<Page>
Exhibit 10.203
ESCROW AGREEMENT
(BASSETT TI WORK/LEASING COMMISSION)
THIS ESCROW AGREEMENT (this "AGREEMENT") is made as of the ___ day of June,
2004, by and among ORIX TOUCHSTONE SEATTLE VENTURE, an Illinois general
partnership ("SELLER"), INLAND WESTERN SEATTLE NORTHGATE NORTH, L.L.C., a
Delaware limited liability company ("PURCHASER"), and FIRST AMERICAN TITLE
INSURANCE COMPANY ("ESCROW HOLDER").
W I T N E S S E T H:
WHEREAS, Seller and Inland Real Estate Acquisitions, Inc., an Illinois
corporation ("Inland"), entered into that certain Agreement of Purchase and Sale
effective as of June 4, 2004, as the same has heretofore been amended by letter
agreement dated June 18, 2004, Amendment to Agreement of Purchase and Sale dated
June 21, 2004, and Second Amendment to Agreement of Purchase and Sale dated June
23, 2004 (as so amended, "SALE AGREEMENT"), for the purchase and sale of certain
real property located in Seattle, Washington, as more particularly described
therein (the "PROPERTY").
WHEREAS, Inland has assigned all of its right, title and interest in, to
and under the Sale Agreement to Purchaser.
WHEREAS, concurrently with the execution of this Agreement, Seller and
Purchaser have entered into an Access Agreement (the "ACCESS AGREEMENT")
pursuant to which Seller has agreed to perform certain tenant improvement work
required to be performed by the landlord under the Bassett Lease (as defined in
the Sale Agreement), as more particularly described in the Access Agreement (the
"BASSETT TI WORK").
WHEREAS, the Sale Agreement provides that Purchaser and Seller shall enter
into an escrow agreement with Escrow Holder into which escrow Seller will
deposit sufficient funds to pay for all unpaid cost of the Bassett TI Work and
all unpaid leasing commissions due in connection with the Bassett Lease (the
"BASSETT LEASING COMMISSIONS").
WHEREAS, the parties wish to provide for the terms upon which such funds
shall be held, invested and distributed as hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINED TERMS. Capitalized terms used but not otherwise defined herein
shall have the meaning ascribed to such terms in the Sale Agreement.
2. DELIVERY OF ESCROW DEPOSIT. Contemporaneously with the execution of
this Agreement by the parties, Seller shall deposit into escrow (the "ESCROW")
with Escrow Holder out of the Purchase Price proceeds the sum of $992,466 (less
any amounts previously paid by Seller on account of the Bassett Leasing
Commissions) (the "DEPOSIT"), which amount represents $92,466 with respect to
the Bassett Leasing Commissions (less any amounts previously paid by
<Page>
Seller on account of the Bassett Leasing Commissions) and $900,000 for the
Bassett TI Work. Escrow Holder agrees to hold, invest and distribute the Deposit
in accordance with the terms and conditions of this Agreement.
3. MAINTENANCE OF DEPOSIT. The Deposit shall be held in a federally
insured interest bearing money market account or certificate of deposit (having
a maturity not greater than 30 days) with a bank having a net worth in excess of
$1,000,000,000 or such other institution as may be mutually agreed to by
Purchaser and Seller. All accrued earnings on the Deposit shall first be
allocated to the payment of the Escrow Holder's fee, and the amount of any
remainder shall be paid to Seller pursuant to the terms of this Agreement.
Escrow Holder shall provide monthly statements to Purchaser and Seller of the
principal and investment income accrued on the Deposit.
4. DEPOSIT DISTRIBUTION. The Deposit shall be disbursed solely to (a)
reimburse Seller for portions of the completed Bassett TI Work for which Seller
has paid, (b) directly pay the costs of the Bassett TI Work, to the extent such
work has been completed, (c) reimburse Seller for the Bassett Leasing
Commissions for which Seller has paid, and (d) directly pay the costs of the
Bassett Leasing Commissions. Two (2) business days following written
certification delivered to Purchaser and Escrow Holder from Seller and BDF's
architect (or such other architect reasonably acceptable to Seller and
Purchaser) that (i) the portion of the Bassett TI Work for which reimbursement
or payment is being sought has been completed, or (ii) that the Bassett Leasing
Commissions are due, Escrow Holder shall promptly release and disburse to Seller
or at Seller's direction a portion of the Deposit equal to the amount requested
in such written certification, and shall issue a title endorsement "dating-down"
Purchaser's title insurance policy insuring against liens that are the subject
of such disbursement. Any remaining Deposit in this escrow after the Bassett TI
Work has been completed and the Bassett Leasing Commissions have been paid shall
be automatically disbursed to Seller. The Bassett TI Work shall be deemed
completed upon the first to occur of (A) receipt of an estoppel certificate from
BDF confirming that the Bassett TI Work has been completed, or (B) (i) BDF
commencing to pay rent under the Bassett Lease, and (ii) receipt of an estoppel
certificate from BDF in the form required by Section 28 of the Bassett Lease;
provided, however, that in the event the permit issued for the Bassett TI Work
requires a certificate of occupancy be issued, then in addition to satisfaction
of either of the conditions set forth in clauses (A) or (B), above, the Bassett
TI Work shall not be deemed completed until such certificate of occupancy has
been issued.
