Inland Real Estate Corporation
Sticker Supplement
This Supplement No. 17 to our Prospectus which is dated April 7, 1998 updates
information contained in the "Management," "Real Property Investments" and
"Plan of Distribution" sections of the Prospectus. Any word that is
capitalized in this supplement but not defined has the same meaning as in our
Prospectus.
Management
The Management Agreements for the properties we own each include a provision
that allows either the Management Agent or us to terminate the Management
Agreement by sending notice of termination not less than 30 days prior to
December 31, 1998. We have not received any notice of termination from the
Management Agent for any of the Management Agreements and, therefore, the term
of each of the Management Agreements has been automatically extended for a one
year period, expiring on December 31, 1999.
Real Property Investments
Marketplace at Six Corners, Chicago, Illinois
On November 30, 1998, we purchased a property known as "Marketplace at Six
Corners" for approximately $18,875,000. The property is located in Chicago,
Illinois and contains approximately 117,000 square feet of leasable space. Its
anchor tenants are Marshall's and Jewel/Osco.
CarMax - Tinley Park, Tinley Park, Illinois
On December 1, 1998, we purchased a property known as "CarMax - Tinley Park"
for approximately $18,900,000. The property is located in Tinley Park,
Illinois and contains approximately 94,518 square feet of leasable space.
CarMax - Schaumburg, Schaumburg, Illinois
On December 1, 1998, we purchased a property known as "CarMax - Schaumburg" for
approximately $20,600,000. The property is located in Schaumburg, Illinois and
contains approximately 93,333 square feet of leasable space.
Staples, Freeport, Illinois
On December 2, 1998, we purchased a property known as "Staples" for
approximately $2,694,000. The property is located in Freeport, Illinois and
contains approximately 24,049 square feet of leasable space.
Park Center, Tinley Park, Illinois
On December 4, 1998, we purchased a property known as "Park Center" for
approximately $15,500,000. The property is located in Tinley Park, Illinois
and contains approximately 193,179 square feet of leasable space. Its anchor
tenant is Cub Foods.
Real Property Investments - Potential Property Acquisitions
Plymouth Collection Center, Plymouth, Minnesota
We anticipate purchasing the entire fee simple interest in the Plymouth
Collection Center located in Plymouth, Minnesota. The Plymouth Collection
Center was constructed in 1998. It is a single story, multi-tenant
Neighborhood Retail Center containing 40,815 rentable square feet. We
anticipate purchasing the Plymouth Collection Center for approximately
$6,626,000.
Circuit City, Traverse City, Michigan
We anticipate purchasing the entire fee simple interest in a Circuit City
located in Traverse City, Michigan. This property was constructed in 1998 and
is a single-user retail center containing 21,337 rentable square feet. We
anticipate purchasing this property for approximately $2,900,000.
Hawthorn Hills Fashion Square, Vernon Hills, Illinois
We anticipate purchasing the entire fee simple interest in a Hawthorn Hills
Fashion Square located in Vernon Hills, Illinois. This property was
constructed in 1986 and is a single story multi-tenant retail center containing
204,584 rentable square feet. We anticipate purchasing this property for
approximately $20,000,000.
Colonial Plaza Shopping Center, Bloomington, Illinois
We anticipate purchasing the entire fee simple interest in a Colonial Plaza
Shopping Center located in Bloomington, Illinois. This property was
constructed in 1962 and is a single story multi-tenant retail center containing
229,616 rentable square feet. We anticipate purchasing this property for
approximately $13,700,000.
Hollywood Video, Hammond, Indiana
We anticipate purchasing the entire fee simple interest in a Hollywood Video
located in Hammond, Indiana. This property was constructed in 1998 and is a
single-user retail center containing 7,488 rentable square feet. We anticipate
purchasing this property for approximately $1,374,000.
