Table of Contents

As filed with the Securities and Exchange Commission on May 21, 2010

Registration No.  333-          

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

INLAND REAL ESTATE CORPORATION

(Exact name of registrant as specified in its charter)

2901 Butterfield Road

Oak Brook, Illinois 60523
Telephone (630) 218-8000

(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant’s Principal Executive Offices)

Beth Sprecher Brooks

Inland Real Estate Corporation

2901 Butterfield Road

Oak Brook, Illinois 60523

(630) 218-8000

(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)

Approximate date of commencement of proposed sale of the securities to the public:  As soon as practicable after this registration statement becomes effective and all of the other conditions precedent to the tender/exchange offer, as described herein, have been satisfied or waived.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Calculation of Registration Fee

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

Table of Contents

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MAY 21, 2010

PROSPECTUS

$125,000,000

Inland Real Estate Corporation

     % Convertible Senior Notes due 2029

Offer to Exchange and Offer to Purchase for Cash

Relating to Any and All of the Outstanding 4.625% Convertible Senior Notes due 2026

(CUSIP No. 457461AB7)

and Solicitation of Consent for Proposed Amendment to the Related Indenture

THE TENDER/EXCHANGE OFFER AND CONSENT SOLICITATION (AS DEFINED HEREIN) WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON               , 2010, WHICH WE REFER TO AS THE “EXPIRATION DATE,” UNLESS EARLIER TERMINATED OR EXTENDED BY US.   TENDERS OF OLD NOTES MAY BE WITHDRAWN AT ANY TIME BEFORE 5:00 P.M., NEW YORK CITY TIME ON THE EXPIRATION DATE. OLD NOTES THAT ARE NOT TENDERED OR THAT ARE WITHDRAWN BEFORE THE EXPIRATION DATE WILL REMAIN OUTSTANDING.

Upon the terms and subject to the conditions described in this prospectus and consent solicitation statement (as it may be supplemented or amended from time to time, the “prospectus”), and set forth in the related letter of transmittal and consent (as it may be supplemented or amended from time to time, the “Letter of Transmittal and Consent”), Inland Real Estate Corporation is offering to exchange or purchase, at the election of each eligible holder and subject to the Cash Payment Limit described below, any and all of our outstanding 4.625% Convertible Senior Notes due 2026 (the “Old Notes”) held by eligible holders for:

(1) A new series of      % Convertible Senior Notes due 2029 (the “New Notes”), in an amount equal to $1,000 principal amount of New Notes for each $1,000 principal amount of Old Notes exchanged (the “Exchange Option”);

(2) Cash, in an amount equal to $1,000 for each $1,000 principal amount of Old Notes tendered (the “Tender Option”).  If the cash required to purchase all of the Old Notes tendered under the Tender Option exceeds $15 million (the “Cash Payment Limit”), we will accept the Old Notes tendered for purchase on a pro rata basis, and unless withdrawn as described herein, the balance of any Old Notes tendered under the Tender Option but not accepted for purchase for cash will be treated as if they had been tendered for exchange under the Exchange Option and will be exchanged for New Notes; or

(3) A combination of the Exchange Option and the Tender Option, subject to the Cash Payment Limit.

The Exchange Option and the Tender Option are referred to collectively as the “tender/exchange offer.”

Our common stock is listed on the New York Stock Exchange under the symbol “IRC.” The last reported sale price of our common stock on the New York Stock Exchange on May 21, 2010 was $8.05 per share. The New Notes will not be listed on any securities exchange or included in any automated quotation system.

See “Risk Factors” beginning on page 19 for a discussion of certain risks that you should consider before participating in the tender/exchange offer and consent solicitation.   Neither we, our board of directors, the exchange agent, the information agent nor the dealer manager is making any recommendation as to whether you should choose to tender your Old Notes pursuant to the tender/exchange offer, or to deliver a consent pursuant to the consent solicitation.  Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

Macquarie Capital

(Dealer Manager)

The date of this prospectus is           , 2010.

Table of Contents

The following table sets forth the series of Old Notes subject to the tender/exchange offer, and indicates the consideration to be received by holders of the Old Notes in the tender/exchange offer.  If a holder validly tenders any Old Notes, and we accept them for exchange or purchase, we will pay in cash all accrued and unpaid interest on Old Notes tendered in the tender/exchange offer up to but excluding the date the tender/exchange offer is completed.

The Consent Solicitation

In connection with the tender/exchange offer, we are also soliciting, upon the terms and subject to the conditions specified in this prospectus, consents from the holders of the Old Notes to a proposed amendment to the indenture governing the Old Notes (the “consent solicitation”), to amend the default provisions contained therein to increase the threshold for accelerating indebtedness under the indenture upon default on any other indebtedness from $20 million to $100 million (the “Indenture Amendment”).  Any holder that tenders the Old Notes, and whose Old Notes are accepted for exchange or purchase by us, pursuant to the tender/exchange offer will be deemed to have delivered a valid consent to the Indenture Amendment.  The Indenture Amendment will become effective only if we receive valid consents from holders of a majority in aggregate principal amount of the Old Notes.

The New Notes

The terms of the New Notes will be the same as the terms of the Old Notes, except that the Old Notes will differ in certain material respects, including:

·                                          the interest rate on the New Notes will be      % per annum, as compared to 4.625% per annum for the Old Notes;

·                                          the maturity date of the New Notes will be November 15, 2029, as compared to November 15, 2026 for the Old Notes;

·                                          the initial conversion price for the New Notes will be $      per share, as compared to $20.71 per share for the Old Notes;

·                                          we will not be permitted to redeem the New Notes prior to November 21, 2014, as compared to November 21, 2011 for the Old Notes;

·                                          holders of the New Notes will have the right to require us to repurchase the New Notes at par on November 15, 2014, November 15, 2016, November 15, 2019 and November 15, 2024, as compared to November 15, 2011, November 15, 2013, November 15, 2016 and November 15, 2021 for the Old Notes; and

·                                          a default on any indebtedness greater than $100 million which results in the acceleration of that debt, or which constitutes a failure to pay that debt at maturity or other scheduled payment date, will constitute an event of default, as compared to $20 million for the Old Notes.

ii

Table of Contents

TABLE OF CONTENTS

No dealer, salesperson or other person is authorized to give any information or to represent anything not contained or incorporated by reference in this prospectus, any accompanying supplement to this prospectus or any free writing prospectus we may provide you in connection with an offering of securities. You must not rely on any unauthorized information or representations not contained or incorporated by reference in this prospectus, any accompanying supplement or any free writing prospectus. This prospectus, any accompanying supplement or any free writing prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities other than the registered securities to which they relate, nor does this prospectus, any accompanying supplement to this prospectus or any free writing prospectus constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. The information contained in this prospectus, any supplement to this prospectus or any free writing prospectus is accurate only as of the date of that document.

