As filed with the Securities and Exchange Commission on July 1, 1997.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report: May 29, 1997
(Date of earliest event reported)
Inland Real Estate Corporation
(Exact name of registrant as specified in the charter)
Maryland 000-28382 36-3953261
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
2901 Butterfield Road
Oak Brook, Illinois 60521
(Address of Principal Executive Offices)
(630) 218-8000
(Registrant's telephone number including area code)
n/a
(Former name or former address, if changed since last report)
-1-
Item 2. Acquisition or Disposition of Assets
Dominick's Finer Foods, Schaumburg, Illinois
On May 29, 1997, the Company acquired a Neighborhood Retail Center located at
1293 East Higgins Road in Schaumburg, Illinois known as Dominick's Finer Foods
("Schaumburg Dominick's") from Rybychi, L.P., an unaffiliated third party, for
approximately $10,691,000. The purchase price was funded using cash and cash
equivalents. The purchase price was approximately $147.92 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.
Schaumburg Dominick's was built in 1996 and consists of a one-story, single-
tenant retail facility aggregating 71,400 rentable square feet. As of May 29,
1997, Schaumburg Dominick's was 100% leased. In evaluating Schaumburg
Dominick's 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. Although
100% of the rentable square feet at Schaumburg Dominick's 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 Schaumburg Dominick's 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 Schaumburg Dominick's 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% $15.53
-2-
The sole tenant leasing more than 10% of the total square footage is Dominick's
Finer Foods, a retail grocery chain, which leases 71,400 square feet, or 100%
of the rentable square feet. The lease with Dominick's requires Dominick's to
pay base rent equal to $18.56 per square foot per annum payable monthly until
April 30, 2003, $19.55 per square foot per annum payable monthly until April
30, 2006, $20.54 per square foot per annum payable monthly until April 30,
2011, $21.54 per square foot per annum payable monthly until April 30, 2016 and
$22.53 per square foot per annum payable monthly until April 30, 2021. The
lease with Dominick's contains five options to renew, each for five years,
which require Dominick's to pay base rent equal to $23.51 per square foot per
annum payable monthly until April 30, 2026, $24.51 per square foot per annum
payable monthly until April 30, 2031, $25.51 per square foot per annum payable
monthly until April 30, 2036, $26.50 per square foot per annum payable monthly
until April 30, 2041 and $27.49 per square foot per annum payable monthly until
April 30, 2046.
For federal income tax purposes, the Company's depreciable basis in Schaumburg
Dominick's will be approximately $8,600,000. 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.
The Company will pay a Property Management Fee equal to 2.5% of the gross
revenues of the property to an Affiliate of the Advisor.
Information regarding real estate taxes payable in 1997 for the tax year ended
1996 is not currently available. Real estate taxes are paid directly by the
tenant.
On May 29, 1997, a total of 71,400 square feet was leased to one tenant at
Schaumburg Dominick's. 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 71,400 5/2021 5/5 yr. $1,108,842 $15.53
-3-
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Building Annual Base
Approx. GLA Annual Base Per Square GLA Rent
Number of of Expiring Rent of Foot Under Represented Represented by
Year Ending Leases Leases Expiring Total Annual Expiring by Expiring Expiring
December 31, Expiring (square feet) Leases Base Rent (1) Leases Leases Leases
<S> <C> <C> <C> <C> <C> <C> <C>
1997-
2002 - - - $1,108,842 - - -
2003 - - - 1,150,492 - - -
2004-
2005 - - - 1,180,242 - - -
2006 - - - 1,221,892 - - -
(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 Schaumburg Dominick's property, as
of May 1, 1997, of $10,800,000. Appraisals are estimates of value and should
not be relied on as a measure of true worth or realizable value.
Calumet Square, Calumet City, Illinois
On June 2, 1997, the Company acquired a Neighborhood Retail Center located at
777 River Oaks Drive in Calumet City, Illinois known as Calumet Square from
Lake River Oaks Limited Partnership, an unaffiliated third party, for
approximately $2,108,000. The purchase price was funded using cash and cash
equivalents. The purchase price was approximately $52.78 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.
Calumet Square was built in 1967, with upgrades in 1987 and 1994, and consists
of a one-story, two-tenant retail facility and an outlot building aggregating
39,936 rentable square feet. As of June 2, 1997, Calumet Square was 100%
leased. In evaluating Calumet 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
occupancy. The Company believes that the center is located within a vibrant
economic area. Although approximately 94% of the rentable square feet at
-4-
Calumet Square 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 Calumet Square 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 Calumet Square expressed as a percentage of total gross leasable area
and the average effective annual base rent per square foot.
Occupancy Rate
as of
Year Ending December 31, Effective Annual Rental
December 31, of Each Year Per Square Foot
1996 100% $5.73
1995 100% 5.53
1994 53% 2.63
1993 6% 1.25
1992 6% 1.08
Tenants leasing more than 10% of the total square footage include Super Trak, an
auto parts store, which leases 18,828 square feet, or approximately 47% of the
rentable square feet and Aronson Furniture, a retail furniture store, which
leases 18,828 square feet or approximately 47%. The lease with Super Trak
requires Super Trak to pay base rent equal to $7.00 per square foot per annum
payable monthly until July 31, 1999. The lease with Super Trak contains one
five year option to renew which requires Super Trak to pay base rent equal to
$7.50 per square foot per annum payable monthly until July 31, 2004. The lease
with Aronson Furniture requires Aronson Furniture to pay base rent equal to
$7.00 per square foot per annum payable until January 31, 2000. The lease with
Aronson Furniture contains one five year option to renew which requires Aronson
Furniture to pay base rent equal to $7.35 per square foot per annum payable
until January 31, 2005.
For federal income tax purposes, the Company's depreciable basis in Calumet
Square will be approximately $1,700,000. 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)
were $144,309.
-5-
On June 2, 1997, a total of 39,936 square feet was leased to three tenants at
Calumet Square. The following tables set forth certain information with respect
to the amount of and expiration of leases at this Neighborhood Retail Center.
Square Feet Lease Renewal Current Rent per
Lessee Leased Ends Option Annual Rent Square Ft
Super Trak 18,828 7/1999 1/5 $131,796 $7.00
Aronson Furniture 18,828 1/2000 1/5 131,796 7.00
Popeye's 2,280 4/2008 4/5 50,000 21.93
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Building Annual Base
Approx. GLA Annual Base Per Square GLA Rent
Number of of Expiring Rent of Foot Under Represented Represented by
Year Ending Leases Leases Expiring Total Annual Expiring by Expiring Expiring
December 31, Expiring (square feet) Leases Base Rent (1) Leases Leases Leases
<S> <C> <C> <C> <C> <C> <C> <C>
1997 - - - $313,592 - - -
1998 - - - 315,264 - - -
1999 1 18,828 131,796 316,100 $7.00 47.15% 41.69%
2000 1 18,828 131,796 184,304 7.00 47.15 71.51
2001 - - - 52,508 - - -
2002 - - - 52,508 - - -
2003 - - - 57,372 - - -
2004 - - - 59,804 - - -
2005 - - - 59,804 - - -
2006 - - - 59,804 - - -
(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>
-6-
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 Calumet Square property, as of April
21, 1997, of $2,150,000. Appraisals are estimates of value and should not be
relied on as a measure of true worth or realizable value.
Sequoia Plaza, Milwaukee, Wisconsin
On June 16, 1997, the Company acquired a Neighborhood Retail Center located at
6807 W. Brown Deer Road, Milwaukee, Wisconsin known as Sequoia Plaza from The
Sequoia Company, a Wisconsin general partnership, an unaffiliated third party,
for approximately $3,010,000. The purchase price was funded using cash and cash
equivalents. The purchase price was approximately $84.92 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.
Sequoia Plaza was built in 1988 and consists of a one-story, multi-tenant
retail facility aggregating 35,447 rentable square feet. As of June 16, 1997,
Sequoia Plaza was 96% leased. In evaluating Sequoia 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's management believes that the
center is located within a vibrant economic area and 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 Sequoia 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 Sequoia Plaza expressed as a percentage of total gross leasable area
and the average effective annual base rent per square foot.
