Inland Real Estate Corporation
Sticker Supplement
Supplement No. 6 to the Company's Prospectus discloses information regarding
three recently completed acquisitions of property and updates certain
information in the sections of the Prospectus headed "Management", "Real
Property Investments", "Plan of Distribution" and "Distribution Reinvestment
and Share Repurchase Programs". Unless otherwise defined, capitalized terms
used herein shall have the same meaning as in the Prospectus.
The Company's Board of Directors, including a majority of the Independent
Directors, has approved an extension of the Advisory Agreement between the
Company and the Advisor for an additional one-year period.
The Company's Board of Directors, including a majority of the Independent
Directors, has approved an extension of the term of the Management Agreement
for an additional one-year period.
On December 15, 1997, the Company completed the acquisition of a 62,344 square
foot Single User Retail Center known as Countryside Shopping Center located at
Joliet Road and Willow Springs Road in Countryside, Illinois for approximately
$2,300,000. The center was purchased from an unaffiliated third party.
On December 19, 1997, the Company completed the acquisition of a 40,965 square
foot Neighborhood Retail Center known as Terramere Plaza located at Lake-Cook
Road and Arlington Heights Road in Arlington Heights, Illinois for a purchase
price of approximately $4,405,000. The Plaza was purchased from an
unaffiliated third party
On December 22, 1997, the Company completed the acquisition of a 11,160 square
foot Neighborhood Retail Center known as Wilson Plaza located at Wilson Street
and Prairie Street in Batavia, Illinois for a purchase price of approximately
$1,290,000. The Plaza was purchased from an unaffiliated third party.
The Company commenced the best efforts offering on July 14, 1997, and as of
December 17, 1997, the Company had accepted subscriptions for 8,513,339 shares
($77,045,716 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 17,
1997, Inland Securities Corporation was entitled to receive commissions, the
Marketing Contribution and the Due Diligence Expense Allowance Fee totaling
$7,047,607 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's Board of Directors, including a majority of the Independent
Directors, has determined not to terminate the Distribution Reinvestment
Program at the termination of the Offering.
SUPPLEMENT NO. 6
DATED DECEMBER 24, 1997
TO THE PROSPECTUS DATED JULY 14, 1997
OF INLAND REAL ESTATE CORPORATION
This Supplement No. 6 is provided for the purpose of supplementing the
Prospectus dated July 14, 1997 of Inland Real Estate Corporation (the
"Company") as previously supplemented by Supplement No. 5 dated December 3,
1997, Supplement No. 4 dated November 20, 1997 and Supplement No. 3 dated
October 14, 1997 (which Supplement No. 3 superseded Supplement Nos. 1 and 2)
and must be read in conjunction therewith. Supplement No. 6 to the Company's
Prospectus discloses information regarding three recently completed
acquisitions of property and updates certain information in the sections of the
Prospectus headed "Management", "Real Property Investments", "Plan of
Distribution" and "Distribution Reinvestment and Share Repurchase Programs".
Unless otherwise defined, capitalized terms used herein shall have the same
meaning as in the Prospectus, as supplemented.
Management
The Company's Board of Directors, including a majority of the Independent
Directors, has approved an extension of the Advisory Agreement between the
Company and the Advisor for an additional one-year period.
The Company's Board of Directors, including a majority of the Independent
Directors, has approved an extension of the term of the Management Agreement
for an additional one-year period.
Real Property Investments
Countryside Shopping Center, Countryside, Illinois
On December 15, 1997, the Company acquired a Neighborhood Retail Center located
at Joliet Road and Willow Springs Road in Countryside, Illinois known as
Countryside Shopping Center from Arnold Lees Corporation, an unaffiliated third
party, for approximately $2,300,000. The purchase price was funded using cash
and cash equivalents. The purchase price was approximately $36.89 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.
