UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 20192020
or
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 Income Trust, Inc.
(Exact name of registrant as specified in its charter)
Maryland80-0947092
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
2800 Post Oak Boulevard
Suite 5000
HoustonTexas77056-6118
(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.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.  Yes   No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes   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 filerAccelerated filerNon-accelerated filer
Smaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act.

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

As of August 1, 2019,2020, approximately 19.018.7 million shares of the registrant’s Class AX common stock, 20.019.6 million shares of the registrant’s Class TX common stock, 0.1 million shares of the registrant’s Class IX common stock, 21.037.4 million shares of the registrant’s Class T common stock, 5.69.4 million shares of the registrant’s Class D common stock and 3.712.2 million shares of the registrant’s Class I common stock were outstanding.




TABLE OF CONTENTS





TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION
Item 1.Condensed Consolidated Financial Statements (Unaudited):
Item 2.
Item 3.
Item 4.
PART II – OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.




Table of Contents
PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

HINES GLOBAL INCOME TRUST, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, 2019 December 31, 2018 June 30, 2020December 31, 2019
(in thousands, except per share amounts)(in thousands, except per share amounts)
ASSETS   ASSETS  
Investment property, net$917,662
 $787,189
Investment property, net$1,266,124  $1,254,304  
Investments in real estate-related securities19,833
 9,599
Investments in real estate-related securities37,653  36,491  
Cash and cash equivalents34,353
 27,138
Cash and cash equivalents71,558  45,875  
Restricted cash7,026
 9,848
Restricted cash6,122  10,563  
Derivative instruments63
 174
Derivative instruments337  163  
Tenant and other receivables, net11,007
 8,995
Tenant and other receivables, net14,589  14,160  
Intangible lease assets, net54,086
 90,697
Intangible lease assets, net81,923  98,537  
Right-of-use asset, net33,691
 
Right-of-use asset, net4,153  37,606  
Deferred leasing costs, net18,031
 13,282
Deferred leasing costs, net15,757  18,418  
Deferred financing costs, netDeferred financing costs, net1,909  2,311  
Other assets3,012
 1,907
Other assets10,107  5,129  
Assets held for saleAssets held for sale—  49,988  
Total assets$1,098,764
 $948,829
Total assets$1,510,232  $1,573,545  
LIABILITIES AND EQUITY   LIABILITIES AND EQUITY
Liabilities:   Liabilities:
Accounts payable and accrued expenses$21,183
 $26,186
Accounts payable and accrued expenses$28,319  $29,838  
Due to affiliates30,205
 26,022
Due to affiliates37,596  42,782  
Intangible lease liabilities, net18,290
 18,034
Intangible lease liabilities, net16,865  19,633  
Operating lease liabilityOperating lease liability1,510  1,583  
Other liabilities10,310
 55,391
Other liabilities12,519  21,428  
Derivative instrumentsDerivative instruments—  1,079  
Distributions payable2,860
 2,024
Distributions payable4,501  3,837  
Note payable to affiliate
 55,000
Note payable to affiliate—  75,000  
Notes payable, net596,812
 487,439
Notes payable, net605,395  752,131  
Liabilities associated with assets held for saleLiabilities associated with assets held for sale—  34,713  
Total liabilities679,660
 670,096
Total liabilities706,705  982,024  
   
Commitments and contingencies (Note 11)
 
Commitments and contingencies (Note 11)—  —  
   
Equity:   Equity:  
Stockholders’ equity:   Stockholders’ equity:  
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
 
Preferred shares, $0.001 par value per share; 500,000 preferred shares authorized, 0ne issued or outstanding as of June 30, 2020 and December 31, 2019Preferred shares, $0.001 par value per share; 500,000 preferred shares authorized, 0ne issued or outstanding as of June 30, 2020 and December 31, 2019—  —  
Common shares, $0.001 par value per share (Note 6)62
 44
Common shares, $0.001 par value per share (Note 6)97  83  
Additional paid-in capital533,778
 371,274
Additional paid-in capital868,235  735,545  
Accumulated distributions in excess of earnings(113,933) (91,711)Accumulated distributions in excess of earnings(57,398) (146,830) 
Accumulated other comprehensive income (loss)(803) (874)Accumulated other comprehensive income (loss)(7,407) 2,723  
Total stockholders’ equity419,104
 278,733
Total stockholders’ equity803,527  591,521  
Noncontrolling interests
 
Noncontrolling interests—  —  
Total equity419,104
 278,733
Total equity803,527  591,521  
Total liabilities and equity$1,098,764
 $948,829
Total liabilities and equity$1,510,232  $1,573,545  
See notes to the condensed consolidated financial statements.

1

Table of Contents
HINES GLOBAL INCOME TRUST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Three and Six Months Ended June 30, 20192020 and 20182019
(UNAUDITED)
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
(in thousands, except per share amounts)
Revenues:
Rental revenue$27,001  $23,018  $60,120  $44,468  
Other revenue813  536  1,539  823  
Total revenues27,814  23,554  61,659  45,291  
Expenses:  
Property operating expenses7,139  5,170  15,213  10,706  
Real property taxes3,489  2,699  6,971  5,297  
Property management fees1,192  940  2,549  1,644  
Depreciation and amortization14,457  9,741  30,686  19,069  
Acquisition related expenses274  13  291  17  
Asset management fees2,747  1,801  5,538  3,288  
Performance participation allocation—  1,476  —  2,597  
General and administrative expenses1,286  948  2,324  1,795  
Total expenses30,584  22,788  63,572  44,413  
Other income (expenses):
Gain (loss) on derivative instruments1,514  (77) 8,470  (1,187) 
Gain (loss) on investments in real estate-related securities3,136  161  (4,601) 1,327  
Gain on sale of real estate80,457  —  130,101  —  
Foreign currency gains (losses)1,374  (267) (1,145) (336) 
Interest expense(4,463) (4,317) (10,395) (8,514) 
Interest and other income159  244  710  372  
Income (loss) before benefit (provision) for income taxes79,407  (3,490) 121,227  (7,460) 
Benefit (provision) for income taxes1,906  40  1,838  11  
Provision for income taxes related to sale of real estate(7,773) —  (7,773) —  
Net income (loss)73,540  (3,450) 115,292  (7,449) 
Net (income) loss attributable to noncontrolling interests(4) (4) (7) (7) 
Net income (loss) attributable to common stockholders$73,536  $(3,454) $115,285  $(7,456) 
Basic and diluted income (loss) per common share$0.77  $(0.06) $1.23  $(0.14) 
Weighted average number of common shares outstanding95,490  57,004  93,900  52,049  
Comprehensive income (loss):
Net income (loss)$73,540  $(3,450) $115,292  $(7,449) 
Other comprehensive income (loss):
Foreign currency translation adjustment5,483  2,091  (10,130) 71  
Comprehensive income (loss)$79,023  $(1,359) $105,162  $(7,378) 
Comprehensive (income) loss attributable to noncontrolling interests(4) (4) (7) (7) 
Comprehensive income (loss) attributable to common stockholders$79,019  $(1,363) $105,155  $(7,385) 
 Three Months Ended June 30, Six Months Ended June 30,
 2019 2018 2019 2018
 (in thousands, except per share amounts)
Revenues:       
Rental revenue$23,018
 $15,725
 $44,468
 $32,168
Other revenue536
 249
 823
 537
Total revenues23,554

15,974
 45,291
 32,705
Expenses: 
  
    
Property operating expenses5,170
 2,668
 10,706
 5,494
Real property taxes2,699
 2,018
 5,297
 4,099
Property management fees940
 344
 1,644
 656
Depreciation and amortization9,741
 6,959
 19,069
 14,300
Acquisition related expenses13
 10
 17
 144
Asset management fees1,801
 1,214
 3,288
 2,420
Performance participation allocation1,476
 1,185
 2,597
 2,777
General and administrative expenses948
 659
 1,795
 1,511
Total expenses22,788
 15,057
 44,413
 31,401
Other income (expenses):       
Gain (loss) on derivative instruments(77) (45) (1,187) (47)
Gain (loss) on investments in real estate-related securities161
 
 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 income244
 34
 372
 47
Income (loss) before benefit (provision) for income taxes(3,490) (2,062) (7,460) 9,988
Benefit (provision) for income taxes40
 654
 11
 (20)
Net income (loss)(3,450) (1,408) (7,449) 9,968
Net (income) loss attributable to noncontrolling interests(4) (3) (7) (6)
Net income (loss) attributable to common stockholders$(3,454) $(1,411) $(7,456) $9,962
Basic and diluted income (loss) per common share$(0.06)
$(0.04)
$(0.14)
$0.25
Weighted average number of common shares outstanding57,004
 39,489
 52,049
 39,443
        
Comprehensive income (loss):       
Net income (loss)$(3,450) $(1,408) $(7,449) $9,968
Other comprehensive income (loss):

 

 

 

Foreign currency translation adjustment2,091
 (5,515) 71
 (2,799)
Comprehensive income (loss)$(1,359) $(6,923) $(7,378) $7,169
Comprehensive (income) loss attributable to noncontrolling interests(4) (3) (7) (6)
Comprehensive income (loss) attributable to common stockholders$(1,363) $(6,926) $(7,385) $7,163

See notes to the condensed consolidated financial statements.

2

Table of Contents
HINES GLOBAL INCOME TRUST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
For the Six Months Ended June 30, 20192020 and 20182019
(UNAUDITED)
(In thousands)
Hines Global Income Trust, Inc. Stockholders
 Common SharesAdditional Paid-in CapitalAccumulated Distributions in Excess of EarningsAccumulated Other Comprehensive Income (Loss)Total Stockholders’ EquityNoncontrolling Interests
SharesAmount
Balance as of January 1, 202081,847  $83  $735,545  $(146,830) $2,723  $591,521  $—  
Issuance of common shares10,735  12  112,179  —  —  112,191  —  
Distributions declared—  —  —  (12,401) —  (12,401) (3) 
Redemption of common shares(464) —  (5,395) —  —  (5,395) —  
Selling commissions, dealer manager fees and distribution and stockholder servicing fees—  —  (6,240) —  —  (6,240) —  
Offering costs—  —  (863) —  —  (863) —  
Net income (loss)—  —  —  41,749  —  41,749   
Foreign currency translation adjustment—  —  —  —  (15,613) (15,613) —  
Balance as of March 31, 202092,118  $95  $835,226  $(117,482) $(12,890) $704,949  $—  
Issuance of common shares4,822   49,404  —  —  49,407  —  
Distributions declared—  —  —  (13,452) —  (13,452) (4) 
Redemption of common shares(1,037) (1) (11,399) —  —  (11,400) —  
Selling commissions, dealer manager fees and distribution and stockholder servicing fees—  —  (4,009) —  —  (4,009) —  
Offering costs—  —  (987) —  —  (987) —  
Net income (loss)—  —  —  73,536  —  73,536   
Foreign currency translation adjustment—  —  —  —  2,323  2,323  —  
Foreign currency translation adjustment reclassified into earnings—  —  —  —  3,160  3,160  —  
Balance as of June 30, 202095,903  $97  $868,235  $(57,398) $(7,407) $803,527  $—  
Hines Global Income Trust, Inc. StockholdersHines Global Income Trust, Inc. StockholdersHines 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 Common SharesAdditional Paid-in CapitalAccumulated Distributions in Excess of EarningsAccumulated Other Comprehensive Income (Loss)Total Stockholders’ EquityNoncontrolling Interests
Shares Amount SharesAmount
Balance as of January 1, 201943,584
 $44
 $371,274
 $(91,711) $(874) $278,733
 $
Balance as of January 1, 201943,584  $44  $371,274  $(91,711) $(874) $278,733  $—  
Issuance of common shares6,109
 7
 62,886
 
 
 62,893
 
Issuance of common shares6,109   62,886  —  —  62,893  —  
Distributions declared
 
 
 (6,704) 
 (6,704) (3)Distributions declared—  —  —  (6,704) —  (6,704) (3) 
Redemption of common shares(362) 
 (4,014) 
 
 (4,014) 
Redemption of common shares(362) —  (4,014) —  —  (4,014) —  
Selling commissions, dealer manager fees and distribution and stockholder servicing fees
 
 (4,366) 
 
 (4,366) 
Selling commissions, dealer manager fees and distribution and stockholder servicing fees—  —  (4,366) —  —  (4,366) —  
Offering costs
 
 (1,240) 
 
 (1,240) 
Offering costs—  —  (1,240) —  —  (1,240) —  
Net income (loss)
 
 
 (4,002) 
 (4,002) 3
Net income (loss)—  —  —  (4,002) —  (4,002)  
Foreign currency translation adjustment
 
 
 
 (2,020) (2,020) 
Foreign currency translation adjustment—  —  —  —  (2,020) (2,020) —  
Balance as of March 31, 201949,331
 $51
 $424,540
 $(102,417) $(2,894) $319,280
 $
Balance as of March 31, 201949,331  $51  $424,540  $(102,417) $(2,894) $319,280  $—  
Issuance of common shares11,785
 11
 121,908
 
 
 121,919
 
Issuance of common shares11,785  11  121,908  —  —  121,919  —  
Distributions declared
 
 
 (8,062) 
 (8,062) (4)Distributions declared—  —  —  (8,062) —  (8,062) (4) 
Redemption of common shares(402) 
 (3,111) 
 
 (3,111) 
Redemption of common shares(402) —  (3,111) —  —  (3,111) —  
Selling commissions, dealer manager fees and distribution and stockholder servicing fees
 
 (8,511) 
 
 (8,511) 
Selling commissions, dealer manager fees and distribution and stockholder servicing fees—  —  (8,511) —  —  (8,511) —  
Offering costs
 
 (1,048) 
 
 (1,048) 
Offering costs—  —  (1,048) —  —  (1,048) —  
Net income (loss)
 
 
 (3,454) 
 (3,454) 4
Net income (loss)—  —  —  (3,454) —  (3,454)  
Foreign currency translation adjustment
 
 
 
 2,091
 2,091
 
Foreign currency translation adjustment—  —  —  —  2,091  2,091  —  
Balance as of June 30, 201960,714
 $62
 $533,778
 $(113,933) $(803) $419,104
 $
Balance as of June 30, 201960,714  $62  $533,778  $(113,933) $(803) $419,104  $—  


Hines Global Income Trust, Inc. Stockholders
 Common SharesAdditional 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, 201839,256
 $39
 $336,761
 $(68,193) $4,938
 $273,545
 $
Issuance of common shares308
 
 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, 201839,431
 $39
 $337,706
 $(62,334) $7,654
 $283,065
 $
Issuance of common shares464
 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, 201839,500
 $40
 $336,437
 $(69,273) $2,139
 $269,343
 $


See notes to the condensed consolidated financial statements.