Occupancy Rate
as of
Year Ending December 31, Effective Annual Rental
December 31, of Each Year Per Square Foot
1996 93% $12.40
1995 72% 12.99
1994 96% 12.29
1993 96% 11.76
1992 100% 11.81
-7-
Tenants leasing more than 10% of the total square footage include the U.S. Post
Office, which leases 5,580 square feet, or approximately 15.7% of the rentable
square feet, Play It Again Sports, a sporting goods store, which leases 3, 984
square feet, or approximately 11.2% of the rentable square feet and Kinko's, a
printer, which leases 4,960 square feet, or approximately 14% of the rentable
square feet. The lease with the U.S. Post Office requires the U.S. Post Office
to pay base rent equal to $12.49 per square foot per annum payable monthly until
February 28, 2001. The lease with the U.S. Post Office contains one ten year
option to renew which requires the U.S. Post Office to pay base rent equal to
$12.49 per square foot per annum payable monthly until February 28, 2011. The
lease with Play It Again Sports requires Play It Again Sports to pay base rent
equal to $8.00 per square foot per annum payable until October 31, 1998, $8.65
per square foot per annum payable until October 31, 1999, $8.98 per square foot
per annum payable until October 31, 2000 and $9.35 per square foot per annum
payable until October 31, 2001. The lease with Play It Again Sports contains
one five year option to renew which requires Play It Again Sports to pay base
rent equal to $9.63 per square foot per annum payable until October 31, 2002,
$9.92 per square foot per annum payable until October 31, 2003, $10.22 per
square foot per annum payable until October 31, 2004, $10.52 per square foot per
annum payable until October 31, 2005 and $10.84 per square foot per annum
payable until October 31, 2006. The lease with Kinko's requires Kinko's to pay
base rent equal to $13.50 per square foot per annum payable until August 31,
1997 and $14.00 per square foot per annum payable until August 31, 1998. The
lease contains one four year option to renew which requires Kinko's to pay base
rent equal to $15.00 per square foot per annum payable until August 31, 2001 and
$15.50 per square foot per annum payable until August 31, 2002.
For federal income tax purposes, the Company's depreciable basis in Sequoia
Plaza will be approximately $2,300,000. 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.
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)
were $82,945.
On June 16, 1997, a total of 34,167 square feet was leased to thirteen tenants
at Sequoia Plaza. The following tables set forth certain information with
respect to the amount of and expiration of leases at this Neighborhood Retail
Center.
Square Feet Lease Renewal Current Rent per
Lessee Leased Ends Option Annual Rent Square Ft
Wong's Palace 3,100 11/2000 - $41,850 $13.50
Play It Again Sports 3,984 10/2001 1/5 yr. 31,872 8.00
Music Go Round 3,362 10/2001 1/5 yr. 26,896 8.00
Big Apple Bagels 2,573 02/2006 - 30,876 12.00
-8-
Square Feet Lease Renewal Current Rent per
Lessee Leased Ends Option Annual Rent Square Ft
Mayfair Rent-A-Car 1,333 09/1997 - 15,996 12.00
Travel for You 1,240 10/1999 - 18,054 14.56
Sign of Times 1,360 06/2001 1/5 yr. 16,320 12.00
U.S. Post Office 5,580 02/2001 1/10 yr. 69,694 12.49
Kinko's 4,960 08/1998 1/4 yr. 66,960 13.50
Pizza Hut 1,860 12/1998 4/2 yr. 29,741 15.99
Norwest 1,775 11/2000 - 22,152 12.48
One Hour Martinizing 1,800 04/2002 - 22,950 12.75
Nail Salon 1,240 02/2002 - 14,880 12.00
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Building Annual Base
Approx. GLA Annual Base Per Square GLA Rent
Number of of Expiring Rent of Foot Under Represented Represented by
Year Ending Leases Leases Expiring Total Annual Expiring by Expiring Expiring
December 31, Expiring (square feet) Leases Base Rent (1) Leases Leases Leases
<S> <C> <C> <C> <C> <C> <C> <C>
1997 1 1,333 $ 15,996 $409,740 $12.00 3.76% 3.90%
1998 2 6,820 100,074 402,210 14.67 19.24 24.88
1999 1 1,240 18,774 311,345 15.14 3.50 6.03
2000 2 4,875 71,421 301,289 14.65 13.75 23.71
2001 4 14,286 157,473 233,757 11.02 40.30 67.37
2002 2 3,040 40,360 77,795 13.27 8.58 51.88
2003 - - - 34,736 - - -
2004 - - - 36,022 - - -
2005 - - - 36,022 - - -
2006 2 2,573 36,022 36,022 14.00 7.26 100.00
(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>
-9-
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 Sequoia Plaza property, as of April
16, 1997, of $3,030,000. Appraisals are estimates of value and should not be
relied on as a measure of true worth or realizable value.
Dominick's Finer Foods, Highland Park, Illinois
On June 16, 1997, the Company acquired a Neighborhood Retail Center located at
Rt. 41, Highland Park, Illinois known as Dominick's Finer Foods ("Highland Park
Dominick's") from Rybychi, L.P., an unaffiliated third party, for approximately
$12,800,000. The purchase price was funded using cash and cash equivalents.
The purchase price was approximately $179.17 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.
Highland Park Dominick's was built in 1996 and consists of a one-story, single-
tenant retail facility aggregating 71,442 rentable square feet. As of June 16,
1997, Highland Park Dominick's was 100% leased. In evaluating Highland Park
Dominick's 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. Although
100% of the rentable square feet at Highland Park Dominick's 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 Highland Park Dominick's 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 Highland Park Dominick's 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% $18.56
-10-
The sole tenant leasing more than 10% of the total square footage is Dominick's
Finer Foods, a retail grocery chain, which leases 71,442 square feet, or 100%
of the rentable square feet. The lease with Dominick's Finer Foods requires
Dominick's Finer Foods to pay base rent equal to $18.56 per square foot per
annum payable monthly until April 30, 2003, $19.55 per square foot per annum
payable monthly until April 30, 2006, $20.54 per square foot per annum payable
monthly until April 30, 2011, $21.54 per square foot per annum payable monthly
until April 30, 2016 and $22.53 per square foot per annum payable monthly until
April 30, 2021. The lease with Dominick's Finer Foods contains five options to
renew, each for five years, which would require Dominick's Finer Foods to pay
base rent equal to $23.51 per square foot per annum payable monthly until April
30, 2026, $24.51 per square foot per annum payable monthly until April 30,
2031, $25.50 per square foot per annum payable monthly until April 30, 2036,
$26.50 per square foot per annum payable monthly until April 30, 2041 and
$27.49 per square foot per annum payable monthly until April 30, 2046.
For federal income tax purposes, the Company's depreciable basis in Highland
Park Dominick's will be approximately $10,000,000. 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.
The Company will pay a Property Management Fee equal to 2.5% of the gross
revenues of the property to an Affiliate of the Advisor.
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)
was $133,197. Real estate taxes are paid directly by the tenant.
On June 16, 1997, a total of 71,442 square feet was leased to one tenant at
Highland Park Dominick's. 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 71,442 4/2021 5/5 yr. $1,325,964 $18.56
-11-
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Building Annual Base
Approx. GLA Annual Base Per Square GLA Rent
Number of of Expiring Rent of Foot Under Represented Represented by
Year Ending Leases Leases Expiring Total Annual Expiring by Expiring Expiring
December 31, Expiring (square feet) Leases Base Rent (1) Leases Leases Leases
<S> <C> <C> <C> <C> <C> <C> <C>
1997-
2002 - - - $1,325,964 - - -
2003 - - - 1,367,221 - - -
2004-
2005 - - - 1,396,691 - - -
2006 - - - 1,437,949 - - -
(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 Highland Park Dominick's property,
as of April 1, 1997, of $12,800,000. Appraisals are estimates of value and
should not be relied on as a measure of true worth or realizable value.
River Square, Naperville, Illinois
On June 19, 1997, the Company acquired a Neighborhood Retail Center located at
Washington Street and Chicago Avenue, Naperville, Illinois known as River
Square from General American Life Company, an unaffiliated third party, for
approximately $6,050,000. The purchase price was funded using cash and cash
equivalents. The purchase price was approximately $103.30 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.
