SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: December 30, 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)
-1-
We filed a Form 8-K dated December 30, 1999 on January 14, 2000 with regard to
the acquisition of Casselberry Commons without the requisite financial
information. Accordingly, we are filing this Form 8-K/A to include that
financial information. We filed a Form 8-K/A dated September 1, 1999 on
November 12, 1999 with the requisite financial information for Countryside
Shopping Center.
Item 7. Financial Statements and Exhibits
Index to Financial Statements
Page
Inland Retail Real Estate Trust, Inc.:
Pro Forma Consolidated Balance Sheet (unaudited)
at September 30, 1999............................................. F- 1
Notes to Pro Forma Consolidated Balance Sheet (unaudited)
at September 30, 1999............................................. F- 3
Pro Forma Consolidated Statement of Operations (unaudited)
for the nine months ended September 30, 1999...................... F- 5
Notes to Pro Forma Consolidated Statement of Operations (unaudited)
for the nine months ended September 30, 1999...................... F- 7
Pro Forma Consolidated Statement of Operations (unaudited)
for the year ended December 31, 1998.............................. F-10
Notes to Pro Forma Consolidated Statement of Operations (unaudited)
for the year ended December 31, 1998.............................. F-12
Casselberry Commons:
Independent Auditors' Report........................................ F-15
Historical Summary of Gross Income and Direct Operating Expenses
for the year ended December 31, 1998.............................. F-16
Notes to the Historical Summary of Gross Income and Direct
Operating Expenses for the year ended December 31, 1998........... F-17
Historical Summary of Gross Income and Direct Operating Expenses
(unaudited) for the nine months ended September 30, 1999.......... F-19
Notes to the Historical Summary of Gross Income and Direct
Operating Expenses (unaudited) for the nine months
ended September 30, 1999.......................................... F-20
-2-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
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/ BARRY L. LAZARUS
Barry L. Lazarus
President, Chief Operating Officer,
Treasurer and Chief Financial Officer
Date: February 16, 2000
-3-
Inland Retail Real Estate Trust, Inc.
Pro Forma Consolidated Balance Sheet
September 30, 1999
(unaudited)
The following unaudited Pro Forma Consolidated Balance Sheet is presented as if
the acquisition of the properties indicated in Note B had occurred on September
30, 1999.
Pro Forma Consolidated Balance Sheet should provide investors with information
about the continuing impact of particular transactions by showing how they may
affect historical financial statements if the transactions were consummated at
an earlier time. Such statements should assist investors in analyzing the
future prospects of the registrant because they illustrate the possible scope
of the change in the registrant's historical financial position and results of
operations caused by the transactions.
This unaudited Pro Forma Consolidated Balance Sheet is not necessarily
indicative of what the actual financial position would have been at September
30, 1999, nor does it purport to represent our future financial position.
Unless otherwise defined, capitalized terms used herein shall have the same
meaning as in the Prospectus.
F-1
Inland Retail Real Estate Trust, Inc.
Pro Forma Consolidated Balance Sheet
September 30, 1999
(unaudited)
Pro Forma
Adjustments
-------------
(A) Property Pro Forma
Historical Acquisitions as adjusted
------------- -------------- -------------
Assets
- ------
Net investment in
properties(B)............. $100,396,313 26,361,971 126,758,284
Cash........................ 2,834,411 429,449 3,263,860
Accounts and rents
receivable................ 378,822 - 378,822
Escrowed funds (E).......... 513,669 - 513,669
Furniture and Equipment..... 10,386 - 10,386
Loan fees................... 129,724 - 129,724
Other assets................ 123,964 - 123,964
------------- -------------- -------------
Total assets................ $104,387,289 26,791,420 131,178,709
============= ============== =============
Liabilities and Stockholders' Equity
- ------------------------------------
Accrued real estate taxes... 373,085 211,941 585,026
Security deposits........... 165,150 63,028 228,178
Mortgages payable (D)....... 73,614,927 20,644,800 94,259,727
Unearned income............. 152,067 - 152,067
Accounts payable............ 37,177 - 37,177
Accrued interest payable.... 339,809 - 339,809
Other liabilities........... 113,140 - 113,140
Distribution payable........ 175,621 - 175,621
Due to Affiliates........... 542,624 - 542,624
Accrued offering costs...... 2,853,774 - 2,853,774
------------- -------------- -------------
Total liabilities........... 78,367,374 20,919,769 99,287,143
------------- -------------- -------------
Minority interest in
partnership (C)........... 2,000 - 2,000
Common Stock................ 32,150 6,828 38,978
Additional paid-in capital
(net of Offering costs)... 26,458,891 5,864,823 32,323,714
Accumulated distributions in
excess of net income...... (473,126) - (473,126)
------------- -------------- -------------
Total stockholders' equity.. 26,017,915 5,871,651 (F) 31,889,566
------------- -------------- -------------
Total liabilities and
stockholders' equity...... $104,387,289 26,791,420 131,178,709
============= ============== =============
See accompanying notes to pro forma consolidated balance sheet.
