Filed pursuant to 424(b)(3)
Registration #333-103799
SUPPLEMENT NO. 40
DATED NOVEMBER 9, 2004
TO THE PROSPECTUS DATED SEPTEMBER 15, 2003
OF INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
We are providing this Supplement No. 40 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. 40 supplements, modifies or supersedes certain information contained in our prospectus, Supplement No. 39 dated November 1, 2004, Supplement No. 38 dated October 22, 2004, and Supplement No. 37 dated October 13, 2004, (Supplement No. 37 superseded certain information contained in our prospectus and prior supplements dated between October 23, 2003 and October 13, 2004), and must be read in conjunction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.
Winchester Commons, Memphis, Tennessee
On November 5, 2004, we purchased an existing shopping center known as Winchester Commons, containing 93,024 gross leasable square feet. The center is located on 7956 Winchester Road, in Memphis, Tennessee.
We purchased this property from an unaffiliated third party. Our total acquisition cost was approximately $13,073,000. 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 $141 per square foot of leasable space.
We purchased this property with our own funds. However, we expect to place financing on the property at a later date.
We do not intend to make significant repairs and improvements to this property over the next few years. However, if we were to make any repairs or improvements, the tenants would be obligated to pay a substantial portion of any monies spent pursuant to the provisions of their respective leases.
One tenant, Kroger, leases more than 10% of the total gross leasable area of the property. The lease with this tenant requires the tenant to pay base annual rent on a monthly basis as follows:
Lessee | Approximate GLA Leased (Sq. Ft.) | % of Total GLA | Base Rent Per Square Foot Per Annum ($) | Lease Term | |
Beginning | To | ||||
Kroger | 59,670 | 64 | 8.24 | 05/99 | 04/19 |
For federal income tax purposes, the depreciable basis in this property will be approximately $9,805,000. When we calculate depreciation expense for tax purposes, we will use the straight-line method. We depreciate buildings and improvements based upon estimated useful lives of 40 and 20 years, respectively.
Winchester Commons was built in 1999. As of November 1, 2004, this property was 100% occupied, with a total 93,024 square feet leased to 15 tenants. The following table sets forth certain information with respect to those leases:
Lessee | Approximate GLA Leased (Sq. Ft.) | Lease Ends | Current Annual Rent ($) | Base Rent Per Square Foot Per Annum ($) |
The Steak Escape | 1,600 | 01/05 | 26,400 | 16.50 |
Shirley's Hallmark | 4,400 | 02/05 | 52.800 | 12.00 |
The Wine Cellar | 4,000 | 03/06 | 66,000 | 16.50 |
Opportunity Mortgage (A+ Wireless) | 1,534 | 07/06 | 26,078 | 17.00 |
China Dragon Restaurant | 2,400 | 10/06 | 39,600 | 16.50 |
Dental Partners of Tennessee | 2,000 | 01/07 | 35,500 | 17.75 |
Sunsations | 1,600 | 07/07 | 27.200 | 17.00 |
Greg Pickett Golf | 1,600 | 01/09 | 27,712 | 17.32 |
The UPS Store | 2,000 | 01/09 | 34,000 | 17.00 |
Southwinds Cleaners | 1,600 | 01/09 | 27,200 | 17.00 |
For Your Eyes Only | 2,220 | 05/09 | 45,443 | 20.47 |
Fantastic Sam's | 1,600 | 06/09 | 28,000 | 17.50 |
Nextel Communications | 1,600 | 06/09 | 33,600 | 21.00 |
East End Grill | 3,600 | 07/09 | 59,400 | 16.50 |
Kroger | 59,670 | 04/19 | 491,681 | 8.24 |
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.
Mansfield Towne Crossing, Mansfield, Texas
On November 3, 2004, we purchased a newly constructed shopping center known as Mansfield Towne Crossing, containing 112,078 gross leasable square feet of which 4,500 is on a ground lease. The center is located at Highway 287 and Debbie Lane, in Mansfield, Texas.
We purchased this property from an unaffiliated third party. Our total acquisition cost was approximately $19,967,700. 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 $178 per square foot of leasable space.
We purchased this property with our own funds. However, we expect to place financing on the property at a later date.
We do not intend to make significant repairs and improvements to this property over the next few years. However, if we were to make any repairs or improvements, the tenants would be obligated to pay a substantial portion of any monies spent pursuant to the provisions of their respective leases.
Two tenants, Ross Dress for Less and Staples lease more than 10% of the total gross leasable area of the property. The leases with these tenants require the tenants to pay base annual rent on a monthly basis as follows:
Base Rent | |||||
Approximate | Per Square | ||||
GLA Leased | % of Total | Foot Per | Lease | Term | |
Lessee | (Sq. Ft.) | GLA | Annum ($) | Beginning | To |
Ross Dress for Less | 30,187 | 27 | 9.25 | 05/04 | 01/15 |
Staples | 20,388 | 18 | 10.50 | 08/03 | 08/18 |
For federal income tax purposes, the depreciable basis in this property will be approximately $14,976,000. When we calculate depreciation expense for tax purposes, we will use the straight-line method. We depreciate buildings and improvements based upon estimated useful lives of 40 and 20 years, respectively.
