Filed pursuant to 424(b)(3)
Registration #333-103799
SUPPLEMENT NO. 18
DATED MAY 3, 2004
TO THE PROSPECTUS DATED SEPTEMBER 15, 2003
OF INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
We are providing this Supplement No. 18 to you in order to supplement our prospectus. This supplement updates information in the "Management", "Investment Objectives and Policies", "Real Property Investments" and "Plan of Distribution" sections of our prospectus.This Supplement No. 18 supplements, modifies or supersedes certain information contained in our prospectus, Supplement No. 17 dated April 28, 2004, Supplement No. 16 dated April 20, 2004, Supplement No. 15 dated April 12, 2004, Supplement No. 14 dated March 25, 2004, Supplement No. 13 dated March 15, 2004, (Supplement No. 13 superseded certain information contained in our prospectus and prior supplements dated between October 23, 2003 and March 9, 2004), and must be read in conjunction with our prospectus.
Management
Our Directors and Executive Officers
The discussion under this section, which starts on page 68 of our prospectus, is modified and supplemented by the following:
Effective April 1, 2004, Catherine L. Lynch resigned from her position as Treasurer of our advisor. Effective April 30, 2004, Kelly E. Tucek resigned from her position as our Treasurer, Principal Accounting Officer and Principal Financial Officer. Steven P. Grimes (age 37), has been appointed as our Treasurer and Principal Financial Officer, and Lori Foust (age 39), has been appointed as our Principal Accounting Officer.
Mr. Steven Grimes joined our advisor as its Chief Financial Officer on February 18, 2004. He is responsible for our finances and borrowings. Prior to joining the advisor, Mr. Grimes was a director with Cohen Financial and was a senior manager with Deloitte and Touche. Mr. Grimes received his B.S. Degree in Accounting from Indiana University.
Ms. Lori Foust joined our advisor as Vice President on November 17, 2003. Ms. Foust is responsible for our financial and SEC reporting. Prior to joining the advisor, Ms. Foust was and was a senior manager in the real estate division with Ernst and Young, LLP. She received her B.S. Degree in Accounting and her M.B.A. Degree from University of Central Florida.
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:
Our board of directors unanimously approved that consistent with our borrowing policies, we may commit up to the aggregate of $25 million in cash for letters of credit in order to obtain financing for properties.
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.
Arvada Marketplace and Arvada Connection, Arvada, Colorado
On April 29, 2004, we purchased two existing shopping centers, situated directly across the street from each other, containing 358,094 total gross leasable square feet (297,015 square feet and 61,079 square feet, respectively). The centers are located at 7320-7490 West 52nd Street in Arvada, Colorado.
We purchased these two centers from one unaffiliated third party. Our total acquisition cost was approximately $51,550,000. 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 $144 per square foot of leasable space.
We purchased this property with our own funds. However, we expect to place financing on the property at a later date.
We do not intend to make significant repairs and improvements to this property over the next few years. However, if we were to make any repairs or improvements, the tenants would be obligated to pay a substantial portion of any monies spent pursuant to the provisions of their respective leases.
Two tenants, Sam's Club and Gart Sports, each lease more than 10% of the total gross leasable area of Arvada Marketplace and two tenants, Old Country Buffet and Pier 1 Imports, each lease more than 10% of the total gross leasable area at Arvada Connection. The leases with these tenants require the tenants to pay base annual rent on a monthly basis as follows:
Base Rent | |||||
Approximate | Per Square | ||||
GLA Leased | % of Total | Foot Per | Lease | Term | |
Lessee | (Sq. Ft.) | GLA | Annum ($) | Beginning | To |
Arvada Marketplace | |||||
Sam's Club | 142,491 | 48 | 8.01 | 04/01 | 03/11 |
Gart Sports | 54,903 | 18 | 7.03 | 10/93 | 01/14 |
Arvada Connection | |||||
Old Country Buffet | 10,000 | 16 | 11.00 | 09/92 | 12/07 |
Pier 1 Imports | 8,068 | 13 | 17.00 | 04/88 | 04/08 |
For federal income tax purposes, the depreciable basis in this property will be approximately $38,700,000. When we calculate depreciation expense for tax purposes, we will use the straight-line method. We depreciate buildings and improvements based upon estimated useful lives of 40 and 20 years, respectively.
