<PAGE> 1
Inland Real Estate Corporation
Sticker Supplement
Supplement No. 8 to the Company's Prospectus discloses information
regarding six recently completed acquisitions of property and updates certain
information in the sections of the Prospectus headed "Real Property
Investments" and "Plan of Distribution". Unless otherwise defined, capitalized
terms used herein shall have the same meaning as in the Prospectus.
On December 24, 1996, the Company completed the acquisition of a
21,222 square foot Neighborhood Retail Center known as Grand & Hunt Club Outlot
Center located at Grand Avenue and Hunt Club Road in Gurnee, Illinois for
approximately $3.6 million. The center was purchased from an unaffiliated
third party. On December 24, 1996, The Company also completed the acquisition
of a 9,650 square foot Neighborhood Retail Center known as The Quarry Outlot
located at La Grange Road and Joliet Road in Hodgkins, Illinois for
approximately $1.8 million. The center was purchased from an unaffiliated
third party. On December 27, 1996, the Company completed the acquisition of a
20,004 square foot Neighborhood Retail Center known as Crestwood Plaza Shopping
Center located at 13335 South Cicero Avenue in Crestwood, Illinois for
approximately $1.81 million. The center was purchased from an affiliated third
party. On December 31, 1996, the Company completed the acquisition of an 11,859
square foot Neighborhood Retail Center known as Park St. Clair Plaza located at
Higgins and Meacham Roads in Schaumburg, Illinois for approximately $1.525
million. The center was purchased from an unaffiliated third party. On December
31, 1996, the Company completed the acquisition of a 233,508 square foot
Neighborhood Retail Center known as Lansing Square Shopping Center located at
Torrence Avenue and Interstate 80/94 in Lansing, Illinois for approximately
$16.3 million. The center was purchased from an unaffiliated third party. On
December 31, 1996, the Company completed the acquisition of a 33,248 square
foot Neighborhood Retail Center known as The Summit of Park Ridge located at
100-150 Euclid Avenue in Park Ridge, Illinois for approximately $3.2 million.
The center was purchased from an unaffiliated third party.
The Company commenced the "best efforts" Offering on July 24, 1996,
and as of December 30, 1996, the Company had accepted subscriptions for
2,991,936 shares ($27,077,020 net of Selling Commissions, the Marketing
Contribution and the Due Diligence Expense Allowance Fee). Inland Securities
Corporation, an Affiliate of the Advisor, serves as dealer manager of the
Offering and is entitled to receive selling commissions and certain other
amounts. As of December 30, 1996, Inland Securities Corporation was entitled
to receive commissions, the Marketing Contribution and the Due Diligence
Expense Allowance Fee totalling $2,762,515 in connection with the Offering. An
Affiliate of the Advisor is also entitled to receive Property Management Fees
for management and leasing services.
<PAGE> 2
SUPPLEMENT NO. 8
DATED JANUARY 7, 1997
TO THE PROSPECTUS DATED JULY 24, 1996
OF INLAND REAL ESTATE CORPORATION
This Supplement No. 8 is provided for the purpose of supplementing the
Prospectus dated July 24, 1996 of Inland Real Estate Corporation (the
"Company"), as supplemented by Supplement No. 7 dated December 17, 1996,
Supplement No. 6 dated November 27, 1996 and Supplement No. 5 dated November 1,
1996 (which superseded Supplements No. 1-4) and must be read in conjunction
therewith. Unless otherwise defined, capitalized terms used herein shall have
the same meaning as in the Prospectus, as supplemented.
REAL PROPERTY INVESTMENTS
GRAND & HUNT CLUB OUTLOT CENTER, GURNEE, ILLINOIS
On December 24, 1996, the Company acquired a Neighborhood Retail
Center located at Grand Avenue and Hunt Club Road in Gurnee, Illinois known as
Grand & Hunt Club Outlot Center ("Hunt Club") from Butler Real Estate, Inc., an
unaffiliated third party, for approximately $3.6 million. The purchase price
was funded using cash and cash equivalents. The purchase price was
approximately $169.26 per square foot, which the Company concluded was fair and
reasonable and within the range of values indicated in an appraisal received by
the Company and presented to the Company's board of directors.
Hunt Club was built in 1996 and consists of a one-story building
aggregating 21,222 rentable square feet. As of January 1, 1997, Hunt Club was
100% leased. In evaluating Hunt Club as a potential acquisition, the Company
considered a variety of factors including location, demographics, tenant mix,
price per square foot, existing rental rates compared to market rates, and the
occupancy of the center. The Company believes that the center is located
within a vibrant economic area. Although 100% of the rentable square feet at
Hunt Club is leased to two tenants, the Company's management believes that
retenanting of any space which is vacated in the future should be accomplished
relatively quickly and at rental rates comparable to those currently paid by
the tenants at the facility. The Company did not consider any other factors
materially relevant to the decision to acquire the property.
The Company does not anticipate making any significant repairs and
improvements to Hunt Club over the next few years because the facility was
completed in 1996. Nevertheless, a substantial portion of any such cost would
be paid by the tenants.
The table below sets forth certain information with respect to the
occupancy rate at Hunt Club expressed as a percentage of total gross leasable
area and the average effective annual base rent per square foot.
<TABLE>
<CAPTION>
Occupancy Rate
as of Effective Annual Rental
January 1, 1997 Per Square Foot
---------------- ---------------
<S> <C>
100% $18.61
</TABLE>
1
<PAGE> 3
Tenants leasing more than 10% of the total square footage are Super
Crown Books, which leases 16,722 square feet, or approximately 78.8% of the
rentable square feet, and Helzberg's Diamond Shops d/b/a Jewelry 3 ("Jewelry
3"), which leases 4,500 square feet, or approximately 21.2% of the rentable
square feet. Super Crown Books is a national chain of discount book stores and
Jewelry 3 is a jewelry store chain. The lease with Super Crown Books requires
Super Crown Books to pay base rent equal to $16.75 per square foot per annum
payable monthly from January 1, 1997 until February 28, 2002 and $17.75 per
square foot per annum payable monthly from March 1, 2002 until February 28,
2007. The Super Crown Books lease contains no option to renew. The lease with
Jewelry 3 requires Jewelry 3 to pay base rent equal to $25.50 per square foot
per annum payable monthly until December 31, 2001 and $29.32 per square foot
per annum payable monthly from January 1, 2002 until December 31, 2006. The
Jewelry 3 lease contains no option to renew.
For federal income tax purposes, the Company's depreciable basis in
Hunt Club will be approximately $2,600,000. Depreciation expense, for tax
purposes, will be computed using the straight-line method. Buildings and
improvements are depreciated based upon estimated useful lives of 40 years.
Information regarding real estate taxes payable in 1996 for the tax
year ended 1995 (the most recent tax year for which information is generally
available) is not available since Hunt Club was completed in 1996. Prior to
the completion of Hunt Club in 1996, the property was vacant land. The Company
believes that any tax information relating to the vacant land would not be
useful to investors.
At January 1, 1997, a total of 21,222 square feet were leased to two
tenants at Hunt Club. The following tables set forth certain information with
respect to the amount of and expiration of leases at this Neighborhood Retail
Center.
<TABLE>
<CAPTION>
Current
Square Feet Lease Renewal Annual Rent per
Lessee Leased Ends Option Rent Square Foot
------ ----------- ----- ------- ------- -----------
<S> <C> <C> <C> <C> <C>
Super Crown Books 16,722 02/2007 None $280,094 $16.75
Jewelry 3 4,500 12/2006 None 114,750 25.50
</TABLE>
<TABLE>
<CAPTION>
Percent of
Average Total Percent of
Base Rent Building Annual Base
Approx. GLA Annual Base Per Square GLA Rent
Number of of Expiring Rent of Foot Under Represented Represented
Year Ending Leases Leases Expiring Total Annual Expiring by Expiring by Expiring
December 31, Expiring (square feet) Leases Base Rent (1) Leases Leases Leases
- ----------- -------- ------------- ------ ------------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
1997-2001 - - - $394,844 - - -
2002 - - - 408,779 - - -
2003-2005 - - - 428,756 - - -
2006 1 4,500 $131,940 428,756 $29.32 21.2% 30.77%
</TABLE>
(1) No assumptions were made regarding the releasing of expired leases. It is
the opinion of the Company's management that the space will be released at
market rates.
2
<PAGE> 4
The Company 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 the Hunt Club property, as of
December 17, 1996, of $3,610,000 million. Appraisals are estimates of value
and should not be relied on as a measure of true worth or realizable value.
THE QUARRY OUTLOT, HODGKINS, ILLINOIS
On December 24, 1996, the Company acquired a Neighborhood Retail
Center located at La Grange Road and Joliet Road in Hodgkins, Illinois known as
The Quarry Outlot ("The Quarry") from Butler Real Estate, Inc., an unaffiliated
third party, for approximately $1.8 million. The purchase price was funded
using cash and cash equivalents. The purchase price was approximately $186.53
per square foot, which the Company concluded was fair and reasonable and within
the range of values indicated in an appraisal received by the Company and
presented to the Company's board of directors.
The Quarry was built in 1996 and consists of a one-story building
aggregating 9,650 rentable square feet. As of January 1, 1997, The Quarry
was 100% leased. In evaluating The Quarry as a potential acquisition, the
Company considered a variety of factors including location, demographics,
tenant mix, price per square foot, existing rental rates compared to market
rates, and the occupancy of the center. The Company believes that the center
is located within a vibrant economic area. Although 100% of the rentable
square feet at The Quarry is leased to three tenants, the Company's management
believes that retenanting of any space which is vacated in the future should be
accomplished relatively quickly and at rental rates comparable to those
currently paid by the tenants at the facility. The Company did not consider
any other factors materially relevant to the decision to acquire the property.
The Company does not anticipate making any significant repairs and
improvements to The Quarry over the next few years because the facility was
completed in 1996. Nevertheless, a substantial portion of any such cost would
be paid by the tenants.
The table below sets forth certain information with respect to the
occupancy rate at The Quarry expressed as a percentage of total gross leasable
area and the average effective annual base rent per square foot.
<TABLE>
<CAPTION>
Occupancy Rate
as of Effective Annual Rental
January 1, 1997 Per Square Foot
---------------- ---------------
<S> <C>
100% $20.88
</TABLE>
Tenants leasing more than 10% of the total square footage are
Helzberg's Diamond Shops d/b/a Jewelry 3 ("Jewelry 3"), which leases 4,700
square feet, or approximately 48.7% of the rentable square feet, Casual Male
Big and Tall ("Casual Male"), which leases 3,150 square feet, or approximately
32.6% of the rentable square feet, and Dunkin Donuts/ Baskin Robbins, which
leases 1,800 square feet, or approximately 18.7% of the rentable square feet.
Jewelry 3 is a jewelry store chain, Casual Male is a retailer of clothing for
men, and Dunkin Donuts/
3
<PAGE> 5
Baskin Robbins is a national chain of retail stores selling donuts and ice
cream. The lease with Jewelry 3 requires Jewelry 3 to pay base rent equal to
$24.00 per square foot per annum payable monthly until December 31, 2001 and
$26.35 per square foot per annum payable monthly from January 1, 2002 until
December 31, 2006. The Jewelry 3 lease contains no option to renew. The lease
with Casual Male requires Casual Male to pay base rent equal to $15.00 per
square foot per annum payable monthly until August 31, 1999, $16.00 per square
foot per annum payable monthly from September 1, 1999 until August 31, 2003,
$17.00 per square foot per annum payable monthly from September 1, 2003 until
August 31, 2006 and $18.70 per square foot per annum payable monthly from
September 1, 2006 until December 31, 2006. The Casual Male lease contains no
option to renew. The lease with Dunkin Donuts/ Baskin Robbins requires Dunkin
Donuts/ Baskin Robbins to pay base rent equal to $23.00 per square foot per
annum payable monthly until October 31, 2001 and $25.30 per square foot per
annum payable monthly from November 1, 2001 until October 31, 2006. The Dunkin
Donut/ Baskin Robbins lease contains no option to renew.
For federal income tax purposes, the Company's depreciable basis in
The Quarry will be approximately $1,275,000. Depreciation expense, for tax
purposes, will be computed using the straight-line method. Buildings and
improvements are depreciated based upon estimated useful lives of 40 years.