-1-
Countryside Shopping Center was built in 1975 and consists of a one-story,
multi-tenant retail facility aggregating 62,344 rentable square feet. As of
December 15, 1997, Countryside Shopping Center was 100% leased to one tenant,
who in turn, sub-leases space to three tenants. In evaluating Countryside
Shopping Center as a potential acquisition, the Company considered a variety of
factors including location, demographics, tenant mix, price per square foot,
existing rental rate compared to market rates, and occupancy. The Company
believes that the center is located within a vibrant economic area. Although
100% of the rentable square feet at Countryside Shopping Center is leased to
one tenant, 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 Countryside Shopping Center over the next few years. Nevertheless, a
substantial portion of any cost of repairs and improvements would be paid by
the tenants.
The table below sets forth certain information with respect to the occupancy
rate at Countryside Shopping Center expressed as a percentage of total gross
leasable area and the average effective annual base rent per square foot.
Occupancy Rate
as of Effective
Year Ending December 31, Annual Rental
December 31, of Each Year Per Square Ft
------------ ------------- -------------
1996 100% $4.28
1995 100% 4.20
1994 100% 4.16
1993 100% 4.16
1992 100% 4.16
Dominick's Finer Foods, a grocery store, leases 100% of the total square
footage. The lease with Dominick's requires Dominick's to pay base rent equal
to $4.28 per square foot per annum payable monthly until June 2000. The lease
with Dominick's contains three options to renew, each for consecutive five year
periods at a rate of $4.28 per square foot per annum payable monthly.
For federal income tax purposes, the Company's depreciable basis in Countryside
Shopping Center will be approximately $1,600,000. 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 1997 for the tax year ended
1996 (the most recent tax year for which information is generally available)
were $191,264. The real estate taxes payable were calculated by multiplying
1,141,073 assessed value by an equalizer of 2.1517 and a tax rate of 7.790%.
-2-
On December 15, 1997, a total of 62,344 square feet was leased to one tenant at
Countryside Shopping Center. The following tables set forth certain
information with respect to the amount of and expiration of the lease at this
Neighborhood Retail Center.
Square Feet Lease Renewal Current Rent per
Lessee Leased Ends Option Annual Rent Square Foot
Dominick's Finer
Foods 62,344 06/2000 3/5 yr. $ 266,601 $ 4.28
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Approx. GLA Annual Base Total Per Square Building GLA Rent
Year Number of of Expiring Rent of Annual Foot Under Represented Represented
Ending Leases Leases Expiring Base Expiring by Expiring By Expiring
December 31, Expiring (Sq. Ft.) Leases Rent (1) Leases Leases Leases
- ----------- --------- ----------- ----------- -------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1997 - - - $266,601 - - -
1998 - - - 266,601 - - -
1999 - - - 266,601 - - -
2000 1 62,344 $ 266,601 266,601 $ 4.28 100% 100%
(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.
</TABLE>
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 Countryside Shopping Center
property, as of October 13, 1997, of $2,300,000. Appraisals are estimates of
value and should not be relied on as a measure of true worth or realizable
value.
-3-
Terramere Plaza, Arlington Heights, Illinois
On December 19, 1997, the Company acquired a Neighborhood Retail Center located
at Lake-Cook Road and Arlington Heights Road in Arlington Heights, Illinois
known as Terramere Plaza from C.B. Institution Fund VIII, an unaffiliated third
party, for approximately $4,405,000. The purchase price was funded using cash
and cash equivalents. The purchase price was approximately $107.53 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.
Terramere Plaza was built in 1980 and consists of two one-story, multi-tenant
retail facilities aggregating 40,965 rentable square feet. As of December 19,
1997, Terramere Plaza was 89% leased. In evaluating Terramere 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 occupancy. 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.
The Company anticipates making approximately $195,000 of repairs and
improvements to Terramere Plaza for a new roof and parking lot overlay over the
next few years.
The table below sets forth certain information with respect to the occupancy
rate at Terramere Plaza expressed as a percentage of total gross leasable area
and the average effective annual base rent per square foot.
Occupancy Rate
as of Effective
Year Ending December 31, Annual Rental
December 31, of Each Year Per Square Ft
------------ ------------ -------------
1996 100% $12.47
1995 100% 12.21
1994 98% 11.89
1993 92% 11.72
There are no tenants leasing more than 10% of the total square footage at
Terramere Plaza.
For federal income tax purposes, the Company's depreciable basis in Terramere
Plaza will be approximately $3,300,000. 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.
