Inland Real Estate Corporation
Sticker Supplement
This Supplement No. 11 to the Company's Prospectus dated April 7, 1998 updates
certain information in the sections of the Prospectus entitled "Management",
"Real Property Investments", "Plan of Distribution" and "Dividend Reinvestment
and Share Repurchase Programs." Unless otherwise defined, capitalized terms
used herein shall have the same meaning as in the Prospectus.
Management - Committees of the Board of Directors
On March 19, 1998, Mr. Joel Herter was appointed to the audit committee, which
now consists of the three Independent Directors.
Real Property Investments
On September 17, 1998, the Company acquired the entire fee simple interest in a
Neighborhood Retail Center located at 15006-80 LaGrange Road, Orland Park,
Illinois known as "Orland Greens" from an unaffiliated third party for
approximately $5,100,000.
Real Property Investments - Potential Property Acquisitions
The Company anticipates purchasing the entire fee simple interest in a
Community Center located at 1025-1253 East Golf Road, Schaumburg, Illinois
known as "Woodfield Commons" from an unaffiliated third party for approximately
$27,000,000.
The Company anticipates purchasing the entire fee simple interest in a
Neighborhood Retail Center located at Irving Park Road at Cicero Avenue,
Chicago, Illinois known as "The Marketplace at Six Corners" from an
unaffiliated third party for approximately $19,000,000.
The Company anticipates purchasing the entire fee simple interest in a
Neighborhood Retail Center located at 8515-8575 Edinburgh Drive, Brooklyn Park,
Minnesota known as "Edinburgh Festival Center" from an unaffiliated third party
for approximately $9,125,000.
The Company anticipates purchasing the entire fee simple interest in a single-
user retail facility located at 133 South State Street, Chicago, Illinois known
as "Bakers Shoe Store" from an unaffiliated third party for approximately
$963,000.
Real Property Investments - New Construction
The Company anticipates acquiring, upon its completion, the entire fee simple
interest in a Neighborhood Retail Center which is to be built at LaGrange Road
and St. Francis Road in Frankfort, Illinois, to be known as "Hickory Creek
Market Place" from an unaffiliated developer for approximately $8,652,000.
The Company anticipates acquiring, upon its completion, the entire fee simple
interest in a Neighborhood Retail Center which is to be built at Essington Road
and Caton Farm Road in Joliet, Illinois, to be known as "Westriver Crossing"
from an unaffiliated developer for approximately $5,540,000.
The Company anticipates acquiring, upon its completion, the entire fee simple
interest in a Neighborhood Retail Center which is to be built at 159th Street
and Central Avenue in Oak Forest, Illinois, to be known as "Oak Forest Commons
Phase III" from an unaffiliated developer for approximately $1,092,000. The
property is contiguous to the Oak Forest Commons center currently owned by the
Company.
Plan of Distribution
The Company commenced the Offering on April 7, 1998. As of September 14, 1998,
the Company had accepted subscriptions for 9,927,834 shares ($104,217,545 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 September 14, 1998, these commissions and fees totaled $10,374,586. The
Advisor is entitled to receive an Advisor Asset Management fee, as described
more fully in the Prospectus. 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. The Company may pay Acquisition
Expenses in an amount estimated to be up to .5% of the Gross Offering Proceeds
and in no event will the Company pay Acquisition Expenses in excess of 6% of
the purchase price of any property.
Dividend Reinvestment and Share Repurchase Programs - Share Repurchase Program
The Board of Directors has approved an increase in the amount of outstanding
Shares which may be repurchased in 1998 from $500,000 worth of outstanding
Shares to $2,000,000 worth of outstanding Shares.
SUPPLEMENT NO. 11
DATED SEPTEMBER 21, 1998
TO THE PROSPECTUS DATED APRIL 7, 1998
OF INLAND REAL ESTATE CORPORATION
This Supplement No. 11 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. 10 dated August 27,
1998, Supplement No. 9 dated August 12, 1998 and Supplement No. 8 dated July 7,
1998, (which Supplement No. 8 superseded Supplement Nos. 1 through 7) and must
be read in conjunction therewith. This Supplement No. 11 updates certain
information in the sections of the Prospectus entitled "Management", "Real
Property Investments", "Plan of Distribution" and "Dividend Reinvestment and
Share Repurchase Programs." Unless otherwise defined, capitalized terms used
herein shall have the same meaning as in the Prospectus.
Management - Committees of the Board of Directors
On March 19, 1998, Mr. Joel Herter was appointed to the audit committee, which
now consists of the three Independent Directors.
