UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the Quarterly Period Ended September 30, 1997
or
[ ] Transition Report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission File #33-79012
Inland Real Estate Corporation
(Exact name of registrant as specified in its charter)
Maryland #36-3953261
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
2901 Butterfield Road, Oak Brook, Illinois 60523
(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: 630-218-8000
Inland Monthly Income Fund III, Inc.
(Former name, former address and former fiscal
year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
21,829,568 shares of common stock outstanding at November 12, 1997.
-1-
Part 1 - Financial Statements
Item 1. Financial Statements
INLAND REAL ESTATE CORPORATION
(a Maryland corporation)
Balance Sheets
September 30, 1997 and December 31, 1996
(unaudited)
Assets
------
1997 1996
---- ----
Investment properties (Notes 1, 4 and 5):
Land............................................ $ 55,549,498 24,705,743
Building and improvements....................... 171,812,967 69,927,238
------------- ------------
227,362,465 94,632,981
Less accumulated depreciation................... 4,116,716 1,109,038
------------- ------------
Net investment properties....................... 223,245,749 93,523,943
Cash and cash equivalents including amounts
held by property manager (Note 1)............... 30,003,445 8,491,735
Restricted funds.................................. 1,236,638 122,043
Accounts and rents receivable (Note 5)............ 4,390,658 1,914,756
Deposits and other assets......................... 3,049,474 95,828
Deferred organization costs (net of accumulated
amortization of $9,612 and $5,492 at September
30, 1997 and December 31, 1996, respectively)
(Note 1)........................................ 17,850 21,970
Loan fees (net of accumulated amortization of
$100,158 and $11,875 at September 30, 1997 and
December 31, 1996, respectively) (Note 1)....... 781,665 338,411
------------- ------------
Total assets.................................. $262,725,479 104,508,686
============= ============
See accompanying notes to financial statements.
-2-
INLAND REAL ESTATE CORPORATION
(a Maryland corporation)
Balance Sheets
(continued)
September 30, 1997 and December 31, 1996
(unaudited)
Liabilities and Stockholders' Equity
------------------------------------
1997 1996
Liabilities: ---- ----
Accounts payable................................ $ 112,204 289,912
Accrued offering costs to Affiliates............ 837,277 298,341
Accrued offering costs to non-affiliates........ 96,647 4,236
Accrued interest payable to Affiliates.......... 4,660 4,718
Accrued interest payable to non-affiliates...... 515,811 52,402
Accrued real estate taxes....................... 4,278,033 2,770,889
Distributions payable (Note 7).................. 1,315,932 548,947
Security deposits............................... 570,115 247,769
Mortgages payable (Note 6)...................... 88,774,835 30,838,233
Unearned income................................. 759,656 64,590
Other liabilities............................... 227,106 32,820
Due to Affiliates (Note 2)...................... 744,502 255,591
------------- ------------
Total liabilities............................. 98,236,778 35,408,448
------------- ------------
Stockholders' Equity (Notes 1 and 2):
Common stock, $.01 par value, 24,000,000 Shares
authorized; 19,262,171 and 19,225,972 issued
and outstanding at September 30, 1997, and
8,144,116 and 8,137,766 Shares issued and
outstanding at December 31, 1996,
respectively.................................. 191,409 81,000
Additional paid-in capital (net of offering
costs of $22,249,025 and 10,500,108 at
September 30, 1997 and December 31, 1996,
respectively, of which $18,551,218 and
$8,096,213 was paid to Affiliates,
respectively)................................. 168,745,410 70,512,073
Accumulated distributions in excess of
net income.................................... (4,448,118) (1,492,835)
------------- ------------
Total stockholders' equity.................... 164,488,701 69,100,238
------------- ------------
Total liabilities and stockholders' equity........ $262,725,479 104,508,686
============= ============
See accompanying notes to financial statements.
-3-
INLAND REAL ESTATE CORPORATION
(a Maryland corporation)
Statements of Operations
For the three and nine months ended September 30, 1997 and 1996
(unaudited)
Three months Nine months
ended ended
September 30, September 30,
------------- -------------
1997 1996 1997 1996
Income: ---- ---- ---- ----
Rental income (Notes 1 and 5).... $6,204,790 1,258,317 14,176,240 2,578,953
Additional rental income......... 1,159,442 396,095 4,569,303 785,719
Interest income.................. 358,797 87,474 833,600 212,063
Other income..................... 15,286 12,064 76,506 64,870
---------- ---------- ---------- ----------
7,738,315 1,753,950 19,655,649 3,641,605
---------- ---------- ---------- ----------
Expenses:
Professional services to
Affiliates..................... - 5,780 19,470 16,434
Professional services to
non-affiliates................. 8,228 4,723 72,153 40,951
General and administrative
expenses to Affiliates......... 26,284 (9,319) 64,339 42,116
General and administrative
expenses to non-affiliates..... 14,510 15,424 77,198 21,418
Advisor asset management fee..... 417,159 116,809 940,159 242,341
Property operating expenses
to Affiliates.................. 349,929 67,501 766,259 139,597
Property operating expenses
to non-affiliates.............. 1,341,468 560,438 5,384,314 1,007,064
Mortgage interest to Affiliates.. 14,000 20,670 72,513 49,993
Mortgage interest to
non-affiliates................. 1,666,344 82,335 3,724,060 160,139
Depreciation..................... 1,368,159 284,483 3,007,678 561,983
Amortization..................... 32,144 1,373 92,403 4,119
Acquisition costs expensed....... 52,293 5,361 105,142 22,511
---------- ---------- ---------- ----------
5,290,518 1,155,578 14,325,688 2,308,666
---------- ---------- ---------- ----------
Net income..................... $2,447,797 598,372 5,329,961 1,332,939
========== ========== ========== ==========
Net income per weighted average
common stock shares outstanding
(16,779,827 and 5,166,900 for the
three months ended September 30,
1997 and 1996, respectively and
12,854,708 and 3,688,310 for the
nine months ended September 30,
1997 and 1996, respectively)..... $ .15 .12 .41 .36
========== ========== ========== ==========
See accompanying notes to financial statements.