Plan of Distribution
We commenced this Offering of 25,000,000 shares on April 7, 1998. As of
December 14, 1998, we had sold 14,429,281 shares resulting in net proceeds of
$153,892,290. Inland Securities Corporation, an Affiliate of our Advisor, is
dealer-manager of this Offering and is entitled to receive selling commissions
and certain other fees, as discussed further in our Prospectus. As of December
14, 1998, the commissions and fees incurred to Inland Securities Corporation
totaled $15,078,598. Our Advisor is entitled to receive an Advisor Asset
Management fee, as described more fully in our Prospectus. We also pay an
Affiliate of the Advisor fees to manage and lease our properties. This
arrangement is also described more fully in our Prospectus. We may pay
Acquisition Expenses up to .5% of the money that we raise in this Offering but
in no event will we pay Acquisition Expenses on an individual property that
exceed 6% of the purchase price of that property.
SUPPLEMENT NO. 17
DATED DECEMBER 14, 1998
TO OUR PROSPECTUS DATED APRIL 7, 1998
OF INLAND REAL ESTATE CORPORATION
We are providing this Supplement No. 17 to you in order to supplement our
Prospectus. We previously supplemented our Prospectus by providing you with
Supplement No. 16 dated November 20, 1998, Supplement No. 15 dated November 4,
1998, Supplement No. 14 dated October 19, 1998, Supplement No. 13 dated October
15, 1998 and Supplement No. 12 dated October 7, 1998. Supplement No. 12
combined all of the information contained in Supplement Nos. 1 through 11.
Therefore, you must read this Supplement No. 17, Supplement No. 16, Supplement
No. 15, Supplement No. 14, Supplement No. 13, Supplement No. 12 and the
Prospectus for the most up to date information. This Supplement No. 17 updates
information in the "Management," "Real Property Investments" and "Plan of
Distribution" sections of our Prospectus. Any word that is capitalized in this
Supplement but not defined has the same meaning as in our Prospectus.
Management
The Management Agreements for the properties we own each include a provision
that allows either the Management Agent or us to terminate the Management
Agreement by sending notice of termination not less than 30 days prior to
December 31, 1998. We have not received any notice of termination from the
Management Agent for any of the Management Agreements and, therefore, the term
of each of the Management Agreements has been automatically extended for a one
year period, expiring on December 31, 1999.
Real Property Investments
Marketplace at Six Corners, Chicago, Illinois
On November 30, 1998, we purchased the entire fee simple interest in a
Neighborhood Retail Center located at Irving Park Road and Cicero Avenue in
Chicago, Illinois known as "Marketplace at Six Corners." We purchased
Marketplace at Six Corners from Six Corners Development L.L.C., an unaffiliated
third party, for approximately $18,875,000 or approximately $161.32 per square
foot. We paid for the purchase price for this property entirely in cash and
cash equivalents. We believe the purchase price was fair and reasonable based
on, among other things, an appraisal from a third party that we received and
presented to our board of directors.
We subsequently borrowed $11,200,000 and gave the lender security interest in
this property. The loan requires us to pay interest on a monthly basis at a
rate equal to 6.85% per annum. The principal amount of the loan is due
December 1, 2003. We paid loan fees at closing of $56,000.
Marketplace at Six Corners, built in 1997, is comprised of two one-story,
multi-tenant retail facilities, containing a total of 117,000 leasable square
feet. As of November 30, 1998, Marketplace at Six Corners was 100% leased. We
considered a variety of factors in deciding to purchase this property including
location, demographics, tenant mix, price per square foot, existing rental
rates compared to market rates, and occupancy. We believe that the center is
located within a densely populated and vibrant economic area. We like this
center because it is grocery anchored, three of the tenants are public
companies and the last tenant is a jeweler who has been in business for 40
years.
-1-
We do not anticipate making any significant repairs and improvements to this
property over the next few years. However, if we were to make any repairs or
improvements, the center's tenants are obligated to pay a substantial portion
of any monies spent on repairs and improvements.