This prospectus incorporates important business and financial information about the Company that is not included in or delivered with the document. We will provide without charge to each person, including any beneficial owner, to whom a prospectus is delivered, upon written or oral request of that person, a copy of any document incorporated by reference. Requests should be directed to Inland Real Estate Corporation, 2901 Butterfield Road, Oak Brook, Illinois 60523, telephone (800) 331-4732. To obtain timely delivery of any of our filings, agreements or other documents, you must make your request to us no later than             , 2010. In the event that we extend the tender/exchange offer and consent solicitation, you must submit your request at least five business days before the expiration date of the tender/exchange offer and consent solicitation, as extended.

iii

Table of Contents

INLAND REAL ESTATE CORPORATION

In this prospectus, except as the context otherwise requires or as otherwise noted, whenever we refer herein to “IRC,” the “Company” or “us” or use the terms “we” or “our,” we are referring to Inland Real Estate Corporation and its consolidated subsidiaries. You should read the following summary together with the more detailed information and consolidated financial statements and the notes to those statements included herein or incorporated herein by reference.

We are a Maryland corporation formed on May 12, 1994.  We are a real estate investment trust or “REIT” that through consolidated or unconsolidated entities acquires, owns, operates and develops open-air neighborhood, community, power and lifestyle shopping centers and single-tenant retail properties located primarily in what we believe is the demographically strong upper Midwest markets.

Approximately 66% of our total retail portfolio (consolidated plus unconsolidated) gross leasable area is located in the Chicago Metropolitan Statistical Area (“MSA”), with our second largest market concentration being approximately 18% in the Minneapolis-St. Paul MSA.  Tenants at our retail properties primarily provide “everyday” goods and services to consumers.  The primary drivers of our internal income growth are rental rate increases over expiring rates on new and renewal leases and cost savings from operational efficiencies.  As of March 31, 2010, we owned interests in 140 investment properties, including those owned through our unconsolidated joint ventures, comprised of:

·                                          sixty-one neighborhood retail centers totaling approximately 4,042,000 gross leasable square feet;

·                                          twenty community centers totaling approximately 2,928,000 gross leasable square feet;

·                                          twenty-eight power centers totaling approximately 4,473,000 gross leasable square feet;

·                                          one lifestyle center totaling approximately 537,000 gross leasable square feet; and

·                                          thirty single-user properties totaling approximately 2,099,000 gross leasable square feet.

We have qualified as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), for federal income tax purposes commencing with the tax year ended December 31, 1995.  So long as we qualify for treatment as a REIT, we generally will not be subject to federal income tax to the extent we meet the requirements of the tests imposed by the Code.  If we fail to qualify as a REIT in any taxable year, without the benefit of certain statutory relief provisions, we will be subject to federal and state income taxes on our taxable income at regular corporate tax rates.  Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income, property or net worth and federal income and excise taxes on our undistributed income.

To maintain our qualifications as a REIT, we engage in certain activities through Inland Venture Corporation and Inland Exchange Venture Corporation, wholly owned taxable REIT subsidiaries (each a “TRS”).  These TRS entities are subject to federal and state income and franchise taxes.

Our principal executive offices are located at 2901 Butterfield Road, Oak Brook, Illinois 60523, and our telephone number at that address is (630) 218-8000. Our web site is located at www.inlandrealestate.com. We also post our key corporate governance documents, including our board committee charters, our ethics policy and our principles of corporate governance on this web site. The information on, or linked to from, the web site is not part of and is not incorporated by reference into this prospectus.

Table of Contents

QUESTIONS AND ANSWERS ABOUT THE TENDER/EXCHANGE OFFER

AND CONSENT SOLICITATION

The following answers to questions that you may have as a holder of Old Notes highlight selected information included elsewhere or incorporated by reference in this prospectus. To fully understand the tender/exchange offer and consent solicitation and the other considerations that may be important to your decision about whether to participate, you should carefully read this prospectus in its entirety, including the section captioned “Risk Factors,” as well as the information incorporated by reference in this prospectus. See “Incorporation by Reference.” For further information about us, see the section of this prospectus captioned “Where You Can Find More Information.”

Q:           Why are you making the tender/exchange offer and consent solicitation?

A:            Holders of the Old Notes have the right to require us to repurchase their Old Notes for cash in whole or in part, at par, beginning on November 15, 2011.  If some or all of the holders exercise this right, failure to satisfy our repurchase obligation would result in an event of default under the indenture governing the Old Notes (the “Old Note Indenture”). Upon default, the holders of not less than 25% in principal amount of the outstanding Old Notes would have the right to declare the principal of all of the Old Notes due and payable immediately.  See the section of this prospectus captioned “Risk Factors” for additional discussion.

Therefore, we are conducting the tender/exchange offer to improve our financial flexibility by extending the repurchase (at the option of the holder) and maturity dates of our convertible senior indebtedness and reducing our overall indebtedness by retiring some of the Old Notes.

In connection with the tender/exchange offer, we are also soliciting consents to a proposed amendment to the Old Note Indenture to amend the default provisions contained therein to mirror the indenture that will govern the New Notes (the “New Note Indenture”).  Currently, a default by us or one of our consolidated subsidiaries on indebtedness which results in the acceleration of that debt, or which constitutes a failure to pay that debt at maturity or other scheduled payment date, will constitute an event of default under the Old Note Indenture if the amount accelerated or not paid equals or exceeds $20 million.  If the proposed amendment is approved by holders of a majority in aggregate principal amount of the Old Notes, the threshold for a cross-acceleration will be increased to $100 million.  We believe that, if effected, the proposed amendment will provide us with additional flexibility to negotiate with our lenders, and the lenders of our subsidiary debt, to the extent it becomes necessary.

Q:           What are the benefits of exchanging my Old Notes for New Notes?

A:            The initial conversion rate for each $1,000 principal amount of New Notes will be        shares of our common stock (compared to 48.2824 shares of our common stock for the Old Notes), equivalent to $       per share (compared to $20.71 per share for the Old Notes).  In addition, the interest rate on the New Notes will be       % per annum, as compared to 4.625% for the Old Notes.

Q:           What securities are being sought in the tender/exchange offer?

A:            We are offering to either exchange or purchase for cash, subject to the Cash Payment Limit, any and all of the Old Notes. As of the date hereof, $125 million aggregate principal amount of the Old Notes were outstanding.

Q:           Who may participate in the tender/exchange offer and consent solicitation?

