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): | December 20, 2016 |
Hines Global REIT, Inc.
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(Exact name of registrant as specified in its charter)
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| Maryland | | 000-53964 | | 26-3999995 |
| (State or other jurisdiction of incorporation) | | (Commission File Number) | | (I.R.S. Employer 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
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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 December 20, 2016, Hines Global REIT 100/140 Fourth Ave LLC (the “Seller”), a wholly-owned subsidiary of Hines Global REIT Properties LP, which is a subsidiary of Hines Global REIT, Inc. (“Hines Global” or the “Company”) sold Komo Plaza to GI TC Seattle, LLC (the “Purchaser”) for a net sale price of $276.0 million in aggregate, exclusive of transaction costs and closing prorations. Komo Plaza is a mixed-use two-building complex located in Seattle, Washington. The Purchaser is not affiliated with Hines Global or its affiliates.
Hines Global acquired Komo Plaza in December 2011 for a net purchase price of $160.0 million, excluding transaction costs and working capital reserves.
Item 7.01 Regulation FD Disclosure
On December 27, 2016, Hines Global issued a press release announcing the close of the sale of Komo Plaza. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information furnished under this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
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 filed herewith and incorporated herein by reference:
Hines Global REIT, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2016
Unaudited Pro Forma Condensed Consolidated Statements of Operations for the Nine Months Ended September 30, 2016 and the Year Ended December 31, 2015
Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements
(d) Exhibits
99.1 Press Release, dated December 27, 2016
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.
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| | | HINES GLOBAL REIT, INC. |
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| December 27, 2016 | | By: | /s/ J. Shea Morgenroth | |
| | | | J. Shea Morgenroth | |
| | | | Chief Accounting Officer and Treasurer | |
Hines Global REIT, Inc.
Unaudited Pro Forma Condensed Consolidated Financial Statements
On December 20, 2016, Hines Global REIT 100/140 Fourth Ave LLC, a wholly-owned subsidiary of Hines Global REIT Properties LP, which is a subsidiary of Hines Global REIT, Inc. (“Hines Global” or the “Company”) sold Komo Plaza, a mixed-use two-building complex located in Seattle, Washington, to GI TC Seattle, LLC (the “Purchaser”). The sales price for Komo Plaza was approximately $276.0 million in aggregate, exclusive of transaction costs and closing prorations. The Purchaser is not affiliated with Hines Global or its affiliates.
The following unaudited pro forma condensed consolidated financial information gives effect to the disposition of Komo Plaza, including the receipt of proceeds from the sale. In our opinion, all material adjustments necessary to reflect the effects of the above transaction have been made.
Hines Global REIT, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2016
(In thousands)
The following unaudited Pro Forma Condensed Consolidated Balance Sheet is presented assuming the disposition of Komo Plaza had occurred as of September 30, 2016. This unaudited Pro Forma Condensed Consolidated Balance Sheet should be read in conjunction with our unaudited Pro Forma Condensed Consolidated Statements of Operations appearing herein and our historical financial statements and notes thereto as filed in our quarterly report on Form 10-Q for the nine months ended September 30, 2016. This unaudited Pro Forma Condensed Consolidated Balance Sheet is not necessarily indicative of what the actual financial position would have been had we completed this transaction on September 30, 2016, nor does it purport to represent our future financial position.
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| | | As of September 30, 2016 (a) | | Adjustments for
Komo Plaza (c) | | | | Pro Forma |
| ASSETS | | | | | | | | |
| Investment property, at cost: | | | | | | | | |
| Buildings and improvements, net | | $ | 2,515,743 |
| | $ | (102,116 | ) | | | | $ | 2,413,627 |
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| Land | | 697,060 |
| | (19,560 | ) | | | | 677,500 |
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| Total investment property | | 3,212,803 |
| | (121,676 | ) | | | | 3,091,127 |
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| Investments in unconsolidated entities | | 24 |
| | — |
| | | | 24 |
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| Cash and cash equivalents | | 119,373 |
| | 265,212 |
| | (b) | | 384,585 |
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| Restricted cash | | 21,057 |
| | — |
| | | | 21,057 |
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| Derivative instruments | | 23 |
| | — |
| | | | 23 |
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| Tenant and other receivables, net | | 115,772 |
| | (3,897 | ) | | | | 111,875 |
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| Intangible lease assets, net | | 556,236 |
| | (14,659 | ) | | | | 541,577 |
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| Deferred leasing costs, net | | 122,600 |
| | (1,466 | ) | | | | 121,134 |
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| Deferred financing costs, net | | 2,692 |
| | — |
| | | | 2,692 |
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| Real estate loans receivable, net | | 32,991 |
| | — |
| | | | 32,991 |
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| Other assets | | 15,719 |
| | (238 | ) | | | | 15,481 |
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| TOTAL ASSETS | | $ | 4,199,290 |
| | $ | 123,276 |
| | | | $ | 4,322,566 |
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| LIABILITIES AND EQUITY | | | | | | | |
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| Liabilities: | | | | | | | |
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| Accounts payable and accrued expenses | | $ | 109,873 |
