As filed with the Securities and Exchange Commission on May 12, 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: April 13, 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
Eagle Ridge Center, Lindenhurst, Illinois
On April 13, 1999, we purchased the entire fee simple interest in a single-user
retail center located at Grand Avenue and Munn Road in Lindenhurst, Illinois
known as "Eagle Ridge Center." We purchased Eagle Ridge Center from Eagle
Foods Centers, Inc., an unaffiliated third party, for approximately $6,004,000
or approximately $114.00 per square foot. We paid the purchase price for this
property using cash and cash equivalents. We believe the purchase price was
fair and reasonable based on, among other things, an appraisal from a third
party that we received and presented to our board of directors.
Eagle Ridge Center, built in 1998, is a one-story, single-user retail
facility. Eagle Ridge Center contains 56,142 leasable square feet. As of May
1, 1999, Eagle Ridge Center was 100% leased. We considered a variety of
factors including location, demographics, price per square foot, existing
rental rates compared to market rates, and occupancy. We believe that the
center is located within a vibrant economic area.
We do not anticipate making any significant repairs and improvements to Eagle
Ridge Center over the next few years. However, if we were to make any repairs
or improvements, pursuant to the lease, the center's tenant would be obligated
to pay a substantial portion of any monies spent on repairs and improvements.
One tenant, Eagle Foods, a grocery store, leases 100% of the total gross
leasable area of the property. This lease requires the tenant to pay base
annual rent on a monthly basis as follows:
Base Rent
Per Square
Approximate Foot Per
GLA % of Total Annum Lease Term
Lessee Leased GLA ($) Beginning To
----------- ----------- ----------- ------------ ------------ ---------
Eagle Foods 56,142 100 10.85 Currently 04/30/03
11.73 05/01/03 04/30/21
Option 1 12.90 05/01/21 04/31/26
Option 2 13.54 05/01/26 04/31/31
Option 3 14.22 05/01/31 04/31/36
Option 4 14.93 05/01/36 04/31/41
For federal income tax purposes, our depreciable basis in Eagle Ridge Center
will be approximately $4,800,000. When we calculate depreciation expense, for
tax purposes, we will use the straight-line method. We depreciate buildings
and improvements based upon estimated useful lives of 40 years.
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On May 1, 1999, a total of 56,142 square feet was leased to one tenant at Eagle
Ridge Center. The following tables set forth information with respect to the
amount of and expiration of the lease at this single user retail center:
Approximate Current Rent per
GLA Lease Renewal Annual Rent Square Foot
Lessee Leased Ends Option ($) ($)
------ ---------- ----- ------ ----------- -----------
Eagle Foods 56,142 04/21 4/5 yr. 609,140 10.85
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Annual Base Total Per Square Building GLA Rent
Approx. GLA Rent of Annual Foot Under Represented Represented
Year Number of of Expiring Expiring Base Expiring by Expiring By Expiring
Ending Leases Leases Leases Rent (1) Leases Leases Leases
December 31, Expiring (Sq. Ft.) ($) ($) ($) (%) (%)
- ----------- --------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1999-
2002 - - - 609,140 - - -
2003 - - - 642,068 - - -
2004-
2008 - - - 658,546 - - -
(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>
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 Eagle Ridge Center property,
as of August 21, 1998, of $6,100,000. 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.
-3-
Rose Plaza - Phase II , Elmwood Park, Illinois
On May 3, 1999, we purchased the entire fee simple interest in a Neighborhood
Retail Center located at 7330 W. North Avenue in Elmwood Park, Illinois known
as "Rose Plaza - Phase II." We purchased Rose Plaza - Phase II from Elmwood
Park L.L.C., an unaffiliated third party, for approximately $1,402,000 or
approximately $236.03 per square foot. We purchased Rose Plaza - Phase I in
December 1998 for approximately $2,753,000. We paid the purchase price for
this property using cash and cash equivalents. We believe the purchase price
was fair and reasonable based on, among other things, an appraisal from a third
party that we received and presented to our board of directors.
Rose Plaza - Phase II, built in 1998, is a one-story, multi-tenant retail
facility. Rose Plaza - Phase II contains 5,940 leasable square feet. As of
May 3, 1999, Rose Plaza - Phase II was 100% leased. We considered a variety of
factors including location, demographics, tenant mix, price per square foot,
existing rental rates compared to market rates, and occupancy. We believe that
the center is located within a vibrant economic area.
We do not anticipate making any significant repairs and improvements to Rose
Plaza - Phase II over the next few years. However, if we were to make any
repairs or improvements, pursuant to the leases, the center's tenants would be
obligated to pay a substantial portion of any monies spent on repairs and
improvements.
Two tenants, St. Louis Bread Co., a restaurant, and Sprint Com Inc., a cellular
telephone store, lease more than 10% of the total gross leasable area of the
property. These leases require the tenants to pay base annual rent on a
monthly basis as follows:
Base Rent
Per Square
Approximate Foot Per
GLA % of Total Annum Lease Term
Lessee Leased GLA ($) Beginning To
----------- ----------- ----------- ------------ ------------ ---------
St. Louis
Bread Co. 3,465 58 22.50 Currently 12/13/03
24.50 12/14/03 12/13/08
Option 1 27.00 12/14/08 12/13/13
Option 2 29.00 12/14/13 12/13/18
Sprint Com Inc. 2,475 42 23.00 Currently 12/31/03
Option 1 26.45 01/01/04 12/31/08
For federal income tax purposes, our depreciable basis in Rose Plaza - Phase II
will be approximately $1,050,000. When we calculate depreciation expense, for
tax purposes, we will use the straight-line method. We depreciate buildings
and improvements based upon estimated useful lives of 40 years.