The table below sets forth the occupancy rate at Marketplace at Six Corners
expressed as a percentage of total gross leasable area and the average annual
base rent per square foot:
Occupancy Rate Effective
as of Annual Rental
December 31, Rate Per Leasable
Year Ending of Each Year Square Ft
December 31, (%) ($)
------------ ------------ -------------
1997 98 15.11
Tenants leasing more than 10% of the total gross leasable area of the property
are Marshall's, a discount clothing store and Jewel/Osco, a grocery/drug store.
These leases require the tenants to pay base annual rent on a monthly basis as
follows:
Base Rent
Per Square
Approximate Foot Per
GLA % of Total Annum Lease Term
Lessee Leased GLA ($) Beginning To
----------- ----------- ----------- ------------ ------------ ---------
Marshall's 34,000 29 15.00 Currently 07/31/02
16.00 08/01/02 07/31/07
17.00 08/01/07 01/31/13
Option 1 18.00 02/01/13 01/31/18
Option 2 19.00 02/01/18 01/31/23
Option 3 20.00 02/01/23 01/31/28
Jewel/Osco 70,000 60 15.00 Currently 11/30/12
Option 1 15.00 12/01/12 11/30/27
Option 2 15.00 12/01/27 11/30/42
For federal income tax purposes, our depreciable basis in Marketplace at Six
Corners will be approximately $14,000,000. When we calculate depreciation
expense, for tax purposes, we will use the straight-line method. We depreciate
buildings and improvements based upon estimated useful lives of 40 years.
Real estate taxes payable in 1998 for the tax year ended 1997 were $223,362.
The real estate taxes payable were calculated by multiplying the assessed value
by an equalizer of 2.1489% and a tax rate of 8.843%.
-2-
On November 30, 1998, a total of 117,000 square feet was leased to five tenants
at Marketplace at Six Corners. The following tables set forth information with
respect to the amount of and expiration of the leases at this Neighborhood
Retail Center:
Approximate Current Rent per
GLA Lease Renewal Annual Rent Square Foot
Lessee Leased Ends Option ($) ($)
------ ---------- ----- ------ ----------- -----------
Marshall's 34,000 01/13 3/5 yr. $ 510,000 $15.00
Kay-Bee Toy &
Hobby Shop 5,000 12/02 1/5 yr. 100,000 20.00
Blockbuster Video 6,000 08/07 2/5 yr. 108,000 18.00
Sandberg Jewelers 2,000 03/03 - 36,000 18.00
Jewel/Osco 70,000 11/12 2/15 yr. 1,050,000 15.00
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Annual Base Total Per Square Building GLA Rent
Approx. GLA Rent of Annual Foot Under Represented Represented
Year Number of of Expiring Expiring Base Expiring by Expiring By Expiring
Ending Leases Leases Leases Rent (1) Leases Leases Leases
December 31, Expiring (Sq. Ft.) ($) ($) ($) (%) (%)
- ----------- --------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1998-
2001 - - - 1,804,000 - - -
2002 1 5,000 100,000 1,804,000 20.00 4.27 5.54
2003 1 2,000 36,000 1,756,000 18.00 1.71 2.05
2004-
2006 - - - 1,720,000 - - -
2007 1 6,000 126,000 1,720,000 21.00 5.13 7.33
(1) We made no assumptions regarding the re-leasing of expired leases. It is the opinion of our
management that the space will be re-leased at market rates at the time of re-leasing.
</TABLE>
We received a letter appraisal prepared by an independent appraiser who is a
member in good standing of the American Institute of Real Estate Appraisers.
The appraisal reported a fair market value for the Marketplace at Six Corners
property, as of September 8, 1998, of $19,000,000. You should note that
appraisals are estimates of value and, therefore, you should not rely upon them
as a measure of true worth or realizable value.
-3-
CarMax - Tinley Park, Tinley Park, Illinois
On December 1, 1998, we purchased the entire fee simple interest in a single-
user retail center located at 18800 South Oak Park Avenue in Tinley Park,
Illinois known as "CarMax - Tinley Park." We purchased CarMax - Tinley Park
from Circuit City Stores, Inc., an unaffiliated third party, for approximately
$18,900,000 or approximately $199.96 per square foot. We paid for the purchase
price for this property entirely in cash and cash equivalents. We believe the
purchase price was fair and reasonable based on, among other things, an
appraisal from a third party that we received and presented to our board of
directors.