3

Table of Contents
HINES GLOBAL INCOME TRUST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 20192020 and 20182019
(UNAUDITED)
 20202019
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)$115,292  $(7,449) 
Adjustments to reconcile net income (loss) to net cash from (used in) operating activities:
Depreciation and amortization31,842  19,673  
Gain on sale of real estate(130,101) —  
Foreign currency (gains) losses1,145  336  
(Gain) loss on derivative instruments(8,470) 1,187  
(Gain) loss on investments in real estate-related securities4,601  (1,327) 
Changes in assets and liabilities:
Change in other assets(4,453) (683) 
Change in tenant and other receivables(3,016) (2,032) 
Change in deferred leasing costs(2,691) (5,616) 
Change in accounts payable and accrued expenses(569) (3,629) 
Change in other liabilities(6,510) (5,958) 
Change in due to affiliates(8,941) (2,680) 
Net cash from (used in) operating activities(11,871) (8,178) 
CASH FLOWS FROM INVESTING ACTIVITIES:  
Investments in acquired properties and lease intangibles(164,096) (182,714) 
Capital expenditures at operating properties(4,613) (3,886) 
Proceeds from sale of real estate340,532  —  
Purchases of real estate-related securities(24,575) (14,086) 
Proceeds from settlement of real estate-related securities18,812  5,180  
Net cash from (used in) investing activities166,060  (195,506) 
CASH FLOWS FROM FINANCING ACTIVITIES:  
Proceeds from issuance of common shares147,932  177,269  
Redemption of common shares(14,985) (7,704) 
Payment of offering costs(2,850) (2,734) 
Payment of selling commissions, dealer manager fees and distribution and stockholder servicing fees(5,516) (5,570) 
Distributions paid to stockholders and noncontrolling interests(11,575) (6,394) 
Proceeds from notes payable75,970  109,935  
Payments on notes payable(248,750) (957) 
Proceeds from related party note payable—  44,000  
Payments on related party note payable(75,000) (99,000) 
Change in security deposit liability736  250  
Deferred financing costs paid(404) (631) 
Payments related to interest rate contracts—  (39) 
Net cash from (used in) financing activities(134,442) 208,425  
Effect of exchange rate changes on cash, restricted cash and cash equivalents1,495  (348) 
Net change in cash, restricted cash and cash equivalents21,242  4,393  
Cash, restricted cash and cash equivalents, beginning of period56,438  36,986  
Cash, restricted cash and cash equivalents, end of period$77,680  $41,379  
(UNAUDITED)
 2019 2018
 (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:   
Net income (loss)$(7,449) $9,968
Adjustments to reconcile net income (loss) to net cash from (used in) operating activities:   
Depreciation and amortization19,673
 14,307
Gain on sale of real estate
 (14,491)
Foreign currency (gains) losses336
 316
(Gain) loss on derivative instruments1,187
 47
(Gain) loss on investments in real estate-related securities(1,327) 
Changes in assets and liabilities:   
Change in other assets(683) 384
Change in tenant and other receivables(2,032) 1,933
Change in deferred leasing costs(5,616) (4,335)
Change in accounts payable and accrued expenses(3,629) (198)
Change in other liabilities(5,958) (2,947)
Change in due to affiliates(2,680) 1,755
Net cash from (used in) operating activities(8,178) 6,739
CASH FLOWS FROM INVESTING ACTIVITIES:   
Investments in acquired properties and lease intangibles(182,714) 
Capital expenditures at operating properties(3,886) (8,095)
Proceeds from sale of real estate
 37,087
Purchases of real estate-related securities(14,086) 
Proceeds from settlement of real estate-related securities5,180
 
Net cash from (used in) investing activities(195,506) 28,992
CASH FLOWS FROM FINANCING ACTIVITIES:   
Proceeds from issuance of common shares177,269
 1,628
Redemption of common shares(7,704) (5,174)
Payment of offering costs(2,734) 
Payment of selling commissions, dealer manager fees and distribution and stockholder servicing fees(5,570) (1,322)
Distributions paid to stockholders and noncontrolling interests(6,394) (5,111)
Proceeds from notes payable109,935
 
Payments on notes payable(957) (844)
Proceeds from related party note payable44,000
 15,500
Payments on related party note payable(99,000) (26,700)
Change in security deposit liability250
 100
Deferred financing costs paid(631) (127)
Payments related to interest rate contracts(39) (10)
Net cash from (used in) financing activities208,425
 (22,060)
Effect of exchange rate changes on cash, restricted cash and cash equivalents(348) (1,087)
Net change in cash, restricted cash and cash equivalents4,393
 12,584
Cash, restricted cash and cash equivalents, beginning of period36,986
 24,553
Cash, restricted cash and cash equivalents, end of period$41,379
 $37,137

See notes to the condensed consolidated financial statements.

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HINES GLOBAL INCOME TRUST INC, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Three and Six Months Ended June 30, 20192020 and 20182019

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 Income Trust, Inc. as of June 30, 20192020 and December 31, 2018,2019, the results of operations for the three and six months ended June 30, 2020 and 2019, the changes in stockholders’ equity for each of the quarterly periods in the six months ended June 30, 2020 and 20182019 and cash flows for the six months ended June 30, 20192020 and 20182019 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 included in Hines Global Income Trust, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2018.2019.

Hines Global Income Trust, Inc. (the “Company”), formerly known as Hines Global REIT II, Inc., was incorporatedis a Maryland corporation formed 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, 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, 20192020 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, 2019,2020, the Company owned direct real estate investments in eleven18 properties totaling 7.38.9 million square feet that were 96%95% 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 “Initial Offering”) in August 2014, and 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 December 2017. As of August 14, 2019,2020, the Company had received gross offering proceeds of $738.9 million$1.1 billion from the sale of 73.8104.5 million shares through its public offerings, including shares issued pursuant to its distribution reinvestment plan.

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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 Income Trust, Inc. and the Operating Partnership (over which the Company exercises financial and operating control). All intercompany balances and transactions have been eliminated in consolidation.

Coronavirus Outbreak

The preparation of financial statements in conformity with U.S GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported in the financial statements. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, actual results may differ from these estimates. In particular, the COVID-19 pandemic (more commonly referred to as the Coronavirus pandemic), has adversely impacted and is likely to further adversely impact the Company’s business, the businesses of the Company’s tenants and the real estate market generally. The full extent to which the pandemic will directly or indirectly impact the Company's business, results of operations and financial condition, including fair value measurements, and asset impairment charges, will depend on future developments that are highly uncertain and difficult to predict. These developments include, but are not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or address its impact, governmental actions to contain the spread of the pandemic and respond to the reduction in global economic activity, and how quickly and to what extent normal economic and operating conditions can resume.

The ongoing global outbreak of the Coronavirus pandemic continues to adversely impact global commercial activity and has contributed to significant volatility in financial markets. It has disrupted global travel and supply chains, adversely impacted global commercial activity, and its long-term economic impact remains uncertain. Considerable uncertainty still surrounds the Coronavirus and its potential effects on the population, as well as the effectiveness of any responses taken on a national and local level by government authorities and businesses. The travel restrictions, limits on hours of operations and/or closures of non-essential businesses and other efforts to curb the spread of the Coronavirus have significantly disrupted business activity globally, including in the markets where the Company invests, and has had an adverse impact on the performance of certain of the Company’s investments. Many of the Company’s tenants are subject to various quarantine restrictions and these restrictions could be in place for an extended period of time. These restrictions are particularly adversely impacting many of the Company’s retail tenants (other than grocery tenants), as government instructions regarding social distancing, capacity limitations and mandated closures have reduced and, in some cases, eliminated customer foot traffic, causing many of the Company’s retail tenants to temporarily close their brick and mortar stores. As of August 14, 2020, the Company owned 2 retail properties in the U.S., which comprised 18% of the Company’s portfolio, based on the estimated value of its real estate investments as of June 30, 2020, as well as 19% of the Company’s total revenue for the six months ended June 30, 2020. Further, while the Company collected approximately 97% of first quarter rents at its retail properties, collections of second quarter rents dropped to around 41%. The Company has agreed to grant $2.3 million of rent relief to its retail tenants through June 30, 2020, as a result of their lost revenues resulting from the Coronavirus pandemic. Such rent relief consisted of $1.2 million of rental payments that were forgiven or reduced due to the conversion of fixed rental payments to rental payments based on a percentage of the tenant’s revenues and $1.1 million of rent payments that have been deferred to future periods. While the Company and certain of its tenants have agreed that these amended lease terms are effective as of a date prior to June 30, 2020, most of the leases were not executed until after June 30, 2020. There can be no assurance the Company will reach an agreement with all of its tenants or if an agreement is reached, that any such tenant will be able to repay any such deferred rent in the future. The Company collected 85% of rent billed for the month of July at its retail properties, including the effects of any rent concessions.

Additionally, the Company agreed to refund May through August rents for 53% of students across its international student housing portfolio following the closing of nearby universities for the remainder of the 2019/2020 school year. These universities have announced a mixture of in-campus and on-line learning for the upcoming 2020/2021 school year with a delayed start. Total refunds of May through August rents were $1.9 million across the portfolio, $1.2 million of which reduced revenue for the three months ended June 30, 2020. The remaining $0.7 million will reduce revenue for the three months ended September 30, 2020. The Company’s other segments were not materially impacted by the Coronavirus pandemic to date.

The Coronavirus pandemic has had an adverse impact on economic and market conditions and has triggered a period of global economic slowdown. In addition, the rapidly evolving nature of the pandemic makes it difficult to ascertain the long term impact it will have on commercial real estate markets and the Company’s investments. Nevertheless, the Coronavirus pandemic presents material uncertainty and risk with respect to the Company’s performance and financial results, such as rent concessions or reduced rental rates, the potential negative impact to occupancy at its properties, the potential closure of certain
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of its assets for an extended period, the potential for increased difficulty in obtaining financing, increased costs of operations, decrease in values of its real estate investments, the potential for increased difficulty of maintaining the current distribution rate, changes in law and/or regulation, and uncertainty regarding government and regulatory policy. The Company is unable to estimate the impact the Coronavirus pandemic will have on its results in future periods.

Due to the business disruptions and challenges severely affecting the global economy caused by the Coronavirus pandemic, many lessors may be required to provide rent deferrals and other lease concessions to lessees. While the lease modification guidance in Accounting Standards Codification (“ASC”) Topic 842 ("Topic 842") addresses routine changes to lease terms resulting from negotiations between the lessee and the lessor, this guidance did not contemplate concessions being so rapidly executed to address the sudden liquidity constraints of some lessees arising from the Coronavirus pandemic. In April 2020, the Financial Accounting Standards Board (“FASB”) staff issued a question and answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of the Coronavirus pandemic. Under existing lease guidance, the Company would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A allows the Company, if certain criteria have been met, to bypass the lease by lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances. The Company has elected to apply such relief and will avail itself of the election to avoid performing a lease by lease analysis for the lease concessions that 1) were granted as relief due to the Coronavirus pandemic and 2) result in the cash flows remaining substantially the same or less. However, while the Company completed negotiations with many of its tenants that requested rent relief by June 30, 2020, most of the related lease amendments were not completed until after June 30, 2020. As a result, the Lease Modification Q&A did not have a material impact on the Company’s consolidated financial statements for the three and six months ended June 30, 2020. However, its future impact on the Company is dependent upon the extent of lease concessions granted to tenants as a result of the Coronavirus pandemic in future periods and the elections made by the Company at the time of agreeing to such concessions.

Investments in Real Estate-Related Securities

In the fourth quarter of 2018, theThe Company made its initialholds investments in real estate-related securities, and as of June 30, 2019 has $20.0 million invested in these securities. These securitieswhich 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,basis. The Company earns interest and dividend income monthly related to these securities, 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 areis recorded in “gain (loss) on investmentsinterest and other income in real estate-related securities” in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). In JulyThe table below presents the effects of the changes in fair value of the Company’s real estate-related securities in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2020 and 2019 (in thousands):

Gain (Loss) Recorded on Investments in Real Estate-Related Securities
Three months ended June 30,Six months ended June 30,
  2020 201920202019
Unrealized gain (loss) $4,548  $(4) $(2,839) $1,099  
Realized gain (loss)(1,412) 165  (1,762) 228  
Total gain (loss) on real estate-related securities $3,136  $161  $(4,601) $1,327  

Assets and Liabilities Held for Sale

Properties that are intended to be sold are to be designated as “held for sale” on the Condensed Consolidated Balance Sheets at the lesser of carrying amount or fair value less estimated selling costs when they meet specific criteria to be presented as held for sale, under GAAP, most significantly that the sale is probable within one year. The Company evaluates probability of sale based on specific facts including whether a sales agreement is in place and the buyer has made significant non-refundable deposits. Properties are no longer depreciated when they are classified as held for sale.  As of June 30, 2020, there were 0 assets designated as held for sale. As of December 31, 2019, the Company made anhad 1 property, the Domain Apartments, designated as held for sale. The Company sold the Domain Apartments in January 2020. See Note 3—Investment Property for additional $15.0 million investment in real estate-related securities.information regarding the disposition of the Domain Apartments.


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Tenant and Other Receivables

Tenant and other receivables consists primarily of receivables attributable to straight-line rent and receivables related to base rents and tenant reimbursements. reimbursements and are carried at cost. As of June 30, 2020 and December 31, 2019, the Company had receivables related to base rents and tenant reimbursements of $8.7 million and $5.6 million, respectively. Additionally, as of June 30, 2020, approximately $1.1 million of these receivables relate to rent that has been deferred at the Company’s retail properties and is expected to be repaid at a later date. The Company has recorded an allowance of approximately $584,000 related to these deferred rents, which reduced rental revenue for the three and six months ended June 30, 2020. The Company also reduced rental revenue by $1.2 million for abated rent at its retail properties as of June 30, 2020, as discussed previously.

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. Straight-line rent receivables were $7.3$5.9 million and $5.8$8.6 million as of June 30, 20192020 and December 31, 2018,2019, respectively.

At June 30, 2020, a $1.9 million receivable related to the sale of Bishop’s Square was included in tenant and other receivables, net on the Condensed Consolidated Balance Sheet. The receivable is contingent on certain conditions being met on or before November 15, 2020 and May 31, 2021.

Other Assets

Other assets included the following (in thousands):
 June 30, 2020December 31, 2019
Prepaid insurance$1,151  $726  
Prepaid property taxes634  589  
Deferred tax assets (1)
5,160  2,973  
Other3,162  (2)932  
Other assets$10,107  $5,220  (3)
  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

(1)Includes the effects of a valuation allowance of $1.9 million and $1.8 million as of June 30, 2020 and December 31, 2019, respectively. The increase in net deferred tax assets from December 31, 2019 to June 30, 2020 is primarily due to changes in tax laws relating to our student housing properties.
(2)Includes $1.3 million in deposits paid in relation to the acquisition of Wakefield Logistics, which was acquired in July 2020. See Note 12—Subsequent Events for additional details on the acquisition of Wakefield Logistics.
(3)Includes $0.1 million classified as other assets within assets held for sale as of December 31, 2019.

(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.

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02 which requires companies that lease assets to recognize on the balance sheet the right-of-use assets and related lease liabilities (“ASC 842”). The accounting by companies that own the assets leased by the lessee (the lessor) remains largely unchanged from 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 permits companies to recognize a 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 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 to account for the lease and non-lease components as a single, combined operating lease component.

The Company completed its evaluation of the impact that the adoption of 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 all operating leases will continue to have a similar pattern of recognition as under current GAAP.

Lessee Accounting

The Company has ground lease agreements in which the Company is the lessee for land underneath Bishop’s Square that the Company 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 ASC 842 on January 1, 2019, the Company determined the lease liability is immaterial and 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 assets, net to right-of-use asset, net in the Company’s Condensed Consolidated Balance Sheets.

New Accounting Pronouncements

In August 2018, the FASB issued ASU No. 2018-13, "Changes to the Disclosure Requirements for Fair Value Measurement." This ASU amends and removes several disclosure requirements including the valuation processes for Level 3 fair value measurements. The ASU also modifies some disclosure requirements and requires additional disclosures for changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements and requires the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The provisions of ASU isNo. 2018-13 are effective for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoptionthe Company as of January 1, 2020 and have not materially impacted the Company’s financial statements.

New Accounting Pronouncements

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), which provides guidance containing practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU No. 2020-04 is permitted for any eliminated or modified disclosures upon issuance of this ASU.optional and may be elected over time as reference rate reform activities occur. The Company is currently assessingin the impactprocess of evaluating the adoptionimpact of this guidance will have onupon its financial statements.

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3. INVESTMENT PROPERTY

Investment property consisted of the following amounts as of June 30, 20192020 and December 31, 20182019 (in thousands):
 June 30, 2020December 31, 2019
Buildings and improvements$1,008,292  $1,077,207  
Less: accumulated depreciation(46,984) (51,719) 
Buildings and improvements, net961,308  1,025,488  
Land304,816  278,639  
Investment property, net$1,266,124  $1,304,127  (1)
 June 30, 2019 December 31, 2018
Buildings and improvements (1)
$773,380
 $693,834
Less: accumulated depreciation(40,003) (30,574)
Buildings and improvements, net733,377
 663,260
Land184,285
 123,929
Investment property, net$917,662
 $787,189

(1) Includes $49.8 million classified within assets held for sale as of December 31, 2019.

(1)In October 2017, the Company commenced construction at Bishop’s Square to add an additional floor and make various upgrades to the property. The 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 expansion of Bishop’s Square as of June 30, 2019 and December 31, 2018, respectively.