Information regarding real estate taxes payable in 1996 for the tax
year ended 1995 (the most recent tax year for which information is generally
available) is not available since The Quarry was completed in 1996. Prior to
the completion of The Quarry in 1996, the property was vacant land. The
Company believes that any tax information relating to the vacant land would not
be useful to investors.
At January 1, 1997, a total of 9,650 square feet were leased to
three tenants at The Quarry. The following tables set forth certain
information with respect to the amount of and expiration of leases at this
Neighborhood Retail Center.
<TABLE>
<CAPTION>
Current
Square Feet Lease Renewal Annual Rent per
Lessee Leased Ends Options Rent Square Foot
------ ------ ---- ------- ---- -----------
<S> <C> <C> <C> <C> <C>
Jewelry 3 4,700 12/2006 None $112,800 $24.00
Casual Male 3,150 12/2006 None 47,250 15.00
Dunkin Donuts/ Baskin 1,800 10/2006 None 41,400 23.00
Robbins
</TABLE>
4
<PAGE> 6
<TABLE>
<CAPTION>
Percent of
Average Total Percent of
Base Rent Building Annual Base
Approx. GLA Annual Base Per Square GLA Rent
Number of of Expiring Rent of Foot Under Represented Represented
Year Ending Leases Leases Expiring Total Annual Expiring by Expiring by Expiring
December 31, Expiring (square feet) Leases Base Rent (1) Leases Leases Leases
----------- -------- ------------- ------ ------------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
1997 - - - $201,450 - - -
1998 - - - 201,450 - - -
1999 - - - 202,500 - - -
2000 - - - 204,600 - - -
2001 - - - 205,290 - - -
2002 - - - 219,785 - - -
2003 - - - 220,835 - - -
2004 - - - 222,935 - - -
2005 - - - 222,935 - - -
2006 3 9,650 $224,720 224,720 $23.29 100% 100%
</TABLE>
(1) No assumptions were made regarding the releasing of expired leases. It is
the opinion of the Company's management that the space will be released at
market rates.
The Company 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 The Quarry property, as of
December 9, 1996, of $1,850,000. Appraisals are estimates of value and should
not be relied on as a measure of true worth or realizable value.
CRESTWOOD PLAZA SHOPPING CENTER, CRESTWOOD, ILLINOIS
On December 27, 1996, the Company acquired a Neighborhood Retail Center
located at 13335 South Cicero Avenue in Crestwood, Illinois known as Crestwood
Plaza Shopping Center ("Crestwood Plaza") from Inland Property Sales, Inc., an
affiliated third party, for approximately $1.81 million. The purchase price was
funded using cash and cash equivalents. The purchase price was approximately
$90.24 per square foot, which the Company concluded was fair and reasonable and
within the range of values indicated in an appraisal received by the Company
and presented to the Company's board of directors.
Crestwood Plaza was built in 1992 and consists of a one-story building
aggregating 20,044 rentable square feet. As of December 27, 1996, Crestwood
Plaza was 100% leased. In evaluating Crestwood Plaza as a potential
acquisition, the Company considered a variety of factors including location,
demographics, tenant mix, price per square foot, existing rental rates compared
to market rates, and the occupancy of the center. The Company believes that
the center is located within a vibrant economic area. Although 100% of the
rentable square feet at Crestwood Plaza is leased to two tenants, the Company's
management believes that retenanting of any space which is vacated in the
future should be accomplished relatively quickly and at rental rates comparable
to those currently paid by the tenants at the facility. The Company did not
consider any other factors materially relevant to the decision to acquire the
property.
5
<PAGE> 7
The Company does not anticipate making any significant repairs and
improvements to Crestwood Plaza over the next few years. Nevertheless, a
substantial portion of any such cost would be paid by the tenants.
The table below sets forth certain information with respect to the
occupancy rate at Crestwood Plaza expressed as a percentage of total gross
leasable area and the average effective annual base rent per square foot.
<TABLE>
<CAPTION>
Occupancy Rate
Year Ending as of December 31 Effective Annual Rental
December 31, of Each Year Per Square Foot
------------ -------------------- ---------------
<S> <C> <C>
1996 100% $10.13
1995 100% $10.13
1994 100% $10.13
1993 100% $10.13
1992 100% $10.13
</TABLE>
Tenants leasing more than 10% of the total square footage are
Entenmann's Inc., which leases 13,644 square feet, or approximately 68% of the
rentable square feet, and Pet Supplies Plus, which leases 6,400 square feet, or
approximately 32% of the rentable square feet. Entenmann's is a national
retailer of baked goods, and Pet Supplies Plus is a national retail pet supply
chain. The lease with Entenmann's requires Entenmann's to pay base rent equal
to $9.25 per square foot per annum payable monthly until October 31, 2002. The
Entenmann's lease contains no option to renew. The lease with Pet Supplies
Plus requires Pet Supplies Plus to pay base rent equal to $12.00 per square
foot per annum payable monthly until January 31, 1998. The lease with Pet
Supplies Plus also grants Pet Supplies Plus one option to renew the lease for a
five-year term. If this option is exercised, Pet Supplies Plus will be
required to pay a base rent of $12.99 per square foot per annum payable monthly
from February 1, 1998 until January 31, 2003.
For federal income tax purposes, the Company's depreciable basis in
Crestwood Plaza will be approximately $1,480,000. Depreciation expense, for
tax purposes, will be computed using the straight-line method. Buildings and
improvements are depreciated based upon estimated useful lives of 40 years.
Real estate taxes payable in 1996 for the tax year ended 1995 (the
most recent tax year for which information is available) were $51,494. The
real estate taxes payable were calculated by multiplying Crestwood Plaza's
assessed value by an equalizer of 2.1243 and a tax rate of 9.316%.
6
<PAGE> 8
At December 27, 1996, a total of 20,044 square feet were leased to two
tenants at Crestwood Plaza. The following tables set forth certain information
with respect to the amount of and expiration of leases at this Neighborhood
Retail Center.
<TABLE>
<CAPTION>
Current
Square Feet Lease Renewal Annual Rent per
Lessee Leased Ends Options Rent Square Foot
------ ------ ---- ------- ------ -----------
<S> <C> <C> <C> <C> <C>
Entenmann's Inc. 13,644 10/2002 None $126,207 $9.25
Pet Supplies Plus 6,400 01/1998 1/ 5 yr. 76,800 12.00
</TABLE>
<TABLE>
<CAPTION>
Percent of
Total
Approx. Average Building Percent of
GLA of Annual Base Rent GLA Annual Base
Expiring Base Rent Total Per Square Represented Rent
Year Ending Number of Leases of Annual Foot Under by Represented
December Leases (square Expiring Base Rent Expiring Expiring by Expiring
31, Expiring feet) Leases (1) Leases Leases Leases
---------- --------- ------ -------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
1997 - - - $203,007 - - -
1998 1 6,400 $76,800 203,007 $12.00 32% 37.83%
1999-2001 - - - 126,207 - - -
2002 1 13,644 126,207 126,207 9.25 68% 100%
</TABLE>
(1) No assumptions were made regarding the releasing of expired leases. It is
the opinion of the Company's management that the space will be released at
market rates.
The Company received a letter 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 the Crestwood Plaza
property, as of December 17, 1996, of not less than $1,850,000. Appraisals are
estimates of value and should not be relied on as a measure of true worth or
realizable value.
PARK ST. CLAIR PLAZA, SCHAUMBURG, ILLINOIS
On December 31, 1996, the Company acquired a Neighborhood Retail Center
located at the corner of Higgins and Meacham Roads in Schaumburg, Illinois
known as Park St. Clair Plaza ("Park St. Clair") from KHF Land Partnership, an
unaffiliated third party, for approximately $1.525 million. The purchase price
was funded using cash and cash equivalents. The purchase price was
approximately $128.59 per square foot, which the Company concluded was fair and
reasonable and within the range of values indicated in an appraisal received by
the Company and presented to the Company's board of directors.
Park St. Clair was built in 1994 and consists of a one-story building
aggregating 11,859 rentable square feet. As of December 31, 1996, Park St.
Clair was 100% leased. In evaluating Park St. Clair as a potential
acquisition, the Company considered a variety of factors including
7
<PAGE> 9
location, demographics, tenant mix, price per square foot, existing rental
rates compared to market rates, and the occupancy of the center. The Company
believes that the center is located within a vibrant economic area. Although
100% of the rentable square feet at Park St. Clair is leased to two tenants,
the Company's management believes that retenanting of any space which is
vacated in the future should be accomplished relatively quickly and at rental
rates comparable to those currently paid by the tenants at the facility. The
Company did not consider any other factors materially relevant to the decision
to acquire the property.
The Company does not anticipate making any significant repairs and
improvements to Park St. Clair over the next few years. Nevertheless, a
substantial portion of any such cost would be paid by the tenants.
The table below sets forth certain information with respect to the
occupancy rate at Park St. Clair expressed as a percentage of total gross
leasable area and the average effective annual base rent per square foot.
<TABLE>
<CAPTION>
Occupancy Rate
Year Ending as of December 31 Effective Annual Rental
December 31, of Each Year Per Square Foot
------------ -------------------- ---------------
<S> <C> <C>
1996 100% $15.06
1995 35% $ 5.70
1994 35% $ 5.65
</TABLE>
Tenants leasing more than 10% of the total square footage are Hallmark
Cards ("Hallmark"), which leases 7,669 square feet, or approximately 65% of the
rentable square feet, and Ameritech Mobile Comm ("Ameritech"), which leases
4,190 square feet, or approximately 35% of the rentable square feet. Hallmark
is a national retailer of greeting cards, and Ameritech is a mobile
telecommunications provider. The lease with Hallmark requires Hallmark to pay
base rent equal to $14.00 per square foot per annum payable monthly until
November 30, 2001. The lease with Hallmark also grants Hallmark one option to
renew the lease for a five-year term. If this option is exercised, Hallmark
will be required to pay a base rent of $19.00 per square foot per annum payable
monthly from December 1, 2001 until November 30, 2006. The lease with
Ameritech requires Ameritech to pay base rent equal to $17.00 per square foot
per annum payable monthly until September 30, 1997, $17.50 per square foot per
annum payable monthly until September 30, 1998 and $18.00 per square foot per
annum payable monthly until September 30, 1999. The lease with Ameritech also
grants Ameritech one option to renew the lease for a five-year term. If this
option is exercised, Ameritech will be required to pay a base rent of $18.00
per square foot per annum payable monthly from October 1, 1998 until September
30, 2004.
For federal income tax purposes, the Company's depreciable basis in
Park St. Clair will be approximately $1,220,000. Depreciation expense, for tax
purposes, will be computed using the straight-line method. Buildings and
improvements are depreciated based upon estimated useful lives of 40 years.
Real estate taxes payable in 1996 for the tax year ended 1995 (the
most recent tax year for which information is available) were $38,938. The
real estate taxes payable were calculated
8
<PAGE> 10
by multiplying Park St. Clair's assessed value by an equalizer of 2.1243 and a
tax rate of 8.967%.
At December 31, 1996, a total of 11,859 square feet were leased to two
tenants at Park St. Clair. The following tables set forth certain information
with respect to the amount of and expiration of leases at this Neighborhood
Retail Center.
<TABLE>
<CAPTION>
Current
Square Feet Lease Renewal Annual Rent per
Lessee Leased Ends Options Rent Square Foot
------ ------ ---- ------- ------- ------------
<S> <C> <C> <C> <C> <C>
Hallmark Cards 7,669 11/2001 1/ 5 yr. $107,366 $14.00
Ameritech Mobile Comm 4,190 09/1999 1/ 5 yr. 71,230 17.00
</TABLE>
<TABLE>
<CAPTION>
Percent of
Total
Approx. Average Building Percent of
GLA of Annual Base Rent GLA Annual Base
Expiring Base Rent Total Per Square Represented Rent
Year Ending Number of Leases of Annual Foot Under by Represented
December Leases (square Expiring Base Rent Expiring Expiring by Expiring
31, Expiring feet) Leases (1) Leases Leases Leases
----------- -------- -------- -------- -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1997 - - - 179,120 - - -
1998 - - - 181,215 - - -
1999 1 4,190 75,420 195,568 18.00 35.3% 38.56%
2000 - - - 122,704 - - -
2001 1 7,669 145,711 145,711 19.00 64.7% 100%
</TABLE>
(1) No assumptions were made regarding the releasing of expired leases. It is
the opinion of the Company's management that the space will be released at
market rates.
