UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



(Mark One)
x☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2017~~2019



¨☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 000-55599

Hines Global ~~REIT II,~~Income Trust, Inc.

(Exact name of registrant as specified in its charter)



Maryland		80-0947092
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2800 Post Oak Boulevard
Suite 5000
Houston	Texas	77056-6118
(Address of principal executive offices)		(Zip code)

(888)220-6121

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act: None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesx☒ No ¨☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yesx☒ No ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filer¨	~~(Do not check if a smaller reporting company)~~☒
Smaller reporting companyx	☒			Emerging growth companyx	☒
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.x				☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨☐ No x☒

As of ~~November 6, 2017,~~August 1, 2019, approximately ~~20,144,588~~19.0 million shares of the registrant’s ~~class A~~Class AX common stock, ~~20,847,380~~20.0 million shares of the registrant’s ~~class T~~Class TX common stock, ~~and 92,063~~0.1 million shares of the registrant’s ~~class~~Class IX common stock, 21.0 million shares of the registrant’s Class T common stock, 5.6 million shares of the registrant’s Class D common stock and 3.7 million shares of the registrant’s Class I common stock were outstanding.

TABLE OF CONTENTS



PART I – FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited):
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	2
	Condensed Consolidated Statements of Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to the Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3538
Item 4.	Controls and Procedures	3638
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	3739
Item 1A.	Risk Factors	3739
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults Upon Senior Securities	4140
Item 4.	Mine Safety Disclosures	4140
Item 5.	Other Information	4140
Item 6.	Exhibits	41

PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

HINES GLOBAL ~~REIT II,~~INCOME TRUST, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


	September 30, 2017			December 31, 2016			June 30, 2019			December 31, 2018
	(in thousands, except per share amounts)						(in thousands, except per share amounts)
ASSETS
Investment property, net	$	504,457		$	283,875		$	917,662		$	787,189
Investments in real estate-related securities							19,833			9,599
Cash and cash equivalents	54,886			98,137			34,353			27,138
Restricted cash	6,246			1,576			7,026			9,848
Derivative instruments	79			—			63			174
Tenant and other receivables, net	6,430			4,803			11,007			8,995
Intangible lease assets, net	97,217			76,070			54,086			90,697
Right-of-use asset, net							33,691			—
Deferred leasing costs, net	872			314			18,031			13,282
Other assets	2,430			5,570			3,012			1,907
Total assets	$	672,617		$	470,345		$	1,098,764		$	948,829
LIABILITIES AND EQUITY
Liabilities:
Accounts payable and accrued expenses	$	10,772		$	7,549		$	21,183		$	26,186
Due to affiliates	16,418			12,141			30,205			26,022
Intangible lease liabilities, net	14,858			2,421			18,290			18,034
Other liabilities	6,436			3,041			10,310			55,391
Distributions payable	1,833			1,195			2,860			2,024
Note payable to affiliate	—			56,000			—			55,000
Notes payable, net	325,531			197,815			596,812			487,439
Total liabilities	$	375,848		$	280,162		679,660			670,096

Commitments and contingencies (Note 12)	—			—
Commitments and contingencies (Note 11)							—			—

Equity:
Stockholders’ equity:
Preferred shares, $0.001 par value per share; 500,000 preferred shares authorized, none issued or outstanding as of September 30, 2017 and December 31, 2016	—			—
Class A common stock, $0.001 par value per share; 375,000 authorized; 20,028 and 16,469 issued and outstanding as of September 30, 2017 and December 31, 2016, respectively	20			16
Class T common stock, $0.001 par value per share; 375,000 authorized; 20,684 and 10,074 issued and outstanding as of September 30, 2017 and December 31, 2016, respectively	21			10
Class I common stock, $0.001 par value per share; 375,000 authorized; 91 issued and outstanding as of September 30, 2017 and none issued and outstanding as of December 31, 2016	—			—
Class J common stock, $0.001 par value per share; 375,000 authorized, none issued or outstanding as of September 30, 2017 and December 31, 2016, respectively	—			—
Preferred shares, $0.001 par value per share; 500,000 preferred shares authorized, none issued or outstanding as of June 30, 2019 and December 31, 2018							—			—
Common shares, $0.001 par value per share (Note 6)							62			44
Additional paid-in capital	351,623			224,134			533,778			371,274
Accumulated distributions in excess of earnings	(58,262		)	(31,222		)	(113,933		)	(91,711		)
Accumulated other comprehensive income (loss)	3,367			(2,755		)	(803		)	(874		)
Total stockholders’ equity	296,769			190,183			419,104			278,733
Noncontrolling interests	—			—			—			—
Total equity	296,769			190,183			419,104			278,733
Total liabilities and equity	$	672,617		$	470,345		$	1,098,764		$	948,829

See notes to the condensed consolidated financial statements.

HINES GLOBAL ~~REIT II,~~INCOME TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018

(UNAUDITED)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016			2019			2018			2019			2018
	(in thousands, except per share amounts)												(in thousands, except per share amounts)
Revenues:
Rental revenue	$	14,869		$	7,849		$	42,951		$	14,888		$	23,018		$	15,725		$	44,468		$	32,168
Other revenue	236			265			682			509			536			249			823			537
Total revenues	15,105			8,114			43,633			15,397			23,554			15,974			45,291			32,705
Expenses:
Property operating expenses	2,372			1,445			6,629			2,764			5,170			2,668			10,706			5,494
Real property taxes	2,523			617			7,614			891			2,699			2,018			5,297			4,099
Property management fees	249			159			727			280			940			344			1,644			656
Depreciation and amortization	7,203			5,562			22,108			9,873			9,741			6,959			19,069			14,300
Acquisition related expenses	550			930			2,641			1,370			13			10			17			144
Asset management and acquisition fees	1,234			4,836			8,890			6,137
Asset management fees													1,801			1,214			3,288			2,420
Performance participation allocation													1,476			1,185			2,597			2,777
General and administrative expenses	787			579			2,065			1,588			948			659			1,795			1,511
Total expenses	14,918			14,128			50,674			22,903			22,788			15,057			44,413			31,401
Income (loss) before other income (expenses)	187			(6,014		)	(7,041		)	(7,506		)
Other income (expenses):
Gain (loss) on derivative instruments	(26		)	(1		)	(100		)	(6		)	(77		)	(45		)	(1,187		)	(47		)
Gain (loss) on investments in real estate-related securities													161			—			1,327			—
Gain on sale of real estate													—			—			—			14,491
Foreign currency gains (losses)	132			(41		)	427			8			(267		)	(291		)	(336		)	(316		)
Interest expense	(2,270		)	(1,115		)	(6,861		)	(1,901		)	(4,317		)	(2,677		)	(8,514		)	(5,491		)
Interest income	49			7			62			48			244			34			372			47
Income (loss) before benefit (provision) for income taxes	(1,928		)	(7,164		)	(13,513		)	(9,357		)	(3,490		)	(2,062		)	(7,460		)	9,988
Benefit (provision) for income taxes	385			—			614			—			40			654			11			(20		)
Net income (loss)	(1,543		)	(7,164		)	(12,899		)	(9,357		)	(3,450		)	(1,408		)	(7,449		)	9,968
Net (income) loss attributable to noncontrolling interests	(3		)	(3		)	(9		)	(9		)	(4		)	(3		)	(7		)	(6		)
Net income (loss) attributable to common stockholders	$	(1,546	)	$	(7,167	)	$	(12,908	)	$	(9,366	)	$	(3,454	)	$	(1,411	)	$	(7,456	)	$	9,962
Basic and diluted income (loss) per common share	$	(0.04	)	$	(0.36	)	$	(0.38	)	$	(0.58	)	$	(0.06	)	$	(0.04	)	$	(0.14	)	$	0.25
Weighted average number of common shares outstanding	38,932			19,808			34,326			16,134			57,004			39,489			52,049			39,443
Cash distributions declared per class A share	$	0.15		$	0.15		$	0.45		$	0.43
Cash distributions declared per class T share	$	0.13		$	0.12		$	0.37		$	0.36
Cash distributions declared per class I share	$	0.15		$	—		$	0.24		$	—

Comprehensive income (loss):
Net income (loss)	$	(1,543	)	$	(7,164	)	$	(12,899	)	$	(9,357	)	$	(3,450	)	$	(1,408	)	$	(7,449	)	$	9,968
Other comprehensive income (loss):
Foreign currency translation adjustment	1,972			379			6,122			1,094			2,091			(5,515		)	71			(2,799		)
Comprehensive income (loss)	$	429		$	(6,785	)	$	(6,777	)	$	(8,263	)	$	(1,359	)	$	(6,923	)	$	(7,378	)	$	7,169
Comprehensive (income) loss attributable to noncontrolling interests	(3		)	(3		)	(9		)	(9		)	(4		)	(3		)	(7		)	(6		)
Comprehensive income (loss) attributable to common stockholders	$	426		$	(6,788	)	$	(6,786	)	$	(8,272	)	$	(1,363	)	$	(6,926	)	$	(7,385	)	$	7,163

See notes to the condensed consolidated financial statements.

HINES GLOBAL ~~REIT II,~~INCOME TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

For the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018

(UNAUDITED)

(In thousands)



Hines Global Income Trust, Inc. Stockholders
	Common Shares				Additional Paid-in Capital			Accumulated Distributions in Excess of Earnings			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity			Noncontrolling Interests
	Shares		Amount		Additional Paid-in Capital			Accumulated Distributions in Excess of Earnings			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity			Noncontrolling Interests
Balance as of January 1, 2019	43,584		$	44	$	371,274		$	(91,711	)	$	(874	)	$	278,733		$	—
Issuance of common shares	6,109		7		62,886			—			—			62,893			—
Distributions declared	—		—		—			(6,704		)	—			(6,704		)	(3		)
Redemption of common shares	(362	)	—		(4,014		)	—			—			(4,014		)	—
Selling commissions, dealer manager fees and distribution and stockholder servicing fees	—		—		(4,366		)	—			—			(4,366		)	—
Offering costs	—		—		(1,240		)	—			—			(1,240		)	—
Net income (loss)	—		—		—			(4,002		)	—			(4,002		)	3
Foreign currency translation adjustment	—		—		—			—			(2,020		)	(2,020		)	—
Balance as of March 31, 2019	49,331		$	51	$	424,540		$	(102,417	)	$	(2,894	)	$	319,280		$	—
Issuance of common shares	11,785		11		121,908			—			—			121,919			—
Distributions declared	—		—		—			(8,062		)	—			(8,062		)	(4		)
Redemption of common shares	(402	)	—		(3,111		)	—			—			(3,111		)	—
Selling commissions, dealer manager fees and distribution and stockholder servicing fees	—		—		(8,511		)	—			—			(8,511		)	—
Offering costs	—		—		(1,048		)	—			—			(1,048		)	—
Net income (loss)	—		—		—			(3,454		)	—			(3,454		)	4
Foreign currency translation adjustment	—		—		—			—			2,091			2,091			—
Balance as of June 30, 2019	60,714		$	62	$	533,778		$	(113,933	)	$	(803	)	$	419,104		$	—

Hines Global REIT II, Inc. Stockholders
Common Shares Additional Paid-in Capital Accumulated Distributions in Excess of Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Noncontrolling Interests
Shares Amount
Balance as of January 1, 2017 26,542
$ 26
$ 224,134
$ (31,222 ) $ (2,755 ) $ 190,183
$ —
Issuance of common shares 14,427
15
143,012
—
—
143,027
—
Distributions declared —
—
—
(14,132 ) —
(14,132 ) (9 )
Redemption of common shares (166 ) —
(1,445 ) —
—
(1,445 ) —
Selling commissions, dealer manager fees and distribution and stockholder servicing fees —
—
(11,131 ) —
—
(11,131 ) —
Issuer costs —
—
(2,947 ) —
—
(2,947 ) —
Net income (loss) —
—
—
(12,908 ) —
(12,908 ) 9
Foreign currency translation adjustment —
—
—
—
6,122
6,122
—
Balance as of September 30, 2017 40,803
$ 41
$ 351,623
$ (58,262 ) $ 3,367
$ 296,769
$ —



Hines Global Income Trust, Inc. Stockholders
	Common Shares				Additional Paid-in Capital			Accumulated Distributions in Excess of Earnings			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity			Noncontrolling Interests
	Shares		Amount		Additional Paid-in Capital			Accumulated Distributions in Excess of Earnings			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity			Noncontrolling Interests
Balance as of January 1, 2018	39,256		$	39	$	336,761		$	(68,193	)	$	4,938		$	273,545		$	—
Issuance of common shares	308		—		2,990			—			—			2,990			—
Distributions declared	—		—		—			(5,514		)	—			(5,514		)	(3		)
Redemption of common shares	(133	)	—		(2,032		)	—			—			(2,032		)	—
Selling commissions, dealer manager fees and distribution and stockholder servicing fees	—		—		4			—			—			4			—
Offering costs	—		—		(17		)	—			—			(17		)	—
Net income (loss)	—		—		—			11,373			—			11,373			3
Foreign currency translation adjustment	—		—		—			—			2,716			2,716			—
Balance as of March 31, 2018	39,431		$	39	$	337,706		$	(62,334	)	$	7,654		$	283,065		$	—
Issuance of common shares	464		1		4,598			—			—			4,599			—
Distributions declared	—		—		—			(5,528		)	—			(5,528		)	(3		)
Redemption of common shares	(395	)	—		(4,212		)	—			—			(4,212		)	—
Selling commissions, dealer manager fees and distribution and stockholder servicing fees	—		—		(28		)	—			—			(28		)	—
Offering costs	—		—		(1,627		)	—			—			(1,627		)	—
Net income (loss)	—		—		—			(1,411		)	—			(1,411		)	3
Foreign currency translation adjustment	—		—		—			—			(5,515		)	(5,515		)	—
Balance as of June 30, 2018	39,500		$	40	$	336,437		$	(69,273	)	$	2,139		$	269,343		$	—

Hines Global REIT II, Inc. Stockholders
Common Shares Additional Paid-in Capital Accumulated Distributions in Excess of Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Noncontrolling Interests
Shares Amount
Balance as of January 1, 2016 11,061
$ 11
$ 91,577
$ (9,757 ) $ (1,392 ) $ 80,439
$ —
Issuance of common shares 10,848
11
104,953
—
—
104,964
—
Distributions declared —
—
—
(6,760 ) —
(6,760 ) (9 )
Redemption of common shares (44 ) —
(438 ) —
—
(438 ) —
Selling commissions, dealer manager fees and distribution and stockholder servicing fees —
—
(9,713 ) —
—
(9,713 ) —
Issuer costs —
—
(2,458 ) —
—
(2,458 ) —
Net income (loss) —
—
—
(9,366 ) —
(9,366 ) 9
Foreign currency translation adjustment —
—
—
—
1,094
1,094
—
Balance as of September 30, 2016 21,865
$ 22
$ 183,921
$ (25,883 ) $ (298 ) $ 157,762
$ —

See notes to the condensed consolidated financial statements.

HINES GLOBAL ~~REIT II,~~INCOME TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018

(UNAUDITED)


	2017			2016			2019			2018
	(In thousands)						(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(12,899	)	$	(9,357	)	$	(7,449	)	$	9,968
Adjustments to reconcile net income (loss) to net cash from (used in) operating activities:
Depreciation and amortization	21,710			9,800			19,673			14,307
Gain on sale of real estate							—			(14,491		)
Foreign currency (gains) losses	(427		)	(8		)	336			316
(Gain) loss on derivative instruments	100			6			1,187			47
(Gain) loss on investments in real estate-related securities							(1,327		)	—
Changes in assets and liabilities:
Change in other assets	(821		)	(355		)	(683		)	384
Change in tenant and other receivables	(2,606		)	(1,854		)	(2,032		)	1,933
Change in deferred leasing costs	(620		)	—			(5,616		)	(4,335		)
Change in accounts payable and accrued expenses	2,331			1,180			(3,629		)	(198		)
Change in other liabilities	1,750			(653		)	(5,958		)	(2,947		)
Change in due to affiliates	(868		)	4,988			(2,680		)	1,755
Net cash from (used in) operating activities	7,650			3,747			(8,178		)	6,739
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in acquired properties and lease intangibles	(131,758		)	(244,817		)	(182,714		)	—
Capital expenditures at operating properties	(1,305		)	(127		)	(3,886		)	(8,095		)
Deposits on investment property	—			(5,000		)
Net cash used in investing activities	(133,063		)	(249,944		)
Proceeds from sale of real estate							—			37,087
Purchases of real estate-related securities							(14,086		)	—
Proceeds from settlement of real estate-related securities							5,180			—
Net cash from (used in) investing activities							(195,506		)	28,992
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock	137,085			104,474
Proceeds from issuance of common shares							177,269			1,628
Redemption of common shares	(1,590		)	(414		)	(7,704		)	(5,174		)
Payment of issuer costs	(3,449		)	(3,783		)
Reimbursement of issuer costs	—			4,050
Payment of offering costs							(2,734		)	—
Payment of selling commissions, dealer manager fees and distribution and stockholder servicing fees	(6,525		)	(6,899		)	(5,570		)	(1,322		)
Distributions paid to stockholders and noncontrolling interests	(6,316		)	(3,094		)	(6,394		)	(5,111		)
Proceeds from notes payable	24,386			141,300			109,935			—
Payments on notes payable	(1,233		)	(269		)	(957		)	(844		)
Proceeds from related party note payable	7,000			25,500			44,000			15,500
Payments on related party note payable	(63,000		)	(25,500		)	(99,000		)	(26,700		)
Change in security deposit liability	(24		)	24			250			100
Deferred financing costs paid	(471		)	(657		)	(631		)	(127		)
Payments related to interest rate contracts	(169		)	—			(39		)	(10		)
Net cash from financing activities	85,694			234,732
Net cash from (used in) financing activities							208,425			(22,060		)
Effect of exchange rate changes on cash, restricted cash and cash equivalents	1,138			64			(348		)	(1,087		)
Net change in cash, restricted cash and cash equivalents	(38,581		)	(11,401		)	4,393			12,584
Cash, restricted cash and cash equivalents, beginning of period	99,713			18,789			36,986			24,553
Cash, restricted cash and cash equivalents, end of period	$	61,132		$	7,388		$	41,379		$	37,137

See notes to the condensed consolidated financial statements.

HINES GLOBAL ~~REIT II,~~INCOME TRUST INC, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018

1. ORGANIZATION

The accompanying interim unaudited condensed consolidated financial information has been prepared according to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments and eliminations, consisting only of normal recurring adjustments, necessary to present fairly and in conformity with accounting principles generally accepted in the United States of America (“GAAP”) the financial position of Hines Global ~~REIT II,~~Income Trust, Inc. as of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018 and cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018 have been included. The results of operations for such interim periods are not necessarily indicative of the results for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted according to such rules and regulations. For further information, refer to the financial statements and footnotes ~~for the year ended December 31, 2016~~ included in Hines Global ~~REIT II,~~Income Trust, Inc.’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018.

Hines Global Income Trust, Inc. (the “Company”), formerly known as Hines Global REIT II, Inc. ~~(the “Company”)~~, was incorporated in Maryland on July 31, 2013, to invest in a diversified portfolio of quality commercial real estate properties and other real estate investments throughout the United States and ~~internationally.~~internationally, and to a lesser extent, invest in real-estate related securities. The Company is sponsored by Hines Interests Limited Partnership (“Hines”), a fully integrated global real estate investment and management firm that has acquired, developed, owned, operated and sold real estate for over 60 years. The Company is managed by Hines Global REIT II Advisors LP (the “Advisor”), an affiliate of Hines. The Company conducts substantially all of its operations through Hines Global REIT II Properties, LP (the “Operating Partnership”). An affiliate of the Advisor, Hines Global REIT II Associates LP, owns less than a 1% limited partner interest in the Operating Partnership as of June 30, 2019 and the Advisor also owns the special limited partnership interest in the Operating Partnership. The Company has elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes beginning with its taxable year ended December 31, 2015.

As of June 30, 2019, the Company owned direct real estate investments in eleven properties totaling 7.3 million square feet that were 96% leased. The Company raises capital for its investments through public offerings of its common stock. The Company commenced its initial public offering of up to $2.5 billion in shares of its common stock (the ~~“Offering”~~“Initial Offering”) in August 2014, and ~~raised $402.1~~commenced its second public offering of up to $2.5 billion in shares of common stock including $500.0 million of shares offered under its distribution reinvestment plan (the “Follow-On Offering”) in ~~primary offering proceeds. On September 30, 2017,~~December 2017. As of August 14, 2019, the Company ~~suspended~~had received gross offering proceeds of $738.9 million from the sale of 73.8 million shares ~~in the primary portion of the Offering. The Company is continuing to offer~~through its public offerings, including shares issued pursuant to its distribution reinvestment plan. The Company has filed a Registration Statement on Form S-11 (File No. 333-220046) with the Securities and Exchange Commission (the “SEC”) to pursue its second public offering of common shares (the “Follow-on Offering”). The Company engaged Hines Securities, Inc. (the “Dealer Manager”), an affiliate of Hines, to serve as the dealer manager for the Offering and expects to engage the Dealer Manager to serve as the dealer manager for the Follow-on Offering.

As of September 30, 2017, the Company owned direct investments in seven properties totaling 2.6 million square feet that were 97% leased. Subsequent to September 30, 2017, the Company acquired Queen’s Court Student Residences (“Queen’s Court”), a student housing property located in Reading, United Kingdom. See the table in “Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations — Executive Summary” for additional information regarding the Company’s real estate investments.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The condensed consolidated financial statements of the Company included in this Quarterly Report on Form 10-Q include the accounts of Hines Global ~~REIT II,~~Income Trust, Inc. and ~~Hines Global REIT II Properties, LP (the “Operating Partnership”)~~the Operating Partnership (over which the Company exercises financial and operating control). All intercompany balances and transactions have been eliminated in consolidation.

Investments in Real Estate-Related Securities

In the fourth quarter of 2018, the Company made its initial investments in real estate-related securities and as of June 30, 2019 has $20.0 million invested in these securities. These securities consist of common equities, preferred equities and debt investments of publicly traded REITs. The Company has elected to classify these investments as trading securities and carry such investments at fair value. These assets are valued on a recurring basis, which resulted in a realized gain of $165,000 and an unrealized loss of $4,000 for the three months ended June 30, 2019, and a realized gain of $228,000 and an unrealized gain of $1.1 million for the six months ended June 30, 2019, both of which are recorded in “gain (loss) on investments in real estate-related securities” in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). In July 2019, the Company made an additional $15.0 million investment in real estate-related securities.

Tenant and Other Receivables

Tenant and other ~~receivable balances consist~~receivables consists primarily of ~~base rents, tenant reimbursements and~~ receivables attributable to straight-line ~~rent. As of September 30, 2017~~rent and ~~December 31, 2016, tenant and other~~ receivables ~~consisted of a receivable from the Company’s transfer agent~~ related to ~~offering proceeds not received by the balance sheet date of $0.4 million~~base rents and ~~$1.6 million, respectively.~~

~~Deferred Financing Costs~~

Deferred financing costs consist of direct costs incurred in obtaining debt financing. These costs are presented as a direct reduction from the related debt liability for permanent mortgages and presented as an asset for revolving credit arrangements. In total, deferred financing costs had a carrying value of $1.3 million and $1.0 million as of September 30, 2017 and December 31, 2016, respectively. These costs are amortized into interest expense on a straight-line basis, which approximates the effective interest method, over the terms of the obligations.

~~Other Assets~~

~~Other assets included the following (in thousands):~~

September 30, 2017 December 31, 2016
Deposits on investment property ⁽¹⁾
$ —
$ 5,000
Deferred issuer costs 974
—
Prepaid insurance 80
219
Prepaid property taxes 76
74
Deferred tax assets 862
—
Other 438
277
Other assets $ 2,430
$ 5,570


~~(1)~~	~~As of December 31, 2016, this amount consisted of a $5.0 million earnest money deposit in connection with the acquisition of Rookwood in January 2017. See~~ ~~Note 3~~ ~~— Investment Property for additional information regarding the acquisition of Rookwood.~~

~~Revenue Recognition~~

The Company recognizes rental revenue on a straight-line basis over the life of the lease including rent holidays, if any. Straight-line rent receivables were $3.7 million and $2.5 million as of September 30, 2017 and December 31, 2016, respectively.tenant reimbursements. Straight-line rent receivable consists of the difference between the tenants’ rents calculated on a straight-line basis from the date of acquisition or lease commencement over the remaining terms of the related leases and the tenants’ actual rents due under the lease ~~agreements~~agreements. Straight-line rent receivables were $7.3 million and ~~is included in tenant~~$5.8 million as of June 30, 2019 and other receivables in the accompanying consolidated balance sheets. Revenues associated with operating expense recoveries are recognized in the period in which the expenses are incurred based upon the tenant lease provisions. Revenues relating to lease termination fees are recognized on a straight-line basis amortized from the time that a tenant’s right to occupy the leased space is modified through the end of the revised lease term.December 31, 2018, respectively.

Other revenues consist primarily of parking revenue, insurance proceeds, administrative fees, and tenant reimbursements related to utilities, insurance, and other operating expenses. Parking revenue represents amounts generated from contractual and transient parking and is recognized in accordance with contractual terms or as services are rendered. Assets

Other ~~revenues relating to tenant reimbursements are recognized in~~assets included the ~~period that the expense is incurred.~~following (in thousands):



	June 30, 2019		December 31, 2018
Prepaid insurance	$	806	$	493
Prepaid property taxes	347		80
Deferred tax assets ⁽¹⁾	979		844
Other	880		490
Other assets	$	3,012	$	1,907

~~Reclassifications~~


(1)	Includes the effects of a valuation allowance of $1.7 million and $0.8 million as of June 30, 2019 and December 31, 2018, respectively.

In connection with recent amendments to the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (the “Codification”) regarding the presentation of restricted cash in the statements of cash flows that the Company adopted as of December 31, 2016, the Company reclassified an immaterial amount of restricted cash on the statement of cash flows as of September 30, 2016 to be consistent with the presentation of cash and cash equivalent balances as of September 30, 2017.

~~Recent~~Recently Adopted Accounting Pronouncements

In May 2014, the FASB, issued Accounting Standards Update (“ASU”) 2014-09 to provide guidance on recognizing revenue from contracts with customers. This ASU’s core objective is for an entity to recognize revenue based on the consideration it expects to receive in exchange for goods or services. The amendments also replace prior guidance regarding the recognition of revenue from sales of real estate, except for revenue from sales that are part of a sale-leaseback transaction. The Company has not had any sales or partial sales of real estate since its inception. Subsequent to ASU 2014-09, the FASB has issued multiple ASUs clarifying multiple aspects of the new revenue recognition standard, which include the deferral of the

effective date by one year, and additional guidance for partial sales of non-financial assets. These amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with retrospective or modified retrospective adoption.

Expanded quantitative and qualitative disclosures regarding revenue recognition will be required for contracts that are subject to this pronouncement. Rental income from leasing arrangements is specifically excluded from ASU 2014-09, and will be evaluated by the Company in its adoption of the lease accounting standard, ASU 2016-02 (described below). Once ASU 2016-02 goes into effect, the new revenue standard, ASU 2014-09, may apply to executory costs and other components of revenue due under leases that are deemed to be non-lease components (such as common area maintenance and provision of utilities), even when the revenue for such activities is not separately stipulated in the lease. In that case, the revenue from these items previously recognized on a straight-line basis under current lease guidance would be recognized under the new revenue guidance as the related services are delivered. As a result, while the total revenue recognized over time would not differ under the new guidance, the recognition pattern could be different. The Company has completed its initial assessment of each of its revenue streams to identify differences in the timing, measurement or presentation of revenue recognition under the new standard, and has elected the modified retrospective method of adoption. While the Company does not expect there to be a material change to its revenue recognition as a result of the adoption of ASU 2014-09, the Company is still evaluating the impact of this adoption on our identified sources of revenue. The Company is also evaluating its controls around the implementation of ASU 2014-09 and believes there will be no significant impact on its control structure.