River Square was built in 1988 and consists of a two-story, multi-tenant retail
facility aggregating 58,557 rentable square feet. As of June 20, 1997, River
Square was 100% leased. In evaluating River 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 occupancy. The Company's management believes that the center is
located within a vibrant economic area and 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.
-12-
The Company anticipates making approximately $150,000 of roof and structure
repairs to River Square over the next few years.
The table below sets forth certain information with respect to the occupancy
rate at River Square expressed as a percentage of total gross leasable area and
the average effective annual base rent per square foot.
Occupancy Rate Effective
Year Ending as of Annual Rental
December 31, December 31, Per Square Foot
1996 95% $ 10.57
Tenants leasing more than 10% of the total square footage include Harbour
Contractors, Inc., a construction business, which leases 11,730 square feet, or
approximately 20% of the rentable square feet and Salon Suites, a hair, nail and
facial salon, which leases 7,720 square feet, or approximately 13% of the
rentable square feet. The lease with Harbour Contractors, Inc. requires Harbour
Contractors, Inc. to pay base rent equal to $14.26 per square foot per annum
payable monthly until June 30, 1998, $14.62 per square foot per annum payable
monthly until June 30, 1999 and $14.99 per square foot per annum payable monthly
until June 30, 2000. The lease with Harbour Contractors, Inc. contains no
option to renew. The lease with Salon Suites requires Salon Suites to pay base
rent equal to $11.00 per square foot per annum payable monthly until December
31, 1999, $12.00 per square foot per annum payable monthly until December 31,
2002 and $13.50 per square foot per annum payable monthly until December 31,
2005. The lease with Salon Suites contains no option to renew.
For federal income tax purposes, the Company's depreciable basis in River Square
will be approximately $4,800,000. 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)
were $156,210.
-13-
On June 20, 1997, a total of 58,557 square feet was leased to twenty-two tenants
at River Square. The following tables set forth certain information with
respect to the amount of and expiration of leases at this Neighborhood Retail
Center.
Square Feet Lease Renewal Current Rent per
Lessee Leased Ends Option Annual Rent Square Ft
West Egg Cafe 4,501 12/2006 2/5 yr. $72,016 $16.00
Off the River Cafe 800 10/1998 1/3 yr. 14,144 17.68
Great West Flooring 3,537 10/2001 1/5 yr. 45,981 13.00
Deanne's Paper Inc. 1,988 06/2001 1/5 yr. 27,832 14.00
Three Wishes Gifts 2,188 11/1999 1/3 yr. 30,632 14.00
Al's Seafood 1,679 12/1999 1/5 yr. 21,357 12.72
Country Wide Home
Loans 1,181 10/1999 1/5 yr. 19,191 16.25
DuPage Me Wireless
Network 1,020 11/1999 - 17,340 17.00
Tri Optics 1,515 02/2005 - 22,725 15.00
Serba's Dance 3,600 11/1999 1/3 yr. 28,800 8.00
Toy Cycles 3,200 06/2002 1/5 yr. 38,400 12.00
Salon Suites, Ltd. 7,720 12/2005 - 84,920 11.00
Duck Duck Goose 2,687 07/1997 - 18,298 6.81
Shoe Shoppe 2,737 02/1998 1/3 yr. 41,438 15.14
Diamond Mart 900 04/1999 - 18,810 19.00
Rocky Mountain
Chocolate 800 10/1998 1/5 yr. 16,000 20.00
Mail Boxes, Etc. 1,020 11/1999 1/5 yr. 13,770 13.50
Cleaners 1,020 05/2000 - 16,830 16.50
Lee Nails 1,120 10/1999 1/3 yr. 16,800 15.00
-14-
Square Feet Lease Renewal Current Rent per
Lessee Leased Ends Option Annual Rent Square Ft
Bancock Village 1,120 12/1999 1/3 yr. 18,480 16.50
Harbour Contractors 11,730 06/2000 - 167,270 14.26
Hipsters Inc. 2,404 02/1999 - 32,454 13.50
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Building Annual Base
Approx. GLA Annual Base Per Square GLA Rent
Number of of Expiring Rent of Foot Under Represented Represented by
Year Ending Leases Leases Expiring Total Annual Expiring by Expiring Expiring
December 31, Expiring (square feet) Leases Base Rent (1) Leases Leases Leases
<S> <C> <C> <C> <C> <C> <C> <C>
1997 1 2,687 $ 18,298 $775,670 $ 6.81 4.59% 2.36%
1998 3 4,337 72,150 774,514 16.64 7.41 9.31
1999 10 16,322 231,534 718,920 14.19 27.87 32.21
2000 2 12,750 194,703 509,373 15.27 21.77 38.22
2001 2 5,525 83,618 319,724 15.13 9.43 26.15
2002 1 3,200 43,232 238,144 13.51 5.46 18.15
2003 - - - 207,250 - - -
2004 - - - 212,508 - - -
2005 2 9,235 132,248 213,266 14.32 15.77 62.01
2006 1 4,501 81,018 81,018 18.00 7.69 100.00
(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 River Square property, as of April
16, 1997, of $3,030,000. Appraisals are estimates of value and should not be
relied on as a measure of true worth or realizable value.
-15-
Item 7. Financial Statements and Exhibits
Index to Financial Statements
Page
Independent Auditors' Report........................................ F-1
Historical Summary of Gross Income and Direct Operating Expenses
for the year ended December 31, 1996 of Sequoia Plaza............... F-2
Notes to Historical Summary of Gross Income and Direct Operating
Expenses for the year ended December 31, 1996 of Sequoia Plaza...... F-3
Independent Auditors' Report........................................ F-5
Historical Summary of Gross Income and Direct Operating Expenses
for the year ended December 31, 1996 of River Square................ F-6
Notes to Historical Summary of Gross Income and Direct Operating
Expenses for the year ended December 31, 1996 of River Square....... F-7
Pro Forma Balance Sheet (unaudited) at March 31, 1996............... F-9
Notes to Pro Forma Balance Sheet (unaudited) at March 31, 1996...... F-11
Pro Forma Statement of Operations (unaudited) of the Company
for the year ended March 31, 1996................................... F-14
Notes to Pro Forma Statement of Operations (unaudited) for
the year ended March 31, 1996....................................... F-16
Pro Forma Statement of Operations (unaudited) of the Company
for the year ended December 31, 1996.............................. F-19
Notes to Pro Forma Statement of Operations (unaudited) for the
year ended December 31, 1996........................................ F-21
-16-
SIGNATURE
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 hereunto duly authorized.
Inland Real Estate Corporation
(Registrant)
By: /s/ Kelly Tucek
Kelly Tucek
Chief Financial and Accounting
Officer
Date: July 1, 1997
-17-
Independent Auditors' Report
The Board of Directors
Inland Real Estate Corporation:
We have audited the accompanying Historical Summary of Gross Income and Direct
Operating Expenses (Historical Summary) of Sequoia Shopping Center for the year
ended December 31, 1996. This Historical Summary is the responsibility of the
management of Inland Real Estate Corporation. Our responsibility is to express
an opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Historical Summary is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the Historical Summary. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the Historical Summary. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and
for inclusion in the Registration Statement on Form S-11 of Inland Real Estate
Corporation as described in note 2. The presentation is not intended to be a
complete presentation of Sequoia Shopping Center's revenues and expenses.
In our opinion, the Historical Summary referred to above presents fairly, in
all material respects, the gross income and direct operating expenses described
in note 2 of Sequoia Shopping Center for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Chicago, Illinois
April 10, 1997
F-1
Sequoia Shopping Center
Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1996
Gross income:
Base rental income.............................. $ 361,986
Operating expense and real estate
tax recoveries................................ 135,404
-----------
Total gross income.............................. 497,390
-----------
Direct operating expenses:
Real estate taxes............................... 104,880
Operating expenses.............................. 32,526
Management fees................................. 16,094
Utilities....................................... 5,252
Insurance....................................... 5,374
-----------
Total direct operating expenses................. 164,126
-----------
Excess of gross income over direct
operating expenses.............................. $ 333,264
===========
See accompanying notes to historical summary of gross income and direct
operating expenses.