-4-
INLAND REAL ESTATE CORPORATION
(a Maryland corporation)
Statements of Stockholders' Equity
September 30, 1997 and December 31, 1996
(unaudited)
Accumulated
Additional Distributions
Common Paid-in in excess of
Stock Capital net income Total
----------- ----------- ----------- ------------
Balance January 1, 1996..... $ 19,996 16,835,183 (240,113) 16,615,066
Net income.................. - - 2,452,221 2,452,221
Distributions declared
($.82 for the year ended
December 31, 1996 per
weighted average common
stock shares outstanding). - - (3,704,943) (3,704,943)
Proceeds from Offering (net
of Offering costs of
$7,378,933).............. 61,038 53,707,177 - 53,768,215
Repurchases of Shares....... (34) (30,287) - (30,321)
----------- ----------------------- ------------
Balance December 31, 1996... 81,000 70,512,073 (1,492,835) 69,100,238
Net income.................. - - 5,329,961 5,329,961
Distributions declared
($.64 for the nine months
ended September 30,1997 per
weighted average common
stock shares outstanding). - - (8,285,244) (8,285,244)
Proceeds from Offering (net
of Offering costs of
$11,748,917).............. 110,708 98,503,094 - 98,613,802
Repurchases of Shares....... (299) (269,757) - (270,056)
----------- ----------------------- ------------
Balance September 30, 1997.. $ 191,409 168,745,410 (4,448,118) 164,488,701
=========== =========== =========== ============
See accompanying notes to financial statements.
-5-
INLAND REAL ESTATE CORPORATION
(a Maryland corporation)
Statement of Cash Flows
For the nine months ended September 30, 1997 and 1996
(unaudited)
1997 1996
Cash flows from operating activities: ---- ----
Net income...................................... $ 5,329,961 1,332,939
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation.................................. 3,007,678 561,983
Amortization.................................. 92,403 4,119
Rental income under master lease.............. 296,688 305,054
Changes in assets and liabilities:
Accounts and rents receivable............... (2,475,902) (753,987)
Other assets................................ 64,884 (78,731)
Accounts payable............................ (177,708) 98,187
Accrued interest payable.................... 463,351 (5,242)
Accrued real estate taxes................... 1,507,144 607,507
Security deposits........................... 322,346 57,891
Unearned income............................. 695,066 22,804
Other liabilities 194,286 -
Due to Affiliates........................... 488,911 236,763
------------- ------------
Net cash provided by operating activities......... 9,809,108 2,389,287
------------- ------------
Cash flows from investing activities:
Restricted cash................................. (1,114,595) -
Additions to investment properties.............. (731,018) (168,035)
Purchase of investment properties............... (99,031,269) (26,729,537)
Deposits on investment properties............... (3,018,530) -
------------- ------------
Net cash used in investing activities............. (103,895,412) (26,897,572)
------------- ------------
Cash flows from financing activities:
Proceeds from offering.......................... 110,332,398 40,255,407
Share repurchases............................... (239,735) (9,148)
Payments of offering costs...................... (11,117,570) (4,569,624)
Loan proceeds................................... 32,848,380 12,820,000
Loan fees....................................... (531,537) (186,828)
Distributions paid.............................. (7,518,259) (1,989,199)
Repayment of note from Affiliate................ - (360,000)
Principal payments of debt...................... (8,175,663) (2,940,277)
------------- ------------
Net cash provided by financing activities......... 115,598,014 43,020,331
------------- ------------
Net increase in cash and cash equivalents......... 21,511,710 18,512,046
Cash and cash equivalents at beginning of period.. 8,491,735 738,931
------------- ------------
Cash and cash equivalents at end of period........ $ 30,003,445 19,250,977
============= =============
See accompanying notes to financial statements.
-6-
INLAND REAL ESTATE CORPORATION
(a Maryland corporation)
Statement of Cash Flows
(continued)
For the nine months ended September 30, 1997 and 1996
(unaudited)
Supplemental schedule of noncash investing and financing activities:
1997 1996
---- ----
Purchase of investment property................. $(132,295,154) (34,102,713)
Assumption of debt.............................. 25,263,885 4,473,176
Note payable.................................... 8,000,000 2,900,000
-------------- -------------
$ (99,031,269) (26,729,537)
============== =============
Distributions payable........................... $ 1,315,932 372,337
============== =============
Cash paid for interest.......................... $ 3,333,222 243,326
============== =============
See accompanying notes to financial statements.
-7-
INLAND REAL ESTATE CORPORATION
(a Maryland corporation)
Notes to Financial Statements
September 30, 1997
(unaudited)
Readers of this Quarterly Report should refer to the Company's audited
financial statements for the fiscal year ended December 31, 1996, which are
included in the Company's 1996 Annual Report, as certain footnote disclosures
which would substantially duplicate those contained in such audited financial
statements have been omitted from this Report.
(1) Organization and Basis of Accounting
Inland Real Estate Corporation (the "Company") was formed on May 12, 1994 to
invest in neighborhood retail centers located within an approximate 150-mile
radius of its headquarters in Oak Brook, Illinois. The Company may also
acquire single-user retail properties in locations throughout the United
States, certain of which may be sale and leaseback transactions, net leased to
creditworthy tenants. Inland Real Estate Advisory Services, Inc. (the
"Advisor"), an Affiliate of the Company, is the advisor to the Company. On
October 14, 1994, the Company commenced an initial public offering, on a best
efforts basis, ("Offering") of 5,000,000 shares of common stock ("Shares"). As
of July 24, 1996, the Company had received subscriptions for a total of
5,000,000 Shares, thereby completing the initial Offering. On July 24, 1996,
the Company commenced an offering of an additional 10,000,000 Shares, on a best
efforts basis, (the "Second Offering"). As of July 10, 1997, the Company had
received subscriptions for a total of 10,000,000 Shares, thereby completing the
Second Offering. On July 14, 1997, the Company commenced an offering of an
additional 20,000,000 Shares, on a best efforts basis, (the "Third Offering").
As of September 30, 1997, the Company had received subscriptions for a total of
3,732,611 Shares from the Third Offering. In addition, the Company has
distributed 529,560 Shares through the Company's Distribution Reinvestment
Program. As a result, Gross Offering Proceeds, total $191,185,844, net of
Shares repurchased through the Share Repurchase Program. As of September 30,
1997, the Company has repurchased 36,199 Shares through the Share Repurchase
Program.
The Company qualified as a real estate investment trust ("REIT") under the
Internal Revenue Code of 1986, as amended, for federal income tax purposes
commencing with the tax year ending December 31, 1995. Since the Company
qualified for taxation as a REIT, the Company generally will not be subject to
federal income tax to the extent it distributes its REIT taxable income to its
stockholders. If the Company fails to qualify as a REIT in any taxable year,
the Company will be subject to federal income tax on its taxable income at
regular corporate tax rates. Even if the Company qualifies for taxation as a
REIT, the Company may be subject to certain state and local taxes on its income
and property and federal income and excise taxes on its undistributed income.
