Why are Diversified shareholders being treated differently than
Inland’s other investors? In March, Inland American internalized
for no fee. Inland has been marketing its latest non-traded REIT with
no internalization fee as a major selling point. Meanwhile, you are
being asked to pay up to $12 Million for a fee that terminates
Diversified’s external management agreements.
Why are you being asked to pay a $10+ Million fee to the same
entity that is headed by Diversified’s President? Mr. Barry
Lazarus wears many hats: he’s not only Diversified’s top executive,
COO and a director, he’s also president of Diversified’s Business
Manager. In addition to the hefty fee for the Business Manager which
is owned by Inland insiders, Mr. Lazarus will be personally rewarded
with an $800,000 cash, “Golden Parachute” as part of this deal.
Haven’t you paid enough? You have been charged over $100
Million in offering costs, $50 Million in fees & expenses to the
Business Manager and Property Managers, and $10 Million in other fees
by entities controlled by Inland insiders. The Business Manager has
regularly waived portions of its fee in the past. Why should you now
have to pay to end these agreements?
UNITE HERE issued the following letter to Inland Diversified Real Estate
Trust shareholders regarding the upcoming merger vote with Kite Realty:
Dear Inland Diversified Investor:
You have been charged $166 Million in fees and expenses by entities
controlled by Inland insiders already. As part of the Kite Realty merger
deal, you are about to pay millions more to these same insiders.
This is in stark contrast to Inland’s no internalization fee promise at
its other non-traded REITs.
The merger’s transaction costs are estimated to be more than $45
Million. Over a quarter of this amount will be paid by you and existing
Kite investors to entities controlled by Inland insiders in the form of
liquidity event and transition fees, a “Golden Parachute” for
Diversified’s top executive, and other consulting and management
Before you vote on June 24th, you should ask:
UNITE HERE is a union representing over 275,000 employees in the
hotel, food service, and gaming industries. Its members are
beneficiaries of pension funds with over $60 billion in assets. We
believe investors and employees alike are better served by strong
corporate governance practices. UNITE HERE Local 19 has a labor dispute
at a hotel owned by Inland American.
Mike French, 510-967-1673
Source: UNITE HERE