Inland Real Estate Corporation
Sticker Supplement
This Supplement No. 6 to the Company's Prospectus dated April 7, 1998 updates
certain information in the sections of the Prospectus entitled "Real Property
Investments" and "Plan of Distribution." Unless otherwise defined, capitalized
terms used herein shall have the same meaning as in the Prospectus.
Real Property Investments-Potential Property Acquisitions
On June 5, 1998, the Company acquired the entire fee simple interest in a
Neighborhood Retail Center located at 225 Irving Park Road in Streamwood,
Illinois known as "Woodland Heights Shopping Center" from an unaffiliated third
party for a purchase price of approximately $9,600,000.
The Company anticipates purchasing the entire fee simple interest in a
Neighborhood Retail Center located at 837 South Westmore in Lombard, Illinois
known as "Eastgate Shopping Center" from an unaffiliated third party for a
purchase price of approximately $7,600,000. The Company anticipates purchasing
the entire fee simple interest in a Single-user Retail facility located at 331
N. Irving Avenue in Woodstock, Illinois known as the "Walgreens Property" from
an unaffiliated third party for a purchase price of approximately $1,162,000.
Plan of Distribution
The Company commenced the Offering on April 7, 1998. As of June 15, 1998, the
Company had accepted subscriptions for 4,675,485 shares ($46,544,449 net of
Selling Commissions, the Marketing Contribution and the Due Diligence Expense
Allowance Fee). Inland Securities Corporation, an Affiliate of the Advisor,
serves as dealer-manager of the Offering and is entitled to receive selling
commissions and certain other fees, as referenced in the Prospectus. As of
June 15, 1998, these commissions and fees totaled $4,885,881. An Affiliate of
the Advisor is also entitled to receive Property Management Fees for management
and leasing services, as described more fully in the Prospectus.
SUPPLEMENT NO. 6
DATED JUNE 16, 1998
TO THE PROSPECTUS DATED APRIL 7, 1998
OF INLAND REAL ESTATE CORPORATION
This Supplement No. 6 is provided for the purpose of supplementing the
Prospectus dated April 7, 1998 of Inland Real Estate Corporation (the
"Company") as previously supplemented by Supplement No. 1 dated April 9, 1998,
Supplement No. 2 dated April 21, 1998, Supplement No. 3 dated April 27, 1998,
Supplement No. 4 dated May 5, 1998 and Supplement No. 5 dated May 28, 1998 and
must be read in conjunction therewith. This Supplement No. 6 updates certain
information in the sections of the Prospectus entitled "Real Property
Investments" and "Plan of Distribution." Unless otherwise defined, capitalized
terms used herein shall have the same meaning as in the Prospectus.
Real Property Investments
Woodland Heights Shopping Center, Streamwood, Illinois
On June 5, 1998, the Company acquired the entire fee simple interest in a
Neighborhood Retail Center located at 225 Irving Park Road in Streamwood,
Illinois known as "Woodland Heights Shopping Center" from Woodland Heights
Associates, an unaffiliated third party, for approximately $9,600,000. The
purchase price was funded using cash and cash equivalents. The purchase price
was approximately $79.44 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.
Woodland Heights Shopping Center, built in 1956, expanded in 1985 and renovated
in 1997, consists of a one-story, multi-tenant retail facility aggregating
120,850 rentable square feet. As of June 15, 1998, Woodland Heights Shopping
Center was 86% leased (100% leased if the master lease, which lasts for one
year, is considered). The Company believes the space currently being master
leased will be leased to new tenants prior to the termination of the master
lease. In evaluating Woodland Heights Shopping Center 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. As part of an overall renovation project in
1997, the Jewel/Osco store was expanded to 60,626 square feet, a new facade and
new signage was created for the other tenants, new roofing was completed
throughout the center, the parking was resurfaced and new parking lot lighting
was installed. The Company believes that the center is located within a
vibrant economic area. Although approximately 50% of the rentable square feet
at Woodland Heights Shopping Center is leased to one tenant, the Company's
management believes that retenanting of any space which is vacated in the
future should be accomplished relatively quickly and at rental rates comparable
to those currently paid by the tenants at the facility. The Company did not
consider any other factors materially relevant to the decision to acquire the
property.
The Company does not anticipate making any significant repairs and improvements
to Woodland Heights Shopping Center over the next few years. Nevertheless,
pursuant to the leases, a substantial portion of any cost of repairs and
improvements would be paid by the tenants.