-8-
INLAND REAL ESTATE CORPORATION
(a Maryland corporation)
Notes to Financial Statements
(continued)
September 30, 1997
(unaudited)
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates.
The Company considers all highly liquid investments purchased with a maturity
of three months or less to be cash equivalents and are carried at cost, which
approximates fair value.
Restricted cash at September 30, 1997 includes $835,279 held in escrow for the
principal payments on the Aurora Commons mortgage payable and $44,677 held in
escrow by the mortgagee for the payment of real estate taxes at Aurora Commons.
Restricted cash at September 30, 1997 also includes amounts held as vacancy
escrows on Cobblers Crossing, Mallard Crossing and Shorecrest Shopping Center.
Such amounts will be added to the basis of the property as tenant improvements
are completed.
Statement of Financial Accounting Standards No. 121 requires the Company to
record an impairment loss on its property to be held for investment whenever
its carrying value cannot be fully recovered through estimated undiscounted
future cash flows from their operations and sale. The amount of the impairment
loss to be recognized would be the difference between the property's carrying
value and the property's estimated fair value. As of September 30, 1997, the
Company has not recognized any such impairments on its properties.
Depreciation expense is computed using the straight-line method. Buildings and
improvements are based upon estimated useful lives of 30 years. Tenant
improvements will be depreciated over the related lease period.
Loan fees are amortized on a straight line basis over the life of the related
loans.
Deferred organization costs are amortized over a 60-month period.
Offering costs are offset against the Stockholders' equity accounts. Offering
costs consist principally of printing, selling and registration costs.
Rental income is recognized on a straight-line basis over the term of each
lease. The difference between rental income earned on a straight-line basis
and the cash rent due under the provisions of the lease agreements is recorded
as deferred rent receivable.
-9-
INLAND REAL ESTATE CORPORATION
(a Maryland corporation)
Notes to Financial Statements
(continued)
September 30, 1997
(unaudited)
(2) Transactions with Affiliates
The Advisor and its Affiliates are entitled to reimbursement for salaries and
expenses of employees of the Advisor and its Affiliates relating to the
Offering. Such costs to Affiliates incurred relating to the offering were
$723,250 and $692,248 as of September 30, 1997 and December 31, 1996,
respectively, of which $3,611 and $120,269 were unpaid as of September 30, 1997
and December 31, 1996, respectively. In addition, an Affiliate of the Advisor
serves as dealer manager of the offering and is entitled to receive selling
commissions, a marketing contribution and a due diligence expense allowance fee
from the Company in connection with the offering. Such amounts incurred were
$17,827,968 and $7,403,965 as of September 30, 1997 and December 31, 1996,
respectively, of which $833,666 and $270,365 was unpaid as of September 30,
1997 and December 31, 1996, respectively. As of September 30, 1997,
approximately $14,959,000 of these commissions had been passed through from the
Affiliate to unaffiliated soliciting broker/dealers.
As of September 30, 1997, the Company had incurred $22,276,487 of organization
and offering costs to Affiliates and non-affiliates. Pursuant to the terms of
the offering, the Advisor is required to pay organizational and offering
expenses (excluding sales commissions, the marketing contribution and the due
diligence expense allowance fee) in excess of 5.5% of the gross proceeds of the
Offering (the "Gross Offering Proceeds") or all organization and offering
expenses (including selling commissions) which together exceed 15% of gross
offering proceeds. As of the completion of the initial and second Offerings,
organizational and offering expenses did not exceed the 5.5% or 15%
limitations. As of September 30, 1997, organizational and offering costs of
the Third Offering did not exceed the 5.5% and 15% limitations. The Company
anticipates that these costs will not exceed these limitations upon completion
of the offerings, however, any excess amounts will be reimbursed by the
Advisor.
The Advisor and its Affiliates are entitled to reimbursement for salaries and
expenses of employees of the Advisor and its Affiliates relating to the
administration of the Company. Such costs are included in professional
services to Affiliates, general and administrative expenses to Affiliates and
acquisition costs expensed, of which $4,343 remained unpaid at September 30,
1997.
As of September 30, 1997, the Advisor has contributed $200,000 to the capital
of the Company for which it received 20,000 Shares.
-10-
INLAND REAL ESTATE CORPORATION
(a Maryland corporation)
Notes to Financial Statements
(continued)
September 30, 1997
(unaudited)
The Advisor may receive an annual Advisor Asset Management Fee of not more than
1% of the Average Invested Assets, paid quarterly. For any year in which the
Company qualifies as a REIT, the Advisor must reimburse the Company: (i) to
the extent that the Advisor Asset Management Fee plus Other Operating Expenses
paid during the previous calendar year exceed 2% of the Company's Average
Invested Assets for the calendar year or 25% of the Company's Net Income for
that calendar year; and (ii) to the extent that Stockholders have not received
an annual Distribution equal to or greater than the 8% Current Return. For the
nine months ended September 30, 1997, the Company has incurred $940,159 of such
fees, of which $740,159 remains unpaid at September 30, 1997.
An Affiliate of the Advisor is entitled to receive Property Management Fees for
management and leasing services. The Company incurred and paid Property
Management Fees of $766,259 and $139,597 for the nine months ended September
30, 1997 and 1996, respectively, all of which has been paid.
(3) Stock Option and Dealer Warrant Plan
The Company adopted an Independent Director Stock Option Plan which granted
each Independent Director an option to acquire 3,000 Shares as of October 19,
1994 and an additional 500 Shares on the date of each annual stockholders'
meeting commencing with the annual meeting in 1995 if the Independent Director
is a member of the Board on such date. The options for the initial 3,000
Shares granted shall be exercisable as follows: 1,000 Shares on the date of
grant and 1,000 Shares on each of the first and second anniversaries of the
date of grant. The succeeding options are exercisable on the second
anniversary of the date of grant.
In addition to sales commissions, Soliciting Dealers will also receive one
Soliciting Dealer Warrant for each 40 Shares sold by such Soliciting Dealer
during the offerings, subject to state and federal securities laws. The holder
of a Soliciting Dealer Warrant will be entitled to purchase one Share from the
Company at a price of $12 during the period commencing with the first date upon
which the Soliciting Dealer Warrants are issued and ending upon the first to
occur of: (i) October 14, 1999 or (ii) the closing date of a secondary offering
of the Shares by the Company. Notwithstanding the foregoing no Soliciting
Dealer Warrant will be exercisable until one year from the date of issuance.
