CHICAGO--(BUSINESS WIRE)--UNITE HERE issued the following letter to Inland Real Estate Income Trust’s shareholders regarding the planned acquisition of properties formerly owned by Inland Diversified:
Dear Inland Real Estate Income Trust Investor:
This week Income Trust announced that it is purchasing a portfolio of properties from Kite Realty. Just a few months ago, this same portfolio was owned by Inland Diversified Real Estate Trust. Shareholders will pay approximately $338 million for the portfolio, plus closing costs and an additional $5 million-plus Acquisition Fee. This fee is on top of the nearly $20 million in insider fees already charged to shareholders.
We question this proposed sale and its price tag for shareholders. The transaction is a boomerang sale. These properties were owned by Inland Diversified—a sister-vehicle of Income Trust’s. Now, the same Inland insider-owned entity that purchased these properties for Inland Diversified has recommended that Income Trust buy them, which comes with a hefty Acquisition Fee of nearly $5.1 million. No independent appraisals were obtained, according to Income Trust’s filings.
We encourage prospective and current Income Trust investors to consider the following:
- Why is Income Trust recycling old Inland Diversified real estate deals?
- Inland Diversified merged into Kite Realty just a few months ago. Was this transaction contemplated as part of that merger deal, i.e. quid pro quo?
- No independent appraisals were obtained. Is the $338 million purchase price reasonable?
- What services are shareholders receiving for the over $5 million Acquisition Fee, since this deal was not newly sourced or independently valued? Inland has waived Acquisition Fees for other non-traded REIT shareholders.
- What protections are in place to protect shareholders from self-serving deals?