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The table below sets forth certain information with respect to the occupancy
rate at Woodland Heights Shopping Center expressed as a percentage of total
gross leasable area and the average effective annual base rent per square foot:
Occupancy Rate
as of Effective
Year Ending December 31, Annual Rental
December 31, of Each Year Per Square Ft
------------ ------------ -------------
1997 86% $ 6.09
1996 87 6.06
1995 86 6.07
1994 95 7.65
1993 100 7.47
Tenants leasing more than 10% of the total square footage include Jewel Food
Store, a grocery store and the U.S. Postal Service. These leases require the
payment of base annual rent, payable monthly as follows:
Base Rent
Per Square
Square Feet % of Total Foot Per Lease Term
Lessee Leased Square Feet Annum Beginning To
- ----------- ----------- ----------- ------------ ------------ ---------
Jewel Food Store 60,626 50% $ 5.00 Currently 11/30/12
Option 1 5.00 12/01/12 11/30/47
U.S. Postal
Service 17,750 15% $ 8.00 Currently 11/30 99
9.00 12/01/99 11/30/04
For federal income tax purposes, the Company's depreciable basis in Woodland
Heights Shopping Center will be approximately $7,000,000. 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.
Real estate taxes payable in 1997 for the tax year ended 1996 (the most recent
tax year for which information is generally available) were $451,843.
On June 15, 1998, a total of 104,000 square feet was leased to twelve tenants
at Woodland Heights Shopping Center. The following tables set forth certain
information with respect to the amount of and expiration of the leases at this
Neighborhood Retail Center:
Square Feet Lease Renewal Current Rent per
Lessee Leased Ends Option Annual Rent Square Foot
------ ---------- ----- ------ ----------- -----------
U.S. Postal
Service 17,750 11/04 - $142,000 $ 8.00
Home to Home 1,600 10/98 1/3 yr. 21,618 13.23
1/2 yr.
1/3 yr.
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Square Feet Lease Renewal Current Rent per
Lessee Leased Ends Option Annual Rent Square Foot
------ ---------- ----- ------ ----------- -----------
Hollywood Video 8,000 09/07 2/5 yr. 114,000 14.25
Lifestyles 2,000 09/00 1/2 yr. 24,000 12.00
Jewel Food Store 60,626 11/12 1/35 yr. 303,130 5.00
New Horizon's
Hair Design 2,000 12/03 1/5 yr. 28,000 14.00
Streamwood Currency
Exchange 1,050 11/00 - 17,724 16.88
Danny's Pizza 1,010 09/06 - 11,110 11.00
Bo Mei Restaurant 2,100 03/03 - 26,250 12.50
Woodland Cleaners 1,050 12/98 1/5 yr. 15,750 15.00
Subway 1,600 01/01 2/5 yr. 20,000 12.50
Video Galaxy 4,800 11/98 - 67,200 14.00
Vacant 16,850
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Approx. GLA Annual Base Total Per Square Building GLA Rent
Year Number of of Expiring Rent of Annual Foot Under Represented Represented
Ending Leases Leases Expiring Base Expiring by Expiring By Expiring
December 31, Expiring (Sq. Ft.) Leases Rent (1) Leases Leases Leases
- ----------- --------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1998 3 7,450 $104,118 $789,018 $ 13.98 6.19% 13.20%
1999 - - - 687,224 - - -
2000 2 3,050 42,260 706,310 13.86 2.53 5.98
2001 1 1,600 21,600 665,860 13.50 1.33 3.24
2002 - - - 645,310 - - -
2003 2 4,100 55,300 660,000 13.49 3.40 8.38
2004 1 17,750 159,750 604,700 9.00 14.74 26.42
2005 - - - 445,960 - - -
2006 1 1,010 15,150 445,960 15.00 .84 3.40
2007 1 8,000 127,680 430,810 15.96 6.64 29.64
(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 Woodland Heights Shopping Center
property, as of May 28, 1998, of $9,650,000. Appraisals are estimates of value
and should not be relied on as a measure of true worth or realizable value.
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Real Property Investments-Potential Property Acquisitions
The Company anticipates purchasing the entire fee simple interest in a
Neighborhood Retail Center located at 837 South Westmore in Lombard, Illinois
known as "Eastgate Shopping Center" from an unaffiliated third party for a
purchase price of approximately $7,600,000. The Company anticipates purchasing
the entire fee simple interest in a Single-user Retail facility located at 331
N. Irving Avenue in Woodstock, Illinois known as the "Walgreens Property" from
an unaffiliated third party for a purchase price of approximately $1,162,000.
Plan of Distribution
The Company commenced the Offering on April 7, 1998, and as of June 15, 1998
had accepted subscriptions for 4,675,485 shares ($46,544,449 net of Selling
Commissions, the Marketing Contribution and the Due Diligence Expense Allowance
Fees).
Inland Securities Corporation, an Affiliate of the Advisor, serves as dealer
manager of the Offering and is entitled to receive selling commissions and
certain other fees, as referenced in the Prospectus. As of June 15, 1998,
these commissions and fees totaled $4,885,881. An Affiliate of the Advisor is
also entitled to receive Property Management Fees for management and leasing
services. The Company incurred Property Management Fees of approximately
$1,120,000 for the year ended December 31, 1997 and $229,307 for the year ended
December 31, 1996. The Advisor may also receive an annual Advisor Asset
Management Fee of not more than 1% of the Average Invested Assets, paid
quarterly. For the year ended December 31, 1997, the Company had incurred
Advisor Asset Management Fees of $843,000.
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