A:            Any holder of Old Notes may participate in the tender/exchange offer and consent solicitation.

2

Table of Contents

Q:           What will I receive in the tender/exchange offer if I tender my Old Notes and they are accepted?

A:            For each $1,000 principal amount of Old Notes that you validly tender as part of the tender/exchange offer and we accept for exchange or purchase, you may elect to receive:

·                                          $1,000 principal amount of New Notes pursuant to the Exchange Option;

·                                          a cash payment of $1,000 pursuant to the Tender Option, subject to the Cash Payment Limit; or

·                                          a combination of the Exchange Option and Tender Option, subject to the Cash Payment Limit.

Regardless of which option you choose, we will pay in cash all accrued and unpaid interest on Old Notes tendered in the tender/exchange offer up to but excluding the date the tender/exchange offer is completed, which we refer to as the “settlement date.”

Your right to receive the applicable consideration in the tender/exchange offer is subject to all of the conditions described herein.

Q:           Are there limits in the amount of New Notes that will be issued pursuant to the Exchange Option?

A:            No, there is no limit on the amount of New Notes that will be issued in exchange for Old Notes pursuant to  the Exchange Option.

Q:           Are there limits in the amount of cash that the Company may use pursuant to the Tender Option?

A:            Yes, we intend to use up to $15 million to purchase Old Notes that are tendered under the Tender Option.  If tenders exceed $15 million, we will accept the Old Notes tendered for purchase on a pro rata basis.  Unless withdrawn as described herein, the balance of any Old Notes tendered under the Tender Option but not accepted for purchase for cash will be exchanged for New Notes as if the holders had elected to exchange them pursuant to the Exchange Option.  See “The Tender/Exchange Offer and Consent Solicitation — Proration and Priority of Exchanges.”

Q:           May I tender my Old Notes without consenting to the Indenture Amendment, or consent to the Indenture Amendment without tendering my Old Notes?

A:            No.  Any holder that tenders the Old Notes, and whose Old Notes are accepted for exchange or purchase by us, pursuant to the tender/exchange offer will be deemed to have delivered a valid consent to the Indenture Amendment.   Similarly, a holder cannot consent to the Indenture Amendment without tendering its Old Notes for exchange or purchase.

Q:           What vote is needed to approve the Indenture Amendment?

A:            The Indenture Amendment will become effective only if we receive valid consents from holders of a majority in aggregate principal amount of the Old Notes.  If you tender any Old Notes pursuant to the tender/exchange offer, you also will be deemed to have delivered a valid consent to the Indenture Amendment.

3

Table of Contents

Q:           How do the conversion rights differ between the Old Notes and the New Notes?

A:            The circumstances under which the holders of New Notes will have the right to convert their New Notes will be identical to those under the Old Notes except for the right to convert within a month of the final maturity date, which will apply at any time on or after October 15, 2029, as compared to October 15, 2026 under the Old Notes.  In addition, the initial conversion price for the New Notes will be different than the current conversion price for the Old Notes.  Each $1,000 principal amount of New Notes will be convertible into        shares of our common stock at a conversion price of $       per share.  Each $1,000 principal amount of Old Notes is currently convertible into 48.2824 shares of our common stock at a conversion price of $20.71 per share.

Q:           What other rights will I lose if I tender my Old Notes for exchange or purchase in the tender/exchange offer?

A:            If you validly tender all your Old Notes, and we accept them for exchange or purchase, you will lose any rights associated with being a holder of the Old Notes, including but not limited to any and all claims you may have, now or in the future, arising out of or related to the Old Notes.  You also will lose the right to receive interest and principal payments on the Old Notes and your rights as a creditor of the Company with respect to those Old Notes.

Q:           May I tender only a portion of the Old Notes that I hold?

A:            Yes. You do not have to tender all of your Old Notes to participate in the tender/exchange offer and consent solicitation. However, if you choose to tender your Old Notes for the New Notes as part of the Exchange Option, you must tender your Old Notes in a principal amount of $1,000 and integral multiples of $1,000 in excess thereof.  If you tender Old Notes in a principal amount that is not an integral multiple of $1,000, we will round downward the principal amount of New Notes that you are entitled to receive in exchange for your Old Notes to the nearest integral multiple of $1,000.  This rounded amount will be the principal amount of New Notes you will receive, and no additional cash will be paid in lieu of any principal amount of New Notes not received as a result of rounding down.

Q:           If the tender/exchange offer and consent solicitation are consummated and I do not participate or I do not tender all of my Old Notes, how will my rights and obligations under my remaining outstanding Old Notes be affected?

A:            If we receive valid consents from holders of a majority in aggregate principal amount of the Old Notes, the Old Note Indenture will be supplemented to give effect to the Indenture Amendment, thereby increasing the threshold for accelerating indebtedness under that indenture upon default on any other indebtedness from the current $20 million to $100 million.  In all other respects, the terms of your Old Notes that remain outstanding after the consummation of the tender/exchange offer and consent solicitation will not change as a result of the tender/exchange offer and consent solicitation.

Q:           How will the tender/exchange offer and consent solicitation affect the trading market for the Old Notes that are not exchanged?

A:            As Old Notes are tendered and accepted in the tender/exchange offer, the principal amount of remaining Old Notes will decrease. This decrease could reduce the liquidity of the trading market for the Old Notes.

Q:           What do you intend to do with the Old Notes that are purchased or exchanged in the tender/exchange offer?

A:            Old Notes accepted in the tender/exchange offer will be retired and cancelled.

4

Table of Contents

Q:           Are you making a recommendation regarding whether I should participate in the tender/exchange offer and consent solicitation?

A:            Neither we, our officers, our board of directors, the exchange agent, the information agent nor the dealer manager is making any recommendation as to whether you should tender all or any portion of your Old Notes for exchange or purchase, or deliver a consent pursuant to the consent solicitation.  Further, we have not authorized anyone to make any recommendation.  Accordingly, you must make your own determination as to whether to tender your Old Notes and, if so, the principal amount of Old Notes to tender. Before making your decision, we urge you to read this prospectus carefully in its entirety, including the information set forth in the section of this prospectus captioned “Risk Factors,” and the other documents incorporated by reference herein.

Q:           What are the conditions to the tender/exchange offer and consent solicitation?

A:            The Indenture Amendment will become effective only if we receive valid consents from holders of a majority in aggregate principal amount of the Old Notes.  In addition, the tender/exchange offer and consent solicitation are subject to certain customary conditions described in “The Tender/Exchange Offer and Consent Solicitation — Conditions to the Tender/Exchange Offer.”  We may, in our sole discretion, waive certain conditions of the tender/exchange offer and consent solicitation. If any of the conditions are not satisfied or waived for the tender/exchange offer by 5:00 p.m., New York City time, on                 , 2010 (unless we, in our sole discretion, elect to extend that date), which we refer to as the “expiration date,” we will not complete the tender/exchange offer and consent solicitation.