Recent AcquisitionDispositions of Investment Property

In May 2019,January 2020, the Company sold the Domain Apartments, a multi-family community located in Henderson, Nevada. The contract sales price for the Domain Apartments was $80.1 million. The Company acquired the Domain Apartments in January 2016 for a contract purchase price of $58.1 million. The Company recognized a gain on sale of this asset of $29.5 million, which was recorded in gain on sale of real estate on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

In February 2020, the Company sold Goodyear Crossing II, a Class A industrial warehouse located in Goodyear, Arizona, a submarket of Phoenix, Arizona. The contract sales price for Goodyear Crossing II was $72.0 million. The Company acquired Goodyear Crossing II in August 2016 for a contract purchase price of $56.2 million. The Company recognized a gain on sale of this asset of $20.2 million, which was recorded in gain on sale of real estate on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

In April 2020, the Company sold Bishop’s Square, a Class A office property located in Dublin, Ireland. The contract sales price for Bishop’s Square was €181.6 million(approximately $198.0 million assuming a rate of $1.09 per EUR as of the date of transaction). The Company acquired Bishop’s Square in March 2015 for €92.0 million (approximately $103.5 million assuming a rate of $1.13 per EUR as of the acquisition date). The Company recognized a gain on sale of this asset of $80.4 million, which was recorded in gain on sale of real estate on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Additionally, the gain on the sale of Bishop’s Square includes a loss of $3.2 million related to the reclassification of the accumulated translation adjustment from stockholders’ equity to the statement of operations. The accumulated translation adjustment represents changes in the EUR-USD exchange rate over Bishop’s Square’s hold period. In addition to the amounts above, the Company paid $7.8 million in taxes upon the sale of Bishop’s Square, which was recorded in provision for income taxes related to sale of real estate on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Recent Acquisitions of Investment Property

In January 2020, the Company acquired the Emerson, an apartment property located in Centreville, Virginia. The net purchase price for the Emerson was $117.0 million, exclusive of transaction costs and working capital reserves.

In February 2020, the Company acquired Bratzler ABC Westland, an industrial property located in The Hague, Netherlands. The net purchase price for Bratzler ABC Westland was €116.4€11.5 million (approximately $130.3$12.5 million assuming a rate of $1.12$1.09 per EUR as of the acquisition date), exclusive of transaction costs and working capital reserves. Bratzler ABC Westland is an addition to our existing ownership in ABC Westland previously acquired in May 2019.

In June 2020, the Company acquired the Madrid Airport Complex, an industrial and office property located in Madrid, Spain through a sale-leaseback transaction. The amountnet purchase price for the Madrid Airport Complex was €29.2 million (approximately $33.2 million assuming a rate of $1.14 per EUR as of the transaction date), exclusive of transaction costs and working capital reserves.

In July 2020, the Company acquired Wakefield Logistics, an industrial logistics property located in Wakefield, United Kingdom. See Note 12—Subsequent Events for more information on the acquisition of Wakefield Logistics.

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The amounts recognized for the asset acquisitionacquisitions as of the acquisition date wasdates were determined by allocating the net purchase price as follows (in thousands):
Property NameAcquisition Date
Building and
Improvements (1)
Land (1)
In-place Lease Intangibles (1)
Out-of-Market Lease Intangibles, Net (1)
Total (1)
The Emerson1/24/2020$97,659  $17,725  $2,197  $—  $117,581  
Bratzler ABC Westland2/19/2020$7,181  $5,704  $816  $—  $13,701  
Madrid Airport Complex6/19/2020$3,807  $20,469  $9,787  $—  $34,063  
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) For acquisitions denominated in a foreign currency, amounts have been translated to U.S. dollars at a rate based on the exchange rate in effect on the acquisition date.

(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 June 30, 2019,2020, the cost basis and accumulated amortization related to lease intangibles are as follows (in thousands):
 Lease Intangibles
 In-Place LeasesOut-of-Market
Lease Assets
Out-of-Market
Lease Liabilities
 
Cost$123,640  $6,631  $(22,428) 
Less: accumulated amortization(46,620) (1,728) 5,563  
Net$77,020  $4,903  $(16,865) 
 Lease Intangibles
 
In-Place Leases (1)
 
Out-of-Market
Lease Assets
 
Out-of-Market
Lease Liabilities
   
Cost$87,802
 $5,692
 $(23,458)
Less: accumulated amortization(36,950) (2,458) 5,168
Net$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, 2018,2019, the cost basis and accumulated amortization related to lease intangibles were as follows (in thousands):
 Lease Intangibles
 In-Place LeasesOut-of-Market
Lease Assets
Out-of-Market
Lease Liabilities
 
Cost$136,215  $8,957  $(25,579) 
Less: accumulated amortization(43,808) (2,827) 5,946  
Net$92,407  $6,130  $(19,633) 
 Lease Intangibles
 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)



Amortization expense of in-place leases was $4.6$7.5 million and $3.8$4.6 million for the three months ended June 30, 20192020 and 2018,2019, respectively. Net amortization of out-of-market leases resulted in an increase to rental revenue of $0.5$0.3 million and $0.2$0.5 million for the three months ended June 30, 20192020 and 2018,2019, respectively.

Amortization expense of in-place leases was $9.3$16.5 million and $7.8$9.3 million for the six months ended June 30, 20192020 and 2018,2019, respectively. Net amortization of out-of-market leases resulted in an increase to rental revenue of $0.6$0.9 million and $0.5$0.6 million for the six months ended June 30, 20192020 and 2018,2019, respectively.

Anticipated amortization of the Company’s in-place leases and out-of-market leases, net for the period from July 1, 20192020 through December 31, 20192020 and for each of the years ending December 31, 20202021 through December 31, 20232025 are as follows (in thousands):
In-Place LeaseOut-of-Market
Leases, Net
July 1, 2020 through December 31, 2020$11,532  $(576) 
2021$15,853  $(1,244) 
2022$12,910  $(1,102) 
2023$8,239  $(875) 
2024$5,108  $(684) 
2025$4,547  $(668) 
 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)


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Commercial Leases

The Company’s commercial 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, 2020 were $3.8 million and $8.7 million, respectively, and for the three and six months ended June 30, 2019 waswere $2.8 million and $5.7 million, respectively, which isare included in Rentalrental 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 June 30, 2019,2020, the approximate fixed future minimum rentals for the period from July 1, 20192020 through December 31, 2019,2020, for each of the years ending December 31, 20202021 through 20232025 and thereafter related to the Company’s commercial properties are as follows (in thousands):
 Fixed Future Minimum Rentals
July 1, 2020 through December 31, 2020$35,708  
202165,524  
202254,198  
202345,079  
202437,856  
202534,295  
Thereafter147,763  
Total$420,423  
 Fixed Future Minimum Rentals
July 1, 2019 through December 31, 2019$31,699
202058,037
202150,520
202242,001
202339,174
Thereafter199,061
Total$420,492


During the six months ended June 30, 20192020 and 2018,2019, the Company did not earn more than 10% of its revenue from any individual tenant.


The Company also enters into leases with tenants at its student housing properties and multi-family properties. These leases generally have terms less than one year and do not contain options to extend, terminate or purchase, escalation clauses, or other such terms, which are common in the Company’s commercial leases.


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4. DEBT FINANCING

As of June 30, 20192020 and December 31, 2018,2019, the Company had approximately $600.5$609.8 million and $545.8$865.7 million of debt outstanding, with weighted average years to maturity of 3.02.5 years and 2.92.6 years, respectively, and a weighted average interest rate of 2.49%2.17% and 2.85%2.54%, respectively. The following table provides additional information regarding the Company’s debt outstanding at June 30, 20192020 and December 31, 20182019 (in thousands):
DescriptionOrigination or Assumption DateMaturity DateMaximum Capacity in Functional CurrencyInterest Rate DescriptionInterest Rate as of June 30, 2020 Principal Outstanding at June 30, 2020Principal Outstanding at December 31, 2019
Secured Mortgage Debt      
Bishop's Square3/3/20153/2/2022(3)55,200  
Euribor + 1.30% (1)
N/A$—  $61,907  
Domain Apartments1/29/20161/29/2020(4)$34,300  
Libor + 1.60% (1)
N/A—  34,300  (7)
Cottonwood Corporate Center7/5/20168/1/2023$78,000  Fixed2.98%71,464  72,359  
Goodyear Crossing II8/18/20168/18/2021(5)$29,000  Libor + 2.00%N/A—  29,000  
Rookwood Commons1/6/20177/1/2023(6)$67,000  Fixed3.13%67,000  67,000  
Rookwood Pavilion1/6/20177/1/2023(6)$29,000  Fixed2.87%29,000  29,000  
Montrose Student Residences3/24/20173/23/202222,605  
Euribor + 1.85% (1)
2.00%25,381  25,352  
Queen's Court Student Residences12/18/201712/18/2022£29,500  
Libor + 2.00% (1)
2.49%36,362  38,896  
Venue Museum District9/21/201810/9/2020$45,000  
Libor + 1.95% (1)
4.02%45,000  45,000  
Fresh Park Venlo10/3/20188/15/202375,000  
Euribor + 1.50% (1)
1.50%84,190  84,092  
Maintal Logistics2/21/20192/28/202423,500  
Euribor + 1.10% (1)
1.10%26,034  26,136  
ABC Westland5/3/20192/15/202475,000  
Euribor + 1.50% (1)
1.50%81,291  82,655  
Łódź Urban Logistics9/20/20199/20/202413,600  
Fixed (2)
1.05%15,143  15,211  
Glasgow West End9/26/20199/26/2024£43,200  
Libor + 1.80% (1)
2.19%53,248  56,959  
Gdańsk PL II10/4/20199/20/202416,800  
Fixed (2)
1.05%18,706  18,790  
Madrid Airport Complex6/19/20206/19/202315,150  Fixed2.80%17,010  —  
Other Notes Payable
JPMorgan Chase Revolving Credit Facility9/13/201911/15/2022$275,000  Variable1.69%40,000  104,000  
Notes Payable  $609,829  $790,657  
Affiliate Note Payable
Credit Facility with Hines10/2/201712/31/2020$75,000  Variable1.78%—  75,000  
Total Note Payable to Affiliate$—  $75,000  
Total Principal Outstanding$609,829  $865,657  
Unamortized discount—  (104) 
Unamortized financing fees(4,434) (4,126) 
Total$605,395  $861,427  
Description 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% $62,740
 $63,171
Domain Apartments 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% 73,241
 74,110
Goodyear Crossing II 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
 67,000
Rookwood Pavilion 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% 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         $600,501
 $490,824
Affiliate Note Payable              
Credit Facility with Hines 10/2/2017 12/31/2019 $75,000
 Variable N/A 
 55,000
Total Note Payable to Affiliate         $
 $55,000
Total Principal Outstanding         $600,501
 $545,824
Unamortized discount         (210) (316)
Unamortized financing fees         (3,479) (3,069)
Total         $596,812
 $542,439


(1)On the loan origination date, the Company entered into a 2.00% Euribor(1)On the loan origination date, the Company entered into an interest rate cap agreement for the 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 $19.3 million assuming a rate of $1.14 per EUR as of June 30, 2019) of the full amount borrowed as an economic hedge against the variability of future interest rates on this borrowing.

(3)On the loan origination date, the Company entered into a 2.00% LIBOR interest rate cap agreement for £22.1 million (approximately $28.1 million assuming a rate of $1.27 per GBP as of June 30, 2019) of the full amount borrowed as an economic hedge against the variability of future interest rates on this borrowing.

(4)On the loan origination date, the Company 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 Maintal Logistics, which was acquired on December 31, 2018. Funding for the acquisition, which relates to the $43.8 million recorded within other liabilities on the 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 $1.14 per EUR as of June 30, 2019) as an economic hedge against the variability of future interest rates on this borrowing.

(7)
On the loan origination date, the Company entered into a 1.00% Euribor interest rate cap agreement for €52.5 million

(approximately $58.8 million assuming a rate of $1.12 per EUR as of June 30, 2019) as an economic hedge against the variability of future interest rates on this borrowing. See Note 5—Derivative Instruments for further details.

(2)On the loan origination date, the Company entered into an interest rate swap contract effectively fixing the interest rate for the full term of the facility. See Note 5—Derivative Instruments for further details.
Hines(3)In April 2020, the Company paid off the outstanding balance using proceeds from the sale of Bishop’s Square, which occurred in April 2020.
(4)In January 2020, the Company paid off the outstanding balance using proceeds from the sale of Domain Apartments, which occurred in January 2020.
(5)In February 2020, the Company paid off the outstanding balance using proceeds from the sale of Goodyear Crossing II, which occurred in February 2020.
(6)On July 1, 2020, the Company entered into an amendment related to its secured mortgage debt agreement for Rookwood Commons and Rookwood Pavilion, which extended the maturity date to July 1, 2023. In connection with this amendment, the Company repaid $12.5 million of the outstanding principal related to Rookwood Commons, resulting in an outstanding balance of $54.5 million.
(7)As of December 31, 2019, this amount was included in liabilities associated with assets held for sale.
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JPMorgan Chase Revolving Credit Facility

During the six months ended June 30, 2019,2020, the Company made draws of $44.0approximately $59.0 million and made payments of $99.0$123.0 million on its revolving loan commitment with JPMorgan Chase, N.A., (the “Revolving Credit Facility”), resulting in an outstanding balance of $40.0 million on June 30, 2020. From July 1, 2020 through August 14, 2020, the Company made 0 additional draws or payments under the Revolving Credit Facility, resulting in an outstanding principal balance of $40.0 million as of August 14, 2020.

Hines Credit Facility

During the six months ended June 30, 2020, the Company made 0 draws and made payments of $75.0 million under its credit facility with Hines (the “Hines Credit Facility”). The Company had no0 outstanding balance on June 30, 2019.2020. From July 1, 20192020 through August 14, 2019,2020, the Company made no0 draws or payments under the Hines Credit Facility.Facility, resulting in 0 outstanding balance on August 14, 2020.

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 II2020, the Company was out of compliance with a loan covenant related to its mortgage debt secured mortgage debt. In August 2019,by two of the Company’s European student housing facilities. The properties were not in compliance with their debt yield calculations as of June 30, 2020 as a result of refunds granted in response to the effects of the Coronavirus pandemic as described in Note 2—Summary of Significant Accounting Policies. However, the debt agreements were amended as of June 30, 2020 to waive any event of default occurring as a result of the debt yield calculation through September 30, 2020. The lender provided a waiver of the covenant that was out of compliance, as the propertyproperties 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 June 30, 2019.the date of this report. The Company’s continued compliance with these covenants depends on many factors and could be impacted by current or future economic conditions associated with the Coronavirus pandemic. Failure to comply with any covenants would result in a default which, if the Company were unable to cure or obtain a waiver from the lenders, could accelerate the repayment obligations and strain the liquidity of the Company.

Principal Payments on Debt

The Company is required to make the following principal payments on its outstanding notes payable for the period from July 1, 20192020 through December 31, 2019,2020, for each of the years ending December 31, 20202021 through December 31, 20232024 and for the period thereafter (in thousands).

 Payments Due by Year
 July 1, 2020 through December 31, 20202021202220232024Thereafter
Principal payments$144,789  (1)$7,658  $109,406  $165,888  $182,088  $—  
 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

(1)Included in this amount is $96.0 million in principal payments due July 1, 2020 relating to the secured mortgage debt at Rookwood Commons and Rookwood Pavilion. On July 1, 2020, the Company modified and extended these agreements, resulting in a new maturity date of July 1, 2023, as described above.

As of August 14, 2019,2020, the Company is required to make $130.3$45.0 million in principal payments on its outstanding notes payable that mature through August 2020. The2021. Although the mortgage loans are non–recourse, which would allow the Company to provide a deed in–lieu of payment, the Company expects to be able to repay all principal payments with cash on hand or proceeds raised from its current offering, utilize additional capacity on the Credit Agreement, 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, 20192020, the Company has one loan2 loans with a variable interest rate tied to LIBOR with a maturitymaturities beyond 2021.  The loan agreement providesagreements provide 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
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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.

5. DERIVATIVE INSTRUMENTS

The Company has entered into several interest rate cap and swap contracts in connection with 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 these derivatives as 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 the fair value amount recorded for its derivative 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 3—Investment Property for additional information regarding the purchase of ABC Westland.