In February 2016, the FASB issued ASU 2016-02 which ~~will require~~requires companies that lease assets to recognize on the balance sheet the right-of-use assets and related lease ~~liabilities.~~liabilities (“ASC 842”). The accounting by companies that own the assets leased by the lessee (the lessor) ~~will remain~~remains largely unchanged from ~~current GAAP.~~the adoption of ASC 842. The Company adopted ASC 842 beginning January 1, 2019 and is using the modified retrospective approach. No adjustment to opening retained earnings was required.

In July 2018, the FASB issued ASU 2018-11, which allows lessors to account for lease and non-lease components by class of underlying assets, as a single lease component if certain criteria are met. The new standard ~~requires~~permits companies to recognize a ~~modified retrospective~~cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption in lieu of restating prior periods and provides other optional practical expedients.

On January 1, 2019, the Company elected the following practical expedients:

The transition ~~approach~~method in which the application date of January 1, 2019 is the beginning of the reporting period that the Company first applied the new guidance.

The practical expedient package which allows an entity not to reassess (1) whether any expired or existing contracts are or contain leases; (2) the lease classification for any expired or existing leases; (3) initial direct costs for any existing leases.

As an accounting policy election, a lessor may choose not to separate the non-lease components, by class of underlying assets, from the lease components and instead account for both types of components as a single component under certain conditions.

As an accounting policy election, a lessee may choose not to separate the non-lease components, by class of underlying assets, from the lease components and instead account for both types of components as a single component. The Company elected to apply the practical expedient for all of its leases ~~existing at, or entered into after,~~to account for the ~~date of initial application, with an option to use certain transition relief. The guidance is effective for public entities for fiscal years beginning after December 15, 2018~~lease and ~~interim periods within those fiscal years. Early adoption is permitted.~~ non-lease components as a single, combined operating lease component.

The Company ~~is in the process~~completed its evaluation of ~~evaluating~~ the impact that the adoption of ~~ASU 2016-02~~ASC 842 will have on the Company’s consolidated financial statements relating to its leases from both the lessee and lessor perspective. Based on the Company’s analysis, the Company identified the following changes to result from its adoption of ASC 842:

Lessor Accounting

The Company is entitled to receive tenant reimbursements for operating expenses for common area maintenance. Based on guidance in these ASUs, such revenue is defined as a non-lease component, which would be accounted for in accordance with ASC 606. However, the Company elected to apply the practical expedient for all of its leases to account for the lease and non-lease components as a single, combined operating lease component.

Capitalization of leasing costs is limited to initial direct costs. Initial direct costs have been defined as incremental costs of a lease that would not have been incurred if the lease had not been obtained. Legal costs are no longer capitalized, but expensed as incurred. There is no change in the Company’s accounting for lease inducements and commissions.

The Company’s existing leases continue to be classified as operating leases, however, leases entered into or modified after January 1, 2019 may be classified as either operating or sales-type leases, based on specific classification criteria. The Company believes all of its leases will continue to be classified as operating leases, and ~~other lessee~~all operating leases ~~if any. The Company has currently identified certain areas the Company believes may be impacted by the adoption~~will continue to have a similar pattern of ~~ASU 2016-02, which include:~~recognition as under current GAAP.

The bifurcation of lease arrangements in which contractual amounts due are on a gross basis and the amount under contract is not allocated between rental and expense reimbursements, such as real estate taxes and insurance. This process would be based on the underlying fair values of these items.Lessee Accounting

The Company has a ground lease ~~agreement~~agreements in which the Company is the lessee for land underneath Bishop’s Square that the Company ~~currently~~ accounts for as an operating lease. The Company previously recognized an amount related to this ground lease as part of the allocation of the purchase price of Bishop’s Square, which was recorded to intangible lease assets, net. The lease has a remaining term of 763 years. Upon adoption of ~~ASU 2016-02,~~ASC 842 on January 1, 2019, the Company ~~will record any rights~~determined the lease liability is immaterial and ~~obligations under this~~reclassified approximately €29.7 million (approximately $33.9 million assuming a rate of $1.14 per EUR as of January 1, 2019, the date of adoption) from intangible lease ~~as an~~assets, net to right-of-use asset, ~~and liability at fair value~~net in the Company’s ~~consolidated balance sheets.~~Condensed Consolidated Balance Sheets.

~~Determination of costs to be capitalized associated with leases. ASU 2016-02 will limit the capitalization associated with certain costs to costs that are a direct result of obtaining a lease.~~New Accounting Pronouncements

In ~~October 2016,~~August 2018, the FASB issued ASU ~~2016-16 which~~No. 2018-13, "Changes to the Disclosure Requirements for Fair Value Measurement." This ASU amends and removes several disclosure requirements including the ~~prohibition~~valuation processes for Level 3 fair value measurements. The ASU also modifies some disclosure requirements and requires additional disclosures for changes in ~~ASC 740 against~~unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements and requires the ~~immediate recognition~~range and weighted average of ~~the current and deferred income tax effects of intra-entity transfers of assets other than inventory.~~significant unobservable inputs used to develop Level 3 fair value measurements. The ASU is ~~intended to reduce the complexity of ASC 740 and the diversity in practice related to the tax consequences of certain types of intra-entity asset transfers. ASU 2016-16 will be~~ effective for annual periods beginning after December 31, 2017. The Company plans to adopt ASU 2016-16 beginning January 1, 2018 and expects to record deferred tax assets and related valuation allowances upon adoption related to its subsidiaries in Ireland.

In January 2017, the FASB issued ASU 2017-01 to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company expects that most of its real estate transactions completed after the Company’s adoption of this guidance will be accounted for using the asset acquisition guidance and, accordingly, acquisition fees and expenses related to those acquisitions will be capitalized. The amendments to the Codification will be effective for public entities for annual and interim periods in fiscal years beginning after December 15, ~~2017 and early~~2019, including interim periods therein. Early adoption is permitted ~~with prospective application.~~for any eliminated or modified disclosures upon issuance of this ASU. The Company ~~expects to adopt ASU 2017-01 beginning January 1, 2018.~~

is currently assessing the impact the adoption of this guidance will have on its financial statements.

3. INVESTMENT PROPERTY

Investment property consisted of the following amounts as of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016~~2018 (in thousands):



	June 30, 2019			December 31, 2018
Buildings and improvements ⁽¹⁾	$	773,380		$	693,834
Less: accumulated depreciation	(40,003		)	(30,574		)
Buildings and improvements, net	733,377			663,260
Land	184,285			123,929
Investment property, net	$	917,662		$	787,189

September 30, 2017 December 31, 2016
Buildings and improvements ⁽¹⁾
$ 434,055
$ 256,452
Less: accumulated depreciation (14,913 ) (6,337 )
Buildings and improvements, net 419,142
250,115
Land 85,315
33,760
Investment property, net $ 504,457
$ 283,875

(1)

Included in buildings and improvements is approximately $0.5 million and $0.3 million of construction-in-progress related to the expansion of Bishop’s Square as of September 30, 2017 and December 31, 2016, respectively. Subsequent to September 30,In October 2017, the Company commenced construction at Bishop’s Square to add an additional floor and make various upgrades to the property. The ~~Company expects~~construction was completed in July 2019. Included in buildings and improvements is approximately $16.7 million and $14.5 million of construction-in-progress related to the ~~total construction costs to approximate €15.0 million (approximately $17.7 million assuming a rate~~expansion of ~~$1.18 per EUR~~Bishop’s Square as of ~~September~~June 30, ~~2017)~~2019 and ~~expects the construction to be completed in the fourth quarter of 2018.~~December 31, 2018, respectively.

Recent Acquisition of Investment Property

In ~~January 2017,~~May 2019, the Company acquired ~~Rookwood, two contiguous shopping centers~~ABC Westland, an industrial property located in ~~Cincinnati, Ohio.~~ The ~~net purchase price was $193.7 million, exclusive of transaction costs and working capital reserves. Rookwood consists of 590,501 square feet that is, in the aggregate, 97% leased. See~~ ~~Note 4~~ ~~— Recent Acquisitions of Real Estate for additional information on Rookwood.~~

~~In March 2017, the Company acquired the Montrose Student Residences, a Class-A student housing asset located in Dublin, Ireland.~~Hague, Netherlands. The net purchase price for ~~the Montrose Student Residences~~ABC Westland was ~~€37.7~~€116.4 million (approximately ~~$40.6~~$130.3 million assuming a rate of ~~$1.08~~$1.12 per EUR as of the acquisition date), exclusive of transaction costs and working capital reserves. The ~~Montrose Student Residences consists~~amount recognized for the asset acquisition as of ~~210 beds and is 100% leased. See~~ ~~Note 4~~ ~~— Recent Acquisitions of Real Estate for additional information on the Montrose Student Residences.~~

~~In October 2017, the Company acquired Queen’s Court, a student housing property located in Reading, United Kingdom. See~~ ~~Note 13~~ ~~— Subsequent Events for additional information regarding~~ the acquisition ~~of Queen’s Court.~~date was determined by allocating the net purchase price as follows (in thousands):



Building and Improvements		Land	In-place Lease Intangibles	Out-of-Market Lease Intangibles, Net	Total
$74,059	⁽¹⁾	$59,664	$6,902	$(1,124)	$139,501


(1)	Amount includes approximately €14.1 million (approximately $15.8 million assuming a rate of $1.12 per EUR as of the acquisition date) of solar panels at date of acquisition, which are to be depreciated using the straight-line method assuming a useful life of 25 years.

As of ~~September~~June 30, ~~2017,~~2019, the cost basis and accumulated amortization related to lease intangibles are as follows (in thousands):


	Lease Intangibles									Lease Intangibles
	In-Place Leases			Out-of-Market Lease Assets			Out-of-Market Lease Liabilities			In-Place Leases⁽¹⁾				Out-of-Market Lease Assets				Out-of-Market Lease Liabilities
	In-Place Leases									In-Place Leases⁽¹⁾				Out-of-Market Lease Assets				Out-of-Market Lease Liabilities
Cost	$	114,430		Out-of-Market Lease Assets	$	4,719	Out-of-Market Lease Liabilities		$	(16,928	)	$	87,802			$	5,692			$	(23,458	)
Less: accumulated amortization	(20,794		)	(1,138		)	2,070			(36,950		)		(2,458		)		5,168
Net	$	93,636		$	3,581		$	(14,858	)	$	50,852			$	3,234			$	(18,290	)


(1)	The Company adopted ASC 842 beginning January 1, 2019 and reclassified certain assets from Intangible lease assets, net to Right-of-use asset, net in the Company’s Condensed Consolidated Balance Sheets. See Note 2—Summary of Significant Accounting Policies for more information on the adoption of ASC 842.

As of December 31, ~~2016,~~2018, the cost basis and accumulated amortization related to lease intangibles were as follows (in thousands):



	Lease Intangibles
	In-Place Leases			Out-of-Market Lease Assets			Out-of-Market Lease Liabilities
	In-Place Leases			Out-of-Market Lease Assets			Out-of-Market Lease Liabilities
Cost	$	118,585		$	5,558		$	(22,318	)
Less: accumulated amortization	(31,320		)	(2,126		)	4,284
Net	$	87,265		$	3,432		$	(18,034	)

Lease Intangibles
In-Place Leases
Out-of-Market
Lease Assets

Out-of-Market
Lease Liabilities

Cost $ 84,473
$ 3,230
$ (3,224 )
Less: accumulated amortization (11,238 ) (395 ) 803
Net $ 73,235
$ 2,835
$ (2,421 )

Amortization expense of in-place leases was ~~$4.3~~$4.6 million and ~~$4.0~~$3.8 million for the three months ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018, respectively. Net amortization of out-of-market leases resulted in an increase to rental revenue of ~~$0.3~~$0.5 million and ~~$17,000~~$0.2 million for the three months ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018, respectively.

Amortization expense of in-place leases was ~~$13.9~~$9.3 million and ~~$6.7~~$7.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018, respectively. Net amortization of out-of-market leases resulted in an increase to rental revenue of ~~$0.8~~$0.6 million and ~~$0.2~~$0.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018, respectively.

Anticipated amortization of the Company’s in-place leases and out-of-market leases, net for the period from ~~October~~July 1, ~~2017~~2019 through December 31, ~~2017~~2019 and for each of the years ending December 31, ~~2018~~2020 through December 31, ~~2021~~2023 are as follows (in thousands):



	In-Place Lease		Out-of-Market Leases, Net
July 1, 2019 through December 31, 2019	$	7,462	$	(1,026	)
2020	$	11,770	$	(1,673	)
2021	$	7,388	$	(1,495	)
2022	$	4,741	$	(1,314	)
2023	$	4,172	$	(988	)

In-Place Lease
Out-of-Market
Leases, Net
October 1, 2017 through December 31, 2017 $ 3,915
$ (231 )
2018 13,937
(908 )
2019 11,102
(947 )
2020 7,853
(1,233 )
2021 5,518
(1,059 )

Leases

The Company’s leases are generally for terms of 15 years or less and may include multiple options to extend the lease term upon tenant election. The Company’s leases typically do not include an option to purchase. Generally, the Company does not expect the value of its real estate assets to be impacted materially at the end of any individual lease term, as the Company is typically able to re-lease the space and real estate assets tend to hold their value over a long period of time. Tenant terminations prior to the lease end date occasionally result in a one-time termination fee based on the remaining unpaid lease payments including variable payments and could be material to the tenant. Many of the Company’s leases have increasing minimum rental rates during the terms of the leases through escalation provisions. In addition, the majority of the Company’s leases provide for separate billings for variable rent, such as, reimbursements of real estate taxes, maintenance and insurance and may include an amount based on a percentage of the tenants’ sales. Total billings related to expense reimbursements from tenants for the three and six months ended June 30, 2019, was $2.8 million and $5.7 million, respectively, which is included in Rental revenue on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

The Company has entered into non-cancelable lease agreements with tenants for space. As of ~~September~~June 30, ~~2017,~~2019, the approximate fixed future minimum rentals for the period from ~~October~~July 1, ~~2017~~2019 through December 31, ~~2017,~~2019, for each of the years ending December 31, ~~2018~~2020 through ~~2021~~2023 and thereafter related to the Company’s commercial properties are as follows (in thousands):



	Fixed Future Minimum Rentals
July 1, 2019 through December 31, 2019	$	31,699
2020	58,037
2021	50,520
2022	42,001
2023	39,174
Thereafter	199,061
Total	$	420,492

Fixed Future Minimum Rentals
October 1, 2017 through December 31, 2017 $ 9,963
2018 38,644
2019 34,045
2020 26,813
2021 22,139
Thereafter 96,006
Total $ 227,610

During the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019 and 2018, the Company did not earn more than 10% of its revenue from any individual tenant.

Of the Company’s total rental revenue for the nine months ended September 30, 2016, approximately 24% was earned from the Commissioner of Public Works in Ireland, a state agency of Ireland, whose lease expires in 2028 and 12% was earned from Acushnet, a tenant in the manufacturing industry, whose lease expires in 2019.

4. ~~RECENT ACQUISITIONS OF REAL ESTATE~~

The amounts recognized for major assets acquired as of the acquisition date were determined by allocating the purchase price of each property acquired during the nine months ended September 30, 2017 and the year ended December 31, 2016 as follows (in thousands):

Property Name Acquisition
Date
Building and
Improvements
Land In-place
Lease
Intangibles Out-of-
Market Lease
Intangibles, Net Discount (premium) on assumed mortgage loan Total
2017
Rookwood 1/6/2017 $ 132,466
$ 45,320
$ 27,477
$ (12,275 ) $ 740
$ 193,728
Montrose Student Residences⁽¹⁾
3/24/2017 $ 33,705
$ 5,691
$ 1,282
⁽²⁾
$ (56 ) $ —
$ 40,622

2016
Domain Apartments 1/29/2016 $ 50,790
$ 5,690
$ 1,640
$ —
$ —
$ 58,120
Cottonwood Corporate Center 7/5/2016 $ 98,758
$ 13,600
$ 26,550
$ 290
$ —
$ 139,198
Goodyear Crossing II 8/18/2016 $ 41,620
$ 7,270
$ 5,280
$ 2,030
$ —
$ 56,200


~~(1)~~	~~For the Montrose Student Residences, which was denominated in Euros, amounts have been translated at an exchange rate based on the rate in effect on the acquisition date.~~


~~(2)~~	~~Includes $0.6 million related to the retail areas of the Montrose Student Residences that have average lease terms between two years and 19 years.~~

The purchase price allocations for the Company’s acquisitions completed during the nine months ended September 30, 2017, are preliminary and subject to change until the Company finalizes the allocations, which will be no later than twelve months from the acquisition dates.

The weighted average amortization period for the intangible assets and liabilities acquired in connection with the properties acquired during the nine months ended September 30, 2017 and the year ended December 31, 2016 acquisitions, as of the date of the respective acquisition, was as follows (in years):

In-Place Leases Above-Market Lease Assets Below-Market Lease Liabilities
2017 Acquisitions:
Rookwood 8.3 16.9 13.7
Montrose Student Residences⁽¹⁾
6.5 — 18.9

2016 Acquisitions:
Domain Apartments 0.6 — —
Cottonwood Corporate Center 4.5 8.2 4.7
Goodyear Crossing II 3.1 3.1 —


~~(1)~~	The residential portion of the Montrose Student Residences had a weighted average in-place lease period of 0.2 years and there was no below-market lease liability assigned to the residential portion of the Montrose Student Residences.

The table below includes the amounts of revenue and net income (loss) of the acquisitions completed during the nine months ended September 30, 2017, which are included in the Company’s condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2017 (in thousands):

For the Three Months Ended For the Nine Months Ended
2017 Acquisitions September 30, 2017 September 30, 2017
Rookwood Revenue $ 4,876
$ 14,523
Net income (loss) $ (550 ) $ (7,254 )
Montrose Student Residences Revenue $ 791
$ 1,623
Net income (loss) $ (432 ) $ (2,852 )

The following unaudited consolidated information is presented to give effect to the Company’s acquisitions completed during the nine months ended September 30, 2017, as if the acquisitions had occurred on January 1, 2016. The pro forma net income (loss) was adjusted to exclude acquisition-related fees and expenses of $7.1 million for the nine months ended September 30, 2017. There were no acquisition-related fees and expenses excluded for the three months ended September 30, 2017. For the nine months ended September 30, 2016, the pro forma net loss was adjusted to include acquisition-related fees and expenses of $7.1 million relating to the acquisitions completed during the nine months ended September 30, 2017, as if these fees and expenses had been incurred as of January 1, 2016. For the three months ended September 30, 2016, $4.4 million of acquisition-related fees and expenses were included.

The information below is not necessarily indicative of what the actual results of operations would have been had the Company completed these acquisitions on January 1, 2016, nor does it purport to represent the Company’s future operations (in thousands):

For the Three Months Ended For the Nine Months Ended
September 30, September 30,
Pro Forma 2017 Pro Forma 2016 Pro Forma 2017 Pro Forma 2016
Revenues $ 15,105
$ 13,881
$ 44,601
$ 32,511
Net income (loss) attributable to stockholders $ (1,932 ) $ (8,101 ) $ (7,446 ) $ (23,781 )

The table below includes the amounts of revenue and net income (loss) of the acquisitions completed during the nine months ended September 30, 2016, which are included in the Company’s condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2016 (in thousands):

For the Three Months Ended For the Nine Months Ended
2016 Acquisitions September 30, 2016 September 30, 2016
Domain Apartments Revenue $ 1,201
$ 3,136
Net income (loss) $ (289 ) $ (1,622 )
Cottonwood Corporate Center Revenue $ 3,572
$ 3,572
Net income (loss) $ (2,042 ) $ (2,042 )
Goodyear Crossing II Revenue $ 624
$ 624
Net income (loss) $ (241 ) $ (241 )

The following unaudited consolidated information is presented to give effect to the Company’s acquisitions completed during the nine months ended September 30, 2016 as if the acquisitions had occurred on January 1, 2015. The pro forma net income (loss) was adjusted to exclude acquisition-related fees and expenses of $5.2 million and $6.2 million for the three and nine months ended September 30, 2016, respectively. For the three and nine months ended September 30, 2015, the pro forma net loss was adjusted to include acquisition-related fees and expenses of $0.5 million and $9.0 million, respectively, relating to the 2016 acquisitions, as if these fees and expenses had been incurred as of January 1, 2015.

The information below is not necessarily indicative of what the actual results of operations would have been had the Company completed these acquisitions on January 1, 2015, nor does it purport to represent the Company’s future operations (in thousands):

For the Three Months Ended For the Nine Months Ended
September 30, September 30,
Pro Forma 2016 Pro Forma 2015 Pro Forma 2016 Pro Forma 2015
Revenues $ 8,956
$ 8,909
$ 26,564
$ 25,137
Net income (loss) attributable to stockholders $ (2,028 ) $ (2,566 ) $ (6,154 ) $ (20,354 )

5. DEBT FINANCING

As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the Company had approximately ~~$327.4~~$600.5 million and ~~$254.8~~$545.8 million of debt outstanding, with a weighted average ~~year~~years to maturity of ~~4.0~~3.0 years and ~~4.3~~2.9 years, respectively, and a weighted average interest rate of ~~2.58%~~2.49% and ~~2.37%~~2.85%, respectively. The following table provides additional information regarding the Company’s debt outstanding at ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016~~2018 (in thousands):


Description		Origination or Assumption Date	Maturity Date		Maximum Capacity in Functional Currency		Interest Rate Description	Interest Rate as of September 30, 2017	Principal Outstanding at September 30, 2017			Principal Outstanding at December 31, 2016				Origination or Assumption Date	Maturity Date	Maximum Capacity in Functional Currency		Interest Rate Description	Interest Rate as of June 30, 2019	Principal Outstanding at June 30, 2019			Principal Outstanding at December 31, 2018
Secured Mortgage Debt
Bishop's Square		3/3/2015	3/2/2022		€	55,200	Euribor + 1.30% ⁽¹⁾	1.30%	$	65,208		$	58,048			3/3/2015	3/2/2022	€	55,200	Euribor + 1.30% ⁽¹⁾	1.30%	$	62,740		$	63,171
Domain Apartments		1/29/2016	1/29/2020		$	34,300	Libor + 1.60%	2.83%	34,300			34,300				1/29/2016	1/29/2020	$	34,300	Libor + 1.60%	4.00%	34,300			34,300
Cottonwood Corporate Center		7/5/2016	8/1/2023		$	78,000	Fixed	2.98%	76,228			77,461				7/5/2016	8/1/2023	$	78,000	Fixed	2.98%	73,241			74,110
Goodyear Crossing II		8/18/2016	8/18/2021		$	29,000	Libor + 2.00%	3.24%	29,000			29,000				8/18/2016	8/18/2021	$	29,000	Libor + 2.00%	4.44%	29,000			29,000
Rookwood Commons		1/6/2017	7/1/2020		$	67,000	Fixed	3.13%	67,000			—				1/6/2017	7/1/2020	$	67,000	Fixed	3.13%	67,000			67,000
Rookwood Pavilion		1/6/2017	7/1/2020		$	29,000	Fixed	2.87%	29,000			—				1/6/2017	7/1/2020	$	29,000	Fixed	2.87%	29,000			29,000
Montrose Student Residences		3/24/2017	3/23/2022		€	22,605	Euribor + 1.85% ⁽²⁾	1.85%	26,703			—				3/24/2017	3/23/2022	€	22,605	Euribor + 1.85% ⁽²⁾	1.85%	25,693			25,869
Queen's Court Student Residences																12/18/2017	12/18/2022	£	29,500	Libor + 2.00% ⁽³⁾	2.88%	37,436			37,565
Venue Museum District																9/21/2018	10/9/2020	$	45,000	Libor + 1.95% ⁽⁴⁾	4.36%	45,000			45,000
Fresh Park Venlo																10/3/2018	8/15/2023	€	75,000	Euribor + 1.50%⁽⁵⁾	1.50%	85,225			85,809
Maintal Logistics																2/21/2019	2/28/2024	€	23,500	Euribor + 1.10% ⁽⁶⁾	1.10%	26,621			—
ABC Westland																5/3/2019	2/15/2024	€	75,000	Euribor + 1.50%⁽⁷⁾	1.50%	85,245			—
Notes Payable	Notes Payable								$	327,439		$	198,809		Notes Payable							$	600,501		$	490,824
Affiliate Note Payable
Credit Facility with Hines		12/15/2014	12/15/2017	⁽³⁾	$	75,000	Variable	N/A	—			56,000				10/2/2017	12/31/2019	$	75,000	Variable	N/A	—			55,000
Total Note Payable to Affiliate	Total Note Payable to Affiliate								$	—		$	56,000		Total Note Payable to Affiliate							$	—		$	55,000
Total Principal Outstanding	Total Principal Outstanding								$	327,439		$	254,809		Total Principal Outstanding							$	600,501		$	545,824
Unamortized discount⁽⁴⁾									(581		)	—
Unamortized discount															Unamortized discount							(210		)	(316		)
Unamortized financing fees	Unamortized financing fees								(1,327		)	(994		)	Unamortized financing fees							(3,479		)	(3,069		)
Total	Total								$	325,531		$	253,815		Total							$	596,812		$	542,439


(1)	~~The~~On the loan origination date, the Company entered into a ~~2.0%~~2.00% Euribor interest rate cap agreement atfor the ~~loan origination date~~full amount borrowed as an economic hedge against the variability of future interest rates on this borrowing.


(2)	On the loan origination date, the Company entered into a 1.25% Euribor interest rate cap agreement for €17.0 million (approximately ~~$20.0~~$19.3 million assuming a rate of ~~$1.18~~$1.14 per EUR as of ~~September~~June 30, ~~2017)~~2019) of the full amount borrowed as an economic hedge against the variability of future interest rates on this borrowing.

(3)

~~Each advance under~~On the ~~credit facility with Hines (the “Hines Credit Facility”) must be repaid within six months, subject to one six-month extension at~~loan origination date, the ~~option of the~~ Company and subject to the satisfaction of certain conditions. Notwithstanding that each advance under the Hines Credit Facility matures six months after it is made, the Company is required to repay each advance under the Hines Credit Facility with proceeds from its public offering as such proceeds are raised, unless the Company, through the Operating Partnership, enters into a revolving credit facility (the “OP Facility”), at which point the Company may use such proceeds from its public offering to repay the OP Facility, if any, prior to repaying any advances under its credit facility with Hines. The Hines Credit Facility also permits voluntary prepayment of principal and accrued interest. On October 2, 2017, the Company terminated its Hines Credit Facility and the Operating Partnership entered into a ~~new uncommitted loan~~2.00% LIBOR interest rate cap agreement ~~with Hines,~~for £22.1 million (approximately $28.1 million assuming a rate of $1.27 per GBP as ~~described more fully below.~~of June 30, 2019) of the full amount borrowed as an economic hedge against the variability of future interest rates on this borrowing.


(4)	~~The~~On the loan origination date, the Company ~~assumed notes payable in connection with its~~entered into a 3.50% LIBOR interest rate cap agreement for the full amount borrowed as an economic hedge against the variability of future interest rates on this borrowing.


(5)	On the loan origination date, the Company entered into a 2.00% Euribor interest rate cap agreement for €52.5 million (approximately $59.7 million assuming a rate of $1.14 per EUR as of June 30, 2019) as an economic hedge against the variability of future interest rates on this borrowing.

(6)

In February 2019, the Company entered into a secured mortgage loan to fund the acquisition of ~~Rookwood,~~Maintal Logistics, which ~~were~~was acquired on December 31, 2018. Funding for the acquisition, which relates to the $43.8 million recorded atwithin other liabilities on the ~~estimated fair value~~Condensed Consolidated Balance Sheet as of December 31, 2018, was not required until the loan closed in February 2019. On the loan origination date, the Company entered into a 2.00% Euribor interest rate cap agreement for €16.5 million (approximately $18.7 million assuming a rate of ~~acquisition. The difference between~~$1.14 per EUR as of June 30, 2019) as an economic hedge against the ~~fair value at acquisition and~~variability of future interest rates on this borrowing.


