As filed with the Securities and Exchange Commission on May 17, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: May 3, 1999
(Date of earliest event reported)
Inland Retail Real Estate Trust, Inc.
(Exact name of registrant as specified in the charter)
Maryland 333-64391 36-4246655
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
2901 Butterfield Road
Oak Brook, Illinois 60523
(Address of Principal Executive Offices)
(630) 218-8000
(Registrant's telephone number including area code)
Not Applicable
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
On May 3, 1999, we purchased a shopping center, Lake Walden Square, by
acquiring the interests of the Lake Walden Affiliated Partners in the Lake
Walden Property Partnership. Lake Walden Square is located at the northwest
and southwest corners of Alexander Road and State Route 39 in Plant City,
Florida. We purchased Lake Walden Square for approximately $14,539,000, which
was the total costs incurred by the Lake Walden Affiliated Partners in
acquiring the property. This equates to approximately $57.00 per square foot.
In addition, we paid transfer fees of $10,500 to the first mortgage lender. We
believe the purchase price was fair and reasonable based on, among other
things, an appraisal from a third party that we received and presented to our
board of directors.
Lake Walden Square, built in 1992, is comprised of two one-story multi-tenant
retail facilities. Lake Walden Square contains 256,155 leasable square feet.
As of May 3, 1999, Lake Walden Square was 93% leased. In evaluating Lake
Walden Square as a potential acquisition, we considered a variety of factors
including location, demographics, tenant mix, price per square foot, occupancy
and the fact that overall rental rates are comparable to market rates. We
believe that Lake Walden Square is located within a vibrant economic area.
Initially, we had planned on purchasing the Merchants Square Shopping Center,
described in our Prospectus, as our first acquisition. However, due to
restrictions of the first mortgage lender on the Lake Walden property, we had
to purchase Lake Walden Square prior to May 4, 1999.
We do not anticipate making any significant repairs and improvements to Lake
Walden Square over the next few years. However, if we were to make any repairs
or improvements, the tenants would be obligated to pay a substantial portion of
any monies spent pursuant to the provisions of their respective leases.
Three tenants, Kash N' Karry, a supermarket, KMart, a discount department store
and Carmike Cinemas, a movie theatre, each lease more than 10% of the total
gross leasable area of the property. The leases with these tenants require the
tenants to pay base annual rent on a monthly basis as follows:
Base Rent
Per Square
Foot Per
Approx. % of Total Annum Lease Term
Lessee GLA Leased GLA ($) Beginning To
- ----------- ----------- ----------- ------------ ------------ ---------
Kash N' Karry 46,300 18 6.75 Currently 03/31/12
Options (1) 6.75 04/01/12 03/31/42
KMart 91,266 36 4.20 Currently 03/31/17
Options (2) 4.20 04/01/17 05/31/67
Carmike Cinemas 25,899 10 8.31 Currently 03/31/07
Option 1 9.31 04/01/07 03/31/12
Option 2 9.81 04/01/12 03/31/17
Option 3 10.31 04/01/17 03/31/22
(1) There are six successive five-year renewal options at the same base
rent per square foot per annum.
(2) There are ten successive five-year renewal options at the same base
rent per square foot per annum.
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For federal income tax purposes, our depreciable basis in Lake Walden Square
will be approximately $11,203,000. When we calculate depreciation expense, for
tax purposes, we will use the straight-line method. We depreciate buildings
and improvements based upon estimated useful lives of 40 and 15 years,
respectively.