5. ADVERSE CLAIMS. If any dispute arises with respect to this Agreement,
Escrow Holder is authorized to interplead such disputes in a court of competent
jurisdiction and deposit all funds held hereunder with the court. In such case
Escrow Holder shall be entitled to costs incurred on account of such action,
including reasonable attorneys fees, which costs shall be allocated between the
parties equally (without prejudice to or modification of their rights and
remedies as against each other). Escrow Holder may not, however, undertake such
deposit and interpleader unless it has given each of the parties hereto no less
than ten (10) days prior written notice before such deposit and interpleader as
to the intentions of Escrow Holder. Upon interpleading funds pursuant hereto,
Escrow Holder shall thereafter be relieved of further responsibility.
-2-
<Page>
6. TERMINATION OF AGREEMENT. This Agreement terminates at such time as
Escrow Holder delivers the Deposit in accordance with Section 4 or interpleads
the Deposit in a court of competent jurisdiction in accordance with Section 5.
7. LIABILITY OF ESCROW HOLDER. Escrow Holder has been induced to accept
its duties under this Agreement by the following terms, conditions, agreements
and representations of the parties hereto.
7.1. LIABILITY. Escrow Holder is not liable to any other party hereto,
or any of their representatives, successors or assigns, for any action or
failure to act by Escrow Holder hereunder, except for Escrow Holder's own bad
faith, fraud, negligence or willful misconduct. Seller and Purchaser agree to
jointly and severally indemnify and hold harmless Escrow Holder and any
successor, representative, employee or agent of Escrow Holder (without prejudice
to or modification of Seller's and Purchaser's rights or remedies as against
each other), from and against any and all losses, liabilities, claims, actions,
damages and expenses, including reasonable attorneys' fees and disbursements,
arising out of or in connection with this Agreement, except for claims against
Escrow Holder based upon bad faith, fraud, negligence or willful misconduct that
are successfully asserted against Escrow Holder. This indemnification survives
the termination of this Agreement.
7.2. ESCROW HOLDER'S RELIANCE. Escrow Holder is entitled to rely upon
any order, judgment, certification, demand, notice, instrument or other writing
delivered to it hereunder believed by it to be genuine without being required to
determine the authenticity or the correctness of any fact stated therein or the
propriety or validity of the service thereof. Escrow Holder may act in reliance
upon any instrument or signature believed by it to be genuine and may assume
that any person purporting to give any notice or receipt or advice or to make
any statement or executing any document in connection with the provisions hereof
has been duly authorized to so do.
7.3. ENTIRE AGREEMENT. This Agreement and the Access Agreement
expressly set forth all the duties of Escrow Holder with respect to any and all
matters pertinent hereto. Escrow Holder is not bound by the provisions of any
other agreement, except as otherwise set forth herein.
7.4. ADVICE OF COUNSEL. Escrow Holder may act in good faith pursuant
to the advice of its counsel with respect to any matter relating to this
Agreement.
8. RESIGNATION AND REMOVAL OF ESCROW HOLDER.
8.1. RESIGNATION AND REMOVAL. Escrow Holder may resign at any time by
giving no less than ten (10) days prior written notice of such resignation to
the other parties hereto. As soon as reasonably practicable after such notice of
resignation, a successor Escrow Holder (the "Successor") shall be appointed by
the other parties hereto. Escrow Holder also may be removed at any time, without
prior notice, as Escrow Holder hereunder by the unanimous written agreement of
the other parties hereto.
8.2. SUCCESSOR ESCROW HOLDER. Any appointed Successor must execute,
acknowledge and deliver to its predecessor Escrow Holder (the "Predecessor") and
the other
-3-
<Page>
parties hereto an instrument accepting such appointment and agreeing to the
terms of this Agreement. Thereupon, the resignation or removal of the
Predecessor shall become effective and the Successor shall succeed to the rights
and duties of the Predecessor hereunder. The Predecessor shall then immediately
deliver to the Successor the Deposit and any documents then held by the
Predecessor pursuant to this Agreement.
