Inland Retail Real Estate Trust, Inc.
Sticker Supplement
This Sticker Supplement No. 6 dated October 6, 1999 to our Prospectus dated
February 11, 1999 summarizes Supplement No. 6 which updates information in the
"Real Property Investments", "Investment Objectives and Policies" and "Plan of
Distribution" sections of our Prospectus. Supplement No. 6 expands upon,
supplements, modifies or supersedes certain information contained in the
Prospectus and its Supplements Nos. 4 and 5 dated August 2 and September 15,
1999, (which Supplement No. 4 superseded Supplements Nos. 1, 2 and 3), and must
be read in conjunction with our Prospectus and those Supplements. Any word
that is capitalized in this Sticker Supplement but not defined has the same
meaning as in our Prospectus.
Real Property Investments
Bartow Marketplace, Cartersville, Georgia
On September 30, 1999, we purchased Bartow Marketplace, an existing shopping
center containing 375,067 gross leasable square feet. This shopping center is
located on Georgia Highway 20, near the intersection of US Highway 41 and
Georgia Highway 411 in Cartersville, Georgia. We purchased this property for
$24,326,600, and incurred acquisition and financing costs of $169,429 for a
total acquisition cost of $24,496,029. This acquisition cost represents
approximately $65 per square foot of leasable space. We purchased this
property with the proceeds of a new first mortgage loan in the amount of
$18,375,000 from SouthTrust Bank, National Association, secured by deeds to
secure debt and security agreement and a collateral assignment of rents and
leases. As of September 30, 1999, our new property was 100% leased. The
tenants leasing more than 10% of the total square footage currently include
Wal-Mart with 204,170 square feet and Lowe's Home Centers with 130,497 square
feet.
Investment Objectives and Policies
Distributions
We have decided to increase distributions from a rate of $.73 per share per
annum to a rate of $.75 per share per annum, effective November 1, 1999,
beginning with the distribution to be paid December 7, 1999.
Plan of Distribution
As of September 30, 1999, we had sold 3,198,659 shares resulting in gross
proceeds of $31,986,590. Inland Securities Corporation, an affiliate of our
Advisor, serves as dealer manager of this Offering and is entitled to receive
selling commissions and certain other fees, as discussed further in our
Prospectus. As of September 30, 1999, we have incurred $3,038,726 of
commissions and fees payable to Inland Securities Corporation, which will
result in our receipt of $28,947,864 of net proceeds from the sale of those
3,198,659 shares. An additional 16,350 shares have been sold pursuant to our
Distribution Reinvestment Program as of September 30, 1999, for which we have
received additional net proceeds of $155,325. We also pay an affiliate of our
Advisor fees to manage and lease our properties. As of September 30, 1999, we
have incurred and paid property management fees of $100,519, of which $92,822
were retained by an affiliate of our Advisor. Our Advisor may also receive an
annual asset management fee of not more than 1% of our average invested assets,
to be paid quarterly. As of the end of the quarter ending September 30, 1999,
we had not paid or incurred any asset management fees. We may pay expenses
associated with property acquisitions of up to .5% of the money that we raise
in this Offering but in no event will we pay acquisition expenses on any
individual property that exceeds 6% of its purchase price. Acquisition
expenses totaling $84,429 are included in the purchase price we paid for Bartow
Marketplace.
SUPPLEMENT NO. 6
DATED OCTOBER 6, 1999
TO THE PROSPECTUS DATED FEBRUARY 11, 1999
OF INLAND RETAIL REAL ESTATE TRUST, INC.
We are providing this Supplement No. 6 to you in order to supplement our
Prospectus. This Supplement No. 6 updates information in the "Real Property
Investments", "Investment Objectives and Policies" and "Plan of Distribution"
sections of our Prospectus. This Supplement No. 6 expands upon, supplements,
modifies or supersedes certain information contained in the Prospectus and its
Supplements Nos. 4 and 5 dated August 2 and September 15, 1999, (which
Supplement No. 4 superseded Supplements Nos. 1, 2 and 3), and must be read in
conjunction with our Prospectus and those Supplements. Any word that is
capitalized in this Supplement but not defined has the same meaning as in our
Prospectus.
Real Property Investments
Bartow Marketplace, Cartersville, Georgia
On September 30, 1999, we purchased an existing shopping center known as Bartow
Marketplace located on approximately 46.66 acres and containing 375,067 gross
leasable square feet. Bartow Marketplace is located on Georgia Highway 20,
near the intersection of US Highway 41 and Georgia Highway 411 in Cartersville,
Georgia. Cartersville is located approximately 35 miles northwest of downtown
Atlanta.