The Company received a letter 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 the Park St. Clair
property, as of December 31, 1996, of not less than $1.6 million. Appraisals
are estimates of value and should not be relied on as a measure of true worth
or realizable value.
LANSING SQUARE SHOPPING CENTER, LANSING, ILLINOIS
On December 31, 1996, the Company acquired a Neighborhood Retail Center
located at Torrence Avenue and Interstate 80/94 in Lansing, Illinois known as
Lansing Square Shopping Center ("Lansing Square") from Lansing Square RPF II
Limited Partnership, an unaffiliated third party, for approximately $16.3
million. The purchase price was funded using cash and cash equivalents as well
as the proceeds of a series of loans from LaSalle Bank. The proceeds of the
loans from LaSalle Bank (the "LaSalle Loans") totalling $12,850,000, were
received on December 30, 1996. The LaSalle Loans are secured by properties the
Company previously acquired. Of the total of $12,850,000, approximately
$8,000,000 was used in the acquisition of
9
<PAGE> 11
Lansing Square. The LaSalle Loans require the payment of interest only at a
rate of 7.6%, fixed for five years and then variable for an additional two
years. The purchase price for Lansing Square was approximately $69.80 per
square foot, which the Company concluded was fair and reasonable and within the
range of values indicated in an appraisal received by the Company and presented
to the Company's board of directors.
Lansing Square was built in 1991 and consists of three one-story
buildings aggregating 233,508 rentable square feet. As of December 31, 1996,
Lansing Square was 90.3% leased. In evaluating Lansing Square as a potential
acquisition, the Company considered a variety of factors including location,
demographics, tenant mix, price per square foot, existing rental rates compared
to market rates, and the occupancy of the center. The Company believes that
the center is located in a vibrant economic area. Although 75.5% of the
rentable square feet at Lansing Square is leased to three tenants, the
Company's management believes that retenanting of any space which is vacated in
the future should be accomplished relatively quickly and at rental rates
comparable to those currently paid by the tenants at the facility. The Company
did not consider any other factors materially relevant to the decision to
acquire the property.
The Company does not anticipate making any significant repairs and
improvements to Lansing Square over the next few years. Nevertheless, a
substantial portion of any such cost would be paid by the tenants.
The table below sets forth certain information with respect to the
occupancy rate at Lansing Square expressed as a percentage of total gross
leasable area and the average effective annual base rent per square foot.
<TABLE>
<CAPTION>
Occupancy Rate
Year Ending as of December 31 Effective Annual Rental
December 31, of Each Year Per Square Foot
------------ -------------------- ---------------
<S> <C> <C>
1995 76.0% $5.81
1994 75.0 7.28
1993 92.0 7.38
1992 90.8 7.26
</TABLE>
Tenants leasing more than 10% of the total square footage are Sams
Club, which leases 107,927 square feet, or approximately 46% of the rentable
square feet, Baby Superstore, which leases 43,596 square feet, or approximately
19% of the rentable square feet, and Office Max, which leases 24,700 square
feet, or approximately 11% of the rentable square feet. Sams Club is a
national warehouse club, Baby Superstore is a national retailer of merchandise
for infants and children and Office Max is a national office supply chain. The
lease with Sams Club requires Sams Club to pay base rent equal to $7.31 per
square foot per annum payable monthly until November 30, 2011. The Sams Club
lease contains no option to renew. The lease with Baby Superstore requires
Baby Superstore to pay base rent equal to $6.50 per square foot per annum
payable monthly until October 31, 2000 and $7.00 per square foot per annum
payable monthly until December 31, 2001. The Baby Superstore lease contains no
option to renew. The lease with Office Max requires Office Max to pay base
rent equal to $7.25 per square foot per annum payable monthly until April 30,
1997, $7.75 per square foot per annum payable
10
<PAGE> 12
monthly until April 30, 2002 and $8.25 per square foot per annum payable
monthly until January 31, 2008. The Office Max lease contains no option to
renew.
For federal income tax purposes, the Company's depreciable basis in
Lansing Square will be approximately $13,000,000. Depreciation expense, for
tax purposes, will be computed using the straight-line method. Buildings and
improvements are depreciated based upon estimated useful lives of 40 years.
Real estate taxes payable in 1996 for the tax year ended 1995 (the
most recent tax year for which information is available) were $1,252,577. The
real estate taxes payable were calculated by multiplying Lansing Square's
assessed value by an equalizer of 2.1243 and a tax rate of 11.494%.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
11
<PAGE> 13
At December 31, 1996, a total of 210,810 square feet were leased to
eighteen tenants at Lansing Square. The following tables set forth certain
information with respect to the amount of and expiration of leases at this
Neighborhood Retail Center.
<TABLE>
<CAPTION>
Rent
Square Current per
Feet Lease Renewal Annual Square
Lessee Leased Ends Options Rent Foot
------ ------ ----- ------- ------ ------
<S> <C> <C> <C> <C> <C>
Sam's Club 107,927 11/2011 None $788,946 $ 7.31
Office Max 24,700 01/2008 None 179,075 7.25
Baby Superstore 43,596 01/2006 None 283,374 6.50
Furniture Max 8,000 07/2002 None 116,000 14.50
Blockbuster 6,275 12/2001 Non 100,400 16.00
Ameritech 3,600 06/2000 None 59,328 16.48
Wolf Camera 1,200 06/2002 1/5 yr. 23,376 19.48
Norwest Financial 1,500 01/1999 1/5 yr. 19,500 13.00
Racers Row 1,500 09/2000 None 23,250 15.50
Cost Cutters 900 11/2001 None 14,751 16.39
Papa Johns 1,200 01/2007 None 16,800 14.00
Great American 2,400 10/2000 None 34,800 14.50
Bagels
Sterling Vision 1,200 05/1999 None 18,000 15.00
Pappy's Gyros 1,200 08/1997 1/5 yr. 19,200 16.00
Dunkin Donuts 1,112 04/2002 None 21,128 19.00
Little Minds 1,200 09/2001 None 17,400 14.50
Discus CD's 1,200 06/1999 1/3 yr. 18,000 15.00
Pet Store 2,100 12/2006 None 29,400 14.00
Vacant 22,698 -- -- -- --
</TABLE>
12
<PAGE> 14
<TABLE>
<CAPTION>
Average Percent
Base Percent of of
Rent Total Annual
Approx. Per Building Base
GLA of Annual Square GLA Rent
Year Number Expiring Base Rent Total Foot Represented Represented
Ending of Leases of Annual Under by by
December Leases (square Expiring Base Expiring Expiring Expiring
31, Expiring feet) Leases Rent(1) Leases Leases Leases
-------- -------- ------- -------- ------ -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1997 1 1,200 $19,200 $1,794,141 $16.00 .51% 1.07%
1998 - - - 1,783,586 - - -
1999 3 3,900 59,250 1,793,960 15.19 1.67 3.30
2000 3 7,500 127,663 1,746,430 17.02 3.21 7.31
2001 3 8,375 151,265 1,654,491 18.06 3.59 9.14
2002 3 10,312 169,720 1,511,946 16.46 4.42 11.23
2003 - - - 1,346,893 - - -
2004 - - - 1,349,043 - - -
2005 - - - 1,349,593 - - -
2006 2 45,696 337,722 1,349,643 7.39 19.57 25.02
</TABLE>
(1) No assumptions were made regarding the releasing of expired leases. It
is the opinion of the Company's management that the space will be released
at market rates.
The Company received a letter 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 the Lansing Square
property, as of January 1, 1997, of $16.3 million. Appraisals are estimates of
value and should not be relied on as a measure of true worth or realizable
value.
THE SUMMIT OF PARK RIDGE, PARK RIDGE, ILLINOIS
On December 31, 1996, the Company acquired a Neighborhood Retail Center
located at 100-150 Euclid Avenue in Park Ridge, Illinois known as The Summit of
Park Ridge ("The Summit") from WHPX-S Real Estate Limited Partnership, an
unaffiliated third party, for approximately $3.2 million. The purchase price
was funded using cash and cash equivalents. The purchase price was
approximately $96.25 per square foot, which the Company concluded was fair and
reasonable and within the range of values indicated in an appraisal received by
the Company and presented to the Company's board of directors.
The Summit was built in 1986 and consists of a one-story building
aggregating 33,248 rentable square feet. As of December 31, 1996, The Summit
was 89% leased. In evaluating The Summit as a potential acquisition, the
Company considered a variety of factors including location, demographics,
tenant mix, price per square foot, existing rental rates compared to market
rates, and the occupancy of the center. The Company believes that the center
is located within a vibrant economic area. The Company's management believes
that retenanting of any space which is vacated in the future should be
accomplished relatively quickly and at rental rates comparable to those
currently paid by the tenants at the facility. The Company did not consider
any other factors materially relevant to the decision to acquire the property.
13
<PAGE> 15
The Company does not anticipate making any significant repairs and
improvements to The Summit over the next few years. Nevertheless, a
substantial portion of any such cost would be paid by the tenants.
Tenants leasing more than 10% of the total square footage are Giappo's
Pizza, which leases 3,683 square feet, or approximately 11% of the rentable
square feet, and Le Peep Restaurant ("Le Peep"), which leases 3,621 square
feet, or approximately 11% of the rentable square feet. The lease with
Giappo's Pizza requires Giappo's Pizza to pay base rent equal to $12.00 per
square foot per annum payable monthly until July 31, 1997, $13.00 per square
foot per annum payable monthly until July 31, 1998, $14.00 per square foot per
annum payable monthly until July 31, 2000, $15.00 per square foot per annum
payable monthly until July 31, 2004 and $16.00 per square foot per month
payable monthly until July 31, 2007. The Giappo's Pizza lease contains no
option to renew. The lease with Le Peep requires Le Peep to pay base rent
equal to $15.50 per square foot per annum payable monthly until December 31,
1998 and $17.00 per square foot per annum payable monthly until December 31,
2002. The lease with Le Peep also grants Le Peep one option to renew the lease
for a seven-year term. If this option is exercised, Le Peep will be required
to pay a base rent of $19.00 per square foot per annum payable monthly from
January 1, 2003 until December 31, 2009.
For federal income tax purposes, the Company's depreciable basis in
The Summit will be approximately $2,500,000. Depreciation expense, for tax
purposes, will be computed using the straight-line method. Buildings and
improvements are depreciated based upon estimated useful lives of 40 years.
Real estate taxes payable in 1996 for the tax year ended 1995 (the
most recent tax year for which information is available) were $171,743. The
real estate taxes payable were calculated by multiplying The Summit's assessed
value by an equalizer of 2.1243 and a tax rate of 9.016%.
At December 31, 1996, a total of 31,800 square feet were leased to
fourteen tenants at The Summit. The following tables set forth certain
information with respect to the amount of and expiration of leases at this
Neighborhood Retail Center.
14
<PAGE> 16
<TABLE>
<CAPTION>
Square Current Rent
Feet Lease Renewal Annual per Square
Lessee Leased Ends Options Rent Foot
------ ------ ---- ------- ---- ----
<S> <C> <C> <C> <C> <C>
Le Peep Restaurant 3,621 12/2002 1/7 yr. 56,126 $15.50
Siam Thai
Restaurant 2,454 06/2000 1/4 yr. 43,482 17.72
Big Apple Bagels 1,124 10/2003 None 14,612 13.00
Sav-A-Lot 2,414 01/1999 None 25,554 11.00
Giappo's Pizza 3,683 07/2007 None 29,464 8.00
Fashion Media 2,142 08/2004 None 29,988 14.00
Purple Bear 788 02/1997 None 6,682 8.48
Spoke & Ski 2,020 Month to None 20,200 10.00
Month
Success Lab of
Park Ridge 2,142 12/1997 1/5 yr. 28,917 13.50
H&R Block 2,142 04/2001 1/5 yr. 22,063 10.30
Heavenly Pet
Center 2,000 09/1997 1/2 yr. 18,000 9.00
Hay Caramba! 2,888 02/2006 1/11 yr. 31,479 10.90
Yahav & Silvers
DDS 1,446 10/2000 1/5 yr. 18,798 13.00
Baker's Daughter 788 10/2001 None 7,092 9.00
Vacant 3,596 -- -- -- --
</TABLE>
<TABLE>
<CAPTION>
Percent of
Average Total Percent of
Base Rent Building Annual Base
Approx. GLA Annual Base Per Square GLA Rent
Number of of Expiring Rent of Foot Under Represented Represented
Year Ending Leases Leases Expiring Total Annual Expiring by Expiring by Expiring
December 31, Expiring (square feet) Leases Base Rent (1) Leases Leases Leases
----------- -------- ------------- -------- ------------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
1997 3 4,930 $53,599 $353,457 $10.81 14.83% 15.16%
1998 -- -- -- 305,544 -- -- --
1999 1 2,414 26,554 316,317 11.00 7.26 8.39
2000 2 3,900 65,175 295,835 16.71 11.73 22.03
2001 2 2,930 33,124 234,614 11.31 8.81 14.11
2002 1 3,621 61,557 203,648 17.00 10.89 30.23
2003 1 1,124 15,736 144,963 14.00 3.38 10.86
2004 1 2,142 34,272 132,206 16.00 6.44 25.92
2005 -- -- -- 100,804 -- -- --
2006 1 2,338 41,876 100,804 14.50 8.69 41.54
</TABLE>
(1) No assumptions were made regarding the releasing of expired leases. It is
the opinion of the Company's management that the space will be released at
market rates.