(7)	On the ~~principal outstanding is amortized over~~loan origination date, the ~~term of the related notes.~~Company entered into a 1.00% Euribor interest rate cap agreement for €52.5 million

~~Rookwood~~

In connection with the acquisition of Rookwood, the Company entered into two loan assumption and modification agreements, with Nationwide Life Insurance Company (“Nationwide”), and with CLP-SPF Rookwood Commons, LLC and CLP-SPF Rookwood Pavilion, LLC. Pursuant to the loans, the Company assumed two secured mortgage facilities with a combined original principal amount of $96.0 million.

Interest accrued on the unpaid principal balance of the Rookwood Commons and Rookwood Pavilion secured mortgage facilities is due and payable on the first day of each month commencing in February 2017. The Rookwood Commons and Rookwood Pavilion secured mortgage facilities have fixed interest rates of 3.13% and 2.87%, respectively, and mature on July 1, 2020. Each secured mortgage facility may be prepaid in full, subject to certain conditions, including but not limited to providing 30 days’ advance written notice to Nationwide.

~~Montrose Student Residences~~

In connection with the acquisition of the Montrose Student Residences, the Company entered into a secured facility agreement (the “Montrose Facility”) with Wells Fargo Bank, National Association London Branch, for €22.6 million (approximately $24.4(approximately $58.8 million assuming a rate of ~~$1.08~~$1.12 per EUR as of June 30, 2019) as an economic hedge against the ~~date~~variability of ~~the agreement). Commencing~~future interest rates on May 1, 2017, interest payments are due and payable each quarter and repayment of principal is due upon the maturity of the Montrose Facility on March 23, 2022. The Montrose Facility has a floating interest rate of EURIBOR plus 1.85% through September 2019. Commencing in October 2019, the Montrose Facility will have a floating interest rate of EURIBOR plus 1.85% or 2%, depending upon certain debt yield metrics. The Montrose Facility may be prepaid in full, or in part, subject to a prepayment fee if it is prepaid during the first two years. In addition, pursuant to the terms of the Montrose Facility, the Company entered into a €17.0 million (approximately $20.0 million assuming a rate of $1.18 per EUR as of September 30, 2017) five-year interest rate cap agreement, which effectively caps the EURIBOR interest rate on the Montrose Facility to 1.25%, to limit exposure to interest rate fluctuations.this borrowing.

Hines Credit Facility

~~For~~During the ~~period from January 2017 through September 2017,~~six months ended June 30, 2019, the Company made draws of ~~$7.0~~$44.0 million and made payments of ~~$63.0~~$99.0 million under its credit facility with Hines (the “Hines Credit Facility”). The Company had no outstanding balance on June 30, 2019. From July 1, 2019 through August 14, 2019, the Company made no draws or payments under the Hines Credit Facility. ~~As a result, the Company had no outstanding balance under the Hines Credit Facility as of September 30, 2017.~~

On October 2, 2017, the Company terminated the Hines Credit Facility and the Operating Partnership entered into an uncommitted loan agreement (the “Restated Hines Credit Facility”) with Hines for a maximum principal amount of $240.0 million. Interest on each advance under the Restated Hines Credit Facility is charged monthly at a variable rate, which is (i) Hines’ then-current borrowing rate under its revolving credit facility or (ii) if the Operating Partnership enters into a revolving credit facility, the rate under such facility. Each advance under the Restated Hines Credit Facility must be repaid within six months, subject to one six-month extension at the option of the Operating Partnership and subject to the satisfaction of certain conditions. The Restated Hines Credit Facility will terminate on the earlier of (a) the termination of the availability period as determined by Hines at its discretion (which will not impact the maturity date of any outstanding or previously approved advance under the loan agreement); (b) December 31, 2018; and (c) the date Hines accelerates the repayment of the loan agreement pursuant to any event of default.

Notwithstanding that each advance under the Restated Hines Credit Facility matures six months after it is made, the Operating Partnership is required to repay each advance with any capital raised, unless the Operating Partnership enters into a revolving credit facility (the “OP Facility”), at which point the Operating Partnership may use such proceeds from its public offering to repay the OP Facility, if any, prior to repaying any advances under the Restated Hines Credit Facility. The Restated Hines Credit Facility also permits voluntary prepayment of principal and accrued interest.

The Restated Hines Credit Facility requires the maintenance of certain financial covenants beginning the earlier of (a) September 30, 2018 or (b) the effective date of the OP Facility, if any, which includes covenants concerning indebtedness to total asset value. In addition, the Restated Hines Credit Facility contains customary affirmative and negative covenants, which, among other things, prohibit the Company and the Operating Partnership from: (i) merging with other companies or changing ownership interest; (ii) selling all or substantially all of the Company’s assets or properties; and (iii) if in default under the loan agreement, paying distributions to the Company’s stockholders other than as required to maintain the Company’s status as a real estate investment trust. The Restated Hines Credit Facility also requires the Company to deliver to Hines certain quarterly and annual financial information.

From October 2, 2017 through November 9, 2017, the Company made draws of $35.0 million and made no additional payments under the Restated Hines Credit Facility, which resulted in the Company having a $35.0 million outstanding balance under the Restated Hines Credit Facility as of November 9, 2017.

Financial Covenants

The Company’s mortgage agreements and other loan documents for the debt described in the table above contain customary events of default, with corresponding grace periods, including payment defaults, bankruptcy-related defaults, and customary covenants, including limitations on liens and indebtedness and maintenance of certain financial ratios. As of June 30, 2019, Goodyear Crossing II was out of compliance with a loan covenant related to its secured mortgage debt. In August 2019, the lender provided a waiver of the covenant that was out of compliance, as the property met certain conditions set forth by the lender. The Company is not aware of any other instances of noncompliance with financial covenants on any of its other loans as of ~~September~~June 30, ~~2017.~~2019.

Principal Payments on Debt

The Company is required to make the following principal payments on its outstanding notes payable for the period from ~~October~~July 1, ~~2017~~2019 through December 31, ~~2017,~~2019, for each of the years ending December 31, ~~2018~~2020 through December 31, ~~2021~~2023 and for the period thereafter (in thousands).



	Payments Due by Year
	July 1, 2019 through December 31, 2019		2020		2021		2022		2023		Thereafter
Principal payments	$	994	$	177,388	$	31,143	$	128,068	$	152,289	$	110,619

Payments Due by Year
October 1, 2017 through December 31, 2017 2018 2019 2020 2021 Thereafter
Principal payments $ 417
$ 1,700
$ 1,751
$ 132,104
$ 30,859
$ 160,608

As of August 14, 2019, the Company is required to make $130.3 million in principal payments on its outstanding notes payable that mature through August 2020. The Company expects to be able to repay with cash on hand or proceeds raised from its current offering, or to be able to refinance the debt terms on the principal outstanding.

LIBOR is expected to be discontinued after 2021. As of June 30, 2019 the Company has one loan with a variable interest rate tied to LIBOR with a maturity beyond 2021. The loan agreement provides procedures for determining a replacement or alternative rate in the event that LIBOR is unavailable. However, there can be no assurances as to whether such replacement or alternative rate will be more or less favorable than LIBOR. The Company intends to monitor the developments with respect to the potential phasing out of LIBOR after 2021 and work with its lenders to ensure any transition away from LIBOR will have minimal impact on its financial condition, but can provide no assurances regarding the impact of the discontinuation of LIBOR.

6.5. DERIVATIVE INSTRUMENTS

The Company has entered into several interest rate cap ~~agreements~~contracts in connection with ~~the Bishop’s Square Facility and the Montrose Facility. The interest rate cap agreements were entered into as an economic hedge~~certain of its secured mortgage loans in order to limit its exposure against the variability of future interest rates on its variable interest rate borrowings. The Company’s interest rate cap contracts have economically limited the interest rate on the loan to which they relate. The Company has not designated ~~this derivative~~these derivatives as ~~a hedge~~hedges for accounting purposes. The Company has not entered into a master netting arrangement with its third-party counterparty and does not offset on its ~~condensed consolidated balance sheets~~Condensed Consolidated Balance Sheets the fair value amount recorded for its derivative ~~instrument.~~instruments.

The Company has also entered into foreign currency forward contracts as economic hedges against the variability of foreign exchange rates related to certain cash flows of some of its international investments. These forward contracts fixed the currency exchange rates on each of the investments to which they related. The Company did not designate any of these contracts as fair value or cash flow hedges for accounting purposes. In December 2018, the Company entered into a €15.0 million foreign currency forward contract with an effective date of December 20, 2018 and a trade date of February 25, 2019, in connection with the funding of the Maintal Logistics acquisition. Additionally, in March 2019, the Company entered into an initial €46.0 million foreign currency forward contract with an effective date of March 1, 2019 and a trade date of March 20,

2019, in connection with the acquisition of ABC Westland. Upon settlement of the initial forward contract in March 2019, the Company entered into a new €46.0 million foreign currency forward contract in connection with the acquisition of ABC Westland with an effective date of March 31, 2019 and a trade date of April 3, 2019. See Note 93— ~~Fair Value Measurements~~Investment Property for additional information regarding the ~~fair value~~purchase of ~~the Company’s interest rate contracts.~~ABC Westland.

The table below provides additional information regarding the Company’s interest rate contracts (in thousands, except percentages).

Interest Rate Contracts
Type Effective Date Expiration Date
Notional Amount ⁽¹⁾
Interest Rate Received Pay Rate /Strike Rate
Interest rate cap March 3, 2015 April 25, 2018 $ 65,208
EURIBOR 2.00 %
Interest rate cap March 24, 2017 March 23, 2022 $ 20,027
EURIBOR 1.25 %



Interest Rate Cap Contracts
Property	Effective Date	Expiration Date	Notional Amount ⁽¹⁾		Interest Rate Received	Pay Rate /Strike Rate
Bishop’s Square	March 3, 2015	April 25, 2020	$	62,735	Euribor	2.00	%
Montrose Student Residences	March 24, 2017	March 23, 2022	$	19,268	Euribor	1.25	%
Queen’s Court Student Residences	December 20, 2017	December 20, 2020	$	28,077	LIBOR	2.00	%
Venue Museum District	September 21, 2018	October 9, 2020	$	45,000	LIBOR	3.50	%
Fresh Park Venlo	October 8, 2018	August 15, 2023	$	59,652	Euribor	2.00	%
Maintal Logistics	February 28, 2019	February 28, 2024	$	18,695	Euribor	2.00	%
ABC Westland	May 3, 2019	February 15, 2024	$	58,800	Euribor	1.00	%


(1)	For notional amounts denominated in a foreign currency, amounts have been translated at a rate based on the rate in effect on ~~September~~June 30, ~~2017.~~2019.

The table below presents the effects of the changes in fair value of the Company’s derivative instruments in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2019 and 2018 (in thousands):



	Gain (Loss) Recorded on Derivative Instruments
	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Derivatives not designated as hedging instruments:
Interest rate caps	$	(151	)	$	(45	)	$	(311	)	$	(47	)
Foreign currency forward contracts	74			—			(876		)	—
Total gain (loss) on derivatives	$	(77	)	$	(45	)	$	(1,187	)	$	(47	)

7.6. STOCKHOLDERS’ EQUITY

Public Offering

~~The~~On November 30, 2017, the Company ~~amended~~(i) redesignated its ~~charter on April 27, 2017 to effect a reclassification of the Company’s common stock in order to add two additional classes of common shares, class I shares ($0.001 par value per share)~~issued and ~~class J shares ($0.001 par value per share). As a result of the amendment to its charter, the Company’s~~outstanding Class A shares of common stock, ~~were classified as class A shares, class~~Class T shares ~~class~~of common stock, Class I shares of common stock and ~~class~~Class J shares of common stock as “Class AX shares,” “Class TX shares,” “Class IX shares” and “Class JX shares,” (collectively, the “IPO Shares”) respectively, and (ii) reclassified the authorized but unissued portion of its common stock into four additional classes of shares of common stock: “Class T shares,” “Class S shares,” “Class D shares,” and “Class I shares.” The Company is offering its shares of common stock in the Follow-On Offering in any combination of Class T shares, Class S shares, Class D shares and Class I shares (collectively, the “Follow-On Offering Shares”). All shares of the Company’s common stock have the same voting rights and rights upon liquidation, although distributions received by the Company’s stockholders are expected to differ due to the distribution and stockholder servicing fees payable with respect to ~~class T shares and class I shares,~~the applicable share classes, which ~~will~~ reduce distributions.

The Company ~~amended its Offering, effective April 28, 2017,~~complies with the FASB ASC 480 “Distinguishing Liabilities from Equity” which requires, among other things, that financial instruments that represent a mandatory obligation of the Company to ~~offer up~~repurchase shares be classified as liabilities and reported at settlement value. When shares are tendered for redemption and approved (or not prohibited) by the board of directors, the Company will reclassify such obligations from equity to ~~$2.5 billion~~an accrued liability based upon their respective settlement values and redeem those shares in ~~shares of its common stock in any combination of class A shares, class T shares and class I shares. The Company did not offer class J shares~~the subsequent month pursuant to the ~~Offering. On September 30, 2017, the~~

Company suspended the sale of shares in the primary portion of the Offering. The Company is continuing to offer shares pursuant to its distribution reinvestment plan. The Company has filed a Registration Statement on Form S-11 (File No. 333-220046) with the SEC to pursue the Follow-On Offering.Company’s current share redemption program.

Common Stock

As of June 30, 2019 and December 31, 2018, the Company had the following classes of shares of common stock authorized, issued and outstanding (in thousands):



	June 30, 2019			December 31, 2018
	Shares Authorized	Shares Issued	Shares Outstanding	Shares Authorized	Shares Issued	Shares Outstanding
Class AX common stock, $0.001 par value per share	40,000	18,960	18,960	40,000	19,123	19,123
Class TX common stock, $0.001 par value per share	40,000	19,951	19,951	40,000	19,969	19,969
Class IX common stock, $0.001 par value per share	10,000	98	98	10,000	96	96
Class JX common stock, $0.001 par value per share	10,000	—	—	10,000	—	—
Class T common stock, $0.001 par value per share	350,000	15,021	15,021	350,000	2,858	2,858
Class S common stock, $0.001 par value per share	350,000	—	—	350,000	—	—
Class D common stock, $0.001 par value per share	350,000	4,497	4,497	350,000	1,479	1,479
Class I common stock, $0.001 par value per share	350,000	2,187	2,187	350,000	59	59

The tables below provide information regarding the issuances and redemptions of each class of the Company’s common stock during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018 (in thousands):. There were no Class JX and S shares issued, redeemed or outstanding during the six months ended June 30, 2019.


	Class A				Class T				Class I			Class J			Total				Class AX				Class TX				Class IX			Class T			Class D				Class I			Total
	Shares		Amount		Shares		Amount		Shares	Amount		Shares	Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares	Amount		Shares	Amount		Shares		Amount		Shares	Amount		Shares		Amount
Balance as of January 1, 2017	16,468		$	16	10,074		$	10	—	$	—	—	$	—	26,542		$	26
Balance as of January 1, 2019																			19,123		$	19	19,969		$	21	96	$	—	2,858	$	3	1,479		$	1	59	$	—	43,584		$	44
Issuance of common shares	3,711		4		10,625		11		91	—		—	—		14,427		15		136		—		155		1		1	—		4,011	4		1,198		1		608	1		6,109		7
Redemption of common shares	(151	)	—		(15	)	—		—	—		—	—		(166	)	—		(163	)	—		(195	)	—		—	—		—	—		(4	)	—		—	—		(362	)	—
Balance as of September 30, 2017	20,028		$	20	20,684		$	21	91	$	—	—	$	—	40,803		$	41
Balance as of March 31, 2019																			19,096		$	19	19,929		$	22	97	$	—	6,869	$	7	2,673		$	2	667	$	1	49,331		$	51
Issuance of common shares																			134		—		154		—		1	—		8,152	8		1,824		2		1,520	1		11,785		11
Redemption of common shares																			(270	)	—		(132	)	—		—	—		—	—		—		—		—	—		(402	)	—
Balance as of June 30, 2019																			18,960		$	19	19,951		$	22	98	$	—	15,021	$	15	4,497		$	4	2,187	$	2	60,714		$	62



	Class AX				Class TX				Class IX			Class T			Class D			Total
	Shares		Amount		Shares		Amount		Shares	Amount		Shares	Amount		Shares	Amount		Shares		Amount
Balance as of January 1, 2018	19,206		$	19	19,958		$	20	92	$	—	—	$	—	—	$	—	39,256		$	39
Issuance of common shares	145		—		162		—		1	—		—	—		—	—		308		—
Redemption of common shares	(116	)	—		(17	)	—		—	—		—	—		—	—		(133	)	—
Balance as of March 31, 2018	19,235		$	19	20,103		$	20	93	$	—	—	$	—	—	$	—	39,431		$	39
Issuance of common shares	143		—		159		1		1	—		123	—		38	—		464		1
Redemption of common shares	(136	)	—		(259	)	—		—	—		—	—		—	—		(395	)	—
Balance as of June 30, 2018	19,242		$	19	20,003		$	21	94	$	—	123	$	—	38	$	—	39,500		$	40

Class A Class T Total
Shares Amount Shares Amount Shares Amount
Balance as of January 1, 2016 10,274
$ 10
787
$ 1
11,061
$ 11
Issuance of common shares 5,003
5
5,845
6
10,848
11
Redemption of common shares (44 ) —
—
—
(44 ) —
Balance as of September 30, 2016 15,233

$ 15

6,632

$ 7

21,865

$ 22

Distributions

With the authorization of ~~its~~the Company’s board of directors, the Company ~~has~~ declared distributions asmonthly from January 2019 through July 2019 at a gross distribution rate of ~~daily record dates.~~$0.05208 per month for each share class (represents an annualized rate of $0.625 per share per year if this rate is declared for an entire year), less any applicable distribution and stockholder servicing fees.

Distributions were made on all classes of the Company’s common stock at the same time. All distributions were ~~or will be~~ paid in cash or reinvested in shares of the Company’s common stock for those participating in the Company’s distribution reinvestment plan and have been ~~or will be~~ paid or issued, respectively, on the first business day following the completion of the month to which they relate. Distributions reinvested pursuant to the Company’s distribution reinvestment plan were ~~or will be~~ reinvested in shares of the same class as the shares on which the distributions ~~are being~~were made. Some or all of the cash distributions may be paid from sources other than cash flows from operations.

The ~~tables below outline the distribution rates declared per share, per day for class A shares, class T shares and class I shares.~~

Class A Shares Class T Shares Class I Shares
Period Declared Distribution Rate Per Share, Per Day Period Declared
Distribution Rate Per Share, Per Day⁽¹⁾
Period Declared
Distribution Rate Per Share, Per Day⁽¹⁾
12/1/2017 - 12/31/2017 $ 0.001671233
12/1/2017 - 12/31/2017 $ 0.001671233
12/1/2017 - 12/31/2017 $ 0.001671233
4/1/2017 - 11/30/2017 $ 0.001653699
4/1/2017 - 11/30/2017 $ 0.001653699
5/1/2017 - 11/30/2017 $ 0.001653699
5/1/2016 - 3/31/2017 $ 0.001594766
5/1/2016 - 3/31/2017 $ 0.001594766
N/A N/A
10/1/2014 - 4/30/2016 $ 0.001575342
8/24/2015 - 4/30/2016 $ 0.001575342
N/A N/A

~~(1)~~

Class T shares and Class I shares are subject to an ongoing distribution and stockholder servicing fee payable to the Dealer Manager of 1.0% and 0.25% per annum of the gross offering price per share or, now that the Company is no longer offering primary shares, the most recently determined net asset value (“NAV”) per share, respectively. The distribution rate is the rate prior to deduction of the distribution and stockholder servicing fees payable with respect to class T shares and class I shares. The actual per share, per day distribution rate for class T shares and class I shares will vary based on the total amount of distribution and stockholder servicing fees payable for that particular period.

~~The~~ following table outlines the Company’s total cash distributions declared to stockholders for each of the quarters ended during ~~2017~~2019 and ~~2016,~~2018, including the breakout between the distributions declared in cash and those reinvested pursuant to the Company’s distribution reinvestment plan (in thousands).



	Stockholders
Distributions for the Three Months Ended	Cash Distributions		Distributions Reinvested		Total Declared
2019
June 30, 2019	$	3,647	$	4,415	$	8,062
March 31, 2019	3,090		3,614		6,704
Total	$	6,737	$	8,029	$	14,766
2018
December 31, 2018	$	2,765	$	3,168	$	5,933
September 30, 2018	2,617		3,034		5,651
June 30, 2018	2,554		2,974		5,528
March 31, 2018	2,544		2,970		5,514
Total	$	10,480	$	12,146	$	22,626

The table below outlines the net distributions declared for each class of shares for the three and six months ended June 30, 2019 and 2018. The net distributions presented below are representative of the gross distribution rate declared by the Company’s board of directors, less any applicable ongoing distribution and stockholder servicing fees.



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Distributions declared per Class AX share, net	$	0.16	$	0.15	$	0.31	$	0.30
Distributions declared per Class TX share, net	$	0.13	$	0.13	$	0.26	$	0.26
Distributions declared per Class IX share, net	$	0.15	$	0.15	$	0.30	$	0.29
Distributions declared per Class T share, net	$	0.13	$	0.13	$	0.26	$	0.26
Distributions declared per Class S share, net	$	0.13	$	0.13	$	0.26	$	0.26
Distributions declared per Class D share, net	$	0.15	$	0.15	$	0.30	$	0.29
Distributions declared per Class I share, net	$	0.16	$	0.15	$	0.31	$	0.30

Stockholders
Distributions for the Three Months Ended Cash Distributions Distributions Reinvested Total Declared
2017

September 30, 2017
$ 2,532

$ 2,901

$ 5,433
June 30, 2017⁽¹⁾

2,225

2,565

4,790
March 31, 2017⁽²⁾

1,833

2,076

3,909
Total
$ 6,590

$ 7,542

$ 14,132
2016
December 31, 2016 $ 1,608
$ 1,744
$ 3,352
September 30, 2016 1,340
1,427
2,767
June 30, 2016 1,107
1,128
2,235
March 31, 2016 871
887
1,758
Total $ 4,926
$ 5,186
$ 10,112


~~(1)~~	Includes $1.5 million of distributions that were declared on March 23, 2017 with respect to daily record dates for each day during the month of April 2017, which were paid in cash or reinvested in shares on May 1, 2017.


~~(2)~~	Includes distributions declared as of daily record dates for the three months ended March 31, 2017, but excludes $1.5 million of distributions that were declared on March 23, 2017 with respect to daily record dates for each day during the month of April 2017. These April 2017 distributions were paid in cash or reinvested in shares on May 1, 2017.

8.7. RELATED PARTY TRANSACTIONS

The table below outlines fees and expense reimbursements incurred that are payable by the Company to the Advisor and the Dealer Manager, Hines and its affiliates for the periods indicated below (in thousands):



	Incurred
	Three Months Ended June 30,				Six Months Ended June 30,				Unpaid as of
Type and Recipient	2019		2018		2019		2018		June 30, 2019		December 31, 2018
Selling Commissions- Dealer Manager ⁽¹⁾	$	2,390	$	36	$	3,560	$	36	$	1	$	4
Dealer Manager Fee- Dealer Manager	422		6		630		6		—		3
Distribution & Stockholder Servicing Fees- Dealer Manager	5,698		—		8,687		—		15,644		8,332
Organization and Offering Costs- the Advisor	1,048		998		2,288		1,502		8,555		9,001
Asset Management Fees- the Advisor	1,801		1,214		3,288		2,420		1,930		1,317
Other- the Advisor ⁽²⁾	730		280		1,223		672		509		691
Performance Participation Allocation- the Advisor ⁽³⁾	1,476		1,185		2,597		2,777		2,597		5,954
Interest expense- Hines and its affiliates ⁽⁴⁾	310		11		747		198		—		151
Property Management Fees- Hines and its affiliates	443		248		815		459		148		78
Development and Construction Management Fees- Hines and its affiliates	223		139		290		251		191		28
Leasing Fees- Hines and its affiliates	230		26		337		110		266		228
Expense Reimbursement- Hines and its affiliates (with respect to management and operations of the Company's properties)	983		409		1,795		885		364		235
Total	$	15,754	$	4,552	$	26,257	$	9,316	$	30,205	$	26,022

Incurred
Three Months Ended September 30, Nine Months Ended September 30, Unpaid as of
Type and Recipient 2017 2016 2017 2016 September 30, 2017 December 31, 2016
Selling Commissions- Dealer Manager $ 971
$ 1,240
$ 4,006
$ 4,002
$ 107
$ 54
Dealer Manager Fee- Dealer Manager 474
614
1,735
2,451
24
2
Distribution & Stockholder Servicing Fee- Dealer Manager 1,719
1,399
5,390
3,260
9,167
4,636
Issuer Costs- the Advisor 1,535
982
3,921
2,458
5,257
4,785
Acquisition Fee- the Advisor and affiliates of Hines —
4,396
5,273
5,704
38
1,265
Asset Management Fee- the Advisor and affiliates of Hines ⁽¹⁾
1,234
440
3,617
440
1,382
941
Other- the Advisor ⁽²⁾
534
451
1,027
815
267
295
Interest expense- Hines ⁽³⁾
—
25
388
28
—
37
Property Management Fee- Hines 237
120
618
144
(15 ) (19 )
Expense Reimbursement- Hines (with respect to management and operations of the Company's properties) 477
245
1,159
416
191
145
Total $ 7,181
$ 9,912
$ 27,134
$ 19,718
$ 16,418
$ 12,141


(1)	~~The Advisor did not waive any asset management~~Some or all of these fees ~~payable~~may be reallowed to ~~it during~~participating broker dealers rather than being retained by the three and nine months ended September 30, 2017 and waived $0.3 million and $1.0 million in asset management fees payable to it during the three and nine months ended September 30, 2016, respectively.Dealer Manager.


(2)	Includes amounts the Advisor paid on behalf of the Company such as general and administrative expenses and acquisition-related expenses. These amounts are generally reimbursed to the Advisor during the month following the period in which they are incurred.

(3)

Through its ownership of the special limited partner interest in the Operating Partnership, the Advisor is entitled to an annual performance participation allocation of 12.5% of the Operating Partnership’s total return. Total return is defined as distributions paid or accrued plus the change in net asset value of the Company’s shares of common stock for the applicable period. This performance participation allocation is subject to the Company earning a 5% total return annually (as defined above), after considering the effect of any losses carried forward from the prior period (as defined in the Operating Partnership agreement). The performance participation allocation accrues monthly and is payable after the completion of each calendar year.


(4)	Includes amounts paid related to the Hines Credit Facility.

9.8. FAIR VALUE MEASUREMENTS

Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities the Company has the ability to access. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices observable for the asset or liability, such as interest rates and yield curves observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In instances in which the inputs used to measure fair value may fall into different levels of the fair value hierarchy, the level in the fair value hierarchy within which the fair value measurement in its entirety has been determined is based on the lowest level input significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Financial Instruments Measured on a Recurring Basis

As described in “Note 5 — Derivative Instruments,” the Company entered into several interest rate contracts as economic hedges against the variability of future interest rates on its variable interest rate borrowings. The valuation of these derivative instruments is determined based on assumptions that management believes market participants would use in pricing, using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate contracts have been determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

Although the Company has determined the majority of the inputs used to value its interest rate contracts fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparties. In adjusting the fair values of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds and guarantees. However, as of June 30, 2019 and 2018, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuations of its derivatives. As a result, the Company has determined its derivative valuations are classified in Level 2 of the fair value hierarchy.