| | $ | (1,133 | ) | | | | $ | 108,740 |
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| Due to affiliates | | 14,284 |
| | (33 | ) | | | | 14,251 |
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| Intangible lease liabilities, net | | 86,649 |
| | (2,937 | ) | | | | 83,712 |
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| Other liabilities | | 39,524 |
| | (409 | ) | | | | 39,115 |
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| Distributions payable | | 20,393 |
| | — |
| | | | 20,393 |
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| Notes payable, net | | 2,483,424 |
| | — |
| | | | 2,483,424 |
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| Total liabilities | | 2,754,147 |
| | (4,512 | ) | | | | 2,749,635 |
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| Commitments and contingencies | | — |
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| | | | — |
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| Equity: | | | | | | | |
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| Preferred shares | | — |
| | — |
| | | | — |
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| Common shares | | 276 |
| | — |
| | | | 276 |
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| Additional paid-in capital | | 2,497,454 |
| | — |
| | | | 2,497,454 |
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| Accumulated distributions in excess of earnings | | (926,668 | ) | | 127,788 |
| | | | (798,880 | ) |
| Accumulated other comprehensive income (loss) | | (171,114 | ) | | — |
| | | | (171,114 | ) |
| Total stockholders’ equity | | 1,399,948 |
| | 127,788 |
| | | | 1,527,736 |
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| Noncontrolling interests | | 45,195 |
| | — |
| | | | 45,195 |
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| Total equity | | 1,445,143 |
| | 127,788 |
| | | | 1,572,931 |
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| TOTAL LIABILITIES AND EQUITY | | $ | 4,199,290 |
| | $ | 123,276 |
| | | | $ | 4,322,566 |
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See notes to unaudited pro forma condensed consolidated financial statements.
Hines Global REIT, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 2016
(In thousands, except per share amounts)
The following unaudited Pro Forma Condensed Consolidated Statement of Operations is presented assuming the disposition of Komo Plaza had occurred as of January 1, 2015. This unaudited Pro Forma Condensed Consolidated Statement of Operations should be read in conjunction with our unaudited Pro Forma Condensed Consolidated Balance Sheet and our historical financial statements and notes thereto as filed in our quarterly report on Form 10-Q for the nine months ended September 30, 2016. This unaudited Pro Forma Condensed Consolidated Statement of Operations is not necessarily indicative of what the actual results of operations would have been had we completed this transaction on January 1, 2015, nor does it purport to represent our future operations.
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| | | Nine Months Ended September 30, 2016 (a) | | Adjustments for Komo Plaza (b) | | Pro Forma |
| Revenues: | | |
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| Rental revenue | | $ | 332,965 |
| | $ | (15,036 | ) | | $ | 317,929 |
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| Other revenue | | 29,421 |
| | (3,213 | ) | | 26,208 |
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| Total revenues | | 362,386 |
| | (18,249 | ) | | 344,137 |
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| Expenses: | | | | | |
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| Property operating expenses | | 68,467 |
| | (5,385 | ) | | 63,082 |
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| Real property taxes | | 37,729 |
| | (960 | ) | | 36,769 |
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| Property management fees | | 7,238 |
| | (705 | ) | | 6,533 |
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| Depreciation and amortization | | 133,819 |
| | (4,140 | ) | | 129,679 |
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| Acquisition related expenses | | 263 |
| | — |
| | 263 |
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| Asset management and acquisition fees | | 27,473 |
| | — |
| | 27,473 |
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| General and administrative expenses | | 8,775 |
| | — |
| | 8,775 |
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| Total expenses | | 283,764 |
| | (11,190 | ) | | 272,574 |
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| Income (loss) before other income (expenses) and benefit (provision) for income taxes | | 78,622 |
| | (7,059 | ) | | 71,563 |
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| Other income (expenses): | | | | | |
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| Gain (loss) on derivative instruments | | (708 | ) | | — |
| | (708 | ) |
| Equity in earnings (losses) of unconsolidated entity | | 7,528 |
| | — |
| | 7,528 |
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| Gain (loss) on sale of real estate investments | | — |
| | — |
| | — |
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| Foreign currency gains (losses) | | (3,798 | ) | | | | (3,798 | ) |
| Interest expense | | (48,727 | ) | | — |
| | (48,727 | ) |
| Other income (expenses) | | 78 |
| | (6 | ) | | 72 |
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| Income (loss) before benefit (provision) for income taxes | | 32,995 |
| | (7,065 | ) | | 25,930 |
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| Benefit (provision) for income taxes | | (5,004 | ) | | — |
| | (5,004 | ) |
| Net income (loss) | | $ | 27,991 |
| | $ | (7,065 | ) | | $ | 20,926 |
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| Income (loss) per common share | | $ | 0.10 |
| | | | $ | 0.08 |
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| Weighted average number common shares outstanding | | 275,539 |
| | | | 275,539 |
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See notes to unaudited pro forma condensed consolidated financial statements.