As of December 31, 1996, none of these warrants were exercised.
-11-
<TABLE> INLAND REAL ESTATE CORPORATION
(a Maryland corporation)
Notes to Financial Statements
(continued)
(4) Investment Properties Gross amount at which carried
<CAPTION> Initial Cost (A) at end of period
-------------------------- ----------------------------------------
Net
Buildings Adjustments Land Buildings
Date and to and and
Acq Land improvements Basis (B) improvements improvements Total
Single-user Retail ------- ------------ ------------- ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Walgreens/Decatur
Decatur, IL............. 01/95 $ 78,330 1,130,723 - 78,330 1,130,723 1,209,053
Zany Brainy
Wheaton, IL............. 07/96 838,000 1,626,033 664 838,000 1,626,697 2,464,697
Ameritech
Joliet, IL.............. 05/97 170,000 883,293 2,544 170,000 885,837 1,055,837
Dominicks-Schaumburg
Schaumburg, IL.......... 05/97 2,670,250 8,012,450 2,679 2,670,250 8,015,129 10,685,379
Dominicks-Highland Park
Highland Park, IL....... 06/97 3,200,000 9,593,565 2,200 3,200,000 9,595,765 12,795,765
Dominicks-Glendale Heights
Glendale Heights, IL.... 09/97 1,265,000 6,934,230 - 1,265,000 6,934,230 8,199,230
Neighborhood Retail Centers
- ---------------------------
Eagle Crest Shopping Center
Naperville, IL.......... 03/95 1,878,618 2,938,352 115,828 1,878,618 3,054,180 4,932,798
Montgomery-Goodyear
Montgomery, IL.......... 09/95 315,000 834,659 (11,158) 315,000 823,501 1,138,501
Hartford/Naperville Plaza
Naperville, IL.......... 09/95 990,000 3,427,961 13,002 990,000 3,440,963 4,430,963
Nantucket Square
Schaumburg, IL.......... 09/95 1,908,000 2,349,918 (69,881) 1,908,000 2,280,037 4,188,037
Antioch Plaza
Antioch, IL............. 12/95 268,000 1,360,445 (120,629) 268,000 1,239,816 1,507,816
Mundelein Plaza
Mundelein, IL........... 03/96 1,695,000 3,965,560 (45,629) 1,695,000 3,919,931 5,614,931
Regency Point
Lockport, IL............ 04/96 1,000,000 4,720,800 (19,377) 1,000,000 4,701,423 5,701,423
Prospect Heights
Prospect Heights, IL.... 06/96 494,300 1,683,755 (9,724) 494,300 1,674,031 2,168,331
Montgomery-Sears
Montgomery, IL.......... 06/96 768,000 2,714,173 (43,552) 768,000 2,670,621 3,438,621
------------ ------------- ------------ ------------- ------------- ------------
Subtotal $17,538,498 52,175,917 (183,033) 17,538,498 51,992,884 69,531,382
-12-
INLAND REAL ESTATE CORPORATION
(a Maryland corporation)
Notes to Financial Statements
(continued)
(4) Investment Properties (continued) Gross amount at which carried
Initial Cost (A) at end of period
-------------------------- ----------------------------------------
Net
Buildings Adjustments Land Buildings
Date and to and and
Acq Land improvements Basis (B) improvements improvements Total
------- ------------ ------------- ------------ ------------- ------------- ------------
Subtotal $17,538,498 52,175,917 (183,033) 17,538,498 51,992,884 69,531,382
Salem Square
Countryside, IL......... 08/96 1,735,000 4,449,217 (17,099) 1,735,000 4,432,118 6,167,118
Hawthorn Village
Vernon Hills, IL........ 08/96 2,619,500 5,887,640 37,541 2,619,500 5,925,181 8,544,681
Six Corners
Chicago, IL............. 10/96 1,440,000 4,538,152 3,359 1,440,000 4,541,511 5,981,511
Spring Hill Fashion Corner
West Dundee, IL......... 11/96 1,794,000 7,415,396 3,955 1,794,000 7,419,351 9,213,351
Crestwood Plaza
Crestwood, IL........... 12/96 325,577 1,483,183 4,750 325,577 1,487,933 1,813,510
Park St. Claire
Schaumburg, IL.......... 12/96 319,578 986,920 226,674 319,578 1,213,594 1,533,172
Lansing Square
Lansing, IL............. 12/96 4,075,000 12,179,383 18,087 4,075,000 12,197,470 16,272,470
Summit of Park Ridge
Park Ridge, IL.......... 12/96 672,000 2,497,950 8,881 672,000 2,506,831 3,178,831
Grand and Hunt Club
Gurnee, IL.............. 12/96 969,840 2,622,575 (52,950) 969,840 2,569,625 3,539,465
Quarry Outlot
Hodgkins, IL............ 12/96 522,000 1,278,431 8,733 522,000 1,287,164 1,809,164
Maple Park Place
Bolingbrook, IL......... 01/97 3,115,005 12,220,332 10,464 3,115,005 12,230,796 15,345,801
Aurora Commons
Aurora, IL.............. 01/97 3,220,000 8,318,661 3,901 3,220,000 8,322,562 11,542,562
Lincoln Park Place
Chicago, IL............. 01/97 819,000 1,299,902 4,707 819,000 1,304,609 2,123,609
------------ ------------- ------------ ------------- ------------- ------------
Subtotal $39,164,998 117,353,659 77,970 39,164,998 117,431,629 156,596,627
-13-
INLAND REAL ESTATE CORPORATION
(a Maryland corporation)
Notes to Financial Statements
(continued)
(4) Investment Properties (continued) Gross amount at which carried
Initial Cost (A) at end of period
-------------------------- ----------------------------------------
Net
Buildings Adjustments Land Buildings
Date and to and and
Acq Land improvements Basis (B) improvements improvements Total
------- ------------ ------------- ------------ ------------- ------------- ------------
Subtotal $39,164,998 117,353,659 77,970 39,164,998 117,431,629 156,596,627
Niles Shopping Center
Niles, IL............... 04/97 850,000 2,408,467 (13,243) 850,000 2,395,224 3,245,224
Mallard Crossing
Elk Grove Village, IL... 05/97 2,030,000 6,080,610 (11,700) 2,030,000 6,068,910 8,098,910
Cobblers Crossing
Elgin, IL............... 05/97 3,200,000 7,763,940 (37,112) 3,200,000 7,726,828 10,926,828
Calumet Square
Calumet City, IL........ 06/97 527,000 1,537,316 3,635 527,000 1,540,951 2,067,951
Sequoia Shopping Center
Milwaukee, WI........... 06/97 752,500 2,266,750 (4,335) 752,500 2,262,415 3,014,915
Riversquare Shopping Center
Naperville, IL.......... 06/97 1,525,000 4,452,958 83,872 1,525,000 4,536,830 6,061,830
Rivertree Court
Vernon Hills, IL........ 07/97 6,350,000 25,154,267 - 6,350,000 25,154,267 31,504,267
Shorecrest Plaza
Racine, WI.............. 07/97 1,150,000 4,743,410 (47,497) 1,150,000 4,695,913 5,845,913
------------ ------------- ------------ ------------- ------------- ------------
Total 55,549,498 171,761,377 51,590 55,549,498 171,812,967 227,362,465
=========== ============ =========== ============ ============ ============
</TABLE>
-14-
INLAND REAL ESTATE CORPORATION
(a Maryland corporation)
Notes to Financial Statements
(continued)
September 30, 1997
(unaudited)
(4) Investment Properties (continued)
(A) The initial cost to the Company, represents the original purchase price of
the property, including amounts incurred subsequent to acquisition, which
were contemplated at the time the property was acquired.