-4-
On May 3, 1999, a total of 5,940 square feet was leased to two tenants at Rose
Plaza - Phase II. The following tables set forth information with respect to
the amount of and expiration of the leases at this Neighborhood Retail Center:
Approximate Current Rent per
GLA Lease Renewal Annual Rent Square Foot
Lessee Leased Ends Option ($) ($)
------ ---------- ----- ------ ----------- -----------
St. Louis
Bread Co. 3,465 12/08 2/5 yr. 77,963 22.50
Sprint Com Inc. 2,475 12/03 1/5 yr. 56,925 23.00
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Annual Base Total Per Square Building GLA Rent
Approx. GLA Rent of Annual Foot Under Represented Represented
Year Number of of Expiring Expiring Base Expiring by Expiring By Expiring
Ending Leases Leases Leases Rent (1) Leases Leases Leases
December 31, Expiring (Sq. Ft.) ($) ($) ($) (%) (%)
- ----------- --------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1999-
2002 - - - 134,888 - - -
2003 1 2,475 56,925 134,888 23.00 42.00 42.20
2004-
2007 - - - 84,892 - - -
2008 1 3,465 84,892 84,892 24.50 58.00 100.00
(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>
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 Rose Plaza - Phase I & II
property, as of November 2, 1998 of $4,200,000. 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.
-5-
Dominick's-Hammond, Hammond, Indiana
On May 7, 1999, we purchased the entire fee simple interest in a single-user
retail center located at 1724 - 165th Street in Hammond, Indiana known as
"Dominick's-Hammond." We purchased Dominick's-Hammond from Safeway, Inc., an
unaffiliated third party, for approximately $8,879,000 or approximately $124.51
per square foot. We paid the purchase price for this property using cash and
cash equivalents. We believe the purchase price was fair and reasonable based
on, among other things, an appraisal from a third party that we received and
presented to our board of directors.
Dominick's-Hammond, built in 1998, is a one-story, single-user retail
facility. Dominick's-Hammond contains 71,313 leasable square feet. As of May
7, 1999, Dominick's-Hammond was 100% leased. We considered a variety of
factors including location, demographics, price per square foot, existing
rental rates compared to market rates, and occupancy. We believe that the
center is located within a vibrant economic area.
We do not anticipate making any significant repairs and improvements to
Dominick's-Hammond over the next few years. However, if we were to make any
repairs or improvements, pursuant to the lease, the center's tenant would be
obligated to pay a substantial portion of any monies spent on repairs and
improvements.
One tenant, Dominick's Finer Foods, a grocery store, leases 100% of the total
gross leasable area of the property. This lease requires the tenant to pay
base annual rent on a monthly basis as follows:
Base Rent
Per Square
Approximate Foot Per
GLA % of Total Annum Lease Term
Lessee Leased GLA ($) Beginning To
----------- ----------- ----------- ------------ ------------ ---------
Dominick's
Finer Foods 71,313 100 11.80 Currently 12/31/18
Option 1 11.80 01/01/19 12/31/23
Option 2 11.80 01/01/24 12/31/28
Option 3 11.80 01/01/29 12/31/33
Option 4 11.80 01/01/34 12/31/38
Option 5 11.80 01/01/39 12/31/43
For federal income tax purposes, our depreciable basis in Dominick's-Hammond
will be approximately $6,700,000. When we calculate depreciation expense, for
tax purposes, we will use the straight-line method. We depreciate buildings
and improvements based upon estimated useful lives of 40 years.
-6-
On May 7, 1999, a total of 71,313 square feet was leased to one tenant at
Dominick's-Hammond. The following tables set forth information with respect to
the amount of and expiration of the lease at this single user retail center:
Approximate Current Rent per
GLA Lease Renewal Annual Rent Square Foot
Lessee Leased Ends Option ($) ($)
------ ---------- ----- ------ ----------- -----------
Dominick's
Finer Foods 71,313 12/18 5/5 yr. 841,493 11.80
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Annual Base Total Per Square Building GLA Rent
Approx. GLA Rent of Annual Foot Under Represented Represented
Year Number of of Expiring Expiring Base Expiring by Expiring By Expiring
Ending Leases Leases Leases Rent (1) Leases Leases Leases
December 31, Expiring (Sq. Ft.) ($) ($) ($) (%) (%)
- ----------- --------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1999-
2008 - - - 841,493 - - -
(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>
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 Dominick's-Hammond property,
as of March 16, 1999, of $8,950,000. 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.
-7-
Item 5. Other Events
On April 18, 1999, our Board of Directors approved an increase in Distributions
effective June 1, 1999, payable beginning July 17, 1999, from the current level
of $.88 per Share per annum to $.89 per Share per annum.
We filed a press release announcing this increase in distributions on May 4,
1999.
We anticipate purchasing the entire fee simple interest in a property known as
"Thatcher Woods Shopping Center" located in River Grove, Illinois. This
property will be redeveloped by an unaffiliated third party and will be
completed in 2000. We will fund the redevelopment with an initial construction
draw of $5,000,000. We will receive interest at the rate of 9% per annum on
all outstanding construction draws. The total purchase price, after
completion, will be approximately $19,000,000.
Item 7. Financial Statements and Exhibits
(a) Financial Statements
Financial statements are not required to be filed with this Form 8K
as the properties that we have acquired are not significant in the
aggregate.
(c) Exhibits
99 Press release dated May 4, 1999.
-8-
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: May 12, 1999
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