Chief operating officer Mark Zalatoris says the company is evaluating a number of potential acquisitions, ranging from single properties to portfolios. Optimism reigns despite a competitive market for the retail properties that become available.

"We haven't seen much change in capitalization rates in our markets," says Zalatoris, referring to a universe within 400 miles of the company's suburban Chicago headquarters. "Even though interest rates have risen slightly, sellers' expectations haven't changed much. But what we have seen is more properties come to market from sellers who've been on the sidelines."

Capitalization rates for grocery-anchored centers, a staple in Inland Real Estate Corp.'s 12.2-million-sf portfolio of neighborhood centers, are 8% or less, Zalatoris reports, the most competitive area of the retail sector. Inland Real Estate Corp.'s four largest tenants are grocery chains, led by Dominick's Finer Foods with 748,574 sf and $9 million a year in base rent, 6.75% of the REIT's total.

The largest of Inland Real Estate Corp.'s four acquisitions this year was the 339,898-sf Crystal Point Center in Crystal Lake, which cost $37.3 million. The other three centers were in suburban Minneapolis. "Each of these transactions were with developers we've worked with before," says Zalatoris, adding the REIT often has a chance to make deals on properties before they hit the market.

While hoping to add to its portfolio in Chicago and Minneapolis, the REIT has sold two smaller suburban Chicago properties this year for $5.5 million, with another eight properties totaling 415,000 sf being held for sale.