Filed pursuant to 424(b)(3)
Registration #333-103799
SUPPLEMENT NO. 9
DATED FEBRUARY 12, 2004
TO THE PROSPECTUS DATED SEPTEMBER 15, 2003
OF INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
We are providing this Supplement No. 9 to you in order to supplement our prospectus. This supplement updates information in the "Investment Objectives and Policies," "Real Property Investments" and "Plan of Distribution" sections of our prospectus.This Supplement No. 9 supplements, modifies or supersedes certain information contained in our prospectus, Supplement No. 8 dated January 21, 2004, Supplement No. 7 dated January 12, 2004, Supplement No. 6 dated December 31, 2003, Supplement No. 5 dated December 15, 2003, (Supplement No. 5 superseded certain information contained in our prospectus and prior supplements dated between October 23, 2003 and December 4, 2003), and must be read in conjunction with our prospectus.
Investment Objectives and Policies
Borrowing
The discussion under this section, which starts on page 91 of our prospectus, is modified and supplemented by the following information regarding our borrowing policies.
Our board of directors adopted a policy to delegate to management the ability to obtain unsecured general financing facilities up to $100,000,000 without prior approval by the board of directors. These facilities would then be matched with specific properties, which would secure the amounts due under the specific financings.
On February 9, 2004, we entered into a rate lock agreement with Bear Stearns. We paid a rate lock deposit of $1,200,000 to lock the interest rate at 4.372% for a period of 90 days on $60,000,000.
Real Property Investments
The discussion under this section, which starts on page 98 of our prospectus, is modified and supplemented by the following information regarding properties we have acquired or intend to acquire.
Mac Arthur Crossing, Las Colinas (Irving), Texas
On February 5, 2004, we purchased an existing shopping center known as Mac Arthur Crossing containing 110,975 gross leasable square feet. The center is located at Mac Arthur Boulevard and LBJ Freeway in Las Colinas (Irving), Texas.
We purchased this property from an unaffiliated third party. Our total acquisition cost was approximately $23,102,000. This amount may increase by additional costs which have not yet been finally determined. We expect any additional costs to be insignificant. Our acquisition cost was approximately $208 per square foot of leasable space.
We purchased this property with our own funds. However, we expect to place financing on the property at a later date.
We do not intend to make significant repairs and improvements to this property over the next few years. However, if we were to make any repairs or improvements, the tenants would be obligated to pay a substantial portion of any monies spent pursuant to the provisions of their respective leases.
One tenant, Stein Mart, leases more than 10% of the total gross leasable area of the property. The lease with this tenant requires the tenant to pay base annual rent on a monthly basis as follows:
Base Rent | |||||
Approximate | Per Square | ||||
GLA Leased | % of Total | Foot Per | Lease | Term | |
Lessee | (Sq. Ft.) | GLA | Annum ($) | Beginning | To |
Stein Mart | 34,000 | 31 | 6.75 | 07/96 | 08/11 |
For federal income tax purposes, the depreciable basis in this property will be approximately $17,326,000. When we calculate depreciation expense for tax purposes, we will use the straight-line method. We depreciate buildings and improvements based upon estimated useful lives of 40 and 20 years, respectively.