Mansfield Towne Crossing was newly constructed in 2003 and 2004. As of November 1, 2004, this property was 92% occupied, with 102,839 leasable square feet leased to 19 tenants and one ground lease tenant, and is currently leasing up the remaining retail space within the shopping center. The following table sets forth certain information with respect to those leases:
Approximate GLA Leased | Current Annual | Base Rent Per Square Foot | ||
Lessee | (Sq. Ft.) | Lease Ends | Rent ($) | Per Annum ($) |
AT & T Wireless | 2,500 | 07/08 | 55,000 | 22.00 |
EB Games | 1,500 | 09/08 | 31,500 | 21.00 |
Sport Clips | 1,440 | 10/08 | 30,240 | 21.00 |
GNC | 1,200 | 01/09 | 22,800 | 19.00 |
Luxury Nails | 1,013 | 02/09 | 20,260 | 20.00 |
Dr. Michael Polson | 1,060 | 05/09 | 20,140 | 19.00 |
Robertson Pools | 1,440 | 06/09 | 25,920 | 18.00 |
Bath Junkie | 1,200 | 06/09 | 22,800 | 19.00 |
Sally Beauty Supplies | 1,600 | 07/09 | 27,200 | 17.00 |
Subway | 1,600 | 08/09 | 28,800 | 18.00 |
Mansfield Urgent Care | 3,000 | 09/09 | 58,500 | 19.50 |
The Cash Store | 1,600 | 09/09 | 30,400 | 19.00 |
Creekside Collections | 3,811 | 09/09 | 62,882 | 16.50 |
Zales Jewelers | 3,000 | 11/13 | 64,500 | 21.50 |
Payless Shoes | 3,000 | 03/14 | 54,000 | 18.00 |
Famous Footwear | 8,000 | 07/14 | 120,000 | 15.00 |
Pier 1 Imports | 10,800 | 08/14 | 162,000 | 15.00 |
Ross Dress for Less | 30,187 | 01/15 | 279,229 | 9.25 |
Staples | 20,388 | 08/18 | 214,074 | 10.50 |
Regions Bank (Ground Lease) | 4,500 | 09/23 | 75,000 | 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.
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 the properties, the tenants or in the local economic conditions;
- our receipts of sufficient net proceeds from this offering and financing proceeds to make these acquisition; 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 each property, 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.
Edgemont Town Center, Homewood, Alabama
We anticipate purchasing an existing shopping center known as Edgemont Town Center, containing 77,655 gross leasable square feet. The center is located at 411 Green Springs Highway in Homewood, Alabama.
We anticipate purchasing this property from an unaffiliated third party. Our total acquisition cost is expected to be approximately $15,639,000. 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 $201 per square foot of leasable space.
We anticipate purchasing this property with our own funds. However, we expect to place financing on the property at a later date.
We do not intend to make significant repairs and improvements to this property over the next few years. However, if we were to make any repairs or improvements, the tenants would be obligated to pay a substantial portion of any monies spent pursuant to the provisions of their respective leases.
One tenant, Publix, leases more than 10% of the total gross leasable area of the property. The lease with this tenant requires the tenant to pay base annual rent on a monthly basis as follows:
Base Rent | |||||
Approximate | Per Square | ||||
GLA Leased | % of Total | Foot Per | Lease | Term | |
Lessee | (Sq. Ft.) | GLA | Annum ($) | Beginning | To |
Publix | 44,840 | 58 | 12.00 | 11/03 | 12/23 |
For federal income tax purposes, the depreciable basis in this property will be approximately $11,729,000. When we calculate depreciation expense for tax purposes, we will use the straight-line method. We depreciate buildings and improvements based upon estimated useful lives of 40 and 20 years, respectively.
