HOUSTON-Within 48 hours of closing the book on a $2.2-billion offering, Hines REIT Inc. has jumpstarted common stock sales on an equally sized pool with a two-year shelf life. Once again, institutional-quality office properties are at the forefront of the buying strategy.
Hines REIT, closing its first offering three days ago, will sell $2 billion of common stock with an initial price of $10.40 per share and will bring to market up to $200 million of common stock, under its dividend reinvestment plan, at $9.88 per share. "It was something we thought we'd probably do, but there was no assurance," Charles Hazen, Hines REIT president, tells GlobeSt.com about the immediate ramp-up of another offering.
Hazen says the expectation is the second pool will end up much like the first--roughly two years to sell out, mostly US office product and all US investors. But, it does have the built-in capability, like the first, to fuel sales outside the US. He says the spotlight is pointed at Asia, Europe and South and Central America while the US focus is the Top 30 markets, with Southern California, Boston and New York City headlining the go-to roster. "Certainly, we're looking at other markets as well," he stresses.
Hazen predicts at least 50% of the acquisitions will be US office properties, but there's room to include mixed-use, retail, residential and warehouse. The sweet spot is properties valued at more than $30 million. Hines REIT's first offering picked up 17 deeds, including the Citymark building in Dallas, 321 N. Clark in Chicago and California Casualty Plaza in San Mateo, CA. The REIT also acquired office assets in Miami, New York City, Sacramento, San Diego, San Francisco, Seattle, Washington, DC and its homeport of Houston. Hazen says the second acquisition thrust is beginning without any contracts in hand, but the scouts are out in the target markets.
Hazen says it might take a few more days for the stocks to hit the open market. The offering is being made through the REIT's affiliated dealer manager, Hines Real Estate Securities Inc. and select broker dealers and financial advisers. The SEC cleared the deck for the sale within 24 hours of the first offering's close-out. The REIT is sponsored and managed by Hines Interest LP and its affiliates.
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