CarMax - Tinley Park, built in 1998, is a one-story, single-tenant retail
facility, containing a total of 94,518 leasable square feet. As of December 1,
1998, CarMax - Tinley Park was 100% leased. We considered a variety of factors
in deciding to purchase this property including location, demographics, tenant
mix, price per square foot, existing rental rates compared to market rates, and
occupancy. We believe that the center is located within a vibrant economic
area. We liked the fact that the lease for this property is with Circuit City
Stores, Inc., which is a public company.
We do not anticipate making any significant repairs and improvements to CarMax
- - Tinley Park over the next few years. However, if we were to make any repairs
or improvements, the center's tenant is obligated to pay a substantial portion
of any monies spent on repairs and improvements.
Circuit City Stores, Inc. (CarMax). leases 100% of the total gross leasable
area of the property. This lease requires the tenant to pay base annual rent
on a monthly basis as follows:
Base Rent
Per Square
Approximate Foot Per
GLA % of Total Annum Lease Term
Lessee Leased GLA ($) Beginning To
----------- ----------- ----------- ------------ ------------ ---------
Circuit City Stores,
Inc. (CarMax) 94,518 100 20.36 Currently 01/31/21
For federal income tax purposes, our depreciable basis in CarMax - Tinley Park
will be approximately $11,500,000. When we calculate depreciation expense, for
tax purposes, we will use the straight-line method. We depreciate buildings
and improvements based upon estimated useful lives of 40 years. The tenant
will pay all real estate taxes directly.
-4-
On December 1, 1998, a total of 94,518 square feet was leased to one tenant at
CarMax - Tinley Park. The following tables set forth information with respect
to the amount of and expiration of the lease at this single-user retail center:
Approximate Current Rent per
GLA Lease Renewal Annual Rent Square Foot
Lessee Leased Ends Option ($) ($)
------ ---------- ----- ------ ----------- -----------
Circuit City Stores,
Inc. (CarMax) 94,518 01/21 2/10 yr. 1,924,020 20.36
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Annual Base Total Per Square Building GLA Rent
Approx. GLA Rent of Annual Foot Under Represented Represented
Year Number of of Expiring Expiring Base Expiring by Expiring By Expiring
Ending Leases Leases Leases Rent Leases Leases Leases
December 31, Expiring (Sq. Ft.) ($) ($) ($) (%) (%)
- ----------- --------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1998-
2007 - - - 1,924,020 - - -
</TABLE>
We received a letter appraisal prepared by an independent appraiser who is a
member in good standing of the American Institute of Real Estate Appraisers.
The appraisal reported a fair market value for the CarMax - Tinley Park
property, as of June 22, 1998, of $19,000,000. You should note that appraisals
are estimates of value and, therefore, you should not rely upon them as a
measure of true worth or realizable value.
CarMax - Schaumburg, Schaumburg, Illinois
On December 1, 1998, we purchased the entire fee simple interest in a single-
user retail center located at 250 East Golf Road in Schaumburg, Illinois known
as "CarMax - Schaumburg." We purchased CarMax - Schaumburg from Circuit City
Stores, Inc., an unaffiliated third party, for approximately $20,600,000 or
approximately $220.72 per square foot. We paid for the purchase price for this
property entirely in cash and cash equivalents. We believe the purchase price
was fair and reasonable based on, among other things, an appraisal from a third
party that we received and presented to our board of directors.
-5-
CarMax - Schaumburg, built in 1998, is a one-story, single-tenant retail
facility, containing a total of 93,333 leasable square feet. As of December 1,
1998, CarMax - Schaumburg was 100% leased. We considered a variety of factors
in deciding to purchase this property including location, demographics, tenant
mix, price per square foot, existing rental rates compared to market rates, and
occupancy. We believe that the center is located within a vibrant economic
area. We liked the fact that the lease for this property is with Circuit City
Stores, Inc., which is a public company.