F-2
Inland Retail Real Estate Trust, Inc.
Notes to Pro Forma Consolidated Balance Sheet
September 30, 1999
(unaudited)
(continued)
(A) The historical column represents our Consolidated Balance Sheet as of
September 30, 1999. We were formed on September 3, 1998. As of September
30, 1999, subscriptions for a total of 3,198,659 Shares had been received
from the public at $10 per Share. In addition, the Company has distributed
16,350 Shares pursuant to the Company's DRP. In addition, we have received
the Advisor's capital contribution of $200,000 for which it was issued
20,000 Shares.
(B) The pro forma adjustments reflect the acquisition of the following
properties purchased on October 26 and December 30, 1999:
Countryside Total
Shopping Casselberry Property
Center Commons Acquisitions
------------ ------------ -------------
Assets
- ------
Net investment in
properties........... $ 8,595,602 17,766,369 26,361,971
Cash................... 283,810 145,639 429,449
------------ ------------ ------------
Total assets........... $ 8,879,412 17,912,008 26,791,420
============ ============ ============
Liabilities and Stockholders' Equity
- ------------------------------------
Accrued real
estate taxes......... 54,000 157,941 211,941
Security deposits...... 11,700 51,328 63,028
Mortgages payable (D).. 6,720,000 13,924,800 20,644,800
------------ ------------ ------------
Total liabilities...... 6,785,700 14,134,069 20,919,769
------------ ------------ ------------
Common Stock........... 2,435 4,393 6,828
Additional paid in
capital (net of
Offering costs)...... 2,091,277 3,773,546 5,864,823
------------ ------------ ------------
Total stockholders'
equity (F)........... 2,093,712 3,777,939 5,871,651
------------ ------------ ------------
Total liabilities and
stockholders' equity. $ 8,879,412 17,912,008 26,791,420
============ ============ ============
F-3
Inland Retail Real Estate Trust, Inc.
Notes to Pro Forma Consolidated Balance Sheet
September 30, 1999
(unaudited)
(continued)
(C) The Pro Forma Consolidated Balance Sheet includes the accounts of the
Operating Partnership in which the Company has an approximately 99%
controlling general partner interest. The Advisor owns the remaining
approximately 1% limited partnership common units in the Operating
Partnership for which it paid $2,000 and which is reflected as a minority
interest.
(D) Represents the first mortgage loans assumed and originated in conjunction
with the acquisition of properties. These mortgage loans with an aggregate
principal balance of approximately $94,260,000 are payable to third parties
at interest rates ranging from 7.0% to 8.25% per annum and have maturities
ranging from March 2000 to November 2008.
(E) Represents real estate tax and insurance escrows held.
(F) Additional offering proceeds of $6,828,000, net of offering costs of
$956,349, are reflected as received as of September 30, 1999. Offering
costs consist principally of registration costs, printing and selling
costs, including commissions.
F-4
Inland Retail Real Estate Trust, Inc.
Pro Forma Consolidated Statement of Operations
For the nine months ended September 30, 1999
(unaudited)
The following unaudited Pro Forma Consolidated Statement of Operations is
presented to effect the acquisition of the properties indicated in Note B of
the Notes to the Pro Forma Consolidated Statement of Operations as though they
occurred on January 1, 1998.
This unaudited Pro Forma Consolidated Statement of Operations is not
necessarily indicative of what the actual results of operations would have been
for the nine months ended September 30, 1999, nor does it purport to represent
our future financial position. Unless otherwise defined, capitalized terms
used herein shall have the same meaning as in the Prospectus.
F-5
Inland Retail Real Estate Trust, Inc.