F-2
Sequoia Shopping Center
Notes to Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1996
1. Business
Sequoia Shopping Center (Sequoia) is located in Milwaukee, Wisconsin. It
consists of approximately 35,000 square feet of gross leasable area and was
approximately 93% leased and occupied at December 31, 1996. Inland Real
Estate Corporation has signed a sale and purchase agreement for the
purchase of Sequoia from an unaffiliated third party (Seller).
2. Basis of Presentation
The Historical Summary of Gross Income and Direct Operating Expenses
(Historical Summary) has been prepared for the purpose of complying with
Rule 3-14 of the Securities and Exchange Commission Regulation S-X and for
inclusion in the Registration Statement on Form S-11 of Inland Real Estate
Corporation and is not intended to be a complete presentation of Sequoia's
revenues and expenses. The Historical Summary has been prepared on the
accrual basis of accounting and requires management of Sequoia to make
estimates and assumptions that affect the reported amounts of the revenues
and expenses during the reporting period. Actual results may differ from
those estimates.
3. Gross Income
Sequoia leases retail space under various lease agreements with its
tenants. All leases are accounted for as operating leases. The leases
include provisions under which Sequoia is reimbursed for common area, real
estate, and insurance costs. Operating expenses and real estate tax
recoveries reflected in the Historical Summary include amounts for 1996
expenses for which the tenants have not yet been billed.
Base rentals are reported as income over the lease term as they become
receivable under the lease provisions. However, when rentals vary from a
straight-line basis due to short-term rent abatements or escalating rents
during the lease term, the income is recognized based on effective rental
rates. Related adjustments increased base rental income by $15,079 for the
year ended December 31, 1996.
F-3
Sequoia Shopping Center
Notes to Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1996
Minimum rents to be received from tenants under operating leases in effect
at December 31, 1996, are approximately as follows:
Year Amount
---- ------
1997 $ 342,684
1998 332,688
1999 264,909
2000 252,985
2001 110,684
Thereafter 147,092
------------
$ 1,451,042
============
4. Direct Operating Expenses
Direct operating expenses include only those costs expected to be
comparable to the proposed future operations of Sequoia. Costs such as
mortgage interest, depreciation, amortization and professional fees are
excluded from the Historical Summary.
Sequoia Center has not received its final real estate tax bill for 1996.
Real estate tax expense is estimated based upon bills for 1995. The
difference between this estimate and the final bill is not expected to
have a material impact on the Historical Summary.
Sequoia is managed pursuant to the terms of a verbal management agreement
for an annual fee of 4% of gross revenues (as defined). Subsequent to the
sale of Sequoia (note 1), the current management agreement will cease. Any
new management agreement may cause future management fees to differ from
the amounts reflected in the Historical Summary.
F-4
Independent Auditors' Report
The Board of Directors
Inland Real Estate Corporation:
We have audited the accompanying Historical Summary of Gross Income and Direct
Operating Expenses (Historical Summary) of River Square Shopping Center for the
year ended December 31, 1996. This Historical Summary is the responsibility of
the management of Inland Real Estate Corporation. Our responsibility is to
express an opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Historical Summary is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the Historical Summary. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the Historical Summary. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and
for inclusion in the Registration Statement on Form S-11 of Inland Real Estate
Corporation as described in note 2. The presentation is not intended to be a
complete presentation of River Square Shopping Center's revenues and expenses.
In our opinion, the Historical Summary referred to above presents fairly, in
all material respects, the gross income and direct operating expenses described
in note 2 of River Square Shopping Center for the year ended December 31, 1996,
in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Chicago, Illinois
April 11, 1997
F-5
River Square Shopping Center
Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1996
Gross income:
Base rental income.............................. $ 619,034
Operating expense and real estate
tax recoveries................................ 253,031
-----------
Total gross income.............................. 872,065
-----------
Direct operating expenses:
Real estate taxes............................... 166,906
Operating expenses.............................. 112,459
Utilities....................................... 51,035
Management fees................................. 31,948
-----------
Total direct operating expenses................. 362,348
-----------
Excess of gross income over direct
operating expenses.............................. $ 509,717
===========
See accompanying notes to historical summary of gross income and direct
operating expenses.
F-6
River Square Shopping Center
Notes to Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1996
1. Business
River Square Shopping Center (River Square) is located in Naperville,
Illinois. It consists of approximately 59,000 square feet of gross
leasable area and was approximately 95% leased and occupied at December 31,
1996. Inland Real Estate Corporation has signed a sale and purchase
agreement for the purchase of River Square from an unaffiliated third party
(Seller).
2. Basis of Presentation
The Historical Summary of Gross Income and Direct Operating Expenses
(Historical Summary) has been prepared for the purpose of complying with
Rule 3-14 of the Securities and Exchange Commission Regulation S-X and for
inclusion in the Registration Statement on Form S-11 of Inland Real Estate
Corporation and is not intended to be a complete presentation of River
Square's revenues and expenses. The Historical Summary has been prepared
on the accrual basis of accounting and requires management of River Square
to make estimates and assumptions that affect the reported amounts of the
revenues and expenses during the reporting period. Actual results may
differ from those estimates.
3. Gross Income
River Square leases retail space under various lease agreements with its
tenants. All leases are accounted for as operating leases. The leases
include provisions under which River Square is reimbursed for common area
and real estate tax costs. Operating expenses and real estate tax
recoveries reflected in the Historical Summary include amounts for 1996
expenses for which the tenants have not yet been billed.
Base rentals are reported as income over the lease term as they become
receivable under the lease provisions. However, when rentals vary from a
straight-line basis due to short-term rent abatements or escalating rents
during the lease term, the income is recognized based on effective rental
rates. Related adjustments increased base rental income by $54,318 for the
year ended December 31, 1996.
F-7
River Square Shopping Center
Notes to Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1996
Minimum rents to be received from tenants under operating leases in effect
at December 31, 1996, are as follows:
Year Amount
---- ------
1997 $ 710,195
1998 741,175
1999 623,650
2000 368,690
2001 261,982
Thereafter 877,731
------------
$ 3,583,423
============
4. Direct Operating Expenses
Direct operating expenses include only those costs expected to be
comparable to the proposed future operations of River Square. Costs such
as mortgage interest, depreciation, amortization and professional fees are
excluded from the Historical Summary.
River Square has not received its final real estate tax bill for 1996.
Real estate tax expense is estimated based upon bills for 1995. The
difference between this estimate and the final bill is not expected to
have a material impact on the Historical Summary.
River Square is managed pursuant to the terms of a management agreement for
an annual fee of 3% of gross revenues (as defined). Subsequent to the sale
of River Square (note 1), the current management agreement will cease. Any
new management agreement may cause future management fees to differ from
the amounts reflected in the Historical Summary.
F-8
Inland Real Estate Corporation
Pro Forma Balance Sheet
March 31, 1997
(unaudited)
The following unaudited Pro Forma Balance Sheet of the Company is presented to
give effect to the acquisitions of the Niles Shopping Center, Cobblers Mall,
Mallard Mall, Ameritech Outlot, Calumet Square, Sequoia Plaza, Highland Park
Dominicks, Schaumburg Dominicks and River Square as though these transactions
occurred March 31, 1997. This unaudited Pro Forma Balance Sheet should be read
in conjunction with the March 31, 1997 Financial Statements and the notes
thereto as included herein.
