Filed pursuant to 424(b)(3)
Registration #333-103799
SUPPLEMENT NO. 11
DATED MARCH 2, 2004
TO THE PROSPECTUS DATED SEPTEMBER 15, 2003
OF INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
We are providing this Supplement No. 11 to you in order to supplement our prospectus. This supplement updates information in the "Real Property Investments" and "Plan of Distribution" sections of our prospectus.This Supplement No. 11 supplements, modifies or supersedes certain information contained in our prospectus, Supplement No. 10 dated February 19, 2004, Supplement No. 9 dated February 12, 2004, 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January 12, 2004, Supplement No. 6 dated December 31, 2003, Supplement No. 5 dated December 15, 2003, (Supplement No. 5 superseded certain information contained in our prospectus and prior supplements dated between October 23, 2003 and December 4, 2003), and must be read in conjunction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.
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.
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.
Bluebonnet Parc, Baton Rouge, Louisiana
We anticipate purchasing an existing shopping center known as Bluebonnet Parc containing 135,289 gross leasable square feet. The center is located at I-10 and Bluebonnet Road in Baton Rouge, Louisiana.
We anticipate purchasing this property from an unaffiliated third party. Our total acquisition cost is expected to be approximately $22,000,000. 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 $163 per square foot of leasable space.
We intend to purchase this property with our own funds. However, we expect to place financing on the property at a later date.
We do not intend to make significant repairs and improvements to this property over the next few years. However, if we were to make any repairs or improvements, the tenants would be obligated to pay a substantial portion of any monies spent pursuant to the provisions of their respective leases.
Three tenants, Best Buy Company, Linen's N Things and Cost Plus, each lease more than 10% of the total gross leasable area of the property. The leases with these tenants require the tenants to pay base annual rent on a monthly basis as follows:
Base Rent | |||||
Approximate | Per Square | ||||
GLA Leased | % of Total | Foot Per | Lease | Term | |
Lessee | (Sq. Ft.) | GLA | Annum ($) | Beginning | To |
Best Buy | 45,439 | 34 | 12.99 | 08/02 | 01/17 |
Linen's N Things | 32,418 | 24 | 11.50 | 10/02 | 01/14 |
Cost Plus | 18,300 | 14 | 14.00 | 12/02 | 01/13 |
For federal income tax purposes, the depreciable basis in this property will be approximately $16,500,000. When we calculate depreciation expense for tax purposes, we will use the straight-line method. We depreciate buildings and improvements based upon estimated useful lives of 40 and 20 years, respectively.
Bluebonnet Parc was built in 2002. As of March 1, 2004, this property was 95% occupied, with a total 128,289 square feet leased to seven tenants. The following table sets forth certain information with respect to those leases:
Approximate GLA Leased | Current Annual | Base Rent Per Square Foot | ||
Lessee | (Sq. Ft.) | Lease Ends | Rent ($) | Per Annum ($) |
Brook Mays Music | 8,000 | 01/09 | 128,000 | 16.00 |
David's Bridal | 9,998 | 10/10 | 159,968 | 16.00 |
Lifeway Christian Bookstore | 9,161 | 12/12 | 141,995 | 15.50 |
Cost Plus | 18,300 | 01/13 | 256,200 | 14.00 |
Linen's N Things | 32,418 | 01/14 | 372,807 | 11.50 |
The Men's Wearhouse | 4,973 | 02/14 | 99,460 | 20.00 |
Best Buy | 45,439 | 01/17 | 590,408 | 12.99 |
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.
Plaza Santa Fe, Phase II, Santa Fe, New Mexico
We anticipate purchasing an existing shopping center known as Plaza Santa Fe, Phase II, containing 222,411 gross leasable square feet. The center is located at Cerrilos Road and Zafarano Boulevard in Santa Fe, New Mexico.
We anticipate purchasing this property from an unaffiliated third party. Our total acquisition cost is expected to be approximately $31,250,000. 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 $141 per square foot of leasable space.
We intend to purchase this property with our own funds and by assuming the existing financing with a remaining balance of approximately $17,800,000. The loan requires principal and interest payments based on an interest rate of 6.2% and cannot be prepaid prior to January 2005.