Pro Forma Consolidated Statement of Operations
For the nine months ended September 30, 1999
(unaudited)
Historical
------------
Company Pro Forma
(A) Adjustment Pro Forma
------------ ------------ ------------
Rental income.................... $ 1,821,483 1,687,672 3,509,155
Additional rental income......... 505,354 417,526 922,880
Interest income.................. 98,758 - 98,758
Other income..................... 100 - 100
------------ ------------ ------------
Total income..................... 2,425,695 2,105,198 4,530,893
------------ ------------ ------------
Professional services............ 60,288 - 60,288
General and administrative
expenses....................... 104,306 - 104,306
Advisor asset management fee (C). - 197,715 197,715
Property operating expenses...... 612,973 805,684 1,418,657
Management fee (G)............... 104,708 94,734 199,442
Interest expense (H)............. 967,363 1,183,091 2,150,454
Acquisition costs expensed....... 25,281 - 25,281
Depreciation and amortization(D) 480,809 511,174 991,983
------------ ------------ ------------
Total expenses................... 2,355,728 2,792,398 5,148,126
------------
Net income (loss) applicable to
common shareholders (F)........ 69,967 (687,200) $ (617,233)
============ ============ ============
Weighted average number of
shares of common stock
outstanding (E)................ - - 3,897,800
============
Basic and diluted net loss
per weighted average
shares of common stock
outstanding (E)................ - - $ (.16)
============
See accompanying notes to pro forma consolidated statement of operations.
F-6
Inland Retail Real Estate Trust, Inc.
Notes to Pro Forma Consolidated Statement of Operations
For the nine months ended September 30, 1999
(unaudited)
(A) Historical information represents the historical statement of operations of
the Company for the nine months ended September 30, 1999 as filed with the
SEC on Form 10-Q.
(B) Total pro forma adjustments for acquisitions are as though they were
acquired January 1, 1998.
Countryside
Shopping Casselberry Total
Center Commons Pro Forma
----------- ----------- -----------
Rental income........ 579,776 1,107,896 1,687,672
Additional rental
income............. 164,672 252,854 417,526
----------- ---------- -----------
Total income......... 744,448 1,360,750 2,105,198
----------- ---------- -----------
Advisor asset
management fee (C). 64,467 133,248 197,715
Property operating
expenses........... 197,137 608,547 805,684
Management fee (G)... 33,500 61,234 94,734
Interest expense (H). 359,352 823,739 1,183,091
Depreciation (D)..... 204,704 306,470 511,174
----------- ---------- -----------
Total expenses....... 859,160 1,933,238 2,792,398
----------- ---------- -----------
Net income (loss).... (114,712) (572,488) (687,200)
=========== ========== ===========
F-7
Inland Retail Real Estate Trust, Inc.
Notes to Pro Forma Consolidated Statement of Operations
For the nine months ended September 30, 1999
(unaudited)
(C) The advisor asset management fee has been calculated as 1% of the cost of
acquisition of the properties, prorated for the 9 months.
(D) Depreciation expense is computed using the straight-line method, based upon
an estimated useful life of thirty years for buildings and fifteen years
for improvements. The allocation of land, buildings and improvements was
based upon values stated in the related appraisal.
(E) The pro forma weighted average shares of common stock outstanding for the
nine months ended September 30, 1999 was calculated using the additional
shares sold to purchase each of the properties on a weighted average basis
plus the 20,000 shares purchased by the Advisor in connection with our
organization.
(F) The net income (loss) allocable to the minority interest is immaterial, and
therefore, has been excluded.
(G) Management fees are calculated as 4.5% of gross revenues.
(H) As part of the acquisition of certain of these properties, the Company
assumed existing debt. The pro forma adjustments relating to interest
expense were based on the following terms:
Countryside Shopping Center
Inland Retail Real Estate Trust, Inc. acquired Countryside Shopping Center
from an affiliate of our Advisor. As part of the acquisition, the Company
assumed the outstanding mortgage debt related to Countryside Shopping
Center of approximately $6,720,000 in connection with the acquisition. The
assumed debt, which originated March 31, 1998, has an annual interest rate
of 175 basis points over LIBOR (currently 7.13%).
Casselberry Commons
The Company acquired Casselberry Commons from an affiliate of our Advisor.
As part of the acquisition, Inland Retail Real Estate Trust, Inc. assumed
two outstanding debts secured by one mortgage related to Casselberry
Commons of approximately $13,924,000. The assumed debts, which originated
April 29, 1999, have annual interest rates of 7.64% and 250 basis points
over LIBOR (currently 8.3%), respectively.
F-8
Inland Retail Real Estate Trust, Inc.
