Inland Real Estate Corporation
Sticker Supplement
This Supplement No. 7 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
On June 23, 1998, the Company acquired the entire fee simple interest in a
Single-user retail property located at 331 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 22, 1998, the
Company had accepted subscriptions for 5,141,661 shares ($51,185,231 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 22, 1998, these commissions and fees totaled $5,373,035. 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. 7
DATED JUNE 25, 1998
TO THE PROSPECTUS DATED APRIL 7, 1998
OF INLAND REAL ESTATE CORPORATION
This Supplement No. 7 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, Supplement No. 5 dated May 28, 1998 and
Supplement No. 6 dated June 16, 1998 and must be read in conjunction therewith.
This Supplement No. 7 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
On June 23, 1998, the Company acquired the entire fee simple interest in a
Single-user retail property located at 331 N. Irving Avenue in Woodstock,
Illinois known as "the Walgreens property" from Woodstock Walgreen Venture, an
unaffiliated third party, for approximately $1,162,000. The purchase price was
funded using cash and cash equivalents. The purchase price was approximately
$73.28 per square foot, which the Company concluded was fair and reasonable
based on, among other things, an appraisal received by the Company and
presented to the Company's board of directors.
The Walgreens property was built in 1973 and is a one-story, single-user retail
property aggregating 15,856 leasable square feet. As of June 23, 1998, the
Walgreens property was 100% leased. In evaluating the Walgreens property as a
potential acquisition, the Company considered a variety of factors including
location, demographics, price per square foot, existing rental rates compared
to market rates, and occupancy. The Company believes that the property is
located within a vibrant economic area. This property has been recently
renovated to include a drive-up 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 the Walgreens property over the next few years. A substantial portion of
any monies spent on repairs and improvements would be paid by the tenant,
pursuant to the terms of the existing lease.
The table below sets forth certain information with respect to the occupancy
rate at the Walgreens property 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 100% $6.99
1996 100 6.99
1995 100 6.99
1994 100 6.99
1993 100 6.99
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One tenant, Walgreens, a drug store, leases 100% of the total gross leasable
area of the property. Walgreens pays 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
- ----------- ----------- ----------- ------------ ------------ ---------
Walgreens 15,856 100% $ 6.99 Current 03/31/30
For federal income tax purposes, the Company's depreciable basis in the
Walgreens property will be approximately $760,000. 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 are paid directly by the tenant and are not available from
the seller.
On June 23, 1998, a total of 15,856 square feet was leased to one tenant at the
Walgreens property. The following tables set forth certain information with
respect to the amount of and expiration of the lease at this single-user retail
property:
Square Feet Lease Renewal Current Rent per
Lessee Leased Ends Option Annual Rent Square Foot
------ ---------- ----- ------ ----------- -----------
Walgreens 15,856 03/30 - $110,800 $6.99
<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-
2007 - - - $110,800 - - -
(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, at the time of
releasing.
</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 Walgreens property, as of May 26,
1998, of $1,200,000. Appraisals are estimates of value and should not be
relied on as a measure of true worth or realizable value.
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Plan of Distribution
The Company commenced the Offering on April 7, 1998, and as of June 22, 1998
had accepted subscriptions for 5,141,661 shares ($51,185,231 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 22, 1998,
these commissions and fees totaled $5,373,035. 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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