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New Estimated Per Share Net Asset Value for Hines REIT

Hines Real Estate Investment Trust Inc.’s board of directors has determined a new estimated per share net asset value of the company’s common stock of $6.65. The new estimated per share NAV represents a 2.3 percent increase over the estimated per share NAV of $6.50 previously determined by the board in December 2014, but far less than the $10 per share originally paid by investors.

According to a recent filing with the Securities and Exchange Commission, the new estimated per share NAV was determined utilizing the guidelines established by Investment Program Association Practice Guideline 2013-01 – “Valuation of Publicly Registered, Non-Listed REITs” issued April 29, 2013. 

Hines engaged Cushman Wakefield and CBRE Group to provide, or cause their subsidiaries to provide, appraised values of the company’s real estate investments as of June 30, 2015. Additionally, Hines engaged Jones Lang LaSalle to provide values of the company’s debt obligations as of June 30, 2015.

The primary drivers of the change in the estimated per share value from $6.50 in December 2014 to $6.65 in September 2015 are as follows:

• $0.39 per share net increase in the aggregate value of the company’s real estate investments since its prior valuation in December 2014, which represents a 4.9 percent net increase in value; and

• $0.27 per share reduction resulting from capital expenditures made since our prior valuation in December 2014 primarily related to leasing capital at the company’s properties.

As of June 30, 2015, the aggregate appraised value of Hines’ real estate property investments, including amounts attributable to unconsolidated subsidiaries, represented a 14 percent decrease compared to the net purchase price plus any capital expenditures of the real estate property investments incurred since their acquisition.

Participants in the company’s dividend reinvestment plan will acquire shares at a fixed price of $6.65 per share rather than at the previous price of $6.50 per share, beginning with the distributions to be paid for the third quarter of 2015, which are expected to be aggregated and paid on October 1, 2015. 

The company’s ordinary share redemption price will continue to be $5.45 per share. Beginning with eligible redemption requests made during the fourth quarter of 2015, which, if redeemed, will be aggregated and redeemed on January 1, 2016, any shares that are redeemed pursuant to eligible redemption requests in connection with the death or disability of a stockholder will be redeemed at the new estimated per share NAV of $6.65. The redemption price was determined by the company’s board of directors in its sole discretion. 

Since June 2004, Hines REIT has raised approximately $2.7 billion through public offerings of its common stock originally priced at $10 per share. As of June 30, 2015, the company owned direct and indirect investments in 32 properties. These properties consisted of 24 U.S. office properties and a portfolio of eight grocery-anchored shopping centers located in four states primarily in the southeastern United States.