Mac Arthur Crossing was built in 1995 and 1996. As of February 1, 2004, this property was 100% occupied, with a total 110,975 square feet leased to 30 tenants. The following table sets forth certain information with respect to those leases:
Approximate GLA Leased | Current Annual | Base Rent Per Square Foot | ||
Lessee | (Sq. Ft.) | Lease Ends | Rent ($) | Per Annum ($) |
Valley Ranch Vacations | 1,381 | 12/03 | 24,858 | 18.00 |
Dental Lab | 3,920 | 12/04 | 66,640 | 17.00 |
Mailboxes | 1,260 | 02/06 | 27,720 | 22.00 |
Regis Haircutters | 1,500 | 02/06 | 37,500 | 25.00 |
Custom Clearners | 2,100 | 02/06 | 52,500 | 25.00 |
Fanci That | 1,996 | 02/06 | 35,928 | 18.00 |
Radio Shack | 2,000 | 02/06 | 31,000 | 15.50 |
Merle Norman | 1,457 | 03/06 | 23,880 | 16.39 |
Rice Boxx | 2,101 | 03/06 | 47,273 | 22.50 |
Starbucks Coffee | 1,604 | 04/06 | 32,080 | 20.00 |
Cingular Wireless | 4,000 | 04/06 | 100,000 | 25.00 |
Wolf Camera | 1,780 | 04/06 | 35,600 | 20.00 |
Sally Beauty | 1,500 | 06/06 | 29,100 | 19.40 |
I Fratellis Restaurant | 5,000 | 09/06 | 102,500 | 20.50 |
Subway | 1,400 | 09/06 | 21,000 | 15.00 |
Planet Tan | 4,400 | 10/06 | 70,400 | 16.00 |
Blockbuster Video | 6,500 | 01/07 | 127,335 | 19.59 |
Flowers For You | 2,100 | 02/07 | 42,000 | 20.00 |
State Farm | 2,000 | 03/07 | 34,000 | 17.00 |
Isshin Sushi | 4,000 | 03/07 | 80,000 | 20.00 |
Eyecare | 2,000 | 06/07 | 40,000 | 20.00 |
GNC | 1,400 | 06/07 | 25,200 | 18.00 |
Marshall Message Therapy | 640 | 03/08 | 11,520 | 18.00 |
TD Waterhouse | 2,500 | 04/08 | 55,000 | 22.00 |
Quizno's | 2,100 | 03/09 | 52,500 | 25.00 |
Stein Mart | 34,000 | 08/11 | 229,500 | 6.75 |
Mi Cocina | 4,964 | 01/12 | 124,100 | 25.00 |
Pei Wei | 3,160 | 02/12 | 96,380 | 30.50 |
AWBMS Antenna | 1,280 | 07/16 | 13,798 | 10.78 |
Firestone Tire | 6,932 | 08/16 | 144,996 | 20.92 |
In general, each tenant will pay its proportionate share of real estate taxes, insurance and common area maintenance costs, although the leases with some tenants may provide that the tenant's liability for such expenses is limited in some way, usually so that their liability for such expenses does not exceed a specified amount.
Potential Property Acquisitions
We are currently considering acquiring the properties listed below. Our decision to acquire these properties will generally depend upon:
- no material adverse change occurring relating to these properties, the tenants or in the local economic conditions;
- our receipt of sufficient net proceeds from this offering and financing proceeds to make these acquisitions; and
- our receipt of satisfactory due diligence information including appraisals, environmental reports and lease information.
Other properties may be identified in the future that we may acquire before or instead of these properties. We cannot guarantee that we will complete these acquisitions.
In evaluating these properties as potential acquisitions and determining the appropriate amount of consideration to be paid for the properties, we have considered a variety of factors including, overall valuation of net rental income, location, demographics, quality of tenant, length of lease, price per square foot, occupancy and the fact that overall rental rate at the shopping center is comparable to market rates. We believe that these properties are well located, have acceptable roadway access, are well maintained and have been professionally managed. These properties will be subject to competition from similar shopping centers within their market area, and their economic performance could be affected by changes in local economic conditions. We did not consider any other factors materially relevant to our decision to acquire these properties.
Heritage Towne Crossing, Euless, Texas
We anticipate purchasing an existing shopping center known as Heritage Towne Crossing containing 73,328 gross leasable square feet. The center is located at Glade Road and State Highway 121 in Euless, Texas.
We anticipate purchasing this property from an unaffiliated third party. Our total acquisition cost is expected to be approximately $16,288,000. This amount may increase by additional costs which have not yet been finally determined. We expect any additional costs to be insignificant. Our acquisition cost is expected to be approximately $222 per square foot of leasable space. A portion of the purchase price will be held in an escrow, to be paid to the seller when the remaining spaces are leased.
We intend to purchase this property with our own funds. However, we expect to place financing on the property at a later date.
We do not intend to make significant repairs and improvements to this property over the next few years. However, if we were to make any repairs or improvements, the tenants would be obligated to pay a substantial portion of any monies spent pursuant to the provisions of their respective leases.
No individual tenant leases more than 10% of the total gross leasable area of the property.
