HGR Liquidating Trust - FORM 8-K - August 30, 2018




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 24, 2018
 
Hines Global REIT, Inc.
__________________________________
Exact name of registrant as specified in its charter)
 
 
 
 
 
 
Maryland
 
000-53964
 
26-3999995
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(I.R.S. Employer 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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging Growth Company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]



Item 2.01 Completion of Acquisition or Disposition of Assets.

On August 24, 2018, Hines Global REIT Properties LP (the “Operating Partnership”), a subsidiary of Hines Global REIT, Inc. (“Hines Global”), sold all of the membership interests in its wholly-owned subsidiaries that own the properties in the Fiege Mega Centre, the Harder Logistics Portfolio, and the Simon Hegele Logistics property (collectively, the “German Logistics Properties”) to Gemini German Majority Holdco S.à r.l. and Gemini German Minority Holdco S.à r.l. (together, the “Purchasers”). The Purchasers are part of the Blackstone Group and are not affiliated with Hines Global or its affiliates.

The sales price for the German Logisitics Properties was approximately €310.0 million (approximately $359.6 million based on an exchange rate of $1.16 per EUR) in aggregate, exclusive of transaction costs and closing prorations.

Item 9.01 Financial Statements and Exhibits.

(a) 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 Global REIT, Inc.

Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2018
Unaudited Pro Forma Condensed Consolidated Statements of Operations for the Six Months Ended June 30, 2018 and the Year Ended December 31, 2017
Notes to 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 hereunto duly authorized.
 

 
 
 
 
 
 
 
Hines Global REIT, Inc.
 
 
 
 
 
August 30, 2018
 
By:
/s/ J. Shea Morgenroth
 
 
 
 
Name: J. Shea Morgenroth
 
 
 
 
Title: Chief Accounting Officer and Treasurer
 









 


2


HINES GLOBAL REIT, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On August 24, 2018, Hines Global REIT Properties LP (the “Operating Partnership”), a subsidiary of Hines Global REIT, Inc. (“Hines Global” or the “Company”), sold all of the membership interests in its wholly-owned subsidiaries that own the properties in the Fiege Mega Centre, the Harder Logistics Portfolio, and the Simon Hegele Logistics property (collectively, the “German Logistics Properties”) to Gemini German Majority Holdco S.à r.l. and Gemini German Minority Holdco S.à r.l. (together, the “Purchasers”). The sales price for the German Logisitics Properties was approximately €310.0 million (approximately $359.6 million based on an exchange rate of $1.16 per EUR) in aggregate, exclusive of transaction costs and closing prorations. The Purchasers are part of the Blackstone Group and are not affiliated with Hines Global or its affiliates.

The following unaudited pro forma condensed consolidated financial information gives effect to the disposition of the German Logistics Properties, including the receipt of proceeds from the sale. In our opinion, all material adjustments necessary to reflect the effect of the above transaction have been made.

 
 

 
 


3


HINES GLOBAL REIT, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of June 30, 2018
(In thousands)

The following unaudited Pro Forma Condensed Consolidated Balance Sheet is presented assuming the disposition of the German Logistics Properties had occurred as of June 30, 2018. 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 six months ended June 30, 2018. This unaudited Pro Forma Condensed Consolidated Balance Sheet is not necessarily indicative of what the actual financial position would have been had we completed this transaction on June 30, 2018, nor does it purport to represent our future financial position.
 
As of
June 30, 2018 (a)
 
Adjustments for the disposition of the German Logistics Properties
 
Pro Forma
ASSETS
 
 
 
 
 
Investment property, net
$
2,602,557

 
$
(201,278
)
(c)
$
2,401,279

Cash and cash equivalents
101,236

 
214,495

(b)
315,731

Restricted cash
15,830

 
(34
)
(c)
15,796

Tenant and other receivables, net
70,331

 
(773
)
(c)
69,558

Intangible lease assets, net
321,418

 
(23,414
)
(c)
298,004

Deferred leasing costs, net
120,623

 
—

 
120,623

Deferred financing costs, net
786

 
—

 
786

Other assets
32,166

 
(3,651
)
(c)
28,515

Total assets
3,264,947

 
(14,655
)
 
3,250,292

LIABILITIES AND EQUITY
 

 
 

 
 

Liabilities:
 

 
 

 
 

Accounts payable and accrued expenses
72,294

 
(2,213
)
(c)
70,081

Due to affiliates
6,929

 
(341
)
(c)
6,588

Intangible lease liabilities, net
60,238

 
—

 
60,238

Other liabilities
22,014

 
—

 
22,014

Distributions payable
14,759

 
—

 
14,759

Notes payable, net
1,802,828

 
(144,715
)
(c)
1,658,113

Total liabilities
1,979,062

 
(147,269
)
 