On May 3, 1999, a total of 237,070 square feet was leased to 29 tenants at Lake
Walden Square. The following tables set forth certain information with respect
to our leases with these 29 tenants as of May 3, 1999:
Approx. Current Rent per Square
GLA Lease Renewal Annual Rent Foot
Lessee Leased Ends Option ($) ($)
------ ---------- ----- ------ ----------- -----------
Kash N' Karry 46,300 03/12 6/5 yr. 312,525 6.75
KMart 91,266 03/17 10/5 yr. 383,317 4.20
Carmike Cinemas 25,899 03/07 3/5 yr. 215,220 8.31
Bookland 4,050 09/00 - 25,000 6.17
Amscot Insurance 1,400 06/01 1/5 yr. 14,000 10.00
Best Brands Plus 3,084 06/01 - 33,369 10.82
Mailboxes, Etc. 1,120 07/02 1/5 yr. 15,680 14.00
Crescent Jewelers 1,300 08/01 1/5 yr. 14,300 11.00
Queen Nails 1,300 12/99 - 14,066 10.82
Sally Beauty Supply 1,600 02/03 - 16,800 10.50
GTE Phone Mart 2,400 12/00 1/3 yr. 24,600 10.25
Simply Fashions 2,800 05/00 - 24,059 8.59
The Associates 1,600 07/03 1/5 yr. 14,400 9.00
Fantastic Sams 1,200 02/00 1/5 yr. 15,276 12.73
Aamco Transmissions 4,800 01/03 2/5 yr. 34,800 7.25
Domino's Pizza 1,295 03/02 2/5 yr. 11,007 8.50
Spec's Music and
Movies 6,000 02/02 1/5 yr. 72,000 12.00
Dr. Longabach 1,600 09/00 1/3 yr. 16,800 10.50
Hao-Hao Chinese
Restaurant 3,120 06/01 - 40,560 13.00
U.S. Army 1,600 07/01 - 12,000 7.50
Sam's Mens Shop 2,950 12/03 - 19,175 6.50
Tampa Tribune 6,277 02/03 2/3 yr. 31,385 5.00
Cici's Pizza 3,605 07/08 1/5 yr. 39,294 10.90
Dollar Tree 6,800 06/03 2/5 yr. 38,091 5.60
Home Choice 4,000 05/03 1/5 yr. 32,000 8.00
Advance America 1,600 11/01 1/3 yr. 16,000 10.00
Woody's Bar-B-Que 3,804 06/02 2/5 yr. 76,742 20.17
Boston Market 3,000 08/04 3/5 yr. 48,000 16.00
Checkers 1,300 07/22 - 42,986 33.07
Vacant 19,085
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<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Approx. Base Total Per Square Building GLA Rent
GLA Rent of Annual Foot Under Represented Represented
Year Number of of Expiring Expiring Base Expiring by Expiring by Expiring
Ending Leases Leases Leases Rent (1) Leases Leases Leases
December 31, Expiring (Sq. Ft.) ($) ($) ($) ($) ($)
- ----------- --------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1999 1 1,300 14,066 1,653,453 10.82 .55 .85
2000 4 12,050 105,735 1,615,661 8.77 5.08 6.39
2001 7 12,104 135,047 1,502,314 11.16 5.11 8.36
2002 4 12,219 179,388 1,323,883 14.68 5.15 11.94
2003 7 28,027 198,802 1,146,316 7.09 11.82 15.02
2004 1 3,000 57,005 1,056,248 19.00 1.27 4.97
2005 - - - 1,018,599 - - -
2006 - - - 1,020,139 - - -
2007 1 25,899 228,170 850,598 8.81 10.92 22.37
2008 1 3,605 43,260 777,164 12.00 1.52 5.09
(1) No assumptions were made regarding the releasing of expired leases. It is the opinion
of our management that the space will be released at market rates, at the time of releasing.
</TABLE>
We received an appraisal prepared by an independent appraiser who is a member
in good standing of the American Institute of Real Estate Appraisers which
reported a fair market value for Lake Walden Square, as of January 15, 1999, of
$14,923,000. Appraisals are estimates of value and should not be relied on as
a measure of true worth or realizable value.
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Item 5. Other Events
Potential Property Acquisition
We are currently considering several potential property acquisitions. Each of
these properties, which are discussed below, has recently been acquired by
affiliates of Inland Real Estate Investment Corporations, our sponsor, with the
intention to keep these properties available for acquisition by us until we
receive sufficient net proceeds from the current public offerings of our shares
of common stock to be able to acquire them. If we purchase these properties
from the affiliates, we will pay the affiliates an amount equal to their
acquisition cost.
Casselberry Commons Shopping Center, Casselberry, Florida, was constructed in
1973 and fully renovated in 1998. It is a single-story retail center
containing 227,664 leasable square feet. As of the date of this report, the
affiliate's acquisition cost is approximately $17,683,000.
Town Center Commons, Kennesaw, Georgia, was constructed in 1998. It is
comprised of two one-story, multi-tenant retail buildings containing a total of
72,108 leasable square feet. As of the date of this report, the affiliate's
acquisition cost is approximately $9,678,000.
Boynton Commons, Boynton Beach, Florida, was constructed in 1998. It is
comprised of six one-story, multi-tenant retail buildings containing a total of
210,748 leasable square feet. As of the date of this report, the affiliate's
acquisition cost is approximately $30,553,000.
The acquisition costs of each property may increase by additional costs
incurred by the affiliates which have not yet been finally determined. We
expect these additional costs to be immaterial.
Distributions
We have decided to begin paying distributions on a monthly basis, with the
first monthly distribution to be paid June 7, 1999. Distributions have been
approved at an annual rate of $.70 per share.
Item 7. Financial Statements and Exhibits
(a) Financial Statements
To be subsequently filed.
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SIGNATURE
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
Inland Retail Real Estate Trust, Inc.
(Registrant)
By:/s/ KELLY TUCEK
Kelly Tucek
Treasurer and Chief Financial Officer
Date: May 17, 1999
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