Pro Forma Consolidated Statement of Operations
For the year ended December 31, 1998
(unaudited)
The following unaudited Pro Forma Consolidated Statement of Operations is
presented to effect the acquisition of the properties indicated in Note B of
the Notes to the Pro Forma Consolidated Statement of Operations as though they
occurred on January 1, 1998.
This unaudited Pro Forma Consolidated Statement of Operations is not
necessarily indicative of what the actual results of operations would have been
for the year ended December 31, 1998, nor does it purport to represent our
future financial position. Unless otherwise defined, capitalized terms used
herein shall have the same meaning as in the Prospectus.
F-9
Inland Retail Real Estate Trust, Inc.
Pro Forma Consolidated Statement of Operations
For the year ended December 31, 1998
(unaudited)
Historical
-------------
Pro Forma
Company Adjustment
(A) (B) Pro Forma
------------- ----------- ------------
Rental income..................... $ - 1,783,023 1,783,023
Additional rental income.......... - 477,654 1,574,543
------------- ----------- ------------
Total income...................... - 2,260,677 2,260,677
------------- ----------- ------------
Advisor asset management fee (E).. - 263,620 263,620
Property operating expenses....... - 614,142 614,142
Management fee (G)................ - 114,827 114,827
Interest expense (H).............. - 1,577,455 1,577,455
Depreciation (C).................. - 692,281 692,281
------------- ----------- ------------
Total expenses.................... - 3,262,325 3,262,325
------------
Net loss applicable to
common shareholders (F)......... $(1,001,648)
============
Weighted average number of
shares of common stock
outstanding (D)................. 3,897,800
============
Basic and diluted net loss
per weighted average
shares of common stock
outstanding (D)................. $ (.26)
============
See accompanying notes to pro forma consolidated statement of operations.
F-10
Inland Retail Real Estate Trust, Inc.
Notes to Pro Forma Consolidated Statement of Operations
For the year ended December 31, 1998
(unaudited)
(A) Historical information is not applicable as the Company had no operations
through December 31, 1998.
(B) Total pro forma adjustments for acquisitions are as though they were
acquired January 1, 1998.
Countryside Total
Shopping Casselberry Pro Forma
Center Commons Adjustment
----------- ----------- -----------
Rental income............. 778,507 1,004,516 1,783,023
Additional rental income.. 184,708 292,946 477,654
----------- ----------- -----------
Total income.............. 963,215 1,297,462 2,260,677
----------- ----------- -----------
Advisor asset
management fee (E)...... 85,956 177,664 263,620
Property operating
expenses................ 240,579 373,563 614,142
Management fees (G)....... 43,345 71,482 114,827
Interest expense (H)...... 479,136 1,098,319 1,577,455
Depreciation (C).......... 283,655 408,626 692,281
----------- ----------- -----------
Total expenses............ 1,132,671 2,129,654 3,262,325
----------- ----------- -----------
Net income (loss)......... (169,456) (832,192) (1,001,648)
=========== =========== ===========
F-11
Inland Retail Real Estate Trust, Inc.
Notes to Pro Forma Consolidated Statement of Operations
For the year ended December 31, 1998
(unaudited)
Acquisition of Countryside Shopping Center, Naples, Florida
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1998 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Countryside Shopping Center
------------------------------------
*As Pro Forma
Reported Adjustments Total
------------ ----------- -----------
Rental income............. $ 778,507 - 778,507
Additional rental income.. 184,708 - 184,708
------------ ----------- -----------
Total income.............. 963,215 - 963,215
------------ ----------- -----------
Advisor asset
management fee (E)..... - 85,956 85,956
Property operating
expenses................ 240,579 - 240,579
Management fees (G)....... 31,848 11,497 43,345
Interest expense (H)...... 336,092 143,044 479,136
Depreciation (C).......... - 283,655 283,655
------------ ----------- -----------
Total expenses............ 608,519 524,152 1,132,671
------------ ----------- -----------
Net income (loss)......... $ 354,696 (524,152) (169,456)
============ =========== ===========
Acquisition of Casselberry Commons, Casselberry, Florida
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1998 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Casselberry Commons
------------------------------------
*As Pro Forma
Reported Adjustments Total
------------ ----------- -----------
Rental income............. $ 1,004,516 - 1,004,516
Additional rental income.. 292,946 - 292,946
------------ ----------- -----------
Total income.............. 1,297,462 - 1,297,462
------------ ----------- -----------
Advisor asset
management fee (E)..... - 177,664 177,664
Property operating
expenses................ 373,563 - 373,563
Management fees (G)....... 71,482 - 71,482
Interest expense (H)...... - 1,098,319 1,098,319
Depreciation (C).......... - 408,626 408,626
------------ ----------- -----------
Total expenses............ 445,045 1,684,609 2,129,654
------------ ----------- -----------
Net income (loss)......... $ 852,417 (1,684,609) (832,192)
============ =========== ===========
F-12
Inland Retail Real Estate Trust, Inc.
