| Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting - Liquidation Basis The Company adopted the liquidation basis of accounting as of July 1, 2020 and for the period subsequent to July 1, 2020 as a result of the entering in to the Liquidating Trust Agreement on June 30, 2020. Accordingly, on July 1, 2020 the carrying value of the Company’s assets were adjusted to their estimated net realizable value, or liquidation value, which represents the estimated amount of cash that the Company reasonably expects to collect from their sale. Liabilities are carried at their contractual amounts due or estimated settlement amounts. The liquidation value of the Company’s net assets is presented on an undiscounted basis. Due to the uncertainty in the timing of the anticipated sale amounts and dates and the estimated cash flows, actual operating results and sale proceeds may differ materially from the amounts estimated. Additionally, the Company accrues costs and income that it expects to incur and earn through the end of the liquidation period, to the extent it has a reasonable basis for estimation. This also includes e stimated costs to dispose of assets. These amounts are classified as a liability for estimated costs in excess of estimated income during liquidation in the consolidated statement of net assets. Actual costs and income may differ from amounts reflected in the financial statements because of inherent uncertainty in estimating future events. These differences may be material. As a result of the change to the liquidation basis of accounting, the Company’s financial statements as of and for the year ended December 31, 2020 are presented using two different presentations. For the liquidation basis of accounting, a consolidated statement of net assets is presented, which represents the estimated liquidation value available to trustees upon liquidation. In addition, a consolidated statement of changes in net assets reflects changes in net assets from the original estimated values as of July 1, 2020 through December 31, 2020. The consolidated balance sheet as of December 31, 2019, and the consolidated statements of operations and comprehensive income (loss), consolidated statement of changes in equity and statements of cash flow for the periods ended June 30, 2020, December 31, 2019 and 2018 included in this Annual Report on Form 10-K are presented based on a going concern basis, which contemplated the realization of assets and liabilities in the normal course of business. The Company no longer presents a Consolidated Balance Sheet, a Consolidated Statement of Operations and Comprehensive Income (Loss), a Consolidated Statement of Changes in Equity or a Consolidated Statement of Cash Flows. Use of Estimates The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities and contingencies as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company evaluates its assumptions and estimates on an ongoing basis. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Additionally, application of the Company’s accounting policies involves exercising judgments regarding assumptions as to future uncertainties. Actual results may differ from these estimates under different assumptions or conditions. Basis of Presentation The consolidated financial statements of the Company include the accounts of Hines Global REIT, Inc. or HGR Liquidating Trust, the Operating Partnership and its wholly-owned subsidiaries and the joint ventures as well as amounts related to noncontrolling interests. All intercompany balances and transactions have been eliminated in consolidation. The Company evaluates the need to consolidate joint ventures in accordance with GAAP. In accordance with GAAP, the Company will consolidate joint ventures that are determined to be variable interest entities for which it is the primary beneficiary. Further, partially owned real estate joint ventures over which the Company has a controlling financial interest are consolidated in its financial statements. In determining if the Company has a controlling financial interest, it considers factors such as ownership interest, authority to make decisions, kick-out rights and substantive participating rights. Management continually analyzes and assesses reconsideration events, including changes in these factors, to determine if the consolidation treatment remains appropriate. Partially owned real estate joint ventures where the Company does not have a controlling financial interest, but has the ability to exercise significant influence, are accounted for using the equity method. Coronavirus pandemic The Coronavirus pandemic has had, and is expected to continue to have, an adverse impact on overall market conditions and the Company’s disposition process. The pandemic has led governments and other authorities around the world, including in Poland and Russia and in the states across the U.S. where the Company’s assets are located, to impose measures intended to control its spread, including restrictions on freedom of movement and business operations such as travel bans, border closings, business closures, quarantines and shelter-in-place orders. While operations in certain areas have been allowed to fully or partially re-open, some areas, including Poland, are experiencing new closures or restrictions subsequent to re-opening due to rising numbers of new cases, and no assurance can be given that such closures or restrictions will not continue to occur. These restrictions have significantly disrupted business activity globally, and could have an adverse impact on the performance of certain of the Company’s investments, as well as the timing of the disposition of its remaining assets. 