The table below provides additional information regarding the Company’s interest rate contracts as of June 30, 2020 (in thousands, except percentages).
Interest Rate Contracts    
TypePropertyEffective DateExpiration DateMaximum Capacity of Debt in Functional CurrencyNotional AmountInterest Rate ReceivedPay Rate /Strike Rate
Interest rate capMontrose Student ResidencesMarch 24, 2017March 23, 202222,605  16,954  Euribor1.25 %
Interest rate capQueen’s Court Student ResidencesDecember 20, 2017December 20, 2020£29,500  £22,125  LIBOR2.00 %
Interest rate capVenue Museum DistrictSeptember 21, 2018October 9, 2020$45,000  $45,000  LIBOR3.50 %
Interest rate capFresh Park VenloOctober 8, 2018August 15, 202375,000  52,487  Euribor2.00 %
Interest rate capMaintal LogisticsFebruary 28, 2019February 28, 202423,500  16,450  Euribor2.00 %
Interest rate capABC WestlandMay 3, 2019February 15, 202475,000  52,500  Euribor1.00 %
Interest rate swapŁódź Urban LogisticsOctober 10, 2019September 20, 202413,600  13,600  Euribor(0.36)%
Interest rate swapGdańsk PL IIOctober 10, 2019September 20, 202416,800  16,800  Euribor(0.36)%
Interest rate capGlasgow West EndSeptember 27, 2019September 24, 2024£43,200  £32,400  LIBOR2.00 %

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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%
The table below provides additional information regarding the Company’s foreign currency forward contracts that were active during the three and six months ended June 30, 2020 (in thousands).
Foreign Currency Forward Contracts   
Effective DateExpiration DateNotional AmountBuy/SellTraded Currency Rate
October 24, 2019February 28, 2020£31,000  USD/GBP$1.29  
December 9, 2019February 28, 2020£15,000  USD/GBP$1.32  
February 21, 2020May 29, 2020£31,000  USD/GBP$1.30  
February 21, 2020May 29, 2020£15,000  USD/GBP$1.30  
March 2, 2020April 30, 202060,000  USD/EUR$1.12  
March 10, 2020April 30, 202050,000  USD/EUR$1.14  
May 27, 2020June 30, 2020£31,000  USD/GBP$1.23  
May 27, 2020June 30, 2020£15,000  USD/GBP$1.23  
June 26, 2020July 15, 2020£32,500  USD/GBP$1.24  

(1)For notional amounts denominated in a foreign currency, amounts have been translated at a rate based on the rate in effect on June 30, 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, 20192020 and 20182019 (in thousands):
Gain (Loss) on Derivative Instruments
Three months ended June 30,Six months ended June 30,
  2020 201920202019
Derivatives not designated as hedging instruments:  
   Interest rate swaps $165  $—  $348  $—  
   Interest rate caps14  (151) (73) (311) 
   Foreign currency forward contracts 1,335  74  8,195  (876) 
Total gain (loss) on derivatives $1,514  $(77) $8,470  $(1,187) 
  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)


6. STOCKHOLDERS’ EQUITY

Public Offering

On November 30, 2017, the Company (i) redesignated its issued and outstanding Class A shares of common stock, Class T shares of common stock, Class I shares of common stock and 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 four4 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 (as defined below) 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 the applicable share classes, which reduce distributions.

The Company 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 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 an accrued liability based upon their respective settlement values and redeem those shares in the subsequent month pursuant to the Company’s current share redemption program.


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Common Stock

As of June 30, 20192020 and December 31, 2018,2019, the Company had the following classes of shares of common stock authorized, issued and outstanding (in thousands):
June 30, 2019 December 31, 2018June 30, 2020December 31, 2019
Shares Authorized Shares Issued Shares Outstanding Shares Authorized Shares Issued Shares OutstandingShares AuthorizedShares Issued and OutstandingShares AuthorizedShares Issued and Outstanding
Class AX common stock, $0.001 par value per share40,000 18,960 18,960 40,000 19,123 19,123Class AX common stock, $0.001 par value per share40,00018,61940,00018,885
Class TX common stock, $0.001 par value per share40,000 19,951 19,951 40,000 19,969 19,969Class TX common stock, $0.001 par value per share40,00019,78040,00019,901
Class IX common stock, $0.001 par value per share10,000 98 98 10,000 96 96Class IX common stock, $0.001 par value per share10,0009310,00091
Class JX common stock, $0.001 par value per share10,000   10,000  Class JX common stock, $0.001 par value per share10,00010,000
Class T common stock, $0.001 par value per share350,000 15,021 15,021 350,000 2,858 2,858Class T common stock, $0.001 par value per share350,00036,769350,00028,837
Class S common stock, $0.001 par value per share350,000   350,000  Class S common stock, $0.001 par value per share350,000350,000
Class D common stock, $0.001 par value per share350,000 4,497 4,497 350,000 1,479 1,479Class D common stock, $0.001 par value per share350,0009,237350,0006,927
Class I common stock, $0.001 par value per share350,000 2,187 2,187 350,000 59 59Class I common stock, $0.001 par value per share350,00011,405350,0007,206


The tables below provide information regarding the issuances and redemptions of each class of the Company’s common stock during the six months ended June 30, 20192020 and 20182019 (in thousands). There were no0 Class JX and S shares issued, redeemed or outstanding during the six months ended June 30, 2019.2020.
Class AXClass TXClass IXClass TClass DClass ITotal
SharesAmountSharesAmountSharesAmountSharesAmountSharesAmountSharesAmountSharesAmount
Balance as of January 1, 202018,885  $19  19,901  $22  91  $—  28,837  $29  6,927  $ 7,206  $ 81,847  $83  
Issuance of common shares126  —  146    —  5,809   1,696   2,957   10,735  12  
Redemption of common shares(159) —  (183) —  —  —  (86) —  (20) —  (16) —  (464) —  
Balance as of March 31, 202018,852  $19  19,864  $23  92  $—  34,560  $35  8,603  $ 10,147  $10  92,118  $95  
Issuance of common shares150  —  127  —   —  2,528   702  —  1,314   4,822   
Redemption of common shares(383) (1) (211) —  —  —  (319) —  (68) —  (56) —  (1,037) (1) 
Balance as of June 30, 202018,619  $18  19,780  $23  93  $—  36,769  $37  9,237  $ 11,405  $11  95,903  $97  
Class AX Class TX Class IX Class T Class D Class I TotalClass AXClass TXClass IXClass TClass DClass ITotal
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares AmountSharesAmountSharesAmountSharesAmountSharesAmountSharesAmountSharesAmountSharesAmount
Balance as of January 1, 201919,123
 $19
 19,969
 $21
 96
 $
 2,858
 $3
 1,479
 $1
 59
 $
 43,584
 $44
Balance as of January 1, 201919,123  $19  19,969  $21  96  $—  2,858  $ 1,479  $ 59  $—  43,584  $44  
Issuance of common shares136
 
 155
 1
 1
 
 4,011
 4
 1,198
 1
 608
 1
 6,109
 7
Issuance of common shares136  —  155    —  4,011   1,198   608   6,109   
Redemption of common shares(163) 
 (195) 
 
 
 
 
 (4) 
 
 
 (362) 
Redemption of common shares(163) —  (195) —  —  —  —  —  (4) —  —  —  (362) —  
Balance as of March 31, 201919,096
 $19
 19,929
 $22
 97
 $
 6,869
 $7
 2,673
 $2
 667
 $1
 49,331
 $51
Balance as of March 31, 201919,096  $19  19,929  $22  97  $—  6,869  $ 2,673  $ 667  $ 49,331  $51  
Issuance of common shares134
 
 154
 
 1
 
 8,152
 8
 1,824
 2
 1,520
 1
 11,785
 11
Issuance of common shares134  —  154  —   —  8,152   1,824   1,520   11,785  11  
Redemption of common shares(270) 
 (132) 
 
 
 
 
 
 
 
 
 (402) 
Redemption of common shares(270) —  (132) —  —  —  —  —  —  —  —  —  (402) —  
Balance as of June 30, 201918,960
 $19
 19,951
 $22
 98
 $
 15,021
 $15
 4,497
 $4
 2,187
 $2
 60,714
 $62
Balance as of June 30, 201918,960  $19  19,951  $22  98  $—  15,021  $15  4,497  $ 2,187  $ 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, 201819,206
 $19
 19,958
 $20
 92
 $
 
 $
 
 $
 39,256
 $39
Issuance of common shares145
 
 162
 
 1
 
 
 
 
 
 308
 
Redemption of common shares(116) 
 (17) 
 
 
 
 
 
 
 (133) 
Balance as of March 31, 201819,235
 $19
 20,103
 $20
 93
 $
 
 $
 
 $
 39,431
 $39
Issuance of common shares143
 
 159
 1
 1
 
 123
 
 38
 
 464
 1
Redemption of common shares(136) 
 (259) 
 
 
 
 
 
 
 (395) 
Balance as of June 30, 201819,242

$19

20,003

$21

94
 $
 123
 $
 38
 $
 39,500

$40


Distributions

With the authorization of the Company’s board of directors, the Company declared distributions monthly from January 20192020 through July 20192020 at a gross distribution rate of $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 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 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 reinvested in shares of the same
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class as the shares on which the distributions were made. Some or all of the cash distributions may be paid from sources other than cash flows from operations.

The following table outlines the Company’s total cash distributions declared to stockholders for each of the quarters ended during 20192020 and 2018,2019, 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 EndedCash DistributionsDistributions ReinvestedTotal Declared
2020
June 30, 2020$6,262  $7,190  $13,452  
March 31, 20205,669  6,732  12,401  
Total$11,931  $13,922  $25,853  
2019
December 31, 2019$4,992  $6,092  $11,084  
September 30, 20194,383  5,325  9,708  
June 30, 20193,647  4,415  8,062  
March 31, 20193,090  3,614  6,704  
Total$16,112  $19,446  $35,558  
  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, 20192020 and 2018.2019. 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,
2020201920202019
Distributions declared per Class AX share, net$0.16  $0.16  $0.31  $0.31  
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  $0.30  
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$0.14  $0.15  $0.29  $0.30  
Distributions declared per Class I share, net$0.16  $0.16  $0.31  $0.31  
  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


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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 Recipient2020201920202019June 30, 2020December 31, 2019
Selling Commissions- Dealer Manager (1)
$658  $2,390  $2,304  $3,560  $—  $—  
Dealer Manager Fee- Dealer Manager117  422  413  630  —  —  
Distribution & Stockholder Servicing Fees- Dealer Manager3,234  5,698  7,532  8,687  27,212  22,479  
Organization and Offering Costs- the Advisor987  1,048  1,850  2,288  6,762  7,763  
Asset Management Fees- the Advisor2,747  1,801  5,538  3,288  2,630  2,353  
Other- the Advisor (2)
692  730  1,054  1,223  629  1,106  
Performance Participation Allocation- the Advisor (3)
—  1,476  —  2,597  —  7,713  
Interest expense- Hines and its affiliates (4)
 310  362  747  —  443  
Property Management Fees- Hines and its affiliates513  443  1,195  815  124  287  
Development and Construction Management Fees- Hines and its affiliates27  223  90  290  110  30  
Leasing Fees- Hines and its affiliates126  230  219  337  197  344  
Expense Reimbursement- Hines and its affiliates (with respect to management and operations of the Company's properties)1,843  983  3,759  1,795  (68) 264  
Total$10,946  $15,754  $24,316  $26,257  $37,596  $42,782  
  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
(1)Some or all of these fees may be reallowed to participating broker dealers rather than being retained by the 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.

(1)Some or all of these fees may be reallowed to participating broker dealers rather than being retained by the 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.

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.




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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, 20192020 and 2018,2019, 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 securitieswhich consist of common equities, preferred equities and debt investments of publicly traded REITs. Since that time, the Company has continued to make additional investments in real estate-related securities. 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.
  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
 $
 $
Basis of Fair Value Measurements
As ofDescriptionFair Value of AssetsQuoted Prices
In Active
Markets for
Identical Items
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
June 30, 2020Investments in real estate-related securities$37,653  $37,653  $—  $—  
December 31, 2019Investments in real estate-related securities$36,491  $36,491  $—  $—  






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Financial Instruments Fair Value Disclosures

As of June 30, 2020, the Company estimated that the fair value of its notes payable, excluding deferred financing costs, which had a book value of $609.8 million, was $609.2 million. As of December 31, 2019, the Company estimated that the fair value of its notes payable, excluding deferred financing costs, which had a book value of $600.5$865.7 million, was $596.7 million. As of December 31, 2018, the Company estimated that the fair value of its notes payable, excluding deferred financing costs, which had a book value of $545.8 million, was $540.3$864.1 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.

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Table of Contents
9. REPORTABLE SEGMENTS

As described previously, the Company invests the net proceeds from 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 and all of the Company’s consolidated revenues and property operating expenses are from these real estate properties.

Management evaluates the operating performance of each of its real estate properties at an individual investment level and considers each investment to be an operating segment. The Company has aggregated its operating segments into seven7 reportable segments: domestic office investments, domestic residential/living investments, domestic retail investments, domestic industrial investments, international industrial investments, international office investments, and international residential/living investments. In April 2020, the Company sold Bishop’s Square, which comprised the international office investments operating segment included in the tables below.

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,
 2020201920202019
Revenues  
Domestic office investments$3,836  $4,128  $7,771  $8,337  
Domestic residential/living investments4,908  2,741  9,314  5,473  
Domestic retail investments5,151  4,903  12,524  9,852  
Domestic industrial investments—  1,099  533  2,185  
International industrial investments10,723  6,582  21,758  11,335  
International office investments528  1,860  3,042  3,791  
International residential/living investments2,668  2,241  6,717  4,318  
Total revenues$27,814  $23,554  $61,659  $45,291  
 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 investments2,741
 1,229

5,473
 2,443
Domestic retail investments4,903
 5,010
 9,852
 10,054
Domestic industrial investments1,099
 1,312
 2,185
 3,290
International industrial investments6,582
 
 11,335
 
International office investments1,860

1,963

3,791

4,062
International residential/living investments2,241

2,350

4,318

4,718
Total Revenue$23,554

$15,974

$45,291

$32,705


For the three and six months ended June 30, 20192020 and 2018,2019, the Company’s total revenue wasrevenues were attributable to the following countries:
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Total revenues
United States49 %55 %49 %57 %
The Netherlands25 %24 %23 %21 %
United Kingdom13 %%14 %%
Poland%— %%— %
Ireland%12 %%13 %
Germany%%%%
Spain%— %— %— %
 Three Months Ended June 30, Six Months Ended June 30,
 2019 2018 2019 2018
Total Revenue       
United States55% 73% 57% 73%
The Netherlands24% % 21% %
Ireland12% 19% 13% 18%
United Kingdom5% 8% 5% 9%
Germany4% % 4% %



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For the three and six months ended June 30, 20192020 and 2018,2019, the Company’s property revenues in excess of expenses by segment were as follows (in thousands):
 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Revenues in excess of property operating expenses (1)
 
Domestic office investments$2,600  $2,813  $5,170  $5,709  
Domestic residential/living investments2,461  1,340  4,757  2,784  
Domestic retail investments2,217  2,816  6,598  5,628  
Domestic industrial investments(3) 958  364  1,656  
International industrial investments6,718  3,743  13,386  6,321  
International office investments370  1,533  2,333  2,480  
International residential/living investments1,631  1,542  4,318  3,066  
Total revenues in excess of property operating expenses$15,994  $14,745  $36,926  $27,644  
 Three Months Ended June 30, Six Months Ended June 30,
 2019 2018 2019 2018
Property revenues in excess of expenses (1)
       
Domestic office investments$2,813
 $2,852
 $5,709
 $5,572
Domestic residential/living investments1,340
 816
 2,784
 1,590
Domestic retail investments2,816
 3,245
 5,628
 6,407
Domestic industrial investments958
 989
 1,656
 2,519
International industrial investments3,743
 
 6,321
 
International office investments1,533
 1,522
 2,480
 3,124
International residential/living investments1,542
 1,520
 3,066
 3,244
Property revenues in excess of expenses$14,745
 $10,944
 $27,644
 $22,456

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

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

As of June 30, 20192020 and December 31, 2018,2019, the Company’s total assets by segment were as follows (in thousands):
 June 30, 2020December 31, 2019
Assets  
Domestic office investments$123,199  $124,144  
Domestic residential/living investments283,117  220,988  
Domestic retail investments300,668  292,526  
Domestic industrial investments191  51,520  
International industrial investments532,700  494,268  
International office investments14,526  (1)122,342  
International residential/living investments195,476  211,785  
Corporate-level accounts60,355  55,972  
Total assets$1,510,232  $1,573,545  
 June 30, 2019 December 31, 2018
Total Assets   
Domestic office investments$127,441
 $130,021
Domestic residential/living investments121,579
 126,175
Domestic retail investments196,686
 199,819
Domestic industrial investments51,821
 51,103
International industrial investments336,747
 190,001
International office investments121,466
 122,471
International residential/living investments108,385
 111,803
Corporate-level accounts34,639
 17,436
Total Assets$1,098,764
 $948,829

(1)Comprised of cash and receivables related to post-closing activities at Bishop’s Square, in accordance with the selling agreement. Once these post-closing activities are concluded, any remaining cash will be repatriated.

