UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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| Date of Report (Date of Earliest Event Reported): | | April 22, 2010 |
Hines Real Estate Investment Trust, Inc.
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(Exact name of registrant as specified in its charter)
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| Maryland | 000-50805 | 20-0138854 |
_____________________ (State or other jurisdiction | _____________ (Commission | ______________ (I.R.S. Employer |
| of incorporation) | File Number) | Identification No.) |
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| 2800 Post Oak Blvd, Suite 5000, Houston, Texas | | 77056-6118 |
_________________________________ (Address of principal executive offices) | | ___________ (Zip Code) |
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| Registrant’s telephone number, including area code: | | (888) 220-6121 |
Not Applicable
______________________________________________
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.01 Completion of Acquisition or Disposition of Assets.
On April 22, 2010, Hines Real Estate Investment Trust, Inc. ("Hines REIT") sold Distribution Parks Elouveira and Vinhedo, two industrial properties located in Curitiba, Brazil, to BR Properties SA. In addition, during the first quarter of 2010, Hines REIT sold Distribution Park Araucaria, an industrial property located in Sao Paulo, Brazil, to BR Properties SA. The aggregate net proceeds from these sales were $127.9 milllion after transaction costs and local taxes. The buyer is not affiliated with Hines REIT or its affiliates.
Item 7.01 Regulation FD Disclosure.
On April 28, 2010, Hines Interests Limited Partnership ("Hines") issued a press release relating to Hines REIT's disposition of Distribution Parks Araucaria, Elouveira and Vinhedo. A copy of such press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. Pursuant to the rules and regulations of the Securities and Exchange Commission, such exhibit and the information set forth therein are deemed to have been furnished and shall not be deemed to be "filed" under the Securities Exchange Act of 1934.
With the authorization of its board of directors, Hines REIT declared distributions for the month of May 2010. These distributions will be calculated based on shareholders of record each day during the month of May 2010 in an amount equal to $0.00165699 per share, per day and will be paid in July 2010 in cash or reinvested in stock for those participating in Hines REIT's dividend reinvestment plan.
Item 9.01 Financial Statements and Exhibits.
(b) Pro Forma Financial Information. The following financial information is submitted at the end of this Current Report on Form 8-K and is furnished herewith and incorporated by reference.
Hines Real Estate Investment Trust, Inc.
Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 2009
Unaudited Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2009
Notes to the Unaudited Pro Forma Consolidated Financial Statements
(d) Exhibits:
99.1 Press Release of Hines dated April 28, 2010.
Statements in this Current Report on Form 8-K, including intentions, beliefs, expectations or projections relating to items such as the timing of payment of distributions are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based on current expectations and assumptions with respect to, among other things, future economic, competitive and market conditions and future business decisions that may prove incorrect or inaccurate. Important factors that could cause actual results to differ materially from those in the forward looking statements include the risks associated with Hines REIT's ability to generate cash flow sufficient to fund distributions and other risks described in the “Ris k Factors” section of Hines REIT’s Registration Statement on Form S-11, its Annual Report on Form 10-K for the year ended December 31, 2009 and its other filings with the Securities and Exchange Commission.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | | Hines Real Estate Investment Trust, Inc. |
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| April 28, 2010 | | By: | | /s/ Ryan T. Sims |
| | | | | Name: Ryan T. Sims |
| | | | | Title: Chief Accounting Officer |
Exhibit Index
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| Exhibit No. | | Description |
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| 99.1 | | Press Release of Hines dated April 28, 2010 |
Hines Real Estate Investment Trust, Inc.
Unaudited Pro Forma Consolidated Financial Statements
On April 22, 2010, a subsidiary of Hines Real Estate Investment Trust, Inc. (“Hines REIT”) sold Distribution Parks Elouveira and Vinhedo, two industrial properties located in Curitiba, Brazil, to BR Properties SA. In addition, during the first quarter of 2010, Hines REIT sold Distribution Park Araucaria, an industrial property located in Sao Paulo, Brazil, to BR Properties SA. The aggregate net proceeds from the sales of these three industrial properties (collectively, the “Properties”) were $127.9 milllion after transaction costs and local taxes. The buyer is not affiliated with Hines REIT or its affiliates.
The following unaudited pro forma consolidated financial information gives effect to the disposition of the Properties, including the receipt of proceeds from the sale. In our opinion, all material adjustments necessary to reflect the effects of the above transactions have been made.
Hines Real Estate Investment Trust, Inc.
