We are currently considering acquiring the following property. Our decision to acquire this property will generally depend upon:

• no material adverse change occurring in the property, then tenants or in the local economic conditions; and
• our receipt of sufficient net proceeds from this offering to make the acquisitions.

Other properties may be identified in the future that we may acquire before or instead of this property. We cannot guarantee that we will complete this acquisition.

Universal Plaza, Lauderhill, Florida

This property, which originally consisted of 18.48 acres, is currently being reconfigured and redeveloped. Approximately 13.68 acres of the original property was sold by the seller to Target Corporation for the construction of a new 184,000 square foot Super Target Store. The balance of the acreage, approximately 4.8 acres is being redeveloped as a shopping center to be known as Universal Plaza, containing 49,749 gross leasable square feet. The site is located on the southwest corner of University Drive and Commercial Boulevard.

Upon completion of the redevelopment, we anticipate purchasing Universal Plaza from the unaffiliated third party. Our total acquisition cost, including expenses, is expected to be approximately $9,000,000. This amount may increase or decrease as a result of our agreement, as contained in the purchase contract, to adjust the purchase price based upon lease rates achieved if and when certain stores, which were vacant at the time the purchase contract was signed, become leased and the new tenants begin paying rent. Any adjustment is intended to maintain a minimum capitalization rate of 10.0%. This amount may also increase by additional costs which have not yet been finally determined. We expect any of such other additional costs to be insignificant. Our acquisition cost is expected to be approximately $180 per square foot of leasable space.

Prior to our acquisition of this property, we intend to fund a loan to the seller in the principal amount of $1,100,000, to be secured by a second mortgage on the property, subject to the approval of the first mortgage holder. The note will bear an interest rate of 10% per annum and will mature August 31, 2002. The seller will be required to deposit $192,500 to an escrow account for the payment of interest. If the note is not paid within one year of funding, the payment of a fee of $50,000 is required and the deposit of an additional amount into the escrow for the payment of interest during the extension term must be made. We will obtain personal guaranties from the seller/developer with regards to the obligations of this loan.

In evaluating this property as a potential acquisition, we considered a variety of factors including location, demographics, price per square foot, projected tenant mix and the fact that overall rental rates for the spaces currently signed at the shopping center are comparable to market rates. We believe that the shopping center is well located within a vibrant economic area. We believe that this property has acceptable roadway access and will attract high-quality tenants, 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. We did not consider any other factors materially relevant to the decision to acquire this property.

As of November 1, 2000, leases have been signed for approximately 35% of the center. Currently, one tenant, Eckerds (a retail drug store) will lease more than 10% of the total gross leasable area of the property. The lease with this tenant requires the tenants to pay base annual rent on a monthly basis as follows:

This lease includes four successive five year options.

For federal income tax purposes, the depreciable basis in this property will be approximately $6,700,000. 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 20 years, respectively.

As of November 1, 2000, a total 17,191 square feet was leased to four tenants at this property. In addition, there are five leases pending for a total of 8,670 square feet. The following table sets forth certain information with respect to those leases.

We received a limited appraisal dated August 10, 2000 which is an update of a complete appraisal dated December 6, 1999, which states that it was prepared in conformity with the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation by an independent appraiser who is a member of the Appraisal Institute. The appraisal reported a prospective market value of the leased fee interest upon completion and upon stabilized operations for Universal Plaza, as of September 2001 to be $10,000,000. Appraisals are estimates of value and should not be relied on as a measure of true worth or realizable value.

As of November 24, 2000, we had sold 11,745,452 shares resulting in gross proceeds of $117,037,580. 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 November 24, 2000, we have incurred $9,845,068 of commissions and fees payable to Inland Securities Corporation, which will result in our receipt of $107,192,512 of net proceeds from the sale of those 11,745,452 shares. An additional 229,222 shares have been sold pursuant to our Distribution Reinvestment Program as of November 24, 2000, for which we have received additional net proceeds of $2,177,609. As of November 24, 2000, we had repurchased 49,523 shares through our Share Repurchase Program resulting in disbursements totaling $448,183. As a result, our gross offering proceeds total approximately $118,767,000 as of November 24, 2000, including amounts raised through our Distribution Reinvestment Program, net of shares repurchased through our Share Repurchase Program. We also pay an affiliate of our Advisor, which is owned principally by individuals who are affiliates of Inland, fees to manage and lease our properties. For the nine months ended September 30, 2000 and for the period ending December 31, 1999, we have incurred and paid property management fees of $670,916 and $225,665, respectively. Our Advisor may also receive an annual asset management fee of not more than 1% of our average invested assets, to be paid quarterly. For the nine months ended September 30, 2000, we had incurred $90,000 of such fees, which we have since paid in full. As of the end of our last fiscal year ending December 31, 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 $1,046,722 are included in the purchase prices we have paid for all our properties purchased through November 24, 2000. As of November 24, 2000, we had invested approximately $84,559,000 in properties that we purchased for an aggregate purchase price of approximately $191,047,000. After expenditures for organization and offering expenses and acquisition expenses and establishing appropriate reserves, as of November 24, 2000, we had net offering proceeds of approximately $19,557,000 available for investment in additional properties.

On November 21, 2000, Inland Real Estate Investment Corporation, our Sponsor, purchased 331,491,713 shares for $3,314,917.13.