We do not anticipate making any significant repairs and improvements to CarMax
- - Schaumburg over the next few years. However, if we were to make any repairs
or improvements, the center's tenant is obligated to pay a substantial portion
of any monies spent on repairs and improvements.
Circuit City Stores, Inc. (CarMax), leases 100% of the total gross leasable
area of the property. This lease requires the tenant to pay base annual rent
on a monthly basis as follows:
Base Rent
Per Square
Approximate Foot Per
GLA % of Total Annum Lease Term
Lessee Leased GLA ($) Beginning To
----------- ----------- ----------- ------------ ------------ ---------
Circuit City Stores,
Inc. (CarMax) 93,333 100 22.47 Currently 01/31/21
For federal income tax purposes, our depreciable basis in CarMax - Schaumburg
will be approximately $12,700,000. When we calculate depreciation expense, for
tax purposes, we will use the straight-line method. We depreciate buildings
and improvements based upon estimated useful lives of 40 years. The tenant
will pay all real estate taxes directly.
On December 1, 1998, a total of 93,333 square feet was leased to one tenant at
CarMax - Schaumburg. The following tables set forth information with respect
to the amount of and expiration of the lease at this single-user retail center:
Approximate Current Rent per
GLA Lease Renewal Annual Rent Square Foot
Lessee Leased Ends Option ($) ($)
------ ---------- ----- ------ ----------- -----------
Circuit City Stores,
Inc. (CarMax) 93,333 01/21 2/10 yr. 2,097,084 22.47
<TABLE>
<CAPTION>
-6-
Average Percent of Percent of
Base Rent Total Annual Base
Annual Base Total Per Square Building GLA Rent
Approx. GLA Rent of Annual Foot Under Represented Represented
Year Number of of Expiring Expiring Base Expiring by Expiring By Expiring
Ending Leases Leases Leases Rent Leases Leases Leases
December 31, Expiring (Sq. Ft.) ($) ($) ($) (%) (%)
- ----------- --------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1998-
2007 - - - 2,097,084 - - -
</TABLE>
We received a letter appraisal prepared by an independent appraiser who is a
member in good standing of the American Institute of Real Estate Appraisers.
The appraisal reported a fair market value for the CarMax - Schaumburg
property, as of July 28, 1998, of $21,000,000. You should note that appraisals
are estimates of value and, therefore, you should not rely upon them as a
measure of true worth or realizable value.
Staples, Freeport, Illinois
On December 2, 1998, we purchased the entire fee simple interest in a single-
user retail center located at 1722-1724 S. West Avenue in Freeport, Illinois
known as "Staples." We purchased Staples from Freeport Development Group,
L.L.C., an unaffiliated third party, for approximately $2,694,000 or
approximately $112.02 per square foot. We paid for the purchase price for this
property entirely in cash and cash equivalents. We believe the purchase price
was fair and reasonable based on, among other things, an appraisal from a third
party that we received and presented to our board of directors.
Staples, built in 1998, is a one-story, single-tenant retail facility,
containing a total of 24,049 leasable square feet. As of December 2, 1998,
Staples was 100% leased. We considered a variety of factors in deciding to
purchase this property including location, demographics, price per square foot,
existing rental rates compared to market rates, and occupancy. We believe that
the center is located within a vibrant economic area.
We do not anticipate making any significant repairs and improvements to Staples
over the next few years. However, if we were to make any repairs or
improvements, the tenant is obligated to pay a substantial portion of any
monies spent on repairs and improvements.
-7-
One tenant, Staples, an office supply store, leases 100% of the total gross
leasable area of the property. This lease requires the tenant to pay base
annual rent on a monthly basis as follows:
Base Rent
Per Square
Approximate Foot Per
GLA % of Total Annum Lease Term
Lessee Leased GLA ($) Beginning To
----------- ----------- ----------- ------------ ------------ ---------
Staples 24,049 100 11.50 Currently 09/30/13
Option 1 12.00 10/01/13 09/30/18
Option 2 12.50 10/01/18 09/30/23
Option 3 13.00 10/01/23 09/30/28
Option 4 13.50 10/01/28 09/30/33
For federal income tax purposes, our depreciable basis in Staples will be
approximately $2,000,000. When we calculate depreciation expense, for tax
purposes, we will use the straight-line method. We depreciate buildings and
improvements based upon estimated useful lives of 40 years.