Arvada Marketplace and Arvada Connection were built between 1987 through 1990. As of March 31, 2004, Arvada Marketplace was 99% occupied, with a total 292,662 square feet leased to twenty-eight tenants and Arvada Connection was 78% occupied, with a total 47,483 square feet leased to twelve tenants. The following table sets forth certain information with respect to those leases:
Approximate GLA Leased | Current Annual | Base Rent Per Square Foot | ||
Lessee | (Sq. Ft.) | Lease Ends | Rent ($) | Per Annum ($) |
Arvada Marketplace | ||||
Carefree Spas & Pools | 6,367 | 06/04 | 54,120 | 8.50 |
Ted Johnson, DDS | 1,564 | 10/04 | 20,301 | 12.98 |
Action Chiropractic | 1,363 | 12/04 | 23,171 | 17.00 |
Armada's Bridal | 5,155 | 05/05 | 51,550 | 10.00 |
Fast Signs | 1,600 | 06/05 | 24,000 | 15.00 |
American General Finance | 1,381 | 11/05 | 24,168 | 17.50 |
Namiko's Restaurant | 3,015 | 02/06 | 53,577 | 17.77 |
Cruise Holidays | 1,400 | 02/06 | 21,000 | 15.00 |
Citifinancial | 2,251 | 12/06 | 35,821 | 15.91 |
Schlotzsky's Deli | 1,900 | 07/07 | 26,600 | 14.00 |
Mail Boxes Etc. | 1,375 | 12/07 | 24,063 | 17.50 |
Supercuts | 2,213 | 12/07 | 37,621 | 17.00 |
Fantastic Sam's | 1,350 | 12/07 | 22,275 | 16.50 |
Fashion Bug | 10,000 | 03/08 | 80,000 | 8.00 |
Subway | 1,230 | 10/08 | 22,140 | 18.00 |
Radio Shack | 2,740 | 10/08 | 43,858 | 16.01 |
Lone Star Steakhouse | 6,000 | 11/08 | 85,430 | 14.24 |
Tile for Less | 3,016 | 12/08 | 48,256 | 16.00 |
Elegant Nails | 1,000 | 01/09 | 17,000 | 17.00 |
Life Uniforms | 3,194 | 05/09 | 47,910 | 15.00 |
Executive Tans | 1,500 | 06/09 | 22,687 | 15.13 |
1st Cleaners | 1,400 | 04/10 | 23,800 | 17.00 |
Red Robin Burger | 7,300 | 12/10 | 201,795 | 27.64 |
Sam's Club | 142,491 | 03/11 | 1,142,063 | 8.01 |
Bennett's Bar-B-Que | 6,054 | 03/12 | 149,836 | 24.75 |
Office Depot | 17,000 | 12/13 | 136,000 | 8.00 |
Lady of America Fitness | 3,900 | 12/13 | 66,300 | 17.00 |
Gart Sports | 54,903 | 01/14 | 385,902 | 7.03 |
Arvada Connection | ||||
SAS Shoes | 2,600 | 11/04 | 28,600 | 11.00 |
Liquor Paradise | 2,600 | 04/06 | 34,450 | 13.25 |
Kwal-Howell Paint Center | 3,965 | 05/06 | 56,779 | 14.32 |
State Farm Insurance | 1,190 | 07/06 | 20,230 | 17.00 |
U-Frame-It | 1,680 | 09/06 | 24,058 | 14.32 |
Verizon Wireless | 1,400 | 10/06 | 26,600 | 19.00 |
Pier 1 Imports | 8,068 | 04/08 | 137,156 | 17.00 |
Household Finance | 1,680 | 11/07 | 25,200 | 15.00 |
Old Country Buffett | 10,000 | 12/07 | 110,000 | 11.00 |
Taco Bell | 2,240 | 12/07 | 74,347 | 33.19 |
Waldenbooks & More | 7,600 | 01/09 | 176,700 | 23.25 |
IHOP | 4,460 | 01/10 | 101.900 | 22.85 |
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.
Alison's Corner Shopping Center, San Antonio, Texas
On April 28, 2004, we purchased an existing shopping center known as Alison's Corner Shopping Center containing 55,066 gross leasable square feet. The center is located at 2720 SW Military Drive in San Antonio, Texas.
We purchased this property from an unaffiliated third party. Our total acquisition cost was approximately $7,042,000. 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 $128 per square foot of leasable space.
We purchased this property with our own funds. However, we expect to place financing on the property at a later date.
We do not intend to make significant repairs and improvements to this property over the next few years. However, if we were to make any repairs or improvements, the tenants would be obligated to pay a substantial portion of any monies spent pursuant to the provisions of their respective leases.
