2015
a.
Reflects the Company's historical condensed consolidated statement of operations for the year ended December 31, 2015.
b.
Reflects the Company's disposition of JPMorgan Chase Tower. Amounts represent the adjustments necessary to remove the historical revenues and expenses of JPMorgan Chase Tower, including property operating expenses, property taxes, management fees, depreciation and amortization, general and administrative expenses, interest expense and interest income associated with JPMorgan Chase Tower. Such adjustments exclude the effect of the gain on sale, as this represents a non-recurring transaction.
c.
Reflects the Company's disposition of 2555 Grand. Amounts represent the adjustments necessary to remove the historical revenues and expenses of 2555 Grand, including property operating expenses, property taxes, management fees, depreciation and amortization and interest income associated with 2555 Grand. Such adjustments exclude the effect of the gain on sale, as this represents a non-recurring transaction.

 Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Year Ended December 31, 2014
a.
Reflects the Company's historical condensed consolidated statement of operations for the year ended December 31, 2014.
b.
Reflects the Company's disposition of JPMorgan Chase Tower. Amounts represent the adjustments necessary to remove the historical revenues and expenses of JPMorgan Chase Tower, including property operating expenses, property taxes, management fees, depreciation and amortization, general and administrative expenses, interest expense and interest income associated with JPMorgan Chase Tower. Such adjustments exclude the effect of the gain on sale, as this represents a non-recurring transaction.
c.
Reflects the Company's disposition of 2555 Grand. Amounts represent the adjustments necessary to remove the historical revenues and expenses of 2555 Grand, including property operating expenses, property taxes, management fees, depreciation and amortization and interest income associated with 2555 Grand. Such adjustments exclude the effect of the gain on sale, as this represents a non-recurring transaction.
d.
Reflects the Company's disposition of Airport Corporate Center. Amounts represent the adjustments necessary to remove the historical revenues and expenses of Airport Corporate Center, including property operating expenses, property taxes, management fees, depreciation and amortization, interest expense and interest income associated with Airport Corporate Center. Such adjustments exclude the effect of the gain on sale, as this represents a non-recurring transaction.

Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Year Ended December 31, 2013
a.
Reflects the Company's historical condensed consolidated statement of operations for the year ended December 31, 2013.
b.
Reflects the Company's disposition of JPMorgan Chase Tower. Amounts represent the adjustments necessary to remove the historical revenues and expenses of JPMorgan Chase Tower, including property operating expenses, property taxes, management fees, depreciation and amortization, general and administrative expenses, interest expense and interest income associated with JPMorgan Chase Tower. Such adjustments exclude the effect of the gain on sale, as this represents a non-recurring transaction.

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c.
Reflects the Company's disposition of 2555 Grand. Amounts represent the adjustments necessary to remove the historical revenues and expenses of 2555 Grand, including property operating expenses, property taxes, management fees, depreciation and amortization, and interest expense associated with 2555 Grand. Such adjustments exclude the effect of the gain on sale, as this represents a non-recurring transaction.
d.
Reflects the Company's disposition of Airport Corporate Center. Amounts represent the adjustments necessary to remove the historical revenues and expenses of Airport Corporate Center, including property operating expenses, property taxes, management fees, depreciation and amortization, interest expense, interest income and impairment losses associated with Airport Corporate Center. Such adjustments exclude the effect of the gain on sale, as this represents a non-recurring transaction.

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HINES REAL ESTATE INVESTMENT TRUST INC Reports