Unaudited Pro Forma Consolidated Balance Sheet
As of December 31, 2009
(in thousands)
The following unaudited Pro Forma Consolidated Balance Sheet is presented as if we had disposed of the Properties as of December 31, 2009. This unaudited Pro Forma Consolidated Balance Sheet should be read in conjunction with our unaudited Pro Forma Consolidated Statement of Operations and our historical financial statements and notes thereto as filed in our annual report on Form 10-K for the year ended December 31, 2009. This unaudited Pro Forma Consolidated Balance Sheet is not necessarily indicative of what the actual financial position would have been had we completed these transactions on December 31, 2009, nor does it purport to represent our future financial position.
| | | As of December 31, 2009 (a) | | | | | | Adjustments for Elouveira/Vinhedo | | | Pro Forma | |
| ASSETS | | | | | | | | | | | | |
| Investment property, at cost: | | | | | | | | | | | | |
| Buildings and improvements, net | | $ | 1,889,135 | | | $ | - | | | $ | (75,755 | )(b) | | $ | 1,813,380 | |
| Land | | | 466,737 | | | - | | | | (20,716 | )(b) | | | 446,021 | |
| Total investment property | | | 2,355,872 | | | | - | | | | (96,471 | ) | | | 2,259,401 | |
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| Investment in unconsolidated entities | | | 379,057 | | | | - | | | | - | | | | 379,057 | |
| Assets of property held for sale | | | 42,499 | | | | (42,499 | )(c) | | | - | | | | - | |
| Cash and cash equivalents | | | 41,577 | | | | 35,359 | (d) | | | 93,264 | (d) | | | 170,200 | |
| Restricted cash and marketable securities | | | 6,610 | | | | - | | | | - | | | | 6,610 | |
| Distributions receivable | | | 2,208 | | | | - | | | | - | | | | 2,208 | |
| Interest rate swap contracts | | | - | | | | - | | | | - | | | | - | |
| Tenant and other receivables | | | 48,208 | | | | - | | | | (1,122 | )(b) | | | 47,086 | |
| Intangible lease assets, net | | | 293,053 | | | | - | | | | (9,277 | )(b) | | | 283,776 | |
| Deferred leasing costs | | | 53,925 | | | | - | | | | - | | | | 53,925 | |
| Deferred financing costs, net | | | 8,197 | | | | - | | | | - | | | | 8,197 | |
| Other assets | | | 108,574 | | | | - | | | | - | | | | 108,574 | |
| TOTAL ASSETS | | $ | 3,339,780 | | | $ | (7,140 | ) | | $ | (13,606 | ) | | $ | 3,319,034 | |
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| LIABILITIES AND EQUITY | | | | | | | | | | | | | | | | |
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| Liabilities: | | | | | | | | | | | | | | | | |
| Accounts payable and accrued expenses | | $ | 62,506 | | | $ | - | | | $ | (394 | )(b) | | $ | 62,112 | |
| Liabilities of property held for sale | | | 355 | | | | (355 | )(c) | | | - | | | | - | |
| Due to affiliates | | | 10,304 | | | | - | | | | - | | | | 10,304 | |
| Intangible lease liabilities, net | | | 92,471 | | | | - | | | | - | | | | 92,471 | |
| Other liabilities | | | 18,602 | | | | - | | | | (13 | )(b) | | | 18,589 | |
| Interest rate swap contracts | | | 66,776 | | | | - | | | | - | | | | 66,776 | |
| Participation interest liability | | | 57,843 | | | | - | | | | - | | | | 57,843 | |
| Distributions payable | | | 33,892 | | | | - | | | | - | | | | 33,892 | |
| Notes payable | | | 1,588,103 | | | | - | | | | - | | | | 1,588,103 | |
| Total liabilities | | | 1,930,852 | | | | (355 | ) | | | (407 | ) | | | 1,930,090 | |
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| Commitments and Contingencies | | | | | | | | | | | | | | | | |
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| Shareholders' equity: | | | | | | | | | | | | | | | | |
| Preferrred shares | | | | | | | | | | | | | | | | |
| Common shares | | | 217 | | | | - | | | | - | | | | 217 | |
| Additional paid-in capital | | | 1,661,006 | | | | - | | | | - | | | | 1,661,006 | |
| Retained deficit | | | (300,703 | ) | | | 2,412 | (e) | | | 13,158 | (e) | | | (285,133 | ) |
| Accumulated other comprehensive income | | | 48,408 | | | | (9,197 | )(e) | | | (26,357 | )(e) | | | 12,854 | |
| Shareholders' equity | | | 1,408,928 | | | | (6,785 | ) | | | (13,199 | ) | | | 1,388,944 | |
| Noncontrolling interests | | | - | | | | - | | | | - | | | | - | |
| Total equity | | | 1,408,928 | | | | (6,785 | ) | | | (13,199 | ) | | | 1,388,944 | |
| TOTAL LIABILITIES AND EQUITY | | $ | 3,339,780 | | | $ | (7,140 | ) | | $ | (13,606 | ) | | $ | 3,319,034 | |
Hines Real Estate Investment Trust, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December, 31, 2009
The following unaudited Pro Forma Consolidated Statement of Operations is presented as if we had disposed of the Properties as of January 1, 2009. This unadited Pro Forma Consolidated Statement of Operations should be read in conjunction with our unaudited Pro Forma Consolidated Balance Sheet and our historical financial statements and notes thereto as filed in our annual report on Form 10-K for the year ended December 31, 2009. This unaudited Pro Forma Consolidated Statement of Operations is not necessarily indicative of what the actual results of operations would have been had we completed these transactions on January 1, 2009, nor does it purport to represent our future operations.