On December 2, 1998, a total of 24,049 square feet was leased to one tenant at
Staples. The following tables set forth information with respect to the amount
of and expiration of the lease at this single-user retail center:
Approximate Current Rent per
GLA Lease Renewal Annual Rent Square Foot
Lessee Leased Ends Option ($) ($)
------ ---------- ----- ------ ----------- -----------
Staples 24,049 09/13 4/5 yr. 276,564 11.50
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Annual Base Total Per Square Building GLA Rent
Approx. GLA Rent of Annual Foot Under Represented Represented
Year Number of of Expiring Expiring Base Expiring by Expiring By Expiring
Ending Leases Leases Leases Rent (1) Leases Leases Leases
December 31, Expiring (Sq. Ft.) ($) ($) ($) (%) (%)
- ----------- --------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1998-
2007 - - - 276,564 - - -
</TABLE>
We received a letter appraisal prepared by an independent appraiser who is a
member in good standing of the American Institute of Real Estate Appraisers.
The appraisal reported a fair market value for the Staples property, as of
April 15, 1998, of $2,725,000. You should note that appraisals are estimates
of value and, therefore, you should not rely upon them as a measure of true
worth or realizable value.
-8-
Park Center, Tinley Park, Illinois
On December 4, 1998, we purchased the entire fee simple interest in a Community
Center located at 16024 S. Harlem Avenue in Tinley Park, Illinois known as
"Park Center." We purchased Park Center from Prudential Insurance Co. of
America, an unaffiliated third party, for approximately $15,500,000 or
approximately $80.24 per square foot. We paid for the purchase price for this
property entirely in cash and cash equivalents. We believe the purchase price
was fair and reasonable based on, among other things, an appraisal from a third
party that we received and presented to our board of directors.
Park Center, built in 1988, is a one-story, multi-tenant retail facility,
containing a total of 193,179 leasable square feet. As of December 4, 1998,
Park Center was 79% leased (100% leased if the master lease, which lasts for
three years, is considered). We considered a variety of factors in deciding to
purchase this property including location, demographics, tenant mix, price per
square foot, existing rental rates compared to market rates, and occupancy. We
believe that the center is located within a vibrant economic area.
We anticipate making approximately $395,000 of repairs and improvements to Park
Center over the next few years, primarily for parking lot overlay. We will pay
for these improvements from working capital reserves.
The table below sets forth the occupancy rate at Park Center expressed as a
percentage of total gross leasable area and the average annual base rent per
square foot:
Occupancy Rate Effective
as of Annual Rental
December 31, Rate Per Leasable
Year Ending of Each Year Square Ft
December 31, (%) ($)
------------ ------------ -------------
1997 74 6.94
1996 68 7.22
1995 90 9.75
1994 93 9.04
1993 96 5.16
-9-
One tenant, Cub Foods, a grocery store, leases more than 10% of the total gross
leasable area of the property. This lease requires the tenant to pay base
annual rent on a monthly basis as follows:
Base Rent
Per Square
Approximate Foot Per
GLA % of Total Annum Lease Term
Lessee Leased GLA ($) Beginning To
----------- ----------- ----------- ------------ ------------ ---------
Cub Foods 61,000 32 6.50 Current 08/31/08
Option 1 7.00 09/01/08 08/31/13
Option 2 7.50 09/01/13 08/31/18
Option 3 8.00 09/01/18 08/31/23
Option 4 8.50 09/01/23 08/31/28
Option 5 9.00 09/01/28 08/31/33
For federal income tax purposes, our depreciable basis in Park Center will be
approximately $11,600,000. When we calculate depreciation expense, for tax
purposes, we will use the straight-line method. We depreciate buildings and
improvements based upon estimated useful lives of 40 years.
