ADVISORY AGREEMENT

Exhibit 10.3

ADVISORY AGREEMENT

Among

HINES REIT PROPERTIES, L.P.,

HINES ADVISORS LIMITED PARTNERSHIP,

and

HINES REAL ESTATE INVESTMENT TRUST, INC.

                     , 20      

TABLE OF CONTENTS

ADVISORY AGREEMENT

     This Advisory Agreement (this “Agreement”), dated as of                      , 20       , is among Hines REIT Properties, L.P., a Delaware limited partnership, Hines Advisors Limited Partnership, a Texas limited partnership, and Hines Real Estate Investment Trust, Inc., a Maryland corporation.

W I T N E S S E T H

     WHEREAS, the Company (as hereinafter defined) desires to avail itself of the knowledge, experience, sources of information, advice, assistance and certain facilities available to the Advisor (hereinafter defined) and to have the Advisor undertake the duties and responsibilities hereinafter set forth herein on the terms set forth in this Agreement; and

     WHEREAS, the Advisor is willing to undertake to render such services on the terms and conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the parties hereto agree as follows:

ARTICLE 1
DEFINITIONS

     The following defined terms used in this Agreement shall have the meanings specified below:

“ Acquisition Expenses ” has the meaning set forth in the Articles of Incorporation.

“ Advisor ” means (i) Hines Advisors Limited Partnership, a Texas limited partnership, or (ii) any successor advisor to the Company.

“ Affiliate ” has the meaning set forth in the Articles of Incorporation. For the purposes of this Agreement, the Advisor shall not be deemed to be an Affiliate of the Company, and vice versa.

“ Articles of Incorporation ” means the Second Amended and Restated Articles of Incorporation of the General Partner, as supplemented by the Articles Supplementary and as otherwise amended from time to time.

“ Articles Supplementary ” means the Articles Supplementary establishing and fixing the rights and preferences of the Preferred Shares, as amended from time to time.

“ Asset ” or “ Assets ” means any and all real estate investments (real, personal or otherwise), tangible or intangible, owned or held by, or for the account of, the Company,

whether directly or indirectly through another entity or entities, including interests in any Person or in joint ventures which directly or indirectly own real estate investments.

“ Board of Directors ” means the Board Directors of the General Partner.

“ Bylaws ” means the Amended and Restated Bylaws of the General Partner, as amended from time to time.

“ Cash Amount ” has the meaning set forth in the Limited Partnership Agreement.

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto. Reference to any provision of the Code shall mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto, as interpreted by any applicable regulations as in effect from time to time.

“ Common Shares ” means shares of common stock of the General Partner, par value $.001 per share.

“ Company ” means Hines REIT Properties, L.P., a Delaware limited partnership. Within the context of discussions of the operations, business and administration of the Company, the term “Company” shall mean, collectively, Hines REIT Properties, L. P. and the General Partner for the purposes of this Agreement.

“ Director ” means a member of the Board of Directors of the General Partner.

“ General Partner ” means Hines Real Estate Investment Trust, Inc., a Maryland corporation and general partner of the Company.

“ Gross Proceeds ” has the meaning set forth in the Articles of Incorporation.

“ Hines ” means Hines Interests Limited Partnership and its Affiliates.

“ Independent Director ” has the meaning set forth in the Articles of Incorporation.

“ Initial Asset Value ” means (i) in the case of an Asset other than a loan or other financing, the gross purchase price of real estate investments acquired directly by the Company, including any debt attributable to such investments, or the pro rata share of the gross asset value of real estate investments held by entities in which the Company invests, and (ii) in the case of a loan or other financing, the total amount of the funds advanced.

“ Limited Partnership Agreement ” means the Amended and Restated Limited Partnership Agreement of Hines REIT Properties, L.P., as the same may be amended and restated from time to time.

“ Managing Dealer ” means Hines Real Estate Investments, Inc., a Delaware corporation, or such other entity selected by the Board of Directors to act as the managing dealer for the Offering.

“ Offering ” means a public offering of Securities pursuant to any Prospectus.

“ Operating Expenses ” has the meaning set forth in the Articles of Incorporation.

“ Organizational and Offering Expenses ” has the meaning set forth in the Articles of Incorporation.

“ Participation Interest ” has the meaning set forth in the Limited Partnership Agreement.

“ Person ” means an individual, corporation, partnership, estate, trust, a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity.

“ Preferred Shares ” means shares of [ ]% Series A Cumulative Preferred stock of the General Partner, par value $.001 per share.

“ Property Manager ” means Hines Interests Limited Partnership, a Texas limited partnership, or an Affiliate thereof.

“ Property Management and Leasing Agreement ” means any Property Management and Leasing Agreement between the Company and the Property Manager.

“ Prospectus ” means the General Partner’s final prospectus for any public offering within the meaning of Section 2(10) of the Securities Act of 1933, as amended.

“ REIT ” means a “real estate investment trust” under Sections 856 through 860 of the Code.

“ REIT Shares Amount ” has the meaning set forth in the Limited Partnership Agreement.

