Inland, NYSTRS Wed $100M for Texas Fund

AUSTIN-Inland Real Estate Corp. and joint venture partner, the New York State Teachers’ Retirement System, have committed another $100 million to a buying pool pointed at Texas after spending $227 million in the first quarter in the Midwest.

The spotlight is pointed at Dallas, Austin, San Antonio, Houston and El Paso. Under the agreement, NYSTRS will kick in $80 million with the Oak Brook, IL-based Inland ponying up the balance to seed the IN Retail Fund Texas LLC.

Inland and NYSTRS formed a JV in 2004 to acquire eight neighborhood and community retail centers in Chicago and Minneapolis, but expanded the buying plan to include surrounding states. The end result was a shopping spree that netted more than one million sf valued at $174 million and bearing a net value of $100 million, according to Inland’s SEC filing. At the 2005 close, the JV pledged to add $100 million so it could acquire another $400 million of retail assets in Illinois, Wisconsin and Minnesota. In Q1 2006, they bought the 565,000-sf Algonquin Commons in Algonquin, IL, $154 million; 226,170-sf Shoppes at Grayhawk in Omaha, $27.1 million; 179,100-sf Honey Creek Commons in Terre Haute, IN, $23.8 million; Big 67.835-sf Lake Town Square in Big Lake, MN, $10 million; and 63,780-sf Pick N Save Shopping Center in Waupaca, WI, $8.1 million.

In 2004, Inland Western Retail REIT Inc. was Texas’ most active buyer, including in its holdings Southpark Meadows in Austin. But, that REIT’s spending started to slow down by midyear 2005–only to be replaced in the third and fourth quarters by MB REIT, a joint venture with Coconut Creek, FL-based Minto Builders Inc., which started shopping the Greater Houston Area for single-tenant and ground-leased properties to build a $442-million portfolio.