OAK BROOK, IL—In this update to last week's story, Inland Real Estate Corporation says that it has closed its acquisition of the 50 percent ownership interest of New York State Teachers' Retirement System in the parties' IN Retail Fund, L.L.C. joint venture entity.
The original story appears below:
OAK BROOK, IL—The Inland Real Estate Corporation, a suburban-Chicago-based real estate investment trust, has just agreed to buy out the New York State Teachers' Retirement System's 50% ownership interest in their joint venture IN Retail Fund, L.L.C. for $121 million in cash. The partners had owned 13 shopping centers across the Midwest with about 2.3-million-square-feet. Inland will entirely own the centers, which have an estimated fair value of about $395.6 million and a total outstanding debt of about $152.2 million. The joint venture was formed in 2004 and Inland officials say it has added more than $300 million of gross value to their portfolio.
Eleven of the centers are in the Chicago metropolitan area and the other two in Racine, Wisconsin and the suburban Twin Cities. The portfolio has an occupancy rate of 97.5% and includes grocery stores or other established retailers such as Jewel Food Stores, Old Navy, Nordstrom Rack, Whole Foods Market, REI and Barnes & Noble.
“This venture has been a capital-efficient way for [Inland] to acquire premier retail assets while enhancing our yield on investment,” says Mark Zalatoris, Inland's president and chief executive officer. “However, the opportunity to acquire NYSTRS's interest at this time advances our strategic goals to increase the size and quality of our consolidated portfolio, simplify our ownership structure and strengthen our balance sheet.”
Inland recently told investors it has long-range plans to upgrade their portfolio through several strategies, including selling non-core properties, acquiring market-dominant Class A assets and replacing underperforming tenants. In the first quarter of 2013, the company completed 97 leases for 607,506-square-feet, an increase of 62.1 percent over first quarter of last year, and the largest amount leased in a single quarter since the final one of 2010.
The 11 properties in the Chicago area includes the Orland Park Place, a 592,495-square-foot-center in Orland Park; Randall Square, a 216,485-square-foot-center in Geneva and the 207,452-square-foot Woodfield Commons-East/West in Schaumburg.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