15
<PAGE> 17
The Company received a letter 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 The Summit property,
as of December 17, 1996, of not less than $3,250,000. Appraisals are estimates
of value and should not be relied on as a measure of true worth or realizable
value.
PLAN OF DISTRIBUTION
The Company commenced the "best efforts" Offering on July 24, 1996,
and as of December 30, 1996, the Company had accepted subscriptions for
2,991,936 shares ($27,077,020 net of Selling Commissions, the Marketing
Contribution and the Due Diligence Expense Allowance Fee).
Inland Securities Corporation, an Affiliate of the Advisor, serves as
dealer manager of the Offering and is entitled to receive selling commissions
and certain other amounts. As of December 30, 1996, Inland Securities
Corporation was entitled to receive commissions, the Marketing Contribution and
the Due Diligence Expense Allowance Fee totalling $2,762,515 in connection with
the Offering. An Affiliate of the Advisor is also entitled to receive Property
Management Fees for management and leasing services. The Company incurred and
paid Property Management Fees of $139,597 for the nine months ended September
30, 1996 and $46,791 for the year ended December 31, 1995. The Advisor may
also receive an annual Advisor Asset Management Fee of not more than 1% of the
Average Invested Assets, paid quarterly. As of September 30, 1996, the Company
had incurred Advisor Asset Management Fees of $242,341, all of which remained
unpaid on such date. As of December 31, 1995, the Company had not incurred or
paid any such fees.
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Pro Forma Balance Sheet (unaudited) at December 31, 1995 of the Company . . . . . . . . . . . . . F-1
Notes to Pro Forma Balance Sheet (unaudited) at December 31, 1995 of the Company . . . . . . . . . F-3
Pro Forma Statement of Operations (unaudited) for the year ended
December 31, 1995 of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-10
Notes to Pro Forma Statement of Operations (unaudited) for the year ended
December 31, 1995 of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-12
Pro Forma Balance Sheet (unaudited) at September 30, 1996 of the Company . . . . . . . . . . . . . F-26
Notes to Pro Forma Balance Sheet (unaudited) at September 30, 1996 of the Company . . . . . . . . F-28
Pro Forma Statement of Operations (unaudited) for the nine months ended
September 30, 1996 of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-33
Notes to Pro Forma Statement of Operations (unaudited) for the nine months
ended September 30, 1996 of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-35
</TABLE>
16
<PAGE> 18
Inland Real Estate Corporation
Pro Forma Balance Sheet
December 31, 1995
(unaudited)
The following unaudited Pro Forma Balance Sheet of the Company is presented to
effect the acquisitions of Mundelein Plaza, the Regency Point Shopping Center,
Prospect Heights Plaza, Montgomery-Sears Shopping Center, the Zany Brainy
store, Salem Square, Hawthorn Village Commons, Six Corners, Spring Hill Fashion
Center, Grand and Hunt Club, The Quarry Outlot, Crestwood Plaza Shopping
Center, Park St. Claire Plaza, Lansing Square Shopping Center and Summit of
Park Ridge as though these transactions occurred December 31, 1995. This
unaudited Pro Forma Balance Sheet should be read in conjunction with the
December 31, 1995 Financial Statements and the notes thereto as filed on Form
10-K.
This unaudited Pro Forma Balance Sheet is not necessarily indicative of what
the actual financial position would have been at December 31, 1995, nor does it
purport to represent the future financial position of the Company. Unless
otherwise defined, capitalized terms used herein shall have the same meaning as
in the Prospectus.
F-1
<PAGE> 19
Inland Real Estate Corporation
Pro Forma Balance Sheet
December 31, 1995
(unaudited)
<TABLE>
<CAPTION>
December 31,
December 31, 1995
1995 Pro Forma Pro Forma
Historical(A) Adjustments(B) Balance Sheet
------------- -------------- -------------
<S> <C> <C> <C>
Assets
- ------
Net investment in
properties.................. $ 17,342,538 77,446,840 94,789,378
Cash and cash equivalents..... 738,931 - 738,931
Restricted cash............... 150,000 - 150,000
Accounts and rents
receivable.................. 333,823 1,859,615 2,193,438
Other assets.................. 185,585 39,550 225,135
------------- ------------- ------------
Total assets.................. $ 18,750,877 79,346,005 98,096,882
============= ============= ============
<CAPTION>
Liabilities and Stockholders' Equity
- ------------------------------------
<S> <C> <C> <C>
Accounts payable and accrued
expenses.................... $ 288,037 7,500 295,537
Accrued real estate taxes..... 374,180 2,554,449 2,928,629
Distributions payable (C)..... 129,532 - 129,532
Security deposits............. 54,483 184,105 238,588
Mortgage payable.............. 750,727 16,428,200 17,178,927
Notes payable to Affiliate.... 360,000 - 360,000
Other liabilities............. 178,852 - 178,852
------------- ------------- ------------
Total liabilities............. 2,135,811 19,174,254 21,310,065
------------- ------------- ------------
Common Stock.................. 19,996 69,968 89,964
Additional paid in capital
(net of Offering costs)..... 16,835,183 60,101,783 76,936,966
Accumulated distributions in
excess of net income........ (240,113) - (240,113)
------------- ------------- ------------
Total Stockholders' equity.... 16,615,066 60,171,751 76,786,817
------------- ------------- ------------
Total liabilities and
Stockholders' equity........ $ 18,750,877 79,346,005 98,096,882
============= ============= ============
See accompanying notes to pro forma balance sheet.
</TABLE>
F-2
<PAGE> 20
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
December 31, 1995
(unaudited)
(A) The December 31, 1995 Historical column represents the historical balance
sheet as presented in the December 31, 1995 10-K as filed with the SEC.
(B) The following pro forma adjustment relates to the acquisition of the
subject properties as though they were acquired on December 31, 1995.
The terms are described in the notes that follow.
<TABLE>
<CAPTION>
Pro Forma Adjustments
---------------------------------------------------
Mundelein Regency Prospect Montgomery-
Plaza Point Heights Sears
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Assets
- ------
Net investment in
properties........ $ 5,658,230 5,700,000 2,165,000 3,419,000
Accounts and rent
receivable........ 84,375 16,867 38,771 27,842
Other assets........ - - - -
------------ ------------ ------------ ------------
Total assets........ $ 5,742,605 5,716,867 2,203,771 3,446,842
============ ============ ============ ============
<CAPTION>
Liabilities and Stockholders' Equity
- ------------------------------------
<S> <C> <C> <C> <C>
Accounts payable and
accrued expenses.. $ 7,500 - - -
Accrued real estate
taxes............. 89,010 16,867 63,517 32,655
Security deposits... 15,000 28,621 8,600 -
Mortgage payable.... - 4,473,200 - -
------------ ------------ ------------ ------------
Total liabilities... 111,510 4,518,688 72,117 32,655
------------ ------------ ------------ ------------
Common Stock(D)..... 6,548 1,393 2,479 3,970
Additional paid in
capital (net of
Offering
costs)(D)......... 5,624,547 1,196,786 2,129,175 3,410,217
------------ ------------ ------------ ------------
Total Stockholders'
equity............ 5,631,095 1,198,179 2,131,654 3,414,187
------------ ------------ ------------ ------------
Total liabilities
and Stockholders'
equity............ $ 5,742,605 5,716,867 2,203,771 3,446,842
============ ============ ============ ============
</TABLE>
F-3
<PAGE> 21
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
December 31, 1995
(unaudited)
(B) Continued
<TABLE>
<CAPTION>
Pro Forma Adjustments
---------------------------------------------------
Hawthorn
Zany Salem Village Six
Brainy Square Commons Corners
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Assets
- ------
Net investment in
properties........ $ 2,455,000 6,173,850 8,450,000 6,000,000
Accounts and rent
receivable........ - 270,729 194,400 65,293
Other assets........ - - 39,550 -
------------ ------------ ------------ ------------
Total assets........ $ 2,455,000 6,444,579 8,683,950 6,065,293
============ ============ ============ ============
<CAPTION>
Liabilities and Stockholders' Equity
- ------------------------------------
<S> <C> <C> <C> <C>
Accounts payable and
accrued expenses.. $ - - - -
Accrued real estate
taxes............. - 270,729 194,400 217,643
Security deposits... - - - 15,542
Mortgage payable.... - - 3,955,000 -
------------ ------------ ------------ ------------
Total liabilities... - 270,729 4,149,400 233,185
------------ ------------ ------------ ------------
Common Stock(D)..... 2,855 7,179 5,273 6,781
Additional paid in
capital (net of
Offering
costs)(D)......... 2,452,145 6,166,671 4,529,277 5,825,327
------------ ------------ ------------ ------------
Total Stockholders'
equity............ 2,455,000 6,173,850 4,534,550 5,832,108
------------ ------------ ------------ ------------
Total liabilities
and Stockholders'
equity............ $ 2,455,000 6,444,579 8,683,950 6,065,293
============ ============ ============ ============
</TABLE>
F-4
<PAGE> 22
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
December 31, 1995
(unaudited)
(B) Continued
<TABLE>
<CAPTION>
Pro Forma Adjustments
---------------------------------------------------
Spring Grand and
Hill Hunt Club Quarry Crestwood
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Assets
- ------
Net investment in
properties........ $ 9,200,000 3,592,000 1,800,000 1,808,760
Accounts and rent
receivable........ 95,470 - - 51,494
Other assets........ - - - -
------------ ------------ ------------ ------------
Total assets........ $ 9,295,470 3,592,000 1,800,000 1,860,254
============ ============ ============ ============
<CAPTION>
Liabilities and Stockholders' Equity
- ------------------------------------
<S> <C> <C> <C> <C>
Accounts payable and
accrued expenses.. $ - - - -
Accrued real estate
taxes............. 123,315 - - 51,494
Security deposits... 40,155 - - 12,800
Mortgage payable.... - - - -
------------ ------------ ------------ ------------
Total liabilities... 163,470 - - 64,294
------------ ------------ ------------ ------------
Common Stock(D)..... 10,619 4,177 2,093 2,088
Additional paid in
capital (net of
Offering
costs)(D)......... 9,121,381 3,587,823 1,797,907 1,793,872
------------ ------------ ------------ ------------
Total Stockholders'
equity............ 9,132,000 3,592,000 1,800,000 1,795,960
------------ ------------ ------------ ------------
Total liabilities
and Stockholders'
equity............ $ 9,295,470 3,592,000 1,800,000 1,860,254
============ ============ ============ ============
</TABLE>
F-5
<PAGE> 23
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
December 31, 1995
(unaudited)
(B) Continued
<TABLE>
<CAPTION>
Pro Forma Adjustments
----------------------------------------------------
Total
Park Lansing Summit of Pro Forma
St. Claire Square Park Ridge Adjustment
------------ ------------ ------------ -------------
Assets
- ------
<S> <C> <C> <C> <C>
Net investment in
properties........ $ 1,525,000 16,300,000 3,200,000 77,446,840
Accounts and rent
receivable........ 26,391 825,340 162,643 1,859,615
Other assets........ - - - 39,550
------------ ------------ ------------ ------------
Total assets........ $ 1,551,391 17,125,340 3,362,643 79,346,005
============ ============ ============ ============
<CAPTION>
Liabilities and Stockholders' Equity
- ------------------------------------
<S> <C> <C> <C> <C>
Accounts payable and
accrued expenses.. $ - - - 7,500
Accrued real estate
taxes............. 38,938 1,252,577 203,304 2,554,449
Security deposits... - 28,918 34,469 184,105
Mortgage payable.... - 8,000,000 - 16,428,200
------------ ------------ ------------ ------------
Total liabilities... 38,938 9,281,495 237,773 19,174,254
------------ ------------ ------------ ------------
Common Stock(D)..... 1,759 9,120 3,634 69,968
Additional paid in
capital (net of
Offering
costs)(D)......... 1,510,694 7,834,725 3,121,236 60,101,783
------------ ------------ ------------ ------------
Total Stockholders'
equity............ 1,512,453 7,843,845 3,124,870 60,171,751
------------ ------------ ------------ ------------
Total liabilities
and Stockholders'
equity............ $ 1,551,391 17,125,340 3,362,643 79,346,005
============ ============ ============ ============
</TABLE>
F-6
<PAGE> 24
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
December 31, 1995
(unaudited)
Acquisition of Mundelein Plaza, Mundelein, Illinois
On March 29, 1996, the Company acquired the Mundelein Plaza property
located in Mundelein, Illinois ("Mundelein Plaza") from an unaffiliated
third party for a purchase price of $5,658,230, including closing costs of
$8,230, on an all cash basis, funded from cash and cash equivalents.