1,831,793

 
 

 
 

 
 

Commitments and Contingencies
—

 
—

 
—

 
 

 
 

 
 

Equity: 
 

 
 

 
 

Stockholders’ equity:
 

 
 

 
 

Preferred shares, $.001 par value; 500,000 preferred shares authorized, none issued or outstanding as of June 30, 2018
—

 
—

 
—

Common shares, $.001 par value; 1,500,000 common shares authorized as of June 30, 2018; 272,459 issued and outstanding as of June 30, 2018
272

 
—

 
272

Additional paid-in capital
2,456,713

 
—

 
2,456,713

Accumulated distributions in excess of earnings
(1,019,484
)
 
129,387

(d)
(890,097
)
Accumulated other comprehensive income (loss)
(153,001
)
 
3,227

(d)
(149,774
)
Total stockholders’ equity
1,284,500

 
132,614

 
1,417,114

Noncontrolling interests
1,385

 
—

 
1,385

Total equity
1,285,885

 
132,614

 
1,418,499

Total liabilities and equity
3,264,947

 
(14,655
)
 
3,250,292


See notes to unaudited pro forma condensed consolidated financial statements.

4


HINES GLOBAL REIT, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2018
(In thousands, except per share amounts)

The following unaudited Pro Forma Condensed Consolidated Statement of Operations is presented assuming the dispositions of the German Logistics Properties had occurred as of January 1, 2017. This unaudited Pro Forma Condensed Consolidated Statement of Operations should be read in conjunction with our unaudited Pro Forma Condensed Consolidated Balance Sheet appearing herein and our historical financial statements and notes thereto as filed in our quarterly report on Form 10-Q for the six months ended June 30, 2018. This unaudited Pro Forma Condensed Consolidated Statement of Operations is not necessarily indicative of what the actual results of operations would have been had we completed this transaction on January 1, 2017, nor does it purport to represent our future operations.

 
Six Months Ended June 30, 2018 (a)
 
Adjustments for the disposition of the German Logistics Properties (b)
 
  Pro Forma
Revenues:
 
 
 
 
 
 
Rental revenue
$
160,610

 
$
(10,569
)
 
$
150,041

Other revenue
 
9,031

 
 
(61
)
 
 
8,970

Total revenues

169,641

 
 
(10,630
)
 
 
159,011

Expenses:
 
 
 
 

 
 
 
Property operating expenses

40,168

 
 
(935
)
 
 
39,233

Real property taxes
 
21,304

 
 
(259
)
 
 
21,045

Property management fees
 
3,572

 
 
(118
)
 
 
3,454

Depreciation and amortization
 
63,423

 
 
(3,519
)
 
 
59,904

Asset management and acquisition fees
 
17,641

 
 
(1,001
)
 
 
16,640

General and administrative expenses

5,975

 
 
—

 
 
5,975

Impairment losses
 
5,105

 
 
—

 
 
5,105

Total expenses

157,188

 
 
(5,832
)
 
 
151,356

Income (loss) before other income (expenses) and benefit (provision) for income taxes

12,453

 
 
(4,798
)
 
 
7,655

Other income (expenses):
 
 
 
 

 
 
 
Gain (loss) on derivative instruments

818

 
 
—

 
 
818

Gain (loss) on sale of real estate investments
 
58,674

 
 
—

 
 
58,674

Foreign currency gains (losses)

(8,361
)
 
 
—

 
 
(8,361
)
Interest expense
 
(30,217
)
 
 
1,118

 
 
(29,099
)
Other income (expenses)
 
409

 
 
—

 
 
409

Income (loss) before benefit (provision) for income taxes

33,776

 
 
(3,680
)
 
 
30,096

Benefit (provision) for income taxes
 
1,478

 
 
275

 
 
1,753

Net income (loss)

35,254

 
 
(3,405
)
 
 
31,849

Net (income) loss attributable to noncontrolling interests

776

 
 
—

 
 
776

Net income (loss) attributable to common stockholders
$
36,030

 
$
(3,405
)
 
$
32,625

Basic and diluted income (loss) per common share:
$
0.13

 
$
—

 
$
0.12

Weighted average number of common shares outstanding
 
272,985

 
 
—

 
 
272,985


See notes to unaudited pro forma condensed consolidated financial statements.