Hines Global REIT, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2015
(In thousands, except per share amounts)
The following unaudited Pro Forma Condensed Consolidated Statement of Operations is presented assuming the disposition of Komo Plaza had occurred as of January 1, 2015. This unaudited Pro Forma Condensed Consolidated Statement of Operations should be read in conjunction with our unaudited Pro Forma Condensed 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, 2015. This unaudited Pro Forma Condensed Consolidated Statement of Operations is not necessarily indicative of what the actual results of operations would have been had we completed this transaction on January 1, 2015, nor does it purport to represent our future operations.
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| | | Year Ended December 31, 2015 (a) | | Adjustments for
Komo Plaza
(b) | | Pro Forma |
| Revenues: | | |
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| Rental revenue | | $ | 441,709 |
| | $ | (20,058 | ) | | $ | 421,651 |
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| Other revenue | | 35,164 |
| | (4,305 | ) | | 30,859 |
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| Total revenues | | 476,873 |
| | (24,363 | ) | | 452,510 |
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| Expenses: | | | | | |
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| Property operating expenses | | 91,902 |
| | (7,323 | ) | | 84,579 |
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| Real property taxes | | 47,431 |
| | (1,462 | ) | | 45,969 |
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| Property management fees | | 10,337 |
| | (888 | ) | | 9,449 |
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| Depreciation and amortization | | 186,965 |
| | (5,557 | ) | | 181,408 |
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| Acquisition related expense | | 10,472 |
| | — |
| | 10,472 |
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| Asset management and acquisition fees | | 44,522 |
| | — |
| | 44,522 |
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| General and administrative expenses | | 8,597 |
| | — |
| | 8,597 |
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| Total expenses | | 400,226 |
| | (15,230 | ) | | 384,996 |
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| Income (loss) before other income (expenses) and benefit (provision) for income taxes | | 76,647 |
| | (9,133 | ) | | 67,514 |
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| Other income (expenses): | | | | | | — |
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| Gain (loss) on derivative instruments | | 562 |
| | — |
| | 562 |
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| Gain (loss) on sale of real estate investments | | 14,684 |
| | — |
| | 14,684 |
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| Foreign currency gains (losses) | | (21,468 | ) | | | | (21,468 | ) |
| Interest expense | | (71,288 | ) | | — |
| | (71,288 | ) |
| Interest income | | 427 |
| | (2 | ) | | 425 |
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| Income (loss) before benefit (provision) for income taxes | | (436 | ) | | (9,135 | ) | | (9,571 | ) |
| Benefit (provision) for income taxes | | (4,518 | ) | | — |
| | (4,518 | ) |
| Net income (loss) | | $ | (4,954 | ) | | $ | (9,135 | ) | | $ | (14,089 | ) |
| Income (loss) per common share | | $ | (0.02 | ) | | | | $ | (0.05 | ) |
| Weighted average number common shares outstanding | | 272,773 |
| | | | 272,773 |
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See notes to unaudited pro forma condensed consolidated financial statements.
Hines Global REIT, Inc.
Unaudited Notes to Pro Forma Condensed Consolidated Financial Statements
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2016
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| a. | Reflects the Company’s historical condensed consolidated balance sheet as of September 30, 2016. |
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| b. | Reflects the proceeds received from the sale of Komo Plaza less any cash on hand at Komo Plaza as of September 30, 2016. |
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| c. | Reflects the Company’s disposition of Komo Plaza. Amounts represent the adjustments necessary to remove the assets and liabilities associated with Komo Plaza. |
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Nine Months Ended September 30, 2016
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| a. | Reflects the Company’s historical condensed consolidated statement of operations for the nine months ended September 30, 2016. |
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| b. | Reflects the Company’s disposition of Komo Plaza. Amounts represent the adjustments necessary to remove the historical revenues and expenses of Komo Plaza, including property operating expenses, property taxes, management fees, depreciation and amortization, and other income associated with Komo Plaza. Such adjustments exclude the effect of the gain on sale, as this represents a non-recurring transaction. |
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Year Ended December 31, 2015
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| a. | Reflects the Company’s historical condensed consolidated statement of operations for the year ended December 31, 2015. |
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| b. | Reflects the Company’s disposition of Komo Plaza. Amounts represent the adjustments necessary to remove the historical revenues and expenses of Komo Plaza, including property operating expenses, property taxes, management fees, depreciation and amortization, and interest income associated with Komo Plaza. Such adjustments exclude the effect of the gain on sale, as this represents a non-recurring transaction. |
Exhibit Index
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| Exhibit No. | | Description |
| 99.1 | | Press Release, dated December 27, 2016 |