Notes to Pro Forma Consolidated Statement of Operations
For the year ended December 31, 1998
(unaudited)
(C) Depreciation expense is computed using the straight-line method, based upon
an estimated useful life of thirty years for buildings and fifteen years
for improvements. The allocation of land, buildings and improvements is
based upon values stated in the related appraisal.
(D) The pro forma weighted average number of shares of common stock for the
year ended December 31, 1998 was calculated by using the additional shares
sold to purchase each of the properties on a weighted average basis plus
the 20,000 shares purchased by the Advisor in connection with our
organization.
(E) The Advisor asset management fee has been calculated as 1% of the cost of
acquisition of the properties
(F) The net income (loss) allocable to the minority interest is immaterial, and
therefore, has been excluded.
(G) Management fees are calculated at 4.5% of gross revenues.
F-13
Inland Retail Real Estate Trust, Inc.
Notes to Pro Forma Consolidated Statement of Operations
For the year ended December 31, 1998
(unaudited)
(H) As part of the acquisition of certain of these properties, the Company
assumed existing debt. The pro forma adjustments relating to interest
expense were based on the following terms:
Countryside Shopping Center
Inland Retail Real Estate Trust, Inc. assumed the outstanding mortgage debt
related to Countryside Shopping Center of approximately $6,720,000 in
connection with the acquisition. The assumed debt, which originated March
31, 1998, has an annual interest rate of 175 basis points over LIBOR
(currently 7.13%).
Casselberry Commons
As part of the acquisition, the Company assumed two outstanding debts
secured by one mortgage related to Casselberry Commons of approximately
$13,924,000 from an affiliate of our Advisor. The assumed debts, which
originated April 29, 1999, have annual interest rates of 7.64% and 250
basis points over LIBOR (currently 8.3%), respectively.
F-14
Independent Auditors' Report
The Board of Directors
Inland Retail Real Estate Trust, Inc.:
We have audited the accompanying Historical Summary of Gross Income and Direct
Operating Expenses (Historical Summary) of Casselberry Commons for the year
ended December 31, 1998. This Historical Summary is the responsibility of the
management of Inland Retail Real Estate Trust, Inc. Our responsibility is to
express an opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Historical Summary is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the Historical Summary. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the Historical Summary. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and
for inclusion in the Post Effective Amendment No. 3 to Form S-11 of Inland
Retail Real Estate Trust, Inc., as described in note 2. The presentation is
not intended to be a complete presentation of Casselberry Common's revenues and
expenses.
In our opinion, the Historical Summary referred to above presents fairly, in
all material respects, the gross income and direct operating expenses described
in note 2 of Casselberry Commons for the year ended December 31, 1998, in
conformity with generally accepted accounting principles.
KPMG LLP
Chicago, Illinois
April 27, 1999
F-15
Casselberry Commons
Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1998
Gross income:
Base rental income.............................. $1,004,516
Operating expense and real estate
tax recoveries................................ 239,293
Percentage rent................................. 53,653
-----------
Total Gross Income.............................. 1,297,462
-----------
Direct operating expenses:
Real estate taxes............................... 132,310
Operating expenses.............................. 172,099
Management fees................................. 71,482
Insurance....................................... 29,935
Utilities....................................... 39,219
-----------
Total direct operating expenses................. 445,045
-----------
Excess of gross income over
direct operating expenses..................... $ 852,417
===========
See accompanying notes to historical summary of gross income and direct
operating expenses.
F-16
Casselberry Commons
Notes to Historical Summary of Gross Income and Direct Operating Expenses
For the Year ended December 31, 1998
1. Business
Casselberry Commons (Casselberry) is located in Orlando, Florida. It
consists of approximately 227,700 square feet of gross leasable area and
was 89% leased and occupied at December 31, 1998. Approximately 46% of
Casselberry is leased to four tenants representing approximately 44% of
base rental income. An Affiliate of Inland Retail Real Estate Trust, Inc.
has purchased Casselberry from an unaffiliated third party on behalf of
Inland Retail Real Estate Trust, Inc. Inland Retail Real Estate Trust,
Inc. will acquire Casselberry from this affiliate at their cost upon
receipt of proceeds from an equity offering.