Edgemont Town Center was built in 2003. As of November 1, 2004, this property was 86% occupied, with a total 66,455 square feet leased to 15 tenants. The following table sets forth certain information with respect to those leases:
Approximate GLA Leased | Current Annual | Base Rent Per Square Foot | ||
Lessee | (Sq. Ft.) | Lease Ends | Rent ($) | Per Annum ($) |
Nextel Communications | 1,360 | 11/06 | 25,840 | 19.00 |
Crown Jewelry | 1,600 | 11/08 | 30,400 | 19.00 |
Mr. Burch Formalwear, Inc. | 2,000 | 11/08 | 38,000 | 19.00 |
Pet Supplies Plus | 6,000 | 12/08 | 114,000 | 19.00 |
Firehouse Subs | 1,600 | 12/08 | 30,400 | 19.00 |
Headstart Family Hair Salons | 1,680 | 01/09 | 23,940 | 14.25 |
Mobility Central, Inc. | 1,600 | 02/09 | 30,400 | 25.00 |
Sally Beauty Supplies | 1,615 | 08/09 | 32,300 | 20.00 |
EB Games | 1,200 | 10/09 | 30,000 | 25.00 |
L.V. Nails | 1,360 | 11/13 | 25,840 | 19.00 |
Hunan Wok | 1,600 | 02/14 | 30,400 | 19.00 |
Qdoba Mexican Grill * | 2,400 | 12/14 | 60,000 | 25.00 |
Bama Wings * | 1,200 | 12/14 | 30,000 | 25.00 |
Deep South Barbecue * | 4,000 | 01/15 | 76,000 | 19.00 |
Publix | 44,840 | 12/23 | 538,080 | 12.00 |
* Lease term has not yet commenced, but commences upon tenant's occupancy.
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.
University Town Center, Tuscaloosa, Alabama
We anticipate purchasing an existing shopping center known as University Town Center, containing 57,250 gross leasable square feet. The center is located at 1190 University Boulevard in Tuscaloosa, Alabama.
We anticipate purchasing this property from an unaffiliated third party. Our total acquisition cost is expected to be approximately $10,569,000. 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 $185 per square foot of leasable space.
We anticipate purchasing this property with our own funds. However, we expect to place financing on the property at a later date.
We do not intend to make significant repairs and improvements to this property over the next few years. However, if we were to make any repairs or improvements, the tenants would be obligated to pay a substantial portion of any monies spent pursuant to the provisions of their respective leases.
One tenant, Publix, leases more than 10% of the total gross leasable area of the property. The lease with this tenant requires the tenant to pay base annual rent on a monthly basis as follows:
Base Rent | |||||
Approximate | Per Square | ||||
GLA Leased | % of Total | Foot Per | Lease | Term | |
Lessee | (Sq. Ft.) | GLA | Annum ($) | Beginning | To |
Publix | 28,800 | 50 | 13.85 | 06/04 | 06/24 |
For federal income tax purposes, the depreciable basis in this property will be approximately $7,927,000. When we calculate depreciation expense for tax purposes, we will use the straight-line method. We depreciate buildings and improvements based upon estimated useful lives of 40 and 20 years, respectively.
University Town Center was built in 2002. As of November 1, 2004, this property was 100% occupied, with a total 57,250 square feet leased to 15 tenants. The following table sets forth certain information with respect to those leases:
Approximate GLA Leased | Current Annual | Base Rent Per Square Foot | ||
Lessee | (Sq. Ft.) | Lease Ends | Rent ($) | Per Annum ($) |
Sun and Soul | 3,665 | 09/07 | 62,305 | 17.00 |
Movie Gallery | 2,411 | 10/07 | 40,987 | 17.00 |
The UPS Store | 2,479 | 12/07 | 44,622 | 18.00 |
Cold Stone Creamery | 1,713 | 01/08 | 39,399 | 23.00 |
Firehouse Subs | 1,827 | 01/08 | 34,713 | 19.00 |
Bad Ass Coffee | 1,947 | 02/08 | 44,781 | 23.00 |
Headstart Family Hair Salons | 1,485 | 02/08 | 34,155 | 23.00 |
Southtrust Bank (ATM) | 42 | 04/08 | 7,800 | 185.71 |
Private Gallery | 1,964 | 09/08 | 45,172 | 23.00 |
Nail Club | 1,449 | 02/09 | 27,531 | 19.00 |
The Buzz | 1,378 | 03/09 | 26,871 | 19.50 |
University Wireless | 3,022 | 07/09 | 57,418 | 19.00 |
Qdoba Mexican Grill | 2,641 | 11/12 | 60,743 | 23.00 |
Hud Guthrie's | 2,427 | 12/12 | 46,113 | 19.00 |
Publix | 28,800 | 06/24 | 398,880 | 13.85 |
In general, each tenant will pay its proportionate share of real estate taxes, insurance and common area maintenance costs, although the leases with some tenants may provide that the tenant's liability for such expenses is limited in some way, usually so that their liability for such expenses does not exceed a specified amount.
Plan of Distribution
The following new subsection is inserted at the end of this section on page 148 of our prospectus.
Update
The following table updates shares sold in our offering as of November 4, 2004:
Gross | Commission and fees | Net | ||
Shares | proceeds ($) | ($) (1) | proceeds ($) | |
From our advisor | 20,000 | 200,000 | - | 200,000 |
Our offering began September 15, 2003: | 172,564,689 | 1,725,566,905 | 180,448,596 | 1,545,118,309 |
Shares sold pursuant to our distribution reinvestment program | 2,530,959 | 24,044,115 | - | 24,044,115 |
175,115,648 | 1,749,811,020 | 180,448,596 | 1,569,362,424 |
(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.