UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: January 5, 2005
(Date of earliest event reported)
Inland Western Retail Real Estate Trust, Inc.
(Exact name of registrant as specified in the charter)
Maryland | 333-103799 | 42-1579325 |
(State or other jurisdiction of incorporation) | (Commission File No.) | (IRS Employer Identification No.) |
2901 Butterfield Road
Oak Brook, Illinois 60523
(Address of Principal Executive Offices)
(630) 218-8000
(Registrant's telephone number including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing in intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.01 Completion of Acquisition or Disposition of Assets.
Hobby Lobby, Concord, North Carolina
On January 10, 2005, we purchased a newly constructed freestanding retail center leased to Hobby Lobby on a long term lease, containing 60,000 gross leasable square feet. The center is located at I-85 and Dale Earnhart in Concord, North Carolina.
We purchased this property from an unaffiliated third party. Our total acquisition cost was approximately $5,500,000. 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 $92 per square foot of leasable space.
We purchased this property with our own funds. However, we expect to place financing on the property at a later date.
We do not intend to make significant repairs and improvements to this property over the next few years. However, if we were to make any repairs or improvements, the tenants would be obligated to pay a substantial portion of any monies spent pursuant to the provisions of their respective leases.
One tenant, Hobby Lobby, will lease 100% of the total gross leasable area of the property. The lease with this tenant requires the tenant to pay base annual rent on a monthly basis as follows:
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| Base Rent |
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| Approximate |
| Per Square |
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| GLA Leased | % of Total | Foot Per | Lease | Term |
Lessee | (Sq. Ft.) | GLA | Annum ($) | Beginning | To |
Hobby Lobby | 60,000 | 100 | 7.00 | 10/04 | 09/24 |
For federal income tax purposes, the depreciable basis in this property will be approximately $4,125,000. 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.
Midtown Center, Milwaukee, Wisconsin
On January 10, 2005, we purchased an existing shopping center known as Midtown Center, containing 319,108 gross leasable square feet including an 11-acre parcel of land for future development. The center is located at North 60th Street and Capital Drive in Milwaukee, Wisconsin.
We purchased this property from an unaffiliated third party. Our total acquisition cost was approximately $53,000,000. 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 was approximately $166 per square foot of leasable space.
We purchased this property with our own funds. However, we expect to place financing on the property at a later date.
We do not intend to make significant repairs and improvements to this property over the next few years. However, if we were to make any repairs or improvements, the tenants would be obligated to pay a substantial portion of any monies spent pursuant to the provisions of their respective leases.
Two tenants, Wal-Mart and Pick 'N Save, each lease more than 10% of the total gross leasable area of the property. The leases with these tenants require the tenants to pay base annual rent on a monthly basis as follows:
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| Base Rent |
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| Approximate |
| Per Square |
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| GLA Leased | % of Total | Foot Per | Lease | Term |
Lessee | (Sq. Ft.) | GLA | Annum ($) | Beginning | To |
Wal-Mart | 157,793 | 49 | 9.04 | 08/02 | 09/22 |
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Pick 'N Save | 53,460 | 17 | 7.80 | 10/02 | 12/22 |
For federal income tax purposes, the depreciable basis in this property will be approximately $39,750,000. When we calculate depreciation expense for tax purposes, we will use the straight-line method. We depreciate buildings and improvements based upon estimated useful lives of 40 and 20 years, respectively.
Midtown Center commenced with one tenant's space built in 1986 and 1987 and the shopping center was then expanded during 2002 through 2004. As of January 1, 2005, this property was 98% occupied, with a total 312,504 square feet leased to 24 tenants. The following table sets forth certain information with respect to those leases:
| Approximate GLA Leased |
| Current Annual | Base Rent Per Square Foot |
Lessee | (Sq. Ft.) | Lease Ends | Rent ($) | Per Annum ($) |
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City Sports | 3,565 | 08/07 | 68,078 | 19.10 |
Lady City Sports | 2,183 | 08/07 | 41,687 | 19.10 |
Golden Ark Jewelers | 1,031 | 08/07 | 19,680 | 19.09 |
Bridgestone/Firestone | 8,100 | 01/08 | 46,200 | 5.70 |
Milwaukee Police (Substation) | 1,250 | 01/08 | N/A | N/A |
Cousins Subs | 1,710 | 04/08 | 29,925 | 17.50 |
Liberty Tax Service | 1,177 | 04/08 | 21,822 | 18.54 |
Rainbow Apparel | 4,891 | 01/09 | 90,679 | 18.54 |
Consolidated Vision | 3,320 | 03/09 | 59,744 | 18.00 |
Payless Shoesource | 2,922 | 08/09 | 46,752 | 16.00 |
Foot Locker | 4,725 | 01/12 | 118,125 | 25.00 |
Kid's Foot Locker | 3,150 | 01/12 | 78,750 | 25.00 |
Rainbow Womens | 10,000 | 01/13 | 150,000 | 15.00 |
T-Mobile | 1,705 | 03/13 | 31,542 | 18.50 |
Starbucks | 1,500 | 09/13 | 64,350 | 42.90 |
Concordia University | 6,635 | 05/14 | 79,620 | 12.00 |
GameStop | 2,112 | 07/14 | 46,464 | 22.00 |
A.J. Wright | 25,001 | 11/14 | 248,000 | 9.92 |
Ashley Stewart | 3,800 | 11/14 | 68,400 | 18.00 |
Culvers | 4,991 | 11/18 | 75,000 | 15.03 |
Applebee's | 5,162 | 03/19 | 118,003 | 22.86 |
Pizza Hut | 2,321 | 09/19 | 64,802 | 27.92 |
Wal-Mart | 157,793 | 09/22 | 1,426,449 | 9.04 |
Pick 'N Save | 53,460 | 12/22 | 416,988 | 7.80 |
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.