Q:           How will you fund the tender/exchange offer?

A:            We intend to fund any cash consideration necessary to complete the Tender Option with cash on hand or with funds drawn under our credit facility.

Q:           When do the tender/exchange offer and consent solicitation expire?

A:            The tender/exchange offer and consent solicitation will expire at 5:00 p.m., New York City time, on                  , 2010, unless extended or earlier terminated by us.

Q:           Under what circumstances can the tender/exchange offer and consent solicitation be extended, amended or terminated?

A:            We reserve the right, in our sole discretion and subject to applicable law, to extend, terminate or amend the tender/exchange offer and consent solicitation, by giving oral (promptly confirmed in writing) or written notice of the extension, termination or amendment to the exchange agent.

If we amend the tender/exchange offer and consent solicitation in a manner that we determine constitutes a material or significant change, we will extend the tender/exchange offer and consent solicitation for a period of five to ten business days, depending upon the significance of the amendment, if the tender/exchange offer and consent solicitation would otherwise have expired during the five to ten business day period. Any change in the consideration offered to holders of Old Notes in the tender/exchange offer will be paid to all holders whose Old Notes have previously been tendered pursuant to the tender/exchange offer.

Q:           How will I be notified if the tender/exchange offer and consent solicitation are extended, amended or terminated?

A:            Any extension, termination or amendment will be followed promptly by a public announcement thereof which, in the case of an extension, will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. For more information regarding notification of extensions, amendments or the termination of the tender/exchange offer and consent solicitation, see the section of this prospectus captioned “The Tender/Exchange Offer and Consent Solicitation — Expiration Date; Extensions; Amendments.”

5

Table of Contents

Q:           How do I tender my Old Notes for exchange or purchase in the tender/exchange offer?

A:            A holder who wishes to tender the Old Notes pursuant to the tender/exchange offer and deliver its consent pursuant to the consent solicitation must deliver a fully completed Letter of Transmittal and Consent or transmit an “agent’s message” to the exchange agent prior to 5:00 p.m., New York City time, on the expiration date. If your Old Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to participate in the tender/exchange offer, you should contact that registered holder promptly and instruct him, her or it to tender your Old Notes on your behalf.  If you are a participant in the Depository Trust Company (“DTC”), you must electronically transmit your acceptance through DTC’s Automated Tender Offer Program (“ATOP”).  A completed Letter of Transmittal and Consent need not accompany tenders effected through ATOP. Please carefully follow the instructions contained in this document on how to tender your Old Notes.  See “The Tender/Exchange Offer and Consent Solicitation — Procedures for Tender.” For further information on how to tender Old Notes, contact the information and exchange agent at the telephone number set forth on the back cover of this prospectus or consult your broker, dealer, commercial bank, trust company or other nominee for assistance.

Q:           How will I receive the New Notes if I choose the Exchange Option under the tender/exchange offer?

A:            The New Notes will be issued in book-entry only form and will be represented by one or more permanent global certificates deposited with a custodian for, and registered in the name of a nominee of, DTC.

Q:           What happens if some or all of my Old Notes are not accepted for exchange or purchase?

A:            If any tendered Old Notes are not accepted because of an invalid tender, the occurrence of other events described under the heading “The Tender/Exchange Offer and Consent Solicitation — Conditions to the Tender/Exchange Offer and Consent Solicitation” or otherwise, we will credit the Old Notes to your account maintained with DTC promptly after the expiration or termination of the tender/exchange offer and consent solicitation.

Q:           How do I deliver my consent to the Indenture Amendment?

A:            Any holder that tenders Old Notes, and whose Old Notes are accepted for exchange or purchase by us, pursuant to the tender/exchange offer will be deemed to have delivered a valid consent to the Indenture Amendment.

Q:           May I withdraw Old Notes previously tendered and revoke my consent to the Indenture Amendment?

A:            Yes, you may withdraw your tender of Old Notes and revoke your consent to the Indenture Amendment (1) at any time before the expiration date of the tender/exchange offer and consent solicitation and (2) after the expiration of 40 business days from the commencement of the tender/exchange offer and consent solicitation if we have not completed the tender/exchange offer as of that date.  Consents may be revoked at any time prior to the applicable withdrawal deadline and only by withdrawing the tendered Old Notes to which the consent relates.  For more information, see the section of this prospectus captioned “The Tender/Exchange Offer and Consent Solicitation — Withdrawal and Revocation Rights.”

Q:           How do I withdraw Old Notes previously tendered and revoke my consent to the Indenture Amendment?

A:            For a withdrawal or revocation to be effective, the holder must deliver to the exchange agent a written or facsimile notice of withdrawal of a tender or properly transmit to the exchange agent an agent’s message, which must be received by the exchange agent prior to the applicable withdrawal deadline.  If the Old Notes to be withdrawn have been delivered or otherwise identified to the exchange agent, a signed notice of withdrawal is effective immediately upon receipt by the exchange agent of written or facsimile transmission of the notice of withdrawal (or receipt of a request via DTC) even if physical release is not yet effected.  For more information regarding the procedures for withdrawal or revocation, see the section of this prospectus captioned “The Tender/Exchange Offer and Consent Solicitation — Withdrawal and Revocation Rights.”

6

Table of Contents

Q:           Will I have to pay any fees or commissions if I participate in the tender/exchange offer and consent solicitation?

A:            We will pay or cause to be paid all transfer taxes with respect to the acceptance of any Old Notes for exchange or purchase unless the box titled “Special Issuance or Payment Instructions” on the Letter of Transmittal and Consent has been completed, as described in the instructions thereto.  However, if your Old Notes are held through a broker or other nominee who tenders the Old Notes on your behalf, your broker may charge you a commission for doing so. You should consult with your broker or nominee to determine whether any charges will apply.

Q:           What risks should I consider in deciding whether or not to tender my Old Notes and deliver my consent?

A:            In deciding whether to participate in the tender/exchange offer and consent solicitation, you should carefully consider the discussion of risks and uncertainties affecting us, the tender/exchange offer and consent solicitation, the New Notes and our common stock that are described in the section of this prospectus captioned “Risk Factors,” and the documents incorporated by reference in this prospectus.

Q:           What are the material U.S. federal income tax considerations of my participating in the tender/exchange offer and consent solicitation?

A:            Please see the section of this prospectus captioned “Material United States Federal Income Tax Considerations.” You should consult your own tax advisor for a full understanding of the tax considerations of participating in the tender/exchange offer and consent solicitation.