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. While it is difficult to ascertain the long-term impact it will have on commercial real estate markets and the successful disposition of the Company’s remaining assets, the pandemic presents material uncertainty and risk with respect to the current and future performance and value of its investments. The Company’s remaining real property investments have been impacted by the pandemic and in some cases significantly. The Company’s tenants operate in industries which are being adversely affected by the disruption to business caused by the outbreak of the Coronavirus. From time to time during the pandemic, many of the Company’s tenants have been subject to shelter in place and other quarantine restrictions, and the restrictions were in place for an extended period of time in some cases. These restrictions have had a particularly adverse impact on the Company’s retail tenants (other than grocery tenants), as government instructions regarding social distancing and mandated closures have reduced and, in some cases, eliminated customer foot traffic, causing some of its retail tenants to temporarily close their brick and mortar stores. As of December 31, 2020, the Company’s owned three retail properties in the U.S., which comprised of approximately 75.0% of its remaining portfolio (based on the estimated value of each real estate investment as of December 31, 2020). While rent collections were adversely affected in the early months of the pandemic, consumer traffic at these properties has recovered to near pre-pandemic levels in recent months and rent collections recovered to 99% of billed rent by the end of the year ended December 31, 2020. However, rising infection rates and the potential for additional government mandated shutdowns could reduce consumer traffic at the retail properties and negatively impact future rent collections and the Company’s ability to dispose of these properties at the time and at the price that it believes is appropriate. The Coronavirus pandemic has also caused, and is likely to continue to cause, severe economic, market and other disruptions worldwide. The Company cannot assure you that conditions in the bank lending, capital and other financial markets will not continue to deteriorate as a result of the pandemic, or that its access to capital and other sources of funding will not become constrained, which could adversely affect the availability and terms of borrowings, renewals or refinancings. The extent of the Coronavirus pandemic’s effect on the timing and success of the Company’s disposition process will depend on future developments, including the duration and lingering impact of the pandemic, the effectiveness of vaccines and speed of their distribution, continued resurgences in Coronavirus cases, and the duration of government measures to mitigate the pandemic, all of which are uncertain and difficult to predict. Due to the speed with which the situation is developing, the Company is not able at this time to estimate the effect of these factors on its business or its disposition process, but any of these factors could have a material adverse effect on its business, results of operations, cash flows and financial condition, as well as the timing and amount of additional distributions to its investors. International Operations The British pound (“GBP”) is the functional currency for the Company’s subsidiaries in the United Kingdom, the Russian ruble (“RUB”) is the functional currency for the Company’s subsidiaries in Russia, the Polish zloty (“PLN”) is the functional currency for the Company’s subsidiaries in Poland, the Australian dollar (“AUD”) is the functional currency for the Company’s subsidiaries in Australia and the Euro (“EUR”) is the functional currency for the Company’s subsidiaries in Germany and France. These subsidiaries have translated their financial statements into U.S. dollars for reporting purposes. Assets and liabilities are translated at the exchange rate in effect as of the balance sheet date while income statement accounts are translated using the average exchange rate for the period and significant nonrecurring transactions using the rate on the transaction date. Gains or losses resulting from translation are included in accumulated other comprehensive income (loss) within stockholders’ equity. Foreign currency transaction gains and losses are recorded in foreign currency gains (losses) on the Consolidated Statement of Operations and result from the effect of changes in exchange rates on transactions denominated in currencies other than a subsidiary’s functional currency, including transactions between consolidated subsidiaries. An exception is made where an intercompany loan or advance is deemed to be of a long-term investment nature, in which instance foreign currency transaction gains or losses are included as currency translation adjustments and are reported in the Consolidated Statement of Equity as accumulated other comprehensive gains or losses. During the year ended December 31, 2018, the Company sold One Westferry Circus, the German Logistics Properties, the Australia Portfolio and the Poland Logistics Portfolio. Upon the disposal of these properties, the Company realized a loss of $58.3 million related to the currency translation adjustment, which was included in the gain (loss) on sale of real estate investments in its consolidated statement of operations. Additionally, during the year ended December 31, 2019, the Company sold FM Logistic. Upon the disposal of this property, the Company realized a loss of $36.8 million related to the currency translation adjustment, which was included in the gain (loss) on the sale of real estate investments in its consolidated statement of operations. During the year ended December 31, 2020, the Company sold Perspective Defense. Upon the disposal of this property, the Company realized a loss of $7.8 million related to the currency translation adjustment, which was included in the gain (loss) on the sale of real estate investments in its consolidated statement of operations. Assets and Liabilities Held for Sale - Going Concern Basis As described above, in connection with the execution of the Plan of Liquidation, the Company is actively working to sell its remaining properties. Accordingly, in July 2019, the Company