5



HINES GLOBAL REIT, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2017
(In thousands, except per share amounts)

The following unaudited Pro Forma Condensed Consolidated Statement of Operations is presented assuming the dispositions of the German Logistics Properties had occurred as of January 1, 2017. This unaudited Pro Forma Condensed Consolidated Statement of Operations should be read in conjunction with our unaudited Pro Forma Condensed Consolidated Balance Sheet appearing herein and our historical financial statements and notes thereto as filed in our annual report on Form 10-K for the year ended December 31, 2017. This unaudited Pro Forma Condensed Consolidated Statement of Operations is not necessarily indicative of what the actual results of operations would have been had we completed this transaction on January 1, 2017, nor does it purport to represent our future operations.

 
Year Ended December 31, 2017 (a)
 
Adjustments for the disposition of the German Logistics Properties (b)
 
  Pro Forma
Revenues:
 
 
 
 
 
 
Rental revenue
$
379,188

 
$
(19,277
)
 
$
359,911

Other revenue
 
24,461

 
 
(118
)
 
 
24,343

Total revenues
 
403,649

 
 
(19,395
)
 
 
384,254

Expenses:
 
 
 
 
 
 
 
 
Property operating expenses
 
89,043

 
 
(1,154
)
 
 
87,889

Real property taxes
 
48,566

 
 
(494
)
 
 
48,072

Property management fees
 
8,230

 
 
(206
)
 
 
8,024

Depreciation and amortization
 
138,503

 
 
(6,564
)
 
 
131,939

Acquisition related expenses
 
127

 
 
—

 
 
127

Asset management and acquisition fees
 
37,949

 
 
(1,983
)
 
 
35,966

General and administrative expenses
 
9,250

 
 
—

 
 
9,250

Impairment losses
 
7,124

 
 
—

 
 
7,124

Total expenses
 
338,792

 
 
(10,401
)
 
 
328,391

Income (loss) before other income (expenses) and benefit (provision) for income taxes
 
64,857

 
 
(8,994
)
 
 
55,863

Other income (expenses):
 
 
 
 
 
 
 
 
Gain (loss) on derivative instruments
 
(634
)
 
 
—

 
 
(634
)
Gain (loss) on sale of real estate investments
 
364,325

 
 
—

 
 
364,325

Foreign currency gains (losses)
 
10,046

 
 
—

 
 
10,046

Interest expense
 
(59,461
)
 
 
2,105

 
 
(57,356
)
Other income (expenses)
 
680

 
 
—

 
 
680

Income (loss) before benefit (provision) for income taxes
 
379,813

 
 
(6,889
)
 
 
372,924

Benefit (provision) for income taxes
 
8,705

 
 
416

 
 
9,121

Provision for income taxes related to sale of real estate
 
(12,911
)
 
 
—

 
 
(12,911
)
Net income (loss)
 
375,607

 
 
(6,473
)
 
 
369,134

Net (income) loss attributable to noncontrolling interests
 
(54,657
)
 
 
—

 
 
(54,657
)
Net income (loss) attributable to common stockholders
$
320,950

 
$
(6,473
)
 
$
314,477

Basic and diluted income (loss) per common share:
$
1.16

 
$
—

 
$
1.14

Weighted average number of common shares outstanding
 
276,374

 
 
—

 
 
276,374


See notes to unaudited pro forma condensed consolidated financial statements.


6



HINES GLOBAL REIT, INC.
NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2018

(a)
Reflects the Company's historical Condensed Consolidated Balance Sheet as of June 30, 2018.

(b)
Reflects the proceeds received from the sale of the German Logisitics Properties less any cash on hand at the German Logistics Properties as of June 30, 2018.

(c)
Amounts represent the adjustments necessary to remove the assets and liabilities associated with the German Logisitics Properties.

(d)
Reflects the adjustments related to the disposition of the German Logisitics Properties and the gain on sale.

Unaudited Pro Forma Condensed Consolidated Statement of Operations for the six months ended June 30, 2018

(a)
Reflects the Company's historical Condensed Consolidated Statement of Operations for the six months ended June 30, 2018.

(b)
Amounts represent the adjustments necessary to remove the historical revenues and expenses of the German Logisitics Properties, including property operating expenses, property taxes, management fees, depreciation and amortization, asset management and and acquisition fees, interest expense, interest income and benefit (provision) for income taxes associated with the German Logisitics Properties. 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, 2017

(a)
Reflects the Company's historical Condensed Consolidated Statement of Operations for the year ended December 31, 2017.

(b)
Amounts represent the adjustments necessary to remove the historical revenues and expenses of the German Logisitics Properties, including property operating expenses, property taxes, management fees, depreciation and amortization, asset management and and acquisition fees, interest expense, interest income and benefit (provision) for income taxes associated with the German Logisitics Properties. Such adjustments exclude the effect of the gain on sale, as this represents a non-recurring transaction.












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HGR Liquidating Trust Reports