Two tenants, Ross Dress for Less and Shoe Carnival, each lease more than 10% of the total gross leasable area of the property. The leases with these tenants require the tenants to pay base annual rent on a monthly basis as follows:
Base Rent | |||||
Approximate | Per Square | ||||
GLA Leased | % of Total | Foot Per | Lease | Term | |
Lessee | (Sq. Ft.) | GLA | Annum ($) | Beginning | To |
Ross Dress for Less | 30,066 | 55 | 10.00 | 09/03 | 09/13 |
Shoe Carnival | 12,000 | 22 | 13.00 | 09/03 | 08/13 |
For federal income tax purposes, the depreciable basis in this property will be approximately $5,282,000. When we calculate depreciation expense for tax purposes, we will use the straight-line method. We depreciate buildings and improvements based upon estimated useful lives of 40 and 20 years, respectively.
Alison's Corner was built in 2003. As of March 31, 2004, this property was 84% occupied, with a total 46,066 square feet leased to three tenants. The following table sets forth certain information with respect to those leases:
Approximate GLA Leased | Current Annual | Base Rent Per Square Foot | ||
Lessee | (Sq. Ft.) | Lease Ends | Rent ($) | Per Annum ($) |
Dots | 4,000 | 09/08 | 67,000 | 16.75 |
Shoe Carnival | 12,000 | 08/13 | 156,000 | 13.00 |
Ross Dress for Less | 30,066 | 09/13 | 300,600 | 10.00 |
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.
North Rivers Town Center, Charleston, South Carolina
On April 27, 2004, we purchased a portion of a newly constructed shopping center known as North Rivers Town Center. The property we acquired contains 109,887 gross leasable square feet. The center is located at Rivers Avenue and Ashley Phosphate Road in Charleston, South Carolina.
We purchased this property from an unaffiliated third party. Our total acquisition cost was approximately $20,100,000. 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 $183 per square foot of leasable space.
We purchased this property with our own funds. However, we expect to place financing on the property at a later date.
We do not intend to make significant repairs and improvements to this property over the next few years. However, if we were to make any repairs or improvements, the tenants would be obligated to pay a substantial portion of any monies spent pursuant to the provisions of their respective leases.
Three tenants, Bed, Bath & Beyond, Ross Dress for Less and Office Depot, each lease more than 10% of the total gross leasable area of the property. The leases with these tenants require the tenants to pay base annual rent on a monthly basis as follows:
Base Rent | |||||
Approximate | Per Square | ||||
GLA Leased | % of Total | Foot Per | Lease | Term | |
Lessee | (Sq. Ft.) | GLA | Annum ($) | Beginning | To |
Bed, Bath & Beyond | 28,000 | 25 | 10.85 | 11/03 | 01/14 |
Ross Dress For Less | 30,187 | 27 | 11.00 | 02/04 | 01/15 |
Office Depot | 16,000 | 15 | 11.50 | 02/04 | 01/14 |
For federal income tax purposes, the depreciable basis in this property will be approximately $15,100,000. When we calculate depreciation expense for tax purposes, we will use the straight-line method. We depreciate buildings and improvements based upon estimated useful lives of 40 and 20 years, respectively.
North Rivers Town Center was built during 2003 to 2004. As of March 31, 2004, this property was 94% occupied, with a total 103,487 square feet leased to fifteen tenants and a parcel of land lease to one tenant under a ground lease. The following table sets forth certain information with respect to those leases:
Approximate GLA Leased | Current Annual | Base Rent Per Square Foot | ||
Lessee | (Sq. Ft.) | Lease Ends | Rent ($) | Per Annum ($) |
All About Cellular | 1,400 | 01/07 | 27,300 | 19.50 |
Mattress Gallery | 2,400 | 10/08 | 52,800 | 22.00 |
Super Nails | 1,400 | 11/08 | 28,000 | 20.00 |
Gamestop | 1,750 | 11/08 | 35,000 | 20.00 |
Great Clips | 1,250 | 01/09 | 26,250 | 21.00 |
Cold Stone Creamery | 1,500 | 01/09 | 30,000 | 20.00 |
Firehouse Subs | 1,800 | 02/09 | 36,000 | 20.00 |
David's Bridal | 10,000 | 10/13 | 155,000 | 15.50 |
Office Depot | 16,000 | 01/14 | 184,000 | 11.50 |
Bed, Bath & Beyond | 28,000 | 01/14 | 303,800 | 10.85 |
Just Fresh Bakery & Cafe | 4,800 | 02/14 | 100,800 | 21.00 |
Pearle Vision | 3,000 | 02/14 | 60,000 | 20.00 |
Ross Dress For Less | 30,187 | 01/15 | 332,057 | 11.00 |
Babies R Us (Ground Lease) | - | 01/14 | 160,776 | N/A |
In general, each tenant will pay its proportionate share of real estate taxes, insurance and common area maintenance costs, although the leases with some tenants may provide that the tenant's liability for such expenses is limited in some way, usually so that their liability for such expenses does not exceed a specified amount.