Real Property Investments
Orland Greens, Orland Park, IL
On September 17, 1998, the Company acquired the entire fee simple interest in a
Neighborhood Retail Center located at 15006-80 LaGrange Road in Orland Park,
Illinois known as "Orland Greens" from the RREEF Funds, an unaffiliated third
party, for approximately $5,100,000. The purchase price was funded using cash
and cash equivalents. The purchase price was approximately $113.25 per square
foot, which the Company concluded was fair and reasonable based on, among other
things an appraisal received by the Company and presented to the Company's
board of directors.
Orland Greens, built in 1984, is a one-story, multi-tenant retail facility
containing 45,031 leasable square feet. As of September 17, 1998, Orland
Greens was 100% leased. In evaluating Orland Greens as a potential
acquisition, the Company considered a variety of factors including location,
demographics, tenant mix, price per square foot, existing rental rates compared
to market rates, and occupancy. The Company believes that the center is
located within a vibrant economic area. The Company did not consider any other
factors materially relevant to the decision to acquire the property.
The Company does not anticipate making any significant repairs and improvements
to Orland Greens over the next few years. A substantial portion of any monies
spent on repairs and improvements would be paid by the tenants, pursuant to the
terms of the existing leases.
-1-
The table below sets forth certain information with respect to the occupancy
rate at Orland Greens expressed as a percentage of total gross leasable area
and the average effective annual base rent per square foot:
Occupancy Rate Effective
as of Annual Rental
December 31, Rate Per Leasable
Year Ending of Each Year Square Ft
December 31, (%) ($)
------------ ------------ -------------
1997 96 9.66
1996 96 9.63
1995 99 9.43
1994 99 9.40
1993 89 7.17
Tenants leasing more than 10% of the total gross leasable area of the property
are Walgreens, a pharmacy and MacFrugal's, a discount 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
----------- ----------- ----------- ------------ ------------ ---------
Walgreens 12,048 27% 7.30 Currently 09/30/21
MacFrugal's 15,305 34% 6.75 Currently 07/31/00
Option 1 7.25 08/01/00 01/31/06
Option 2 7.75 02/01/06 01/31/11
Option 3 8.25 02/01/11 01/31/16
Option 4 8.75 02/01/16 01/31/21
Option 5 9.25 02/01/21 01/31/26
For federal income tax purposes, the Company's depreciable basis in Orland
Greens will be approximately $3,800,000. 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.
Real estate taxes payable in 1997 for the tax year ended 1996 (the most recent
tax year for which information is generally available) were $ 252,719. The
real estate taxes payable were calculated by multiplying the assessed value by
an equalizer of 2.1517 and a tax rate of 8.87%.
-2-
On September 17, 1998, a total of 45,031 square feet was leased to fourteen
tenants at Orland Greens. The following tables set forth certain 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 ($) ($)
------ ---------- ----- ------ ----------- -----------
Walgreens 12,048 09/21 - 87,950 7.30
Bedmart 3,600 10/99 - 41,400 11.50
MacFrugal's 15,305 01/06 4/5 yr. 103,309 6.75
HIQ Computers 1,575 02/00 - 22,050 14.00
Bo Rics 1,525 03/99 - 27,831 18.25
Parcel Plus 1,240 06/02 - 19,840 16.00
Little Caesars 1,240 03/99 1/5 yr. 16,740 13.50
C.P. Studios 1,240 07/99 - 19,840 16.00
Lee Nails 930 08/01 - 16,740 18.00
Standard Fed Bank 2,790 12/01 - 47,430 17.00
Hair Salon 1,674 05/03 - 21,762 13.00
Currency Exchange 600 12/99 - 21,000 35.00
Disc Replay 454 09/99 - 10,668 23.50
Able Camera 810 06/01 - 14,175 17.50
<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 - - - 463,097 - - -
1999 6 8,659 143,890 487,304 16.62 19.23 29.53
2000 2 4,365 78,210 348,314 17.92 9.69 22.45
2001 2 1,740 33,060 278,580 19.00 3.86 11.87
2002 1 1,240 22,320 246,760 18.00 2.75 9.05
2003 1 1,674 25,529 224,440 15.25 3.72 11.37
2004 - - - 198,911 - - -
2005 - - - 198,911 - - -
2006 1 15,305 110,961 198,911 7.25 33.99 55.78
2007 - - - 87,950 - - -
(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>
-3-
The Company received a letter 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 Orland Greens property,
as of July 27, 1998, of at least $5,350,000. Appraisals are estimates of value
and should not be relied on as a measure of true worth or realizable value.
Potential Property Acquisitions
The Company is considering the following potential property acquisitions which
are subject to further negotiation and execution of definitive agreements and
receipt by the Company of acceptable appraisals and environmental reports.