Real estate taxes payable in 1998 for the tax year ended 1997 were $840,380.
The real estate taxes payable were calculated by multiplying the assessed value
by an equalizer of 2.1489% and a tax rate of 12.390%.
On December 4, 1998, a total of 153,050 square feet was leased to twenty-eight
tenants at Park Center. The following tables set forth information with
respect to the amount of and expiration of the leases at this Community Center:
Approximate Current Rent per
GLA Lease Renewal Annual Rent Square Foot
Lessee Leased Ends Option ($) ($)
------ ---------- ----- ------ ----------- -----------
Old Country Buffet 10,000 12/03 2/5 yr. 109,900 10.99
Radio Shack 3,125 01/99 - 331,250 10.00
Cub Foods 61,000 08/08 5/5 yr. 396,500 6.50
Firestone Tire 6,600 02/99 - 82,500 12.50
H & R Block 1,200 04/02 1/5 yr. 20,700 17.25
McDonald's 5,089 10/08 2/5 yr. 54,045 10.62
Blockbuster Video 6,400 09/03 2/5 yr. 86,400 13.50
Subway Sandwiches 1,600 03/00 1/5 yr. 27,200 17.00
Dana's Hallmark 4,375 12/01 - 48,125 11.00
Currency Exchange 1,600 11/03 - 31,200 19.50
RPM Cellular 1,600 10/01 - 22,400 14.00
One Hour Cleaners 1,300 04/99 - 23,374 17.98
-10-
Approximate Current Rent per
GLA Lease Renewal Annual Rent Square Foot
Lessee Leased Ends Option ($) ($)
------ ---------- ----- ------ ----------- -----------
Dark Side of
the Sun 1,755 04/01 1/1 yr. 17,550 10.00
The Collectors
Gallery 1,620 01/99 2/3 yr. 23,490 14.50
TCF Consumer
Financial 1,200 09/99 1/4 yr. 20,400 17.00
Amazing Fantasy
Comics 1,200 01/01 - 14,400 12.00
Amato Hair Design 1,200 12/01 - 18,000 15.00
Tinley Park Florist 1,200 05/99 - 18,600 15.50
Insure One 1,200 08/01 - 18,720 15.60
Optimal Dental 1,200 06/02 1/5 yr. 16,800 14.00
El Famous Burrito 1,650 02/02 1/10 yr. 39,287 23.81
Able Camera 1,200 04/01 1/5 yr. 19,800 16.50
Kenny's for Ribs 2,350 03/02 2/3 yr. 33,558 14.28
We Care Hair 1,225Month to Month - 28,775 23.49
Nail Salon 1,225 11/00 - 21,609 17.64
Chuck E. Cheese 9,040 01/99 - 149,160 16.50
Bud's Sport's
Place IV 10,514 08/07 - 97,149 9.24
Powerhouse Gym 11,382 10/08 - 79,674 7.00
Vacant 40,129
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Annual Base Total Per Square Building GLA Rent
Approx. GLA Rent of Annual Foot Under Represented Represented
Year Number of of Expiring Expiring Base Expiring by Expiring By Expiring
Ending Leases Leases Leases Rent (1) Leases Leases Leases
December 31, Expiring (Sq. Ft.) ($) ($) ($) (%) (%)
- ----------- --------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1998 - - - 1,549,467 - - -
1999 7 24,085 349,374 1,544,361 14.51 12.47 22.62
2000 2 2,825 51,014 1,218,775 18.06 1.46 4.19
2001 7 12,530 169,845 1,186,156 13.56 6.49 14.32
2002 4 6,400 113,589 1,029,390 17.75 3.31 11.03
2003 3 18,000 244,720 928,207 13.60 9.32 26.36
2004 - - - 689,746 - - -
2005 - - - 701,128 - - -
2006 - - - 712,510 - - -
2007 1 10,514 102,091 712,510 9.71 5.44 14.33
(1) We made no assumptions regarding the re-leasing of expired leases. It is the opinion of our
management that the space will be re-leased at market rates at the time of re-leasing.
