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OAK BROOK, IL-Nearing the three-quarter turn in its $400-million investment goal, Inland Real Estate Corp. has begun talking with New York State Teachers Retirement System about increasing their joint venture program. The joint venture with the pension fund eclipsed its previous investments with its $154-million acquisition of the 565,000-sf Algonquin Commons.

"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."