Additionally, as described in “Note 5 — Derivative Instruments,” the Company has entered into foreign currency forward contracts as economic hedges against the variability of foreign exchange rates. The valuation of these forward contracts is determined based on assumptions that management believes market participants would use in pricing, using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including currency exchange rate curves and implied volatilities. The Company has determined its foreign currency forward contracts valuations are classified in Level 2 of the fair value hierarchy, as they are based on observable inputs but are not traded in active markets.

In the fourth quarter of 2018, the Company made its initial investments in real estate-related securities and as of June 30, 2019 has $20.0 million invested in these securities. These securities consist of common equities, preferred equities and debt investments of publicly traded REITs. The Company has elected to classify these investments as trading securities and carry such investments at fair value. In July 2019, the Company made an additional $15.0 million investment in real estate-related securities. The following table summarizes activity for the Company’s real estate-related securities measured at fair value on a recurring basis, and excludes balances of uninvested cash in our managed account of $1.3 million and $62,000 as of June 30, 2019 and December 31, 2018, respectively.



	Basis of Fair Value Measurements
As of	Description	Fair Value of Assets		Quoted Prices In Active Markets for Identical Items (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2019	Investments in real estate-related securities	$	19,833	$	19,833	$	—	$	—
December 31, 2018	Investments in real estate-related securities	$	9,599	$	9,599	$	—	$	—

Financial Instruments Fair Value Disclosures

As of ~~September~~June 30, ~~2017,~~2019, the Company estimated that the fair value of its notes payable, excluding deferred financing costs, which had a book value of ~~$327.4~~$600.5 million, was ~~$324.7~~$596.7 million. As of December 31, ~~2016,~~2018, the Company estimated that the fair value of its notes payable, excluding deferred financing costs, which had a book value of ~~$254.8~~$545.8 million, was ~~$251.0~~$540.3 million. Management has utilized available market information such as interest rate and spread assumptions of notes payable with similar terms and remaining maturities, to estimate the amounts required to be disclosed. Although the Company has determined that the majority of the inputs used to value its notes payable fall within Level 2 of the fair value hierarchy, the credit quality adjustments associated with its fair value of notes payable utilize Level 3 inputs. However, the Company has assessed the significance of the impact of the credit quality adjustments on the overall valuations of the fair market value of its notes payable and has determined they are not significant. Other financial instruments not measured at fair value on a recurring basis include cash and cash equivalents, restricted cash, tenant and other receivables, accounts payable and accrued expenses, other liabilities, due to affiliates and distributions payable. The carrying value of these items reasonably approximates their fair value based on their highly-liquid nature and/or short-term maturities. Due to the short-term nature of these instruments, Level 1 inputs are utilized to estimate the fair value of the cash and cash equivalents and restricted cash and Level 2 inputs are utilized to estimate the fair value of the remaining financial instruments.

~~10.~~9. REPORTABLE SEGMENTS

As described previously, the Company ~~intends to invest~~invests the net proceeds from ~~the Offering in a diversified~~its public offerings into its portfolio of quality commercial real estate properties and other real estate investments throughout the United States and internationally. The Company’s current business consists of owning, operating, acquiring, developing, investing in, and disposing of real estate ~~assets. All~~assets and all of the Company’s consolidated revenues and property operating expenses ~~as of September 30, 2017~~ are from these real estate properties.

Management evaluates the ~~Company’s seven consolidated~~operating performance of each of its real estate properties ~~owned as of that date. As a result, the Company’s~~at an individual investment level and considers each investment to be an operating segment. The Company has aggregated its operating segments ~~have been classified~~ into ~~six~~seven reportable segments: domestic office investments, domestic ~~multi-family~~residential/living investments, domestic retail investments, domestic ~~other~~industrial investments, international industrial investments, international office investments, and international ~~multi-family~~residential/living investments.

The tables below provide additional information related to each of the Company’s segments (in thousands) and a reconciliation to the Company’s net income (loss), as applicable. “Corporate-Level Accounts” includes amounts incurred by the corporate-level entities which are not allocated to any of the reportable segments.



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Total Revenue
Domestic office investments	$	4,128	$	4,110	$	8,337	$	8,138
Domestic residential/living investments	2,741		1,229		5,473		2,443
Domestic retail investments	4,903		5,010		9,852		10,054
Domestic industrial investments	1,099		1,312		2,185		3,290
International industrial investments	6,582		—		11,335		—
International office investments	1,860		1,963		3,791		4,062
International residential/living investments	2,241		2,350		4,318		4,718
Total Revenue	$	23,554	$	15,974	$	45,291	$	32,705

Three Months Ended September 30,
Nine Months Ended September 30,
2017
2016
2017
2016
Total Revenue

Domestic office investments $ 3,986
$ 3,573
$ 11,582
$ 3,573
Domestic multi-family investments 1,155
1,201

3,496
3,134
Domestic retail investments 4,876
—
14,523
—
Domestic other investments 1,884
1,228
5,706
2,437
International office investments 2,413

2,112

6,703

6,253
International multi-family investments 791

—

1,623

—
Total Revenue $ 15,105

$ 8,114

$ 43,633

$ 15,397

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018, the Company’s total revenue was attributable to the following countries:



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Total Revenue
United States	55	%	73	%	57	%	73	%
The Netherlands	24	%	—	%	21	%	—	%
Ireland	12	%	19	%	13	%	18	%
United Kingdom	5	%	8	%	5	%	9	%
Germany	4	%	—	%	4	%	—	%

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Total Revenue
United States 79 % 74 % 81 % 59 %
Ireland 21 % 26 % 19 % 41 %

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018, the Company’s property revenues in excess of expenses by segment were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016		2019		2018		2019		2018
Property revenues in excess of expenses⁽¹⁾
Domestic office investments	$	2,729	$	2,404	$	7,896	$	2,400	$	2,813	$	2,852	$	5,709	$	5,572
Domestic multi-family investments	719		840		2,228		2,066
Domestic residential/living investments									1,340		816		2,784		1,590
Domestic retail investments	2,566		—		7,672		—		2,816		3,245		5,628		6,407
Domestic other investments	1,449		927		4,396		1,836
Domestic industrial investments									958		989		1,656		2,519
International industrial investments									3,743		—		6,321		—
International office investments	2,030		1,722		5,424		5,160		1,533		1,522		2,480		3,124
International multi-family investments	468		—		1,047		—
International residential/living investments									1,542		1,520		3,066		3,244
Property revenues in excess of expenses	$	9,961	$	5,893	$	28,663	$	11,462	$	14,745	$	10,944	$	27,644	$	22,456


(1)	Revenues less property operating expenses, real property taxes and property management fees.

As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the Company’s total assets by segment were as follows (in thousands):



	June 30, 2019		December 31, 2018
Total Assets
Domestic office investments	$	127,441	$	130,021
Domestic residential/living investments	121,579		126,175
Domestic retail investments	196,686		199,819
Domestic industrial investments	51,821		51,103
International industrial investments	336,747		190,001
International office investments	121,466		122,471
International residential/living investments	108,385		111,803
Corporate-level accounts	34,639		17,436
Total Assets	$	1,098,764	$	948,829

September 30, 2017 December 31, 2016
Total Assets
Domestic office investments $ 133,418
$ 137,407
Domestic multi-family investments 53,757
55,201
Domestic retail investments 204,585
—
Domestic other investments 75,561
78,182
International office investments 112,776
99,002
International multi-family investments 48,603
—
Corporate-level accounts 43,917
100,553
Total Assets $ 672,617
$ 470,345

As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the Company’s total assets were attributable to the following countries:



	June 30, 2019		December 31, 2018
Total Assets
United States	49	%	55	%
Ireland	15	%	18	%
The Netherlands	26	%	15	%
United Kingdom	6	%	7	%
Germany	4	%	5	%

September 30, 2017 December 31, 2016
Total Assets
United States 76 % 79 %
Ireland 24 % 21 %

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018 the Company’s reconciliation of the Company’s property revenues in excess of expenses to the Company’s net income (loss) is as follows (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Reconciliation to property revenue in excess of expenses
Net income (loss)	$	(3,450	)	$	(1,408	)	$	(7,449	)	$	9,968
Depreciation and amortization	9,741			6,959			19,069			14,300
Acquisition related expenses	13			10			17			144
Asset management fees	1,801			1,214			3,288			2,420
Performance participation allocation	1,476			1,185			2,597			2,777
General and administrative expenses	948			659			1,795			1,511
(Gain) loss on derivative instruments	77			45			1,187			47
(Gain) loss on real estate-related securities	(161		)	—			(1,327		)	—
Gain on sale of real estate	—			—			—			(14,491		)
Foreign currency (gains) losses	267			291			336			316
Interest expense	4,317			2,677			8,514			5,491
Interest income	(244		)	(34		)	(372		)	(47		)
(Benefit) provision for income taxes	(40		)	(654		)	(11		)	20
Total property revenues in excess of expenses	$	14,745		$	10,944		$	27,644		$	22,456

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Reconciliation to property revenue in excess of expenses
Net income (loss) $ (1,543 ) $ (7,164 ) $ (12,899 ) $ (9,357 )
Depreciation and amortization 7,203
5,562
22,108
9,873
Acquisition related expenses 550
930
2,641
1,370
Asset management and acquisition fees 1,234
4,836
8,890
6,137
General and administrative expenses 787
579
2,065
1,588
(Gain) loss on derivative instruments 26
1
100
6
Foreign currency (gains) losses (132 ) 41
(427 ) (8 )
Interest expense 2,270
1,115
6,861
1,901
Interest income (49 ) (7 ) (62 ) (48 )
(Benefit) provision for income taxes (385 ) —
(614 ) —
Total property revenues in excess of expenses $ 9,961
$ 5,893
$ 28,663
$ 11,462

~~11.~~10. SUPPLEMENTAL CASH FLOW DISCLOSURES

Supplemental cash flow disclosures for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018 (in thousands):



	Six Months Ended June 30,
	2019		2018
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	7,947	$	5,025
Supplemental Schedule of Non-Cash Investing and Financing Activities
Distributions declared and unpaid	$	2,860	$	1,844
Distributions reinvested	$	7,543	$	5,961
Shares tendered for redemption	$	596	$	1,090
Non-cash net liabilities assumed	$	2,686	$	—
Offering costs payable to the Advisor	$	2,288	$	1,502
Distribution and stockholder servicing fees payable to the Dealer Manager	$	8,687	$	—
Accrued capital additions	$	2,282	$	2,636
Accrued acquisition costs	$	164	$	—

Nine Months Ended September 30,
2017 2016
Supplemental Disclosure of Cash Flow Information
Cash paid for interest $ 6,173
$ 1,619
Supplemental Schedule of Non-Cash Investing and Financing Activities
Distributions declared and unpaid $ 1,833
$ 966
Distributions reinvested $ 7,187
$ 3,189
Other receivables $ 384
$ 250
Non-cash net liabilities assumed $ 1,652
$ 7,201
Assumption of mortgage upon acquisition of property $ 95,260
$ —
Offering costs payable to the Advisor $ 472
$ 1,376
Selling commissions, dealer manager fees and distribution and stockholder servicing fees payable to the Dealer Manager $ 4,662
$ 3,158
Equipment acquired under capital lease $ —
$ 178
Accrued capital additions $ 754
$ —

~~12.~~11. COMMITMENTS AND CONTINGENCIES

The Company may be subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance. While the resolution of these matters cannot be predicted with certainty, management believes the final outcome of such matters will not have a material adverse effect on the Company’s condensed consolidated financial statements.

~~13.~~12. SUBSEQUENT EVENTS

~~Tender Offer~~The Promenade Shops at Briargate

~~On October 3, 2017,~~In August 2019, the Company ~~filed~~entered into a ~~tender offer statement on Schedule TO with the SEC~~purchase and ~~commenced a self-tender offer~~sale agreement to purchase ~~for cash up to $200 million of the Company’s outstanding common stock in any combination of class A shares, class T shares and class I shares.~~ The ~~Company is offering to purchase the shares~~Promenade Shops at Briargate, a price of $9.69 per share, which is the NAV per share of the Company’s common stock determined as of August 31, 2017, and the maximum number of shares that will be accepted for payment pursuant to the Company’s offer (unless the amount of the offer is increased in accordance with applicable law) is 20,639,835 shares.

The Tender Offer will expire at 5:00 p.m., Central Time, on November 15, 2017, unless extended by the Company. The Tender Offer is being made upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal, each of which was filed with the SEC on October 3, 2017.

~~Hines Credit Facility~~

On October 2, 2017, the Company terminated the Hines Credit Facility and the Operating Partnership entered into the Restated Hines Credit Facility with Hines for a maximum principal amount of $240.0 million. See ~~Note 5~~ ~~— Debt Financing for additional information regarding the terms of the Restated Hines Credit Facility.~~

~~Queen’s Court~~

In October 2017, the Company, through a wholly-owned subsidiary of the Operating Partnership, acquired from CPA 18 Pan-European Holding Cooperatif U.A. and Crown Students LLP (collectively, the “Sellers”), all of the share capital of the entities that own Queen’s Court, a student housing assetretail center located in ~~Reading, United Kingdom.~~Colorado Springs, Colorado. The contract purchase price for ~~Queen’s Court was £49.2~~The Promenade Shops at Briargate is expected to be approximately $93.2 million, ~~(approximately $65.3 million assuming a rate of $1.33 per GBP as of the acquisition date),~~ exclusive of transaction costs and ~~working capital reserves. Queen’s Court consists~~closing prorations. The Company expects to fund the acquisition using proceeds from the Follow-on Offering. The Company funded a $2.0 million earnest money deposit in August 2019. There is no guarantee that this sale will be consummated and the Company’s deposit may not be refunded in such event. The Company expects the closing of ~~395 beds and is 100% leased. The Sellers are not affiliated with~~this acquisition to occur in September 2019, subject to a number of closing conditions. However, the Company can provide no assurance that this acquisition will close on the expected timeline or its affiliates. The Company has not concluded its accounting for this recent acquisition, but it expects that the purchase price will primarily be allocated to building, land and in-place lease assets.at all.

*****

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included in Item 1 in this Quarterly Report on Form 10-Q. The following discussion should also be read in conjunction with our audited consolidated financial statements and the notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”), as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as amended. Such statements include statements concerning future financial performance and distributions, future debt and financing levels, acquisitions and investment objectives, payments to Hines Global REIT II Advisors LP (the “Advisor”), and its affiliates and other plans and objectives of management for future operations or economic performance, or assumptions or forecasts related thereto as well as all other statements that are not historical statements. These statements are only predictions. We caution that forward-looking statements are not guarantees. Actual events or our investments and results of operations could differ materially from those expressed or implied in forward-looking statements. Forward-looking statements are typically identified by the use of terms such as “may,” “should,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “potential” or the negative of such terms and other comparable terminology.

The forward-looking statements included in this Quarterly Report on Form 10-Q are based on our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, the availability of future financing and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Any of the assumptions underlying forward-looking statements could prove to be inaccurate. To the extent that our assumptions differ from actual results, our ability to meet such forward-looking statements, including our ability to generate positive cash flow from operations, pay distributions to our shareholders and maintain the value of any real estate investments and real estate-related investments in which we may hold an interest in the future, may be significantly hindered.

The following are some of the risks and uncertainties, which could cause actual results to differ materially from those presented in certain forward-looking statements:




—	Whether we will have the opportunity to invest offering and distribution reinvestment plan proceeds to acquire properties or other investments or whether such proceeds will be needed to redeem shares or for other purposes, and if proceeds are available for investment, our ability to make such investments in a timely manner and at appropriate amounts that provide acceptable returns;

—	Competition for tenants and real estate investment opportunities, including competition with ~~Hines Global REIT, Inc. and~~ other programs sponsored by or affiliated with Hines Interests Limited Partnership (“Hines”);

—	Our reliance on our Advisor, Hines and affiliates of Hines for our day-to-day operations and the selection of real estate investments, and our Advisor’s ability to attract and retain high-quality personnel who can provide service at a level acceptable to us;

—	Our ability to complete acquisitions of properties under contract;

—	Risks associated with conflicts of interests that result from our relationship with our Advisor and Hines, as well as conflicts of interests certain of our officers and directors face relating to the positions they hold with other entities;

—	The potential need to fund tenant improvements, lease-up costs or other capital expenditures, as well as increases in property operating expenses and costs of compliance with environmental matters or discovery of previously undetected environmentally hazardous or other undetected adverse conditions at our properties;

—	The availability and timing of distributions we may pay is uncertain and cannot be assured;



—	Our distributions have been paid using cash flows from financing activities, including proceeds from our public offering, as well as cash from the waiver of fees by our Advisor, and some or all of the distributions we pay in the future may be paid from similar sources or sources such as cash advances by our Advisor, cash resulting from a waiver or deferral of fees, borrowings and/or proceeds from the offering. When we pay distributions from sources other than our cash flow from operations, we will have less funds available for the acquisition of properties, and your overall return may be reduced;

—	Risks associated with debt and our ability to secure financing;

—	Risks associated with adverse changes in general economic or local market conditions, including terrorist attacks and other acts of violence, which may affect the markets in which we and our tenants operate;

—	Catastrophic events, such as hurricanes, earthquakes, tornadoes and terrorist attacks; and our ability to secure adequate insurance at reasonable and appropriate rates;

—	The failure of any bank in which we deposit our funds could reduce the amount of cash we have available to pay distributions and make additional investments;

—	Changes in governmental, tax, real estate and zoning laws and regulations and the related costs of compliance and increases in our administrative operating expenses, including expenses associated with operating as a public company;

—	International investment risks, including the burden of complying with a wide variety of foreign laws and the uncertainty of such laws, the tax treatment of transaction structures, political and economic instability, foreign currency fluctuations, and inflation and governmental measures to curb inflation may adversely affect our operations and our ability to make distributions;

—	The lack of liquidity associated with our assets; and

—	Our ability to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes.

These risks are more fully discussed in, and all forward-looking statements should be read in light of, all of the risk factors ~~discussed in~~under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018.

You are cautioned not to place undue reliance on any forward-looking statements included in this Quarterly Report on Form 10-Q. All forward-looking statements are made as of the date of this Quarterly Report on Form 10-Q and the risk that actual results will differ materially from the expectations expressed in this Quarterly Report on Form 10-Q may increase with the passage of time. In light of the significant uncertainties inherent in the forward-looking statements included in this Quarterly Report on Form 10-Q, the inclusion of such forward-looking statements should not be regarded as a representation by us or any other person that the objectives and plans set forth in this Quarterly Report on Form 10-Q will be achieved. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. Each forward-looking statement speaks only as of the date of the particular statement, and we do not undertake to update any forward-looking statement.

~~Executive Summary~~The Company

Hines Global Income Trust, Inc. (“Hines Global”), formerly known as Hines Global REIT II, Inc. ~~(“Hines Global II” and, together with its consolidated subsidiaries, “we,” “us” or the “Company”)~~, was ~~incorporated in~~formed as a Maryland corporation on July 31, 2013, ~~to invest~~for the purpose of investing in a diversified portfolio of quality commercial real estate properties and other real estate investments located throughout the United States and internationally. ~~We raise capital for our investments through public offerings of our common stock. We are~~Hines Global is sponsored by Hines Interests Limited Partnership (“Hines”), a fully integrated global real estate investment and management firm that has acquired, developed, owned, operated and sold real estate for over 60 years. The Company has elected to be taxed as a REIT for U.S. federal income tax purposes beginning with its taxable year ended December 31, 2015.

We raise capital for our investments through public offerings of our common stock. We commenced our initial public offering of up to $2.5 billion in shares of our common stock (the ~~“Offering”~~“Initial Offering”) in August 2014 and ~~raised $402.1~~commenced our second public offering of up to $2.5 billion in shares of common stock including $500.0 million of shares offered under our distribution reinvestment plan (the “Follow-On Offering”) in ~~primary~~December 2017. It is our intention to conduct a continuous offering ~~proceeds. On September 30, 2017,~~for an indefinite period of time by conducting additional offerings of our shares of common stock following the conclusion of the Follow-On Offering. As of August 14, 2019, we ~~suspended~~had received gross offering proceeds of $738.9 million from the sale of 73.8 million shares ~~in the primary portion of the Offering. We are continuing to offer~~through our public offerings, including shares issued pursuant to our distribution reinvestment plan. We have filed a Registration Statement on Form S-11 (File No. 333-220046), with the Securities and Exchange Commission (“SEC”), to pursue our second public offering of common shares (the “Follow-on Offering”). We engaged Hines Securities, Inc. (the “Dealer Manager”), an affiliate of Hines, to serve as the dealer manager for our Offering and expect to engage the Dealer Manager to serve as the dealer manager for the Follow-on Offering.

On September 26, 2017, our board of directors determined a new net asset value (“NAV”) per share of our common stock of $9.69, based on the number of shares issued and outstanding as of August 31, 2017, which represents a 0.4% increase over the previously determined NAV per share of $9.65 as of December 31, 2016. The new NAV per share reflects a 9.8% increase in the aggregate appraised value of our real estate investments when compared to the purchase price of our real estatePortfolio Highlights

investments excluding closing costs, transaction fees and additional capital investments since acquisition. This 9.8% net increase resulted from a 7.8% appreciation in the aggregate appraised values of our real estate investments since their purchase, and a 2.0% appreciation resulting from the increased strength of the Euro against the U.S dollar.

Hines is committed to our success and we executed different agreements described below between Hines and its affiliates to reduce costs during our public offerings and to ensure our product remains competitive in the marketplace. As a result of the changing landscape in the non-traded REIT industry, we filed a Registration Statement for our proposed Follow-on Offering with the SEC which reflects a restructuring that our board of directors believes is in the best interests of our shareholders. The new structure will revise, reduce or eliminate certain fees payable to our advisor and its affiliates and increase liquidity for the holders of our class A shares and class T shares.

We, our Dealer Manager and our Advisor entered into a Dealer Manager Agreement, pursuant to which our Advisor paid a portion of the dealer manager fees payable to our Dealer Manager in an amount equal to 1.5% of the gross offering proceeds with respect to class A shares and class T shares sold in the primary Offering on and after August 2, 2016. In addition, under the Dealer Manager Agreement, the Advisor agreed to pay all of the dealer manager fees payable to our Dealer Manager with respect to class I shares, in an amount equal to up to 1.50% of the gross proceeds of the class I shares sold in the primary offering. Our Advisor was not reimbursed by us in any way for the payment of such dealer manager fees.

Also, the Advisory Agreement was amended, effective February 29, 2016, to reflect that we will not reimburse our Advisor for the cumulative issuer costs incurred in connection with our organization and public offerings, in excess of 2.5% of gross offering proceeds from our public offerings. As a result, on April 14, 2016, our Advisor reimbursed us for $4.0 million in issuer costs that we had previously reimbursed to our Advisor in excess of this 2.5% cap. From inception through September 30, 2017, our Advisor incurred $15.0 million in issuer costs, of which $1.0 million is related to costs incurred for our Follow-On Offering. We have reimbursed our Advisor $9.8 million of these issuer costs.

Further, commencing with the quarter ended December 31, 2014, our Advisor agreed to waive the asset management fees for each quarter through December 31, 2016, to the extent that our modified funds from operations (“MFFO”), for a particular quarter, as disclosed in our Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as applicable, amounted to less than 100% of the aggregate distributions declared to our stockholders for such quarter. Our Advisor also agreed to waive the asset management fees otherwise payable to it for the quarter ended March 31, 2017 to the extent that our MFFO for such quarter, as reduced to reflect the distribution and stockholder servicing fees payable for such quarter, as disclosed in our Quarterly Report on Form 10-Q, amounts to less than 100% of the aggregate distributions declared to our stockholders for that quarter. As a result of these fee waivers, cash flows from operations that would have been paid to our Advisor for asset management fees was available to pay distributions to stockholders. These fee waivers are not deferrals and accordingly, any fees that were waived will not be paid to our Advisor in cash at any time in the future.

The table below outlines, with respect to each of the quarters during 2016, the asset management fees earned by our Advisor before application of the waivers, the amounts waived pursuant to the asset management fee waivers described above, if any, and the asset management fees that were earned by our Advisor after application of the waivers (in thousands). Our Advisor did not waive any asset management fees payable to it during the three and nine months ended September 30, 2017.

For the Three Months Ended Asset Management Fee Pre-Waiver Asset Management Fee Waived Asset Management Fee Post-Waiver
December 31, 2016 $ 751
$ 242
$ 509
September 30, 2016 708
269
439
June 30, 2016 377
377
—
March 31, 2016 364
364
—
Total $ 2,200
$ 1,252
$ 948

We intend to meet our primary investment objectives by investing in a portfolio of quality commercial real estate properties and other real estate investments that relate to properties that are generally diversified by geographic area, lease expirations and tenant industries. As of ~~September~~June 30, ~~2017,~~2019, we owned ~~seven~~eleven real estate ~~investments. Additionally, in October 2017, we acquired~~investments consisting of 7.3 million square feet that were 96% leased. The following chart depicts the percentage of our ~~eighth~~portfolio’s investment types based on the estimated value of each real estate investment ~~Queen’s Court.~~ as of June 30, 2019 (“Estimated Values”), which are consistent with the values used to determine our net asset value (“NAV”) per share on that date.

The following charts depict the location of our real estate investments as of June 30, 2019. Approximately 46% of our portfolio is located throughout the United States and approximately 54% is located internationally, based on the Estimated Values.

The following table provides additional information regarding each of ~~these properties. The information in this table~~our properties and is presented as of ~~September~~June 30, ~~2017 for properties acquired prior to September 30, 2017 and as of the date of acquisition with respect to Queen’s Court, which was acquired on October 11, 2017.~~

2019.


Property		Location	Investment Type	Date Acquired/ Net Purchase Price (in millions)⁽¹⁾	Estimated Going-in Capitalization Rate⁽²⁾	Leasable Square Feet	Percent Leased			Location	Investment Type	Date Acquired/ Net Purchase Price (in millions) ⁽¹⁾	Estimated Going-in Capitalization Rate ⁽²⁾	Leasable Square Feet	Percent Leased
2819 Loker Avenue East		Carlsbad, California	Industrial	12/2014; $25.4	6.5%	161,310	100	%
Bishop's Square		Dublin, Ireland	Office	3/2015; $103.2	6.1%	153,387	89	%
Bishop’s Square										Dublin, Ireland	Office	3/2015; $103.2	6.1%	182,370	100	%
Domain Apartments		Las Vegas, Nevada	Multi-family	1/2016; $58.1	5.5%	331,038	96	%		Las Vegas, Nevada	Residential/Living	1/2016; $58.1	5.5%	331,038	96	%
Cottonwood Corporate Center		Salt Lake City, Utah	Office	7/2016; $139.2	6.9%	490,030	94	%		Salt Lake City, Utah	Office	7/2016; $139.2	6.9%	487,283	97	%
Goodyear Crossing II		Phoenix, Arizona	Industrial	8/2016; $56.2	8.5%	820,384	100	%		Phoenix, Arizona	Industrial	8/2016; $56.2	8.5%	820,384	100	%
Rookwood		Cincinnati, Ohio	Retail	1/2017; $193.7	6.0%	590,501	97	%		Cincinnati, Ohio	Retail	1/2017; $193.7	6.0%	567,335	96	%
Montrose Student Residences		Dublin, Ireland	Multi-family	3/2017; $40.6	5.5%	53,827	100	%		Dublin, Ireland	Residential/Living	3/2017; $40.6	5.5%	53,835	100	%	⁽³⁾
Queen’s Court Student Residences		Reading, United Kingdom	Multi-family	10/2017; $65.3	6.2%	79,115	100	%		Reading, United Kingdom	Residential/Living	10/2017; $65.3	6.2%	79,115	91	%	⁽³⁾
Venue Museum District										Houston, Texas	Residential/Living	9/2018; $72.9	3.9%	294,964	93	%
Fresh Park Venlo										Venlo, Netherlands	Industrial	10/2018; $136.3	6.7%	2,863,628	93	%
Maintal Logistics										Frankfurt, Germany	Industrial	12/2018; $43.8	5.7%	387,253	96	%
ABC Westland										The Hague, Netherlands	Industrial	5/2019; $130.3	6.2%	1,268,515	97	%
Total for All Investments	Total for All Investments					2,679,592	97	%	Total for All Investments					7,335,720	96	%


(1)	~~The~~For acquisitions ~~of Bishop’s Square, Montrose Student Residences and Queen’s Court Student Residences are~~ denominated in a foreign ~~currencies, and~~currency, amounts have been translated to U.S. dollars at a rate based on the exchange rate in effect on the acquisition date.

