As filed with the Securities and Exchange Commission on November 2, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: October 18, 1999
(Date of earliest event reported)
Inland Real Estate Corporation
(Exact name of registrant as specified in the charter)
Maryland 0-28382 36-3953261
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
2901 Butterfield Road
Oak Brook, Illinois 60523
(Address of Principal Executive Offices)
(630) 218-8000
(Registrant's telephone number including area code)
Not Applicable
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
Pine Tree Plaza - Janesville, Janesville, Wisconsin
On October 18, 1999, we purchased the entire fee simple interest in a Community
Center located at 2900 Deerfield Road in Janesville, Wisconsin known as "Pine
Tree Plaza - Janesville." We purchased Pine Tree Plaza - Janesville from Pine
Tree Janesville, L.L.C., an unaffiliated third party, for approximately
$18,490,000 or approximately $98.66 per square foot. We paid the purchase
price for this property using cash and cash equivalents. We believe the
purchase price was fair and reasonable based on, among other things, an
appraisal from a third party that we received and presented to our board of
directors.
Pine Tree Plaza - Janesville, built in 1998, is a one-story, multi-tenant
retail facility. Pine Tree Plaza - Janesville contains 187,413 leasable square
feet. As of October 30, 1999, Pine Tree Plaza - Janesville was 96% leased. We
considered a variety of factors including location, demographics, tenant mix,
price per square foot, existing rental rates compared to market rates, and
occupancy. We believe that the center is located within a vibrant economic
area.
We do not anticipate making any significant repairs and improvements to Pine
Tree Plaza - Janesville over the next few years. However, if we were to make
any repairs or improvements, pursuant to the leases, the center's tenants would
be obligated to pay a substantial portion of any monies spent on repairs and
improvements.
The table below sets forth the occupancy rate at Pine Tree Plaza - Janesville
expressed as a percentage of total gross leasable area and the average annual
base rent per square foot:
Occupancy Rate Effective
as of Annual Rental
December 31, Rate Per Leasable
Year Ending of Each Year Square Ft
December 31, (%) ($)
------------ ------------ -------------
1998 61 10.54
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Four tenants, Gander Mountain, a sporting goods store, T.J. Maxx, a discount
clothing store, Staples, an office supply store, and Michaels, a craft store,
lease more than 10% of the total gross leasable area of the property. 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
----------- ----------- ----------- ------------ ------------ ---------
Gander Mountain 33,032 18 8.25 Currently 02/28/04
8.50 03/01/04 02/28/09
8.75 03/01/09 02/28/14
Option 1 9.75 03/01/14 02/28/19
Option 2 10.50 03/01/19 02/28/24
Option 3 11.00 03/01/24 02/28/29
Option 4 12.00 03/01/29 02/28/34
T.J. Maxx 30,000 16 7.25 Currently 10/31/03
7.75 11/01/03 10/31/08
Option 1 8.25 11/01/08 10/31/13
Option 2 8.75 11/01/13 10/31/18
Option 3 9.25 11/01/18 10/31/23
Staples 24,049 13 10.75 Currently 11/30/03
11.25 12/01/03 11/30/08
11.75 12/01/08 11/30/13
Option 1 12.25 12/01/13 11/30/18
Option 2 12.75 12/01/18 11/28/23
Option 3 13.25 12/01/23 11/28/28
Option 4 13.75 12/01/28 11/30/33
Michaels 20,232 11 9.50 Currently 02/28/04
10.50 03/01/04 02/28/09
Option 1 11.00 03/01/09 02/28/14
Option 2 11.75 03/01/14 02/28/19
Option 3 12.50 03/01/19 02/28/24
Option 4 13.25 03/01/24 02/28/29
For federal income tax purposes, our depreciable basis in Pine Tree Plaza -
Janesville will be approximately $15,500,000. 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.
Real estate taxes payable in 1999 for the tax year ended 1998 were $4,235.
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On October 30, 1999, a total of 182,313 square feet was leased to sixteen
tenants at Pine Tree Plaza - Janesville. The following tables set forth
information with respect to the amount of and expiration of the leases at this
Community center:
Approximate Current Rent per
GLA Lease Renewal Annual Rent Square Foot
Lessee Leased Ends Option ($) ($)
------ ---------- ----- ------ ----------- -----------
Gander Mountain 33,032 02/14 4/5 yr. 272,514 8.25
Shoe Carnival 12,000 01/09 2/5 yr. 123,000 10.25
T.J. Maxx 30,000 01/09 3/5 yr. 217,500 7.25
Staples 24,049 11/13 4/5 yr. 258,527 10.75
Michaels 20,232 02/09 4/5 yr. 192,204 9.50
Old Navy 15,000 01/09 4/5 yr. 135,000 9.00
Petco 15,000 01/09 3/5 yr. 157,500 10.50
Old Country Buffet 8,000 11/08 3/5 yr. 128,000 16.00
Kate's Hallmark 6,000 10/03 3/3 yr. 66,000 11.00
Radio Shack 2,000 10/03 3/5 yr. 26,000 13.00
Fancy Nails 1,200 12/02 1/3 yr. 18,000 15.00
Advance America 1,600 12/01 1/3 yr. 24,000 15.00
GNC 1,600 06/04 - 24,000 15.00
Subway 1,600 06/04 - 24,000 15.00
Today's Bedroom 6,500 07/04 - 87,750 13.50
The Exclusive Co. 2,500 07/02 - 35,000 14.00
Vacant 7,100
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Annual Base Total Per Square Building GLA Rent
Approx. GLA Rent of Annual Foot Under Represented Represented
Year Number of of Expiring Expiring Base Expiring by Expiring By Expiring
Ending Leases Leases Leases Rent (1) Leases Leases Leases
December 31, Expiring (Sq. Ft.) ($) ($) ($) (%) (%)
- ----------- --------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1999 - - - 1,788,995 - - -
2000 - - - 1,788,995 - - -
2001 1 1,600 24,000 1,788,995 15.00 .85 1.34
2002 3 5,300 79,400 1,767,395 14.98 2.83 4.49
2003 2 8,000 92,000 1,700,019 11.50 4.27 5.41
2004 2 8,100 111,750 1,665,509 13.80 4.32 6.71
2005 - - - 1,553,759 - - -
2006 - - - 1,553,759 - - -
2007 - - - 1,553,759 - - -
2008 1 8,000 136,000 1,565,784 17.00 4.27 8.69
(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 Pine Tree Plaza - Janesville
property, as of February 3, 1999 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.
Item 7. Financial Statements and Exhibits
To be subsequently filed.
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SIGNATURE
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
Inland Real Estate Corporation
(Registrant)
By:/s/ KELLY TUCEK
Kelly Tucek
Chief Financial and Accounting Officer
Date: November 2, 1999
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