Hines Securities Inc. has completed a $152 million offering of interests in HGIT 200 Park Place DST, a Delaware Statutory Trust designed to offer qualified investors tax-advantaged investment opportunities. The DST owns 200 Park Place, a 15-story, 206,943-square-foot office building in Houston’s River Oaks district.
Completed in 2020, the property at 4200 Westheimer Road is fully leased to a diverse tenant roster and anchored by JLL and Buckeye Partners. The asset was sourced by Hines Global Income Trust Inc., a division of Hines which acquired the Class A office building in July 2022 from Stonelake Capital Partners for $145 million.
The WELL-certified and LEED-certified building is located on a 1.3-acre lot and has seven parking levels encompassing nearly 700 spots. On-site amenities include a rooftop terrace, conference center and lounge. The property is within walking distance of numerous dining and retail options and less than 1 mile from the Uptown District and Interstate 610.
Hines launches HREX
In September 2022, Hines launched Hines Real Estate Exchange, a platform that makes 1031 exchange opportunities available to investors in the form of interests in DSTs holding assets sourced from HGIT. The 200 Park Place property was the first HGIT asset to offer DST shares. The global real estate investment, development and property management firm filed a registration statement for the DST offering with the U.S. Securities and Exchange Commission on Sept. 19, 2022. HGIT has the option to acquire the properties held by the DSTs.
When Hines announced the HREX platform last year, Alfonso Munk, CIO of the Americas, said in prepared remarks that it was a natural progression for the firm and a way to meet strong market demand for 1031 exchange products. Citing the current market uncertainty, Munk said in a more recent prepared statement that the enthusiasm around the HGIT 200 Park Place DST showed investors shared Hines’ conviction in the offering as well as the asset.
Growing investment option
In May, JLL Income Property Trust announced it had fully subscribed its JLLX Diversified II DST, a five-property, $200 million diversified portfolio structured as a DST. It marked the firm’s largest 1031 exchange offering at that time and experienced significant demand from wealth management firms and their clients.
The DST featured five institutional-quality properties diversified by property type, geography and tenant profile. The properties were a 78,000-square-foot grocery-anchored shopping center; a 559,000-square-foot bulk industrial distribution facility leased to Mitsubishi; and three medical office buildings leased to creditworthy medical tenants.
In early 2022, Greystone made a minority investment in Passco Cos., as the two firms formed a strategic alliance to provide clients increased benefits from the DST investment sector and other real estate investment opportunities. The alliance helped Greystone, a national commercial real estate finance company, strengthen its platform in a market where Passco has been an industry leader for more than two decades.