Inland, NYSTRS Wed $100M for Texas Fund

The spotlight is pointed at Dallas, Austin, San Antonio, Houston and El Paso. Under the agreement, NYSTRS will kick in $80 million with the Oak Brook, IL-based Inland ponying up the balance to seed the IN Retail Fund Texas LLC.

Inland and NYSTRS formed a JV in 2004 to acquire eight neighborhood and community retail centers in Chicago and Minneapolis, but expanded the buying plan to include surrounding states. The end result was a shopping spree that netted more than one million sf valued at $174 million and bearing a net value of $100 million, according to Inland's SEC filing. At the 2005 close, the JV pledged to add $100 million so it could acquire another $400 million of retail assets in Illinois, Wisconsin and Minnesota. In Q1 2006, they bought the 565,000-sf Algonquin Commons in Algonquin, IL, $154 million; 226,170-sf Shoppes at Grayhawk in Omaha, $27.1 million; 179,100-sf Honey Creek Commons in Terre Haute, IN, $23.8 million; Big 67.835-sf Lake Town Square in Big Lake, MN, $10 million; and 63,780-sf Pick N Save Shopping Center in Waupaca, WI, $8.1 million.

In 2004, Inland Western Retail REIT Inc. was Texas' most active buyer, including in its holdings Southpark Meadows in Austin. But, that REIT's spending started to slow down by midyear 2005--only to be replaced in the third and fourth quarters by MB REIT, a joint venture with Coconut Creek, FL-based Minto Builders Inc., which started shopping the Greater Houston Area for single-tenant and ground-leased properties to build a $442-million portfolio.