(B) Adjustments to basis includes additions to investment properties and
payments received under master lease agreements. As part of several
purchases, the Company will receive rent under master lease agreements on
the spaces currently vacant for periods ranging from one to two years or
until the spaces are leased. Generally Accepted Accounting Principles
("GAAP") require that as these payments are received, they be recorded as a
reduction in the purchase price of the properties rather than as rental
income. The cumulative amount of such payments was $867,382 and $570,694
as of September 30, 1997 and December 31, 1996, respectively. (Note 5)
(5) Operating Leases
As part of the purchases of several of the properties, the Company will receive
rent under master lease agreements on spaces currently vacant for periods
ranging from one to two years or until the spaces are leased and tenants begin
paying rent. GAAP requires the Company to reduce the purchase price of the
properties as these payments are received, rather than record the payments as
rental income.
Certain tenant leases contain provisions providing for stepped rent increases.
GAAP requires the Company to record rental income for the period of occupancy
using the effective monthly rent, which is the average monthly rent for the
entire period of occupancy during the term of the lease. The accompanying
financial statements include increases of $441,104 and $63,007 for the nine
months ended September 30, 1997 and 1996, of rental income for the period of
occupancy for which stepped rent increases apply and $572,742 and $131,638 in
related accounts receivable as of September 30, 1997 and December 31, 1996,
respectively. The Company anticipates collecting these amounts over the terms
of the related leases as scheduled rent payments are made.
-15-
INLAND REAL ESTATE CORPORATION
(a Maryland corporation)
Notes to Financial Statements
(continued)
September 30, 1997
(unaudited)
(6) Mortgages and Note Payable
Mortgages payable consist of the following at September 30, 1997 and December
31, 1996:
Current Current Balance at
Property as Interest Maturity Monthly Sept. 30, Dec. 31,
Collateral Rate Date Payment(a) 1997 1996
- ------------ ---------- --------- ---------- ----------- ------------
Mortgage payable to Affiliate:
Walgreens 7.655% 05/2004 $ 5,689 $ 730,576 739,543
Mortgages payable to non-affiliates:
Regency Point 7.4875% 08/2000 (b) 4,389,005 4,428,690
Eagle Crest 7.850% 10/2003 15,373 2,350,000 2,350,000
Nantucket Square 7.850% 10/2003 14,392 2,200,000 2,200,000
Antioch Plaza 7.850% 10/2003 5,724 875,000 875,000
Mundelein Plaza 7.850% 10/2003 18,382 2,810,000 2,810,000
Montgomery-Goodyear 7.850% 10/2003 4,121 630,000 630,000
Montgomery-Sears 7.850% 08/2003 10,761 1,645,000 1,645,000
Hartford/Naperville 7.850% 08/2003 15,111 2,310,000 2,310,000
Zany Brainy 7.590% 01/2004 7,875 1,245,000 1,245,000
Prospect Heights
Plaza 7.590% 01/2004 6,926 1,095,000 1,095,000
Hawthorn Village
Commons 7.590% 01/2004 27,071 4,280,000 4,280,000
Six Corners Plaza 7.590% 01/2004 19,608 3,100,000 3,100,000
Salem Square
Shopping Center 7.590% 01/2004 19,797 3,130,000 3,130,000
Lansing Square 7.800% 01/2004 52,975 8,150,000 -
Spring Hill Fashion
Mall 7.800% 01/2004 30,485 4,690,000 -
Aurora Commons (c) 9.000% 10/2001 85,423 9,436,874 -
Maple Park Place 7.650% 06/2004 (d) 7,650,000 -
Dominicks-Schaumburg 6.80625% 06/2004 (d) 5,345,500 -
Summit Park Ridge 6.80625% 06/2004 (d) 1,600,000 -
Lincoln Park Place 6.80625% 06/2004 (d) 1,050,000 -
Crestwood Plaza 7.650% 06/2004 (d) 904,380 -
Park St. Claire 7.650% 06/2004 (d) 762,500 -
Quarry 7.650% 06/2004 (d) 900,000 -
Grand/Hunt Club 6.80625% 06/2004 (d) 1,796,000 -
Rivertree Court (e) 10.030% 11/1998 131,226 15,700,000 -
----------- ------------
Mortgages Payable.................................... $88,774,835 30,838,233
=========== ============
(a) All payments are interest only, with the exception of the loans secured by
the Walgreens, Regency Point and Aurora Commons properties.
-16-
INLAND REAL ESTATE CORPORATION
(a Maryland corporation)
Notes to Financial Statements
(continued)
September 30, 1997
(unaudited)
(b) Payments on this mortgage are based on a floating interest rate of 180
basis points over the 30-day LIBOR rate, which adjusts monthly, amortizing
over 25 years.
(c) The Company received a credit for interest expense on the debt at closing,
which is included in restricted cash along with an amount set aside by the
Company for principal payments on the debt. Interest income earned on the
restricted cash amounts, when netted with interest expense on the debt,
results in an adjusted interest rate on the debt of approximately 8.2%.