We purchased Bartow Marketplace from an unaffiliated third party. Our total
acquisition cost, including expenses, was $24,496,029. This amount may
increase by additional costs which have not yet been finally determined. We
expect any additional costs to be immaterial. Our acquisition cost is
approximately $65 per square foot of leasable space, which consists of the
following:
* Purchase Price.......................... $ 24,326,600
* Acquisition costs to third parties...... 84,429
* Financing costs to an Inland affiliate.. 35,000
* Financing costs to third parties........ 50,000
Total.......... $ 24,496,029
=============
In evaluating this property 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 at the shopping center are
comparable to market rates. We believe that the shopping center is located
within a vibrant economic area. We did not consider any other factors
materially relevant to the decision to acquire this property.
We do not anticipate making any significant repairs and improvements to this
property 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.
We believe that this property is well located, has acceptable roadway access,
attracts high-quality tenants, is well maintained and has been professionally
managed. This property will be subject to competition from similar shopping
centers within its market area, and its economic performance could be affected
by changes in local economic conditions.
-1-
We purchased this property with the proceeds of a new first mortgage loan in
the amount of $18,375,000 from SouthTrust Bank, National Association, secured
by deeds to secure debt and security agreement and a collateral assignment of
rents and leases. The loan is evidenced by two promissory notes. One
promissory note is in the principal amount of $13,475,000, requires monthly
payments of interest only at a floating rate per annum of 1.50% over a LIBOR
related index, is due on September 30, 2004 and may be prepaid at any time
prior to maturity without penalty. However, the note provides that we may
elect to pay interest at a fixed rate equal to the greater of 7.75% or 2.00% in
excess of the rate being paid on U.S. Treasury Securities with a maturity date
closest to September 30, 2004 at the time of exercise of the option. If this
election is made, then the note may be prepaid in whole or in part at any time
prior to maturity with a penalty equal to 1.00% of the amount prepaid. The
other note is in the principal amount of $4,900,000, requires monthly payments
of interest only at a floating rate per annum of 1.50% over a LIBOR related
index, is due on September 30, 2000, and may be prepaid at any time prior to
maturity without penalty. We or any of our affiliates are required to maintain
deposit accounts with SouthTrust Bank, National Association beginning January
1, 2000; and by June 30, 2000, we must maintain an average collected demand
deposit balance or average overnight repurchase agreement balances of not less
than $2,000,000. In the event this condition is not met, the applicable
interest rate on both notes shall be increased by .0025% from the time this
occurs throughout the remaining term of the loan.
Bartow Marketplace, which was built in 1995, consists of a single-story, multi-
tenant retail center. As of September 30, 1999, this property was 100% leased.
Tenants leasing more than 10% of the total square footage currently include
Wal-Mart, a discount department store, and Lowe's Home Centers, a home
furnishing store. The leases with these tenants require the tenants to pay
base annual rent on a monthly basis as follows:
Base Rent
Approximate Per Square
GLA Foot Per
Leased % of Total Annum Lease Term
Lessee (Sq. Ft.) GLA ($) Beginning To
----------- ----------- ----------- ------------ ------------ ---------
Wal-Mart 204,170 54.44 5.41 10/1995 10/2015
Options (1) 5.41 11/2015 10/2035
Lowe's Home
Centers 130,497 34.79 6.03 10/1995 10/2015
Option 1 6.63 11/2015 10/2020
Option 2 7.30 11/2020 10/2025
Option 3 8.03 11/2025 10/2030
Option 4 8.83 11/2030 10/2035
Option 5 9.71 11/2035 10/2040
Option 6 10.68 11/2040 10/2045
(1) There are four successive five-year renewal options at the same base rent
per square foot per annum.
For federal income tax purposes, our depreciable basis in this property will be
approximately $18,372,000. 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. Real estate taxes for 1998 (the most recent tax year for which
information is generally available) were $22,410. Wal-Mart and Lowe's are
located on separately assessed parcels for real estate tax purposes and pay
their own tax bills. Real estate taxes for 1999 are expected to be
approximately $22,410.