“ Securities ” means any class or series of units or shares of the Company or the General Partner, including common shares or preferred units or shares and any other evidences of equity or beneficial or other interests, voting trust certificates, bonds, debentures, notes or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in, temporary or interim certificates for, receipts for, guarantees of, or warrants, options or rights to subscribe to, purchase or acquire, any of the foregoing.

“ Shares ” means the Common Shares and the Preferred Shares.

“ Shareholders ” means the registered holders of the outstanding Shares.

“ Termination Date ” means the date of termination of this Agreement.

“ Preferred Offering ” means the offering by the General Partner on Form S-11 (Reg. No. 333-                      ) of up to $750,000,000 Preferred Shares, including $50,000,000 Preferred Shares offered pursuant to the General Partner’s dividend reinvestment plan.

“ 2%/25% Guidelines ” has the meaning set forth in the Articles of Incorporation.

“ Units ” has the meaning set forth in the Limited Partnership Agreement.

ARTICLE 2

APPOINTMENT

     The Company hereby appoints the Advisor to serve as its advisor on the terms and conditions set forth in this Agreement, and the Advisor hereby accepts such appointment.

ARTICLE 3

DUTIES OF THE ADVISOR

     The Advisor is responsible for managing, operating, directing and supervising the operations and administration of the Company and its Assets to the fullest extent allowed by law. The Advisor shall, either directly or by engaging an Affiliate or third party, perform the following duties:

     3.01 Offering Services . The Advisor shall manage and supervise:

     (i) development of the product offering, including the determination of the specific terms of the Securities to be offered by the General Partner and/or the Company, preparation of all offering and related documents, and obtaining all required regulatory approvals of such documents;

     (ii) along with the Managing Dealer, approval of the participating broker dealers and negotiation of the related selling agreements;

     (iii) preparation and approval of all marketing materials to be used by the Managing Dealer or others in the Offering of the General Partner’s Securities;

     (iv) coordination of the due diligence process relating to participating broker dealers and their review of any Prospectus and other Offering and Company documents;

     (v) creation and implementation of various technology and electronic communications related to the Offering of the General Partner’s Securities;

     (vi) along with the Managing Dealer, negotiation and coordination with the transfer agent for the receipt, collection, processing and acceptance of subscription agreements, commissions, and other administrative support functions; and

     (vii) all other services related to organization of the Company or the Offering, whether performed and incurred by the Advisor or its Affiliates.

     3.02 Acquisition Services .

     (i) Serve as the Company’s investment and financial advisor and provide relevant market research and economic and statistical data in connection with the Company’s Assets and investment objectives and policies;

     (ii) Subject to Section 4.03 and Article 7 hereof and the investment objectives and policies of the Company: (a) locate, analyze and select potential investments; (b) structure and negotiate the terms and conditions of transactions pursuant to which investments in Assets will be made; (c) acquire Assets on behalf of the Company; and (d) arrange for financing on behalf of the Company;

     (iii) Perform due diligence on prospective investments and create due diligence reports summarizing the results of such work;

     (iv) Prepare reports regarding prospective investments which include recommendations and supporting documentation necessary for the Directors to evaluate the proposed investments;

     (v) Obtain reports (which may be prepared by the Advisor or its Affiliates), where appropriate, concerning the value of contemplated investments of the Company; and

     (vi) Negotiate and execute approved investments, loans, debt financing and other transactions.

     3.03 Asset Management Services .

     (i) Real Estate Services:

     (a) Investigate, select, and, on behalf of the Company, engage and conduct business with such Persons as the Advisor deems necessary to the proper performance of its obligations hereunder, including but not limited to consultants, accountants, lenders, technical advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, developers, construction companies and any and all Persons acting in any other capacity deemed by the Advisor necessary or desirable for the performance of any of the foregoing services;

     (b) Monitor applicable markets and obtain reports (which may be prepared by the Advisor or its Affiliates) where appropriate, concerning the value of investments of the Company;

     (c) Monitor and evaluate the performance of investments of the Company; provide daily management services to the Company and perform and supervise the various management and operational functions related to the Company’s investments;

     (d) Coordinate with the Property Manager on its duties under any Property Management and Leasing Agreement and assist in obtaining all necessary approvals of major property transactions as governed by the applicable Property Management and Leasing Agreement;

     (e) Coordinate and manage relationships between the Company and any joint venture partners;

     (f) Consult with the officers and Directors of the General Partner and provide assistance with the evaluation and approval of potential property dispositions, sales or refinancings;

     (g) Provide financial and operational planning services and investment portfolio management functions;

     (ii) Accounting and Other Administrative Management Services:

     (a) Manage and perform the various administrative functions necessary for the management of the day-to-day operations of the Company;

     (b) From time-to-time, or at any time reasonably requested by the Directors, make reports to the Directors on the Advisor’s performance of services to the Company under this Agreement;

     (c) Provide or arrange for administrative services and items, legal and other services, office space, office furnishings, personnel and other overhead items necessary and incidental to the Company’s business and operations;