Plan of Distribution
The following new subsection is inserted at the end of this section on page 148 our prospectus.
Update
The following table updates shares sold in our offerings as of April 29, 2004:
Gross | Commission and fees | Net | ||
Shares | proceeds ($) | ($) (1) | proceeds ($) | |
From our advisor | 20,000 | 200,000 | - | 200,000 |
Our first offering began September 15, 2003: | 58,790,268 | 587,858,058 | 69,545,444 | 518,312,614 |
Shares sold pursuant to our distribution reinvestment program | 374,204 | 3,554,939 | - | 3,554,939 |
59,184,472 | 591,612,997 | 69,545,444 | 522,067,553 |
(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.
Volume Discounts
The discussion under this section, which starts on page 152 of our prospectus, is changed in full and supplemented by the following:
Investors making an initial purchase of at least $250,010 of common stock (25,001 shares) through the same soliciting dealer will receive a reduction of the reallowable 7.0% selling commission payable in connection with the purchase of those shares in accordance with the following schedule:
Amount of Selling | Amount of Purchaser's Investment | Maximum Commission | |
Volume Discount | From | To | Per Share |
1% | $ 250,010 | $ 500,000 | 6% |
2% | $ 500,010 | $ 1,000,000 | 5% |
3% | $ 1,000,010 | $ 2,500,000 | 4% |
4% | $ 2,500,010 | $ 5,000,000 | 3% |
5% | $ 5,000,010 | $10,000,000 | 2% |
6% | $10,000,010 | more than $10,000,000 | 1% |
Any reduction in the amount of the selling commissions in respect of volume discounts received will be credited to the investor in the form of additional whole shares or fractional shares. Selling commissions will not be paid on any such whole shares or fractional shares issued for a volume discount.
Some purchases may be combined for the purpose of qualifying for a volume discount, and for determining commissions payable to the managing dealer or the soliciting dealers, so long as all the combined purchases are made through the same soliciting dealer. Subscriptions made in this offer will be combined with other subscriptions in this offering for the purposes of computing amounts invested. Purchases by spouses will also be combined with other purchases by you will be combined with other purchases of common stock to be held as a joint tenant or as tenants-in-common by you with others for purposes of computing amounts invested. Purchases by entities not required to pay federal income tax may only be combined with purchases by other entities not required to pay federal income tax for purposes of computing amounts invested if investment decision are made by the same person. If the investment decisions are made by in independent investment advisor, that investment adviser may not have any direct or in direct beneficial interest in any of the entities not required to pay federal income tax whose purchases are sought to be combined. You must mark the "Additional Investment" space on the subscription agreement signature page in order for purchases to be combined. We are not responsible for failing to combine purchases if you fail to mark the "Additional Investment" space.
If the subscription agreements for the purchases to be combined are submitted at the same time, then the additional common stock to be credited to you as a result of such combined purchases will be credited on a pro rata basis. If the subscription agreements for the purchases to be combined are not submitted at the same time, then any additional common stock to be credited as a result of the combined purchases will be credited to the last component purchase, unless we are otherwise directed in writing at the time of the submission. However, the additional common stock to be credited to any entities not required to pay federal income tax whose purchases are combined for purposes of the volume discount will be credited only on a pro rata basis based on the amount of the investment of each entity not required to pay federal income tax and their combined purchases.
Notwithstanding the preceding paragraphs, you may not receive a discount greater than 5% on any purchase of shares if you already own, or may be deemed to already own, any shares. This restriction may limit the amount of the volume discount available to you after your initial purchase and the amount of additional shares that you may be credited as a result of the combination of purchases.
In the case of subsequent investments or combined investments, a volume discount will be given only on the portion of the subsequent or combined investment that caused the investment to exceed the breakpoint. For example, if you are investing $50,000 with us today, but had previously invested $240,000, these amounts can be combined to reach the $250,010 breakpoint, which will entitle you to a lower sales commission on your current $50,000 investment.