</TABLE>
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We received a letter appraisal prepared by an independent appraiser who is a
member in good standing of the American Institute of Real Estate Appraisers.
The appraisal reported a fair market value for the Park Center property, as of
July 3, 1998, of $15,600,000. You should note that appraisals are estimates of
value and, therefore, you should not rely upon them as a measure of true worth
or realizable value.
Woodfield Commons, Schaumburg, Illinois
On December 2, 1998, we borrowed $13,500,000 and gave the lender a security
interest in this property. The loan requires us to pay interest on a monthly
basis at a rate equal to 6.5% per annum for five years. After the five year
period, the rate then floats at prime plus 1/2 for the remaining two years of
the loan. We paid loan fees at closing of $101,250.
Real Property Investments - Potential Property Acquisitions
Plymouth Collection Center, Plymouth, Minnesota
We anticipate purchasing the entire fee simple interest in the Plymouth
Collection Center located in Plymouth, Minnesota. The Plymouth Collection
Center was constructed in 1998. It is a single story, multi-tenant
Neighborhood Retail Center containing 40,815 rentable square feet. We
anticipate purchasing the Plymouth Collection Center for approximately
$6,626,000.
Circuit City, Traverse City, Michigan
We anticipate purchasing the entire fee simple interest in a Circuit City
located in Traverse City, Michigan. This property was constructed in 1998 and
is a single-user retail center containing 21,337 rentable square feet. We
anticipate purchasing this property for approximately $2,900,000.
Hawthorn Hills Fashion Square, Vernon Hills, Illinois
We anticipate purchasing the entire fee simple interest in a Hawthorn Hills
Fashion Square located in Vernon Hills, Illinois. This property was
constructed in 1986 and is a single story multi-tenant retail center containing
204,584 rentable square feet. We anticipate purchasing this property for
approximately $20,000,000.
Colonial Plaza Shopping Center, Bloomington, Illinois
We anticipate purchasing the entire fee simple interest in a Colonial Plaza
Shopping Center located in Bloomington, Illinois. This property was
constructed in 1962 and is a single story multi-tenant retail center containing
229,616 rentable square feet. We anticipate purchasing this property for
approximately $13,700,000.
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Hollywood Video, Hammond, Indiana
We anticipate purchasing the entire fee simple interest in a Hollywood Video
located in Hammond, Indiana. This property was constructed in 1998 and is a
single-user retail center containing 7,488 rentable square feet. We anticipate
purchasing this property for approximately $1,374,000.
Plan of Distribution
We commenced this Offering of 25,000,000 Shares on April 7, 1998. As of
December 14, 1998, we had sold 14,429,281 shares resulting in net proceeds of
$153,892,290.
Inland Securities Corporation, an Affiliate of our Advisor, serves as dealer
manager of this Offering and is entitled to receive selling commissions and
certain other fees, as discussed further in our Prospectus. As of December 14,
1998, the commissions and fees incurred to Inland Securities Corporation
totaled $15,078,598. We also pay an Affiliate of our Advisor fees to manage
and lease our properties. We incurred Property Management Fees of
approximately $1,904,860 for the nine months ended September 30, 1998 and
$1,120,000 for the year ended December 31, 1997. Our Advisor may also receive
an annual Advisor Asset Management Fee of not more than 1% of the Average
Invested Assets, paid quarterly. For the nine months ended September 30, 1998,
we had incurred Advisor Asset Management Fees of $1,252,815. For the year
ended December 31, 1997, we had incurred Advisor Asset Management Fees of
$843,000. We may pay Acquisition Expenses up to .5% of the money that we raise
in this Offering but in no event will we pay Acquisition Expenses on any
individual property that exceeds 6% of the purchase price of any individual
property. As of September 30, 1998, we had paid Acquisition Expenses of
approximately $2,800,000.
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