As of June 30, 20192020 and December 31, 2018,2019, the Company’s total assets were attributable to the following countries:
June 30, 2020December 31, 2019
Total assets
United States51 %47 %
The Netherlands19 %17 %
United Kingdom17 %18 %
Ireland%11 %
Poland%%
Germany%%
Spain%— %
 June 30, 2019 December 31, 2018
Total Assets   
United States49% 55%
Ireland15% 18%
The Netherlands26% 15%
United Kingdom6% 7%
Germany4% 5%


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For the three and six months ended June 30, 20192020 and 20182019 the Company’s reconciliation of the Company’s property revenues in excess of property operating expenses to the Company’s net income (loss) is as follows (in thousands):
 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Reconciliation to revenues in excess of property operating expenses  
Net income (loss)$73,540  $(3,450) $115,292  $(7,449) 
Depreciation and amortization14,457  9,741  30,686  19,069  
Acquisition related expenses274  13  291  17  
Asset management fees2,747  1,801  5,538  3,288  
Performance participation allocation—  1,476  —  2,597  
General and administrative expenses1,286  948  2,324  1,795  
(Gain) loss on derivative instruments(1,514) 77  (8,470) 1,187  
(Gain) loss on investments in real estate-related securities(3,136) (161) 4,601  (1,327) 
Gain on sale of real estate(80,457) —  (130,101) —  
Foreign currency (gains) losses(1,374) 267  1,145  336  
Interest expense4,463  4,317  10,395  8,514  
Interest and other income(159) (244) (710) (372) 
(Benefit) provision for income taxes(1,906) (40) (1,838) (11) 
Provision for income taxes related to sale of real estate7,773  —  7,773  —  
Total revenues in excess of property operating expenses$15,994  $14,745  $36,926  $27,644  
 Three Months Ended June 30, Six Months Ended June 30,
 2019 2018 2019 2018
Reconciliation to property revenue in excess of expenses       
Net income (loss)$(3,450) $(1,408) $(7,449) $9,968
Depreciation and amortization9,741
 6,959
 19,069
 14,300
Acquisition related expenses13
 10
 17
 144
Asset management fees1,801
 1,214
 3,288
 2,420
Performance participation allocation1,476
 1,185
 2,597
 2,777
General and administrative expenses948
 659
 1,795
 1,511
(Gain) loss on derivative instruments77
 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) losses267
 291
 336
 316
Interest expense4,317
 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


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10. SUPPLEMENTAL CASH FLOW DISCLOSURES

Supplemental cash flow disclosures for the six months ended June 30, 20192020 and 20182019 (in thousands):

Six Months Ended June 30,
20202019
Supplemental Disclosure of Cash Flow Information
Cash paid for interest$9,686  $7,947  
Cash paid for income taxes related to sale of real estate$7,773  $—  
Supplemental Schedule of Non-Cash Investing and Financing Activities
Distributions declared and unpaid$4,501  $2,860  
Distributions reinvested$13,618  $7,543  
Shares tendered for redemption$3,489  $596  
Non-cash net liabilities assumed$848  $2,686  
Offering costs payable to the Advisor$1,850  $2,288  
Distribution and stockholder servicing fees payable to the Dealer Manager$7,532  $8,687  
Accrued capital additions$961  $2,282  
Accrued acquisition costs$1,084  $164  
 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
 $


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.

12. SUBSEQUENT EVENTS

The Promenade Shops at Briargate        Wakefield Logistics

In August 2019,July 2020, the Company entered into a purchase and sale agreement to purchaseacquired Wakefield Logistics from AEW UK Core Property Fund (the “Seller”). The Promenade Shops at Briargate, a retail center located in Colorado Springs, Colorado. The contractnet purchase price for The Promenade Shops at Briargate is expected to be approximately $93.2was £20.6 million (approximately $25.6 million), exclusive of transaction costs and closing prorations. Wakefield Logistics is an industrial logistics property located in Wakefield, United Kingdom, consisting of 207,115 square feet and is currently 100% leased to one tenant. The Seller is not affiliated with the Company or its affiliates.

        DekaBank Facility Agreement

In July 2020, the Company entered into a secured facility agreement with DekaBank Deutsche Girozentrale (“Deka”), which provides for borrowings up to a maximum aggregate principal amount of £55.1 million. The facility agreement has a termination date of July 2, 2023. Interest on our utilization of the facility will be calculated as LIBOR plus a margin of 1.75% per annum, to be paid quarterly. On the effective date, the Company borrowed the full amount of the facility.

        Montrose Renovation

On August 13, 2020, the Company proactively closed the residential accommodations at Montrose, its student housing property located in Ireland, for the upcoming 2020/2021 school year in order to more efficiently perform renovations including the replacement of certain building safety equipment systems. The Company expects to fundwas in the acquisition using proceeds from the Follow-on Offering.process of exterior cladding refurbishments when it identified certain interior systems requiring replacement. The Company funded a $2.0is in the process of evaluating the full scope of the project, but it currently estimates the total cost of the renovation to be approximately $5 million earnest money deposit in August 2019. There is no guarantee that this sale will be consummated andto $8 million. Due to the Company’s deposit may not be refunded in such event. Theproximity to the commencement of the upcoming school year, the Company expects the closingproperty to be vacant for the 2020/2021 academic year, which could result in reductions of this acquisitionrevenues in excess of property operating expenses of approximately $2 million to occur in September 2019, subject to a number of closing conditions. However,$3 million. Additionally, the Company can provide no assurance that this acquisition will close onmay be required to escrow certain interest payments or reduce the expected timeline oroutstanding principal of its $25 million mortgage at all.the property.



*****

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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, 2018.2019.

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:


Risks associated with adverse changes in general economic or local market conditions, including the impact of the ongoing Coronavirus pandemic and efforts to prevent its spread, which are adversely effecting the markets in which we and our tenants operate;
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 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;



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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 under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018.2019.

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.

The Company

Hines Global Income Trust, Inc. (“Hines Global”), formerly known as Hines Global REIT II, Inc., was formed as a Maryland corporation on July 31,in 2013 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. 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 “Initial Offering”) in August 2014 and 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 December 2017. It is our intention to conduct a continuous offering 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, 2019,2020, we had received gross offering proceeds of $738.9 million$1.1 billion from the sale of 73.8104.5 million shares through our public offerings, including shares issued pursuant to our distribution reinvestment plan.

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Portfolio Highlights

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 June 30, 2019,2020, we owned eleveneighteen real estate investments consisting of 7.38.9 million square feet that were 96%95% leased. The following chart depicts the percentage of our portfolio’s investment types based on the estimated value of each real estate investment as of June 30, 20192020 (“Estimated Values”), which are consistent with the values used to determine our net asset value (“NAV”) per share on that date.

chart-3b6de3b9a1b7574a8b1a03.jpghgit-20200630_g1.jpg


The following charts depict the location of our real estate investments as of June 30, 2019.2020. Approximately 46%48% of our portfolio is located throughout the United States and approximately 54%52% is located internationally, based on the Estimated Values.
hgitassetmapa09.jpghgit-20200630_g2.jpg

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The following table provides additional information regarding each of our properties and is presented as of June 30, 2019.2020.
PropertyLocationInvestment Type
Date Acquired/
Net Purchase Price
(in millions)(1)
Estimated Going-in Capitalization Rate (2)
Leasable Square FeetPercent Leased
Cottonwood Corporate CenterSalt Lake City, UtahOffice7/2016; $139.26.9%487,518  96 %
RookwoodCincinnati, OhioRetail1/2017; $193.76.0%600,973  90 %
Montrose Student ResidencesDublin, IrelandResidential/Living3/2017; $40.65.5%53,835  100 %(3)
Queen’s Court Student ResidencesReading, United KingdomResidential/Living10/2017; $65.36.2%79,115  100 %(3)
Venue Museum DistrictHouston, TexasResidential/Living9/2018; $72.93.9%294,964  96 %
Fresh Park VenloVenlo, NetherlandsIndustrial10/2018; $136.36.7%2,863,620  96 %
Maintal LogisticsFrankfurt, GermanyIndustrial12/2018; $43.85.7%387,253  96 %
ABC WestlandThe Hague, NetherlandsIndustrial5/2019; $142.86.2%1,386,847  91 %
Promenade Shops at BriargateColorado Springs, ColoradoRetail9/2019; $93.27.7%236,539  84 %
Gdańsk PL IIGdańsk, PolandIndustrial9/2019; $29.96.7%346,996  100 %
Łódź Urban LogisticsŁódź, PolandIndustrial9/2019; $25.26.6%389,233  100 %
Glasgow West EndGlasgow, United KingdomResidential/Living9/2019; $89.55.5%113,389  98 %(3)
Charles Tyrwhitt DCMilton Keynes, United KingdomIndustrial11/2019; $19.95.7%140,106  100 %
The AlloyCollege Park, MarylandResidential/Living11/2019; $98.05.0%230,362  87 %
DSG BristolBristol, United KingdomIndustrial11/2019; $47.05.0%265,000  100 %
Royal MailEdinburgh, United KingdomIndustrial12/2019; $33.45.3%212,028  100 %
The EmersonCentreville, VirginiaResidential/Living01/2020; $117.04.5%328,341  80 %
Madrid Airport ComplexMadrid, SpainIndustrial6/2020; $33.212.7%467,014  100 %
Total for All Investments 8,883,133  95 %

(1)For acquisitions denominated in a foreign 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, 2020 reflects the leased percentage as of the most recently completed school year, before considering effects of recent school closures and rent refunds. Our international student housing properties have been significantly impacted by the Coronavirus pandemic as a result of school closures, which resulted in refunded rent during the months of May through August 2020. Additionally, as described previously, we closed residential accommodations at Montrose for the 2020/2021 school year to complete renovations at the property. See Subsequent Events for additional information.
28
Property Location Investment Type 
Date Acquired/ Net Purchase Price (in millions) (1)
 
Estimated Going-in Capitalization Rate (2)
 Leasable Square Feet Percent Leased 
Bishop’s Square Dublin, Ireland Office 3/2015; $103.2 6.1% 182,370
 100% 
Domain Apartments 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% 487,283
 97% 
Goodyear Crossing II Phoenix, Arizona Industrial 8/2016; $56.2 8.5% 820,384
 100% 
Rookwood Cincinnati, Ohio Retail 1/2017; $193.7 6.0% 567,335
 96% 
Montrose Student Residences Dublin, Ireland Residential/Living 3/2017; $40.6 5.5% 53,835
 100%
(3) 
Queen’s Court Student Residences 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       7,335,720
 96% 


Table of Contents
(1)For acquisitions denominated in a foreign 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$9.78 in the beginning of 2018 to $10.24 in February 2020. As illustrated in the chart below, the NAV fell to $9.71 as of August 31, 2017April 30, 2020 before increasing to $10.15$9.72 as of June 30, 2019 as illustrated2020. As described elsewhere in this Quarterly Report on Form 10-Q, the chart below.Coronavirus pandemic has had, and is expected to continue to have, an adverse impact on global commercial activity and has contributed to significant volatility in financial markets. While it is difficult to ascertain the long term impact it will have on commercial real estate markets and our investments, it presents material uncertainty and risk with respect to the current and future performance and value of our investments. Investments in real properties and real estate-related securities have not been immune to the impact of the pandemic, which was the primary cause of the decline in our NAV during March and April 2020. 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).
distributionandnavcharts001.jpghgit-20200630_g3.jpg
1.Please see our Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on July 17, 2020 for additional information concerning the methodology used to determine, and the limitations of, the NAV per share as of June 30, 2020. Please see our Annual Reports on Form 10-K for the years ended December 31, 2019, 2018, and 2017 as well as our Current Reports on Form 8-K for additional information concerning the NAV per share determined as of prior dates.
1.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.
2.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.
2.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 stock, 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.
29

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 toremained at $0.625 per share since January 2019. As described previously, the Coronavirus pandemic has had adverse effects on the operations of several of our real estate investments in recent months, which could affect our ability to maintain the current distribution rate.
hgit-20200630_g4.jpg
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.
2. 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 the three and six months ended June 30, 2019.additional information concerning our distributions.
distributionandnavcharts002.jpg
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.

2.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 tabletables presented below disclosesdisclose the total returns for the classeseach of shares that are no longer available for investment in our current public offering.share classes. 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,distribution reinvestment plan, are derived from unaudited financial information, and are net of all Hines Global expenses, including general and administrative expenses, transaction relatedtransaction-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.Total returns would be lower if calculated assuming that distributions were not reinvested. 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. Past performance is not a guarantee of future results. Actual returns realized by individual stockholders will vary.
30

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%
Table of Contents
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. Follow-On Offering:
As of June 30, 2020
Shares Class (1)
1-YearITD
Class I Shares (2)
1.90 %6.50 %
Class D Shares (2)
1.64 %6.24 %
Class S Shares (No Sales Load) (3)
0.88 %5.45 %
Class S Shares (With Sales Load) (4)
(2.67)%3.96 %
Class T Shares (No Sales Load) (3)
0.88 %5.45 %
Class T Shares (With Sales Load) (4)
(2.67)%3.96 %
(1)The inception date for Class I, Class D, Class S and Class T Shares is December 6, 2017.
(2)Class I Shares and Class D Shares are sold without an upfront sales load.
(3)Class S Shares and Class T Shares listed as (No Sales Load) exclude up-front selling commissions and dealer manager fees.
(4)Class S Shares and Class ST Shares listed as (With Sales Load) reflect the returns after the maximum up-front selling commissioncommissions and dealer manager fees, which total 3.5% for both share classes.


The table below discloses the total returns for the classes of shares that were sold in the Initial Offering, but are no longer available for investment in the Follow-On Offering:
As of June 30, 2020
Shares Class (1)
1-Year3-YearITD
Class AX Shares (No Sales Load)1.90 %6.65 %7.95 %
Class AX Shares (With Sales Load)N/A3.23 %5.83 %
Class TX Shares (No Sales Load)0.88 %5.59 %7.27 %
Class TX Shares (With Sales Load)N/A4.13 %6.00 %
Class IX Shares (No Sales Load)1.64 %6.38 %6.37 %
Class IX Shares (With Sales Load)N/A6.09 %6.10 %
(1)The inception date for Class TAX Shares, Class TX Shares, and Class SIX Shares listed as (No Sales Load) exclude up-front selling commissionsare October 1, 2014, September 1, 2015, and dealer manager fees. The returns have been prepared using unaudited data and valuationsMay 1, 2017, respectively.
31

Table 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. Contents
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 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 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, 20182019 under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” There have been no significant changes to our policies during 2019.2020.

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 from our public offerings, debt proceeds and 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, 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 June 30, 20192020 our portfolio was approximately 49%39% leveraged, based on the Estimated Values of our real estate investments owned as of that date, with a weighted average interest rate of 2.49%2.17%.

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 Coronavirus pandemic had a material adverse impact on our liquidity and capital resources for the six months ended June 30, 2020, which resulted from reduced rent collections at our retail properties and rent refunds at our international student housing properties and a reduction of capital raised from the Offering as compared to prior periods. We are still in the early stages of navigating the actual and potential long-term impacts the pandemic will have on our business. These conditions may continue to worsen as the pandemic continues. Fortunately, the Company’s liquidity position was bolstered by its recent sale of Bishop’s Square in April 2020. As a result of this sale, the Company has significant cash on hand and significant undrawn capacity under its revolving credit facilities that it may use to fund cash needs, including shortages that may arise as a result of the Coronavirus pandemic or to make additional real estate investments. See Note 2—Summary of Significant Accounting Policies for additional information.

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The following discussions provide additional details regarding our cash flows.

Cash Flows from Operating Activities

Our real estate properties generate cash flows in the form of rental revenues, which are used to pay direct leasing costs, property-level operating expenses, leasing costs and interest payments. Additionally, we incur corporate level costs and fees such as general and administrative expenses, asset management fees, and the performance participation allocation as well as interest expense on our credit facilityfacilities with Hines.Hines and JPMorgan.