determined that all of its real estate properties and their related assets and associated liabilities should be classified as held for sale in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360-10. ASC 360-10 requires amounts related to assets held for sale to be recorded at the lower of their current carrying value or their estimated net realizable value (i.e. fair value less costs to sell). As a result, the Company recorded impairment losses on six of its properties during the six months ended June 30, 2019 based on the offers received and third party broker consultations, which were obtained in conjunction with its marketing process. See Note 9 — Fair Value Measurements for additional information regarding these impairment charges. As ASC 360-10 requires the separate presentation of assets and liabilities classified as held for sale, the Company has aggregated and presented these assets and liabilities each as one line on the Consolidated Balance Sheet (“assets held for sale” and “liabilities associated with assets held for sale”, respectively), which are described further in the tables below. Further, as a result of the held for sale designation, no depreciation or amortization related to the properties was recorded after July 2019. These assets did not qualify to be classified as discontinued operations, because the sale of these assets does not represent a strategic shift in the Company’s operations. As of June 30, 2020 and December 31, 2019, assets held for sale consisted of the following (in thousands): June 30, 2020 December 31, 2019 Investment property, net $ 814,541 $ 1,179,770 Restricted cash 6,233 12,780 Tenant and other receivables, net 47,452 50,278 Intangible lease assets, net 84,509 97,030 Right-of-use asset, net 91,543 97,499 Deferred leasing costs, net 71,075 102,366 Deferred financing costs, net 875 845 Other assets 8,564 11,290 Total assets held for sale $ 1,124,792 $ 1,551,858 As of June 30, 2020 and December 31, 2019, liabilities associated with assets held for sale consisted of the following (in thousands): June 30, 2020 December 31, 2019 Accounts payable and accrued expenses $ 32,203 $ 48,459 Due to affiliates 426 2,003 Intangible lease liabilities, net 43,358 45,425 Other liabilities 14,877 21,328 Notes payable, net (1) 221,420 536,685 Total liabilities associated with assets held for sale $ 312,284 $ 653,900 (1) Includes outstanding liabilities related to the Company’s Revolving Credit Facility, which is collateralized by several of the remaining properties and must be repaid after the sale of those properties. Investment Property and Lease Intangibles - Going Concern Basis Real estate assets acquired by the Company are stated at fair value at the date of acquisition less accumulated depreciation. Depreciation is computed using the straight-line method. The estimated useful lives for computing depreciation are generally 10 years for furniture and fixtures, 15-20 years for electrical and mechanical installations and 40 years for buildings. Major replacements that extend the useful life of the assets are capitalized and maintenance and repair costs are expensed as incurred. The estimated fair value of acquired in-place leases are the costs the Company would have incurred to lease the properties to the occupancy level of the properties at the date of acquisition. Such estimates include the fair value of leasing commissions, legal costs and other direct costs that would be incurred to lease the properties to such occupancy levels. Additionally, the Company evaluates the time period over which such occupancy levels would be achieved. Such evaluation will include an estimate of the net market-based rental revenues and net operating costs (primarily consisting of real estate taxes, insurance and utilities) that would be incurred during the lease-up period. Acquired in-place leases as of the date of acquisition are amortized over the remaining lease terms. Should a tenant terminate its lease, the unamortized portion of the in-place lease value is charged to amortization expense. Acquired out-of-market lease values (including ground leases) are recorded based on the present value (using a discount rate that reflects the risks associated with the lease acquired) of the difference between the contractual amounts paid pursuant to the in-place leases and management’s estimate of fair market value lease rates for the corresponding in-place leases. The capitalized out-of-market lease values are amortized as adjustments to rental revenue (or ground lease expense, as applicable) over the remaining terms of the respective leases, which include periods covered by bargain renewal options. Should a tenant terminate its lease, the unamortized portion of the out-of-market lease value is charged to rental revenue. Management estimates the fair value of assumed mortgage notes payable based upon indications of then-current market pricing for similar types of debt with similar maturities. Assumed mortgage notes payable are initially recorded at their estimated fair value as of the assumption date, and the difference between such estimated fair value and the outstanding principal balance of the note will be amortized over the life of the mortgage note payable. Real estate assets are reviewed for impairment each reporting period if events or changes in circumstances indicate that the carrying amount of the individual property may not be recoverable. In such an event, a comparison will be made of the current and projected operating cash flows and expected proceeds from the eventual disposition of each property on an undiscounted basis to the carrying amount of such property. If the carrying amount exceeds the undiscounted cash flows, it would be written down to the estimated fair value to reflect impairment in the value of the asset. The determination of whether investment property is impaired requires a significant amount of judgment by management and is based on the best information available to management at the time of the