This unaudited Pro Forma Balance Sheet is not necessarily indicative of what
the actual financial position would have been at March 31, 1997, 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-9
Inland Real Estate Corporation
Pro Forma Balance Sheet
March 31, 1997
(unaudited)
March 31,
March 31, 1997
1997 Pro Forma Pro Forma
Historical(A) Adjustments(B) Balance Sheet
------------- ------------- --------------
Assets
- ------
Net investment in
properties.................. $121,755,366 58,041,900 179,797,266
Cash and cash equivalents..... 22,647,158 - 22,647,158
Restricted cash............... 1,117,333 - 1,117,333
Accounts and rents
receivable.................. 2,666,872 1,551,196 4,218,068
Other assets.................. 3,323,680 - 3,323,680
------------- ------------- -------------
Total assets.................. $151,510,409 59,593,096 211,103,505
============= ============= =============
Liabilities and Stockholders' Equity
- ------------------------------------
Accounts payable and accrued
expenses.................... $ 1,318,463 - 1,318,463
Accrued real estate taxes..... 3,134,066 1,650,996 4,785,062
Distributions payable (C)..... 749,856 - 749,856
Security deposits............. 320,966 14,250 335,216
Mortgages payable............. 53,182,067 - 53,182,067
Unearned income............... 375,570 - 375,570
Due to Affiliates............. 247,191 - 247,191
------------- ------------- -------------
Total liabilities............. 59,328,179 1,665,246 60,993,425
------------- ------------- -------------
Common Stock (D).............. 108,280 67,358 175,638
Additional paid in capital
(net of Offering costs) (D). 94,623,475 57,860,492 152,483,967
Accumulated distributions in
excess of net income........ (2,549,525) - (2,549,525)
------------- ------------- -------------
Total Stockholders' equity.... 92,182,230 57,927,850 150,110,080
------------- ------------- -------------
Total liabilities and
Stockholders' equity........ $151,510,409 59,593,096 211,103,505
============= ============= =============
See accompanying notes to pro forma balance sheet.
F-10
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
March 31, 1997
(unaudited)
(A) The March 31, 1997 Historical column represents the historical balance
sheet as presented in the unaudited March 31, 1997 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 March 31, 1997. The
terms are described in the notes that follow.
Pro Forma Adjustments
--------------------------------------
Niles
Shopping Cobblers Mallard
Center Mall Mall
------------ ------------ ------------
Assets
- ------
Net investment in
properties............ $ 3,280,000 10,953,000 8,099,900
Accounts and rents
receivable............ 154,001 493,734 397,602
------------ ------------ ------------
Total assets............ $ 3,434,001 11,446,734 8,497,502
============ ============ ============
Liabilities and Stockholders' Equity
- ------------------------------------
Accrued real estate
taxes................. $ 154,001 542,971 429,322
Security deposits....... 14,250 - -
------------ ------------ ------------
Total liabilities....... 168,251 542,971 429,322
------------ ------------ ------------
Common Stock............ 3,797 12,679 9,382
Additional paid in capital
(net of Offering
Costs)................ 3,261,953 10,891,084 8,058,798
------------ ------------ ------------
Total Stockholders'
equity................ 3,265,750 10,903,763 8,068,180
------------ ------------ ------------
Total liabilities and
Stockholders' equity.. $ 3,434,001 11,446,734 8,497,502
============ ============ ============
F-11
<TABLE>
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
March 31, 1997
(unaudited)
(B) Continued
<CAPTION>
Pro Forma Adjustments
--------------------------------------------------------------------------
Highland Total
Ameritech Calumet Sequoia Park Schaumburg River Pro Forma
Outlot Square Plaza Dominicks Dominicks Square Adjustments
----------- ----------- ------------ ----------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
- ------
Net investment in
properties........... 1,050,000 2,108,000 3,010,000 12,800,000 10,691,000 6,050,000 58,041,900
Accounts and rents
receivable........... 6,941 176,750 123,968 - - 198,200 1,551,196
----------- ----------- ------------ ----------- ----------- ------------ -------------
Total assets........... 1,056,941 2,284,750 3,133,968 12,800,000 10,691,000 6,248,200 59,593,096
=========== =========== ============ =========== =========== ============ =============
Liabilities and Stockholders' Equity
- ------------------------------------
Accrued real estate
taxes................ $ 6,941 176,750 132,411 - - 208,600 1,650,996
Security deposits...... - - - - - - 14,250
----------- ----------- ------------ ----------- ----------- ------------ -------------
Total liabilities...... 6,941 176,750 132,411 - - 208,600 1,665,246
----------- ----------- ------------ ----------- ----------- ------------ -------------
Common Stock........... 1,221 2,451 3,490 14,884 12,431 7,023 67,358
Additional paid in capital
(net of Offering
Costs)............... $1,048,779 2,105,549 2,998,067 12,785,116 10,678,569 6,032,577 57,860,492
----------- ----------- ------------ ----------- ----------- ------------ -------------
Total Stockholders'
equity............... 1,050,000 2,108,000 3,001,557 12,800,000 10,691,000 6,039,600 57,927,850
----------- ----------- ------------ ----------- ----------- ------------ -------------
Total liabilities and
Stockholders' equity. 1,056,941 2,284,750 3,133,968 12,800,000 10,691,000 6,248,200 59,593,096
============ ============ ============ =========== =========== ============ =============
</TABLE>
F-12
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
March 31, 1997
(unaudited)
Acquisition of Properties:
On April 11, 1997, the Company acquired Niles Shopping Center, Niles,
Illinois from an unaffiliated third party for the purchase price of
$3,280,000 on an all cash basis, funded from cash and cash equivalents.
On May 6, 1997, the Company acquired Cobblers Mall, Elgin, Illinois from an
unaffiliated third party for the purchase price of $10,953,000 on an all
cash basis, funded from cash and cash equivalents.
On May 6, 1997, the Company acquired Mallard Mall, Elk Grove Village,
Illinois from an unaffiliated third party for the purchase price of
$8,099,900 on an all cash basis, funded from cash and cash equivalents.
On May 9, 1997, the Company acquired Ameritech Outlot, Joliet, Illinois
from an unaffiliated third party for the purchase price of $1,050,000 on an
all cash basis, funded from cash and cash equivalents.
On May 30, 1997, the Company acquired Schaumburg Dominick's, Schaumburg,
Illinois from an unaffiliated third party for the purchase price of
$10,691,000 on an all cash basis, funded from cash and cash equivalents.
On June 2, 1997, the Company acquired Calumet Square, Calumet, Illinois
from an unaffiliated third party for the purchase price of $2,108,000 on an
all cash basis, funded from cash and cash equivalents.
On June 16, 1997, the Company acquired Sequoia Plaza, Milwaukee, Wisconsin
from an unaffiliated third party for the purchase price of $3,010,000 on an
all cash basis, funded from cash and cash equivalents.
On June 16, 1997, the Company acquired Highland Park Dominick's, Highland
Park, Illinois from an unaffiliated third party for the purchase price of
$12,800,000 on an all cash basis, funded from cash and cash equivalents.
On June 19, 1997, the Company acquired River Square, Naperville, Illinois
from an unaffiliated third party for the purchase price of $6,050,000 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 $67,358,000, net of additional Offering
costs of $9,430,150 are reflected as received as of March 31, 1997, prior
to the purchase of the properties. Offering costs consist principally of
registration costs, printing and selling costs, including commissions.
F-13
Inland Real Estate Corporation
Pro Forma Statement of Operations
For the three months ended March 31, 1997
(unaudited)
The following unaudited Pro Forma Statement of Operations of the Company is
presented to effect the acquisitions of Maple Park Place Shopping Center,
Aurora Commons Shopping Center, Lincoln Park Place Shopping Center, Niles
Shopping Center, Cobblers Mall, Mallard Mall, Ameritech Outlot, Calumet Square,
Sequoia Plaza, Highland Park Dominicks, Schaumburg Dominicks and River Square
as though they occurred on January 1, 1997. This unaudited Pro Forma Statement
of Operations should be read in conjunction with the March 31, 1997 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 three months
ended March 31, 1997, 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-14
Inland Real Estate Corporation
Pro Forma Statement of Operations
For the three months ended March 31, 1997
(unaudited)
Pro Forma Adjustments
-----------------------
1997 1997
Historical Acquisitions 1997
(A) (B) Pro Forma
----------- ----------- -----------
Rental income..... $3,603,584 1,541,859 5,145,443
Additional rental
income.......... 1,061,507 543,025 1,604,532
Interest
income(C)....... 156,436 - 156,436
Other income...... 36,244 - 36,244
----------- ----------- ------------
Total income.... 4,857,771 2,084,884 6,942,655
----------- ----------- ------------
Professional services
and general and
administrative
fees............ 85,158 - 85,158
Advisor asset
management fee.(F) 233,337 145,105 378,442
Property operating
expenses........ 1,859,461 605,341 2,464,802
Interest expense.. 1,005,741 26,718 1,032,459
Depreciation (D).. 741,920 389,312 1,131,232
Amortization...... 38,364 - 38,364
Acquisition costs
expensed........ 9,090 - 9,090
----------- ----------- ------------
Total expenses.... 3,973,071 1,166,476 5,139,547
----------- ----------- ------------
Net income...... $ 884,700 918,408 1,803,108
=========== =========== ============
Weighted average
common stock shares
outstanding (E). 9,384,792 16,120,592
=========== ============
Net income per weighted
average common stock
outstanding (E). $ .09 .11
=========== ============
See accompanying notes to pro forma statement of operations.