(d) Payments on this mortgage are based on a floating interest rate of 115
basis points over the 30-day LIBOR rate, which adjusts monthly.
(e) The Company received a credit for interest expense on the debt at closing.
(7) Deposits on Investment Properties
On February 7, 1997, the Company made an initial deposit of $1,228,510 for the
purchase of Oak Forest Commons. On July 31, 1997, the Company made an
additional deposit of $524,390. The balance of the purchase price,
approximately $10,083,000 will be paid upon completion of the redevelopement of
the center and when the anticipated main tenant, Dominick's Finer Foods, Inc.,
begins paying rent under a lease agreement.
On February 7, 1997, the Company made an initial deposit of $1,265,630 for the
purchase of Downers Grove Plaza. The balance of the purchase price,
approximately $15,382,000 will be paid upon completion of the redevelopement of
the center and when the anticipated main tenant, Dominick's Finer Foods, Inc.
begins paying rent under a lease agreement.
The Company earns interest on these deposits at the rate of 9.3% per annum.
(8) Subsequent Events
In October 1997, the Company paid a distribution of $1,315,932 to the
Stockholders.
On November 6, 1997, the Company purchased the Party City from an unaffiliated
third party for approximately $1,975,000. The property is located in Oakbrook
Terrace, Illinois and contains approximately 10,000 square feet of leasable
space.
-17-
INLAND REAL ESTATE CORPORATION
(a Maryland corporation)
Notes to Financial Statements
(continued)
September 30, 1997
(unaudited)
In October 1997, the Company committed to additional financing secured by Niles
Shopping Center, Ameritech, Calumet Square and Sequoia Shopping Center
properties totaling $4,677,795 from an unaffiliated lender. The funding of
these loans is to occur prior to December 31, 1997. The mortgage loans have a
term of seven years and, prior to maturity date, require payments of interest
only, fixed at 7.23%.
In October 1997, the Company committed to additional financing secured by
Dominicks-Highland Park property for $6,400,000 from an unaffiliated lender.
The funding of this loan is to occur on or before December 15, 1997. The
mortgage loan has a term of seven years and, prior to maturity date, require
payments of interest only, fixed at 7.21%.
-18-
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Certain statements in this "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and elsewhere in this quarterly report on
Form 10-Q constitute "forward-looking statements" within the meaning of the
Federal Private Securities Litigation Reform Act of 1995. These forward-
looking statements involve known and unknown risks, uncertainties and other
factors which may cause the Company's actual results, performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied by these forward-looking statements. These
factors include, among other things, limitations on the area in which the
Company may acquire properties; risks associated with borrowings secured by the
Company's properties; competition for tenants and customers; federal, state or
local regulations; adverse changes in general economic or local conditions;
competition for property acquisitions with third parties that have greater
financial resources than the Company; inability of lessees to meet financial
obligations; uninsured losses; risks of failing to qualify as a REIT; and
potential conflicts of interest between the Company and its affiliates
including the Advisor.
Liquidity and Capital Resources
As of July 24, 1996, the Company had received subscriptions for a total of
5,000,000 Shares, thereby completing the initial Offering. On July 24, 1996,
the Company commenced a Second Offering of 10,000,000 shares. As of July 10,
1997, the Company had received subscriptions for a total of 10,000,000 Shares,
thereby completing the Second Offering. On July 14, 1997, the Company
commenced a Third Offering of 20,000,000 Shares. As of September 30, 1997, the
Company had received subscriptions for a total of 3,732,611 Shares from the
Third Offering. In addition, the Company has distributed 529,560 Shares
through the Company's Distribution Reinvestment Program. As a result, Gross
Offering Proceeds, total $191,185,844, net of Shares repurchased through the
Share Repurchase Program. As of September 30, 1997, the Company has
repurchased 36,199 Shares through the Share Repurchase Program.
The Company's capital needs and resources are expected to undergo changes as a
result of the completion of the initial public offering of Shares, the
commencement of the follow-on Offerings and the acquisition of properties.
Operating cash flow is expected to increase as these additional properties are
added to the portfolio. Distributions to Stockholders are determined by the
Company's Board of Directors and are dependent on a number of factors,
including the amount of funds available for distribution, the Company's
financial condition, capital expenditures, and the annual distribution required
to maintain REIT status under the Code.
-19-
Cash and cash equivalents consists of cash and short-term investments. Cash
and cash equivalents at September 30, 1997 and December 31, 1996 were
$30,003,445 and $8,491,735 respectively. The increase in cash and cash
equivalents since December 31, 1996 is due to the additional sales proceeds
raised and $32,848,379 in additional loan proceeds from financing the
properties. Partially offsetting these increases in cash and cash equivalents
was the purchase of additional properties since December 31, 1996 and the
payment of Offering costs. The Company intends to use cash and cash
equivalents to purchase additional properties, to pay distributions and to pay
offering costs.
As of September 30, 1997, the Company had acquired thirty-six properties. The
properties owned by the Company are currently generating sufficient cash flow
to cover operating expenses of the Company plus pay a monthly distribution on
weighted average shares. Commencing with the fourth quarter of 1996, the
Company increased the monthly distributions from 8.0% to 8.3% per annum on
weighted average shares. Beginning March 1, 1997, the Company increased the
monthly distribution paid to 8.5% per annum on weighted average shares.
Beginning August 1, 1997, the Company increased the monthly distribution paid
to 8.7% per annum on weighted average shares. Distributions declared for the
nine months ended September 30, 1997 were $8,285,244, a portion of which
represents a return of capital for federal income tax purposes. The return of
capital portion of the distributions cannot be determined at this time and will
be calculated at year end.
Management of the Company monitors the various qualification tests the Company
must meet to maintain its status as a real estate investment trust. Large
ownership of the Company's stock is tested upon purchase to determine that no
more than 50% in value of the outstanding stock is owned directly, or
indirectly, by five or fewer persons or entities at any time. Management of
the Company also determines, on a quarterly basis, that the Gross Income, Asset
and Distribution Tests as described in the section of the Prospectus entitled
"Federal Income Tax Considerations--Taxation of the Company--REIT Qualification
Tests" are met. On an ongoing basis, as due diligence is performed by
management of both the Company and the Advisor on potential real estate
purchases or temporary investment of uninvested capital, management of both
entities determines that the income from the new asset will qualify for REIT
purposes. Beginning with the year ended December 31, 1995, the Company
qualified as a REIT.