Acquisition of Regency Point Shopping Center, Lockport, Illinois
On April 5, 1996, the Company completed the acquisition of the Regency
Point Shopping Center located in Lockport, Illinois ("Regency Point"), from
an unaffiliated third party for a purchase price of $5,700,000. As part of
the acquisition, the Company will assume the existing first mortgage loan
of $4,473,200 along with a related interest rate swap agreement, with the
balance funded with cash and cash equivalents.
The first mortgage loan has a floating interest rate of 180 basis points
over the 30-day LIBOR rate, which rate is adjusted monthly. The interest
rate swap agreement, in conjunction with the first mortgage, provides for
Bank One, Chicago, to receive from or pay to the Company the difference
between 6.11% and the 30-day LIBOR rate, so that the first mortgage loan
has an effective rate of 7.91% per annum. The first mortgage loan matures
in August 2000. The related interest rate swap agreement was terminated on
April 18, 1996 resulting in $48,419 proceeds to the Company. No pro forma
adjustment has been made as a result of this termination.
Acquisition of Prospect Heights Plaza, Prospect Heights, Illinois
On June 17, 1996, the Company acquired this property from an unaffiliated
third party for the purchase price of $2,165,000 on an all cash basis,
funded from cash and cash equivalents.
Acquisition of Montgomery-Sears, Montgomery, Illinois
On June 17, 1996, the Company acquired this property from an unaffiliated
third party for the purchase price of $3,419,000 on an all cash basis,
funded from cash and cash equivalents.
Acquisition of Zany Brainy, Wheaton, Illinois
On July 1, 1996, the Company acquired this property from an unaffiliated
third party for the purchase price of $2,455,000 on an all cash basis,
funded from cash and cash equivalents.
F-7
<PAGE> 25
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
December 31, 1995
(unaudited)
Acquisition of Salem Square, Countryside, Illinois
On August 2, 1996, the Company acquired this property from an unaffiliated
third party for the purchase price of $6,173,850, on an all cash basis,
funded from cash and cash equivalents.
Acquisition of Hawthorn Village Commons, Vernon Hills, Illinois
On August 15, 1996, the Company acquired this property from an unaffiliated
third party for the purchase price of $8,450,000.
The Company funded the purchase using: (i) the proceeds of a short-term
loan maturing August 23, 1996 in the amount of $2.9 million from Inland
Mortgage Investment Corporation ("IMIC"), an Affiliate of the Company (the
"Short-Term Loan"), and (ii) cash and cash equivalents. The Company did
not pay any fees in connection with the Short-Term Loan, which bears
interest at a rate of eight percent per annum. A majority of the Company's
board, including a majority of the Independent Directors has approved the
terms and conditions of the Short-Term Loan. The Company repaid the Short-
Term Loan using the proceeds of a loan (the "Mortgage Loan") in the amount
of $3,955,000 from an unaffiliated lender. The Company paid a 1%
origination fee to the lender of the Mortgage Loan. The Mortgage Loan has
a term of five years and, prior to the maturity date, requires payments of
interest only, at an annual rate of 7.85%.
Acquisition of Six Corners, Chicago, Illinois
On October 18, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of approximately
$6,000,000, on an all cash basis, funded from cash and cash equivalents.
Acquisition of Spring Hill Fashion Center, West Dundee, Illinois
On November 13, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of approximately
$9,200,000, on an all cash basis, funded from cash and cash equivalents.
Acquisition of Grand and Hunt Club Outlot Center, Gurnee, Illinois
On December 24, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of $3,592,000 on an all
cash basis, funded from cash and cash equivalents.
Acquisition of the Quarry Outlot, Hodgkins, Illinois
On December 24, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of $1,800,000 on an all
cash basis, funded from cash and cash equivalents.
F-8
<PAGE> 26
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
December 31, 1995
(unaudited)
Acquisition of Crestwood Plaza Shopping Center, Crestwood, Illinois
On December 27, 1996, the Company acquired this property from an affiliated
party, Inland Property Sales, for the purchase price of $1,808,760. As
part of the acquisition, the Company assumed the existing first mortgage
loan of 1,303,303 with the balance funded with cash and cash equivalents.
The assumed mortgage was paid off December 30, 1996.
Acquisition of Park St. Claire Plaza, Schaumburg, Illinois
On December 31, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of $1,525,000, on an all
cash basis, funded from cash and cash equivalents.
Acquisition of Lansing Square Shopping Center, Lansing, Illinois
On December 31, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of $16,300,000.
The Company funded the purchase using: (i) the proceeds of five long-term
loans totaling $12,850,000 from LaSalle Bank of which approximately
$8,000,000 was used to purchase this property and (ii) cash and cash
equivalents. The Company paid a one point fee in connection with these
long-term loans. The loans have a term of seven years and, prior to the
maturity date, require payment of interest only, at 7.6%, fixed for five
years with the remaining two years at prime plus 1/2%.
Acquisition of The Summit of Park Ridge, Park Ridge, Illinois
On December 31, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of $3,200,000, on an all
cash basis, funded from cash and cash equivalents.
(C) No pro forma assumptions have been made for the additional payment of
distributions resulting from the additional proceeds raised.
(D) Additional Offering Proceeds of $69,968,000, net of additional Offering
costs of $9,796,249, are reflected as received as of December 31, 1995,
prior to the purchase of the properties. Offering costs consist
principally of registration costs, printing and selling costs, including
commissions.
F-9
<PAGE> 27
Inland Real Estate Corporation
Pro Forma Statement of Operations
For the year ended December 31, 1995
(unaudited)
The following unaudited Pro Forma Statement of Operations of the Company is
presented to effect the acquisitions of the Walgreens/Decatur property, Eagle
Crest Shopping Center, Montgomery-Goodyear property, Nantucket Square Shopping
Center, Mundelein Plaza, Regency Point Shopping Center, Prospect Heights Plaza,
Montgomery-Sears Shopping Center, Salem Square, Hawthorn Village Commons, Six
Corners, Spring Hill Fashion Center, Crestwood Plaza Shopping Center, Park St.
Claire Plaza, Lansing Square Shopping Center and Summit of Park Ridge as though
these transactions occurred on January 1, 1995. Hartford/Naperville Plaza,
Antioch Plaza and the Zany Brainy store were constructed in 1995 and acquired
shortly after construction was completed and as such, the unaudited Pro Forma
Statement of Operations of the Company is presented to effect these
acquisitions as of August 17, 1995, September 1, 1995 and November 22, 1995,
respectively, the date occupancy commenced at these properties. Grand and Hunt
Club and the Quarry Outlot were constructed in 1996, as such, no operations are
presented on the unaudited Pro Forma Statement of Operations for 1995. This
unaudited Pro Forma Statement of Operations should be read in conjunction with
the December 31, 1995 Financial Statements and the notes thereto as filed on
Form 10-K.
This unaudited Pro Forma Statement of Operations is not necessarily indicative
of what the actual results of operations would have been for the year ended
December 31, 1995, nor does it purport to represent the future results of
operations of the Company. Unless otherwise defined, capitalized terms used
herein shall have the same meaning as in the Prospectus.
F-10
<PAGE> 28
Inland Real Estate Corporation
Pro Forma Statement of Operations
for the year ended December 31, 1995
(unaudited)
<TABLE>
<CAPTION>
Pro Forma Adjustments
--------------------------------------------------
1995 1995 1996
Historical Acquisitions Acquisitions 1995
(A) (B) (C) Pro Forma
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Rental
income.......... $ 869,485 585,614 7,163,124 8,618,223
Additional
rental income... 228,024 162,536 2,663,228 3,053,788
Interest
income (D)...... 82,913 - - 82,913
----------- ----------- ----------- -----------
Total income.... 1,180,422 748,150 9,826,352 11,754,924
----------- ----------- ----------- -----------
Professional
services and
general and
administrative.. 23,132 - - 23,132
Property operating
expenses........ 326,721 275,218 4,232,681 4,834,620
Interest expense.. 164,161 429,997 1,270,368 1,864,526
Depreciation (E).. 169,894 111,767 1,779,708 2,061,369
----------- ----------- ----------- -----------
Total expenses.... 683,908 816,982 7,282,757 8,783,647
----------- ----------- ----------- -----------
Net income
(loss).......... $ 496,514 (68,832) 2,543,595 2,971,277
=========== =========== =========== ===========
Weighted average
common stock shares
outstanding (F). 943,156 7,939,956
=========== ===========
Net income per weighted
average common stock
outstanding (F). $ .53 .37
=========== ===========
</TABLE>
See accompanying notes to pro forma statement of operations.
F-11
<PAGE> 29
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
For the year ended December 31, 1995
(unaudited)
(A) The 1995 Historical column represents the historical statement of
operations of the Company for the year ended December 31, 1995, as filed
with the SEC on Form 10-K.
(B) Total pro forma adjustments for the year ended December 31, 1995 are as
though the acquisitions were acquired the earlier of January 1, 1995 or
date that operations commenced.
<TABLE>
<CAPTION>
Pro Forma Adjustments
---------------------------------------------------
Hartford
Montgomery- Naperville
Walgreens Eagle Crest Goodyear Plaza
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Rental
income........... $ 10,651 95,232 101,359 15,077
Additional
Rental income.... - 2,218 19,203 662
----------- ----------- ------------ -----------
Total income..... 10,651 97,450 120,562 15,739
----------- ----------- ------------ -----------
Property operating
expenses......... 533 17,376 47,758 3,436
Interest expense... 4,840 77,170 46,325 13,625
Depreciation (E)... 3,141 16,324 20,682 8,867
----------- ----------- ------------ -----------
Total expenses..... 8,514 110,870 114,765 25,928
----------- ----------- ------------ -----------
Net income(loss). $ 2,137 (13,420) 5,797 (10,189)
=========== =========== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
Total
Nantucket Antioch 1995
Square Plaza Pro Forma
----------- ----------- -----------
<S> <C> <C> <C>
Rental
income........... $ 340,545 22,750 585,614
Additional
Rental income.... 140,453 - 162,536
----------- ----------- -----------
Total income..... 480,998 22,750 748,150
----------- ----------- -----------
Property operating
expenses......... 205,903 212 275,218
Interest expense... 267,137 20,900 429,997
Depreciation (E)... 57,357 5,396 111,767
----------- ----------- -----------
Total expenses..... 530,397 26,508 816,982
----------- ----------- -----------
Net income(loss). $ (49,399) (3,758) (68,832)
=========== =========== ===========
</TABLE>
F-12
<PAGE> 30
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Acquisition of Walgreens/Decatur, Decatur, Illinois
In conjunction with the acquisition, the Company assumed a portion of the
first mortgage loan with a balance of $775,000. This mortgage has an
interest rate of 7.655%, amortizes over a 25-year period and matures May
31, 2004. The Company is responsible for monthly payments of principal
and interest of $5,689. The pro forma adjustment for interest expense for
the period prior to acquisition was estimated using the described loan
terms.
