Inland Real Estate Corporation
Sticker Supplement
This Supplement No. 18 to our Prospectus which is dated April 7, 1998 updates
information contained in the "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.
Real Property Investments
Hollywood Video, Hammond, Indiana
On December 18, 1998, we purchased a property known as "Hollywood Video" for
approximately $1,374,000. The property is located in Hammond, Indiana and
contains approximately 7,448 square feet of leasable space.
Plymouth Collection Center, Plymouth, Minnesota
On January 6, 1999, we purchased a property known as "Plymouth Collection
Center" for approximately $6,626,000. The property is located in Plymouth,
Minnesota and contains approximately 40,815 square feet of leasable space.
Plan of Distribution
We commenced this Offering of 25,000,000 shares on April 7, 1998. As of
December 29, 1998, we had sold 15,980,951 shares resulting in net proceeds of
$171,025,007. 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
29, 1998, the commissions and fees incurred to Inland Securities Corporation
totaled $16,700,093. 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. 18
DATED JANUARY 7, 1999
TO OUR PROSPECTUS DATED APRIL 7, 1998
OF INLAND REAL ESTATE CORPORATION
We are providing this Supplement No. 18 to you in order to supplement our
Prospectus. We previously supplemented our Prospectus by providing you with
Supplement No. 17 dated December 14, 1998, 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 "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.
Hollywood Video, Hammond, Indiana
On December 18, 1998, we purchased the entire fee simple interest in a single-
user retail center located at 1738 165th Street in Hammond, Indiana known as
"Hollywood Video". We purchased Hollywood Video from KTJ Limited Partnership
Twenty L.P., an unaffiliated third party, for approximately $1,374,000 or
approximately $183.49 per square foot. We paid for the purchase price for this
property entirely in cash and cash equivalents. We believe the purchase price
was fair and reasonable based on, among other things, an appraisal from a third
party that we received and presented to our board of directors.
Hollywood Video, built in 1998, is a one-story, single tenant retail facility.
Hollywood Video contains 7,488 leasable square feet. As of December 18, 1998,
Hollywood Video was 100% leased. We considered a variety of factors including
location, demographics, tenant mix, price per square foot, existing rental
rates compared to market rates, and occupancy. We believe that the center is
located within a vibrant economic area.
We do not anticipate making any significant repairs and improvements to this
property over the next few years. However, if we were to make any repairs or
improvements, the tenant is obligated to pay a substantial portion of any
monies spent on repairs and improvements.
One tenant, Hollywood Video, leases more than 100% of the total gross leasable
area of the property. This lease requires the tenant to pay base annual rent
on a monthly basis as follows:
Base Rent
Per Square
Approximate Foot Per
GLA % of Total Annum Lease Term
Lessee Leased GLA ($) Beginning To
----------- ----------- ----------- ------------ ------------ ---------
Hollywood Video 7,488 100 19.00 Currently 03/31/03
21.38 04/01/03 03/31/13
Option 1 24.05 04/01/13 03/31/18
option 2 27.05 04/01/18 03/31/23
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For federal income tax purposes, our depreciable basis in Hollywood Video will
be approximately $1,000,000. When we calculate depreciation expense, for tax
purposes, we will use the straight-line method. We depreciate buildings and
improvements based upon estimated useful lives of 40 years.
On December 18, 1998, a total of 7,488 square feet was leased to one tenant at
Hollywood Video. The following tables set forth information with respect to
the amount of and expiration of the lease at this single-user retail center:
Approximate Current Rent per
GLA Lease Renewal Annual Rent Square Foot
Lessee Leased Ends Option ($) ($)
------ ---------- ----- ------ ----------- -----------
Hollywood Video 7,488 04/13 2/5 yr. 142,272 19.00
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Annual Base Total Per Square Building GLA Rent
Approx. GLA Rent of Annual Foot Under Represented Represented
Year Number of of Expiring Expiring Base Expiring by Expiring By Expiring
Ending Leases Leases Leases Rent (1) Leases Leases Leases
December 31, Expiring (Sq. Ft.) ($) ($) ($) (%) (%)
- ----------- --------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1999-
2003 - - - 142,272 - - -
2004-
2008 - - - 160,093 - - -
</TABLE>
We received an 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 Hollywood Video property, as of
January 1, 1998, of $1,400,000. 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.
Plymouth Collection Center, Plymouth, Minnesota
On January 6, 1999, we purchased the entire fee simple interest in a
Neighborhood Retail Center located at 4135 Berkshire Lane in Plymouth,
Minnesota known as "Plymouth Collection Center." We purchased Plymouth
Collection Center from Baker Plymouth Collection, LLC, an unaffiliated third
party, for approximately $6,626,000 or approximately $162.34 per square foot.