Maytag Corp. Distribution Center, Iowa City, Iowa
On January 6, 2005, we purchased a freestanding distribution center building, containing 750,000 of gross leasable square feet. The building is located at 720 Alexander Way in Iowa City, Iowa.
We purchased this property from an unaffiliated third party. Our total acquisition cost was approximately $23,159,500. 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 $31 per square foot of leasable space.
We purchased this property with our own funds. However, we expect to place financing on the property at a later date.
We do not intend to make significant repairs and improvements to this property over the next few years. However, if we were to make any repairs or improvements, the tenant would be obligated to pay a substantial portion of any monies spent pursuant to the provisions of their respective leases.
One tenant, Maytag Corporation, leases 100% of the total gross leasable area of the property. The lease with this tenant requires the tenant to pay base annual rent on a monthly basis over the next ten years.
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| Base Rent |
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| Approximate |
| Per Square | Estimated | |
| GLA Leased | % of Total | Foot Per | Lease | Term |
Lessee | (Sq. Ft.) | GLA | Annum ($) | Beginning | To |
Maytag Corp. Distribution Center | 750,000 | 100 | 2.30 | 12/04 | 10/14 |
For federal income tax purposes, the depreciable basis in this property is approximately $17,625,000. 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.
Fairgrounds Plaza, Middletown, New York
On January 5, 2005, we purchased a portion of a redeveloped shopping center which is known as Fairgrounds Plaza, which will contain 98,021 of gross leasable square feet (which includes 11,791 of ground lease space) when completed. The portion we purchased contains 66,254 of gross leasable square feet. The remaining 31,767 of gross leasable square feet (including the ground lease space) is expected to be completed by spring 2005, at which time we anticipate purchasing the remaining square feet. The center is located at 330 Route 211 East in Middletown, New York.
We purchased this property from an unaffiliated third party. Our acquisition cost for this portion of the property was approximately $22,250,000. The total acquisition cost for the remaining portion of the shopping center is expected to be approximately $5,198,000. These amounts may increase by additional costs which have not yet been finally determined. We expect any additional costs to be insignificant. Our acquisition cost for this portion of the property was approximately $336 per square foot of leasable space.
We purchased this property with our own funds and by assuming the existing mortgage debt on the property. The outstanding balance on the mortgage debt at the date of acquisition was $15,982,000. The loan requires monthly principal and interest payments at an annual fixed rate of 5.69% and matures February 2013.
We do not intend to make significant repairs and improvements to this property over the next few years. However, if we were to make any repairs or improvements, the tenants would be obligated to pay a substantial portion of any monies spent pursuant to the provisions of their respective leases.
One tenant, Super Stop & Shop, leases more than 10% of the total gross leasable area of the portion of the property we purchased. The lease with this tenant requires the tenant to pay base annual rent on a monthly basis as follows:
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| Base Rent |
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| Approximate | % of | Per Square |
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| GLA Leased | GLA We | Foot Per | Lease | Term |
Lessee | (Sq. Ft.) | Purchased | Annum ($) | Beginning | To |
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Super Stop & Shop | 59,970 | 91 | 28.51 | 01/03 | 01/28 |
For federal income tax purposes, the depreciable basis in the portion of the property we purchased will be approximately $16,688,000. The depreciable basis in the entire property will be approximately $20,586,000 once we purchase the remaining portion. When we calculate depreciation expense for tax purposes, we will use the straight-line method. We depreciate buildings and improvements based upon estimated useful lives of 40 and 20 years, respectively.
The portion of Fairgrounds Plaza that we have purchased commenced redevelopment construction during 2002 and was completed in 2004. As of January 1, 2005, the portion of the property we purchased was 100% leased with a total 66,254 square feet leased to three tenants. The following table sets forth certain information with respect to those leases:
| Approximate GLA Leased |
| Current Annual | Base Rent Per Square Foot |
Lessee | (Sq. Ft.) | Lease Ends | Rent ($) | Per Annum ($) |
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First Union Bank | 2,284 | 09/08 | 38,828 | 17.00 |
Majestic Carpet | 4,000 | 12/14 | 54,000 | 13.50 |
Super Stop & Shop | 59,970 | 01/28 | 1,710,000 | 28.51 |
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.
Item 9.01. Financial Statements, ProForma Financial Information and Exhibits
- Financial Statements
To be subsequently filed for Midtown Center and Fairgrounds Plaza under Rule 3-14 of the Securities and Exchange Commission Regulation S-X. No financial statements will be filed for Hobby Lobby and Maytag Distribution Center as the acquisition of these properties does not require financial statements under Rule 3-14 of the Securities and Exchange Commission Regulation S-X.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| INLAND WESTERN RETAIL REAL ESTATE TRUST, INC. |
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By: | /s/ Lori J. Foust |
Name: | Lori J. Foust |
Title: | Principal Accounting Officer |
Date: | January 5, 2005 |