     (d) Provide financial and operational planning services and portfolio management functions;

     (e) Maintain accounting data and any other information requested concerning the activities of the Company as shall be required to prepare and to file all periodic financial reports and returns required to be filed with the Securities and Exchange Commission and any other regulatory agency, including annual financial statements;

     (f) Maintain all appropriate books and records of the Company;

     (g) Provide tax and compliance services and risk management services and coordinate with appropriate third parties, including independent accountants and other consultants, on related tax matters;

     (h) Supervise the performance of such ministerial and administrative functions as may be necessary in connection with the daily operations of the Assets;

     (i) Provide the Company with all necessary cash management services;

     (j) Manage and coordinate with the transfer agent the dividend process and payments to shareholders;

     (k) Consult with the officers and Directors of the General Partner and assist the Directors in evaluating and obtaining adequate insurance coverage based upon risk management determinations;

     (l) Provide the officers and Directors of the General Partner with timely updates related to the overall regulatory environment affecting the Company, as well as managing compliance with such matters, including but not limited to compliance with the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”);

     (m) Consult with the officers and Directors of the General Partner and the Board of Directors relating to the corporate governance structure and appropriate policies and procedures related thereto; and

     (n) Perform all reporting, record keeping, internal controls and similar matters in a manner to allow the General Partner to comply with applicable law, including the Sarbanes-Oxley Act.

     3.04 Shareholder Services .

     (i) Manage communications with Shareholders, including answering phone

calls, preparing and sending written and electronic reports and other communications; and

     (ii) Establish technology infrastructure to assist in providing Shareholder support and service.

     3.05 Financing Services

     (i) Identify and evaluate potential financing and refinancing sources, engaging a third-party broker if necessary;

     (ii) Negotiate terms, arrange and execute financing agreements;

     (iii) Manage relationships between the Company and its lenders; and

     (iv) Monitor and oversee the service of the Company’s debt facilities and other financings.

     3.06 Disposition Services .

     (i) Consult with the Board of Directors and provide assistance with the evaluation and approval of potential asset dispositions, sales or other liquidity events; and

     (ii) Structure and negotiate the terms and conditions of transactions pursuant to which real estate investments may be sold.

ARTICLE 4

AUTHORITY OF THE ADVISOR

     4.01 General . All rights and powers to manage and control the day-to-day business and affairs of the Company shall be vested in the Advisor to the fullest extent allowed by law. The Advisor shall have the power to delegate all or any part of its rights and powers to manage and control the business and affairs of the Company to such officers, employees, Affiliates, agents and representatives of the Advisor or the Company as it may from time to time deem appropriate. Any authority delegated by the Advisor to any other Person shall be subject to applicable law and the limitations on the rights and powers of the Advisor specifically set forth in this Agreement or the Articles of Incorporation.

     4.02 Powers of the Advisor . Subject to the express limitations set forth in this Agreement, the power to direct the management, operation and policies of the Company shall to the fullest extent allowed by law be vested in the Advisor, which shall have the power by itself and shall be authorized and empowered on behalf and in the name of the Company to carry out any and all of the objectives and purposes of the Company and to perform all acts and enter into and perform all contracts and other undertakings that it

may in its sole discretion deem necessary, advisable or incidental thereto to perform its obligations under this Agreement.

     4.03 Approval by Directors .

     (i) Notwithstanding the foregoing, any investment in Assets, including any acquisition of an Asset by the Company or any investment by the Company in a joint venture, limited partnership or similar entity owning real properties, will require the prior approval of the Board of Directors. The Advisor will deliver to the Board of Directors all documents required by it to properly evaluate the proposed investment.

     (ii) If the Articles of Incorporation require that a transaction be approved by the Independent Directors, the Advisor will deliver to the Independent Directors all documents required by them to properly evaluate the proposed investment in the Asset. The prior approval of a majority of the Independent Directors will be required for each transaction between the Company and the Advisor or its Affiliates.

ARTICLE 5

BANK ACCOUNTS

     The Advisor will maintain one or more bank accounts in the name of the Company and will collect and deposit into any such account or accounts, and disburse from any such account or accounts, any money on behalf of the Company. Notwithstanding the foregoing, no funds shall be commingled with the funds of the Advisor.

ARTICLE 6

RECORDS AND FINANCIAL STATEMENTS

     The Advisor, in the conduct of its responsibilities to the Company, shall maintain adequate and separate books and records for the Company’s operations in accordance with United States generally accepted accounting principles (“GAAP”), which shall be supported by sufficient documentation to ascertain that such books and records are properly and accurately recorded. Such books and records shall be the property of the Company. Such books and records shall include all information necessary to calculate and audit the fees or reimbursements paid under this Agreement. The Advisor shall utilize procedures to attempt to ensure such control over accounting and financial transactions as is reasonably required to protect the Company’s assets from theft, error or fraudulent activity. All financial statements that the Advisor delivers to the Company shall be prepared on an accrual basis in accordance with GAAP, except for specia