evaluation. For the six months ended June 30, 2020, the Company determined that three of its remaining properties were impaired as a result of such assets having carrying values that exceeded their estimate sales price less costs to sell based on the offers received (level 2 inputs). As a result of the Company’s remaining real estate properties meeting the criteria to be classified as held for sale as of December 31, 2019, the Company determined that six of its remaining properties were impaired by $115.4 million based on such assets having carrying values that exceeded their estimated sales price less costs to sell based on the offers received (level 2 inputs) and third party broker consultations (level 3 inputs), which were obtained in conjunction with the Company’s marketing process during the period. Of this amount, $46.9 million is attributable to the requirement when real estate properties are classified as held for sale to include cumulative foreign currency translation adjustments (“cumulative CTA”) in the carrying value for two of the Company’s foreign denominated assets within the impairment tests in accordance with ASC 830, Foreign Currency Matters. These impairment losses are limited to the carrying amount of each asset. Prior to designating its properties as held for sale, investment properties were reviewed for impairment at each reporting period if events or changes in circumstances indicated that the carrying amount may not be recoverable. During the year ended year ended December 31, 2019, the Company determined that one of its properties was impaired by $7.2 million as a result of deteriorating market conditions and valued it using level 3 inputs. For the year ended December 31, 2018, the Company determined that three of its properties were impaired as a result of deteriorating market conditions. As a result, an impairment loss of $19.2 million was recorded to write down its carrying value to its fair value for the year ended December 31, 2018. Cash and Cash Equivalents The Company considers all short-term, highly liquid investments that are readily convertible to cash with an original maturity of three months or less at the time of purchase to be cash equivalents. Restricted Cash The Company has restricted cash primarily related to certain escrow accounts required by several of the Company’s mortgage agreements. Concentration of Credit Risk As of December 31, 2020, the Company had cash and cash equivalents and restricted cash deposited in certain financial institutions in excess of federally insured levels. Management regularly monitors the financial stability of these financial institutions in an effort to manage the Company’s exposure to any significant credit risk in cash and cash equivalents or restricted cash. In addition, as of December 31, 2020, the Company had $10.5 million of cash and cash equivalents deposited in certain financial institutions located in the United Kingdom, Russia, Poland, Australia, and France. Management regularly monitors the financial stability of these financial institutions in an effort to manage its exposure to any significant credit risk in cash and cash equivalents. Tenant and Other Receivables Receivable balances consist primarily of base rents, tenant reimbursements and receivables attributable to straight-line rent, and are carried at cost. Upon the adoption of Accounting Standards Update (“ASU”) 2016-02, individual leases are assessed for collectability and upon the determination that the collection of rents is not probable, accrued rent and accounts receivables are reduced as an adjustment to rental revenues. Revenue from leases where collection is deemed to be less than probable is recorded on a cash basis until collectability is determined to be probable. Further, the Company assesses whether operating lease receivables, at a portfolio level, are appropriately valued based upon an analysis of balances outstanding, historical bad debt levels and current economic trends. The uncollectible portion of the portfolio is recorded as an adjustment to rental revenues. Deferred Leasing Costs - Going Concern Basis Direct leasing costs, primarily consisting of third-party leasing commissions and tenant inducements are capitalized and amortized over the life of the related lease. Tenant inducement amortization is recorded as an offset to rental revenue and the amortization of other direct leasing costs is recorded in amortization expense. The Company had no tenant inducement amortization for the six months ended June 30, 2020. Tenant inducement amortization were $8.9 million and $19.5 million for the years ended December 31, 2019 and 2018, respectively, and was recorded as an offset to rental revenue. The Company recorded no amortization expense related to other direct leasing costs for the six months ended June 30, 2020. Amortization expense related to other direct leasing costs were $2.4 million and $4.5 million for the years ended December 31, 2019 and 2018, respectively. In addition, no amortization was recorded after July 2019 due to the Company’s properties being classified as held for sale. Deferred Financing Costs - Going Concern Basis Deferred financing costs consist of direct costs incurred in obtaining debt financing (see Note 4 — Debt Financing). These fees are presented as a reduction to the related debt liability for permanent mortgages and presented as an asset for revolving credit arrangements. In total, deferred financing costs (net of amortization) were $2.0 million and $2.0 million as of June 30, 2020 and December 31, 2019. These costs are amortized into interest expense on a straight-line basis, which approximates the effective interest method, over the terms of the obligations. The Company had no amortized interest expense. For the years ended December 31, 2019 and 2018, $1.9 million and $4.2 million, were amortized into interest expense in the accompanying consolidated statement of operations, respectively. In addition, no amortization was recorded after July 2019 due to the