DRA Buys Inland Real Estate in $2.3B Deal

Inland Real Estate Corporation (IRC) announced that it has entered into a definitive agreement to be acquired by DRA Advisors in a deal valued at about $2.3 billion, including the assumption of existing debt. International law firm Proskauer represented Inland Real Estate in the deal, which, as of September 30, 2015, owned interests in 135 fee simple investment properties, including 36 owned through its unconsolidated joint ventures, with aggregate leasable space of approximately 15 million square feet. Inland's board has unanimously approved the merger, expected to occur in the first half of 2016, though it is contingent upon customary closing conditions, including the approval of stockholders, who will vote on the deal at a special meeting. Under the terms of the merger agreement, funds managed by DRA will acquire all issued and outstanding common stock of IRC for $10.60 per share in cash; upon completion of the transaction, IRC will become a privately held REIT.

"The Board has been focused on the options available to address the long-term discount at which the Company's shares have traded versus private market valuations and its shopping center REIT peers," said Thomas P. D'Arcy, non-executive chairman of Inland Real Estate Corporation. "The Board unanimously believes this all-cash offer is the best course of action to address this valuation gap and provide our stockholders with strong relative value for their investment."

IRC said it expects to pay regular monthly cash distributions of $0.0475 per share on the outstanding shares of its common stock until the merger closes. In addition, the company will pay monthly cash dividends of $0.169271 per share on the outstanding shares of its 8.125 percent Series A cumulative redeemable preferred stock and and $0.144791667 per share on the outstanding shares of its 6.95% Series B cumulative redeemable preferred stock.

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REISA Panel on Non-Traded REIT Industry

REISA's Spring Symposium met this month with nearly 600 in attendance, featuring an opening session panel, "Liquidity in Non-Traded REITs: Insights from Industry Leaders," with industry leaders American Realty Capital, Cole Real Estate Investments, Inland Real Estate Corporation, and CNL Financial Group. The main message, as noted by CoStar, was that "non-traded REITs need to continue to implement best practices to reduce fees, improve transparency and bring more investors to the industry. Job one will be unlocking shareholder by making good on the $39 billion in liquidity events being considered by companies in the non-traded REIT space." The panel featured Nicholas Schorsch, chairman and CEO of American Realty Capital, Marc Nemer, president and CEO of Cole, Andrew Hyltin, group president, fund management of CNL, and Daniel Goodwin, chairman and CEO of Inland.

"The non-traded REIT industry has generated a tremendous number of headlines in recent months on a number of fronts, particularly as several offerings have or are pursuing liquidity events," said REISA Executive Director John Harrison. "Non-traded REITs are increasingly popular investment vehicles and account for more than $80 billion in assets under management – as these offerings transition from illiquid to liquid investments, they are shaking up the investment real estate world. These industry giants will share their insights on this increasingly important issue to investors and their financial advisors."

"The public markets believe in non-traded REITs. Tomorrow's public companies are coming from this room," said ARCP's Schorsch. “We sit here together on this panel with close to $30 billion of assets that are going to look for liquidity. The bigger the market, the more efficient the transactions."

The Real Estate and Investment Securities Association is a national trade association serving alternative investment and securities industry professionals since 2003, with over 1,200 members who are key decision makers that represent over 30,000 professionals throughout the nation.

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