F-15
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
For the three months ended March 31, 1997
(unaudited)
(A) The 1997 Historical column represents the historical statement of
operations of the Company for the three months ended March 31, 1997
(unaudited), as filed with the SEC on Form 10-Q.
(B) Total pro forma adjustments for the three months ended March 31, 1997 are
as though the 1997 acquisitions of the following properties occurred on
January 1, 1997 on an all cash basis except for Maple Park, Aurora Commons
and Lincoln Park Place. Proforma adjustments for interest expense on these
properties were based on the following terms.
Maple Park Shopping Center
The Company funded the purchase using (i) the proceeds of a short-term loan
maturing April 7, 1997 in the amount of $8 million from Inland Mortgage
Investment Corporation ("IMIC"), an affiliate of the Company (the "Short-
Term Loan"), and (ii) cash and cash equivalents. The Short-Term Loan bears
interest at a rate of 9.0% per annum and requires a loan fee of 1/4%.
Aurora Commons Shopping Center
As part of the acquisition of Aurora Commons Shopping Center, the Company
assumed the existing mortgage loan, maturing December 31, 2001, with the
balance funded with cash and cash equivalents. The loan bears interest at
a rate of 9% per annum with monthly payments of principal and interest on
the first day of each month.
Lincoln Park Place Shopping Center
The Company funded the purchase of Lincoln Park Place Shopping Center using
the proceeds of a short-term loan maturing February 7, 1997 in the amount
of $2,016,110 from Inland Mortgage Investment Corporation ("IMIC"), an
affiliate of the Company (the "Short-Term Loan"). The Company did not pay
any fees in connection with the Short-Term Loan, which bears interest at a
rate of 9% per annum.
F-16
<TABLE>
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the three months ended March 31, 1997
(unaudited)
(B) Total pro forma adjustments for 1997 acquisitions are as though they were acquired January 1, 1997.
<CAPTION>
Niles
Maple Park Aurora Lincoln Shopping Cobblers Mallard Calumet
Place Commons Park Place Center Mall Mall Square
----------- ----------- ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Rental income..... 39,736 82,740 14,159 98,780 255,790 267,028 78,398
Additional rental
income.......... 8,168 26,594 5,714 39,507 142,382 103,809 87,939
----------- ----------- ----------- ----------- ----------- ------------ -----------
Total income...... 47,904 109,334 19,873 138,287 398,172 370,837 166,337
----------- ----------- ----------- ----------- ----------- ------------ -----------
Advisor asset
management fee.. - - - - - - -
Property operating
expenses........ 10,039 30,055 6,352 43,952 153,892 121,290 91,467
Interest expense.. - - - - - - -
Depreciation...... - - - - - - -
----------- ----------- ----------- ----------- ----------- ------------ -----------
Total expenses.... 10,039 30,055 6,352 43,952 153,892 121,290 91,467
----------- ----------- ----------- ----------- ----------- ------------ -----------
Net income (loss). 37,865 79,279 13,521 94,335 244,280 249,547 74,870
=========== =========== =========== =========== =========== =========== ============
Total
Highland 1997
Ameritech Schaumburg Sequoia Park River Pro Forma Acquisitions
Outlot Dominicks Plaza Dominicks Square Adjustments Pro Forma
----------- ----------- ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Rental income..... 27,576 161,706 99,580 220,994 195,372 - 1,541,859
Additional rental
income.......... 6,068 - 36,786 - 86,058 - 543,025
----------- ----------- ----------- ----------- ----------- ------------ ------------
Total income...... 33,644 161,706 136,366 220,994 281,430 - 2,084,884
----------- ----------- ----------- ----------- ----------- ------------ ------------
Advisor asset
management fee.. - - - - - 145,105 145,105
Property operating
expenses........ 7,309 3,234 42,744 4,420 90,587 - 605,341
Interest expense.. - - - - - 26,718 26,718
Depreciation...... - - - - - 389,312 389,312
----------- ----------- ----------- ----------- ----------- ------------ ------------
Total expenses.... 7,309 3,234 42,744 4,420 90,587 561,135 1,166,476
----------- ----------- ----------- ----------- ----------- ------------ ------------
Net income (loss). 26,335 158,472 93,622 216,574 190,843 (561,135) 918,408
=========== =========== =========== =========== =========== ============ ============
</TABLE>
F-17
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the three months ended March 31, 1997
(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 three months
ended March 31, 1997 was calculated by estimating the additional shares
sold to purchase each of the Company's properties on a weighted average
basis.
(F) Advisor Asset Management Fees are calculated as 1% of the Average Invested
Assets (as defined).
F-18
Inland Real Estate Corporation
Pro Forma Statement of Operations
For the year ended December 31, 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 Plaza, Spring
Hill Fashion Corner, Crestwood Plaza Shopping Center, Park St. Claire, Lansing
Square Shopping Center, Summit of Park Ridge, Maple Park Place Shopping Center,
Aurora Commons Shopping Center, Lincoln Park Place Shopping Center, Niles
Shopping Center, Cobblers Mall, Mallard Mall, Calumet Square, Ameritech Outlot,
Sequoia Plaza, Highland Park Dominicks, Schaumburg Dominicks and River Square
as though they occurred the earlier of January 1, 1996 or the date operations
commenced. Grand and Hunt Club and the Quarry Outlot were constructed in 1996,
and had not commenced significant operations prior to acquisition, therefore,
no operations relating to these properties are presented on the unaudited Pro
Forma Statement of Operations for December 31, 1996. This unaudited Pro Forma
Statement of Operations should be read in conjunction with the December 31,
1996 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, 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-19
Inland Real Estate Corporation
Pro Forma Statement of Operations
For the year ended December 31, 1996
(unaudited)
Pro Forma Adjustments
------------------------
1996 1996 1997
Historical Acquisitions Acquisitions 1996
(A) (B) (C) Pro Forma
----------- ------------ ----------- -----------
Rental income..... $4,467,903 6,127,326 8,636,819 19,232,048
Additional rental
income.......... 1,336,809 3,198,250 2,531,865 7,066,924
Interest
income(E)....... 438,188 - - 438,188
Other income...... 84,834 - - 84,834
----------- ----------- ----------- ------------
Total income.... 6,327,734 9,325,576 11,168,684 26,821,994
----------- ----------- ----------- ------------
Professional services
and general and
administrative
fees............ 183,559 - - 183,559
Advisor asset
management fee.(I) 238,108 708,222 869,040 1,815,370
Property operating
expenses........ 1,873,174 3,656,698 3,107,123 8,636,995
Interest expense.. 597,485 949,958 1,784,433 3,331,876
Depreciation (F).. 939,144 1,448,017 2,232,111 4,619,272
Amortization (H).. 17,367 11,428 6,457 35,252
Acquisition costs
expensed........ 26,676 - - 26,676
----------- ----------- ----------- ------------
Total expenses.... 3,875,513 6,774,323 7,999,164 18,649,000
----------- ----------- ----------- ------------
Net income...... $2,452,221 2,551,253 3,169,520 8,172,994
=========== =========== =========== ============
Weighted average
common stock shares
outstanding (G). 4,494,620 12,110,720
=========== ============
Net income per weighted
average common stock
outstanding (G). $ .55 .67
=========== ============
See accompanying notes to pro forma statement of operations.
F-20
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
For the year ended December 31, 1996
(unaudited)
(A) The 1996 Historical column represents the historical statement of
operations of the Company for the year ended December 31, 1996, as filed
with the SEC on Form 10-K.
(B) Total pro forma adjustments for the year ended December 31, 1996 are as
though the 1996 acquisitions of the following properties occurred on
January 1, 1996 on an all cash basis except for Regency Point, Hawthorn
Village Commons, Crestwood and Lansing Square. Proforma adjustments for
interest expense on these properties were based on the following terms.