Company’s properties being classified as held for sale. Other Assets Other assets included the following (in thousands): June 30, 2020 December 31, 2019 Prepaid expenses $ 1,253 $ 1,580 Deferred tax assets 7,280 10,056 Other 218 228 Other assets (1) $ 8,751 $ 11,864 (1) As of June 30, 2020 and December 31, 2019, with the exception of $0.2 million and $0.6 million, respectively, related to corporate level activities, these amounts were included in other assets within assets held for sale. Revenue Recognition FASB issued ASU 2014-09 which superseded the revenue recognition requirements under previous guidance. The Company adopted ASU 2014-09 on January 1, 2018. ASU 2014-09 requires the use of a new five-step model to recognize revenue from contracts with customers. The five-step model requires that the Company identify the contract with the customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when it satisfies the performance obligations. Management has concluded that the majority of the Company’s total revenue, with the exception of gains and losses from the sale of real estate, consist of rental income from leasing arrangements, which is specifically excluded from the standard. Excluding gains and losses on the sale of real estate (as discussed further below), the Company concluded that its remaining revenue streams were immaterial and, as such, the adoption of ASU 2014-09 did not have a material impact on the Company’s consolidated financial statements. As of January 1, 2018, the Company began accounting for the sale of real estate properties under ASU 2017-05 and provides for revenue recognition based on completed performance obligations, which typically occurs upon the transfer of ownership of a real estate asset. Rental payments are generally paid by the tenants prior to the beginning of each month. As of June 30, 2020 and December 31, 2019, respectively, the Company recorded liabilities of $7.9 million and $12.4 million related to prepaid rental payments which were included in liabilities associated with assets held for sale as of June 30, 2020 and other liabilities as of December 31, 2019 in the accompanying Consolidated Balance Sheets. The Company recognizes rental revenue on a straight-line basis over the life of the lease including rent holidays, if any. Straight-line rent receivable was $34.9 million and $40.4 million as of June 30, 2020 and December 31, 2019, respectively. 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 and is included in assets held for sale as of June 30, 2020 and in tenant and other receivables as of December 31, 2019 in the accompanying Consolidated Balance Sheets. Revenues associated with operating expense recoveries are recognized in the period in which the expenses are incurred based upon the tenant lease provisions. Revenues relating to lease termination fees are recognized on a straight-line basis amortized from the time that a tenant’s right to occupy the leased space is modified through the end of the revised lease term. Other revenues consist primarily of parking revenue, tenant reimbursements and interest on loans receivable. Parking revenue represents amounts generated from contractual and transient parking and is recognized in accordance with contractual terms or as services are rendered. Other revenues relating to tenant reimbursements are recognized in the period that the expense is incurred. Income Taxes The Company elected to be treated as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”) through June 30, 2020, when it transferred all of its assets and liabilities to the Liquidating Trust. The Company’s management believes that the Company operated in such a manner as to qualify for treatment as a REIT until June 30, 2020. Accordingly, no provision has been made for U.S. federal income taxes for the six months ended June 30, 2020, and years ended December 31, 2019 and 2018 in the accompanying consolidated financial statements. In 2020, 2019 and 2018, income tax expense recorded by the Company was primarily comprised of foreign income taxes related to the operation of its international properties. All periods from December 31, 2017 through December 31, 2020 are open for examination by the IRS. The Company does not believe it has any uncertain tax positions or unrecognized tax benefits requiring disclosure. Redemption of Common Stock The Company complies with 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 approved, the Company will reclassify such obligations from equity to an accrued liability based upon their respective settlement values. The Company had no recorded liabilities as of June 30, 2020 and $0.7 million as of December 31, 2019 in accounts payable and accrued expenses in the accompanying Consolidated Balance Sheets related to shares tendered for redemption and approved by the board of directors, but which were not redeemed until the subsequent month. Such amounts have been included in redemption of common shares in the accompanying consolidated statements of equity. Per Share Data Net income (loss) per common share is calculated by dividing the net income (loss) attributable to common investors for each period by the weighted average number of common shares outstanding during such period. Net income (loss) per common share on a basic and diluted basis is the same because the Company has no potentially dilutive common shares outstanding. Recently Adopted Accounting Pronouncements - Going Concern Basis 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 earlier guidance under ASC 840. The Company adopted ASC 842 as of 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. Also, the new standard indicates that companies are permitted to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption in lieu of restating prior periods in accordance with ASC 842 and provides other optional practical expedients. Upon adoption, 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. Based on the Company’s analysis, the Company identified the following changes resulte |