(2)

The estimated going-in capitalization rate is determined as of the date of acquisition by dividing the projected property revenues in excess of expenses for the first fiscal year by the net purchase price (excluding closing costs and taxes). Property revenues in excess of expenses includes all projected operating revenues (rental income, tenant reimbursements, parking and any other property-related income) less all projected operating expenses (property operating and maintenance expenses, property taxes, insurance and property management fees). The projected property revenues in excess of expenses includes assumptions which may not be indicative of the actual future performance of the property, including the assumption that the tenants will perform under their lease agreements during the 12 months following our acquisition of the properties and assumptions concerning estimates of timing and rental rates related to re-leasing vacant space.


(3)	For our student housing properties, percent leased as of June 30, 2019 reflects the leased percentage as of the most recent school year.

NAV and Distributions

We began determining an NAV per share on a monthly basis as of the end of January 2018. Since that time, our NAV per share has increased from $9.69 as of August 31, 2017 to $10.15 as of June 30, 2019 as illustrated in the chart below. Set forth below is additional historical information regarding our NAV per share since February 29, 2016 (the date as of which our board of directors first determined an NAV per share).

Please see our Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on July 17, 2019 for additional information concerning the methodology used to determine, and the limitations of, the NAV per share as of June 30, 2019. Please see our Annual Reports on Form 10-K for the years ended December 31, 2018 and December 31, 2017 as well as our Current Reports on Form 8-K for additional information concerning the NAV per share determined as of prior dates.

Our board of directors determined an NAV per share of $9.03 as of February 29, 2016. Prior thereto, $8.92 was considered to be the “net investment value” per share of our common stocks, which was equal to the offering price per share of $10.00 in effect at that time, as arbitrarily determined by our board of directors, net of the applicable selling commissions, dealer manager fees and issuer costs.

Set forth below is information regarding our gross annualized distribution rate, excluding any applicable distribution and stockholder servicing fees, since October 1, 2014 (the date our board first authorized distributions to be declared). As illustrated in the chart below, we increased our gross annualized distribution rate from $0.61 per share to $0.625 per share for the three and six months ended June 30, 2019.


1.	With the authorization of our board of directors, we declared distributions as of daily record dates and paid them on a monthly basis through December 31, 2017. Beginning in January 2018, we began, and intend to continue, to declare distributions as of monthly record dates and pay them on a monthly basis.

We have not generated and we may continue to be unable to generate sufficient cash flows from operations to fully fund distributions. Therefore, some or all of our distributions have been and may continue to be paid, and during the offering phase, are likely to be paid at least partially from other sources, such as proceeds from the sales of assets, proceeds from our debt financings, proceeds from our public offerings, cash advances by our Advisor and/or cash resulting from a waiver or deferral of fees. See “— Financial Condition, Liquidity and Capital Resources” for additional information concerning our distributions.

Performance Summary of Share Classes

The table below discloses the total returns for the classes of shares that are no longer available for investment in our current public offering. The total returns shown reflect the percent change in the NAV per share from the beginning of the applicable period, plus the amount of any distribution per share declared during the period. The total returns shown are calculated assuming reinvestment of distributions pursuant to our DRP, are derived from unaudited financial information, and are net of all Hines expenses, including general and administrative expenses, transaction related expenses, management fees, the performance participation allocation, and share class specific fees, but exclude the impact of early redemption deductions on the redemption of shares that have been outstanding for less than one year. The inception dates for the Class AX Shares, Class TX Shares, and Class IX Shares are October 1, 2014, September 1, 2015, and May 1, 2017, respectively. The returns have been prepared using unaudited data and valuations of the underlying investments in our portfolio, which are estimates of fair value and form the basis for our NAV per share. Valuations based upon unaudited reports from the underlying investments may be subject to later adjustments, may not correspond to realized value and may not accurately reflect the price at which assets could be liquidated.



As of June 30, 2019
Shares Class	1-Year		3-Year		ITD
Class AX Shares (No Sales Load)	8.92	%	11.82	%	11.04	%
Class AX Shares (With Sales Load)	N/A		6.96	%	7.57	%
Class TX Shares (No Sales Load)	7.84	%	10.51	%	10.23	%
Class TX Shares (With Sales Load)	N/A		8.08	%	8.20	%
Class IX Shares (No Sales Load)	8.65	%	N/A		9.08	%
Class IX Shares (With Sales Load)	N/A		N/A		8.62	%

The table below discloses the total returns for the classes of shares that are available for investment in our current public offering. Class I Shares and Class D Shares are sold without an upfront sales load. The total returns shown reflect the percent change in the NAV per share from the beginning of the applicable period, plus the amount of any distribution per share declared during the period. The total returns shown are calculated assuming reinvestment of distributions pursuant to our DRP, are derived from unaudited financial information, and are net of all Hines Global expenses, including general and administrative expenses, transaction related expenses, management fees, the performance participation allocation, and share class specific fees, but exclude the impact of early redemption deductions on the redemption of shares that have been outstanding for less than one year. The inception date for Class I, Class D, Class S and Class T Shares is December 6, 2017. Class T Shares and Class S Shares listed as (With Sales Load) reflect the returns after the maximum up-front selling commission and dealer manager fees, which total 3.5% for both share classes. Class T Shares and Class S Shares listed as (No Sales Load) exclude up-front selling commissions and dealer manager fees. The returns have been prepared using unaudited data and valuations of the underlying investments in our portfolio, which are estimates of fair value and form the basis for our NAV per share. Valuations based upon unaudited reports from the underlying investments may be subject to later adjustments, may not correspond to realized value and may not accurately reflect the price at which assets could be liquidated.



As of June 30, 2019
Shares Class	1-Year		ITD
Class I Shares	8.92	%	9.94	%
Class D Shares	8.65	%	9.65	%
Class S Shares (No Sales Load)	7.84	%	8.81	%
Class S Shares (With Sales Load)	4.07	%	6.16	%
Class T Shares (No Sales Load)	7.84	%	8.81	%
Class T Shares (With Sales Load)	4.07	%	6.16	%

Critical Accounting Policies

Each of our critical accounting policies ~~involves~~involve the use of estimates that require management to make assumptions that are subjective in nature. Management relies on its experience, collects historical and current market data, and analyzes these assumptions in order to arrive at what it believes to be reasonable estimates. In addition, application of these accounting policies involves the exercise of ~~judgments~~judgment regarding assumptions as to future uncertainties. Actual results could materially differ from these estimates. For a discussion of recent accounting pronouncements, see Note 2 — Summary of Significant Accounting Policies to the accompanying condensed consolidated financial statements. Also, a disclosure of our critical accounting policies is included in our Annual Report on Form 10-K for the year ended December 31, ~~2016 in Management’s~~2018 under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations. ~~Unless described below, there~~” There have been no significant changes to our policies during ~~2017.~~2019.

Financial Condition, Liquidity and Capital Resources

Our principal demands for funds are to make real estate investments, including investments in real estate-related securities and capital expenditures, for the payment of operating expenses and distributions, and for the payment of principal and interest on any indebtedness we incur. Generally, we expect to meet operating cash needs from our cash flows from operating activities, and we expect to fund our investments using proceeds offrom our public offerings, debt proceeds and ~~debt proceeds.~~proceeds from the sales of real estate investments. As described above under the heading “—NAV and Distributions,” we may be required to continue to fund distributions from sources other than cash flows from operations.

We expect that once we have fully invested the proceeds of our public offerings and other potential subsequent offerings, our debt financing, including our pro rata share of the debt financing of entities in which we invest, will be in the range of approximately 40% to 60% of the aggregate value of our real estate investments and other assets. Financing for acquisitions and investments may be obtained at the time an asset is acquired or an investment is made or at such later time as determined to be appropriate. In addition, debt financing may be used from time to time for property improvements, lease inducements, tenant improvements, purchase of real estate-related securities and other working capital ~~needs.~~needs, including the payment of distributions and redemptions. Our real estate-related securities portfolio may have embedded leverage, including through the use of reverse repurchase agreements and derivatives, including, but not limited to, total return swaps, securities lending arrangements and credit default swaps. Additionally, the amount of debt placed on an individual property or related to a particular investment, including our pro

rata share of the amount of debt incurred by an individual entity in which we invest, may be less than 40% or more than 60% of the value of such property/investment or the value of the assets owned by such entity, depending on market conditions and other factors. Our aggregate borrowings, secured and unsecured, must be reasonable in relation to our net assets and must be reviewed by our board of directors at least quarterly. Further, our charter limits our borrowing to 300% of our net assets (which approximates 75% of the cost of our assets) unless any excess borrowing is approved by a majority of our independent directors and is disclosed to our stockholders in our next quarterly report along with justification for the excess. As of ~~September~~June 30, ~~2017,~~2019 our portfolio was approximately ~~45%~~49% leveraged, based on the ~~most recent appraised values~~Estimated Values of our real estate ~~investments.~~investments owned as of that date, with a weighted average interest rate of 2.49%.

Notwithstanding the above, depending on market conditions and other factors, we may choose not to place debt on our portfolio or our assets and may choose not to borrow to finance our operations or to acquire properties. Any indebtedness we do incur will likely be subject to continuing covenants, and we will likely be required to make continuing representations and warranties about our company in connection with such debt. Moreover, some or all of our debt may be secured by some or all of our assets. If we default in the payment of interest or principal on any such debt, breach any representation or warranty in connection with any borrowing or violate any covenant in any loan document, our lender may accelerate the maturity of such debt requiring us to immediately repay all outstanding principal. If we are unable to make such payment, our lender could foreclose on our assets that are pledged as collateral to such lender. The lender could also sue us or force us into bankruptcy. Any such event would have a material adverse effect on the value of an investment in our common shares.

The following discussions ~~below~~ provide additional details regarding our cash flows.

Cash Flows from Operating Activities

Our real estate properties generate cash ~~flow~~flows in the form of rental revenues, which are used to pay direct leasing costs, property-level operating expenses and interest payments. Property-level operating expenses consist primarily of salaries and wages of property management personnel, utilities, cleaning, insurance, security and building maintenance costs, property management and leasing fees, and property taxes. Additionally, we incur corporate level costs and fees such as general and administrative expenses, ~~acquisition~~asset management fees, and ~~expenses and asset management fees.~~the performance participation allocation as well as interest expense on our credit facility with Hines.

Net cash ~~provided by~~from operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2017 increased~~2019 decreased by ~~$3.9~~$14.9 million as compared to the same period in the prior year. ~~The~~This change is primarily due to the payment of the performance participation allocation of $6.0 million accrued as of December 31, 2018 related to the year then ended, which was paid to the Advisor during the six months ended June 30, 2019. This change is also attributable to an increase in ~~operating cash flows is due to our acquisition of additional properties as offset by increased~~ costs ~~paid to acquire our properties. We paid acquisition fees and acquisition-related expenses totaling $8.7 million and $2.5 million for~~associated with leasing activities, including tenant inducement payouts, during the ~~nine~~six months ended ~~September~~June 30, ~~2017 and 2016, respectively. UnderU.S generally accepted~~accounting principles (“GAAP”), acquisition fees and acquisition-related expenses are expensed and therefore reduce cash flows from operating activities. However, we fund these expenses with proceeds from our public offerings and/or acquisition-related indebtedness.2019 as compared to the same period in the prior year, as well as other decreases explained in Results of Operations—Same Store Analysis.

Cash Flows from Investing Activities

Net cash used in investing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018 were primarily due to the following:

~~Nine~~Six months ended ~~September~~June 30, ~~2017~~2019

Payment of ~~$131.8~~$182.7 million, primarily related to the acquisition of ~~Rookwood~~Maintal Logistics and ABC Westland. Maintal Logistics was acquired in December 2018, but funding for the ~~Montrose Student Residences.~~acquisition was not required until the debt closed in February 2019.

Capital expenditures of approximately ~~$1.3~~$3.9 million, primarily related to ~~parking upgrades~~development work at Bishop’s Square and various capital improvements at our ~~properties~~other properties. With respect to the development work at Bishop’s Square, the Company commenced construction in October 2017 and the project was completed in July 2019.

Payments of $14.1 million to purchase real estate-related securities. We also received proceeds of $5.2 million from the sales of real estate-related securities.

Six months ended June 30, 2018

Capital expenditures of approximately $8.1 million, primarily related to development ~~works~~work at Bishop’s ~~Square.~~Square and various capital improvements at our other properties.

~~Nine months ended September~~We received proceeds of $37.1 million from the sale of 2819 Loker Avenue East, a Class A industrial property located in Carlsbad, California, on March 30, ~~2016~~

~~Payment~~2018. We sold 2819 Loker Avenue East for a contract sales price of ~~$244.8~~$38.3 million ~~related to the acquisition of the Domain Apartments, Cottonwood Corporate Center~~ and ~~Goodyear Crossing II.~~

~~Payment of a $5.0 million earnest money deposit in connection with the acquisition of Rookwood, which~~ we acquired 2819 Loker Avenue East in ~~January 2017.~~December 2014 for a net purchase price of $25.4 million.

Cash Flows from Financing Activities

~~Initial~~ Public ~~Offering~~Offerings

~~During the nine months ended September 30, 2017 and 2016, we~~We raised gross proceeds of ~~$137.1~~$177.3 million ~~and $104.5 million, respectively,~~ from our Follow-On Offering during the ~~Offering,~~six months ended June 30, 2019, excluding proceeds from the distribution reinvestment plan. We commenced our Follow-On Offering in December 2017, and during the six months ended June 30, 2018 had not yet raised any gross proceeds. In addition, during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018, we redeemed ~~$1.6~~$7.7 million and ~~$0.4~~$5.2 million in shares of our common stock

pursuant to our share redemption program, respectively. In August 2017, in connection with the announcement of our intent to launch our ongoing self-tender offer, we suspended our share redemptions programs with the exception of death and disability requests received for the month of August 2017. See “— Subsequent Events” for additional information regarding our self-tender offer.

In addition to the investing activities described previously, we have used proceeds from ~~the Offering~~our public offerings to make certain payments to our Advisor, our Dealer Manager and Hines and their affiliates during the various phases of our organization and ~~operation. During the organization and offering stage, these~~operation which include, without limitation, payments to our Dealer Manager for selling commissions, dealer manager fees, distribution and stockholder servicing fees and payments to our Advisor for reimbursement of ~~issuer~~organization and offering costs. During the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018, we made payments of ~~$10.0~~$5.6 million and ~~$10.7~~$1.3 million, respectively, for selling commissions, dealer manager fees and distribution and stockholder servicing fees ~~and issuer costs~~ related to ~~the~~our Follow-On Offering. ~~These~~The increase in selling commissions, ~~and~~ dealer manager fees ~~are lower~~and distribution and stockholder servicing fees for ~~class T shares~~the six months ended June 30, 2019 as compared to the same period in 2018 is due to the increase of capital raised since our restructuring and ~~class I shares~~related modifications in our Follow-On Offering, which commenced in December 2017.

Until December 31, 2018, the Advisor advanced all of our ~~common stock than for class A shares. Therefore, the decrease in the payment~~organization and offering costs, consisting of ~~these fees~~issuer costs and certain underwriting costs (but excluding selling commissions, ~~noted above is primarily due to a higher proportion of class T shares and class I shares being sold during the current period. We also amended our Dealer Manager Agreement in July 2016 to reduce the~~ dealer manager fees ~~payable by us on the sale of class A shares~~ and ~~class T shares,~~distribution and ~~no dealer manager fees are payable by us with respect~~stockholder servicing fees) related to ~~class I shares.~~

Finally, our Advisory Agreement was amended, effective February 29, 2016, to cap the amount which we will reimburse our Advisor for the cumulative issuer costs incurred in connection with our organization and our public offerings, ~~at 2.5% of gross proceeds from our public offering. As a result of~~which totaled $9.0 million. In January 2019, we began reimbursing the ~~cap on reimbursement~~Advisor in ratable amounts over 60 months for all such advanced expenses, as ~~a percentage of gross~~well as any organization and offering ~~proceeds, on April 14, 2016, our Advisor reimbursed us for $4.0 million in issuer~~ costs ~~that we had previously reimbursed in excess of this new 2.5% cap. As we raise additional offering proceeds, we expect~~incurred subsequent to ~~reimburse our Advisor for the $4.0 million in issuer costs they repaid to us~~December 31, 2018, to the extent ~~such~~cumulative organization and offering costs paid by the Company do not exceed an amount equal to 2.5% of gross offering proceeds from our public offerings. The total reimbursement related to organization and offering costs, selling commissions, dealer manager fees and distribution and stockholder servicing fees may not

exceed 15.0% of gross proceeds from our public offerings. For the six months ended June 30, 2019, we reimbursed the Advisor $2.7 million for organization and offering costs.

Distributions

In January 2018, we began and intend to continue to declare distributions as of monthly record dates and pay them on a monthly basis. With the authorization of our board of directors, we ~~have~~ declared monthly distributions asfrom January 2019 through July 2019 at a gross distribution rate of ~~daily record dates.~~$0.05208 per month for each share class less any applicable distribution and stockholder servicing fees. Distributions are made on all classes of the Company’s common stock at the same time. All distributions were ~~or will be~~ paid in cash or reinvested in shares of ~~our~~the Company’s common stock for those stockholders participating in our distribution reinvestment plan and have been or will be paid or issued, respectively, on the first business day following the completion of the month to which they relate. Distributions reinvested pursuant to our distribution reinvestment plan were or will be reinvested in shares of the same class as the shares on which the distributions are ~~being~~ made. Some or all of the cash distributions may be paid from sources other than cash flows from operations.

~~The tables below outline the distribution rates declared per share, per day since October 1, 2014 and the annualized distribution rates for each class A share, class T share and class I share.~~

Class A Shares
Period Declared Distribution Rate Per Share, Per Day Annualized Distribution Rate Per Share
12/1/2017 - 12/31/2017 $ 0.001671233
$ 0.61
4/1/2017 - 11/30/2017 $ 0.001653699
$ 0.60
5/1/2016 - 3/31/2017 $ 0.001594766
$ 0.58
10/1/2014 - 4/30/2016 $ 0.001575342
$ 0.57

Class T Shares
Period Declared Gross Distribution Rate Per Share, Per Day
Net Annualized Distribution Rate Per Share⁽¹⁾
12/1/2017 - 12/31/2017 $ 0.001671233
$ 0.51
4/1/2017 - 11/30/2017 $ 0.001653699
$ 0.50
5/1/2016 - 3/31/2017 $ 0.001594766
$ 0.49
8/24/2015 - 4/30/2016 $ 0.001575342
$ 0.48

Class I Shares
Period Declared Gross Distribution Rate Per Share, Per Day
Net Annualized Distribution Rate Per Share⁽¹⁾
12/1/2017 - 12/31/2017 $ 0.001671233
$ 0.59
5/1/2017 - 11/30/2017 $ 0.001653699
$ 0.58

~~(1)~~

Class T shares and Class I shares are subject to an ongoing distribution and stockholder servicing fee payable to the Dealer Manager of 1.0% and 0.25% per annum, respectively, of the then-current primary gross offering price per share or, now that we are no longer offering primary shares, the most recently determined NAV per share. The net distribution rate per class T share and class I share is equal to the respective gross distribution rate per share less the respective distribution and stockholder servicing fee payable with respect to such share. For purposes of calculating the net annualized distribution rate per share, we calculate the weighted average daily net distribution rate per share and annualize that amount for the periods presented. The actual net annualized distribution rate per share will be higher or lower than the rates presented depending on the price paid by the stockholder for the shares.

Distributions paid to stockholders during the ~~three~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018 were ~~$5.2~~$13.9 million and $2.6 million, respectively, including those reinvested in shares pursuant to our distribution reinvestment plan. Distributions paid to stockholders during the nine months ended September 30, 2017 and 2016 were $13.5 million and $6.3$11.1 million, respectively, including those reinvested in shares pursuant to our distribution reinvestment plan. We have not generated and we may continue to be unable to generate sufficient cash flows from operations to fully fund distributions paid. Therefore, some or all of our distributions have been and may continue to be paid and during the offering phase, are likely to be paid at least partially from other sources, such as proceeds from the sales of assets, proceeds from our debt financings, proceeds from ~~the Offering,~~our public offerings, cash advances by our Advisor and/or cash resulting from a waiver or deferral of ~~fees and/or proceeds from the sale of assets.~~fees. We have not placed a cap on the amount of distributions that may be paid from any of these sources. For example, for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019 and June 30, 2018, we funded 100% and 39% of total distributions with cash flows from ~~financing~~other sources such as cash flows from investing activities, respectively, which ~~included offering proceeds. For~~may include proceeds from the ~~nine months ended September 30, 2016, we funded 46%~~sale of ~~total distributions with~~real estate and/or cash flows from financing activities, which ~~includes~~may include offering proceeds. As described previously, we paid acquisitions fees and acquisition-related expenses totaling $8.7 million and $2.5 million for the nine months ended September 30, 2017 and 2016, respectively. Acquisition fees and acquisition-related expenses are expensed and therefore reduce cash flows from operating activities. However, we fund such acquisition fees and acquisition-related expenses with proceeds from the Offering and/or acquisition-related indebtedness.

The following table outlines our total distributions declared to stockholders for each ~~of the quarters~~quarter during ~~2017~~2019 and ~~2016,~~2018, including the breakout between the distributions declared in cash and those reinvested pursuant to our distribution reinvestment plan (in thousands, except percentages).

Stockholders
Sources⁽¹⁾
Distributions for the Three Months Ended Cash Distributions Distributions Reinvested Total Declared Cash Flows From Operating Activities Cash Flows From Financing Activities
2017
September 30, 2017 $ 2,532
$ 2,901
$ 5,433
$ 3,869
71 % $ 1,567
29 %
June 30, 2017⁽²⁾
2,225
2,565
4,790
4,793
100 % —
— %
March 31, 2017⁽³⁾
1,833
2,076
3,909
—
— % 3,912
100 %
Total $ 6,590
$ 7,542
$ 14,132
$ 8,662
61 % $ 5,479
39 %
2016
December 31, 2016 $ 1,608
$ 1,744
$ 3,352
$ 379
11 % $ 2,976
89 %
September 30, 2016 1,340
1,427
2,767
1,449
52 % 1,321
48 %
June 30, 2016 1,107
1,128
2,235
2,238
100 % —
— %
March 31, 2016 871
887
1,758
—
— % 1,761
100 %
Total $ 4,926
$ 5,186
$ 10,112
$ 4,066
40 % $ 6,058
60 %



	Stockholders						Distributions Paid With Cash Flows From Operating Activities⁽¹⁾
Distributions for the Three Months Ended	Cash Distributions		Distributions Reinvested		Total Declared
2019
June 30, 2019	$	3,647	$	4,415	$	8,062	$	—	—	%
March 31, 2019	3,090		3,614		6,704		—		—	%
Total	$	6,737	$	8,029	$	14,766	$	—	—	%
2018
December 31, 2018	$	2,765	$	3,168	$	5,933	$	3,091	52	%
September 30, 2018	2,617		3,034		5,651		5,654		100	%
June 30, 2018	2,554		2,974		5,528		2,065		37	%
March 31, 2018	2,544		2,970		5,514		4,674		85	%
Total	$	10,480	$	12,146	$	22,626	$	15,484	68	%


(1)	Includes ~~sources used to fund~~ distributions paid to noncontrolling interests.


~~(2)~~	~~Includes $1.5 million of distributions that were declared on March 23, 2017 with respect to daily record dates for each day during the month of April 2017.~~


~~(3)~~	Includes distributions declared as of daily record dates for the three months ended March 31, 2017, but excludes $1.5 million of distributions that were declared on March 23, 2017 with respect to daily record dates for each day during the month of April 2017. These April 2017 distributions were paid in cash or reinvested in shares on May 1, 2017.

Commencing with the quarter ended December 31, 2014, our Advisor agreed to waive the asset management fees for each quarter through December 31, 2016, to the extent that our MFFO, for a particular quarter, as disclosed in our Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as applicable, amounted to less than 100% of the aggregate distributions declared to our stockholders for such quarter. Our Advisor also agreed to waive the asset management fees otherwise payable to it for the quarter ended March 31, 2017 to the extent that our MFFO for such quarter, as reduced to reflect the distribution and stockholder servicing fees payable for such quarter, as disclosed in our Quarterly Report on Form 10-Q, amounted to less than 100% of the aggregate distributions declared to our stockholders for that quarter. As a result of these fee waivers, cash flows from operations that would have been paid to our Advisor for asset management fees were available to pay distributions to stockholders. These fee waivers are not deferrals and accordingly, any fees that were waived will not be paid to our Advisor in cash at any time in the future.

The table below provides additional information regarding our asset management fees and related waivers with respect to each of the quarters in 2016 (in thousands). Our Advisor did not waive any asset management fees payable to it during the three and nine months ended September 30, 2017.

Debt Financings

As mentioned ~~previously,~~above under “—Financial Condition, Liquidity and Capital Resources,” our portfolio was approximately ~~45%~~49% leveraged as of ~~September~~June 30, ~~2017~~2019 (based on the ~~most recent appraised values of our real estate investments) with~~Estimated Values). Our total loan principal outstanding had a weighted average interest rate of ~~2.58%.~~2.49% as of June 30, 2019. Below is additional information regarding our loan activity for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016.~~2018. See “Note 54 — Debt ~~Financing~~Financing” for additional information regarding our outstanding ~~debt.~~debt and our interest rate exposure.

~~Nine~~Six months ended ~~September~~June 30, ~~2017~~

~~We assumed $96.0 million in mortgage loans related to the acquisition of Rookwood.~~2019

We entered into ~~$24.4~~$109.9 million of permanent mortgage financing related to the acquisitions of Maintal Logistics, which was acquired on December 31, 2018, and ABC Westland, which was acquired on May 3, 2019. Funding for the Maintal Logistics acquisition ofwas not required until the Montrose Student Residences and paid $0.2 million to purchase an interest rate cap to effectively cap the Euribor interest rate at 1.25% with a notional amount of €17.0 million (approximately $18.3 million assuming a rate of $1.08 per EUR as of the date of the agreement).

~~We made payments of $0.5 million~~loan closed in ~~financing costs related to the mortgage loans at Rookwood and the Montrose Student Residences.~~February 2019.

We borrowed ~~$7.0~~$44.0 million under the Hines Credit Facility primarily to provide cash for the acquisitions of Maintal Logistics and ABC Westland, and made payments of ~~$63.0~~$99.0 million on this facility. We had no outstanding balance under this facility as of ~~September~~June 30, ~~2017. See “— Subsequent Events” for additional information regarding our Hines Credit Facility.~~2019.


•	We made payments of $0.6 million in financing costs primarily related to our mortgage loans.

~~Nine~~Six months ended ~~September~~June 30, ~~2016~~

We entered into $141.3 million of permanent mortgage financing related to the acquisition of the Domain Apartments, Cottonwood Corporate Center and Goodyear Crossing II and made payments of $0.7 million for financing costs related to these loans.2018

We borrowed ~~$25.5~~$15.5 million under the Hines Credit Facility primarily to provide cash for the Bishop’s Square expansion and made payments of ~~$25.5~~$26.7 million on this ~~facility. No amounts were~~facility in April 2018 using proceeds received from the sale of 2819 Loker Avenue East. We had no outstanding balance under this facility as of ~~September~~June 30, ~~2016.~~2018.