Acquisition of Eagle Crest Shopping Center, Naperville, Illinois
As part of the acquisition, the Company assumed a portion of the first
mortgage loan with a balance of $3,534,000, as well as entering into a
loan agreement with Inland Property Sales, Inc. ("IPS"), an Affiliate of
the Advisor, for the balance of the purchase price for $1,212,427. The
first mortgage bears interest at 9.5% per annum and the loan to IPS bears
interest at 10.5%. The pro forma adjustment for interest expense for the
period prior to acquisition was estimated using the described loan terms.
Acquisition of Montgomery-Goodyear, Montgomery, Illinois
As part of the acquisition, the Company entered into a loan agreement with
Inland Mortgage Investment Corporation ("IMIC"), an affiliate of the
Advisor, for $600,000 which bears interest of 10.9% per annum. The pro
forma adjustment for interest expense for the period prior to acquisition
was estimated using the described loan terms.
Acquisition of Hartford/Naperville Plaza, Naperville, Illinois
In conjunction with the acquisition, the Company entered into a loan
agreement with IMIC for $600,000 which bears interest of 10.9% per annum.
The pro forma adjustment for interest expense was estimated using the
described loan terms.
Acquisition of Nantucket Square Shopping Center, Schaumburg, Illinois
As part of the acquisition, the Company entered into a loan agreement with
IMIC for $3,550,000 which bears interest of 10.5% per annum. The pro
forma adjustment for interest expense for the period prior to acquisition
was estimated using the described loan terms.
F-13
<PAGE> 31
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Acquisition of Antioch Plaza, Antioch, Illinois
This pro forma adjustment reflects the purchase of the Antioch Plaza
property as if the Company had purchased the property as of September 1,
1995, the date the first tenant occupied this newly constructed property.
The pro forma adjustment for operations for the period September 1, 1995
to December 28, 1995 (date of acquisition) was estimated using applicable
lease information. Blockbuster Video was the only tenant occupying the
property during that period. No pro forma adjustment was made for real
estate tax expense and the related recovery income since the property was
vacant land for most of 1995 and the amount would be difficult to estimate
and have an immaterial effect.
As part of the acquisition, the Company entered into a loan agreement with
Inland Real Estate Investment Corporation, an affiliate of the Advisor,
for $660,000 which bears interest of 9.5% per annum. The pro forma
adjustment for interest expense was estimated using the described loan
terms.
F-14
<PAGE> 32
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
(C) Total pro forma adjustments for 1996 Acquisitions are as though they were
acquired the earlier of January 1, 1995 or date that operations commenced.
<TABLE>
<CAPTION>
Pro Forma Adjustments
-----------------------------------------------------------
Mundelein Regency Prospect Montgomery- Zany
Plaza Point Heights Sears Brainy
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Rental
income.......... $ 639,124 541,085 164,152 327,610 28,643
Additional
Rental income... 66,669 63,294 116,175 76,182 5,030
----------- ----------- ----------- ----------- -----------
Total income.... 705,793 604,379 280,327 403,792 33,673
----------- ----------- ----------- ----------- -----------
Property operating
expenses........ 141,482 71,615 180,819 102,067 5,502
Interest expense.. - 351,900 - - -
Depreciation (E).. 128,233 162,500 46,900 83,200 4,422
----------- ----------- ----------- ----------- -----------
Total expenses.... 269,715 586,015 227,719 185,267 9,924
----------- ----------- ----------- ----------- -----------
Net income...... $ 436,078 18,364 52,608 218,525 23,749
=========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Hawthorn
Salem Village Six Spring
Square Commons Corners Hill Crestwood
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Rental
income.......... $ 717,522 970,313 685,443 1,117,082 203,007
Additional
Rental income... 387,179 353,145 164,345 290,755 66,739
----------- ----------- ----------- ----------- -----------
Total income.... 1,104,701 1,323,458 849,788 1,407,837 269,746
----------- ----------- ----------- ----------- -----------
Property operating
expenses........ 435,021 407,404 584,070 366,360 73,358
Interest expense.. - 310,468 - - -
Depreciation (E).. 150,000 194,467 153,000 246,866 49,439
----------- ----------- ----------- ----------- -----------
Total expenses.... 585,021 912,339 737,070 613,226 122,797
----------- ----------- ----------- ----------- -----------
Net income...... $ 519,680 411,119 112,718 794,611 146,949
=========== =========== =========== =========== ===========
</TABLE>
F-15
<PAGE> 33
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
<TABLE>
<CAPTION>
Total
Park Lansing Summit of 1995
St. Claire Square Park Ridge Pro Forma
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Rental
income........... $ 70,928 1,406,317 291,898 7,163,124
Additional
Rental income.... 28,960 825,340 219,415 2,663,228
----------- ----------- ----------- -----------
Total income..... 99,888 2,231,657 511,313 9,826,352
----------- ----------- ----------- -----------
Property operating
expenses......... 82,601 1,508,113 274,269 4,232,681
Interest expense... - 608,000 - 1,270,368
Depreciation (E)... 40,681 434,667 85,333 1,779,708
----------- ----------- ----------- -----------
Total expenses..... 123,282 2,550,780 359,602 7,282,757
----------- ----------- ----------- -----------
Net income(loss). $ (23,394) (319,123) 151,711 2,543,595
=========== =========== =========== ===========
</TABLE>
F-16
<PAGE> 34
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Acquisition of Mundelein Plaza, Mundelein, Illinois
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1995 prepared in accordance with Rule 3.14 of
Regulation S-X (*) to the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Mundelein Plaza
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
<S> <C> <C> <C>
Rental income.................... $ 639,124 - 639,124
Additional rental income......... 66,669 - 66,669
----------- ----------- -----------
Total income..................... 705,793 - 705,793
----------- ----------- -----------
Property operating expenses...... 141,482 - 141,482
Interest expense................. - - -
Depreciation (E)................. - 128,233 128,233
----------- ----------- -----------
Total expenses................... 141,482 128,233 269,715
----------- ----------- -----------
Net income....................... $ 564,311 (128,233) 436,078
=========== =========== ===========
</TABLE>
Acquisition of Regency Point, Lockport, Illinois
As part of the acquisition, the Company will assume the existing first
mortgage loan of $4,473,200, along with a related interest rate swap
agreement.
The first mortgage loan has a floating interest rate of 180 basis points
over the 30-day LIBOR rate, which rate is adjusted monthly. The interest
rate swap agreement, in conjunction with the first mortgage, provides for
Bank One, Chicago, to receive from or pay to the Company the difference
between 6.11% and the 30-day LIBOR rate, so that the first mortgage loan
has an effective rate of 7.91% per annum. The pro forma adjustment for
interest expense for 1995 was estimated using the described loan terms.
The related interest rate swap agreement was terminated on April 18, 1996
resulting in $48,419 proceeds to the Company. The pro forma adjustment
does not give effect to the termination of this agreement.
F-17
<PAGE> 35
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1995 prepared in accordance with Rule 3.14 of
Regulation S-X (*) to the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Regency Point
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
<S> <C> <C> <C>
Rental income.................... $ 541,085 - 541,085
Additional rental income......... 63,294 - 63,294
----------- ----------- -----------
Total income..................... 604,379 - 604,379
----------- ----------- -----------
Property operating expenses...... 71,615 - 71,615
Interest expense................. - 351,900 351,900
Depreciation (E)................. - 162,500 162,500
----------- ----------- -----------
Total expenses................... 71,615 514,400 586,015
----------- ----------- -----------
Net income....................... $ 532,764 (514,400) 18,364
=========== =========== ===========
</TABLE>
Acquisition of Prospect Heights Plaza, Prospect Heights, Illinois
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1995 prepared in accordance with Rule 3.14 of
Regulation S-X (*) to the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Prospect Heights
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
<S> <C> <C> <C>
Rental income.................... $ 164,152 - 164,152
Additional rental income......... 116,175 - 116,175
----------- ----------- -----------
Total income..................... 280,327 - 280,327
----------- ----------- -----------
Property operating expenses...... 180,819 - 180,819
Interest expense................. - - -
Depreciation (E)................. - 46,900 46,900
----------- ----------- -----------
Total expenses................... 180,819 46,900 227,719
----------- ----------- -----------
Net income....................... $ 99,508 (46,900) 52,608
=========== =========== ===========
</TABLE>
F-18
<PAGE> 36
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Acquisition of Montgomery-Sears, Montgomery, Illinois
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1995 prepared in accordance with Rule 3.14 of
Regulation S-X (*) to the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Montgomery-Sears
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
<S> <C> <C> <C>
Rental income.................... $ 327,610 - 327,610
Additional rental income......... 76,182 - 76,182
----------- ----------- -----------
Total income..................... 403,792 - 403,792
----------- ----------- -----------
Property operating expenses...... 102,067 - 102,067
Interest expense................. - - -
Depreciation (E)................. - 83,200 83,200
----------- ----------- -----------
Total expenses................... 102,067 83,200 185,267
----------- ----------- -----------
Net income....................... $ 301,725 (83,200) 218,525
=========== =========== ===========
</TABLE>
Acquisition of Zany Brainy, Wheaton, Illinois
This pro forma adjustment reflects the purchase of Zany Brainy as if the
Company had purchased the property as of January 1, 1995. Operations for
this property for the period from November 22, 1995 (date of occupancy) to
December 31, 1995 were estimated using the lease and operating expense
information supplied by the seller. This property was purchased on an all
cash basis.
F-19
<PAGE> 37
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Acquisition of Salem Square, Countryside, Illinois
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1995 prepared in accordance with Rule 3.14 of
Regulation S-X (*) to the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Salem Square
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
<S> <C> <C> <C>
Rental income.................... $ 717,522 - 717,522
Additional rental income......... 387,179 - 387,179
----------- ----------- -----------
Total income..................... 1,104,701 - 1,104,701
----------- ----------- -----------
Property operating expenses...... 435,021 - 435,021
Interest expense................. - - -
Depreciation (E)................. - 150,000 150,000
----------- ----------- -----------
Total expenses................... 435,021 150,000 585,021
----------- ----------- -----------
Net income....................... $ 669,680 (150,000) 519,680
=========== =========== ===========
</TABLE>
Acquisition of Hawthorn Village Commons, Vernon Hills, Illinois
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1995 prepared in accordance with Rule 3.14 of
Regulation S-X (*) to the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Hawthorn Village Commons
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
<S> <C> <C> <C>
Rental income.................... $ 970,313 - 970,313
Additional rental income......... 353,145 - 353,145
----------- ----------- -----------
Total income..................... 1,323,458 - 1,323,458
----------- ----------- -----------
Property operating expenses...... 407,404 - 407,404
Interest expense................. - 310,468 310,468
Depreciation (E)................. - 194,467 194,467
----------- ----------- -----------
Total expenses................... 407,404 504,935 912,339
----------- ----------- -----------
Net income....................... $ 916,054 (504,935) 411,119
=========== =========== ===========
</TABLE>
F-20
<PAGE> 38
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
The Company funded the purchase of Hawthorn Village Commons using: (i) the
proceeds of a short-term loan maturing August 23, 1996 in the amount of
$2.9 million from Inland Mortgage Investment Corporation ("IMIC"), an
Affiliate of the Company (the "Short-Term Loan"), and (ii) cash and cash
equivalents. The Company did not pay any fees in connection with the
Short-Term Loan, which bears interest at a rate of eight percent per
annum. A majority of the Company's board, including a majority of the
Independent Directors has approved the terms and conditions of the Short-
Term Loan. The Company repaid the Short-Term Loan using the proceeds of a
loan (the "Mortgage Loan") in the amount of $3,955,000 from an
unaffiliated lender. The Company paid a 1% origination fee to the lender
of the Mortgage Loan. The Mortgage Loan has a term of five years and,
prior to the maturity date, requires payments of interest only, at an
annual rate of 7.85%.
Acquisition of Six Corners, Chicago, Illinois
This pro forma adjustment reflects the purchase of Six Corners as if the
Company had acquired the property as of January 1, 1995. The year ended
December 31, 1995 is based on the Historical Summary of Gross Income and
Direct Operating Expenses for the year ended June 30, 1996 prepared in
accordance with Rule 3-14 of Regulation S-X and information provided by
the seller.
