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Related Companies Inland Real Estate Corp. (IRC)

Related Documents Earnings Release (ER) Inland Real Estate Corp. 9/30/2009, filed on 11/4/2009

Related Articles 11/4/2009 Inland Real Estate reports lower Q3 FFO

Inland Real Estate Corp. detailed its third-quarter leasing, financing and joint venture activity in its earnings release issued Nov. 4.

During the quarter, the company executed a total of 90 leases aggregating 552,289 square feet of gross leasable area, representing a 30% increase in square feet leased during the prior quarter and a 100% increase over the first quarter of 2009.

The leases include 56 renewals comprising 393,863 square feet of GLA. The 33 new leases signed during the quarter comprise 146,704 square feet of GLA. Excluding one lease for a former Linens 'N Things space and nonconsolidated leasing activity, total portfolio new lease spreads decreased 2.6%. One noncomparable lease was signed during the quarter for 11,722 square feet of GLA, the company said in the release.

As of Sept. 30, Inland Real Estate had $35.0 million outstanding on its unsecured line of credit facility. During the quarter, it utilized funds drawn on its line of credit facility to purchase an additional $5.0 million in principal of its convertible senior notes at a discount to the contract amount resulting in a net gain on retirement of debt of $263,000. Subsequent to the debt purchase, $125.0 million in principal amount of the convertible notes remains outstanding.

During the three months ended Sept. 30, the company retired in advance of the 2010 maturity dates two consolidated mortgage notes totaling $12.4 million at a 5% discount to the original loan amounts. Subsequent to the close of the quarter, the company retired its sole remaining 2009 consolidated secured debt maturity of $7.4 million on its maturity date in October and retired in advance of its 2012 maturity date one consolidated mortgage note of $11.0 million at a 10% discount to the original loan amount.

Inland Real Estate said it continues to proactively explore with lenders financing options for consolidated mortgage debt that is scheduled to mature in the first half of 2010.

In August, the company's joint venture with New York State Teachers Retirement System replaced an $11.8 million mortgage loan on a neighborhood center, due to mature January 2010, with a $12.0 million amortizing loan. The new loan has a five-year term at a fixed rate of 6.5%. There is no additional mortgage debt maturing in the joint venture with New York State Teachers Retirement System until March 2011.

During the quarter, Inland Real Estate's joint venture with TMK Development sold for $4.7 million a free-standing 14,280-square-foot retail store at the Savannah Crossing development in Aurora, Ill., under a 25-year triple net lease to Walgreen Co.

Inland Real Estate's development joint ventures with established partners include seven properties in various stages of development. Completion time lines for certain development projects were extended due to challenging market conditions, according to the company.

Accordingly, in August the joint ventures completed negotiations with lenders to restructure and extend, for up to two years, construction loans that matured in 2009 on three unconsolidated development joint venture projects including North Aurora Town Centre in North Aurora, Ill.; Orchard Crossing in Fort Wayne, Ind.; and Lantern Commons in Westfield, Ind.

In conjunction with the refinancings, Inland Real Estate invested about $19.0 million in preferred equity to pay down principal on the loans and negotiated dollar-for-dollar reductions of loan guarantees on certain projects.

As of Sept. 30, the company had an equity investment of $56.7 million in development joint venture projects and was obligated under loan guarantees for up to $15.5 million.

In addition, Inland Real Estate purchased the mortgage on Southshore Shopping Center in Boise, Idaho, from the lender, at a discount and became a lender to the joint venture. Subsequent to the end of the quarter, the company extended the maturity date to the joint venture to October 2010.