2. Basis of Presentation
The Historical Summary of Gross Income and Direct Operating Expenses
(Historical Summary) has been prepared for the purpose of complying with
Rule 3-14 of the Securities and Exchange Commission Regulation S-X and for
inclusion in the Post Effective Amendment No. 3 to Form S-11 of Inland
Retail Real Estate Trust, Inc. and is not intended to be a complete
presentation of Casselberry's revenues and expenses. The Historical
Summary has been prepared on the accrual basis of accounting and requires
management of Casselberry to make estimates and assumptions that affect the
reported amounts of the revenues and expenses during the reporting period.
Actual results may differ from those estimates.
3. Gross Income
Casselberry leases retail space under various lease agreements with its
tenants. All leases are accounted for as operating leases. The leases
include provisions under which Casselberry is reimbursed for common area
costs, real estate taxes and insurance costs. Operating expenses and real
estate tax recoveries reflected in the Historical Summary include amounts
for 1998 expenses for which tenants have not yet been billed. Certain
leases contain renewal options for various periods at various rental rates.
Base rentals are reported as income over the lease term as they become
receivable under the lease provisions. However, when rentals vary from a
straight-line basis due to short-term rent abatements or escalating rents
during the lease term, the income is recognized based on effective rental
rates. Related adjustments increased base rental income by $18,056 for the
year ended December 31, 1998.
F-17
Casselberry Commons
Notes to Historical Summary of Gross Income and Direct Operating Expenses
For the Year ended December 31, 1998
Minimum rents to be received from tenants under operating leases in effect
at December 31, 1998, are as follows:
Year Amount
---- ------
1999 $ 1,545,278
2000 1,511,405
2001 1,447,929
2002 1,362,923
2003 982,041
Thereafter 3,529,552
-----------
$10,379,128
===========
4. Direct Operating Expenses
Direct operating expenses include only those costs expected to be
comparable to the proposed future operations of Casselberry. Costs such as
mortgage interest, depreciation, amortization and professional fees are
excluded from the Historical Summary.
Casselberry is managed by an affiliate of the seller pursuant to the terms
of a management agreement for an annual fee of 5% of cash receipts.
Subsequent to the sale of Casselberry (note 1), the current management
agreement will cease. Any new management agreement may cause future
management fees to differ from the amounts reflected in the Historical
Summary.
F-18
Casselberry Commons
Historical Summary of Gross Income and Direct Operating Expenses
Nine months ended September 30, 1999
(unaudited)
Gross income:
Base rental income.............................. $1,107,896
Operating expense and real estate
tax and insurance recoveries.................. 252,854
-----------
Total gross income.............................. 1,360,750
-----------
Direct operating expenses:
Operating expenses.............................. 415,354
Management fees................................. 61,234
Real estate taxes............................... 166,943
Insurance....................................... 26,250
Interest expense................................ 457,633
-----------
Total direct operating expenses................. 1,127,414
-----------
Excess of gross income over
direct operating expenses..................... $ 233,336
===========
See accompanying notes to historical summary of gross income and direct
operating expenses.
F-19
Casselberry Commons
Notes to Historical Summary of Gross Income and Direct Operating Expenses
Nine months ended September 30, 1999
(unaudited)
1. Basis of Presentation
The Historical Summary of Gross Income and Direct Operating Expenses for the
nine months ended September 30, 1999 has been prepared from operating
statements provided by the owners of the property during that period and
requires management of Casselberry Commons to make estimates and assumptions
that affect the amounts of the revenues and expenses during that period.
Actual results may differ from those estimates.
In the opinion of management, all normal recurring adjustments necessary for
a fair presentation of results for the unaudited interim period presented
have been reflected. Certain information in footnote disclosures included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted.
2. The Company acquired Casselberry Commons from an affiliate of our Advisor.
As part of the acquisition, Inland Retail Real Estate Trust, Inc. assumed
two outstanding debts secured by one mortgage related to Casselberry Commons
of approximately $13,924,000. The assumed debts, which originated April 29,
1999, have annual interest rates of 7.64% and 250 basis points over LIBOR
(currently 8.3%), respectively.
F-20