<TABLE>
<CAPTION>
Six Corners
-------------------------------------
Year Ended
December 31, Pro Forma
1995 Adjustments Total
----------- ----------- -----------
<S> <C> <C> <C>
Rental income.................... $ 685,443 - 685,443
Additional rental income......... 164,345 - 164,345
----------- ----------- -----------
Total income..................... 849,788 - 849,788
----------- ----------- -----------
Property operating expenses...... 584,070 - 584,070
Interest expense................. - - -
Depreciation (E)................. - 153,000 153,000
----------- ----------- -----------
Total expenses................... 584,070 153,000 737,070
----------- ----------- -----------
Net income....................... $ 265,718 (153,000) 112,718
=========== =========== ===========
</TABLE>
F-21
<PAGE> 39
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Acquisition of Spring Hill Fashion Center, West Dundee, Illinois
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1995 prepared in accordance with Rule 3.14 of
Regulation S-X (*) to the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Spring Hill Fashion Center
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
<S> <C> <C> <C>
Rental income.................... $1,117,082 - 1,117,082
Additional rental income......... 290,755 - 290,755
----------- ----------- -----------
Total income..................... 1,407,837 - 1,407,837
----------- ----------- -----------
Property operating expenses...... 366,360 - 366,360
Interest expense................. - - -
Depreciation (E)................. - 246,866 246,866
----------- ----------- -----------
Total expenses................... 366,360 246,866 613,226
----------- ----------- -----------
Net income....................... $1,041,477 (246,866) 794,611
=========== =========== ===========
</TABLE>
Acquisition of Crestwood Plaza Shopping Center, Crestwood, Illinois
This pro forma adjustment reflects the purchase of Crestwood Plaza
Shopping Center as if the Company had acquired the property as of January
1, 1995. The year ended December 31, 1995 is based on the Historical
Summary of Gross Income and Direct Operating Expenses for the year ended
October 31, 1996 prepared in accordance with Rule 3-14 of Regulations S-X
and information provided by the seller.
The mortgage loan assumed at the time of purchase was originally funded
January 1996, and accordingly, no pro forma adjustment has been made for
interest expense for the year ended December 31, 1995.
F-22
<PAGE> 40
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
<TABLE>
<CAPTION>
Crestwood
-------------------------------------
Year ended
December 31, Pro Forma
1995 Adjustments Total
----------- ----------- -----------
<S> <C> <C> <C>
Rental income.................... $ 203,007 - 203,007
Additional rental income......... 66,739 - 66,739
----------- ----------- -----------
Total income..................... 269,746 - 269,746
----------- ----------- -----------
Property operating expenses...... 73,358 - 73,358
Interest expense................. - - -
Depreciation (E)................. - 50,293 50,293
----------- ----------- -----------
Total expenses................... 73,358 50,293 123,651
----------- ----------- -----------
Net income....................... $ 196,388 (50,293) 146,095
=========== =========== ===========
</TABLE>
Acquisition of Park St. Claire Plaza, Schaumburg, Illinois
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1995 prepared in accordance with Rule 3.14 of
Regulation S-X (*) to the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Park St. Claire
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
<S> <C> <C> <C>
Rental income.................... $ 70,928 - 70,928
Additional rental income......... 28,960 - 28,960
----------- ----------- -----------
Total income..................... 99,888 - 99,888
----------- ----------- -----------
Property operating expenses...... 82,601 - 82,601
Interest expense................. - - -
Depreciation (E)................. - 40,681 40,681
----------- ----------- -----------
Total expenses................... 82,601 40,681 123,282
----------- ----------- -----------
Net income....................... $ 17,287 (40,681) (23,394)
=========== =========== ===========
</TABLE>
F-23
<PAGE> 41
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Acquisition of Lansing Square Shopping Plaza, Lansing, Illinois
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1995 prepared in accordance with Rule 3.14 of
Regulation S-X (*) to the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Lansing Square
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
<S> <C> <C> <C>
Rental income.................... $ 1,406,317 - 1,406,317
Additional rental income......... 825,340 - 825,340
----------- ----------- -----------
Total income..................... 2,231,657 - 2,231,657
----------- ----------- -----------
Property operating expenses...... 1,508,113 - 1,508,113
Interest expense................. - 608,000 608,000
Depreciation (E)................. - 434,667 434,667
----------- ----------- -----------
Total expenses................... 1,508,113 1,042,667 2,550,780
----------- ----------- -----------
Net income....................... $ 723,544 (1,042,667) (319,123)
=========== =========== ===========
</TABLE>
The Company funded the purchase using: (i) the proceeds of five long-term
loans totaling $12,850,000 from LaSalle Bank of which approximately
$8,000,000 was used to purchase this property and (ii) cash and cash
equivalents. The Company paid a one point fee in connection with these
long-term loans. The loan has a term of seven years and, prior to the
maturity date, requires payments of interest only, at 7.6%, fixed for five
years with the remaining two years at prime plus 1/2%.
Acquisition of Summit of Park Ridge, Park Ridge, Illinois
This pro forma adjustment reflects the purchase of Summit of Park Ridge as
if the Company had acquired the property as of January 1, 1995. The year
ended December 31, 1995 is based on the Historical Summary of Gross Income
and Direct Operating Expenses for the ten months ended November 30, 1996
prepared in accordance with Rule 3-14 of Regulation S-X and information
provided by the Seller.
F-24
<PAGE> 42
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
<TABLE>
<CAPTION>
Summit of Park Ridge
-------------------------------------
Year ended
December 31, Pro Forma
1995 Adjustments Total
----------- ----------- -----------
<S> <C> <C> <C>
Rental income.................... $ 291,898 - 291,898
Additional rental income......... 219,415 - 219,415
----------- ----------- -----------
Total income..................... 511,313 - 511,313
----------- ----------- -----------
Property operating expenses...... 274,269 - 274,269
Interest expense................. - - -
Depreciation (E)................. - 85,333 85,333
----------- ----------- -----------
Total expenses................... 274,269 85,333 359,602
----------- ----------- -----------
Net income....................... $ 237,044 (85,333) 151,711
=========== =========== ===========
</TABLE>
(D) No pro forma adjustment has been made relating to interest income which
would have been earned on the additional Offering Proceeds raised.
(E) Depreciation expense is computed using the straight-line method, based
upon an estimated useful life of thirty years.
(F) The pro forma weighted average common stock shares for the year ended
December 31, 1995 was calculated by estimating the additional shares sold
to purchase each of the Company's properties on a weighted average basis.
F-25
<PAGE> 43
Inland Real Estate Corporation
Pro Forma Balance Sheet
September 30, 1996
(unaudited)
The following unaudited Pro Forma Balance Sheet of the Company is presented to
effect the acquisition of the Six Corners, Spring Hill Fashion Center, Grand
and Hunt Club, The Quarry Outlot, Crestwood Plaza Shopping Center, Park St.
Claire Plaza, Lansing Square Shopping Center and Summit of Park Ridge, as
though these transactions occurred September 30, 1996. This unaudited Pro
Forma Balance Sheet should be read in conjunction with the September 30, 1996
Financial Statements and the notes thereto as filed on Form 10-Q.
This unaudited Pro Forma Balance Sheet is not necessarily indicative of what
the actual financial position would have been at September 30, 1996, nor does
it purport to represent the future financial position of the Company. Unless
otherwise defined, capitalized terms used herein shall have the same meaning as
in the Prospectus.
F-26
<PAGE> 44
Inland Real Estate Corporation
Pro Forma Balance Sheet
September 30, 1996
(unaudited)
<TABLE>
<CAPTION>
September 30,
September 30, 1996
1996 Pro Forma Pro Forma
Historical(A) Adjustments(B) Balance Sheet
------------- ------------- -------------
<S> <C> <C> <C>
Assets
Net investment in
properties.................. $ 50,746,249 43,425,760 94,172,009
Cash and cash equivalents..... 19,250,977 - 19,250,977
Accounts and rents
receivable.................. 1,087,810 1,477,566 2,565,376
Other assets.................. 447,025 - 447,025
------------- ------------- -------------
Total assets.................. $ 71,532,061 44,903,326 116,435,387
============= ============= =============
<CAPTION>
Liabilities and Stockholders' Equity
- ------------------------------------
<S> <C> <C> <C>
Accounts payable and accrued
expenses.................... $ 840,418 - 840,418
Accrued real estate taxes..... 981,687 1,681,838 2,663,525
Distributions payable (C)..... 372,337 - 372,337
Security deposits............. 112,374 131,884 244,258
Mortgages payable............. 18,003,626 8,000,000 26,003,626
Unearned income............... 62,650 - 62,650
Other liabilities............. 28,852 - 28,852
Due to Affiliates............. 244,040 - 244,040
------------- ------------- -------------
Total liabilities............. 20,645,984 9,813,722 30,459,706
------------- ------------- -------------
Common Stock.................. 59,824 40,801 100,625
Additional paid in capital
(net of Offering costs)..... 51,965,431 35,048,803 87,014,234
Accumulated distributions in
excess of net income........ (1,139,178) - (1,139,178)
------------- ------------- -------------
Total Stockholders' equity.... 50,886,077 35,089,604 85,975,681
------------- ------------- -------------
Total liabilities and
Stockholders' equity........ $ 71,532,061 44,903,326 116,435,387
============= ============= =============
</TABLE>
See accompanying notes to pro forma balance sheet.
F-27
<PAGE> 45
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
September 30, 1996
(unaudited)
(A) The September 30, 1996 Historical column represents the historical balance
sheet as presented in the September 30, 1996 10-Q as filed with the SEC.
(B) The following pro forma adjustment relates to the acquisition of the
subject properties as though they were acquired on September 30, 1996. The
terms are described in the notes that follow.
<TABLE>
<CAPTION>
Pro Forma Adjustments
--------------------------------------
Six Spring Grand and
Corners Hill Hunt Club
------------ ------------ ------------
<S> <C> <C> <C>
Assets
- ------
Net investment in
properties........... $ 6,000,000 9,200,000 3,592,000
Accounts and rents
receivable........... 306,203 91,576 -
------------ ------------ ------------
Total assets........... $ 6,306,203 9,291,576 3,592,000
============ ============ ============
<CAPTION>
Liabilities and Stockholders' Equity
- ------------------------------------
<S> <C> <C> <C>
Accrued real estate
taxes................ $ 336,487 97,421 -
Security deposits...... 15,542 40,155 -
Mortgage payable...... - - -
------------ ------------ ------------
Total liabilities...... 352,029 137,576 -
------------ ------------ ------------
Common Stock (D)....... $ 6,923 10,644 4,177
Additional paid in capital
(net of Offering
Costs)(D)............ 5,947,251 9,143,356 3,587,823
------------ ------------ ------------
Total Stockholders'
equity............... 5,954,174 9,154,000 3,592,000
------------ ------------ ------------
Total liabilities and
Stockholders' equity. $ 6,306,203 9,291,576 3,592,000
============ ============ ============
</TABLE>
F-28
<PAGE> 46
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
September 30, 1996
(unaudited)
(B) Continued
<TABLE>
<CAPTION>
Pro Forma Adjustments
--------------------------------------
Park
Quarry Crestwood St. Claire
------------ ------------ ------------
<S> <C> <C> <C>
Assets
- ------
Net investment in
properties........... $ 1,800,000 1,808,760 1,525,000
Accounts and rents
receivable........... - 53,639 23,627
------------ ------------ ------------
Total assets........... $ 1,800,000 1,862,399 1,548,627
============ ============ ============
<CAPTION>
Liabilities and Stockholders' Equity
- ------------------------------------
<S> <C> <C> <C>
Accrued real estate
taxes................ $ - 53,639 47,785
Security deposits...... - 12,800 -
Mortgage payable....... - - -
------------ ------------ ------------
Total liabilities...... - 66,439 47,785
------------ ------------ ------------
Common Stock (D)....... $ 2,093 2,088 1,745
Additional paid in capital
(net of Offering
Costs)(D)............ 1,797,907 1,793,872 1,499,097
------------ ------------ ------------
Total Stockholders'
equity............... 1,800,000 1,795,960 1,500,842
------------ ------------ ------------
Total liabilities and
Stockholders' equity. $ 1,800,000 1,862,399 1,548,627
============ ============ ============
</TABLE>
F-29
<PAGE> 47
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
September 30, 1996
(unaudited)
(B) Continued
<TABLE>
<CAPTION>
Pro Forma Adjustments
--------------------------------------
Total
Lansing Summit of Pro Forma
Square Park Ridge Adjustments
------------ ------------ ------------
<S> <C> <C> <C>
Assets
- ------
Net investment in
properties............... $16,300,000 3,200,000 43,425,760
Accounts and rents
receivable............... 868,035 134,486 1,477,566
------------ ------------ ------------
Total assets............... $17,168,035 3,334,486 44,903,326
============ ============ ============
<CAPTION>
Liabilities and Stockholders' Equity
- ------------------------------------
<S> <C> <C> <C>
Accrued real estate
taxes.................... $ 986,404 160,102 1,681,838
Security deposits.......... 28,918 34,469 131,884
Mortgage payable........... 8,000,000 - 8,000,000
------------ ------------ ------------
Total liabilities.......... 9,015,322 194,571 9,813,722
------------ ------------ ------------
Common Stock (D)........... $ 9,480 3,651 40,801
Additional paid in capital
(net of Offering
Costs)(D)................ 8,143,233 3,136,264 35,048,803
------------ ------------ ------------
Total Stockholders'
equity................... 8,152,713 3,139,915 35,089,604
------------ ------------ ------------
Total liabilities and
Stockholders' equity..... $17,168,035 3,334,486 44,903,326
============ ============ ============
</TABLE>
F-30
<PAGE> 48
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
September 30, 1996
(unaudited)
Acquisition of Six Corners, Chicago, Illinois
On October 18, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of approximately
$6,000,000, on an all cash basis, funded from cash and cash equivalents.