There can be no assurance that the Company will complete the transactions
described herein.
Woodfield Commons, Schaumburg, Illinois
The Company anticipates purchasing the entire fee simple interest in a
Community Center located at 1025-1253 East Golf Road, Schaumburg, Illinois
known as "Woodfield Commons" from an unaffiliated third party for approximately
$27,000,000. Woodfield Commons is comprised of three centers, Woodfield
Commons West, East and a retail strip adjacent to Toys R Us. Woodfield Commons
West, is a single story "L-shaped" shopping center and another single story
building occupied by Toys R Us , and was built in 1973. Woodfield Commons
East, a second single story "L-shaped" shopping center, was built in 1975. The
retail strip adjacent to Toys R Us was constructed in 1997. The major tenants
at the center are Toys R Us, Comp USA and Tower Records.
The Marketplace at Six Corners, Chicago, Illinois
The Company anticipates purchasing the entire fee simple interest in a
Neighborhood Retail Center located at Irving Park Road at Cicero Avenue,
Chicago, Illinois known as "The Marketplace at Six Corners" from an
unaffiliated third party for approximately $19,000,000. The Marketplace at Six
Corners consists of two one-story, multi-tenant, retail centers and was built
in 1997. The major tenants at the center are Jewel/Osco and Marshall's.
Edinburgh Festival Center, Brooklyn Park, Minnesota
The Company anticipates purchasing the entire fee simple interest in a
Neighborhood Retail Center located at 8515-8575 Edinburgh Drive, Brooklyn Park,
Minnesota known as "Edinburgh Festival Center" from an unaffiliated third party
for approximately $9,125,000. Edinburgh Festival Center consists of two one-
story, multi-tenant, retail centers and was built in 1997. The major tenant at
the center is Knowlan's Super Markets.
Bakers Shoe Store, Chicago, Illinois
The Company anticipates purchasing the entire fee simple interest in a single-
user retail facility located at 133 South State Street, Chicago, Illinois known
as "Bakers Shoe Store" from an unaffiliated third party for approximately
$963,000. Bakers Shoe Store consists of a four-story commercial building and
was built in 1891. The sole tenant is Bakers Shoe Store.
-4-
New Construction Projects
Hickory Creek Market Place, Frankfort, Illinois
The Company anticipates acquiring, upon its completion, the entire fee simple
interest in a Neighborhood Retail Center which is to be built at LaGrange Road
and St. Francis Road in Frankfort, Illinois, to be known as "Hickory Creek
Market Place" from an unaffiliated developer for approximately $8,652,000. On
September 15, 1998, the Company made an initial deposit of $500,000.
Westriver Crossing, Joliet, Illinois
The Company anticipates acquiring, upon its completion, the entire fee simple
interest in a Neighborhood Retail Center which is to be built at Essington Road
and Caton Farm Road in Joliet, Illinois, to be known as "Westriver Crossing"
from an unaffiliated developer for approximately $5,540,000. On September 15,
1998, the Company made an initial deposit of $500,000.
Oak Forest Commons Phase III, Oak Forest, Illinois
The Company anticipates acquiring, upon its completion, the entire fee simple
interest in a Neighborhood Retail Center which is to be built at 159th Street
and Central Avenue in Oak Forest, Illinois, to be known as "Oak Forest Commons
Phase III" from an unaffiliated developer for approximately $1,092,000. The
property is contiguous to the Oak Forest Commons center currently owned by the
Company. On September 15, 1998, the Company made an initial deposit of
$100,000.
Plan of Distribution
The Company commenced the Offering on April 7, 1998, and as of September 14,
1998 had accepted subscriptions for 9,927,834 shares ($104,217,545 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 September 14, 1998,
these commissions and fees totaled $10,374,586. 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
$1,149,000 for the six months ended June 30, 1998 and $1,120,000 for the year
ended December 31, 1997. 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 six months ended June 30, 1998, the Company had incurred
Advisor Asset Management Fees of $980,376. For the year ended December 31,
1997, the Company had incurred Advisor Asset Management Fees of $843,000. The
Company may pay Acquisition Expenses in an amount estimated to be up to .5% of
the Gross Offering Proceeds and in no event will the Company pay Acquisition
Expenses in excess of 6% of the purchase price of any property.
Dividend Reinvestment and Share Repurchase Programs - Share Repurchase Program
The Board of Directors has approved an increase in the amount of outstanding
Shares which may be repurchased in 1998 from $500,000 worth of outstanding
Shares to $2,000,000 worth of outstanding Shares.
-5-