Results of Operations

~~We owned~~Same Store Analysis

The following table presents the property-level revenues in excess of expenses for the three months ended June 30, 2019, as compared to the same period in 2018, by reportable segment. Same-store properties for the three months ended June 30, 2019 includes seven properties that were ~~97%~~98% leased as of ~~September~~June 30, ~~2017~~2019 and June 30, 2018. In total, property revenues in excess of expenses of the same-store properties decreased 4% for the three months ended June 30, 2019 as compared to ~~five~~the same period in 2018.

Below is additional information regarding our same-store results and other financial results with variances from the comparative period. All amounts are in thousands, except for percentages:



	Three Months Ended June 30,					Change
	2019		2018			$				%
Property revenues in excess of expenses⁽¹⁾
Same-store properties
Domestic office investments	$	2,813	$	2,852		$	(39	)		(1	)%
Domestic residential/living investments	838		816			22				3	%
Domestic retail investments	2,816		3,245			(429		)	⁽²⁾	(13	)%
Domestic industrial investments	958		1,009			(51		)		(5	)%
International office investments	1,533		1,522			11				1	%
International residential/living investments	1,542		1,520			22				1	%
Total same-store properties	$	10,500	$	10,964		$	(464	)		(4	)%
Recent acquisitions	4,245		—			4,245				100	%
Disposed properties	—		(20		)	20				(100	)%
Total property revenues in excess of expenses	$	14,745	$	10,944		$	3,801			35	%


(1)	Property revenues in excess of expenses include total revenues less property operating expenses, real property taxes and property management fees.


(2)	The decrease is primarily due to a decline in revenue resulting from the early move-out of two tenants, as well as various increases in property operating expenses.

The following table presents the property-level revenues in excess of expenses for the six months ended June 30, 2019, as compared to the same period in 2018, by reportable segment. Same-store properties for the six months ended June 30, 2019 includes seven properties that were ~~97%~~98% leased as of ~~September~~June 30, ~~2016. As we~~2019 and June 30, 2018. In total, property revenues in excess of expenses of the same-store properties decreased 8% for the six months ended June 30, 2019 as compared to the same period in 2018.

Below is additional information regarding our same-store results and other financial results with variances from the comparative period. All amounts are ~~currently~~ in ~~the acquisition phase of our life cycle,~~thousands, except for percentages:



	Six Months Ended June 30,				Change
	2019		2018		$				%
Property revenues in excess of expenses⁽¹⁾
Same-store properties
Domestic office investments	$	5,710	$	5,572	$	138			2	%
Domestic residential/living investments	1,687		1,590		97				6	%
Domestic retail investments	5,628		6,407		(779		)	⁽²⁾	(12	)%
Domestic industrial investments	1,656		2,036		(380		)	⁽³⁾	(19	)%
International office investments	2,480		3,124		(644		)	⁽⁴⁾	(21	)%
International residential/living investments	3,066		3,244		(178		)		(5	)%
Total same-store properties	$	20,227	$	21,973	$	(1,746	)		(8	)%
Recent acquisitions	7,417		—		7,417				100	%
Disposed properties	—		483		(483		)		(100	)%
Total property revenues in excess of expenses	$	27,644	$	22,456	$	5,188			23	%


(1)	Property revenues in excess of expenses include total revenues less property operating expenses, real property taxes and property management fees.


(2)	The decrease is primarily due to a decline in revenue resulting from the early move-out of two tenants, as well as various increases in property operating expenses.


(3)	The decrease is primarily due to a decline in revenue, primarily resulting from the free rent period of a tenant’s amended lease. The lease was amended in the fourth quarter of 2018 and the free rent period expired in March 2019.

(4)

The decrease is primarily due to a decline in revenue at Bishop’s Square as a result of the free rent period of a tenant’s amended lease. The lease was amended in the fourth quarter of 2018 and the free rent period remains ongoing. Additionally, an increase in operating expenses resulted from the adoption of ASC 842 due to the Company no longer capitalizing legal fees as leasing costs, but instead expensing legal fees as incurred.

Other Changes

The table below includes additional information regarding changes in our results of operations ~~related~~for the three months ended June 30, 2019, including explanations for significant changes. All amounts are in thousands, except for percentages:



	Three Months Ended June 30,				Change
	2019		2018		$			%
Other
Depreciation and amortization	$	9,741	$	6,959	$	2,782		40	%
Acquisition related expenses	$	13	$	10	$	3		30	%
Asset management fees	$	1,801	$	1,214	$	587		48	%
Performance participation allocation	$	1,476	$	1,185	$	291		25	%
General and administrative expenses	$	948	$	659	$	289		44	%
Interest expense	$	4,317	$	2,677	$	1,640		61	%
Benefit (provision) for income taxes	$	40	$	654	$	(614	)	(94	)%

Depreciation and amortization: Depreciation and amortization expense increased for the three months ended June 30, 2019 compared to ~~our properties are~~the three months ended June 30, 2018 primarily due to real estate investments acquired during the ~~acquisition~~last six months of ~~properties. Amounts recorded~~2018 and first six months of 2019.

Asset management fees: Asset management fees increased for the three months ended June 30, 2019 as compared to the three months ended June 30, 2018 primarily due to real estate investments acquired during the last six months of 2018 and first six months of 2019.

Performance participation allocation: Performance participation allocation increased for the three months ended June 30, 2019 compared to the three months ended June 30, 2018 primarily due to changes in our ~~condensed consolidated statements~~NAV per share as well as the increase in our distribution rate per share, which occurred in January 2019.

General and administrative expenses: General and administrative expenses increased for the three months ended June 30, 2019 compared to the three months ended June 30, 2018 primarily due to increased legal costs and shareholder costs. We generally expect our G&A costs to increase as we continue raising capital from our Follow-On Offering.

Interest expense: Interest expense increased for the three months ended June 30, 2019 due to an increase in our principal outstanding during the period resulting from real estate investments acquired during the last six months of 2018 and first six months of 2019.

Benefit (provision) for income taxes: Provision for income taxes changed from a $654,000 benefit for the three months ended June 30, 2018 to a $40,000 benefit for the three months ended June 30, 2019 as a result of changes in our deferred tax assets and liabilities related to book / tax timing differences at our international subsidiaries.

The table below includes additional information regarding changes in our results of operations for the ~~three and nine~~six months ended ~~September~~June 30, ~~2017~~2019, including explanations for significant changes. All amounts are in thousands, except for percentages:



	Six Months Ended June 30,					Change
	2019		2018			$			%
Other
Depreciation and amortization	$	19,069	$	14,300		$	4,769		33	%
Acquisition related expenses	$	17	$	144		$	(127	)	(88	)%
Asset management fees	$	3,288	$	2,420		$	868		36	%
Performance participation allocation	$	2,597	$	2,777		$	(180	)	(6	)%
General and administrative expenses	$	1,795	$	1,511		$	284		19	%
Gain on sale of real estate	$	—	$	14,491		$	(14,491	)	N/A*
Interest expense	$	8,514	$	5,491		$	3,023		55	%
Benefit (provision) for income taxes	$	11	$	(20	)	$	31		(155	)%

* Not a meaningful percentage

Depreciation and ~~2016 are due~~amortization: Depreciation and amortization expense increased for the six months ended June 30, 2019 compared to the ~~following:~~

Total revenues, property operating expenses, real property taxes, property management fees, depreciation and amortization, and interest expense relate to the operation of our properties and have generally increasedsix months ended June 30, 2018 primarily due to ~~the acquisition of additional properties.~~

~~Acquisition-related expenses represent costs related to the acquisition of our~~ real estate investments ~~including those properties which we may acquire in future periods. These costs vary significantly from one acquisition~~acquired during the last six months of 2018 and first six months of 2019.

Asset management fees: Asset management fees increased for the six months ended June 30, 2019 as compared to the ~~next and generally tend~~six months ended June 30, 2018 primarily due to ~~be higher for our international acquisitions.~~

~~We expect to pay monthly asset management fees to our Advisor based on an annual fee equal to 0.75% of (i) the cost of our~~ real estate investments ~~or (ii) with respect~~acquired during the last six months of 2018 and first six months of 2019.

Performance participation allocation: Performance participation allocation decreased for the six months ended June 30, 2019 compared to ~~our real estate investments included~~the six months ended June 30, 2018 primarily due to changes in our ~~board of directors’ most recent determination of an~~ NAV per share between the ~~most recently determined value~~periods. NAV per share increased by only $0.05 throughout the six months ended June 30, 2019, while a total increase of such real estate investments, net of any applicable waivers by our Advisor, as described previously. These fees generally increase as we acquire additional properties before deductions for applicable waivers, if any.

~~We pay our Advisor acquisition fees equal to 2.25% of the purchase price of our real estate investments. We acquired two properties for an aggregate purchase price of $234.3 million~~$0.22 per share was seen during the ~~nine~~six months ended ~~September~~June 30, ~~2017, as compared to three properties for an aggregate purchase price of $253.5 million during the nine months ended September 30, 2016.~~2018.

General and administrative expenses:General and administrative expenses increased for the ~~nine~~six months ended ~~September~~June 30, ~~2017 and 2016~~2019 compared to the six months ended June 30, 2018 primarily ~~consist of~~due to increased legal ~~and accounting fees,~~ costs and ~~expenses associated with~~shareholder costs. We generally expect our ~~board of directors, transfer agent and other shareholder-related~~G&A costs ~~and insurance costs. Certain of these costs are variable and will~~to increase ~~in the future~~ as we continue ~~to raise~~raising capital ~~and make additional~~from our Follow-On Offering.

Gain on sale of real estate ~~investments.~~: We sold 2819 Loker Avenue East for a contract sales price of $38.3 million on March 30, 2018 and we acquired 2819 Loker Avenue East in December 2014 for a net purchase price of $25.4 million. We recognized a gain of $14.5 million related to this sale. We had no property dispositions during the six months ended June 30, 2019.

Interest expense: Interest expense increased for the six months ended June 30, 2019 due to an increase in our principal outstanding during the period resulting from real estate investments acquired during the last six months of 2018 and first six months of 2019.

Benefit (provision) for income taxes: Provision for income taxes changed from a $20,000 provision for the six months ended June 30, 2018 to a $11,000 benefit for the six months ended June 30, 2019 as a result of changes in our deferred tax assets and liabilities related to book / tax timing differences at our international subsidiaries.

Funds from Operations ~~and Modified Funds~~

We believe funds from ~~Operations~~

~~Funds from Operations~~operations (“FFO”) is a meaningful supplemental non-GAAP operating metric. FFO is a non-GAAP financial performance measure defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and is widely recognized by investors and analysts as one measure of operating performance of a real estate company. FFO excludes items such as real estate depreciation and amortization. Depreciation and amortization, as applied in accordance with GAAP, implicitly assumes that the value of real estate assets diminishes predictably over time and also assumes that such assets are adequately maintained and renovated as required in order to maintain their value. Since real estate values have historically risen or fallen with market conditions such as occupancy rates, rental rates, inflation, interest rates, the business cycle, unemployment and consumer spending, it is management’s view, and we believe the view of many industry investors and analysts, that the presentation of operating results for real estate companies using historical cost accounting alone is insufficient. In addition, FFO excludes gains and losses from the sale of real estate and impairment charges related to

depreciable real estate assets and in-substance real estate equity investments, which we believe provides management and investors with a helpful additional measure of the historical performance of our real estate portfolio, as it allows for comparisons, year to year, that reflect the impact on operations from trends in items such as occupancy rates, rental rates, operating costs, general and administrative expenses and interest costs. A property will be evaluated for impairment if events or circumstances indicate that the carrying amount may not be recoverable (i.e. the carrying amount exceeds the total estimated undiscounted future cash flows from the property). Undiscounted future cash flows are based on anticipated operating performance, including estimated future net rental and lease revenues, net proceeds on the sale of the property, and certain other ancillary cash flows. While impairment charges are excluded from the calculation of FFO as described above, stockholders are cautioned that ~~due to the limited term of our operations, it could be difficult to~~we may not recover any impairment charges.

In addition to FFO, management uses MFFO, as defined by the Investment Program Association, (the “IPA”), as a non-GAAP supplemental financial performance measure to evaluate our operating performance. The IPA has recommended the use of MFFO as a supplemental measure for publicly registered, non-listed REITs to enhance the assessment of the operating performance of a non-listed REIT. MFFO is not equivalent to our net income or loss as determined under GAAP. MFFO may not be useful as a measure of the long-term operating performance of our investments and our calculation of MFFO may not be

comparable to those of other publicly registered, non-listed REITs that operate with a limited life and targeted exit strategy. MFFO includes funds generated by the operations of our real estate investments and funds used in our corporate-level operations. MFFO is based on FFO, but includes certain additional adjustments which we believe are appropriate. Such items include reversing the effects of straight-line rent revenue recognition, fair value adjustments to derivative instruments that do not qualify for hedge accounting treatment and certain other items as described below. Some of these adjustments are necessary to address changes in the accounting and reporting rules under GAAP such as the accounting for acquisition-related expenses from a capitalization/depreciation model to an expensed-as-incurred model that were put into effect in 2009 and other changes to GAAP rules for real estate subsequent to the establishment of NAREIT’s definition of FFO. These changes in the accounting and reporting rules under GAAP affected all industries, and as a result of these changes, acquisition fees and expenses are typically accounted for as operating expenses under GAAP. Management believes these fees and expenses do not affect our overall long-term operating performance. These changes also have prompted a significant increase in the magnitude of non-cash and non-operating items included in FFO, as defined. Such items include amortization of out-of-market lease intangible assets and liabilities and certain tenant incentives.

The purchase of properties, and the corresponding expenses associated with that process, including acquisition fees and expenses, is a key operational feature of our business plan to generate operational income and cash flows in order to make distributions to our stockholders. MFFO excludes acquisition fees payable to our Advisor and acquisition expenses. Under GAAP, acquisition fees and expenses are characterized as operating expenses in determining operating net income. These expenses are paid in cash by us, and therefore such funds will not be available to distribute to our stockholders. All paid and accrued acquisition fees and expenses with respect to the acquisition of a property negatively impact our operating performance during the period in which the property is acquired and will have negative effects on returns to our stockholders, the potential for future distributions, and future cash flows, unless earnings from operations or net sales proceeds from the disposition of other properties are generated to cover the purchase price of the property, the related acquisition fees and expenses and other costs related to such property. In addition, if we acquire a property after all offering proceeds from our public offerings have been invested, there will not be any offering proceeds to pay the corresponding acquisition-related costs. Accordingly, unless our Advisor determines to waive the payment of any then-outstanding acquisition-related costs otherwise payable to our Advisor, such costs will be paid from additional debt, operational earnings or cash flow, net proceeds from the sale of properties, or ancillary cash flows. Therefore, MFFO may not be an accurate indicator of our operating performance, especially during periods in which properties are being acquired. Since MFFO excludes acquisition fees and expenses, MFFO would only be comparable to the operations of non-listed REITs that have completed their acquisition activity and have other similar operating characteristics.

Management uses MFFO to evaluate the financial performance of our investment portfolio, including the impact of potential future investments. In addition, management uses MFFO to evaluate and establish our distribution policy and the sustainability thereof. Further, we believe MFFO is one of several measures that may be useful to investors in evaluating the potential performance of our portfolio following the conclusion of the acquisition phase, as it excludes acquisition fees and expenses, as described herein.

MFFO has limitations as a performance measure. MFFO is useful in assisting management and investors in assessing the sustainability (that is, the capacity to continue to be maintained) of operating performance in future operating periods, and in particular, after the offering and acquisition stages are complete.

FFO ~~and MFFO~~ should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating our operating performance. In addition, FFO ~~and MFFO~~ should not be considered as ~~alternatives~~an alternative to net income (loss) or income (loss) from continuing operations as an indication of our performance or as ~~alternatives~~an alternative to cash flows from operating activities as an indication of our liquidity, but rather should be reviewed in conjunction with these and other GAAP measurements. Further, FFO ~~and MFFO are~~is not intended to be used as a liquidity ~~measures~~measure indicative of cash flow available to fund our cash needs, including our ability to make distributions to our stockholders. Please see the limitations listed below associated with the use of ~~MFFO:~~FFO:

~~As we are currently in the acquisition phase of~~Prior to January 1, 2018, FFO included costs related to our ~~life cycle, acquisition costs and other adjustments that are increases to MFFO are, and may continue to be, a significant use of cash and dilutive to the value of an investment in our shares.~~

~~MFFO excludes~~acquisitions, including acquisition fees payable to our ~~Advisor and acquisition expenses.~~Advisor. Although these amounts ~~reduce~~reduced net income for periods prior to January 1, 2018, we generally ~~fund~~funded such costs with proceeds from our public offerings and/or acquisition-related indebtedness and dodid not consider these fees and expenses in the evaluation of our operating ~~performance~~performance. In January 2018, we adopted ASU 2017-01 which clarified the definition of a business and ~~determining MFFO.~~

added guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. We ~~use interest rate caps as economic hedges against~~expect that most of our real estate transactions completed after that date will be accounted for using the ~~variability of interest rates on our variable interest rate borrowings. Although we generally expect to hold these instruments to maturity, if we were to settle these instruments~~

currently, it would have an impact on our operating performance. Additionally, these derivative instruments are measured at fair value on a quarterly basis in accordance with GAAP. MFFO excludes gains (losses)asset acquisition guidance and, accordingly, the related ~~to changes~~acquisition-related expenses incurred will be capitalized and included in the ~~estimated values of our derivative instruments because such adjustments may~~allocated purchase price and will not be ~~reflective~~expensed. Prior to ASU 2017-01, real estate acquisitions were generally considered business combinations and the acquisition-related expenses and acquisition fees were treated as operating expenses under GAAP. Additionally, effective as of ~~ongoing operations and may reflect unrealized impacts on~~December 6, 2017, we no longer pay acquisition fees to our ~~operating performance.~~Advisor.

We utilize the definition of FFO as set forth by ~~NAREIT and the definition of MFFO as set forth by the IPA.~~NAREIT. Our FFO ~~and MFFO as presented~~ may not be comparable to amounts calculated by other REITs, if they use different approaches.

Our business is subject to volatility in the real estate markets and general economic conditions, and adverse changes in those conditions could have a material adverse impact on our business, results of operations and ~~MFFO.~~FFO. Accordingly, the predictive nature of ~~MFFO~~FFO is uncertain and past performance may not be indicative of future results.

Neither the SEC, NAREIT nor any regulatory body has passed judgment on the acceptability of the adjustments that we use to calculate ~~FFO or MFFO.~~FFO. In the future, the SEC, NAREIT or a regulatory body may decide to standardize the allowable adjustments across the non-listed REIT industry and we would have to adjust our calculation and characterization of ~~FFO or MFFO.~~FFO.

The following section presents our calculation of FFO ~~and MFFO~~ attributable to common stockholders and provides additional information related to our operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018 and the period from inception through ~~September~~June 30, ~~2017~~2019 (in thousands, except per share amounts). As we are in the capital raising and acquisition phase of our operations, FFO ~~and MFFO are~~may not be useful in comparing operations for the periods presented below. We expect revenues and expenses to increase in future periods as we raise additional offering proceeds and use them to make additional real estate investments.


	Three Months Ended September 30,						Nine Months Ended September 30,						Period from July 31, 2013 (date of inception) through September 30, 2017			Three Months Ended June 30,						Six Months Ended June 30,						Period from July 31, 2013 (date of inception) through June 30, 2019
	2017			2016			2017			2016						2019			2018			2019			2018
Net income (loss)	$	(1,543	)	$	(7,164	)	$	(12,899	)	$	(9,357	)	$	(31,204	)	$	(3,450	)	$	(1,408	)	$	(7,449	)	$	9,968		$	(43,821	)
Depreciation and amortization ⁽¹⁾	7,203			5,562			22,108			9,873			41,736			9,741			6,959			19,069			14,300			100,862
Gain on sale of real estate																—			—			—			(14,491		)	(14,491		)
Adjustments for noncontrolling interests⁽²⁾	(7		)	(8		)	(22		)	(15		)	175			(7		)	(7		)	(15		)	(6		)	124
Funds From Operations attributable to common stockholders	5,653			(1,610		)	9,187			501			10,707			$	6,284		$	5,544		$	11,605		$	9,771		$	42,674
Loss (gain) on derivative instruments⁽³⁾	26			1			100			6			147
Loss (gain) on foreign currency⁽⁴⁾	(111		)	44			(344		)	(1		)	(344		)
Other components of revenues and expenses⁽⁵⁾	(500		)	(904		)	(1,694		)	(1,420		)	(4,668		)
Acquisition fees and expenses ⁽⁶⁾	550			5,241			7,914			6,988			21,310
Adjustments for noncontrolling interests ⁽²⁾	—			(4		)	(4		)	(6		)	(83		)
Modified Funds From Operations attributable to common stockholders	$	5,618		$	2,768		$	15,159		$	6,068		$	27,069
Basic and diluted income (loss) per common share	$	(0.04	)	$	(0.36	)	$	(0.38	)	$	(0.58	)	$	(2.57	)	$	(0.06	)	$	(0.04	)	$	(0.14	)	$	0.25		$	(2.03	)
Funds From Operations attributable to common stockholders per common share	$	0.15		$	(0.08	)	$	0.27		$	0.03		$	0.89		$	0.11		$	0.14		$	0.22		$	0.25		$	1.98
Modified Funds From Operations attributable to common stockholders per common share	$	0.14		$	0.14		$	0.44		$	0.38		$	2.24
Weighted average shares outstanding	38,932			19,808			34,326			16,134			12,075			57,004			39,489			52,049			39,443			21,526

Notes to the table:

(1)

Represents the depreciation and amortization of real estate assets. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, we believe that such depreciation and amortization may be of limited relevance in evaluating current operating performance and, as such, these items are excluded from our determination of FFO.


(2)	Includes income attributable to noncontrolling interests and all adjustments to eliminate the noncontrolling interests’ share of the adjustments to convert our net loss to ~~FFO and MFFO.~~FFO.


~~(3)~~	Represents components of net income (loss) related to the estimated changes in the values of our interest rate caps. We have excluded this change in value from our evaluation of our operating performance and MFFO because such adjustments may not be reflective of our ongoing performance and may reflect unrealized impacts on our operating performance.


~~(4)~~	Represents components of net income (loss) primarily resulting from transactions that are denominated in currencies other than our functional currencies. We have excluded these changes in value from our evaluation of our operating performance and MFFO because such adjustments may not be reflective of our ongoing performance and may reflect unrealized impacts on our operating performance.


~~(5)~~	Includes the following components of revenues and expenses that we do not consider in evaluating our operating performance and determining MFFO for the three and nine months ended September 30, 2017 and 2016 and the period from inception through September 30, 2017 (in thousands):

Three Months Ended September 30, Nine Months Ended September 30, Period from July 31, 2013 (date of inception) through September 30, 2017
2017 2016 2017 2016
Straight-line rent adjustment ^(a)
$ (316 ) $ (888 ) $ (1,076 ) $ (1,222 ) $ (3,605 )
Amortization of lease incentives ^(b)
29
1
58
4
65
Amortization of out-of-market leases^(b)
(266 ) (17 ) (835 ) (202 ) (1,287 )
Other 53
—
159
—
159
$ (500 ) $ (904 ) $ (1,694 ) $ (1,420 ) $ (4,668 )

~~(a)~~

Represents the adjustments to rental revenue as required by GAAP to recognize minimum lease payments on a straight-line basis over the respective lease terms. We have excluded these adjustments from our evaluation of our operating performance and in determining MFFO because we believe that the rent that is billable during the current period is a more relevant measure of our operating performance for such period.


~~(b)~~	~~Represents the amortization of lease incentives and out-of-market leases.~~


~~(6)~~	Represents acquisition-related expenses and acquisition fees paid to our Advisor which are expensed in our condensed consolidated statements of operations. We fund such costs with proceeds from our public offerings and/or acquisition-related indebtedness, and therefore do not consider these expenses in evaluating our operating performance and determining MFFO.

Set forth below is additional information, ~~relating to certain items excluded from the analysis above~~ which may be helpful in assessing our operating results:

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017, we incurred $0.5 million and $1.1 million in distribution and stockholder servicing fees.~~

~~In addition, commencing with~~2019, the quarter ended December 31, 2014, our Advisor agreed to waive the asset management fees for each quarter through December 31, 2016, to the extent that our MFFO, for a particular quarter, as disclosed in our Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as applicable, amounted to less than 100% of the aggregate distributions declared to our stockholders for such quarter. Our Advisor also agreed to waive the asset management fees otherwise payable to it for the quarter ended March 31, 2017 to the extent that our MFFO for such quarter, as reduced to reflect theDealer Manager earned distribution and stockholder servicing fees ~~payable for such quarter, as disclosed in our Quarterly Report on Form 10-Q, amounted to less than 100%~~ of ~~the aggregate distributions declared to our stockholders for that quarter.~~

~~The table below provides additional information regarding our asset management fees~~$0.8 million and ~~related waivers, for the periods presented below (in thousands). Our Advisor did not waive any asset management fees payable to it during~~$1.5 million, respectively, which are paid by Hines Global. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017.~~ 2018, the Dealer Manager earned distribution and stockholder servicing fees of $0.5 million and $1.0 million, respectively. Total distribution and stockholder servicing fees earned by the Dealer Manager from inception through June 30, 2019 were $5.6 million.

•

As of December 6, 2017, through its ownership of the special limited partner interest in the Operating Partnership, our Advisor is entitled to an annual performance participation allocation of 12.5% of the Operating Partnership’s total return subject to the Company earning a 5% total return annually, after considering the effect of any losses carried forward from the prior year. The performance participation allocation accrues monthly and is payable after the completion of each calendar year. We do not consider the performance participation allocation in evaluating our operating performance. For the three and six months ended June 30, 2019, we incurred $1.5 million and $2.6 million in performance participation allocation fees, respectively. For the three and six months ended June 30, 2018, we incurred $1.2 million and $2.8 million in performance participation allocation fees, respectively. Total performance participation allocation fees incurred were $8.8 million from inception through June 30, 2019. Refer to “Note 7—Related Party Transactions” for more information on the performance participation allocation.

For the three and six months ended June 30, 2019 , we recorded non-cash adjustments primarily related to amortization of out-of-market lease intangibles and lease incentives and straight-line rent adjustments, which resulted in a ~~result~~net increase to rental revenue of $0.4 million and $2.6 million, respectively. For the ~~fee waivers described above, cash flows from operations that would have been paid~~three and six months ended June 30, 2018 we recorded non-cash adjustments primarily related to ~~our Advisor~~amortization of out-of-market lease intangibles and lease incentives and straight-line rent adjustments, which resulted in a net increase to rental revenue of $0.5 million and $0.9 million, respectively.

We recorded non-cash adjustments related to gains/losses on derivative instruments and/or foreign currencies and certain amounts related to deferred taxes, which reduced net income by approximately $0.4 million and $1.5 million for ~~asset management fees may be available to pay distributions to stockholders. These fee waivers are not deferrals~~the three and ~~accordingly, any fees that are waived will not be paid to our Advisor~~six months ended June 30, 2019, respectively. Such amounts were insignificant in ~~cash at any time in the future.~~prior periods.

As noted previously, our cash flows from operations have been and may continue to be insufficient to fund distributions to stockholders. We may continue to choose to use proceeds from the sales of assets, proceeds from our debt financings, proceeds from our public offerings, cash advances ~~from~~by our Advisor and/or cash resulting from a waiver or deferral of fees ~~and/or proceeds from the sale of assets~~ to fund distributions to our stockholders. For ~~the nine months ended September 30, 2017 and 2016,~~example, we funded ~~39%~~100% and ~~46%, respectively,~~39% of total distributions for the six months ended June 30, 2019 and 2018, respectively, with cash flows from other sources, such as cash flows from investing activities, which may include proceeds from the sale of real estate and/or cash flows from financing activities, which ~~includes~~may include offering proceeds. ~~Our Advisor waived $1.0 million in asset management fees payable to it for the nine months ended September 30, 2016.~~ We have not placed a cap on the amount of our distributions that may be paid from sources other than cash flows from operations, including proceeds from our debt financings, proceeds from our public offerings, cash advances by our Advisor and cash resulting from a waiver or deferral of fees.

