March 23, 2020 Comments Off on Hines Global REIT Uncertain Liquidation in 2020 – updated July 16, 2020 Blog, Current Investigations, Securities Fraud

Hines Global REIT Uncertain Liquidation in 2020 – updated July 16, 2020

Hines Global REIT Uncertain Liquidation in 2020, featured by Top Securities Fraud Attorneys, The White Law Group

Hines Global REIT forms Liquidating Trust Updated on July 16, 2020

Are you concerned about your investment losses in Hines Global REIT? If so, the securities attorneys at The White Law Group may be able to help you by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.

The White Law Group continues to investigate FINRA arbitration claims involving brokerage firms who may have unsuitably recommended Hines Global REIT to investors.  If you have suffered investment losses, the securities attorneys at The White Law Group may be able to help you.

Shareholders have apparently been waiting for news of the REIT’s liquidation after approving a plan in July 2018 for liquidation and dissolution. The dissolution was originally planned to be finalized in July 2020 with final distributions to be paid to Hines Global REIT shareholders at that time. Now the board is reportedly stating the distributions may not be paid to shareholders right away due to adverse market conditions, according to SEC filings. Instead, the REIT will set up a reserve for its remaining obligations and to cover its expenses as it completes its wind down and dissolution.

Update on July 16, 2020 – HGR Liquidating Trust

The REIT reportedly transferred its remaining assets and liabilities and liabilities to the HGR Liquidating Trust, according to SEC filings this week. The trust’s primary purpose is reportedly to liquidate assets transferred to it and distribute the sales proceeds to equity holders after paying any of the remaining liabilities.

According to a letter to investors on July 15, HGR Liquidating Trust will be paying shareholders a special distribution of $1.00 per unit on July 31, 2020.

The trust notes that after this special distribution is paid, the company and the trust will have made total special distributions, including return of invested capital distributions and liquidating distributions, of approximately $5.00 per share/unit between January 2018 and July 2020.

The company also reports that it has paid  “aggregate distributions of $10.64 per unit to holders that have been invested since the inception” of Hines Global REIT.” The offering price for Hines Global REIT at the inception was $10.00 per share/unit.

According to the letter, the board of trustees has determined a NAV per unit of $5.58 as of June 30, 2020, following the completion of third-party valuations of the Trust’s seven remaining assets. 

The new NAV represents an approximate 10% decrease from the previous NAV per share of $6.17 determined as of February 14, 2019. The company notes that the decrease was primarily a result of “declines in values of the Trust’s four remaining retail assets, including the most recent negative impact related to the COVID-19 pandemic.”

Update on May 4, 2020 Tender Offer Price may Indicate Losses for Investors

Mackenzie Realty Capital has just extended a tender offer to investors to purchase shares of Hines Global REIT for just $1.50 per share. According to Mackenzie’s letter to investors on April 13, in conjunction with its Plan of Liquidation, Hines’ ordinary redemptions were suspended on February 2, 2019. Currently, the share repurchase program is only available for hardship cases, like the death or disability of a shareholder.

The REIT’s original plan was to liquidate and make final distributions by July 17, 2020, according to the offer letter. Unfortunately, the COVID-19 pandemic and its impact to the global economic environment is expected to have “an adverse impact on overall market conditions and the Company’s disposition process.” As a result Hines says there can be no assurances regarding the timing or amounts of “any additional liquidating distributions or that the Company will make the final distribution on or before July 17, 2020.”

Recovery of Investment Losses

Prior to making recommendations to an individual investor, brokerage firms are required by the Financial Industry Regulatory Authority (FINRA) to disclose all the risks of an investment. Recommendations should only be made if the investment is suitable for an individual investor given their age, investment objections, investment experience and risk tolerance.

Brokerage firms that do not perform adequate due diligence on an investment and/or make unsuitable recommendations can be held accountable for investment losses through FINRA arbitration.

High commissions could be a motivating factor for unscrupulous financial advisors to sell the REIT regardless of whether the investment is in line with the client’s investment objectives and profile.  Moreover, the total commissions and expenses make it difficult for non-traded REITs to perform in line with the market.

If you are concerned about your investment in Hines Global REIT, please call the securities attorneys of The White Law Group at 888-637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.

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