Net cashCash flows from operating activities for the six months ended June 30, 20192020 decreased by $14.9$3.7 million as compared to the same period in the prior year. This change is primarily dueWe generally expect cash flows from operating activities to increase each year as we continue to acquire additional properties. However, some of the increases in the current year were offset by the effect of the three property sales completed during the first half of 2020. Additionally, cash flows from operating activities in 2020 includes the payment of $7.8 million of taxes related to the sale of Bishop’s Square in April 2020 and the payment of the performance participation allocation was $1.7 million higher in 2020. Both of $6.0 million accrued as of December 31, 2018 relatedthese payments contributed 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 increasedecrease in costs associated with leasingcash flows from operating activities including tenant inducement payouts, during the six months ended June 30, 2019 as compared to the same period in the prior year, as well as other decreases explained in Results of Operations—Same Store Analysis.current year.

Cash Flows from Investing Activities

Net cash used in investing activities for the six months ended June 30, 20192020 and 20182019 were primarily due to the following:

Six months ended June 30, 2020
Payment of $164.1 million, primarily related to the acquisitions of three real estate investments during the six months ended June 30, 2020.
Capital expenditures of approximately $4.6 million at our real estate properties.
We received proceeds of $340.5 million from the sale of the Domain Apartments in January 2020, Goodyear Crossing II in February 2020 and Bishop’s Square in April 2020. We sold the Domain Apartments for a contract sales price of $80.1 million and we acquired the Domain Apartments in January 2016 for a net purchase price of $58.1 million. We sold Goodyear Crossing II for a contract sales price of $72.0 million and we acquired Goodyear Crossing II in August 2016 for a net purchase price of $56.2 million. We sold Bishop’s Square for a contract sales price of €181.6 million(approximately $198.0 million assuming a rate of $1.09 per EUR as of the date of transaction) and we acquired Bishop’s Square in March 2015 for $92.0 million (approximately $103.5 million assuming a rate of $1.13 per EUR as of the acquisition date). Proceeds from these sales were used to pay off the secured debt outstanding on the two real estate investments in full as well as to fund the acquisitions of real estate investments made during the six months ended June 30, 2020.
Payments of $24.6 million to purchase real estate-related securities. We also received proceeds of $18.8 million from the sales of real estate-related securities.

Six months ended June 30, 2019
Payment of $182.7 million, primarily related to the acquisition of Maintal Logistics and ABC Westland. Maintal Logistics was acquired in December 2018, but funding for the acquisition was not required until the debt closed in February 2019.
Capital expenditures of approximately $3.9 million, primarily related to development work at Bishop’s Square and various capital improvements at our 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 work at Bishop’s Square and various capital improvements at our other properties.
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, 2018. We sold 2819 Loker Avenue East for a contract sales price of $38.3 million and we acquired 2819 Loker Avenue East in December 2014 for a net purchase price of $25.4 million.

Cash Flows from Financing Activities

Public Offerings

We raised gross proceeds of $177.3$147.9 million from our Follow-On Offering during the six months ended June 30, 2019,2020, 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, duringDuring the six months ended June 30, 2019, we had raised $177.3 million from our Follow-On Offering, excluding proceeds from the distribution reinvestment plan. In addition, during the six
33

months ended June 30, 2020 and 2018,2019, we redeemed $7.7$15.0 million and $5.2$7.7 million in shares of our common stock pursuant to our share redemption program, respectively.

In addition to the investing activities described previously, we have used proceeds from 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 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 organization and offering costs. During the six months ended June 30, 20192020 and 2018,2019, we made payments of $5.6$5.5 million and $1.3$5.6 million, respectively, for selling commissions, dealer manager fees and distribution and stockholder servicing fees related to our Follow-On Offering. The increase in selling commissions, dealer manager fees and distribution and stockholder servicing fees for the six months ended June 30, 20192020 as compared to the same period in 20182019 is due to the increase of capital raised since our restructuring and related modifications in our Follow-On Offering, which commenced in December 2017.

Until December 31, 2018, the Advisor advanced all of our organization and offering costs, consisting of issuer costs and certain underwriting costs (but excluding selling commissions, dealer manager fees and distribution and stockholder servicing fees) related to our public offerings, which totaled $9.0 million. In January 2019, we began reimbursing the Advisor in ratable amounts over 60 months for all such advanced expenses, as well as any organization and offering costs incurred subsequent to December 31, 2018, to the extent 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, 2019,2020, we reimbursed the Advisor $2.7$2.9 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 declared monthly distributions from January 2019 through July 20192020 at a gross distribution rate of $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 paid in cash or reinvested in shares of 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 made. Some or all of the cash distributions may be paid from sources other than cash flows from operations. As described previously, the Coronavirus pandemic has had adverse effects on the operations of several of our real estate investments in recent months, which has adversely impacted our NAV and could affect our ability to maintain the current distribution rate.

Distributions paid to stockholders during the six months ended June 30, 2020 and 2019 and 2018 were $13.9$25.2 million and $11.1$13.9 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 our public offerings, cash advances by our Advisor and/or cash resulting from a waiver or deferral of 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 six months ended June 30, 20192020 and June 30, 2018,2019, we funded 100% and 39%100% of total distributions with cash flows from other sources such as cash flows from investing activities, respectively, which may include proceeds from the sale of real estate and/or cash flows from financing activities, which may include offering proceeds.

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The following table outlines our total distributions declared to stockholders for each quarter during 20192020 and 2018,2019, including the breakout between the distributions declared in cash and those reinvested pursuant to our distribution reinvestment plan (in thousands, except percentages).
 Stockholders
Distributions Paid With Cash Flows From Operating Activities (1)
Distributions for the Three Months EndedCash DistributionsDistributions ReinvestedTotal Declared
2020
June 30, 2020$6,262  $7,190  $13,452  $—  — %
March 31, 20205,669  6,732  12,401  —  — %
Total$11,931  $13,922  $25,853  $—  — %
2019
December 31, 2019$4,992  $6,092  $11,084  $11,087  100 %
September 30, 20194,383  5,325  9,708  9,711  100 %
June 30, 20193,647  4,415  8,062  —  — %
March 31, 20193,090  3,614  6,704  —  — %
Total$16,112  $19,446  $35,558  $20,798  58 %
  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 distributions paid to noncontrolling interests.

(1)Includes distributions paid to noncontrolling interests.

Debt Financings

As mentioned above under “—Financial Condition, Liquidity and Capital Resources,” our portfolio was approximately 49%39% leveraged as of June 30, 20192020 (based on the Estimated Values). Our total loan principal outstanding had a weighted average interest rate of 2.49%2.17% as of June 30, 2019.2020. Below is additional information regarding our loan activity for the six months ended June 30, 20192020 and 2018.2019. See Note 4—Debt Financing”Financing for additional information regarding our outstanding debt and our interest rate exposure.


Six months ended June 30, 2020
We received proceeds of $76.0 million from draws on our revolving credit facility with JPMorgan, as well as in permanent mortgage financing. We used these proceeds primarily to provide cash for the acquisition of real estate investments during the six months ended June 30, 2020. We made draws of $59.0 million and made payments of $123.0 million on the Revolving Credit Facility with JPMorgan during the six months ended June 30, 2020, resulting in an outstanding balance of $40.0 million as of June 30, 2020.
We made payments of $248.8 million on notes payable, which includes payments of $123.0 million on the Revolving Credit Facility with JPMorgan, as well as the paying off of the outstanding balances of our secured debt relating to the Domain Apartments, which was sold in January 2020, Goodyear Crossing II, which was sold in February 2020, and Bishop’s Square, which was sold in April 2020, using the proceeds from the sales of the properties.
We made no draws under the Hines Credit Facility during the six months ended June 30, 2020, and made payments of $75.0 million on this facility. We had no outstanding balance under the Hines Credit Facility as of June 30, 2020.

Six months ended June 30, 2019
We entered into $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 was not required until the loan closed in February 2019.
We borrowed $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 $99.0 million on this facility. We had no outstanding balance under this facility as of June 30, 2019.
We made payments of $0.6 million in financing costs primarily related to our mortgage loans.

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


35

Results of Operations

Three months ended June 30, 2018
We borrowed $15.5 million under the Hines Credit Facility primarily2020 compared to provide cash for the Bishop’s Square expansion and made payments of $26.7 million on this 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 June 30, 2018.

Results of Operations

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 98% leased as of June 30, 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 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 investments838
 816
 22
 3 %
Domestic retail investments2,816
 3,245
 (429)
(2) 
(13)%
Domestic industrial investments958
 1,009
 (51) (5)%
International office investments1,533
 1,522
 11
 1 %
International residential/living investments1,542
 1,520
 22
 1 %
Total same-store properties$10,500
 $10,964
 $(464) (4)%
Recent acquisitions4,245
 
 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 98% leased as of June 30, 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 in 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 investments1,687
 1,590
 97
 6 %
Domestic retail investments5,628
 6,407
 (779)
(2) 
(12)%
Domestic industrial investments1,656
 2,036
 (380)
(3) 
(19)%
International office investments2,480
 3,124
 (644)
(4) 
(21)%
International residential/living investments3,066
 3,244
 (178) (5)%
Total same-store properties$20,227
 $21,973
 $(1,746) (8)%
Recent acquisitions7,417
 
 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 for the three months ended June 30, 2020 compared to the three months ended June 30, 2019, including explanations for significant changes.changes and any significant or unusual activity. As described previously, the Coronavirus pandemic had adverse effects on our results of operations for the three months ended June 30, 2020. These effects were primarily due to rent concessions at our retail properties and rent refunds at our international student housing properties. Our other segments were not materially affected. To the extent the Coronavirus pandemic causes additional adverse conditions at our properties, our results in future periods could also be affected. As described more completely below, most amounts increased in 2020 compared to 2019 as a result of significant additional capital raised and invested in real estate, as offset by recent property dispositions. All amounts are in thousands, except for percentages:
Three Months Ended June 30,Change
20202019$%
Revenues:
Rental revenue$27,001  $23,018  $3,983  17 %
Other revenue813  536  277  52 %
Total revenues27,814  23,554  4,260  18 %
Expenses:
Property operating expenses7,139  5,170  1,969  38 %
Real property taxes3,489  2,699  790  29 %
Property management fees1,192  940  252  27 %
Depreciation and amortization14,457  9,741  4,716  48 %
Acquisition related expenses274  13  261  N/A*
Asset management fees2,747  1,801  946  53 %
Performance participation allocation—  1,476  (1,476) (100)%
General and administrative expenses1,286  948  338  36 %
Total expenses30,584  22,788  7,796  34 %
Other income (expenses):
Gain (loss) on derivative instruments1,514  (77) 1,591  N/A*
Gain (loss) on investments in real estate-related securities3,136  161  2,975  N/A*
Gain on sale of real estate80,457  —  80,457  N/A*
Foreign currency gains (losses)1,374  (267) 1,641  N/A*
Interest expense(4,463) (4,317) (146) (3)%
Interest and other income159  244  (85) (35)%
Income (loss) before benefit (provision) for income taxes79,407  (3,490) 82,897  N/A*
Benefit (provision) for income taxes1,906  40  1,866  N/A*
Provision for income taxes related to sale of real estate(7,773) —  (7,773) N/A*
Net income (loss)$73,540  $(3,450) $76,990  N/A*
 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)%

* Not a meaningful percentage
Depreciation
Total revenues: The increase in total revenue is primarily due to the additional real estate investments acquired between June 30, 2019 and amortization: DepreciationJune 30, 2020, offset by dispositions during the same period. We acquired ten and amortization expense increased fordisposed of three real estate investments since June 30, 2019 and had a portfolio of eighteen real estate investments as of June 30, 2020 that contained 8.9 million leasable square feet, of which 95% was leased. Despite this increase, total revenues of our same-store properties decreased $3.1 million between the three months ended June 30, 2020 and June 30, 2019. Please refer to our “Same Store Analysis” below for additional discussion on the results of operations of our portfolio.
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Property operating expenses: The increase in property operating expenses is primarily due to our significant net acquisition activity since June 30, 2019, compared toas described above. Despite this increase, property operating expenses of our same-store properties decreased $27,000 between the three months ended June 30, 20182020 and June 30, 2019. Please refer to our “Same Store Analysis” below for additional discussion on the results of operations of our portfolio.
Real property taxes: The increase in real property taxes is primarily due to our significant net acquisition activity since June 30, 2019, as described above. Despite this increase, real property taxes of our same-store properties decreased $48,000 between the three months ended June 30, 2020 and June 30, 2019. Please refer to our “Same Store Analysis” below for additional discussion on the results of operations of our portfolio.
Property management fees: The increase in property management fees is primarily due to our significant net acquisition activity since June 30, 2019, as described above. Despite this increase, property management fees decreased $69,000 between the three months ended June 30, 2020 and June 30, 2019. Please refer to our “Same Store Analysis” below for additional discussion on the results of operations of our portfolio.
Depreciation and amortization: The increase in depreciation and amortization expense is primarily due to the additional real estate investments acquired since June 30, 2019, offset by dispositions during the last six months of 2018 and first six months of 2019.same period, as previously described.
Asset management fees: Asset management fees increasedare charged based on the aggregate valuation of our real estate investments, as most recently determined in connection with the determination of our NAV. The increase in these fees is primarily due to the additional real estate investments made since June 30, 2019, offset by dispositions during the same period, as previously described.
Performance participation allocation: The decrease in performance participation allocation is a result of the fee not being earned by the Advisor for the three months ended June 30, 2019 as compared to the three months ended June 30, 2018 primarily2020 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 changesa decline in our NAV per share as well asduring 2020. Please see Item 2—Management’s Discussion and Analysis—NAV and Distributions for additional information concerning the increasechange in our distribution rateNAV per share, which occurred in January 2019.share.
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 costsgeneral and administrative expenses to continue to increase as we continue raising capital from our Follow-On Offering.
Gain (loss) on derivative instruments: We enter into interest rate hedging instruments in order to limit our exposure against the variability of future interest rates on our variable interest rate borrowings as well as foreign currency forward contracts as economic hedges against the variability of foreign exchange rates. During the three months ended June 30, 2020, such gains were primarily related to the position of our foreign currency forward contracts.
Gain (loss) on investments in real estate-related securities: We hold investments in real estate-related securities which consist of common equities, preferred equities and debt investments of publicly traded REITs.  These amounts include realized gains (losses) related to securities sold during the year and unrealized gains (losses) based on values determined on a recurring basis. The gain on securities during the three months ended June 30, 2020 is primarily due to $4.5 million of unrealized gains on the portfolio resulting from market recovery from the lows earlier in the year, which related to the Coronavirus pandemic. For information about the valuation of our investments in real estate-related securities, see Note 8—Fair Value Measurements in the notes to the accompanying financial statements.
Gain on sale of real estate: We acquired Bishop’s Square in March 2015 for €92.0 million (approximately $103.5 million assuming a rate of $1.13 per EUR as of the acquisition date) and we sold Bishop’s Square in April 2020 for €181.6 million(approximately $198.0 million assuming a rate of $1.09 per EUR as of the date of transaction). We recognized a gain on sale of this asset of $80.4 million, excluding taxes related to the sale, which are described below. We had no property dispositions during the three months ended June 30, 2019.
Foreign currency gains (losses): Foreign currency gains (losses) primarily reflects the effect of changes in foreign currency exchange rates on transactions that were denominated in currencies other than the functional currency of the related entity. During the three months ended June 30, 2020 and 2019, these gains were primarily related to the effect of remeasuring debt and cash held in foreign currencies into their related functional currencies.
Interest expense: Interest expense increased due to the net increase in our principal amount of indebtedness outstanding during the period resulting from additional real estate investments acquired since June 30, 2019, as offset by the effects of the properties sold during 2020.
Interest and other income: Primarily relates to interest and dividend income associated with our investments in real estate-related securities. The decrease in interest and dividend income earned during the three months ended June 30, 2020 compared to 2019 is primarily related to market reaction to the Coronavirus pandemic.
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Benefit (provision) for income taxes: Benefit for income taxes increased nearly $1.9 million primarily as a result of recent changes in tax laws related to our international student housing properties and their effect on book / tax timing differences at these properties.
Provision for income taxes related to sale of real estate: The increase during the three months ended June 30, 2020 compared to 2019 relates to the income tax incurred as a result of the sale of Bishop’s Square during April 2020, as described above.
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Same-Store Analysis

We evaluate our consolidated results of operations on a same-store basis, which allows us to analyze our property operating results excluding the effects of acquisitions and dispositions during the periods under comparison. Properties in our portfolio are considered same-store if they were owned for the full periods presented. Same-store properties for the three months ended June 30, 2019 due2020 includes seven properties. The tables below include additional information regarding the operating results of our same-store properties for the current period as compared to an increasethe same period 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.prior year.