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.
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.
F-21
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 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%.
Total pro forma adjustments for 1996 acquisitions are as though they were
acquired the earlier of January 1, 1996 or date that operations commenced
(related to Zany Brainy).
Mundelein Regency Prospect Montgomery- Zany
Plaza Point Heights Sears Brainy
----------- ----------- ----------- ----------- -----------
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
----------- ----------- ----------- ----------- -----------
Total income...... 196,356 155,305 172,698 220,712 161,633
----------- ----------- ----------- ----------- -----------
Property operating
expenses........ 53,986 19,046 91,364 66,944 30,331
----------- ----------- ----------- ----------- -----------
Total expenses.... 53,986 19,046 91,364 66,944 30,331
----------- ----------- ----------- ----------- -----------
Net income........ $ 142,370 136,259 81,334 153,768 131,302
=========== =========== =========== =========== ===========
F-22
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1996
(unaudited)
Hawthorn
Salem Village Six Spring
Square Commons Corners Hill Crestwood
----------- ----------- ----------- ----------- -----------
Rental income..... $ 422,146 548,667 790,888 948,906 203,007
Additional rental
income.......... 260,832 270,570 517,804 234,837 69,315
----------- ----------- ----------- ----------- -----------
Total income...... 682,978 819,237 1,308,692 1,183,743 272,322
----------- ----------- ----------- ----------- -----------
Property operating
expenses........ 270,756 293,132 640,772 300,842 78,450
----------- ----------- ----------- ----------- -----------
Total expenses.... 270,756 293,132 640,772 300,842 78,450
----------- ----------- ----------- ----------- -----------
Net income........ $ 412,222 526,105 667,920 882,901 193,872
=========== =========== =========== =========== ===========
Total
1996
Park Lansing Park Pro Forma Acquisitions
St. Claire Square Ridge Adjustments Pro Forma
----------- ----------- ----------- ----------- ------------
Rental income..... $ 178,596 2,001,855 340,315 - 6,127,326
Additional rental
income.......... 62,194 1,332,149 236,791 - 3,198,250
----------- ----------- ----------- ----------- -----------
Total income...... 240,790 3,334,004 577,106 - 9,325,576
----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. - - - 708,222 708,222
Property operating
expenses........ 103,386 1,507,941 299,748 - 3,656,698
Interest Expense.. - - - 949,958 949,958
Depreciation...... - - - 1,448,017 1,448,017
Amortization...... - - - 11,428 11,428
----------- ----------- ----------- ----------- -----------
Total expenses.... 103,386 1,507,941 299,748 3,117,625 6,774,323
----------- ----------- ----------- ----------- -----------
Net income (loss). $ 137,404 1,826,063 277,358 (3,117,625) 2,551,253
=========== =========== =========== =========== ===========
F-23
<TABLE> Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1996
(unaudited)
(C) Total pro forma adjustments for 1997 acquisitions are as though they were
acquired the earlier of January 1, 1996 or the date operations commenced.
<CAPTION>
Niles
Maple Park Aurora Lincoln Shopping Cobblers Mallard Calumet
Place Commons Park Place Center Mall Mall Square
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Rental income..... 1,844,314 1,341,448 228,218 375,349 1,014,342 992,972 222,072
Additional rental
income.......... 405,864 534,247 111,997 104,619 376,560 412,024 179,854
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total income...... 2,250,178 1,875,695 340,215 479,968 1,390,902 1,404,996 401,926
----------- ----------- ----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. 152,621 115,000 21,000 32,800 109,530 80,999 21,080
Property operating
expenses........ 444,390 632,131 130,176 141,974 548,023 420,090 214,748
Interest expense.. 720,000 882,983 181,450 - - - -
Depreciation...... 404,905 334,573 42,260 81,600 273,825 202,498 52,700
Amortization...... 2,857 - 3,600 - - - -
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total expenses.... 1,724,773 1,964,687 378,486 256,374 931,378 703,587 228,528
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income (loss). 525,405 (88,992) (38,271) 223,594 459,524 701,409 113,398
=========== =========== =========== =========== =========== =========== ===========
Total
Highland 1997
Ameritech Schaumburg Sequoia Park River Acquisitions
Outlot Dominicks Plaza Dominicks Square Pro Forma
----------- ----------- ----------- ----------- ----------- ------------
<C> <C> <C> <C> <C>
Rental income..... 106,283 646,825 361,986 883,976 619,034 8,636,819
Additional rental
income.......... 18,265 - 135,404 - 253,031 2,531,865
----------- ----------- ----------- ----------- ----------- -----------
Total income...... 124,548 646,825 497,390 883,976 872,065 11,168,684
----------- ----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. 10,500 106,910 30,100 128,000 60,500 869,040
Property operating
expenses........ 18,500 12,937 164,126 17,680 362,348 3,107,123
Interest expense.. - - - - - 1,784,433
Depreciation...... 26,250 267,000 75,250 320,000 151,250 2,232,111
Amortization...... - - - - - 6,457
----------- ----------- ----------- ----------- ----------- -----------
Total expenses.... 55,250 386,847 269,476 465,680 574,098 7,999,164
----------- ----------- ----------- ----------- ----------- -----------
Net income (loss). 69,298 259,978 227,914 418,296 297,967 3,169,520
=========== =========== =========== =========== =========== ===========
</TABLE>
F-24
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1996
(unaudited)
Acquisition of Maple Park Shopping Center, Bolingbrook, Illinois
The Company funded the purchase using (i) the proceeds of a short-term loan
maturing April 7, 1997 in the amount of $8 million from Inland Mortgage
Investment Corporation ("IMIC"), an affiliate of the Company (the "Short-
Term Loan"), and (ii) cash and cash equivalents. The Short-Term Loan bears
interest at a rate of 9.0% per annum and requires a loan fee of 1/4%.
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1996 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Maple Park Place
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income.................... $1,844,314 - 1,844,314
Additional rental income......... 405,864 - 405,864
----------- ----------- -----------
Total income..................... 2,250,178 - 2,250,178
----------- ----------- -----------
Advisor asset management fee..... - 152,621 152,621
Property operating expenses...... 444,390 - 444,390
Interest expense................. - 720,000 720,000
Depreciation..................... - 404,905 404,905
Amortization..................... - 2,857 2,857
----------- ----------- -----------
Total expenses................... 444,390 1,280,383 1,724,773
----------- ----------- -----------
Net income (loss)................ $1,807,788 (1,280,383) 525,405
=========== =========== ===========
Acquisition of Aurora Commons Shopping Center, Aurora, Illinois
As part of the acquisition of Aurora Commons Shopping Center, the Company
assumed the existing mortgage loan, maturing December 31, 2001, with the
balance funded with cash and cash equivalents. The loan bears interest at
a rate of 9% per annum with monthly payments of principal and interest on
the first day of each month.
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1996 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Aurora Commons
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income.................... $1,314,448 - 1,341,448
Additional rental income......... 534,247 - 534,247
----------- ----------- -----------
Total income..................... 1,875,695 - 1,875,695
----------- ----------- -----------
Advisor asset management fee..... - 115,000 115,000
Property operating expenses...... 659,205 (27,074) 632,131
Interest expense................. - 882,983 882,983
Depreciation..................... - 334,573 334,573
----------- ----------- -----------
Total expenses................... 659,205 1,193,482 1,964,687
----------- ----------- -----------
Net income (loss)................ $1,216,490 (1,193,482) (88,992)
=========== =========== ===========
F-25
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1996
(unaudited)
Acquisition of Lincoln Park Place Shopping Center, Chicago, Illinois
The Company funded the purchase of Lincoln Park Place Shopping Center using
the proceeds of a short-term loan maturing February 7, 1997 in the amount
of $2,016,110 from Inland Mortgage Investment Corporation ("IMIC"), an
affiliate of the Company (the "Short-Term Loan"). The Company did not pay
any fees in connection with the Short-Term Loan, which bears interest at a
rate of 9% per annum.