-2-
On September 30, 1999, a total of 375,067 square feet was leased to 17 tenants
at this property. The following tables set forth certain information with
respect to our leases with those tenants:
Approximate
GLA Current Rent per
Leased Lease Renewal Annual Rent Square Foot
Lessee (Sq. Ft.) Ends Options ($) ($)
------ ---------- ----- ------- ----------- -----------
Wal-Mart 204,170 10/15 4/5 yr. 1,104,560 5.41
Lowe's Home Centers 130,497 10/15 6/5 yr. 786,897 6.03
Fashion Bug (2) 12,000 01/06 6/5 yr. 90,000 7.50
The Sport Shoe 4,800 03/01 - 61,200 12.75
Gold & Diamond
Exchange (2) 1,200 08/06 2/5 yr. 16,872 14.06
Dollar Tree 3,000 03/00 - 36,750 12.25
Payless Shoesource 3,000 05/06 2/5 yr. 36,750 12.25
Fast Rental 2,800 11/00 2/5 yr. 33,600 12.00
Hickory Hams 2,800 03/01 2/5 yr. 35,700 12.75
Sally Beauty
Supply 1,800 02/01 1/5 yr. 19,800 11.00
Gorin's Cafe &
Grill 1,800 05/01 2/5 yr. 22,950 12.75
V. Nail Salon 1,200 12/00 - 16,068 13.39
Mailboxes, Etc. 1,200 12/00 1/5 yr. 15,600 13.00
Team Personnel
Services 1,200 01/01 - 15,756 13.13
Hair Cuttery 1,200 03/01 - 17,304 14.42
Tele-Dynamics 1,200 11/01 - 16,044 13.37
New Ming Moon 1,200 08/04 1/5 yr. 16,800 14.00
(1) Each tenant also pays its proportionate share of real estate taxes,
insurance and common area maintenance costs. In addition, Lowe's Home
Centers, Fashion Bug, The Sport Shoe, Gold & Diamond Exchange, Dollar Tree,
Payless Shoesource, Hickory Hams, Sally's Beauty Supply, Gorin's Cafe &
Grill and Hair Cuttery pay, as additional rent, a percentage of gross sales
in excess of a prescribed amount.
(2) Gold & Diamond Exchange is expanding into 2,400 square feet of space
currently occupied by Fashion Bug (which will downsize by a like amount of
square footage). Fashion Bug will continue to pay its current rental of
$7,500 per month until November 2nd, 1999 at which time its rent shall
reduce automatically to $6,000 per month (reflecting the downsizing from
12,000 square feet to 9,600 square feet). Gold & Diamond Exchange shall
continue paying its current rental in the amount of $1,406 per month
through the 45th day after Landlord's delivery of the expansion space (i.e.
2,400 additional square feet taken from Fashion Bug) at which time its
rental shall automatically increase to $4,218 per month.
-3-
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Annual Base Total Per Square Building GLA Rent
Approx. GLA Rent of Annual Foot Under Represented Represented
Year Number of of Expiring Expiring Base Expiring by Expiring By Expiring
Ending Leases Leases Leases Rent (1) Leases Leases Leases
December 31, Expiring (Sq. Ft.) ($) ($) ($) (%) (%)
- ----------- --------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1999 - - - 2,349,211 - - -
2000 4 8,200 102,663 2,334,979 12.52 2.19 4.37
2001 7 14,800 194,368 2,139,697 13.13 3.95 8.32
2002 - - - 2,080,499 - - -
2003 - - - 2,081,051 - - -
2004 1 1,200 18,912 2,074,747 15.76 .32 .91
2005 - - - 2,062,139 - - -
2006 3 16,200 170,682 1,950,133 10.54 4.32 8.28
2007 - - - 1,891,457 - - -
2008 - - - 1,891,457 - - -
(1) We made no assumptions regarding the re-leasing of expired leases. It is the opinion of
our management that the space will be re-leased at market rates at the time of re-leasing.
</TABLE>
We received an appraisal prepared in conformity with the Uniform Standards of
Professional Appraisal Practice of the Appraisal Institute and the Appraisal
Foundation by an independent appraiser who is a member of the Appraisal
Institute. The appraisal reported a fair market value for Bartow Marketplace,
as of August 31, 1999, of $24,500,000. Appraisals are estimates of value and
should not be relied on as a measure of true worth or realizable value.
Investment Objectives and Policies
Distributions
We have decided to increase distributions from a rate of $.73 per share per
annum to a rate of $.75 per share per annum, effective November 1, 1999,
beginning with the distribution to be paid December 7, 1999.
-4-
Plan of Distribution
As of September 30, 1999, we had sold 3,198,659 shares resulting in gross
proceeds of $31,986,590. Inland Securities Corporation, an affiliate of our
Advisor, serves as dealer manager of this Offering and is entitled to receive
selling commissions and certain other fees, as discussed further in our
Prospectus. As of September 30, 1999, we have incurred $3,038,726 of
commissions and fees payable to Inland Securities Corporation, which will
result in our receipt of $28,947,864 of net proceeds from the sale of those
3,198,659 shares. An additional 16,350 shares have been sold pursuant to our
Distribution Reinvestment Program, for which we will receive additional net
proceeds of $155,325. We also pay an affiliate of our Advisor fees to manage
and lease our properties. As of September 30, 1999, we have incurred and paid
property management fees of $100,519, of which $92,822 were retained by an
affiliate of our Advisor. Our Advisor may also receive an annual asset
management fee of not more than 1% of our average invested assets, paid
quarterly. As of the end of the quarter ending September 30, 1999, we had not
paid or incurred any asset management fees. We may pay expenses associated
with property acquisitions of up to .5% of the money that we raise in this
Offering but in no event will we pay acquisition expenses on any individual
property that exceeds 6% of its purchase price. Acquisition expenses totaling
$84,429 are included in the purchase price we paid for Bartow Marketplace.
-5-