-4-
Information regarding real estate taxes payable in 1997 for the tax year ended
1996 (the most recent tax year for which information is generally available)
were $247,803.
On December 19, 1997, a total of 36,255 square feet were leased to eighteen
tenants at Terramere Plaza. The following tables set forth certain information
with respect to the amount of and expiration of the lease at this Neighborhood
Retail Center.
Square Feet Lease Renewal Current Rent per
Lessee Leased Ends Option Annual Rent Square Foot
------ ---------- ----- ------ ----------- -----------
White Hen 2,400 12/01 1/5 yr. $16,800 $ 7.00
Scholastics Sports 750 10/00 - 9,000 12.00
Associated Travel 990 08/01 - 15,840 16.00
Mail Boxes Etc. 875 02/98 1/5 yr. 11,576 13.23
Otavio & Sons 1,255 03/05 - 20,933 16.68
Artist's Frame 2,255 10/00 - 28,581 12.67
Palmer Video 2,120 04/99 - 25,440 12.00
Kim's Temple 2,210 03/99 1/5 yr. 26,564 12.02
Yen Yen 3,430 03/03 - 43,801 12.77
Appell Dental 1,030 01/99 1/5 yr. 13,390 13.00
Pompei Rest. 2,370 04/98 - 32,588 13.75
Baird & Warner 3,000 03/00 - 51,000 17.00
Fancy Colours 3,950 03/99 1/8 yr. 55,932 14.16
Fast Food Pg
Rest. Inc. 1,447 06/02 1/5 yr. 18,811 13.00
European Tan 1,200 06/99 - 16,631 13.86
A-1 Lock 1,718 10/01 - 18,211 10.60
Jeffery Scott, Ltd. 3,000 02/99 - 45,000 15.00
Illusions 2,255 12/02 - 30,443 13.50
Vacant 4,710
-5-
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Approx. GLA Annual Base Total Per Square Building GLA Rent
Year Number of of Expiring Rent of Annual Foot Under Represented Represented
Ending Leases Leases Expiring Base Expiring by Expiring By Expiring
December 31, Expiring (Sq. Ft.) Leases Rent (1) Leases Leases Leases
- ----------- --------- ----------- ----------- -------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1998 2 3,245 $44,164 $483,969 $13.61 7.92% 9.13%
1999 6 13,510 188,254 445,244 13.93 32.98 42.28
2000 3 6,005 90,629 261,145 15.09 14.66 34.70
2001 3 5,108 51,950 171,756 10.17 12.47 30.25
2002 2 3,702 54,115 123,343 14.62 9.04 43.87
2003 1 3,430 48,294 69,227 14.08 8.37 69.76
2004 - - - 20,933 - - -
2005 1 1,255 20,933 20,933 16.68 3.06 100.00
(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.
</TABLE>
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 Terramere Plaza property, as of
December 11, 1997, of $4,550,000. Appraisals are estimates of value and should
not be relied on as a measure of true worth or realizable value.
Wilson Plaza, Batavia, Illinois
On December 22, 1997, the Company acquired a Neighborhood Retail Center located
at Wilson Street and Prairie Street in Batavia, Illinois known as Wilson Plaza
from American National Bank and Trust, as trustee under trust agreement dated
June 18, 1986, Trust No. 67678, an unaffiliated third party, for approximately
$1,300,000. The purchase price was funded using cash and cash equivalents.
The purchase price was approximately $116.49 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.
-6-
Wilson Plaza was built in 1986 and consists of a one-story, multi-tenant retail
facility aggregating 11,160 rentable square feet. As of December 22, 1997,
Wilson Plaza was 100% leased. In evaluating Wilson 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 occupancy. 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.
The Company does not anticipate making any significant repairs and improvements
to Wilson Plaza over the next few years. Nevertheless, a substantial portion
of any cost of repairs and improvements would be paid by the tenants.
The table below sets forth certain information with respect to the occupancy
rate at Wilson Plaza expressed as a percentage of total gross leasable area and
the average effective annual base rent per square foot.