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1996 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Lincoln Park Place
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income.................... $ 228,218 - 228,218
Additional rental income......... 111,997 - 111,997
----------- ----------- -----------
Total income..................... 340,215 - 340,215
----------- ----------- -----------
Advisor asset management fee..... - 21,000 21,000
Property operating expenses...... 130,176 - 130,176
Interest expense................. - 181,450 181,450
Depreciation..................... - 42,260 42,260
Amortization..................... - 3,600 3,600
----------- ----------- -----------
Total expenses................... 130,176 248,310 378,486
----------- ----------- -----------
Net income (loss)................ $ 210,039 (248,310) (38,271)
=========== =========== ===========
Acquisition of Niles Shopping Center, Niles, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1996 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Niles Shopping Center
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income.................... $ 375,349 - 375,349
Additional rental income......... 104,619 - 104,619
----------- ----------- -----------
Total income..................... 479,968 - 479,968
----------- ----------- -----------
Advisor asset management fee..... - 32,800 32,800
Property operating expenses...... 141,974 - 141,974
Depreciation..................... - 81,600 81,600
----------- ----------- -----------
Total expenses................... 141,974 114,400 256,374
----------- ----------- -----------
Net income (loss)................ $ 337,995 (114,400) 223,594
=========== =========== ===========
F-26
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1996
(unaudited)
Acquisition of Cobblers Mall, Elgin, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1996 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Cobblers Mall
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income.................... $1,014,342 - 1,014,342
Additional rental income......... 376,560 - 376,560
----------- ----------- -----------
Total income..................... 1,390,902 - 1,390,902
----------- ----------- -----------
Advisor asset
management fee................. - 109,530 109,530
Property operating
expenses....................... 548,023 - 548,023
Depreciation..................... - 273,825 273,825
----------- ----------- -----------
Total expenses................... 548,023 383,355 931,378
----------- ----------- -----------
Net income (loss)................ $ 842,879 (383,355) 459,524
=========== =========== ===========
Acquisition of Mallard Mall, Elk Grove Village, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1996 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Mallard Mall
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income.................... $ 992,972 - 992,972
Additional rental income......... 412,024 - 412,024
----------- ----------- -----------
Total income..................... 1,404,996 - 1,404,996
----------- ----------- -----------
Advisor asset
management fee................. - 80,999 80,999
Property operating
expenses....................... 420,090 - 420,090
Depreciation..................... - 202,498 202,498
----------- ----------- -----------
Total expenses................... 420,090 283,497 703,587
----------- ----------- -----------
Net income (loss)................ $ 984,906 (283,497) 701,409
=========== =========== ===========
F-27
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1996
(unaudited)
Acquisition of Calumet Square Shopping Center, Calumet City, Illinois
This pro forma adjustment reflects the purchase of Calumet Square as if the
Company had acquired the property as of January 1, 1996 and is based on
information provided by the Seller.
Calumet Square
-------------------------------------
Year ended
December 31, Pro Forma
1996 Adjustments Total
----------- ----------- -----------
Rental income............. $ 222,072 - 222,072
Additional rental income.. 179,854 - 179,854
----------- ----------- -----------
Total income.............. 401,926 - 401,926
----------- ----------- -----------
Advisor asset
management fee.......... - 21,080 21,080
Property operating
expenses................ 214,748 - 214,748
Depreciation.............. - 52,700 52,700
----------- ----------- -----------
Total expenses............ 214,748 73,780 288,528
----------- ----------- -----------
Net income (loss)......... $ 187,178 (73,780) 113,398
=========== =========== ===========
Acquisition of Ameritech Outlot, Joliet, Illinois
This pro forma adjustment reflects the purchase of Ameritech as if the
Company had acquired the property as of January 1, 1996 and is based on
information provided by the Seller.
Ameritech Outlot
-------------------------------------
Year ended
December 31, Pro Forma
1996 Adjustments Total
----------- ----------- -----------
Rental income............. $ 106,283 - 106,283
Additional rental income.. 18,265 - 18,265
----------- ----------- -----------
Total income.............. 124,548 - 124,548
----------- ----------- -----------
Advisor asset
management fee.......... - 10,500 10,500
Property operating
expenses................ 18,500 - 18,500
Depreciation.............. - 26,250 26,250
----------- ----------- -----------
Total expenses............ 18,500 36,750 55,250
----------- ----------- -----------
Net income (loss)......... $ 106,048 (36,750) 69,298
=========== =========== ===========
F-28
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1996
(unaudited)
Acquisition of Dominicks, Schaumburg, Illinois
This pro forma adjustment reflects the purchase of Schaumburg Dominicks as
if the Company had acquired the property as of June 1, 1996, the date
operations commenced and is based on information provided by the Seller.
Schaumburg Dominicks
-------------------------------------
Year ended
December 31, Pro Forma
1996 Adjustments Total
----------- ----------- -----------
Rental income............. $ 646,825 - 646,825
Additional rental income.. - - -
----------- ----------- -----------
Total income.............. 646,825 - 646,825
----------- ----------- -----------
Advisor asset
management fee.......... - 106,910 106,910
Property operating
expenses................ 12,937 - 12,937
Depreciation.............. - 267,000 267,000
----------- ----------- -----------
Total expenses............ 12,937 373,910 386,847
----------- ----------- -----------
Net income (loss)......... $ 633,888 (373,910) 259,978
=========== =========== ===========
Acquisition of Sequoia Plaza, Milwaukee, Wisconsin
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1996 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Sequoia Plaza
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $ 361,986 - 361,986
Additional rental income.. 135,404 - 135,404
----------- ----------- -----------
Total income.............. 497,390 - 497,390
----------- ----------- -----------
Advisor asset
management fee.......... - 30,100 30,100
Property operating
expenses................ 164,126 - 164,126
Depreciation.............. - 75,250 75,250
----------- ----------- -----------
Total expenses............ 164,126 105,350 269,476
----------- ----------- -----------
Net income (loss)......... $ 333,264 (105,350) 227,914
=========== =========== ===========
F-29
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1996
(unaudited)
Acquisition of Dominicks, Highland Park, Illinois
This pro forma adjustment reflects the purchase of Highland Park Dominicks
as if the Company had acquired the property as of May 1, 1996, the date
operations commenced and is based on information provided by the Seller.
Highland Park Dominicks
-------------------------------------
Year ended
December 31, Pro Forma
1996 Adjustments Total
----------- ----------- -----------
Rental income............. $ 883,976 - 883,976
Additional rental income.. - - -
----------- ----------- -----------
Total income.............. 883,976 - 883,976
----------- ----------- -----------
Advisor asset
management fee.......... - 128,000 128,000
Property operating
expenses................ 17,680 - 17,680
Depreciation.............. - 320,000 320,000
----------- ----------- -----------
Total expenses............ 17,680 448,000 465,680
----------- ----------- -----------
Net income (loss)......... $ 866,296 (448,000) 418,296
=========== =========== ===========
Acquisition of River Square, Naperville, Illinois
This pro forma adjustment reflects the purchase of Highland Park Dominicks
as if the Company had acquired the property as of May 1, 1996, the date
operations commenced and is based on information provided by the Seller.
River Square
-----------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $ 619,034 - 619,034
Additional rental income.. 253,031 - 253,031
----------- ----------- -----------
Total income.............. 872,065 - 872,065
----------- ----------- -----------
Advisor asset
management fee.......... - 60,500 60,500
Property operating
expenses................ 362,348 - 362,348
Depreciation.............. - 151,250 151,250
----------- ----------- -----------
Total expenses............ 362,348 211,750 574,098
----------- ----------- -----------
Net income (loss)......... $ 509,717 (211,750) 297,967
=========== =========== ===========
F-30
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1996
(unaudited)
(E) No pro forma adjustment has been made relating to interest income which
would have been earned on the additional Offering Proceeds raised.
(F) Depreciation expense is computed using the straight-line method, based upon
an estimated useful life of thirty years.
(G) The pro forma weighted average common stock shares for the year ended
December 31, 1996 was calculated by estimating the additional shares sold
to purchase each of the Company's properties on a weighted average basis.
(H) Loan fees are amortized over the term of the related loan.
(I) Advisor Asset Management Fees are calculated as 1% of the Average Invested
Assets (as defined).
F-31