We paid the purchase price for this property using using cash and cash
equivalents. We believe the purchase price was fair and reasonable based on,
among other things, an appraisal from a third party that we received and
presented to our board of directors.
-2-
Plymouth Collection Center, built in 1998, is a one-story, multi-tenant retail
facility. Plymouth Collection Center contains 40,815 leasable square feet. As
of January 6, 1999, Plymouth Collection Center was 100% leased. We considered
a variety of factors including location, demographics, tenant mix, price per
square foot, existing rental rates compared to market rates, and occupancy. We
believe that the center is located within a vibrant economic area.
We do not anticipate making any significant repairs and improvements to
Plymouth Collection Center over the next few years. However, if we were to
make any repairs or improvements, the center's tenants would be obligated to
pay a substantial portion of any monies spent on repairs and improvements.
The table below sets forth the occupancy rate at Plymouth Collection Center
expressed as a percentage of total gross leasable area and the average annual
base rent per square foot:
Occupancy Rate Effective
as of Annual Rental
December 31, Rate Per Leasable
Year Ending of Each Year Square Ft
December 31, (%) ($)
------------ ------------ -------------
1998 95 16.02
Three tenants, Golf Galaxy, a golf supply store, Paper Warehouse, a discount
party and card store, and Vintage Liquors, a liquor store, lease 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
----------- ----------- ----------- ------------ ------------ ---------
Golf Galaxy 17,748 43 15.50 Currently 07/31/03
17.20 08/01/03 07/31/08
19.15 08/01/08 07/31/13
Option 1 19.15 08/01/13 07/31/18
Option 2 19.15 08/01/18 07/31/23
Paper Warehouse 9,216 23 14.50 Currently 08/31/03
15.50 09/01/03 02/28/08
Option 1 17.00 03/01/08 02/28/13
Option 2 18.00 03/01/13 02/28/18
Vintage Liquors 4,581 11 15.00 Currently 08/31/01
15.75 09/01/01 08/31/03
16.50 09/01/03 08/31/05
17.25 09/01/05 08/31/07
18.00 09/01/07 08/31/08
-3-
For federal income tax purposes, our depreciable basis in Plymouth Collection
Center will be approximately $5,100,000. When we calculate depreciation
expense, for tax purposes, we will use the straight-line method. We depreciate
buildings and improvements based upon estimated useful lives of 40 years.
On January 6, 1999, a total of 40,815 square feet was leased to eight tenants
at Plymouth Collection Center. The following tables set forth information with
respect to the amount of and expiration of the leases at this Neighborhood
Retail Center:
Approximate Current Rent per
GLA Lease Renewal Annual Rent Square Foot
Lessee Leased Ends Option ($) ($)
------ ---------- ----- ------ ----------- -----------
Golf Galaxy 17,748 07/13 2/5 yr. 275,094 15.50
Paper Warehouse 9,216 08/08 2/5 yr. 133,632 14.50
Vintage Market 4,581 08/08 - 68,715 15.00
Pilgrim Drycleaners 1,400 08/08 1/5 yr. 25,200 18.00
Caribou Coffee 1,540 05/08 1/5 yr. 32,340 21.00
Leeann Chin 2,500 08/08 2/5 yr. 52,500 21.00
Thomas John's
Tobacconists 1,710 09/03 1/5 yr. 32,490 19.00
Air Touch
Communication 2,120 12/04 1/6 yr. 42,400 20.00
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Annual Base Total Per Square Building GLA Rent
Approx. GLA Rent of Annual Foot Under Represented Represented
Year Number of of Expiring Expiring Base Expiring by Expiring By Expiring
Ending Leases Leases Leases Rent (1) Leases Leases Leases
December 31, Expiring (Sq. Ft.) ($) ($) ($) (%) (%)
- ----------- --------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1999 - - - 662,371 - - -
2000 - - - 664,081 - - -
2001 - - - 670,131 - - -
2002 - - - 682,396 - - -
2003 2 3,830 85,970 691,406 22.45 9.38 12.43
2004 - - - 648,259 - - -
2005 - - - 659,979 - - -
2006 - - - 663,415 - - -
2007 - - - 669,295 - - -
2008 5 19,237 374,088 679,353 19.45 47.13 55.07
(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>
-4-
We received an 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 Plymouth Collection Center
property, as of October 1, 1998, of $7,250,000. 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.
Plan of Distribution
We commenced this Offering of 25,000,000 Shares on April 7, 1998. As of
December 29, 1998, we had sold 15,980,951 shares resulting in net proceeds of
$171,025,007.
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 29,
1998, the commissions and fees incurred to Inland Securities Corporation
totaled $16,700,093. 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.
-5-