8.3. FAILURE TO APPOINT A SUCCESSOR ESCROW HOLDER. Should the parties
fail to appoint a Successor as set forth herein upon Escrow Holder's resignation
under this Section, Escrow Holder may petition a court of competent jurisdiction
for the appointment of a Successor. Any costs incurred by Escrow Holder with
respect to such petition, including reasonable attorneys' fees and expenses, are
to be paid equally by Purchaser and Seller.
9. AMENDMENT AND MODIFICATION. No amendment, modification, supplement,
termination, consent or waiver of any provision of this Agreement, nor consent
to any departure therefrom, will in any event be effective unless the same is in
writing and is signed by the party against whom enforcement of the same is
sought. Any waiver of any provision of this Agreement and any consent to any
departure from the terms of any provision of this Agreement is to be effective
only in the specific instance and for the specific purpose for which given.
10. ASSIGNMENTS. No party may assign or transfer any of its rights or
obligations under this Agreement to any other person (except as set forth in
Section 8 with respect to Escrow Holder) without the prior written consent of
the other parties.
11. FACSIMILE EXECUTION. For purposes of this Agreement, a document (or
signature page thereto) signed and transmitted by facsimile machine or
telecopier is to be treated as an original document. The signature of any party
thereon, for purposes hereof, is to be considered as an original signature, and
the document transmitted is to be considered to have the same binding effect as
an original signature on an original document.
12. COUNTERPARTS. This Agreement may be executed by the parties on any
number of separate counterparts, and all such counterparts so executed
constitute one agreement binding on all the parties notwithstanding that all the
parties are not signatories to the same counterpart.
13. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties pertaining to the subject matter hereof and supersedes all
prior agreements, understandings, negotiations and discussions of the parties,
whether oral or written.
14. FURTHER ASSURANCES. The parties will execute and deliver such further
instruments and do such further acts and things as may be required to carry out
the intent and purpose of this Agreement.
15. GOVERNING LAW. This Agreement and the rights and obligations of the
parties hereunder are to be governed by and construed and interpreted in
accordance with the laws of the State of Illinois applicable to contracts made
and to be performed wholly within Illinois, without regard to choice or conflict
of laws rules.
-4-
<Page>
16. NOTICES. All notices, consents, requests, demands and other
communications hereunder shall be deemed to have been duly given or made if
given or made as provided in Section 18.01 of the Sale Agreement.
17. LEGAL FEES. Except as otherwise provided herein, all legal and other
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby are to be paid by the party incurring such
costs and expenses. In the event any party brings suit to construe or enforce
the terms hereof, or raises this Agreement as a defense in a suit brought by
another party, the prevailing party shall be entitled to recover its reasonable
attorneys' fees and expenses.
18. SUCCESSORS AND ASSIGNS. All provisions of this Agreement shall be
binding upon, inure to the benefit of and are enforceable by or against the
parties and their respective heirs, executors, administrators or other legal
representatives and permitted successors and permitted assigns.
19. CONFLICT. This Agreement does not modify or amend any of the rights or
obligations set forth in the Access Agreement. In the event of any conflict
between this Agreement and the Access Agreement, the terms of the Access
Agreement shall govern.
20. NO THIRD PARTY BENEFICIARY. There are no third party beneficiaries to
this Agreement.
-5-
<Page>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
SELLER:
ORIX TOUCHSTONE SEATTLE VENTURE, an
Illinois general partnership
By: ORIX Seattle II, Inc., its Managing General
Partner
By: /s/ David R. Brown
---------------------------------------
Its: David R. Brown
------------------------------------
President
PURCHASER:
INLAND WESTERN SEATTLE NORTHGATE NORTH,
L.L.C., a Delaware limited liability company
By: Inland Western Retail Real Estate Trust,
Inc., a Maryland corporation, its sole
member
By: /s/ Valerie Medina
----------------------------------------
Name: Valerie Medina
--------------------------------------
Title: Assistant Secretary
-------------------------------------
ESCROW HOLDER:
FIRST AMERICAN TITLE INSURANCE
COMPANY
By: /s/ [ILLEGIBLE] for Mary Lou Kennedy
----------------------------------------------
Name: Mary Lou Kennedy
--------------------------------------------
Title: SUP National Counsel
-------------------------------------------
-6-
<Page>
JOINDER
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned, an affiliate of Seller, hereby joins
in the execution of this Agreement for the purpose of guaranteeing to Purchaser
Seller's obligations hereunder.
ORIX REAL ESTATE EQUITIES, INC., a
Delaware corporation
By: /s/ David R. Brown
----------------------------------------------
Name: David R. Brown
--------------------------------------------
Title: President & CEO
-------------------------------------------
-7-