For federal income tax purposes, the depreciable basis in this property will be approximately $12,200,000. When we calculate depreciation expense for tax purposes, we will use the straight-line method. We depreciate buildings and improvements based upon estimated useful lives of 40 and 20 years, respectively.
Heritage Towne Crossing was built in 2002. As of February 10, 2004, this property was 88% occupied, with a total 64,808 square feet leased to 27 tenants. The following table sets forth certain information with respect to those leases:
Approximate GLA Leased | Current Annual | Base Rent Per Square Foot | ||
Lessee | (Sq. Ft.) | Lease Ends | Rent ($) | Per Annum ($) |
APB Mortgage | 2,530 | 09/06 | 45,540 | 18.00 |
Gamestop | 1,371 | 03/07 | 29,400 | 21.44 |
Mattress Firm | 4,000 | 04/07 | 96,000 | 24.00 |
All Battery Store | 2,000 | 05/07 | 44,000 | 22.00 |
Sun Tailors | 1,200 | 05/07 | 20,400 | 17.00 |
Dapper Dan Cleaners | 2,000 | 06/07 | 38,000 | 19.00 |
Lava Asian Grill | 3,000 | 07/07 | 51,000 | 17.00 |
Salon G | 2,800 | 08/07 | 50,400 | 18.00 |
Ultra Tan | 1,600 | 08/07 | 24,000 | 15.00 |
Golf USA of Euless | 3,437 | 12/07 | 69,459 | 20.21 |
Sara Donuts | 1,400 | 04/08 | 23,800 | 17.00 |
Coppell Spine/Sports Rehab | 2,000 | 04/08 | 38,000 | 19.00 |
Plato's Closet | 3,000 | 04/08 | 54,000 | 18.00 |
Village Barber | 1,100 | 04/08 | 23,100 | 21.00 |
Town & Country Tobacco | 1,800 | 04/08 | 32,400 | 18.00 |
Parker Uniforms | 3,000 | 05/08 | 42,000 | 14.00 |
The Cash Store | 1,300 | 07/08 | 24,700 | 19.00 |
Art & Frame Warehouse | 2,546 | 07/08 | 39,463 | 15.50 |
Wings to Go | 2,000 | 09/08 | 32,000 | 16.00 |
Ultima Fitness | 2,266 | 10/08 | 37,389 | 16.50 |
Approximate GLA Leased | Current Annual | Base Rent Per Square Foot | ||
Lessee | (Sq. Ft.) | Lease Ends | Rent ($) | Per Annum ($) |
Delicious Delights | 1,500 | 11/08 | 27,000 | 18.00 |
Nails Spa | 3,410 | 01/09 | 61,380 | 18.00 |
DoubleDave's Pizza Works | 3,308 | 03/09 | 54,582 | 16.50 |
Panda Express | 2,250 | 04/12 | 47,250 | 21.00 |
Washington Mutual | 4,000 | 10/12 | 84,000 | 21.00 |
Pearle Vision | 1,990 | 12/12 | 35,820 | 18.00 |
The Soccer Corner | 4,000 | 05/13 | 62,600 | 15.65 |
Whataburger | * | 08/18 | 60,000 | * |
Taco Bell | * | 10/18 | 51,000 | * |
* ground lease
In general, each tenant will pay its proportionate share of real estate taxes, insurance and common area maintenance costs, although the leases with some tenants may provide that the tenant's liability for such expenses is limited in some way, usually so that their liability for such expenses does not exceed a specified amount.
Plan of Distribution
The following new subsection is inserted at the end of this section on page 148 our prospectus.
Update
The following table updates shares sold in our offerings as of February 10, 2004:
Gross | Commission and fees | Net | ||
Shares | proceeds ($) | ($) (1) | proceeds ($) | |
From our advisor | 20,000 | 200,000 | - | 200,000 |
Our first offering began September 15, 2003: | 30,003,460 | 300,011,964 | 30,975,276 | 269,036,688 |
Shares sold pursuant to our distribution reinvestment program | 142,414 | 1,352,938 | - | 1,352,938 |
30,165,874 | 301,564,902 | 30,975,276 | 270,589,626 |
(1) Inland Securities Corporation serves as dealer manager of this offering and is entitled to receive selling commissions and certain other fees, as discussed further in our prospectus.