Benefit (provision) for income taxes: Provision for income taxes changed from a $654,000 benefitThe following table presents the same-store revenues for the three months ended June 30, 20182020, as compared to the three months ended June 30, 2019, by reportable segment. Total revenues increased by 18% primarily as a result of 10 additional property acquisitions made between June 30, 2019 and June 30, 2020 as offset by the dispositions of three properties in 2020. However, revenues of our same-store properties decreased by 18% primarily due to the adverse effects of the Coronavirus pandemic on our retail properties and international student housing properties, as described above. To the extent the Coronavirus pandemic causes additional adverse conditions at our properties, our results in future periods could also be affected. See below for additional explanations of notable changes in same-store revenues.
 Three Months Ended June 30,Change
 20202019$%
Revenues
Same-store properties
Domestic office investments$3,835  $4,128  $(293) (1)(7)%
Domestic residential/living investments1,461  1,464  (3) — %
Domestic retail investments3,207  4,903  (1,696) (2)(35)%
International industrial investments4,637  4,687  (50) (1)%
International residential/living investments1,216  2,242  (1,026) (3)(46)%
Total same-store properties$14,356  $17,424  $(3,068) (18)%
Recent acquisitions12,929  1,895  11,034  N/A*
Disposed properties529  4,235  (3,706) (88)%
Total revenues$27,814  $23,554  $4,260  18 %
* Not a meaningful percentage

(1)The decrease is primarily due to a $40,000 benefit$265,000 decline in rental revenue from tenant vacancies and one tenant reducing their leased space. Despite these changes, this property was 96% leased as of June 30, 2020.
(2)The decrease is primarily due to rent concessions negotiated with our tenants during the three months ended June 30, 2020, due to the impact of the Coronavirus pandemic.
(3)The decrease is primarily due to rent refunds granted to our student housing tenants resulting from school closures in response to the Coronavirus pandemic.


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The following table presents the property operating expenses for the three months ended June 30, 2020, as compared to the three months ended June 30, 2019, by reportable segment. Property operating expenses increased by 34% primarily as a result of 10 additional property acquisitions made between June 30, 2019 and June 30, 2020 as offset by the dispositions of three properties during the six months ended June 30, 2020. Additionally, property operating expenses at our retail properties and international student housing properties decreased due to forced store closures and school closures resulting from the Coronavirus pandemic. See below for additional explanations of notable changes in same-store property operating expenses.
 Three Months Ended June 30,Change
 20202019$%
Property operating expenses(1)
Same-store properties
Domestic office investments$1,235  $1,315  $(80) (6)%
Domestic residential/living investments972  960  12  %
Domestic retail investments2,010  2,087  (77) (4)%
International industrial investments2,074  1,984  90  %
International residential/living investments600  694  (94) (14)%
Total same-store properties$6,891  $7,040  $(149) (2)%
Recent acquisitions4,767  855  3,912  N/A*
Disposed properties162  914  (752) (82)%
Total property operating expenses$11,820  $8,809  $3,011  34 %
* Not a meaningful percentage

(1)Property operating expenses include property operating expenses, real property taxes and property management fees.


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The following table presents revenues in excess of property operating expenses for the three months ended June 30, 2020, as compared to the three months ended June 30, 2019, by reportable segment. Total revenues in excess of property operating expenses increased 8% primarily as a result of our deferred tax assetssignificant recent acquisition activity, as offset by our recent dispositions. However, total revenues in excess of property operating expenses of our same-store properties decreased by 28% primarily due to adverse effects of the Coronavirus pandemic on our retail properties and liabilities related to book / tax timing differencesour international student housing properties, as described previously. To the extent the Coronavirus pandemic causes additional adverse conditions at our international subsidiaries.properties, our results in future periods could also be affected. All amounts below are in thousands, except for percentages:
 Three Months Ended June 30,Change
 20202019$%
Revenues in excess of property operating expenses(1)
Same-store properties
Domestic office investments$2,600  $2,813  $(213) (2)(8)%
Domestic residential/living investments489  504  (15) (3)%
Domestic retail investments1,197  2,816  (1,619) (2)(57)%
International industrial investments2,563  2,703  (140) (5)%
International residential/living investments616  1,548  (932) (2)(60)%
Total same-store properties$7,465  $10,384  $(2,919) (28)%
Recent acquisitions8,162  1,040  7,122  N/A*
Disposed properties367  3,321  (2,954) (89)%
Total revenues in excess of property operating expenses$15,994  $14,745  $1,249  %
* Not a meaningful percentage


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

(2)Please refer to the tables above for explanations regarding these changes.


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Six months ended June 30, 2020 compared to the six months ended June 30, 2019

The table below includes additional information regarding changes in our results of operations for the six months ended June 30, 2020 compared to the six months ended June 30, 2019, including explanations for significant changes.changes and any significant or unusual activity. As described previously, the Coronavirus pandemic had adverse effects on our results of operations for the three months ended June 30, 2020. These effects were primarily due to rent concessions at our retail properties and rent refunds at our international student housing properties. Our other segments were not materially affected. To the extent the Coronavirus pandemic causes additional adverse conditions at our properties, our results in future periods could also be affected. As described more completely below, most amounts increased in 2020 compared to 2019 as a result of significant additional capital raised and invested in real estate. 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)%

Six Months Ended June 30,Change
20202019$%
Revenues:
Rental revenue$60,120  $44,468  $15,652  35 %
Other revenue1,539  823  716  87 %
Total revenues61,659  45,291  16,368  36 %
Expenses:
Property operating expenses15,213  10,706  4,507  42 %
Real property taxes6,971  5,297  1,674  32 %
Property management fees2,549  1,644  905  55 %
Depreciation and amortization30,686  19,069  11,617  61 %
Acquisition related expenses291  17  274  N/A*
Asset management fees5,538  3,288  2,250  68 %
Performance participation allocation—  2,597  (2,597) (100)%
General and administrative expenses2,324  1,795  529  29 %
Total expenses63,572  44,413  19,159  43 %
Other income (expenses):
Gain (loss) on derivative instruments8,470  (1,187) 9,657  N/A*
Gain (loss) on investments in real estate-related securities(4,601) 1,327  (5,928) N/A*
Gain on sale of real estate130,101  —  130,101  N/A*
Foreign currency gains (losses)(1,145) (336) (809) N/A*
Interest expense(10,395) (8,514) (1,881) (22)%
Interest and other income710  372  338  91 %
Income (loss) before benefit (provision) for income taxes121,227  (7,460) 128,687  N/A*
Benefit (provision) for income taxes1,838  11  1,827  N/A*
Provision for income taxes related to sale of real estate(7,773) —  (7,773) N/A*
Net income (loss)$115,292  $(7,449) $122,741  N/A*
* Not a meaningful percentage

DepreciationTotal revenues: The increase in total revenue is primarily due to the additional real estate investments acquired between June 30, 2019 and amortization: DepreciationJune 30, 2020, offset by dispositions during the same period. We acquired ten and amortization expense increased fordisposed of three real estate investments between June 30, 2019 and June 30, 2020 and had a portfolio of eighteen real estate investments as of June 30, 2020 that contained 8.9 million leasable square feet, of which 95% was leased. Despite this increase, total revenues of our same-store properties decreased $3.4 million between the six months ended June 30, 2020 and June 30, 2019. Please refer to our “Same Store Analysis” below for additional discussion on the results of operations of our portfolio.
Property operating expenses: The increase in property operating expenses is primarily due to our significant net acquisition activity since June 30, 2019, compared toas described above. Despite this increase, property operating expenses of our same-store properties only increased $17,000 between the six months ended June 30, 20182020 and June 30, 2019. Please refer to our “Same Store Analysis” below for additional discussion on the results of operations of our portfolio.
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Real property taxes: The increase in real property taxes is primarily due to our significant net acquisition activity since June 30, 2019. Despite this increase, real property taxes of our same-store properties decreased $4,000 between the six months ended June 30, 2020 and June 30, 2019. Please refer to our “Same Store Analysis” below for additional discussion on the results of operations of our portfolio.
Property management fees: The increase in property management fees is primarily due to our significant net acquisition activity since June 30, 2019. Despite this increase, property management fees of our same-store properties only increased $16,000 between the six months ended June 30, 2020 and June 30, 2019. Please refer to our “Same Store Analysis” below for additional discussion on the results of operations of our portfolio.
Depreciation and amortization: The increase in depreciation and amortization expense is primarily due to the additional real estate investments acquired since June 30, 2019, offset by dispositions during the last six months of 2018 and first six months of 2019.same period, as previously described.
Asset management fees: Asset management fees increasedare charged based on the aggregate valuation of our real estate investments, as most recently determined in connection with the determination of our NAV. The increase in these fees is primarily due to the additional real estate investments made since June 30, 2019, as previously described.
Performance participation allocation: The decrease in performance participation allocation is a result of the fee not being earned by the Advisor for the six months ended June 30, 2019 as compared to the six months ended June 30, 2018 primarily2020 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 decreased for the six months ended June 30, 2019 compared to the six months ended June 30, 2018 primarily due to changesa decline in our NAV per share betweenduring 2020. Please see Item 2—Management’s Discussion and Analysis—NAV and Distributions for additional information concerning the periods.change in NAV per share increased by only $0.05 throughout the six months ended June 30, 2019, while a total increase of $0.22 per share was seen during the six months ended June 30, 2018.share.
General and administrative expenses: General and administrative expenses increased for the six months ended June 30, 2019 compared to the six months ended June 30, 2018 primarily due to increased legal costs and shareholder costs. We generally expect our G&A costsgeneral and administrative expenses to continue to increase as we continue raising capital from our Follow-On Offering.
Gain (loss) on derivative instruments: We enter into interest rate hedging instruments in order to limit our exposure against the variability of future interest rates on our variable interest rate borrowings as well as foreign currency forward contracts as economic hedges against the variability of foreign exchange rates. During the six months ended June 30, 2020, gains were primarily related to the position of our foreign currency forward contracts.
Gain (loss) on investments in real estate-related securities: We hold investments in real estate-related securities, which consist of common equities, preferred equities and debt investments of publicly traded REITs.  These amounts include realized gains (losses) related to securities sold during the year and unrealized gains (losses) based on values determined on a recurring basis. The loss on securities during the six months ended June 30, 2020 is primarily due to $2.8 million of unrealized losses on the portfolio resulting from the lows earlier in the year, which related to the Coronavirus pandemic. For information about the valuation of our investments in real estate-related securities, see Note 8—Fair Value Measurements in the notes to the accompanying financial statements.
Gain on sale of real estate:estate: We acquired the Domain Apartments in January 2016 for a contract purchase price of $58.1 million and we sold 2819 Loker Avenue Eastthe Domain Apartments for a contract sales price of $38.3$80.1 million on March 30, 2018January 7, 2020 and we recognized a gain of $29.5 million related to this sale. Additionally, we acquired 2819 Loker Avenue EastGoodyear Crossing II in December 2014August 2016 for a netcontract purchase price of $25.4 million.$56.2 million and we sold Goodyear Crossing II for a contract sales price of $72.0 million on February 14, 2020 and we recognized a gain of $20.2 million related to this sale. We acquired Bishop’s Square in March 2015 for €92.0 million (approximately $103.5 million assuming a rate of $1.13 per EUR as of the acquisition date) and we sold Bishop’s Square in April 2020 for €181.6 million(approximately $198.0 million assuming a rate of $1.09 per EUR as of the date of transaction). We recognized a gain on sale of $14.5this asset of $80.4 million, excluding taxes related to this sale.the sale, which are described below. We had no property dispositions during the six months ended June 30, 2019.
Foreign currency gains (losses): Foreign currency gains (losses) primarily reflects the effect of changes in foreign currency exchange rates on transactions that were denominated in currencies other than the functional currency of the related entity. During the six months ended June 30, 2020 and 2019, these losses were primarily related to the effect of remeasuring cash held in foreign currencies into their related functional currencies.
Interest expense: Interest expense increased fordue to the net increase in our principal amount of indebtedness outstanding during the period resulting from additional real estate investments acquired since June 30, 2019, as offset by the effects of the properties sold during 2020.
Interest and other income: Primarily relates to interest and dividend income associated with our investments in real estate-related securities. The increase in interest and dividend income earned during the six months ended June 30, 2020 compared to 2019 is due to an increaseadditional investments in our principal outstanding during the period resulting from real estate investments acquired during the last six months of 2018 and first six months ofestate-related securities since June 30, 2019.
Benefit (provision) for income taxes: Benefit for income taxes increased nearly $1.8 million primarily as a result of recent changes in tax laws related to our international student housing properties and their effect on book / tax timing differences at these properties.
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Provision for income taxes changed fromrelated to sale of real estate: The increase during the six months ended June 30, 2020 compared to 2019 relates to the income tax incurred as a $20,000 provisionresult of the sale of Bishop’s Square during April 2020, as described above.
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Same-Store Analysis

We evaluate our consolidated results of operations on a same-store basis, which allows us to analyze our property operating results excluding the effects of acquisitions and dispositions during the periods under comparison. Properties in our portfolio are considered same-store if they were owned for the full periods presented. Same-store properties for the six months ended June 30, 20182020 includes seven properties. The tables below include additional information regarding the operating results of our same-store properties for the current period as compared to a $11,000 benefitthe same period in the prior year.

The following table presents the same-store revenues for the six months ended June 30, 2020, as compared to the six months ended June 30, 2019, by reportable segment. Total revenues increased by 36% primarily as a result of 10 additional property acquisitions made between June 30, 2019 and June 30, 2020, as offset by the dispositions of three properties during the six months ended June 30, 2020. However, revenues of our same-store properties decreased by 10% primarily due to the adverse effects of the Coronavirus pandemic on our retail properties and international student housing properties, as described above. To the extent the Coronavirus pandemic causes additional adverse conditions at our properties, our results in future periods could also be affected. See below for additional explanations of notable changes in same-store revenues.
 Six months ended June 30,Change
 20202019$%
Revenues
Same-store properties
Domestic office investments$7,771  $8,337  $(566) (1)(7)%
Domestic residential/living investments2,943  2,943  —  — %
Domestic retail investments7,901  9,852  (1,951) (2)(20)%
International industrial investments9,440  9,440  —  — %
International residential/living investments3,464  4,319  (855) (3)(20)%
Total same-store properties$31,519  $34,891  $(3,372) (10)%
Recent acquisitions26,480  1,895  24,585  N/A*
Disposed properties3,660  8,505  (4,845) (57)%
Total revenues$61,659  $45,291  $16,368  36 %
* Not a meaningful percentage

(1)The decrease is primarily due to a $529,000 decline in rental revenue from tenant vacancies and one tenant reducing their leased space. Despite these changes, the property was 96% leased as of June 30, 2020.
(2)The decrease is primarily due to rent concessions negotiated with our deferred tax assetstenants during the three months ended June 30, 2020, due to the impact of the Coronavirus pandemic.
(3)The decrease is primarily due to rent refunds granted to our student housing tenants resulting from school closures in response to the Coronavirus pandemic.


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The following table presents the property operating expenses for the six months ended June 30, 2020, as compared to the six months ended June 30, 2019, by reportable segment. Property operating expenses increased by 40% primarily as a result of 10 additional property acquisitions made between June 30, 2019 and liabilities related to book / tax timing differencesJune 30, 2020, as offset by the dispositions of three properties in 2020. Additionally, property operating expenses at our international subsidiaries.retail properties decreased due to forced store closures and school closures resulting from the Coronavirus pandemic. See below for additional explanations of notable changes in same-store property operating expenses.
 Six months ended June 30,Change
 20202019$%
Property operating expenses(1)
Same-store properties
Domestic office investments$2,608  $2,628  $(20) (1)%
Domestic residential/living investments1,968  1,837  131  (2)%
Domestic retail investments4,073  4,225  (152) (4)%
International industrial investments4,215  4,159  56  %
International residential/living investments1,270  1,247  23  %
Total same-store properties$14,134  $14,096  $38  — %
Recent acquisitions9,638  855  8,783  N/A*
Disposed properties961  2,696  (1,735) (64)%
Total property operating expenses$24,733  $17,647  $7,086  40 %
* Not a meaningful percentage

(1)Property operating expenses include property operating expenses, real property taxes and property management fees.
(2)The increase in property operating expenses is due to one-time costs incurred at certain properties that are individually immaterial and not indicative of a trend.