| | | Year Ended December 31, 2009 (a) | | | | | | Adjustments for Elouveira/Vinhedo (b) | | | Pro Forma | |
| Revenues: | | | | | | | | | | | | | | | |
| Rental revenue | | $ | 337,455 | | | $ | - | | | $ | (10,011 | ) | | $ | 327,444 | |
| Other revenue | | | 27,781 | | | - | | | | - | | | | 27,781 | |
| | | | 365,236 | | | | - | | | | (10,011 | ) | | | 355,225 | |
| | | | | | | | | | | | | | | | | |
| Expenses: | | | | | | | | | | | | | | | | |
| Property operating expenses | | | 93,057 | | | | - | | | | (432 | ) | | | 92,625 | |
| Real property taxes | | | 45,887 | | | | - | | | | (396 | ) | | | 45,491 | |
| Property management fees | | | 8,016 | | | | - | | | | (117 | ) | | | 7,899 | |
| Depreciation and amortization | | | 124,183 | | | | - | | | | (4,454 | ) | | | 119,729 | |
| Asset management and acquisition fees | | | 27,984 | | | | - | | | | - | | | | 27,984 | |
| Organizational and offering expenses | | | - | | | | - | | | | - | | | | - | |
| General and administrative expenses | | | 6,108 | | | | - | | | | - | | | | 6,108 | |
| Other losses | | | 3,441 | | | | - | | | | - | | | | 3,441 | |
| Total Expenses | | | 308,676 | | | | - | | | | (5,399 | ) | | | 303,277 | |
| Income (loss) before other income (expense), provision for income taxes and equity in losses of unconsolidated entities, net | | | 56,560 | | | | - | | | | (4,612 | ) | | | 51,948 | |
| Gain on derivative instruments, net | | | 49,297 | | | | | | | | | | | | 49,297 | |
| Other | | | - | | | | - | | | | - | | | | - | |
| Interest expense | | | (91,538 | ) | | | - | | | | - | | | | (91,538 | ) |
| Interest income | | | 472 | | | | - | | | | (44 | ) | | | 428 | |
| Income (loss) before other income (expense), provision for income taxes and equity in losses of unconsolidated entities, net | | | 14,791 | | | | - | | | | (4,656 | ) | | | 10,135 | |
| Provision for income taxes | | | (1,605 | ) | | | - | | | | 1,080 | | | | (525 | ) |
| Equity in losses of unconsolidated entities, net | | | (8,777 | ) | | | - | | | | - | | | | (8,777 | ) |
| Income (loss) from continuing operations | | | 4,409 | | | | - | | | | (3,576 | ) | | | 833 | |
| Income from discontinued operations, net of taxes | | | 1,664 | | | | (1,664 | )(c) | | | - | | | | - | |
| Gain on sale of real estate | | | 612 | | | | - | | | | - | | | | 612 | |
| Net income | | | 6,685 | | | | (1,664 | ) | | | (3,576 | ) | | $ | 1,445 | |
| Less: Net income attributable to noncontrolling interests | | | (4,065 | ) | | | - | | | | - | | | | (4,065 | ) |
| Net Income (loss) attributable to common shareholders | | $ | 2,620 | | | $ | (1,664 | ) | | $ | (3,576 | ) | | $ | (2,620 | ) |
| Income (loss) per common share | | $ | 0.01 | | | | | | | | | | | $ | (0.01 | ) |
| Weighted average number common shares outstanding | | | 207,807 | | | | | | | | | | | | 207,807 | |
Unaudited Notes to Pro Forma Consolidated Financial Statements
Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 2009
| a. | Reflects the Company's historical consolidated balance sheet as of December 31, 2009. |
| b. | Reflects the Company's disposition of Distribution Parks Elouveira and Vinhedo. Amounts represent the necessary adjustments to remove the assets and liabilities associated with Distribution Parks Elouveira and Vinhedo. |
| c. | Reflects the Company's disposition of Distribution Park Aruacuaria which was classifed as an asset held for sale in our historical consolidated balance sheet as of December 31, 2009. |
| d. | Reflects the proceeds received from the sale of the Properties less any cash on hand as of December 31, 2009. |
| e. | Reflects the adjustments necessary to remove the retained deficit and accumulated other comprehensive income related to the Properties. |
Unaudited Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2009
| a. | Reflects the Company's historical consolidated statement of operations for the year ended December 31, 2009. |
| b. | Reflects the Company's disposition of Distribution Parks Elouveira and Vinhedo. Amount represents the necessary adjustments to remove the historical revenues and expenses of Distribution Parks Elouveira and Vinhedo, including property operating expenses, property taxes, management fees, depreciation and amortization, interest income and income taxes associated with Distribution Parks Elouveira and Vinhedo. |
| c. | Reflects the Company's disposition of Distribution Park Aruacuaria which was classifed as income from discontinued operations in our historical consolidated statement of operations for the year ended December 31, 2009. |