Occupancy Rate
as of Effective
Year Ending December 31, Annual Rental
December 31, of Each Year Per Square Ft
------------ ------------ -------------
1996 100% $12.64
1995 100% $12.44
1994 100% $12.39
1993 100% $12.39
1992 100% $12.39
-7-
Tenants leasing more than 10% of the total square footage include White Hen
Pantry, a convenience store, Dimples Donuts, a donut shop, and Riverside
Liquors, a liquor store. These leases require the payment of base annual rent,
payable monthly as follows:
Base Rent
Per Square
Square Feet % of Total Foot Per Lease Term
Lessee Leased Square Feet Annum Beginning To
- ----------- ----------- ----------- ------------ ------------ ---------
White Hen Pantry 2,400 22% $ 12.00 Currently 08/31/02
Option 1 14.08 09/01/02 08/31/07
Option 2 15.17 09/01/07 08/31/12
Option 3 16.25 09/01/12 08/31/17
Dimples Donuts 2,100 19% $ 12.50 Currently 12/31/98
12.75 01/01/99 12/31/00
13.00 01/01/01 12/31/01
Option 1 13.00 01/01/02 12/31/02
13.25 01/01/03 12/31/03
13.50 01/01/04 12/31/04
13.75 01/01/05 12/31/05
14.00 01/01/06 12/31/06
Riverside Liquors 2,485 22% 9.36 Currently 04/31/01
For federal income tax purposes, the Company's depreciable basis in Wilson
Plaza will be approximately $975,000. 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 1997 for the tax year ended
1996 (the most recent tax year for which information is generally available)
were $25,089.
-8-
On December 22, 1997, a total of 11,160 square feet were leased to seven
tenants at Wilson Plaza. The following tables set forth certain information
with respect to the amount of and expiration of the lease at this Neighborhood
Retail Center.
Square Feet Lease Renewal Current Rent per
Lessee Leased Ends Option Annual Rent Square Foot
------ ---------- ----- ------ ----------- -----------
White Hen Pantry 2,400 08/02 3/5 yr. $28,800 $12.00
Dimples Donuts 2,100 12/01 1/5 yr. 26,250 12.50
Wilsons Cleaners 1,050 07/02 3/5 yr. 16,275 15.50
Subway Sandwiches 1,050 02/00 - 15,750 15.00
Rosati's Pizza 1,025 11/02 2/5 yr. 14,350 14.00
Riverside Liquors 2,485 04/01 - 23,260 9.36
Fantastic Sams 1,050 11/01 - 15,225 14.50
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Approx. GLA Annual Base Total Per Square Building GLA Rent
Year Number of of Expiring Rent of Annual Foot Under Represented Represented
Ending Leases Leases Expiring Base Expiring by Expiring By Expiring
December 31, Expiring (Sq. Ft.) Leases Rent (1) Leases Leases Leases
- ----------- --------- ----------- ----------- -------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1998 - - - $139,910 - - -
1999 - - - 141,485 - - -
2000 1 1,050 $ 16,800 142,003 $ 16.00 9% 12%
2001 3 5,635 65,785 125,991 11.67 51% 52%
2002 3 4,475 60,463 60,463 13.51 40% 100%
(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.
</TABLE>
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 Wilson Plaza property, as of
September 21, 1997, of $1,320,000. Appraisals are estimates of value and
should not be relied on as a measure of true worth or realizable value.
-9-
Plan of Distribution
The Company commenced the best efforts Offering on July 14, 1997, and as of
December 17, 1997 the Company had accepted subscriptions for 8,513,339 shares
($77,045,716 net of Selling Commissions, the Marketing Contributions 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 17, 1997, Inland Securities Corporation
was entitled to receive commissions, the Marketing Contribution and the Due
Diligence Expense Allowance Fee totaling $7,047,607 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 approximately $766,259 for the nine months
ended September 30, 1997 and $229,307 for the year ended December 31, 1996. The
Advisor may also receive an annual Advisor Asset Management Fee of not more than
1% of the Average Invested Assets, paid quarterly. For the nine months ended
September 30, 1997, the Company had incurred Advisor Asset Management Fees of
$940,159.
Distribution Reinvestment and Share Repurchase Program
The Company's Board of Directors, including a majority of the Independent
Directors, has determined not to terminate the Distribution Reinvestment Program
at the termination of the Offering.
-10-