-20-
Cash Flows From Operating Activities
Net cash provided by operating activities increased by approximately $7,419,821
for the nine months ended September 30, 1997 to $9,809,108 from $2,389,287 for
the same period in 1996. This increase is due primarily to an increase in net
income for the nine months ended September 30, 1997, as compared to the net
income for the nine months ended September 30, 1996. This increase in net
income is due to the purchase of additional properties. As of September 30,
1997, the Company had acquired thirty-six properties, as compared to thirteen
properties as of September 30, 1996.
Cash Flows From Investing Activities
During the nine months ended September 30, 1997, the Company utilized
$99,031,269 in investing activities for the purchase of fifteen properties, as
compared to the $26,729,537 utilized in the nine months ended September 30,
1996 for the purchase of seven properties.
In addition, the Company made deposits totaling $3,018,530 for the purchase of
two centers to be completed in late 1997.
Cash Flows From Financing Activities
For the nine months ended September 30, 1997, the Company generated
$115,598,014 of cash flows from financing activities as compared to $43,020,331
of cash flows generated from financing activities for the nine months ended
September 30, 1996. This increase is due primarily to the increase in proceeds
raised from the Offering of $110,092,663 for the nine months ended September
30, 1997, as compared to $40,246,259 of Offering proceeds raised for the nine
months ended September 30, 1996 and loan proceeds, net of principal payment of
debt, received in the nine months ended September 30, 1997. This increase is
partially offset by an increase in the cash used for the payment of Offering
costs for the nine months ended September 30, 1997. The increase is also
partially offset by an increase in the amount of distributions paid for the
nine months ended September 30, 1997 of $7,518,259 as compared to the
distributions paid for the nine months ended September 30, 1996 of $1,989,199.
The Advisor has guaranteed payment of all public offering expenses (excluding
selling commissions, the marketing contribution and the due diligence expense
allowance fee) in excess of 5.5% of the Gross Offering Proceeds of the Offering
(the "Gross Offering Proceeds") or all organization and offering expenses
(including such selling expenses) which together exceed 15% of the Gross
Offering Proceeds. As of September 30, 1997, organizational and offering costs
did not exceed this limitation.
-21-
Results of Operations
As of September 30, 1997, subscriptions for a total of 19,262,171 Shares were
received from the public resulting in $191,185,844 in Gross Offering Proceeds,
which includes the Advisor's capital contribution of $200,000 and Shares
purchased through the DRP.
Funds from operations ("FFO") means net income (computed in accordance with
generally accepted accounting principles), excluding gains (or losses) from
debt restructuring and sales of property, plus depreciation and other non-cash
items. FFO and funds available for distribution for the nine months ended
September 30, 1997 and 1996 are calculated as follows:
September 30, September 30,
1997 1996
---- ----
Net income................................... $ 5,329,961 1,332,939
Depreciation................................. 3,007,678 561,983
------------ ------------
Funds from operations(1)................... 8,337,639 1,894,922
Deferred rent receivable (2)................. (441,104) (63,007)
Rental income received under
Master lease agreements (3)................. 296,688 305,054
------------ ------------
Funds available for distribution............. $ 8,193,223 2,136,969
============ ============
(1) FFO does not represent cash generated from operating activities in
accordance with generally accepted accounting principles and is not
necessarily indicative of cash available to fund cash needs. FFO should
not be considered as an alternative to net income as an indicator of the
Company's operating performance or as an alternative to cash flow as a
measure of liquidity.
(2) Reference is made to Note (5) of the Notes to Financial Statements of the
Company.
(3) As part of the purchase of some of the properties, the Company will
receive rent under master lease agreements on some of the spaces currently
vacant for periods ranging from one to two years or until the spaces are
leased. Generally accepted accounting principles require that as these
payments are received, they be recorded as a reduction in the purchase
price of the properties rather than as rental income. Reference is made
to Note (5) of the Notes to Financial Statements of the Company.
-22-
Total income for the nine months ended September 30, 1997 and 1996 was
$19,655,649 and $3,641,605, respectively. This increase was due to the purchase
of additional properties. As of September 30, 1997, the Company had acquired
thirty-six properties, as compared to thirteen properties as of September 30,
1996. The purchase of additional properties also resulted in increases in
property operating expenses to Affiliates and non-affiliates and depreciation
expense.
The increase in mortgage interest to Affiliates and non-affiliates for the nine
months ended September 30, 1997, as compared to the nine months ended September
30, 1996, is due to financing placed on previously acquired centers as well as
mortgages assumed as part of the purchases of Regency Point, Aurora Commons and
Rivertree Court. The mortgages payable totaled $88,774,835 for the nine months
ended September 30, 1997 as compared to $18,003,626 for the nine months ended
September 30, 1996. The Company continues to have a mortgage collateralized by
the Walgreens, Decatur property payable to an Affiliate.
Interest income is the result of cash and cash equivalents being invested in
short-term investments until a property is purchased.
The increases in professional services to non-affiliates and general and
administrative expenses to Affiliates and non-affiliates for the three and nine
months ended September 30, 1997, as compared to the three and nine months ended
September 30, 1996, is due to the management of an increased number of real
estate assets.
The following is a list of approximate physical occupancy levels for the
Company's investment properties as of the end of each quarter during 1996 and
1997. N/A indicates the property was not owned by the Company at the end of the
quarter.
