Inland Real Estate Partners with Dutch Pension Fund on $270M Shopping Center JV

The joint venture will kick off with PGGM's infusion of $20 million of equity and Inland's contribution of three retail properties valued at an aggregate $45 million.

June 9, 2010
By Barbra Murray, Contributing Editor

Courtesy Flickr Creative Commons user gmnonic

Oak Brook, Ill.-based Inland Real Estate Corp. is ready to snap up as much as $270 million of grocery-anchored properties and community retail centers now that it has established a new strategic joint venture with Zeist, Netherlands-headquartered pension fund administrator and asset manager PGGM.

The joint venture will kick off with PGGM’s infusion of $20 million of equity and Inland’s contribution of three retail properties valued at an aggregate $45 million. The group of assets includes two Illinois shopping centers, the 170,100-square-foot Woodland Commons in Buffalo Grove and the 83,000-square-foot Mallard Crossing in Elk Grove Village, as well as Arden, Minnesota’s 97,600-square-foot Shannon Square Shoppes.

Following the closing of the initial investment by the two parties, Inland will eventually contribute nine additional properties to the joint venture and PGGM will throw in more money, specifically $60 million for asset purchases and $50 million for assets contributed by Inland. As for the target market, Inland will stick to its usual stomping grounds, shopping for high quality properties in well-located markets exclusively in the Midwest region. Leveraging the monetary investment, the team will make purchases over a two-year period.

Per terms of the agreement, PGGM will possess a 45 percent equity ownership interest in the joint venture, leaving Inland holding the remaining 45 percent stake. Additionally, as managing partner, Inland will rake in a bit of dough through asset management, property management and leasing activities on behalf of the joint venture.

But Inland isn’t the country’s only real estate player that has been partnering up with entities beyond U.S. borders for shopping center acquisition purposes. Last month, New Hyde Park, N.Y.-based Kimco Realty Corp. announced the formation of a joint venture with Herzliya Pituach, Israel-based BIG Shopping Centers to acquire high-quality neighborhood and community shopping centers across the U.S. May also brought an agreement by Inland Western Retail Real Estate Trust Inc.–another REIT sponsored by The Inland Real Estate Group of Companies Inc.–to create a joint venture with Toronto, Ont.’s RioCan Real Estate Investment Trust, focusing on necessity-based shopping centers.