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The following table presents revenues in excess of property operating expenses for the six months ended June 30, 2020, as compared to the six months ended June 30, 2019, by reportable segment. In total, revenues in excess of property operating expenses of the same-store properties increased 34% primarily as a result of our significant recent acquisition activity, as offset by our recent dispositions. However, total revenues in excess of property operating expenses of our same-store properties decreased by 16% primarily due to adverse effects of the Coronavirus pandemic on our retail properties and our international student housing properties, as described previously. To the extent the Coronavirus pandemic causes additional adverse conditions at our properties, our results in future periods could also be affected. All amounts below are in thousands, except for percentages:
 Six months ended June 30,Change
 20202019$%
Revenues in excess of property operating expenses(1)
Same-store properties
Domestic office investments$5,163  $5,709  $(546) (2)(10)%
Domestic residential/living investments975  1,106  (131) (2)(12)%
Domestic retail investments3,828  5,627  (1,799) (2)(32)%
International industrial investments5,225  5,281  (56) (1)%
International residential/living investments2,194  3,072  (878) (2)(29)%
Total same-store properties$17,385  $20,795  $(3,410) (16)%
Recent acquisitions16,842  1,040  15,802  N/A*
Disposed properties2,699  5,809  (3,110) (54)%
Total revenues in excess of property operating expenses$36,926  $27,644  $9,282  34 %
* Not a meaningful percentage

(1)Revenues in excess of property operating expenses include total revenues less property operating expenses, real property taxes and property management fees.
(2)Please refer to the tables above for explanations regarding these changes.

Funds from Operations

We believe funds from 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 and realized and unrealized gains and losses related to investments in real estate-related securities, 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 we may not recover any impairment charges.

FFO 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 should not be considered as an alternative to net income (loss) or income (loss) from continuing operations as an indication of our performance or as an alternative to cash flows from operating activities as an indication of our liquidity, but rather should be reviewed in conjunction
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with these and other GAAP measurements. Further, FFO is not intended to be used as a liquidity 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 FFO:

Prior to January 1, 2018, FFO included costs related to our acquisitions, including acquisition fees payable to our Advisor. Although these amounts reduced net income for periods prior to January 1, 2018, we generally funded such costs with proceeds from our public offerings and/or acquisition-related indebtedness and did not consider these fees and expenses in the evaluation of our operating performance. In January 2018, we adopted ASU 2017-01 which clarified the definition of a business and added guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. We expect that most of our real estate transactions completed after that date will be accounted for using the asset acquisition guidance and, accordingly, the related acquisition-related expenses incurred will be capitalized and included in the allocated purchase price and will not be 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 December 6, 2017, we no longer pay acquisition fees to our Advisor.

We utilize the definition of FFO as set forth by NAREIT. Our FFO 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 FFO. Accordingly, the predictive nature of 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. 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.


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The following section presents our calculation of FFO attributable to common stockholders and provides additional information related to our operations for the three and six months ended June 30, 20192020 and 20182019 and the period from inception through June 30, 20192020 (in thousands, except per share amounts). As we are in the capital raising and acquisition phase of our operations, FFO 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 June 30,Six Months Ended June 30,Period from July 31, 2013 (date of inception) through June 30, 2020
2020201920202019
Net income (loss)$73,540  $(3,450) $115,292  $(7,449) $59,372  
Depreciation and amortization (1)
14,457  9,741  30,686  19,069  158,672  
Gain on sale of real estate(80,457) —  (130,101) —  (144,592) 
Taxes related to sale of real estate7,773  —  7,773  —  7,773  
(Gain) loss on securities (2)
(3,136) (161) 4,601  (1,327) 2,686  
Adjustments for noncontrolling interests (3)
—  (7) —  (15) 117  
Funds From Operations attributable to common stockholders$12,177  $6,123  $28,251  $10,278  $84,028  
Basic and diluted income (loss) per common share$0.77  $(0.06) $1.23  $(0.14) $1.95  
Funds From Operations attributable to common stockholders per common share$0.13  $0.11  $0.30  $0.20  $2.75  
Weighted average shares outstanding95,490  57,004  93,900  52,049  30,580  
 Three Months Ended June 30, Six Months Ended June 30, Period from July 31, 2013 (date of inception) through June 30, 2019
 2019 2018 2019 2018 
Net income (loss)$(3,450) $(1,408) $(7,449) $9,968
 $(43,821)
 Depreciation and amortization (1)
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) (7) (15) (6) 124
Funds From Operations attributable to common stockholders$6,284
 $5,544
 $11,605
 $9,771
 $42,674
Basic and diluted income (loss) per common share$(0.06) $(0.04) $(0.14) $0.25
 $(2.03)
Funds From Operations attributable to common stockholders per common share$0.11
 $0.14
 $0.22
 $0.25
 $1.98
Weighted average shares outstanding57,004
 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.
(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.
(2)Represents the realized and unrealized gains and losses related to investments in real estate-related securities, which consist of common equities, preferred equities and debt investments of publicly traded REITs. These securities are incidental to our operations. As such, these gains and losses were excluded from our determination of FFO, as defined by NAREIT, in the current period. Additionally, certain immaterial amounts have now been included in prior periods for comparative purposes.

(3)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.

Set forth below is additional information, which may be helpful in assessing our operating results:

For the three and six months ended June 30, 2020, the Dealer Manager earned distribution and stockholder servicing fees of $1.4 million and $2.8 million, respectively, which are paid by Hines Global. For the three and six months ended June 30, 2019, the Dealer Manager earned distribution and stockholder servicing fees of $0.8 million and $1.5 million, respectively, which are paid by Hines Global. For the three and six months ended June 30, 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, 20192020 were $5.6$10.6 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, 2020, we did not incur any performance participation allocation fees. 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. Total performance participation allocation fees incurred were $13.9 million from inception through June 30, 2020. Refer to Note 7—Related Party Transactions for more information on the performance participation allocation.
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For the three and six months ended June 30, 2020, we recorded adjustments primarily related to 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 $1.4 million, respectively. 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 net increase to rental revenue of $0.4 million and $2.6 million, respectively. ForTotal of such adjustments from inception through June 30, 2020 were $13.2 million. Included in these adjustments is the amortization of deferred financing costs, which amounted to $0.5 million and $1.1 million for the three and six months ended June 30, 2018 we recorded non-cash adjustments primarily related to amortization of out-of-market lease intangibles2020, respectively and lease incentives and straight-line rent adjustments, which resulted in a net increase to rental revenue of $0.5$0.3 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$0.1 million for the three and six months ended June 30, 2019, respectively. Such amounts
We recorded non-cash adjustments related to derivative instruments and foreign currencies, which increased net income by approximately $2.8 million and reduced net income by approximately $7.5 million for the three and six months ended June 30, 2020, respectively. For the three and six months ended June 30, 2019, these adjustments reduced net income by approximately $0.4 million and $1.5 million, respectively. Total of such non-cash adjustments from inception through June 30, 2020 were insignificant in prior periods.


$3.9 million.
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 by our Advisor and/or cash resulting from a waiver or deferral of fees to fund distributions to our stockholders. For example, we funded 100% and 39% of total distributions for both the six months ended June 30, 20192020 and 2018, respectively,2019, 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 may include offering proceeds. 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 June 30, 2019,2020, we declared $70.2$116.9 million of distributions to our stockholders, compared to our total aggregate FFO of $42.7$84.0 million and our total aggregate net lossincome of $43.8$59.4 million for that period. We incurred acquisition fees and expenses of $23.3 million from inception through December 31, 2017 in connection with our real estate investments, which were recorded as reductions to net income (loss) and FFO. We adopted ASU 2017-01 on January 1, 2018, which allows us to capitalize acquisition-related costs and fees instead of treating them as operating expenses under GAAP. For the six months ended June 30, 2020, we declared $25.9 million of distributions to our stockholders compared to our total aggregate FFO of $28.3 million. For the six months ended June 30, 2019, we declared $14.8 million of distributions to our stockholders compared to our total aggregate FFO of $11.6 million. For the six months ended June 30, 2018, we declared $11.0 million of distributions to our stockholders compared to our total aggregate FFO of $9.8$10.3 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. 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 organization and offering costs. Relating to acquisition and operational stages, these include payments for certain services related to the management and 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 7—Related Party Transactions in Item 1 of this Quarterly Report on Form 10-Q, as well as Note 8 — 8—Related Party Transactions in our Annual Report on Form 10-K for the year ended December 31, 20182019 for additional information concerning our related party transactions and agreements.

Off-Balance Sheet Arrangements

As of June 30, 20192020 and December 31, 2018,2019, 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.
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Table of Contents

Subsequent Events

The Promenade Shops at Briargate        Wakefield Logistics

In August 2019,July 2020, we entered into a purchase and sale agreement to purchase The Promenade Shops at Briargate, a retail center located in Colorado Springs, Colorado.acquired Wakefield Logistics, from AEW UK Core Property Fund (the “Seller”). The net contract salespurchase price for The Promenade Shops at Briargate is expected to be approximately $93.2was £20.6 million (approximately $25.6 million), exclusive of transaction costs and closing prorations. We expectWakefield Logistics is an industrial logistics property located in Wakefield, United Kingdom, consisting of 207,115 square feet and is currently 100% leased to fundone tenant. The Seller is not affiliated with us or our affiliates.

        DekaBank Facility Agreement

In July 2020, we entered into a secured facility agreement with DekaBank Deutsche Girozentrale, which provides for borrowings up to a maximum aggregate principal amount of £55.1 million. The facility agreement has a termination date of July 2, 2023. Interest on our utilization of 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 salefacility will be consummated andcalculated as LIBOR plus a margin of 1.75% per annum, to be paid quarterly. On the effective date, we borrowed the full amount of the facility.

        Montrose Renovation

On August 13, 2020, we proactively closed the residential accommodations at Montrose, our deposit may notstudent housing property located in Ireland, for the upcoming 2020/2021 school year in order to more efficiently perform renovations including the replacement of certain building safety equipment systems. We were in the process of exterior cladding refurbishments when we identified certain interior systems requiring replacement. We are in the process of evaluating the full scope of the project, but we currently estimates the total cost of the renovation to be refunded in such event. Weapproximately $5 million to $8 million. Due to the proximity to the commencement of the upcoming school year, we expect the closingproperty to be vacant for the 2020/2021 academic year, which could result in reductions of this acquisitionrevenues in excess of property operating expenses of approximately $2 million to occur in September 2019, subject$3 million. Additionally, we may be required to a numberescrow certain interest payments or reduce the outstanding principal of closing conditions. However, we can provide no assurance that this acquisition will close onour $25 million mortgage at the expected timeline or at all.property.

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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 and currency risk are the primary market risks to which we are exposed. As of June 30, 2019,2020, we were exposed to the following market 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 June 30, 2019,2020, we had $431.3$392 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 $4.3$3.9 million in interest expense annually. Additionally, we have entered into interest rate cap agreements to limit our exposure to rising interest rates related to our mortgage loans secured by our investment properties. See Note 4—Debt Financing in the Notes to the Condensed Consolidated Financial Statements for more information concerning our outstanding debt and our interest rate exposure.

Foreign Currency Risk

We currently have real estate investments located in countries outside of the U.S. that are subject to the effects of exchange rate movements between the 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 foreign currencies for these investments, which provide natural hedges with regard to changes in exchange rates between the foreign currencies and U.S. dollar and reduce our exposure to exchange rate differences. Additionally, we are typically a net receiver of 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. The table below identifies the effect that a 10% immediate, unfavorable change in the exchange rates would have on the net book value of our international real estate investments, including any foreign currency mortgage loans and their year-to-date net income (loss), by foreign currency (in thousands)(1):

Reduction in Book Value as of June 30, 2020Reduction in Net Income (Loss) for the Six Months Ended June 30, 2020
EUR$15,767$13
GBP$5,732$60

(1) Our real estate assets in Poland were purchased in Euros and we expect that when we dispose of these assets, the sale transactions will also be denominated in Euros. Accordingly, we do not expect to have Polish zloty exposure upon disposition.

  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 June 30, 2019,2020, 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.

52

Change in Internal Controls

NoThere have not been any changes have occurred in our internal controlscontrol over financial reporting (as such term is defined in Rule 13a-15(f) under the Securities and Exchange Act of the Exchange Act)1934, as amended) during the quarter ended June 30, 20192020 that hashave materially affected, or isare reasonably likely to materially affect, our internal controlscontrol over financial reporting. We have not experienced any material impact to our internal control over financial reporting to date as a result of most of the employees of Hines and its affiliates working remotely due to the Coronavirus pandemic. We are continually monitoring and assessing the Coronavirus pandemic on our internal controls to minimize the impact to their design and operating effectiveness.


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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 August 14, 2019,2020, neither we nor any of our subsidiaries were a party to any material pending legal proceedings.

Item 1A.  Risk Factors

As of June 30, 2019,2020, there have been no material changes to the risk factors previously disclosed in response to “Part I - Item 1A. ‘Risk Factors’” in our Annual Report on Form 10-K for the year ended December 31, 2018,2019, filed with the SEC on March 29, 2019.30, 2020 and in “Part II - Item 1A. ‘Risk Factors’” of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed with the SEC on May 15, 2020.

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

During the three months ended June 30, 2019,2020, we did not sell or issue any equity securities that were not registered under the Securities Act of 1933, as amended.

Issuer Redemptions of Equity Securities
        
Our share redemption program may allow stockholders who 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. Redemptions under our share redemption program will be made on a monthly basis. Subject to the limitations of and restrictions on our share redemption program, and subject to funds being available as described below, shares redeemed under our share redemption program will be redeemed at the transaction price in effect on the date of redemption, which generally will be a price equal to the NAV per share applicable to the class of shares being redeemed and most recently disclosed by us in a public filing with the SEC (subject to the 5% holding discount described below).
Under our share redemption program, we may redeem during any calendar month shares whose aggregate value (based on the redemption price per share in effect when the redemption is effected) is 2% of our aggregate NAV 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 as of the last calendar day of the prior calendar quarter (the “5% Quarterly Limitation”). During a given quarter, if in each of the first two months of such quarter the 2% 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 our aggregate NAV 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% Quarterly Limitation.
There is no minimum holding period for shares under our share redemption program and stockholders may request that we redeem their shares at any time. However, shares that have not been outstanding for at least one year will be redeemed at 95% of the transaction price (the “5% holding discount”) that would otherwise 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 5% holding discount in the case of 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.
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 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 satisfy redemption requests (subject to the 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, 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 following: property operating expenses, taxes and insurance, debt service and
54

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 (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 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 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 the Securities Act) or current report on Form 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 our shares of 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, which represents all of the share repurchase requests received for the same period.

PeriodTotal Number of Shares RedeemedAverage Price Paid Per ShareTotal 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, 2020 to April 30, 2020271,461  $10.24  271,461  1,490,516  
May 1, 2020 to May 31, 2020342,187  $9.84  342,187  1,460,206  
June 1, 2020 to June 30, 2020423,848  $9.71  423,848  1,888,507  
Total1,037,496   1,037,496   

(1)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 pursuant to the share redemption program.

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)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 pursuant to the share redemption program.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

55

Item 5. Other Information

Not applicable.

56

Item 6. Exhibits
Exhibit
No.
Description
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
4.1
4.2
10.110.1*
10.2
10.3
10.4
10.5
10.6

10.731.1*
10.8
10.9
10.10
10.11
10.12
10.13
10.14
10.15
10.16
10.17
10.18
10.19
10.20
10.21
10.22
10.23
10.24
10.25*
31.1*


57

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 INCOME TRUST, INC.
August 14, 20192020By: /s/ Sherri W. SchugartJeffrey C. Hines
Sherri W. SchugartJeffrey C. Hines
President and Chief Executive Officer and
Chairman of the Board of Directors
August 14, 20192020By:  /s/ J. Shea Morgenroth
J. Shea Morgenroth
Chief Financial Officer

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