From inception through ~~September~~June 30, ~~2017,~~2019, we declared ~~$27.2~~$70.2 million of distributions to our stockholders, compared to our total aggregate FFO of ~~$10.7~~$42.7 million and our total aggregate net loss of ~~$31.2~~$43.8 million for that period. ~~During our offering and investment stages, we incur~~We incurred acquisition fees and expenses of $23.3 million from inception through December 31, 2017 in connection with our real estate investments, which ~~are~~were recorded as reductions to net income (loss) and FFO. ~~From inception through September 30, 2017, we incurred acquisition~~We adopted ASU 2017-01 on January 1, 2018, which allows us to capitalize acquisition-related costs and fees ~~and~~instead of treating them as operating expenses ~~totaling $21.3 million.~~under GAAP. For the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, we declared ~~$14.1~~$14.8 million of distributions to our stockholders compared to our total aggregate FFO of ~~$9.2~~$11.6 million. For the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2018, we declared ~~$6.8~~$11.0 million of distributions to our stockholders compared to our total aggregate FFO of ~~$0.5~~$9.8 million.

Related Party Transactions and Agreements

We have entered into agreements with our Advisor, our Dealer Manager and Hines and its affiliates, whereby we pay certain fees and reimbursements to these entities during the various phases of our organization and operation. ~~During the~~Relating to organization and offering stage, these include payments to our Dealer Manager for selling commissions, the dealer manager fee, distribution and stockholder servicing fees, and payments to our Advisor for reimbursement of ~~issuer~~organization and offering costs. ~~During the~~Relating to acquisition and operational stages, these include payments for certain services related to ~~acquisitions, financing~~the management and ~~management~~performance of our investments and operations provided to us by our Advisor and Hines and its affiliates pursuant to various agreements we have entered into with these entities. See Note 87 — Related Party Transactions in Item 1 of this Quarterly Report on Form 10-Q, as well as Note 8 — Related Party Transactions in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2018 for additional information concerning our related party transactions and agreements.

Off-Balance Sheet Arrangements

As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016~~2018, we had no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Subsequent Events

~~Tender Offer~~The Promenade Shops at Briargate

~~On October 3, 2017,~~In August 2019, we ~~filed~~entered into a ~~tender offer statement on Schedule TO with the SEC~~purchase and ~~commenced a self-tender offer~~sale agreement to purchase ~~for cash up to $200 million of our outstanding common stock in any combination of class A shares, class T shares and class I shares. We are offering to purchase the shares~~The Promenade Shops at Briargate, a price of $9.69 per share, which is the NAV per share of our common stock determined as of August 31, 2017, and the maximum number of shares that will be accepted for payment pursuant to our offer (unless the amount of the offer is increased in accordance with applicable law) is 20,639,835 shares.

The Tender Offer will expire at 5:00 p.m., Central Time, on November 15, 2017, unless extended by us. The Tender Offer is being made upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal, each of which was filed with the SEC on October 3, 2017.

~~Hines Credit Facility~~

On October 2, 2017, we terminated our Hines Credit Facility and subsequently, the Operating Partnership, entered into the Restated Hines Credit Facility with Hines for a maximum principal amount of $240.0 million. See ~~Note 5~~ ~~— Debt Financing for additional information regarding the terms of the Restated Hines Credit Facility.~~

~~Queen’s Court~~

In October 2017, we, through a wholly-owned subsidiary of the Operating partnership, acquired from CPA 18 Pan-European Holdings Cooperatif U.A. and Crown Students LLP (collectively, the “Sellers”), all of the share capital of the entities that own Queen’s Court, a student housing assetretail center located in ~~Reading, United Kingdom.~~Colorado Springs, Colorado. The net contract ~~purchase~~sales price for ~~Queen’s Court was £49.2~~The Promenade Shops at Briargate is expected to be approximately $93.2 million, ~~(approximately $65.3 million assuming a rate of $1.33 per GBP as of the acquisition date),~~ exclusive of transaction costs and ~~working capital reserves. Queen’s Court consists~~closing prorations. We expect to fund the acquisition using proceeds from the Follow-on Offering. We funded a $2.0 million earnest money deposit in August 2019. There is no guarantee that this sale will be consummated and our deposit may not be refunded in such event. We expect the closing of ~~395 beds and is 100% leased. The Sellers are not affiliated with us~~this acquisition to occur in September 2019, subject to a number of closing conditions. However, we can provide no assurance that this acquisition will close on the expected timeline or ~~our affiliates. We have not concluded our accounting for this recent acquisition, but we expect that the purchase price will primarily be allocated to building, land and in-place lease assets.~~at all.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market-sensitive instruments. In pursuing our business plan, we believe that interest rate risk ~~currency risk~~ and ~~real estate valuation~~currency risk are the primary market risks to which we are exposed. As of ~~September~~June 30, ~~2017,~~2019, we were exposed to the following market ~~risks listed below.~~risks.

Interest Rate Risk

We are exposed to the effects of interest rate changes primarily as a result of debt used to maintain liquidity and fund expansion of our real estate investment portfolio and operations. As of ~~September~~June 30, ~~2017,~~2019, we had ~~$155.2~~$431.3 million of variable-rate debt outstanding. If interest rates were to increase by 1%, and everything else remained the same, we would incur an additional ~~$1.6~~$4.3 million in interest ~~expense.~~expense annually. Additionally, we have entered into interest rate ~~caps~~cap agreements to limit our exposure to rising interest rates related to our mortgage loans secured by ~~Bishop’s Square and the Montrose Student Residences.~~our investment properties. See Note 54 — Debt Financing in the Notes to the Condensed Consolidated Financial Statements for more information concerning our outstanding ~~debt.~~debt and our interest rate exposure.

Foreign Currency Risk

~~Our~~We currently have real estate investments located in ~~Bishop’s Square and~~countries outside of the ~~Montrose Student Residences~~U.S. that are subject to the effects of exchange rate movements between the ~~Euro~~foreign currency of each real estate investment and the U.S. dollar, which may affect future costs and cash flows as well as amounts translated into U.S. dollars for inclusion in our ~~condensed~~ consolidated financial statements. We have entered into mortgage loans denominated in ~~Euros~~foreign currencies for these investments, which ~~provides a~~provide natural ~~hedge~~hedges with regard to changes in exchange rates between the ~~Euro~~foreign currencies and U.S. dollar and ~~reduces~~reduce our exposure to exchange rate differences. Additionally, we are typically a net receiver of ~~Euros,~~these foreign currencies, and, as a result, our foreign operations benefit from a weaker U.S. dollar and are adversely affected by a stronger U.S. dollar. ~~Based upon our analysis,~~The table below identifies the effect that a 10% immediate, unfavorable change in the exchange ~~rate between the Euro and U.S. dollar~~rates would have ~~decreased~~on the net book value of our ~~investment in Bishop’s Square~~international real estate investments, including any foreign currency mortgage loans and ~~the Montrose Student Residences by approximately $4.7 million and would have reduced the~~their year-to-date net income (loss) ~~of Bishop’s Square and the Montrose Student Residences~~, by ~~$0.5 million.~~foreign currency (in thousands):



	Reduction in Book Value as of June 30, 2019	Reduction in Net Income (Loss) for the Six Months Ended June 30, 2019
EUR	$10,066	$98
GBP	$2,461	$116

Item 4. Controls and Procedures

Disclosure Controls and Procedures

In accordance with Exchange Act Rules 13a-15 and 15d-15, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of ~~September~~June 30, ~~2017,~~2019, to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Change in Internal Controls

No changes have occurred in our internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarter ended ~~September~~June 30, ~~2017~~2019 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time in the ordinary course of business, we or our subsidiaries may become subject to legal proceedings, claims or disputes. As of ~~November 9, 2017,~~August 14, 2019, neither we nor any of our subsidiaries were a party to any material pending legal proceedings.

Item 1A. Risk Factors

~~We are subject~~As of June 30, 2019, there have been no material changes to ~~a number of risks and uncertainties, which are discussed~~the risk factors previously disclosed in ~~Part~~response to “Part I - Item ~~1A, “Risk Factors”~~1A. ‘Risk Factors’” in our Annual Report on Form 10-K for the year ended December 31, 2016. With the exception of the risk factors set forth below, there have been no material changes to the risk factors set forth under Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016.

~~We offer two share redemption programs for stockholders seeking liquidity of their shares, but we suspended both programs in connection~~2018, filed with the launch of our ongoing self-tender offer. There is no public market for our common shares; therefore, it will be difficult for our stockholders to sell their shares and, if they are able to sell their shares, they will likely sell them at a substantial discount.

There is no public market for our common shares, and we do not expect one to develop. Although we have a share redemption program applicable to both class A shares and class T shares and a share redemption program applicable to class I shares and class J shares, each program has been suspended in connection with the launch of our ongoing self-tender offer. If and when we lift the suspension of our share redemption programs, they will continue to be limited in terms of the amount of shares which may be redeemed. It will therefore be difficult for our stockholders~~to sell their shares of common stock promptly or at all. Additionally, our charter contains restrictions~~SEC on ~~the ownership and transfer of our shares, and these restrictions may limit the ability of our stockholdersto sell their shares. If our stockholders~~are able to sell their shares, they may only be able to sell them at a substantial discount from the price they paid. This may be the result, in part, of the fact that the amount of funds available for investment are reduced by funds used to pay certain up-front fees and expenses, including organization and offering costs, such as issuer costs, selling commissions, and the dealer manager fees and acquisition fees and expenses in connection with our public offerings. Unless our aggregate investments increase in value to compensate for these up-front fees and expenses, which may not occur, it is unlikely that our stockholders will be able to sell their shares without incurring a substantial loss. Our stockholders may also experience substantial losses if we dispose of our assets or in connection with a liquidation event. We cannot assure our stockholders that their shares will ever appreciate in value to equal the price they paid for their shares. Thus, prospective stockholders should consider our common shares as illiquid and a long-term investment, and they must be prepared to hold their shares for an indefinite length of time.

~~The availability and timing of distributions to our stockholders is uncertain and cannot be assured.~~

There is no assurance that distributions will continue to be authorized and paid. We cannot assure our stockholders that we will have sufficient cash to pay distributions to our stockholders or that the amount of any such distributions will increase over time. In addition, the distribution and stockholder servicing fees payable with respect to class T shares and class I shares issued in the primary offering will reduce the amount of funds available for distribution with respect to all class T shares and class I shares, as applicable (including class T shares and class I shares issued pursuant to the distribution reinvestment plan). Further, because the distribution and stockholder servicing fees payable with respect to class T shares are higher than those payable with respect to class I shares, distributions with respect to class T shares will be lower than distributions with respect to class I shares. Should we fail for any reason to distribute at least 90% of our REIT taxable income, we would not qualify for the favorable tax treatment accorded to REITs.

Our share redemption programs are currently suspended. If and when we lift the suspension of our share redemption programs, the ability of our stockholders to have their shares redeemed will continue to be limited under our share redemption programs and may be more limited for holders of class A shares and class T shares than for holders of class I shares and class J shares. If our stockholders are able to have their shares redeemed, it may be at a price that is less than the price our stockholders paid for the shares and the then-current market value of the shares.

Our share redemption programs are currently suspended. If and when we lift the suspension of our share redemption programs, the ability of our stockholders to have their shares redeemed will be subject to significant restrictions and limitations. For example, only stockholders who purchase their shares directly from us or who received their shares through a non-cash transaction, not in the secondary market, will be eligible to participate, holders of class A shares and class T shares generally

will be required to hold their shares for a minimum of one year before they can participate in our share redemption program and if holders of class I shares and class J shares do not hold their shares for a minimum of one year, then they will only be eligible for redemption at 95% of the redemption price that would otherwise apply. If the suspension is lifted, the terms of our share redemption program applicable to class I shares and class J shares may provide holders of class I shares and class J shares with a greater opportunity to have their shares redeemed than holders of class A shares and class T shares. The limit on the amount of shares that may be redeemed under our share redemption program applicable to class I shares and class J shares is higher than the limit on our share redemption program applicable to class A shares and class T shares. In addition, the funds available for redemptions under our share redemption program applicable to class A shares and class T shares generally will be limited to funds received from the distribution reinvestment plan in the prior month; whereas unless our board of directors determines otherwise, we intend to fund redemptions pursuant to our share redemption program applicable to class I shares and class J shares from any available cash sources at our disposal, if the suspension is lifted. Our board of directors may terminate or amend each of our share redemption programs without stockholder approval. As a result of these limitations, the redemption price our stockholders may receive upon any such redemption if the suspension is lifted may not be indicative of the price our stockholders would receive if our shares were actively traded or if we were liquidated, and our stockholders should not assume that they will be able to sell all or any portion of their shares back to us pursuant to our share redemption programs or to third parties at a price that reflects the then current market value of the shares or at all.

The U.S. Department of Labor, or DOL, has adopted certain amendments, including an amendment to the definition of “fiduciary” under the Employee Retirement Income Security Act of 1974, as amended, or ERISA, and the Code, which could impact our ability to raise significant additional capital in this offering.

The DOL has adopted certain amendments, including an amendment to the definition of “fiduciary” under ERISA and the Code. The amendments have broadened the definition of “fiduciary” and have changed the prohibited transaction exemptions relating to investments by employee benefit plans subject to Title I of ERISA or retirement plans or accounts subject to Section 4975 of the Code (including individual retirement accounts). The amendments took effect in 2016, with implementation scheduled to commence on April 10, 2017 and continue through January 1, 2018; however, the initial implementation date was delayed until June 9, 2017. On February 3, 2017, a Presidential Memorandum was issued directing the DOL to, among other things, examine the regulation to determine whether it may adversely affect the ability of Americans to gain access to market information and financial advice. The outcome of this review by the DOL and the ultimate impact of the final regulation are not yet known, but if the regulation is implemented, it could negatively impact the sale of shares of our common stock to such employee benefit plans and retirement plans and accounts.

~~The United Kingdom’s determination to exit the European Union could adversely affect market rental rates and commercial real estate values in the United Kingdom and Europe.~~

~~On June 23, 2016, the United Kingdom held a non-binding referendum in which a majority of voters voted in favor of the United Kingdom’s exit from the European Union. On~~ March 29, 2017, the United Kingdom gave formal notice of its exit from the European Union and commenced the two-year period of negotiations to determine the terms of the United Kingdom’s relationship with the European Union after the exit, including, among other things, the terms of trade between the United Kingdom and the European Union. The effects of the exit will depend on any agreements the United Kingdom makes to retain access to European Union markets either during a transitional period or more permanently. The announcement of the Brexit vote caused significant volatility in global stock markets and currency exchange rate fluctuations that resulted in the strengthening of the U.S. dollar against foreign currencies in which we conduct business. The strengthening of the U.S. dollar relative to other currencies such as the Euro may adversely affect our results of operations and had an adverse impact on the NAV per share of our common stock determined as of December 31, 2016. In addition, the uncertainty caused by the Brexit vote and the notice of departure may:2019.

~~adversely affect European and worldwide economic and market conditions;~~

~~adversely affect commercial property market rental rates in the United Kingdom and continental Europe;~~

~~adversely affect commercial property market values in the United Kingdom and continental Europe;~~

adversely affect the availability of financing for commercial properties in the United Kingdom and continental Europe, which could reduce the price for which we are able to sell properties we have acquired in such geographic locations; and

~~create further instability in global financial and foreign exchange markets, including volatility in the value of the sterling and euro.~~

Each of these effects may occur before the United Kingdom departs from the European Union because the capital and credit markets are subject to volatility and disruption caused by the uncertainty introduced by the Brexit vote. As of September 30, 2017, 28% of our real estate investment portfolio consisted of two properties located in Dublin, Ireland (based

on the estimated aggregate value of our real estate investments). A decline in economic conditions could negatively impact commercial real estate fundamentals and result in lower occupancy, lower rental rates and declining values in our portfolio, which could, among other things, adversely affect our business and financial condition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~On September 13, 2017, 518.135 restricted common shares~~During the three months ended June 30, 2019, we did not sell or issue any equity securities that were granted to each of our independent directors, Messrs. Humberto “Burt” Cabañas, Dougal A. Cameron, and John O. Niemann, Jr. Such restricted shares were granted pursuant to Restricted Share Award Agreements between us and each of our independent directors, as part of the independent directors’ annual compensation for service on our board of directors and without registrationnot registered under the Securities Act of 1933, as ~~amended (the “Securities Act”), in reliance upon the exemption from registration contained in Section 4(a)(2) of the Securities Act.~~amended.

~~Use of Proceeds from Registered Securities~~

On August 20, 2014, the Registration Statement on Form S-11 (File No. 333-191106) for the Offering was declared effective under the Securities Act. The Offering commenced on August 20, 2014. We suspended the sale of shares in the primary portion of the Offering as of September 30, 2017. We are continuing to offer shares pursuant to our distribution reinvestment plan.

From August 20, 2014 through September 30, 2017, we received gross proceeds of approximately $201.7 million through the sale of 20.3 million class A shares, $199.5 million through the sale of 20.7 million class T shares and $0.9 million through the sale of 91,000 class I shares to the public in connection with the Offering. Since August 20, 2014, we have used proceeds from the Offering to pay $23.8 million of selling commissions and dealer manager fees, as well as $9.8 million of issuer costs related to the Offering. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Executive Summary” for additional information regarding the amendment to our Advisory Agreement executed in April 2016 and effective February 29, 2016, which has reduced the amount of issuer costs payable to our Advisor as a percentage of gross offering proceeds. As a result of the amendment to our Advisory Agreement, our Advisor reimbursed us for $4.0 million in issuer costs that we had previously reimbursed to our Advisor. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Executive Summary” for additional information regarding the amendment of the Dealer Manager Agreement, pursuant to which our Advisor will pay a portion of the dealer manager fees payable to the dealer manager, without reimbursement from us. The selling commissions and dealer manager fees were not paid with respect to the shares sold through our distribution reinvestment plan. The selling commissions and dealer manager fees were paid to our dealer manager, which is an affiliate of Hines and is wholly-owned, indirectly, by, or for the benefit of, our Chairman, Jeffrey C. Hines and his father, Gerald D. Hines.

Net proceeds available for investment after the payment of the costs described above were approximately $354.9 million. A portion of these proceeds, along with proceeds from debt financing, were used to make approximately $309.5 million of investments in real estate, including the purchase price of our investments, acquisition fees and expenses, and costs of leveraging each real estate investment. We had approximately $45.4 million in uninvested offering proceeds as of September 30, 2017 which were subsequently used to acquire Queen’s Court on October 11, 2017.

Additionally, we have not generated sufficient cash flow from operations to fully fund distributions paid. From inception through September 30, 2017, a portion of our distributions have been funded with cash flows from financing activities, which includes offering proceeds. See “Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition, Liquidity and Capital Resources — Distributions” for a description of the sources that have been used to fund our distributions.

Issuer Redemptions of Equity Securities

~~In connection with our launch of our self-tender offer, in August 2017, we suspended our~~Our share redemption program applicable to class A shares and class T shares and a share redemption program applicable to class I shares and class J shares; provided, that, with respect to any requests for the redemption of shares submitted in good order in connection with the death or disability of a stockholder for the month of August 2017 we planned to redeem such shares on August 31, 2017 in accordance with the terms of each of our share redemption programs. We anticipate lifting the suspension and reinstating our share redemption programs following the termination of our self-tender offer. Prior to the suspension, each program allowedmay allow stockholders who ~~had~~have purchased shares from us or received their shares through a non-cash transaction, not in the secondary market, to have their shares redeemed subject to certain limitations and restrictions. ~~The terms of our share redemption~~

~~programs, as in effect prior to the suspension, are described more fully below. The terms described below will not take effect unless and until the suspension is lifted.~~

~~Share Redemption Program Applicable to Class A Shares and Class T Shares - Currently Suspended~~

~~In addition to currently being suspended,~~Redemptions under our share redemption program applicable to class A shares and class T shares is subject to significant restrictions and limitations and our board of directors may terminate, suspend or amend the program without stockholder approval. We may redeem shareswill be made on a monthly ~~basis if~~basis. Subject to the limitations of and restrictions on our share redemption program, and subject to funds being available as described below, shares ~~were held for at least one year and meet certain other conditions. Any such redemptions~~redeemed under our share redemption program will be ~~limited~~redeemed at the transaction price in effect on the date of redemption, which generally will be a price equal to the ~~amount required to redeem 5% of the shares outstanding as of the same date in the prior calendar year, and unless our board of directors determines otherwise, redemptions will be further limited~~NAV per share applicable to the ~~amount~~class of ~~proceeds received from our distribution reinvestment plan~~shares being redeemed and most recently disclosed by us in a public filing with the ~~month prior~~SEC (subject to the ~~month in which the redemption request was received. Per the terms of~~5% holding discount described below).

Under our share redemption program, we may waive the one-year holding requirement and limitations described above for share redemption requests made in connection with the bankruptcy, death or disability of a stockholder. No fees will be paid to Hines in connection with any redemption.

~~Share Redemption Program Applicable to Class I Shares and Class J Shares - Currently Suspended~~

In addition to currently being suspended, our share redemption program applicable to class I shares and class J shares is subject to significant restrictions and limitations and our board of directors may terminate, suspend or amend the program without stockholder approval. Under our share redemption program applicable to class I shares and class J shares, we may redeem during any calendar month ~~class I shares and class J~~ shares whose aggregate value (based on the redemption price per share in effect when the redemption is effected) is 2% of ~~the~~our aggregate NAV ~~of such classes of shares~~ as of the last calendar day of the previous month (the “2% Monthly Limitation”) and during any calendar quarter whose aggregate value (based on the redemption price per share in effect when the redemption is effected) is up to 5% of our aggregate NAV ~~of such classes of shares~~ as of the last calendar day of the prior calendar ~~quarter.~~quarter (the “5% Quarterly Limitation”). During a given quarter, if in each of the first two months of such quarter the 2% ~~redemption limit~~Monthly Limitation is reached and stockholders’ redemptions are reduced pro rata for such months, then in the third and final month of that quarter, the applicable limit for such month will likely be less than 2% of ~~the~~our aggregate NAV ~~applicable to all such shares~~ as of the last calendar day of the previous month because the redemptions for that month, combined with the redemptions in the previous two months, cannot exceed the 5% ~~of the NAV of such classes of shares as of the last calendar day of the prior calendar quarter.~~

Quarterly Limitation.

There is no minimum holding period for ~~class I~~ shares under our share redemption program and ~~class J shares.~~stockholders may request that we redeem their shares at any time. However, ~~class I shares and/or class J~~ shares that have not been outstanding for at least one year will be redeemed at 95% of the ~~redemption~~transaction price (the “5% holding discount”) that would otherwise ~~apply.~~apply; provided, that, the period that a share was held prior to being converted into a share of another class pursuant to our charter will count toward the total hold period for such share, as converted. Upon request, we may waive the ~~short-term~~5% holding discount in the case of ~~the~~ death or disability of a stockholder. The 5% holding discount also will be waived with respect to shares issued pursuant to our distribution reinvestment plan and any shares that we issue as stock dividends. ~~No fees~~

Unless our board of directors determines otherwise, we intend to fund redemptions pursuant to our share redemption program from any available cash sources at our disposal, including available cash, cash flow from operations, the sale of real estate-related securities and other assets, borrowings or offering proceeds, without any limitation on the amounts we may pay from such sources. If during any consecutive 24-month period, we do not have at least one month in which we fully satisfy 100% of properly submitted redemption requests or accept all properly submitted tenders in a self-tender offer for our shares, we will ~~be paid~~not make any new investments (excluding short-term cash management investments under 30 days in duration) and we will use all available investable assets to ~~Hines in connection with any redemption.~~

~~All eligible~~satisfy redemption requests ~~for redemptions that were received for~~(subject to the ~~three months ended September 30, 2017 were redeemed using~~limitations under this program) until all outstanding redemption requests, or “Unfulfilled Redemptions,” have been satisfied. For purposes of this policy, investable assets include net proceeds from new subscription agreements, unrestricted cash, working capital, proceeds from marketable securities, proceeds from our distribution reinvestment ~~plan. See~~plan, and net operating cash flows. Notwithstanding this policy, investable assets may be used at any time to fund any of our operating cash needs (as well as to establish reserves to meet such needs), including, without limitation, the ~~full text~~following: property operating expenses, taxes and insurance, debt service and repayment or refinancing of debt, debt financing expenses, funding commitments related to real estate, including without limitation, commitments to acquire new real estate investments

(provided such commitments were made at least twelve (12) months prior to the end of such 24-consecutive-month period), obligations imposed by law, courts, or arbitration, necessary capital improvements, lease-related expenditures, customary general and administrative expenses, asset management fees and other fees payable to our Advisor as described in the prospectus, or shareholder distributions. Our Advisor also will defer payment of the performance participation allocation until all Unfulfilled Redemptions are satisfied. Furthermore, our board of directors and management will consider additional ways to improve shareholder liquidity through our share redemption ~~programs, which~~program or otherwise. Exceptions to the limitations of this paragraph may be made to complete like-kind exchanges under Section 1031 of the Code necessary to avoid adverse tax consequences, or to take actions necessary to maintain our qualification as a REIT under the Code.

Our board of directors has complete discretion to determine whether all available cash sources at our disposal will be applied to redemptions pursuant to the program, whether such funds are ~~incorporated~~needed for other purposes or whether additional funds from other sources may be used for redemptions pursuant to the program.

If redemption requests, in the business judgment of our board of directors, place an undue burden on our liquidity, adversely affect our operations or risk having an adverse impact on stockholders whose shares are not redeemed, then our board of directors may terminate, suspend or amend the share redemption program at any time without stockholder approval, if it deems such action to be in the best interest of our stockholders. Further, our share redemption program will be terminated in the event that our shares ever become listed on a national securities exchange or in the event a secondary market for our common shares develops. In addition, our board of directors may determine to suspend the share redemption program due to regulatory changes, changes in law or if our board of directors becomes aware of undisclosed material information that it believes should be publicly disclosed before shares are redeemed. Material modifications, including any reduction to the monthly or quarterly limitations on redemptions, and suspensions of the program will be promptly disclosed to stockholders in a prospectus supplement (or post-effective amendment if required by ~~reference as Exhibits 99.1 and 99.2 to this Quarterly Report~~the Securities Act) or current report on Form ~~10-Q, for~~8-K filed with the SEC. Any material modifications will also be disclosed on our website.

Any new transaction price may be higher or lower than the most recently disclosed transaction price. The transaction price is not a representation, warranty or guarantee that (i) a stockholder would be able to realize such per share amount if such stockholder attempts to sell his or her shares; (ii) a stockholder would ultimately realize distributions per share equal to such per share amount upon our liquidation or sale; (iii) shares of our common stock would trade at such per share amount on a national securities exchange; or (iv) a third party would offer such per share amount in an arm’s-length transaction to purchase all or substantially all of ~~the terms and conditions~~our shares of ~~the programs.~~ common stock.

The following table lists shares we redeemed under our share redemption program during the period covered by this report, including the average price paid per ~~share.~~share, which represents all of the share repurchase requests received for the same period.

Period Total Number of Shares Redeemed Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans of Programs Maximum Number of Shares that May Yet be Redeemed Under the Plans or Programs
July 1, 2017 to July 31, 2017 15,182
$ 9.69
15,182

⁽¹⁾
August 1, 2017 to August 31, 2017⁽²⁾
25,149
$ 9.65
25,149

⁽¹⁾
September 1, 2017 to September 30, 2017⁽²⁾
422
$ 9.96
422

⁽¹⁾
Total 40,753
40,753



Period	Total Number of Shares Redeemed	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans of Programs	Maximum Number of Shares that May Yet be Redeemed Under the Plans or Programs⁽¹⁾
April 1, 2019 to April 30, 2019	153,701	$	10.11	153,701	833,444
May 1, 2019 to May 31, 2019	89,661	$	10.11	89,661	972,987
June 1, 2019 to June 30, 2019	159,459	$	10.09	159,459	1,139,159
Total	402,821			402,821


(1)	~~We limit~~Amount provided represents the 2% Monthly Limitation which can be further limited by the 5% Quarterly Limitation. See the description of the share redemption program above for a description of the limitations on the number of shares that may be redeemed ~~quarterly under~~pursuant to the ~~programs as described above.~~share redemption program.

