Inland Real Estate Corporation
Sticker Supplement
Supplement No. 5 to the Company's Prospectus discloses information regarding a
recently completed acquisition 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 November 26, 1997, the Company completed the acquisition of a 42,283 square
foot Single User Retail Center located in Roselle, Illinois, known as Roselle
Eagle from an unaffiliated third party for a purchase price of approximately
$2,900,000.
The Company commenced the best efforts offering on July 14, 1997, and as of
December 1, 1997, the Company had accepted subscriptions for 7,418,534 shares
($67,137,734 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 1, 1997,
Inland Securities Corporation was entitled to receive commissions, the
Marketing Contribution and the Due Diligence Expense Allowance Fee totaling
$7,047,607. An Affiliate of the Advisor is also entitled to receive Property
Management Fees for management and leasing services.
SUPPLEMENT NO. 5
DATED DECEMBER 3, 1997
TO THE PROSPECTUS DATED JULY 14, 1997
OF INLAND REAL ESTATE CORPORATION
This Supplement No. 5 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. 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superseded Supplement Nos. 1 and 2) and must be read in conjunction therewith.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. 5 to the Company's Prospectus discloses information regarding a
recently completed acquisition 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, as supplemented.
Real Property Investments
Roselle Eagle, Roselle, Illinois
On November 26, 1997, the Company acquired a Single-User Retail Center located
at 550 West Lake Street in Roselle, Illinois known as Roselle Eagle from
Capital Ventures, an unaffiliated third party, for approximately $2,900,000.
The purchase price was funded using cash and cash equivalents. The purchase
price was approximately $68.59 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.
Roselle Eagle was built in 1990 and consists of a single-tenant retail facility
aggregating 42,283 rentable square feet. As of November 26, 1997, Roselle
Eagle was 100% leased. In evaluating Roselle Eagle as a potential acquisition,
the Company considered a variety of factors including location, demographics,
tenant, 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. Although 100% of the rentable square feet at Roselle
Eagle 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 tenant 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 Roselle Eagle over the next few years. Nevertheless, a substantial portion
of any cost of repairs and improvements would be paid by the tenants.
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The table below sets forth certain information with respect to the occupancy
rate at Roselle Eagle 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% $7.95
1995 100% 7.95
1994 100% 7.95
1993 100% 7.95
1992 100% 7.95
Eagle Food Centers, a grocery store, leases 42,283 square feet or 100% of the
total square footage. The lease with Eagle requires Eagle to pay base rent
equal to $7.95 per square foot per annum payable monthly until January 31,
2011. The lease with Eagle contains five options to renew, each for
consecutive five year periods at a rate of $7.95 per square foot per annum
payable monthly throughout the term.
For federal income tax purposes, the Company's depreciable basis in Roselle
Eagle will be approximately $2,100,000. 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 $72,194.
On November 26, 1997, a total of 42,283 square feet was leased to one tenant at
Roselle Eagle. The following tables set forth certain information with respect
to the amount of and expiration of the lease at this Single-user Retail Center.
Square Feet Lease Renewal Current Rent per
Lessee Leased Ends Option Annual Rent Square Foot
------ -------- ----- ------ ----------- -----------
Eagle Food
Centers, L.P. 42,283 01/2011 5/5 yr. $335,979 $7.95
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<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-
2006 - - - $335,979 - - -
(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 Roselle Eagle property, as of
October 7, 1997, of $2,925,000. 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 14, 1997, and as of
December 1, 1997 the Company had accepted subscriptions for 7,418,534 shares
($67,137,734 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 1, 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.
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