Q:           Will you receive any cash proceeds from the tender/exchange offer?

A:            No, we will not receive any cash proceeds from the tender/exchange offer and consent solicitation.

Q:           With whom may I talk if I have questions about the tender/exchange offer and consent solicitation?

A:            If you have questions about the terms of the tender/exchange offer and consent solicitation, please contact Macquarie Capital (USA) Inc., the dealer manager for the tender/exchange offer and consent solicitation (“Macquarie” or the “Dealer Manager”). If you have questions regarding the procedures for tendering Old Notes in the tender/exchange offer or delivering your consent to the Indenture Amendment, or require assistance regarding this process, please contact the information and exchange agent. The contact information for the Dealer Manager and the information and exchange agent are set forth on the back cover page of this prospectus.  See also “Where You Can Find More Information.”

7

Table of Contents

SUMMARY OF THE TENDER/EXCHANGE OFFER AND CONSENT SOLICITATION

This summary highlights the information contained elsewhere in this prospectus. Because this is only a summary, it does not contain all of the information that may be important to you. You should read the following summary together with the more detailed description of the terms of the tender/exchange offer and consent solicitation contained elsewhere in this prospectus.  See the section captioned “The Tender/Exchange Offer and Consent Solicitation.”

The Tender/Exchange Offer and Consent Solicitation

The following is a brief summary of the terms of the tender/exchange offer and consent solicitation. For a more complete description, see “The Tender/Exchange Offer and Consent Solicitation.”

8

Table of Contents

9

Table of Contents

10

Table of Contents

11

Table of Contents

YOU SHOULD READ THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL AND CONSENT CAREFULLY BEFORE MAKING A DECISION TO TENDER YOUR OLD NOTES AND GIVE YOUR CONSENT.

12

Table of Contents

SUMMARY OF THE NEW NOTES

This summary is not a complete description of the New Notes. You should read the following summary together with the more detailed description of the New Notes contained elsewhere in this prospectus. See the section captioned “Description of the New Notes” herein.  As used in this portion of the summary, the terms “we,” “us,” “our” and Inland Real Estate Corporation (“IRC”) refer only to IRC and not to any of our subsidiaries.

13

Table of Contents

14

Table of Contents

15

Table of Contents

16

Table of Contents

SUMMARY FINANCIAL DATA AND RATIO OF EARNINGS TO FIXED CHARGES

The table below sets forth certain of our historical financial data as of and for each of the periods indicated.  You should read the data set forth below in conjunction with our consolidated financial statements and related notes, our Management’s Discussion and Analysis of Financial Condition and Results of Operations and other financial information, incorporated by reference to our Annual Report on Form 10-K as of and for the year ended December 31, 2009 and our Quarterly Report on Form 10-Q as of and for the period ended March 31, 2010. The following tables show selected portions of our audited historical consolidated financial data as of and for the five years ended December 31, 2009.  We derived our summary financial data as of and for the five years ended December 31, 2009 from our audited consolidated financial statements, which have been audited by KPMG LLP, independent registered public accounting firm. The summary financial data as of and for the three months ended March 31, 2010 and 2009 are derived from our unaudited financial statements included in our Quarterly Report on Form 10-Q as of and for the period ended March 31, 2010, which is incorporated by reference in this prospectus, and have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information, and in our opinion, reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of our results of operations and financial position. The results of operations for the three months ended March 31, 2010 are not necessarily indicative of the results of operations to be expected for the full year or any future period.

17

Table of Contents

Summary of our Ratio of Earnings to Fixed Charges

The following table sets forth our ratio of earnings to fixed charges for each of the periods indicated. For a more complete description, see “Ratio of Earnings to Fixed Charges.”

18

Table of Contents

RISK FACTORS

You should carefully consider the risks described below, as well as the risks described in the documents incorporated by reference into this prospectus and any accompanying supplement thereto, before tendering the Old Notes for exchange or purchase and delivering a consent. These risks are not the only ones we face. Additional risks, not presently known or that are currently deemed immaterial, could also materially and adversely affect our business, financial condition and results of operations. The trading price of the New Notes and our common stock could decline due to any of these risks, and you may lose all or part of your investment. This prospectus, any accompanying supplement and the documents incorporated herein by reference also contain forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks we face described below, in any supplement or in the documents incorporated herein by reference, including our Annual Report on Form 10-K for the year ended December 31, 2009.

Risks Related to the Tender/Exchange Offer and Consent Solicitation

Holders who fail to exchange their Old Notes may have reduced liquidity after the tender/exchange offer.

As Old Notes are tendered and accepted in the tender/exchange offer, the principal amount of remaining Old Notes will decrease. This decrease could reduce the liquidity of the trading market for the Old Notes. We cannot assure you of the liquidity, or even the continuation, of any trading market for the Old Notes following the completion of the tender/exchange offer.

Following the consummation or earlier termination of the tender/exchange offer, we may acquire remaining outstanding Old Notes upon terms and at prices as we may determine, which may be more or less than the price paid pursuant to the tender/exchange offer and could be for cash or other consideration.

We and our subsidiaries or affiliates reserve the absolute right, in our sole discretion and to the extent permitted by applicable law, at any time and from time to time after the consummation or earlier termination of the tender/exchange offer, to acquire any Old Notes that are not tendered and accepted pursuant to the tender/exchange offer through open market purchases, privately negotiated transactions, tender offers, exchange offers or otherwise, upon terms, at prices and for consideration as we or our subsidiaries or affiliates may determine, or by redeeming the Old Notes in accordance with their terms and the terms of the Old Note Indenture.  In each case, the consideration for the Old Notes may be different from the consideration offered in the tender/exchange offer. There can be no assurance as to which, if any, of these alternatives or combinations thereof we and our subsidiaries or affiliates may choose to pursue in the future.

Upon consummation of the tender/exchange offer, holders that validly tender their Old Notes will lose their rights under the Old Notes, including the right to future interest and principal payments.

Holders that validly tender Old Notes, which are accepted as part of the tender/exchange offer, will lose the rights of a holder of the Old Notes, except to the extent that they continue to hold any Old Notes after the consummation of the tender/exchange offer.  These rights include the right to require us to repurchase their Old Notes at par beginning on November 15, 2011 and the right to receive interest and principal payments on the Old Notes.  Holders will also lose their rights to any and all claims they may have, now or in the future, arising out of or related to any Old Notes accepted for exchange or purchase, and any rights as creditors of the Company with respect to these Old Notes.  In addition, any holders that exchange their Old Notes for New Notes as part of the Exchange Option will become subject to all of the risks and uncertainties associated with ownership of the New Notes.

