H&R REIT Completes the Acquisition of the Hess Tower in Houston
December 22 2011 - 2:40PM
PR Newswire (Canada)
TORONTO, Dec. 22, 2011 /CNW/ - H&R Real Estate Investment Trust
(the "REIT") is pleased to announce that it has completed the
previously announced acquisition of the Hess Tower. This recently
completed State-of-the-Art office tower in Houston, Texas was
purchased for U.S. $442.5 million. As one of downtown Houston's
most energy efficient office buildings, Hess Tower has achieved the
prestigious LEED Platinum certification for Core and Shell, the
U.S. Green Building Council's highest rating. The property is
comprised of an impeccably designed 29-storey office tower offering
844,763 rentable square feet of superior office space connected by
a climate-controlled skybridge to its adjacent 10-level, 1,430
space parking garage. Hess Tower is part of Houston's
Pedestrian Tunnel System that interconnects 77 of Houston's major
downtown office buildings to an abundance of upscale restaurants
and retail, first class hotels, and world class sports and
entertainment destinations. Completed in June 2011, Hess Tower is
fully leased to Hess Corporation, a global integrated energy
company listed on the New York Stock Exchange. The purchase price
was funded from the REIT's operating facilities and cash on hand
(including proceeds from the REIT's offering of stapled units
completed earlier today). The REIT has secured a commitment for a
U.S. $250 million first mortgage financing at 4.5% per annum for 8
years. Closing of the mortgage is expected to occur in January
2012. Tom Hofstedter, President and CEO of the REIT stated: "This
acquisition presents a truly rare opportunity to acquire a
best-in-class, LEED Platinum office tower in an irreplaceable
downtown Houston location, overlooking the recently completed
Discovery Green Park, with a long-term triple net lease secured by
a Fortune 100 investment grade tenant at a 6.6% capitalization
rate. Hess Tower, along with the recently acquired Gotham Center in
New York City and the Bow in downtown Calgary, will together become
the hallmark of our portfolio of high quality properties that will
provide stable and growing cash flow to our unitholders for decades
to come". About H&R REIT H&R REIT is an open-ended real
estate investment trust, which owns a North American portfolio of
39 office, 117 industrial and 133 retail properties comprising over
43 million square feet, with a net book value of approximately $5.9
billion. The foundation of H&R REIT's success since inception
in 1996 has been a disciplined strategy that leads to consistent
and profitable growth. H&R REIT leases its properties long term
to creditworthy tenants and strives to match those leases with
primarily long-term, fixed-rate financing. Forward-looking
Statements Certain statements in this news release contains
forward-looking information within the meaning of applicable
securities laws (also known as forward-looking statements),
including in particular, H&R's expectation regarding the
expected completion of the Hess Tower mortgage. Such
forward-looking statements reflect H&R's current beliefs and
are based on information currently available to management. These
statements are not guarantees of future performance and are based
on H&R's estimates and assumptions that are subject to risks
and uncertainties, including those discussed in H&R's materials
filed with the Canadian securities regulatory authorities from time
to time, which could cause the actual results and performance of
H&R to differ materially from the forward-looking statements
contained in this news release. Those risks and uncertainties
include, among other things, risks related to: prices and market
value of securities of H&R; availability of cash for
distributions; development and financing relating to the Bow
development; restrictions pursuant to the terms of indebtedness;
liquidity; credit risk and tenant concentration; interest rate and
other debt related risk; tax risk; ability to access capital
markets; dilution; lease rollover risk; construction risks;
currency risk; unitholder liability; co-ownership interest in
properties; competition for real property investments;
environmental matters; reliance on one corporation for management
of substantially all of the REIT's properties and changes in
legislation and indebtedness of H&R. Material factors or
assumptions that were applied in drawing a conclusion or making an
estimate set out in the forward-looking statements include that the
general economy is stable; local real estate conditions are stable;
interest rates are relatively stable; and equity and debt markets
continue to provide access to capital. H&R cautions that this
list of factors is not exhaustive. Although the forward-looking
statements contained in this news release are based upon what
H&R believes are reasonable assumptions, there can be no
assurance that actual results will be consistent with these
forward-looking statements. All forward-looking statements in this
news release are qualified by these cautionary statements. These
forward-looking statements are made as of today and H&R, except
as required by applicable law, assumes no obligation to update or
revise them to reflect new information or the occurrence of future
events or circumstances. SOURCE H&R Real Estate Investment
Trust Image with caption: " Hess Tower, Houston, TX (CNW
Group/H&R Real Estate Investment Trust)". Image available at:
http://photos.newswire.ca/images/download/20111222_C8940_PHOTO_EN_8481.jpg
H&R Real Estate Investment Trust CONTACT: Larry Froom,Chief
Financial Officer, H&R REIT(416) 635-7520, or e-mail
info@hr-reit.com
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