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OAK BROOK, IL-Inland Real Estate Corp. plans to profit handsomely from its first-ever multiproperty joint venture, both from management and leasing fees, as well as from income as 50% owner of the portfolio, according to the REIT’s president and CEO Robert D. Parks. In this week’s third-quarter 2004 earnings conference call, Parks noted that the JV with the New York State Teachers’ Retirement System, which was announced in early October, is expected to boost Inland’s per year FFO by 3 to 4 cents per share.

“The expected investment horizon is one to two years, to acquire the $400 million in new properties,” said Parks. “We have about $125 million in properties to bring to the venture right now, so we’re well on our way.”

Though the multiproperty JV is something new for Inland, Parks added that in some respects it’s a continuation of the REIT’s acquisition strategies. “The acquisition perimeters that we’ve agreed to run exactly in line with those properties we would buy for our own account,” he said. “When we’re investing concurrently with our partner, we’re benefiting from the same kinds of properties that we would buy for ourselves.”

According to the company’s latest report, its net income for the third quarter of 2004 was $13.9 million ($0.21 per share), an increase of 27.5% compared to the third quarter of 2003. FFO in the same period was $20.2 million, an increase of 1.5% compared to Q3 2003, though the per-share FFO of $0.30 in the most recent quarter was the same as it was in Q3 2003. Parks said that the estimated FFO for all of 2004 now stands at $1.23 to $1.25, with the upper end of the estimate recently lowered to reflect the costs of starting the JV with Teachers’ and the expense of complying with accounting reform requirements of the Sarbanes-Oxley Act of 2002.

Also in the third quarter, Inland acquired two retail centers, the 339,900-sf Crystal Point Center in northwest suburban Chicago, and Deer Trace II, a 24,400-sf property in Kohler, WI. “We acquired these properties from developers with which we have long-lasting relationships,” noted Mark E. Zalatoris, Inland COO. “Crystal Point is loaded with national tenants, such as Best Buy, Office Depot and Sports Authority.”

He added that these properties, along with the properties that are being bought as part of the joint venture with Teachers’, will be more than enough to meet Inland’s acquisition goals for this year.

At the end of the third quarter, the company’s portfolio was 96.3% leased, compared to 95.3% a year ago, and during the third quarter 2004, 83 new and renewal leases were executed for 480,000 sf, according to figures released by the REIT. Of that total, Zalatoris noted, 39 leases were new, representing about 224,000 sf with an average rent of $11.16 per sf.

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