Old Notes tendered for purchase under the Tender Option may instead be exchanged for New Notes, if tenders exceed the Cash Payment Limit.

We intend to use up to $15 million to purchase Old Notes that are tendered.  If tenders for purchase in cash under the Tender Option exceed the Cash Payment Limit, we will accept the Old Notes tendered for purchase on a pro rata basis.  Unless withdrawn as described herein, the balance of any Old Notes tendered under the Tender

19

Table of Contents

Option but not accepted for purchase for cash will be treated as if they had been tendered for exchange under the Exchange Option and will be exchanged for New Notes.   Holders of the New Notes will become subject to all of the risks and uncertainties associated with the ownership of the New Notes.

We are not making a recommendation as to whether you should participate in the tender/exchange offer and consent solicitation, and we have not obtained a third-party determination that the tender/exchange offer is fair to holders.

Neither we, our officers, our board of directors, the exchange agent, the information agent nor the dealer manager is making any recommendation as to whether you should tender or refrain from tendering all or any portion of your Old Notes, or deliver a consent pursuant to the consent solicitation.  Further, we have not authorized anyone to make any recommendation.  We have not obtained a third-party determination that the tender/exchange offer is fair to the holders of the Old Notes, nor do we intend to do so.

The exchange ratio for the New Notes does not reflect any independent valuation of the Old Notes or the New Notes.

We have not obtained or requested, and do not intend to obtain or request, a fairness opinion from any banking or other firm as to the fairness of the exchange ratio for the New Notes or the relative values of the Old Notes and the New Notes.

If the consent solicitation is successful and we consummate the tender/exchange offer, holders that continue to hold the Old Notes will not have the benefit of certain default provisions currently included in the Old Note Indenture.

Under the Old Note Indenture, an “event of default,” known as a “cross-acceleration,” occurs upon a default under any bond, note, debenture or other evidence of indebtedness of us or any of our subsidiaries, or under any mortgage, indenture or other instrument under which there may be issued or secured or evidenced any indebtedness of us or any of our subsidiaries, which results in the acceleration of such indebtedness in an aggregate principal amount exceeding $20 million or which constitutes a failure to pay at maturity or other scheduled payment date (after expiration of any applicable grace period) that indebtedness in an aggregate principal amount exceeding $20 million, but only if the indebtedness is not discharged or the acceleration is not rescinded or annulled within 10 days after notice to us by the trustee or to us and the trustee by the holders of at least 25% in aggregate principal amount of the securities.  If the Indenture Amendment is approved, the cross-acceleration provision will be increased to $100 million, the level provided for in the New Note Indenture.  Any holder that tenders the Old Notes, and whose Old Notes are accepted for exchange or purchase by us, pursuant to the tender/exchange offer will be deemed to have delivered a valid consent to the Indenture Amendment.   If we receive valid consents from holders of a majority in aggregate principal amount of the Old Notes, the Indenture Amendment will be approved, and a supplemental indenture to the Old Note Indenture (the “Supplemental Indenture”) will be executed by us and the trustee. Any continuing holders of the Old Notes will be bound by the Supplemental Indenture even if those holders did not give their consents.

If the consent solicitation is not successful and we consummate the tender/exchange offer, holders that continue to hold the Old Notes will have certain rights that are greater than those that holders of the New Notes have.

If the Indenture Amendment is not approved by the holders of a majority in aggregate principal amount of the Old Notes, and yet the tender/exchange offer is consummated and New Notes are issued, holders of the Old Notes will have the benefit of a $20 million cross-acceleration provision.  If a default occurs under any bond, note, debenture or other evidence of indebtedness of us or any of our subsidiaries, or under any mortgage, indenture or other instrument under which there may be issued or secured or evidenced any indebtedness of us or any of our subsidiaries, which results in the acceleration of such indebtedness in an aggregate principal amount exceeding $20 million or which constitutes a failure to pay at maturity or other scheduled payment date (after expiration of any applicable grace period) that indebtedness in an aggregate principal amount exceeding $20 million, the holders of at least 25% in aggregate principal amount of the Old Notes may declare the principal amount and accrued and unpaid interest, if any, to be immediately due and payable.  Holders of the New Notes will not have this right unless the cross acceleration equals or exceeds $100 million.

20

Table of Contents

To the extent that a holder of Old Notes exchanges some or all of its Old Notes for New Notes with a later maturity date, the holder may increase its risk that we will be unable to repay (or refinance) the New Notes when they mature.

Holders of Old Notes are being offered the option to exchange some or all of their Old Notes for New Notes with a maturity date later than the maturity date of the Old Notes that they presently hold.  Holders who tender their Old Notes and whose tender is accepted for exchange will be exposed to the risk of nonpayment on the New Notes they hold for a longer period of time than non-tendering holders or those holders whose Old Notes were not accepted for exchange.  For instance, following the maturity date of the Old Notes, but prior to the maturity date of the New Notes, we may become subject to a bankruptcy or similar proceeding.  If so, holders of Old Notes who opted not to tender all of their Old Notes in the tender/exchange offer (or whose Old Notes were not accepted for exchange) may have been paid in full, and there is a risk that the holders of Old Notes who elected to participate in the tender/exchange offer and whose Old Notes were accepted for exchange would not be paid in full.

The use of our cash balances or draws under our credit facility to fund the cash consideration necessary to complete the Tender Option will reduce the cash available for other uses.

We may fund the cash consideration necessary to complete the Tender Option from our cash balances or with funds drawn under our credit facility, which is one of our primary sources of short-term liquidity.  Using our cash or funds drawn under our credit facility will reduce the cash available for other uses, which may in turn reduce our ability to generate cash for working capital, debt service requirements, general corporate or other purposes.

The U.S. federal income tax consequences of the exchange of the Old Notes for the New Notes are uncertain.

The U.S. federal income tax consequences of the tender/exchange offer and of the ownership and disposition of the New Notes are uncertain due to the absence of statutory, administrative or judicial authority. Depending on whether the Old Notes and the New Notes are “securities” for U.S. federal income tax purposes, the exchange may be a “recapitalization” or a taxable exchange.  See “Material United States Federal Income Tax Considerations — Tax Consequences to Tendering U.S. Holders — Treatment of Exchange of Old Notes for New Notes.”  In addition, the New Notes may be issued with original issue discount (“OID”), as described below, depending on the fair market value of the New Notes, determined as of the exchange date.  There can be no assurance as to the fair market value of the New Notes as of the exchange date and, consequently, there can be no assurance as to whether the New Notes will be issued with OID. If the New Notes are issued with OID, an exchanging U.S. holder (as defined below in the section entitled “Material United States Federal Income Tax Considerations”) receiving a New Note may be required to report the OID as income annually as it accrues, based on a constant yield method (which includes at least annual compounding) and regardless of the holder’s regular method of tax accounting. Thus, OID income on a New Note, if any, may be taxable before the amount is received by the holder in cash.

