Wednesday, August 31, 2011

10-K Review: Hines

Financial reviews continue.  I have run a basic financial statement analysis on the Hines  offerings – Hines REIT and Hines Global REIT.


In  Millions
Hines REIT
Hines Global REIT
Total Assets
$3,150.016
$775.684
Total Liabilities
$1,887.872
$411.299
Equity Raised
$2,534.600
$531.800
Net Real Estate
$2,213.212
$449.029
Direct Debt
$1,521.544
$378.295
Leverage Ratio
68.7%
84.2%
Revenue
$334.471
$24.874
Net Income
($35.383)
($31.416)
FFO
$77.070
($12.629)
ModFFO[1]
$84.174
$4.141
Dividends
$122.348
$13,697
Yield ($10 share)
5.0%
7.0%

Hines Real Estate Investment Trust, Inc. (Hines REIT), closed its offering in January 2010.  At December 31, 2010, the REIT had $3.15 billion of assets including $2.213 billion of real estate owned directly.  Hines REIT realized $334.5 million total revenue and a $35.4 million net loss in 2010.  The shareholder 5.0% dividend is only 63% covered by Funds from Operations and 68.7% by Modified Cash Flow as reported by the REIT..   Property operations in 2010 capitalized at a 6.0% rate suggest net real estate value of approximately $2.6 billion, about 18% higher than the book value of the real estate.  This estimate would suggest a share value of approximately $7.84, about 22% lower than management's estimate of $10.08 per share as of December 31, 2010.  On May 24, 2011, the Hines REIT board of directors established an estimated per-share value of Hines REIT's common stock of $7.78.


Hines Global REIT, Inc. (Hines Global), commenced its initial equity offering in August 2009. As of March 23, 2011,  the company had raised $531.8 million of equity.  As of December 31, 2010, Hines Global had $775.7 million of assets, including $449 million of net real estate, and $411.3 million of liabilities.  The company reported a net loss of $31.4 million on $24.9 million of total revenues.  The REIT used $12.6 million of Funds From Operations and generated $4.1 million of Modified FFO, compared with declaring $13.7 million in dividends. 

If you are interested in seeing  a similar report for another REIT or REIT family, please leave a comment, or send me a note.

[1] As reported in the 10-K

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