Acquisition of Spring Hill Fashion Center, West Dundee, Illinois
On November 13, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of approximately
$9,200,000, on an all cash basis, funded from cash and cash equivalents.
Acquisition of Grand and Hunt Club Outlot Center, Gurnee, Illinois
On December 24, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of $3,592,000 on an all
cash basis, funded from cash and cash equivalents.
Acquisition of The Quarry Outlot, Hodgkins, Illinois
On December 24, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of $1,800,000 on an all
cash basis, funded from cash and cash equivalents.
Acquisition of Crestwood Plaza Shopping Center, Crestwood, Illinois
On December 27, 1996, the Company acquired this property from an affiliated
party, Inland Property Sales, for the purchase price of $1,808,760. As
part of the acquisition, the Company assumed the existing first mortgage
loan of $1,303,303 with the balance funded with cash and cash equivalents.
The assumed mortgage was paid off December 30, 1996.
Acquisition of Park St. Claire Plaza, Schaumburg, Illinois
On December 31, 1996, the Company acquired the property from an
unaffiliated third party for the purchase price of $1,525,000, on an all
cash basis, funded from cash and cash equivalents.
Acquisition of Lansing Square Shopping Center, Lansing, Illinois
On December 31, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of $16,300,000. The
Company funded the purchase using: (i) the proceeds of five long-term loans
totaling $12,850,000 from LaSalle Bank of which approximately $8,000,000
was used to purchase this property and (ii) cash and cash equivalents. The
Company paid a one point fee in connection with these long-term loans. The
loans have a term of seven years and, prior to the maturity date, require
payment of interest only, at 7.6%, fixed for five years with the remaining
two years at prime plus 1/2%.
F-31
<PAGE> 49
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
September 30, 1996
(unaudited)
Acquisition of The Summit of Park Ridge, Park Ridge, Illinois
On December 31, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of $3,200,000, on an all
cash basis, funded from cash and cash equivalents.
(C) No pro forma assumptions have been made for the additional payment of
distributions resulting from the additional proceeds raised.
(D) Additional Offering Proceeds of $40,801,000, net of additional Offering
costs of $5,711,396 are reflected as received as of September 30, 1996,
prior to the purchase of the properties. Offering costs consist
principally of registration costs, printing and selling costs, including
commissions.
F-32
<PAGE> 50
Inland Real Estate Corporation
Pro Forma Statement of Operations
For the nine months ended September 30, 1996
(unaudited)
The following unaudited Pro Forma Statement of Operations of the Company is
presented to effect the acquisitions of Mundelein Plaza, Regency Point Shopping
Center, Prospect Heights Plaza, Montgomery-Sears Shopping Center, the Zany
Brainy store, Salem Square, Hawthorn Village Commons, Six Corners, Spring Hill
Fashion Center, Crestwood Plaza Shopping Center, Park St. Claire Plaza, Lansing
Square Shopping Center and Summit of Park Ridge as of January 1, 1996. Grand
and Hunt Club and the Quarry Outlot were constructed in 1996. Operations had
not commenced as of September 30, 1996, and as such, no operations are
presented on the unaudited Pro Forma Statement of Operations for September 30,
1996. This unaudited Pro Forma Statement of Operations should be read in
conjunction with the September 30, 1996 Financial Statements and the notes
thereto as filed on Form 10-Q.
This unaudited Pro Forma Statement of Operations is not necessarily indicative
of what the actual results of operations would have been for the nine months
ended September 30, 1996, nor does it purport to represent the future financial
position of the Company. Unless otherwise defined, capitalized terms used
herein shall have the same meaning as in the Prospectus.
F-33
<PAGE> 51
Inland Real Estate Corporation
Pro Forma Statement of Operations
For the nine months ended September 30, 1996
(unaudited)
<TABLE>
<CAPTION>
1996 Total
Historical Pro Forma 1996
(A) Adjustments(B) Pro Forma
------------- -------------- ------------
<S> <C> <C> <C>
Rental income............... $ 2,578,953 5,272,553 7,851,506
Additional rental income.... 785,719 2,702,440 3,488,158
Interest income (C)......... 212,063 - 212,063
Other income................ 64,870 - 64,870
------------- -------------- ------------
Total income.............. 3,641,605 7,974,993 11,616,598
------------- -------------- ------------
Professional services and
general and
administrative fees....... 120,919 - 120,919
Advisor asset management
fee....................... 242,341 699,379 941,720
Property operating expenses. 1,146,661 3,184,499 4,331,160
Interest expense............ 210,132 777,303 987,435
Depreciation (D)............ 561,983 1,519,186 2,081,169
Amortization................ 4,119 - 4,119
Acquisition costs expensed.. 22,511 - 22,511
------------- -------------- ------------
Total expenses.............. 2,308,666 6,180,367 8,368,114
------------- -------------- ------------
Net income................ $ 1,332,939 1,794,626 3,248,484
============= ============== ============
Weighted average
common stock shares
outstanding (E)........... 3,688,310 7,768,410
============= ============
Net income per weighted
average common stock
outstanding (E)........... $ .36 .42
============= ============
</TABLE>
See accompanying notes to pro forma statement of operations.
F-34
<PAGE> 52
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
For the nine months ended September 30, 1996
(unaudited)
(A) The 1996 Historical column represents the historical statement of
operations of the Company for the nine months ended September 30, 1996, as
filed with the SEC on Form 10-Q.
(B) Total pro forma adjustments for the nine months ended September 30, 1996
are as though the acquisitions of the following properties occurred on
January 1, 1996 on an all cash basis except for the following:
Regency Point
In the purchase of Regency Point the Company assumed the existing first
mortgage loan of $4,473,200, along with a related interest rate swap
agreement. The first mortgage loan has a floating interest rate of 180
basis points over the 30-day LIBOR rate, which rate is adjusted monthly.
The interest rate swap agreement, in conjunction with the first mortgage,
provides for Bank One, Chicago, to receive from or pay to the Company the
difference between 6.11% and the 30-day LIBOR rate, so that the first
mortgage loan has an effective rate of 7.91% per annum. The pro forma
adjustment for interest expense for 1996 was estimated using the described
loan terms. The related interest rate swap agreement was terminated on
April 18, 1996 resulting in $48,419 proceeds to the Company. The pro forma
adjustment does not give effect to the termination of this agreement.
Hawthorn Village Commons
The Company funded the purchase of Hawthorn Village Commons using: (i) the
proceeds of a short-term loan maturing August 23, 1996 in the amount of
$2.9 million from Inland Mortgage Investment Corporation ("IMIC"), an
Affiliate of the Company (the "Short-Term Loan"), and (ii) cash and cash
equivalents. The Company did not pay any fees in connection with the
Short-Term Loan, which bears interest at a rate of eight percent per annum.
A majority of the Company's board, including a majority of the Independent
Directors has approved the terms and conditions of the Short-Term Loan.
The Company repaid the Short-Term Loan using the proceeds of a loan (the
"Mortgage Loan") in the amount of $3,955,000 from an unaffiliated lender.
The Company paid a 1% origination fee to the lender of the Mortgage Loan.
The Mortgage Loan has a term of five years and, prior to the maturity date,
requires payments of interest only, at an annual rate of 7.85%.
Crestwood Plaza Shopping Center
As part of the December 27, 1996 purchase of Crestwood Plaza, the Company
assumed the existing first mortgage loan of $1,330,253. This loan was paid
off December 30, 1996, and accordingly, no pro forma adjustment has been
made to record interest expense.
F-35
<PAGE> 53
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the nine months ended September 30, 1996
(unaudited)
Lansing Square Shopping Center
The Company funded the purchase using: (i) the proceeds of five long-term
loans totaling $12,850,000 from LaSalle Bank of which approximately
$8,000,000 was used to purchase this property and (ii) cash and cash
equivalents. The Company paid a one point fee in connection with these
long-term loans. The loans have a term of seven years and, prior to the
maturity date, require payments of interest only, at 7.6%, fixed for five
years with the remaining two years at prime plus 1/2%.
<TABLE>
<CAPTION>
Mundelein Regency Prospect Montgomery- Zany
Plaza Point Heights Sears Brainy
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Rental income..... $ 163,381 139,271 89,105 163,700 137,489
Additional rental
income.......... 32,975 16,034 83,593 57,012 24,144
Interest income... - - - - -
----------- ----------- ----------- ----------- -----------
Total income...... 196,356 155,305 172,698 220,712 161,633
----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. - - - - -
Property operating
expenses........ 53,986 19,046 91,364 66,944 30,331
Interest expense.. - - - - -
Depreciation (D).. - - - - -
----------- ----------- ----------- ----------- -----------
Total expenses.... 53,986 19,046 91,364 66,944 30,331
----------- ----------- ----------- ----------- -----------
Net income........ $ 142,370 136,259 81,334 153,768 131,302
=========== =========== =========== =========== ===========
</TABLE>
F-36
<PAGE> 54
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the nine months ended September 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Hawthorn
Salem Village Six Spring
Square Commons Corners Hill Crestwood
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Rental income..... $ 422,146 548,667 749,262 808,264 152,255
Additional rental
income.......... 260,832 270,570 490,551 200,033 51,986
----------- ----------- ----------- ----------- -----------
Total income...... 682,978 819,237 1,239,813 1,008,297 204,241
----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. - - - - -
Property operating
expenses........ 270,756 293,132 607,048 257,627 58,837
Interest expense.. - - - - -
Depreciation (D).. - - - - -
----------- ----------- ----------- ----------- -----------
Total expenses.... 270,756 293,132 607,048 257,627 58,837
----------- ----------- ----------- ----------- -----------
Net income........ $ 412,222 526,105 632,765 750,670 145,404
=========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Park Lansing Park Pro Forma
St. Claire Square Ridge Adjustments Total
------------ ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Rental income..... $ 71,317 1,568,672 259,024 - 5,272,553
Additional rental
income.......... 37,148 998,368 179,194 - 2,702,440
------------ ---------- ----------- ----------- -----------
Total income...... 108,465 2,567,040 438,218 - 7,974,993
------------ ---------- ----------- ----------- -----------
Advisor asset
management fee.. - - - 699,379 699,379
Property operating
expenses........ 77,540 1,132,906 224,982 - 3,184,499
Interest expense.. - - - 777,303 777,303
Depreciation (D).. - - - 1,519,186 1,519,186
------------ ---------- ----------- ----------- -----------
Total expenses.... 77,540 1,132,906 224,982 2,995,868 6,180,367
------------ ---------- ----------- ----------- -----------
Net income........ $ 30,925 1,434,134 213,236 (2,995,868) 1,794,626
============ ========== =========== =========== ===========
</TABLE>
F-37
<PAGE> 55
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the nine months ended September 30, 1996
(unaudited)
(C) No pro forma adjustment has been made relating to interest income which
would have been earned on the additional Offering Proceeds raised.
(D) Depreciation expense is computed using the straight-line method, based upon
an estimated useful life of thirty years.
(E) The pro forma weighted average common stock shares for the nine months
ended September 30, 1996 was calculated by estimating the additional shares
sold to purchase each of the Company's properties on a weighted average
basis.
F-38