You may be subject to tax if we make or fail to make certain adjustments to the conversion rate of the New Notes even though you do not receive a corresponding cash distribution.

The conversion rate of the New Notes is subject to adjustment in certain circumstances, including the payment of certain cash dividends.  If the conversion rate is adjusted as a result of a distribution that is taxable to our common stockholders, such as a cash dividend, you may be deemed to have received a constructive distribution which may subject you to U.S. federal income tax even though you did not receive any cash or other property in connection with the adjustment and even though you may not exercise your conversion right.  In addition, a failure to adjust (or to adjust adequately) the conversion rate after an event that increases your proportionate interest in us could be treated as a constructive distribution which may subject you to U.S. federal income tax.  If certain change in control transactions occur, under some circumstances, we will adjust the conversion rate for New Notes converted in connection with the change in control transaction.  Such adjustment also may be treated as a constructive distribution which may subject you to U.S. federal income tax.  See “Material United States Federal Income Tax Considerations” in this prospectus.

21

Table of Contents

Risks Related to the New Notes and Our Common Stock

The effective subordination of the New Notes may limit our ability to satisfy our obligations under the New Notes.

The New Notes will be our senior unsecured obligations, and will rank equally in right of payment with all of our other senior unsecured indebtedness, including any Old Notes that remain outstanding after we complete the tender/exchange offer and consent solicitation. The New Notes, however, will be effectively subordinated in right of payment to all of our secured indebtedness, including any secured indebtedness we may incur in the future, to the extent of the value of the collateral securing the secured indebtedness. As of March 31, 2010, we had approximately $370.2 million of outstanding secured indebtedness, on a consolidated basis. The indenture governing the New Notes will not prohibit us from incurring additional secured or unsecured indebtedness. Consequently, in the event of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding, the holders of any secured indebtedness will be entitled to proceed directly against the collateral that secures the indebtedness. Therefore, this collateral will not be available to satisfy any amounts owed under our unsecured indebtedness, including the New Notes, until the secured indebtedness is satisfied in full.

The New Notes also will be effectively subordinated in right of payment to all unsecured and secured liabilities and preferred equity of our subsidiaries. In the event of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding with respect to any subsidiary, the assets of the subsidiary will first be used to satisfy the prior claims of the subsidiary’s creditors, including trade creditors and preferred equity holders, before any amounts become available to the holders of the New Notes.  As of March 31, 2010, the total balance sheet liabilities (excluding any intercompany debt, distributions payable, accrued expenses and other liabilities) and preferred equity of our consolidated subsidiaries was approximately $685.2 million. In addition, as of March 31, 2010, our share of the total liabilities (excluding any intercompany debt, distributions payable, accrued expenses and other liabilities) and preferred equity of the entities which we account for under the equity method of accounting was approximately $234.1 million. The indenture governing the New Notes will not prohibit our subsidiaries from incurring additional indebtedness or issuing preferred equity.

We may not have the cash necessary to pay the principal return and any net amount upon a conversion of New Notes or to repurchase the New Notes on specified dates or following certain change in control transactions.

Upon a conversion of New Notes in accordance with their terms, we will be required to pay the principal return of the New Notes in cash. In addition, there may be circumstances that prevent us from issuing shares of our common stock for all or any portion of any net amount deliverable upon a conversion of New Notes, thereby requiring us to satisfy our net amount obligation in cash. Holders of New Notes also will have the right to require us to repurchase the New Notes for cash on November 15, 2014, November 15, 2016, November 15, 2019 and November 15, 2024, or upon the occurrence of certain change in control transactions. Any of our future debt agreements or securities may contain similar provisions. We may not have sufficient funds to pay the principal return and any net cash amount or make the required repurchase of New Notes, as the case may be, in cash at the applicable time and, in these circumstances, may not be able to arrange the necessary financing on favorable terms, if at all. In addition, our ability to pay the principal return and any net cash amount or make the required repurchase, as the case may be, may be limited by the terms of other debt agreements or securities, including our credit facility. Failure to pay the principal return and any net cash amount or make the required repurchase, as the case may be, would constitute an event of default under the New Note Indenture which, in turn, would constitute an event of default under certain of our other debt agreements or securities, including our credit facility and term loan, thereby resulting in acceleration and required prepayment of this other debt and further restrict our ability to make payments on, or to repurchase, the New Notes.

22

Table of Contents

There is currently no trading market for the New Notes, and an active liquid trading market for the New Notes may not develop or, if it develops, may not be maintained.

We do not intend to list the New Notes on any securities exchange or include them for quotation on any automated dealer quotation system. An active public trading market may not develop for the New Notes and, even if one develops, may not be maintained. If an active public trading market for the New Notes does not develop or is not maintained, the market price and liquidity of the New Notes is likely to be adversely affected and holders may not be able to sell their New Notes at desired times and prices, if at all. If any of the New Notes are traded after their purchase, they may trade at a discount from face value.

The liquidity of the trading market, if any, and future trading prices of the New Notes will depend on many factors, including, among other things, the aggregate principal amount of New Notes outstanding, the market price of our common stock, prevailing interest rates, our financial condition, results of operations and business, the market for similar securities and the overall securities market, and may be adversely affected by unfavorable changes in any of these factors, some of which are beyond our control and others of which would not affect debt that is not convertible or exchangeable into common stock. Historically, the market for convertible debt has been volatile. Market volatility could materially and adversely affect the trading price of the New Notes.

The New Notes will have a number of features that may adversely affect their value and trading prices, including conversion conditions and the lack of financial covenants. Furthermore, even if the conversion conditions are met, because the conversion value of the New Notes will depend on the closing sale price of our common stock, a volatile or depressed market price for our common stock is likely to have a similar effect on the trading price of the New Notes. The market price of our common stock may adversely affect the trading price of the New Notes.

The New Notes will not contain any financial or operational covenants; therefore, you will not have protection against adverse changes in our business.

The New Note Indenture will not require us to satisfy any financial or operational covenants, restrict our ability to repurchase our securities other than the New Notes in accordance with their terms, pay dividends or distributions or make restricted payments, or contain covenants or other provisions to afford holders protection in the event of a transaction that substantially increases the level of our indebtedness. Furthermore, the New Note Indenture will contain only limited protections for holders of the New Notes in the event of a “change in control” (as defined in the New Note Indenture). We could engage in many types of transactions, such as acquisitions, refinancings or recapitalizations, that could substantially affect our capital structure and the value of the New Notes and our common stock that will not constitute a “change in control” permitting holders to require us to repurchase their New Notes under the New Note Indenture.

