Filed Pursuant to Rule 253(g)(2)
File No. 024-10563
HC GOVERNMENT REALTY TRUST, INC.
SUPPLEMENT NO. 1 DATED MARCH 7, 2017
TO THE OFFERING CIRCULAR DATED NOVEMBER 7, 2016
document supplements, and should be read in conjunction with, the
offering circular of HC Government Realty Trust, Inc.
(“we,” “our” or “us”), dated
November 7, 2016 and filed by us with the Securities and Exchange
Commission, or the Commission, on November 8, 2016, or the Offering
Circular. Unless otherwise defined in this supplement, capitalized
terms used in this supplement shall have the same meanings as set
forth in the Offering Circular.
The purpose of this supplement is to disclose
our anticipated investment in the Norfolk
Investment in the Norfolk Property
December 28, 2016, HC Government Realty Holdings, L.P., a Delaware
limited partnership, or the Operating Partnership, being the
wholly-owned operating partnership of HC Government Realty Trust,
Inc, a Maryland corporation, or the Company, entered into a
Purchase and Sale Agreement, as amended from time to time, or the
PSA, with USAA Real Estate Company, a Delaware corporation, or the
Seller, pursuant to which the Seller agreed to sell and the
Operating Partnership agreed to purchase that certain Class A
office building located at 5850 Lake Herbert Drive, Norfolk,
Virginia, or the Norfolk Property. The purchase price for the
Norfolk Property will be approximately $14,500,000, subject to
customary adjustments and prorations, of which we anticipate
approximately $10,875,000 will be funded by a first mortgage loan
secured by the Norfolk Property. The Company expects to invest
approximately $3,975,000 of equity in the Norfolk Property,
including financing fees and other closing costs aggregating
approximately $350,000, all of which are intended to be funded out
of the proceeds of the Company’s common stock offering,
pursuant to Regulation A. The Operating Partnership has paid
$350,000 in the form of an initial deposit, additional deposit and
an extension fee, or the Deposits and Fees. The Deposits and Fees
will be applied to the purchase price at closing, which is expected
to occur on or before March 30, 2017. On or before closing, it is
expected that the Operating Partnership will assign the PSA to a
wholly-owned subsidiary formed for the sole purpose of acquiring
the Norfolk Property.
Norfolk Property is a three-story, Class A office building with
53,917 rentable square feet. It is 100% leased to the U.S.
Government on a non-cancellable lease through June 2027, having
recently executed a new 10-year lease. The Social Security
Administration has been the sole occupant of the building since
construction was completed for them as a build-to-suit in 2007.
Annual rent for the Norfolk Property is expected to be
approximately $1,429,000, which is inclusive of an operating cost
base of approximately $364,000. Beginning with the second year of
the lease and each year thereafter, the annual rent will be
adjusted based on the Cost of Living Index, as measured by the
Department of Labor’s revised Consumer Price Index published
by the Bureau of Labor Statistics.