We do not intend to make significant repairs and improvements to this property over the next few years. However, if we were to make any repairs or improvements, the tenants would be obligated to pay a substantial portion of any monies spent pursuant to the provisions of their respective leases.
Three tenants, Best Buy, Linen N Things and TJ Maxx, each lease more than 10% of the total gross leasable area of the property. The leases with these tenants require the tenants to pay base annual rent on a monthly basis as follows:
Base Rent | ||||||
Approximate | Per Square | |||||
GLA Leased | % of Total | Foot Per | Lease | Term | ||
Lessee | (Sq. Ft.) | GLA | Annum ($) | Beginning | To | |
Best Buy | 31,226 | 14 | 13.50 | 09/01 | 01/17 | |
Linen's N Things | 31,500 | 14 | 13.50 | 11/00 | 01/16 | |
TJ Maxx | 30,900 | 14 | 10.50 | 11/00 | 11/10 | |
For federal income tax purposes, the depreciable basis in this property will be approximately $23,500,000. When we calculate depreciation expense for tax purposes, we will use the straight-line method. We depreciate buildings and improvements based upon estimated useful lives of 40 and 20 years, respectively.
Plaza Santa Fe II was built in 2000 to 2002. As of March 1, 2004, this property was 100% occupied, with a total 222,411 square feet leased to 22 tenants. The following table sets forth certain information with respect to those leases:
Approximate GLA Leased | Current Annual | Base Rent Per Square Foot | ||
Lessee | (Sq. Ft.) | Lease Ends | Rent ($) | Per Annum ($) |
State Farm | 1,250 | 02/05 | 27,500 | 22.00 |
Lady D Bakery | 1,260 | 04/05 | 28,889 | 22.93 |
Old Navy | 20,115 | 03/06 | 251,438 | 12.50 |
H & R Block | 1,900 | 10/07 | 37,050 | 19.50 |
Corral West | 7,450 | 11/07 | 75,543 | 10.14 |
Cactus Salon | 1,250 | 01/08 | 30,000 | 24.00 |
Payless Shoe Source | 2,850 | 03/08 | 57,000 | 20.00 |
Mens Wearhouse | 4,539 | 05/08 | 83,972 | 18.50 |
French & French | 3,038 | 11/08 | 69,874 | 23.00 |
Alltel | 3,932 | 12/08 | 112,612 | 28.64 |
TJ Maxx | 30,900 | 11/10 | 324,450 | 10.50 |
Michael's | 20,280 | 03/11 | 253,500 | 12.50 |
D & A Mattress | 4,710 | 03/11 | 89,490 | 19.00 |
Clothestime | 3,800 | 04/11 | 76,000 | 20.00 |
Famous Footwear | 8,000 | 01/12 | 136,000 | 17.00 |
Super Nails | 1,000 | 03/12 | 30,000 | 30.00 |
Quizno's | 1,900 | 04/12 | 37,715 | 19.85 |
Osaka Grill | 6,000 | 09/12 | 150,000 | 25.00 |
Linen's N Things | 31,500 | 01/16 | 425,250 | 13.50 |
Best Buy | 31,226 | 01/17 | 421,551 | 13.50 |
PetSmart | 20,010 | 01/17 | 284,742 | 14.23 |
Borders | 15,501 | 01/18 | 232,515 | 15.00 |
In general, each tenant will pay its proportionate share of real estate taxes, insurance and common area maintenance costs, although the leases with some tenants may provide that the tenant's liability for such expenses is limited in some way, usually so that their liability for such expenses does not exceed a specified amount.
Plan of Distribution
The following new subsection is inserted at the end of this section on page 148 our prospectus.
Update
The following table updates shares sold in our offerings as of February 17, 2004:
Gross | Commission and fees | Net | ||
Shares | proceeds ($) | ($) (1) | proceeds ($) | |
From our advisor | 20,000 | 200,000 | - | 200,000 |
Our first offering began September 15, 2003: | 34,494,386 | 344,912,924 | 35,653,141 | 300,259,783 |
Shares sold pursuant to our distribution reinvestment program | 142,411 | 1,352,905 | - | 1,352,905 |
34,656,797 | 346,465,829 | 35,653,141 | 310,812,688 |
(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.