1996 1997
------------------------ ------------------------
at at at at at at at at
Properties 03/31 06/30 09/30 12/31 03/31 06/30 09/30 12/31
---------- ----- ----- ----- ----- ----- ----- ----- -----
Walgreens 100% 100% 100% 100% 100% 100% 100%
Decatur, Illinois
Eagle Crest 100% 100% 100% 100% 97% 97% 97%
Naperville, Illinois
Montgomery-Goodyear 100% 100% 100% 100% 77% 77% 77%
Montgomery, Illinois
Hartford/Naperville Plaza 100% 100% 100% 100% 100% 100% 94%
Naperville, Illinois
Nantucket Square 81% 81% 94% 85% 94% 94% 96%
Schaumburg, Illinois
Antioch Plaza 49% 49% 49% 57% 59% 59% 68%*
Antioch, Illinois
Mundelein Plaza 100% 100% 100% 100% 100% 96% 97%
Mundelein, IL
Regency Point N/A 97% 97% 97% 100% 100% 97%
Lockport, IL
Prospect Heights N/A 78% 100% 100% 83% 83% 83%*
Prospect Heights, IL
Montgomery-Sears N/A 85% 85% 85% 85% 85% 85%*
Montgomery, IL
-23-
1996 1997
------------------------ ------------------------
at at at at at at at at
Properties 03/31 06/30 09/30 12/31 03/31 06/30 09/30 12/31
---------- ----- ----- ----- ----- ----- ----- ----- -----
Zany Brainy N/A N/A 100% 100% 100% 100% 100%
Wheaton, IL
Salem Square N/A N/A 97% 97% 97% 97% 97%*
Countryside, IL
Hawthorn Village N/A N/A 99% 98% 97% 98% 99%
Vernon Hills, IL
Six Corners N/A N/A N/A 92% 94% 94% 94%
Chicago, IL
Spring Hill Fashion Ctr. N/A N/A N/A 95% 96% 96% 96%
West Dundee, IL
Crestwood Plaza N/A N/A N/A 100% 100% 100% 100%
Crestwood, IL
Park St. Claire N/A N/A N/A 100% 100% 100% 100%
Schaumburg, IL
Lansing Square N/A N/A N/A 89% 90% 90% 90%
Lansing, IL
Summit of Park Ridge N/A N/A N/A 81% 82% 81% 84%*
Park Ridge, IL
Grand and Hunt Club N/A N/A N/A 100% 100% 100% 100%
Gurnee, IL
Quarry Outlot N/A N/A N/A 100% 100% 100% 100%
Hodgkins, IL
Maple Park Place N/A N/A N/A N/A 99% 97% 98%
Bolingbrook, IL
Aurora Commons N/A N/A N/A N/A 99% 100% 100%
Aurora, IL
Lincoln Park Place N/A N/A N/A N/A 100% 100% 100%
Chicago, IL
Ameritech N/A N/A N/A N/A N/A 100% 100%
Joliet, IL
Dominicks-Schaumburg N/A N/A N/A N/A N/A 100% 100%
Schaumburg, IL
Dominicks-Highland Park N/A N/A N/A N/A N/A 100% 100%
Highland Park, IL
Niles Shopping Center N/A N/A N/A N/A N/A 100% 87%
Niles, IL
Mallard Crossing N/A N/A N/A N/A N/A 95% 95%*
Elk Grove Village, IL
Cobblers Crossing N/A N/A N/A N/A N/A 91% 89%*
Elgin, IL
Calumet Square N/A N/A N/A N/A N/A 100% 100%
Calumet City, IL
Sequoia Shopping Center N/A N/A N/A N/A N/A 96% 97%*
Milwaukee, WI
Riversquare Shopping Center N/A N/A N/A N/A N/A 100% 100%
Naperville, IL
-24-
1996 1997
------------------------ ------------------------
at at at at at at at at
Properties 03/31 06/30 09/30 12/31 03/31 06/30 09/30 12/31
---------- ----- ----- ----- ----- ----- ----- ----- -----
Rivertree Court N/A N/A N/A N/A N/A N/A 97%*
Vernon Hills, IL
Shorecrest Plaza N/A N/A N/A N/A N/A N/A 96%*
Racine, WI
Dominicks-Glendale Heights N/A N/A N/A N/A N/A N/A 100%
Glendale Heights, IL
* As part of the purchase of these properties the Company receives rent under
master lease agreements on the space which was vacant at the time of the
purchase, resulting in 100% economic occupancy at September 30, 1997 for
Montgomery-Sears, Mallard Crossing, Sequoia Shopping Center and Shorecrest
Plaza, 98% economic occupancy for Cobblers Crossing and 99% occupancy for
Rivertree Court. The master lease agreements resulted in 100% economic
occupancy through June 30, 1997 for Antioch Plaza and through August 1, 1997
for Salem Square, at which times the master leases expired.
As part of the purchase of Summit of Park Ridge, a portion of the Seller's
proceeds were escrowed for the monthly release of master lease payments.
The master lease agreements along with credits for signed leases resulted in
90% economic occupancy at September 30, 1997.
The master lease agreements are for periods ranging from one to two years or
until the spaces are leased.
The Company has received termination fees resulting in 100% economic
occupancy for Prospect Heights through September 30, 1997.
Subsequent Events
In October 1997, the Company paid a distribution of $1,315,932 to the
Stockholders.
On November 6, 1997, the Company purchased the Party City from an unaffiliated
third party for approximately $1,975,000. The property is located in Oakbrook
Terrace, Illinois and contains approximately 10,000 square feet of leasable
space.
In October 1997, the Company committed to additional financing secured by Niles
Shopping Center, Ameritech, Calumet Square and Sequoia Shopping Center
properties totaling $4,677,795 from an unaffiliated lender. The funding of
these loans is to occur prior to December 31, 1997. The mortgage loans have a
term of seven years and, prior to maturity date, require payments of interest
only, fixed at 7.23%.
In October 1997, the Company committed to additional financing secured by
Dominicks-Highland Park property for $6,400,000 from an unaffiliated lender.
The funding of this loan is to occur on or before December 15, 1997. The
mortgage loan has a term of seven years and, prior to maturity date, require
payments of interest only, fixed at 7.21%.
On the behalf of the Company, the Advisor is currently exploring the purchase of
additional shopping centers from unaffiliated third parties.
-25-
PART II - Other Information
Items 1 through 5 are omitted because of the absence of conditions under which
they are required.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: Required by the Securities and Exchange Commission
Regulations S-K. Item 601. The following documents are incorporated by
reference:
Registration Statement on Form S-11 and related exhibits, as amended,
File No. 33-79012, filed under the Securities Act of 1933.
(27) Financial Data Schedule
(b) Report on Form 8-K/A dated May 6, 1997
Item 7. Financial Statements and Exhibits
Report on Form 8-K dated May 29, 1997
Item 2. Acquisition or Disposition of Assets
Item 7. Financial Statements and Exhibits
Report on Form 8-K dated July 17, 1997
Item 2. Acquisition or Disposition of Assets
Item 5. Other Events
Item 7. Financial Statements and Exhibits
-26-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
INLAND REAL ESTATE CORPORATION
/S/ ROBERT D. PARKS
By: Robert D. Parks
Chief Executive Officer
Date: November 13, 1997
/S/ KELLY TUCEK
By: Kelly Tucek
Chief Financial and Accounting Officer
Date: November 13, 1997
-27-
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<PERIOD-END> SEP-30-1997
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<RECEIVABLES> 4390658
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<COMMON> 191409
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