~~(2)~~

In connection with our self-tender offer, effective August 18, 2017, we suspended our share redemption programs, as required by Rule 14e-5 promulgated under the Securities Exchange Act of 1934, as amended; provided, that, with respect to any requests for the redemption of shares submitted in good order in connection with the death or disability of a stockholder for the month of August 2017 the we planned to redeem such shares on August 31, 2017 in accordance with

~~the terms of each of our share redemption programs. We anticipate lifting the suspension and reinstating our share redemption programs following the termination of our self-tender offer.~~

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits



Exhibit No.		Description
3.1		Articles of Amendment and Restatement of Hines Global Income Trust, Inc. (formerly known as Hines Global REIT II, Inc.) (filed as Exhibit 3.1 to Pre- Effective Amendment No. 5 to the Registrant’s Registration Statement on Form S-11, File No. 333-191106 (the ~~“Registration~~“IPO Registration Statement”) on August 15, 2014 and incorporated by reference herein)
3.2		Articles Supplementary of Hines Global Income Trust, Inc. (formerly known as Hines Global REIT II, Inc.) (filed as Exhibit 3.1 to Post-Effective Amendment No. 1 to the IPO Registration Statement on December 12, 2014 and incorporated by reference herein)
3.3		Articles Supplementary of Hines Global Income Trust, Inc. (formerly known as Hines Global REIT II, Inc.) (filed as Exhibit 3.1 to Post-Effective Amendment No. 6 to the IPO Registration Statement on August 12, 2015 and incorporated by reference herein)
3.4		Articles Supplementary of Hines Global Income Trust, Inc. (formerly known as Hines Global REIT II, Inc.) (filed as Exhibit 3.1 to Post-Effective Amendment No. 12 to the IPO Registration Statement on April 28, 2017 and incorporated by reference herein)
3.5		Articles of Amendment to Articles of Amendment and Restatement of Hines Global Income Trust, Inc. (formerly known as Hines Global REIT II, Inc.) (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K on October 16, 2017 and incorporated by reference herein)
3.6		Articles of Amendment to Articles of Amendment and Restatement of Hines Global Income Trust, Inc. (formerly known as Hines Global REIT II, Inc.) (filed as Exhibit 3.5 to Pre-Effective Amendment No. 1 to the Registrant’s Registration Statement on Form S-11. File No. 333-220046 (the “Follow-On Registration Statement”) on December 1, 2017 and incorporated by reference herein)
3.7		Articles Supplementary of Hines Global Income Trust, Inc. (formerly known as Hines Global REIT II, Inc.) (filed as Exhibit 3.6 to Pre-Effective Amendment No. 1 to the Follow-On Registration Statement on December 1, 2017 and incorporated by reference herein)
3.8		Articles of Amendment to Articles of Amendment and Restatement of Hines Global Income Trust, Inc. (formerly known as Hines Global REIT II, Inc.) (filed as Exhibit 3.7 to Pre-Effective Amendment No. 1 to the Follow-On Registration Statement on December 1, 2017 and incorporated by reference herein)
3.9		Amended and Restated Bylaws of Hines Global Income Trust, Inc. (formerly known as Hines Global REIT II, Inc.) (filed as Exhibit 3.2 to Pre-Effective Amendment No. 5 to the IPO Registration Statement on August 15, 2014 and incorporated by reference herein)
~~3.4~~3.10		~~Articles Supplementary of Hines Global REIT II, Inc. (filed as Exhibit 3.1 to Post-Effective Amendment No. 6 to the Registration Statement on August 12, 2015 and incorporated by reference herein)~~
~~3.5~~		Amendment No. 1 to Amended and Restated Bylaws of Hines Global Income Trust, Inc. (formerly known as Hines Global REIT II, Inc.), dated September 23, 2015 (filed as Exhibit 3.5 to Post-Effective Amendment No. 7 to the IPO Registration Statement on November 17, 2015 and incorporated by reference herein)
~~3.6~~3.11		~~Articles Supplementary of Hines Global REIT II, Inc. (filed as Exhibit 3.1 to Post-Effective Amendment No. 12 to the Registration Statement on April 28, 2017 and incorporated by reference herein)~~
~~3.7~~		Amendment No. 2 to Amended and Restated Bylaws of Hines Global Income Trust, Inc. (formerly known as Hines Global REIT II, Inc.) (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K on September 14, 2017 and incorporated by reference herein)
~~3.8~~		Articles of Amendment to Articles of Amendment and Restatement of Hines Global REIT II, Inc. (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K on October 16, 2017 and incorporated by reference herein)
4.1		~~Form~~Forms of Subscription Agreement ~~(filed~~(included as Appendix BA-1 and Appendix A-2 to the ~~Prospectus filed~~Post-Effective Amendment No. 11 to the Follow-On Registration Statement on April ~~28, 2017~~12, 2019 and incorporated by reference herein)
4.2		~~Hines Global REIT II, Inc. Fifth~~Sixth Amended and Restated Distribution Reinvestment Plan, effective as of ~~October 31, 2016 (filed~~December 4, 2017 (included as ~~Exhibit 4.1~~Appendix B to the ~~Registrant’s Current Report~~Prospectus included in Post-Effective Amendment No. 11 to the Follow-On Registration Statement on ~~Form 8-K filed on September 22, 2016~~April 12, 2019 and incorporated by reference herein)
10.1		~~Amendment No. 2 to Advisory~~Form of Indemnification Agreement ~~dated~~entered into between Hines Global Income Trust, Inc. (formerly known as ~~of April 13, 2016 and effective as of February 29, 2016, among~~ Hines Global REIT II, ~~Advisors LP,~~Inc.) and each of the following persons as of August 15, 2014: Jeffrey C. Hines, ~~Global REIT II Properties LP,~~Charles M. Baughn, Humberto Cabañas, Dougal A. Cameron, John O. Niemann, Jr., Sherri W. Schugart, Ryan T. Sims, David L. Steinbach, Kevin L. McMeans and ~~Hines Global REIT II, Inc.~~J. Shea Morgenroth and each of the following persons as of June 30, 2019: Janice E. Walker, A. Gordon Findlay, Jason P. Maxwell, Omar H. Throwfeek, John. H Harrison and Eleni Vakali (filed as Exhibit ~~10.1~~10.4 to the ~~Registrant’s Current Report~~IPO Registration Statement on ~~Form 8-K on April 15, 2016~~September 11, 2013 and incorporated by reference herein)
10.2		~~Loan~~Amended and Restated Escrow Agreement, dated as of ~~January 29, 2016~~December 12, 2014, by and between Wells Fargo Bank, National Association, as Lender and Hines Global REIT II 891 Coronado LLC, as Borrower (filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K on February 4, 2016 and incorporated by reference herein)
~~10.3~~		Promissory Note, dated as of January 29, 2016 by and between Hines Global REIT II 891 Coronado LLC, as borrower, and Wells Fargo Bank, National Association, as lender (filed as Exhibit 10.6 to the Registrant’s Current Report on Form 8-K on February 4, 2016 and incorporated by reference herein)
~~10.4~~		~~Amendment No. 3 to Selected Dealer Agreement, dated April 12, 2016, by and~~ among ~~Hines Global REIT II, Inc.,~~ Hines Securities Inc., Hines Global REIT II, ~~Advisors LP~~Inc. and ~~Ameriprise Financial Services, Inc.~~UMB Bank, N.A. (filed as Exhibit ~~10.23~~10.3 to Post-Effective Amendment No. 81 to the IPO Registration Statement on ~~April 15, 2016~~December 12, 2014 and incorporated by reference herein)



~~Exhibit~~ ~~No.~~		~~Description~~
~~10.5~~10.3		Sale, Purchase and Escrow Agreement, dated as of May 13, 2016, by and between NOP Cottonwood Holdings, LLC, HGREIT II Cottonwood Center LLC, Commonwealth Land Title Insurance Company, Hines Global REIT II Properties LP and National Office Partners LLC (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed May 19, 2016 and incorporated by reference herein)
~~10.6~~		Agreement of Purchase and Sale, dated as of June 24, 2016, by and between RT GOODYEAR, LLC and HGREIT II Goodyear Crossing LLC (filed as Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q on August 12, 2016 and incorporated by reference herein)
~~10.7~~		Loan Agreement, dated as of July 5, 2016 by and between Principal Life Insurance Company, as Lender and HGREIT II Cottonwood Center LLC, as Borrower (filed as Exhibit 10.26 to Post-Effective Amendment No. 10 to the Registration Statement on October 5, 2016 and incorporated by reference herein)
~~10.8~~		Term Loan Agreement, dated as of August 18, 2016 by and between SunTrust Bank, as Lender and HGREIT II Goodyear Crossing LLC, as Borrower (filed as Exhibit 10.27 to Post-Effective Amendment No. 10 to the Registration Statement on October 5, 2016 and incorporated by reference herein)
~~10.9~~		Contract of Sale, dated as of September 16, 2016, by and between CLP-SPF Rookwood Commons, LLC and CLP-SPF Rookwood Pavilion, LLC and HGREIT II Edmonson Road LLC and HGREIT II Madison Road LLC (filed as Exhibit 10.28 to Post-Effective Amendment No. 10 to the Registration Statement on October 5, 2016 and incorporated by reference herein)
~~10.10~~		Form of Property Management and Leasing Agreement between Subsidiary of Hines Global REIT II and Hines Interests Limited Partnership (Domestic Office Properties) (filed as Exhibit 10.29 to Post-Effective Amendment No. 10 to the Registration Statement on October 5, 2016 and incorporated by reference herein)
~~10.11~~		Form of Property Management and Leasing Agreement between Subsidiary of Hines Global REIT II and Hines Interests Limited Partnership (Domestic Multi-family and Industrial Properties) (filed as Exhibit 10.30 to Post-Effective Amendment No. 10 to the Registration Statement on October 5, 2016 and incorporated by reference herein)
~~10.12~~		Amendment No. 4 to Selected Dealer Agreement, dated as of December 8, 2016, by and among Hines Global REIT II, Inc., Hines Securities, Inc., Hines Global REIT II Advisors LP and Ameriprise Financial Services, Inc. (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on December 8, 2016 and incorporated by reference herein)
~~10.13~~		Cost Reimbursement Agreement, dated as of December 8, 2016 and effective as of January 1, 2017, by and among Hines Global REIT II, Inc., Hines Securities, Inc., Hines Global REIT II Advisors LP and American Enterprise Investment Services Inc. (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K on December 8, 2016 and incorporated by reference herein)
~~10.14~~		Open End Mortgage and Security Agreement dated as of April 1, 2015 by and between Nationwide Life Insurance Company, as Lender, and CLP-SPF Rookwood Commons, LLC, as Borrower (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K on January 6,9, 2017 and incorporated by reference herein)
~~10.15~~10.4		Open End Mortgage and Security Agreement dated as of July 1, 2013 by and between Nationwide Life Insurance Company, as Lender, and CLP-SPF Rookwood Pavilion, LLC, as Borrower (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K on January 6,9, 2017 and incorporated by reference herein)
~~10.16~~10.5		Promissory Note, dated as of January 29, 2016 by and between Hines Global REIT II 891 Coronado LLC, as borrower, and Wells Fargo Bank, National Association, as lender (filed as Exhibit 10.6 to the Registrant’s Current Report on Form 8-K filed on February 4, 2016 and incorporated by reference herein)
10.6		Loan Agreement, dated as of July 5, 2016 by and between Principal Life Insurance Company, as Lender and HGREIT II Cottonwood Center LLC, as Borrower (filed as Exhibit 10.26 to Post-Effective Amendment No. 10 to the IPO Registration Statement on October 5, 2016 and incorporated by reference herein)



10.7		Term Loan Agreement, dated as of August 18, 2016 by and between SunTrust Bank, as Lender and HGREIT II Goodyear Crossing LLC, as Borrower (filed as Exhibit 10.27 to Post-Effective Amendment No. 10 to the IPO Registration Statement on October 5, 2016 and incorporated by reference herein)
10.8		Form of Property Management and Leasing Agreement between Subsidiary of Hines Global Income Trust, Inc. (formerly known as Hines Global REIT II, Inc.) and Hines Interests Limited Partnership (Domestic Multi-family and Industrial Properties) (filed as Exhibit 10.30 to Post-Effective Amendment No. 10 to the IPO Registration Statement on October 5, 2016 and incorporated by reference herein)
10.9		Form of Property Management and Leasing Agreement between Subsidiary of Hines Global Income Trust, Inc. (formerly known as Hines Global REIT II, Inc.) and Hines Interests Limited Partnership (Domestic Office Properties) (filed as Exhibit 10.29 to Post-Effective Amendment No. 10 to the IPO Registration Statement on October 5, 2016 and incorporated by reference herein)
10.10		Assumption and Modification Agreement dated as of January 6, 2017, by and between Nationwide Life Insurance Company, as Lender, CLP-SPF Rookwood Pavilion LLC, as Original Borrower, and HGREIT II Madison Road LLC, as Borrower (filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K on January 6,9, 2017 and incorporated by reference herein)
~~10.17~~10.11		Assumption and Modification Agreement dated as of January 6, 2017, by and between Nationwide Life Insurance Company, as Lender, CLP-SPF Rookwood Commons LLC, as Original Borrower, and HGREIT II Edmondson Road LLC, as Borrower (filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K on January 6,9, 2017 and incorporated by reference herein)
~~10.18~~10.12		Third Amended and Restated Agreement of Limited Partnership of Hines Global REIT II Properties LP, dated as of April 28, 2017 (filed as Exhibit 10.1 to Post-Effective Amendment No. 12 to the Registration Statement on April 28, 2017 and incorporated by reference herein)
~~10.19~~		Uncommitted Loan Agreement, dated as of October 2, 2017, by and between Hines Global REIT II Properties, LP, as borrower, and Hines Interests Limited Partnership, as lender (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on October 3, 2017 and incorporated by reference herein)
~~10.20~~10.13		Form of Restricted Share Award Agreement (filed as Exhibit 99(a)(1)(G) to the Registrant’s tender offer statement on Schedule TO on October 3, 2017 and incorporated by reference herein)
~~99.1~~10.14		First Amendment to Uncommitted Loan Agreement, dated as of November 30, 2017, by and between Hines Global REIT II ~~Inc. Share Redemption Program applicable to class A shares~~Properties, LP, as borrower, and ~~class T shares, effective~~Hines Interests Limited Partnership, as ~~of May 31, 2017~~lender (filed as Exhibit ~~99.1 to Post-Effective Amendment No. 12~~10.1 to the ~~Registration Statement~~Registrant’s Current Report on ~~April 28,~~Form 8-K on December 6, 2017 and incorporated by reference herein)
10.15		Amended and Restated Advisory Agreement, dated as of December 6, 2017, by and among Hines Global REIT II Advisors LP, Hines Global REIT II Properties LP, and Hines Global Income Trust, Inc. (filed as Exhibit 10.2 to Post-Effective Amendment No. 1 to the Follow-On Registration Statement on December 6, 2017 and incorporated by reference herein)
10.16		Fifth Amended and Restated Agreement of Limited Partnership of Hines Global REIT II Properties LP, dated as of March 6, 2018 (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on March 12, 2018 and incorporated by reference herein)
10.17		Purchase and Sale Agreement, dated as of August 17, 2018, by and between Grayco Lui Museum Investment 2006 LP, Grayco Lui Museum Investment II LP, as sellers and HGIT 5353 Fannin LP and HGIT 5353 Fannin Lot Parcel, Inc. as purchasers (filed as Exhibit 10.26 to the Registrant’s Quarterly Report on Form 10-Q on November 14, 2018 and incorporated by reference herein)
10.18		Facility Agreement, dated as of October 3, 2018 by and between Deutsche Pfandbriefbank AG as the Original Lender, Agent and Security Agent and HGIT Venrayseweg 100 Venlo Coöperatief U. A., as Borrower, and HGIT Fresh Park Venlo Holdings LLC and HGIT Fresh Park Partner LLC as Guarantors (filed as Exhibit 10.28 to the Registrant’s Post-Effective Amendment No. 16 to the Follow-On Registration Statement on December, 20 2018 and incorporated by reference herein)
10.19		Agreement regarding the Release of a Perpetual Right of Leasehold, dated as of October 5 2018, by and between Fresh Park Venlo B.V., as seller and HGIT Venrayseweg 100 Venlo Coöperatief U.A., as buyer (filed as Exhibit 10.27 to the Registrant’s Post-Effective Amendment No. 16 to the Follow-On Registration Statement on December, 20 2018 and incorporated by reference herein)
10.20		Investment Management Agreement, dated July 31, 2018 between Security Capital Research & Management Incorporated and Hines Global Investments, Inc. (filed as Exhibit 10.1 to the Registrant’s Post-Effective Amendment No. 17 to the Follow-On Registration Statement on December 31, 2018 and incorporated by reference herein)
10.21		Acknowledgment of Renewal and Extension of Advisory Agreement of Hines Global Income Trust, Inc., dated December 6, 2018, by and among Hines Global Income Trust, Inc., Hines Global REIT II Properties, LP and Hines Global REIT II Advisors LP (filed as Exhibit 10.32 to the Registrant’s Post-Effective Amendment No. 16 to the Follow-On Registration Statement on December, 20 2018 and incorporated by reference herein)
10.22		Selected Dealer Agreement, dated as of December 13, 2018, by and among Hines Global Income Trust, Inc., Hines Securities, Inc., Hines Global REIT II Advisors LP and Ameriprise Financial Services, Inc. (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on December 19, 2018 and incorporated by reference herein)
10.23		Cost Reimbursement Agreement, dated as of December 13, 2018, by and among Hines Global Income Trust, Inc., Hines Securities, Inc., Hines Global REIT II Advisors LP, and American Enterprise Investment Services Inc. (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K on December 19, 2018 and incorporated by reference herein)
10.24		Second Amendment to Uncommitted Loan Agreement, dated as of December 13, 2018, by and between Hines Global REIT II Properties, LP, as borrower, and Hines Interests Limited Partnership, as lender (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K on December 19, 2018 and incorporated by reference herein)
10.25*		Asset Sale and Purchase Agreement between HGIT ABC Westland 200 Poeldijk Coöperatief U.A. as the Purchaser and ABC Westland Beheer B.V. (in its capacity as general partner of ABC Westland Beheer C.V.) and ABC Westland Beheer B.V. and Van Rijn Beheer Poeldijk B.V. and KMB Vastgoed B.V. and Windtmeulen Beheer B.V. as the Sellers relating to the agri logistics park located at ABC Westland 200 in Poeldijk, the Netherlands
31.1*		Certification



~~Exhibit~~ ~~No.~~		~~Description~~
~~99.2~~		Hines Global REIT II, Inc. Share Redemption Program applicable to class I shares and class J shares, effective as of May 1, 2017 (filed as Exhibit 99.2 to Post-Effective Amendment No. 12 to the Registration Statement on April 28, 2017 and incorporated by reference herein)
31.1*		~~Certification~~
31.2*		Certification
32.1*		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC Release 34-47551 this Exhibit is furnished to the SEC herewith and shall not be deemed to be “filed.”
101*99.1		~~The following materials from~~ Hines Global ~~REIT II,~~Income Trust, Inc.~~’s Quarterly~~ Amended and Restated Share Redemption Program, effective as of November 27, 2018 (filed as Exhibit 99.1 to Post-Effective Amendment No. 14 to the Follow-On Registration Statement on November 27, 2018 and incorporated by reference herein)
99.2		Valuation Policy and Procedures (filed as Exhibit 99.1 to the Registrant’s Current Report on Form ~~10-Q for the quarter ended September 30, 2017, filed~~8-K on November 9, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Equity (Deficit), (iv) Condensed Consolidated Statements of Cash Flows,April 16, 2018 and ~~(v) Notes to the Condensed Consolidated Financial Statements.~~incorporated by reference herein)
101.INS*		Instance Document—The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101 SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document
*		Filed herewith

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 GLOBAL ~~REIT II,~~INCOME TRUST, INC.

~~November 9, 2017~~August 14, 2019	By:	/s/ Sherri W. Schugart
		Sherri W. Schugart
		President and Chief Executive Officer

~~November 9, 2017~~August 14, 2019	By:	/s/ ~~Ryan T. Sims~~ J. Shea Morgenroth
		~~Ryan T. Sims~~ J. Shea Morgenroth
		Chief Financial Officer ~~and Secretary~~



Hines Global REIT II, Inc. Stockholders
	Common Shares				Additional Paid-in Capital			Accumulated Distributions in Excess of Earnings			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity			Noncontrolling Interests
	Shares		Amount		Additional Paid-in Capital			Accumulated Distributions in Excess of Earnings			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity			Noncontrolling Interests
Balance as of January 1, 2017	26,542		$	26	$	224,134		$	(31,222	)	$	(2,755	)	$	190,183		$	—
Issuance of common shares	14,427		15		143,012			—			—			143,027			—
Distributions declared	—		—		—			(14,132		)	—			(14,132		)	(9		)
Redemption of common shares	(166	)	—		(1,445		)	—			—			(1,445		)	—
Selling commissions, dealer manager fees and distribution and stockholder servicing fees	—		—		(11,131		)	—			—			(11,131		)	—
Issuer costs	—		—		(2,947		)	—			—			(2,947		)	—
Net income (loss)	—		—		—			(12,908		)	—			(12,908		)	9
Foreign currency translation adjustment	—		—		—			—			6,122			6,122			—
Balance as of September 30, 2017	40,803		$	41	$	351,623		$	(58,262	)	$	3,367		$	296,769		$	—



	September 30, 2017		December 31, 2016
Deposits on investment property ⁽¹⁾	$	—	$	5,000
Deferred issuer costs	974		—
Prepaid insurance	80		219
Prepaid property taxes	76		74
Deferred tax assets	862		—
Other	438		277
Other assets	$	2,430	$	5,570



	In-Place Lease		Out-of-Market Leases, Net
October 1, 2017 through December 31, 2017	$	3,915	$	(231	)
2018	13,937		(908		)
2019	11,102		(947		)
2020	7,853		(1,233		)
2021	5,518		(1,059		)



	Fixed Future Minimum Rentals
October 1, 2017 through December 31, 2017	$	9,963
2018	38,644
2019	34,045
2020	26,813
2021	22,139
Thereafter	96,006
Total	$	227,610



Property Name	Acquisition Date	Building and Improvements		Land		In-place Lease Intangibles			Out-of- Market Lease Intangibles, Net			Discount (premium) on assumed mortgage loan		Total
2017
Rookwood	1/6/2017	$	132,466	$	45,320	$	27,477		$	(12,275	)	$	740	$	193,728
Montrose Student Residences⁽¹⁾	3/24/2017	$	33,705	$	5,691	$	1,282	⁽²⁾	$	(56	)	$	—	$	40,622

2016
Domain Apartments	1/29/2016	$	50,790	$	5,690	$	1,640		$	—		$	—	$	58,120
Cottonwood Corporate Center	7/5/2016	$	98,758	$	13,600	$	26,550		$	290		$	—	$	139,198
Goodyear Crossing II	8/18/2016	$	41,620	$	7,270	$	5,280		$	2,030		$	—	$	56,200



	In-Place Leases	Above-Market Lease Assets	Below-Market Lease Liabilities
2017 Acquisitions:
Rookwood	8.3	16.9	13.7
Montrose Student Residences⁽¹⁾	6.5	—	18.9

2016 Acquisitions:
Domain Apartments	0.6	—	—
Cottonwood Corporate Center	4.5	8.2	4.7
Goodyear Crossing II	3.1	3.1	—



		For the Three Months Ended			For the Nine Months Ended
2017 Acquisitions		September 30, 2017			September 30, 2017
Rookwood	Revenue	$	4,876		$	14,523
	Net income (loss)	$	(550	)	$	(7,254	)
Montrose Student Residences	Revenue	$	791		$	1,623
	Net income (loss)	$	(432	)	$	(2,852	)



	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	Pro Forma 2017			Pro Forma 2016			Pro Forma 2017			Pro Forma 2016
Revenues	$	15,105		$	13,881		$	44,601		$	32,511
Net income (loss) attributable to stockholders	$	(1,932	)	$	(8,101	)	$	(7,446	)	$	(23,781	)



		For the Three Months Ended			For the Nine Months Ended
2016 Acquisitions		September 30, 2016			September 30, 2016
Domain Apartments	Revenue	$	1,201		$	3,136
	Net income (loss)	$	(289	)	$	(1,622	)
Cottonwood Corporate Center	Revenue	$	3,572		$	3,572
	Net income (loss)	$	(2,042	)	$	(2,042	)
Goodyear Crossing II	Revenue	$	624		$	624
	Net income (loss)	$	(241	)	$	(241	)



Class A Shares			Class T Shares			Class I Shares
Period Declared	Distribution Rate Per Share, Per Day		Period Declared	Distribution Rate Per Share, Per Day⁽¹⁾		Period Declared	Distribution Rate Per Share, Per Day⁽¹⁾
12/1/2017 - 12/31/2017	$	0.001671233	12/1/2017 - 12/31/2017	$	0.001671233	12/1/2017 - 12/31/2017	$	0.001671233
4/1/2017 - 11/30/2017	$	0.001653699	4/1/2017 - 11/30/2017	$	0.001653699	5/1/2017 - 11/30/2017	$	0.001653699
5/1/2016 - 3/31/2017	$	0.001594766	5/1/2016 - 3/31/2017	$	0.001594766	N/A	N/A
10/1/2014 - 4/30/2016	$	0.001575342	8/24/2015 - 4/30/2016	$	0.001575342	N/A	N/A



For the Three Months Ended	Asset Management Fee Pre-Waiver		Asset Management Fee Waived		Asset Management Fee Post-Waiver
December 31, 2016	$	751	$	242	$	509
September 30, 2016	708		269		439
June 30, 2016	377		377		—
March 31, 2016	364		364		—
Total	$	2,200	$	1,252	$	948



Class T Shares
Period Declared	Gross Distribution Rate Per Share, Per Day		Net Annualized Distribution Rate Per Share⁽¹⁾
12/1/2017 - 12/31/2017	$	0.001671233	$	0.51
4/1/2017 - 11/30/2017	$	0.001653699	$	0.50
5/1/2016 - 3/31/2017	$	0.001594766	$	0.49
8/24/2015 - 4/30/2016	$	0.001575342	$	0.48



	Stockholders						Sources⁽¹⁾
Distributions for the Three Months Ended	Cash Distributions		Distributions Reinvested		Total Declared		Cash Flows From Operating Activities				Cash Flows From Financing Activities
2017
September 30, 2017	$	2,532	$	2,901	$	5,433	$	3,869	71	%	$	1,567	29	%
June 30, 2017⁽²⁾	2,225		2,565		4,790		4,793		100	%	—		—	%
March 31, 2017⁽³⁾	1,833		2,076		3,909		—		—	%	3,912		100	%
Total	$	6,590	$	7,542	$	14,132	$	8,662	61	%	$	5,479	39	%
2016
December 31, 2016	$	1,608	$	1,744	$	3,352	$	379	11	%	$	2,976	89	%
September 30, 2016	1,340		1,427		2,767		1,449		52	%	1,321		48	%
June 30, 2016	1,107		1,128		2,235		2,238		100	%	—		—	%
March 31, 2016	871		887		1,758		—		—	%	1,761		100	%
Total	$	4,926	$	5,186	$	10,112	$	4,066	40	%	$	6,058	60	%