$154-million acquisition

"Discussions have commenced about increasing the total investment commitment," said chief operating officer Mark E. Zalatoris during his company's recent earnings conference call. Inland Real Estate officials expect to hit the $400-million mark by the middle of this year, meeting a timetable set when the joint venture was formed in October 2004. However, both Inland Real Estate and NYSTRS share a commitment to disciplined investing, he added, even though the pension fund has lowered its return hurdles in the face of a competitive investment market.

"They have the same philosophy as we do--taking our time and buying it right," said Zalatoris, noting his company's 2005 acquisitions as well as those so far this year have been at a capitalization rate slightly above 7%. "We believe this is significantly above the market rate, particularly for the assets purchased."

The number was dragged down by the Algonquin Commons purchase, which was at a 6.7% capitalization rate, Zalatoris reported. "We would not turn down a property like Algonquin Commons," he said, adding NYSTRS was extremely interested in the center at Randall and County Line roads. The largest property in the joint venture, the 598,054-sf Orland Park Place in the southwest suburbs, was acquired last spring at a 7.6% capitalization rate, and $76.9 million.