Holders of New Notes will not be entitled to any rights with respect to our common stock, but will be subject to all changes made with respect to our common stock.

Holders of New Notes, as such, will not be entitled to any rights with respect to our common stock (including, without limitation, voting rights and rights to receive any dividends or other distributions on our common stock), but holders of New Notes will be subject to all changes affecting our common stock. Holders of New Notes will be entitled to the rights afforded to our common stock only if and when our common stock is delivered to them upon a conversion of New Notes.

23

Table of Contents

The price of our common stock may fluctuate significantly and may affect the trading price of the New Notes.

The market price of our common stock may fluctuate significantly in response to many factors, including:

·                                          general economic conditions, including the current conditions, competition and the supply of and demand for shopping center and single-tenant properties in our markets;

·                                          risks that tenants will not remain in occupancy or pay rent, or pay reduced rent due to bankruptcies or declines in their businesses;

·                                          interest rate levels and the availability of financing;

·                                          potential environmental liability and other risks associated with owning, developing and acquiring real estate;

·                                          greater than anticipated funding costs associated with our joint venture properties or operating costs;

·                                          inflationary, deflationary and other general economic trends;

·                                          actual or anticipated variations in our operating results or distributions;

·                                          changes in our funds from operations or earnings;

·                                          publication of research reports about us or the real estate industry, generally and recommendations by financial analysts or actions taken by rating agencies with respect to our securities or those of other REITs;

·                                          future sales of our common stock or securities convertible into, or exchangeable or exercisable for, our common stock;

·                                          failure to pay our obligations under, or comply with the terms of our indebtedness;

·                                          impairment charges;

·                                          the effects of natural disasters; and

·                                          other risks detailed from time to time in the reports filed by us with the Securities and Exchange Commission.

Because the conversion value of the New Notes will be based upon the value of the shares of our common stock, volatility or depressed prices for our common stock could have a similar effect on the trading price of the New Notes and could limit the value of the shares of our common stock, if any, that you would receive upon conversion of the New Notes. This may result in greater volatility in the trading price of the New Notes than would be expected for any non-convertible debt securities we may issue. Holders who receive any shares of our common stock upon conversion of their New Notes will also be subject to the risk of volatile and depressed market prices of our common stock. In addition, many of the factors listed above are beyond our control. These factors may cause the market price of our common stock to decline, regardless of our financial condition, results of operations, business or prospects.

24

Table of Contents

The conditional conversion feature of the New Notes may prevent a conversion of New Notes prior to October 15, 2029.  We also will have the right to deliver all cash upon a conversion of New Notes and holders may not receive any of our common stock upon conversion.

The New Notes will be convertible on or after October 15, 2029 and also if the closing sale price of our common stock reaches a specified threshold over a specified time period, if the trading price of the New Notes is below a specified threshold for a specified time period, if our common stock is delisted from a U.S. national or regional securities exchange or if certain specified transactions or events occur and then only at prescribed times. In addition, the New Notes will be convertible if they have been called for redemption. See “Description of the New Notes — Conversion Rights.”  If these conditions are not met, holders of New Notes will not have the right to convert their New Notes prior to October 15, 2029 and therefore may not be able to receive the value of the consideration for which the New Notes would otherwise be convertible. In addition, even if these conditions are met, upon a conversion of New Notes, we will be required to pay the principal return in cash and, to the extent any net amount exists, we may elect to pay the entire net amount in cash. As a result, we will not be required to deliver any of our common stock upon a conversion of New Notes.

The premium payable on New Notes converted in connection with certain change in control transactions prior to November 21, 2014 may not adequately compensate holders for the lost option time value of their New Notes as a result of any change in control.

If certain transactions that constitute a change in control occur prior to November 21, 2014, under certain circumstances, we will increase the conversion rate of the New Notes by a number of additional shares of our common stock. This increased conversion rate will apply only to holders who convert their New Notes in connection with any of these certain transactions. The number of additional shares of our common stock will be determined based on the date on which the transaction becomes effective and the price paid per share of our common stock in the transaction, as described under “Description of the New Notes — Conversion Rate Adjustments — Make Whole Upon Certain Change in Control Transactions.” While the number of additional shares of our common stock is designed to compensate holders for the lost option time value of the New Notes as a result of the transaction, the amount of the premium payable is only an approximation of the lost value and may not adequately compensate holders for the loss. In addition, notwithstanding the foregoing, if the price paid per share of our common stock in the transaction is less than $         or equal to or in excess of $        , the applicable conversion rate will not be increased. In no event will the number of shares of our common stock issuable upon a conversion of New Notes exceed                      per $1,000 principal amount of New Notes, subject to adjustment under certain circumstances, regardless of when the transaction becomes effective or the price paid per share of our common stock in the transaction.

The applicable conversion rate of the New Notes may not exceed                      shares of our common stock per $1,000 principal amount of New Notes and may not be adjusted for all dilutive events.

The applicable conversion rate of the New Notes may not exceed                      shares of our common stock per $1,000 principal amount of New Notes, subject to adjustment in certain cases. As a result, holders of the New Notes will not realize the benefits of an increase to the conversion rate otherwise described in this prospectus if the increase, together with previous increases, would result in the issuance of a number of shares of our common stock upon conversion in excess of the specified maximum amount.

The conversion rate of the New Notes will be subject to adjustment for certain events, including, but not limited to, certain cash distributions on shares of our common stock in excess of $0.08 per share per month, the issuance of certain rights, options or warrants to holders of our common stock to acquire shares of our common stock or securities convertible into shares of our common stock, subdivisions or combinations of our common stock, certain distributions of assets, debt securities, capital stock or cash to holders of shares of our common stock and certain tender or tender/exchange offers as described under “Description of the New Notes — Conversion Rate Adjustments.”   The conversion rate will not be adjusted for other events, such as an issuance of our common stock for cash at market value, that may adversely affect the trading price of the New Notes and our common stock.  Events may occur that will be adverse to the interests of the holders of the New Notes and the value of the New Notes, even though the conversion rate will not be adjusted.

25

Table of Contents

The definition of a change in control requiring us to repurchase New Notes will be limited and therefore the market price of the New Notes may decline if we enter into a transaction that is not a change in control under the New Note Indenture.

The term “change in control,” as used in the New Note Indenture, will mirror the term as used in the Old Note Indenture and will be limited and will not include every event that might cause the market price of the New Notes to decline. The term “change in control” will not apply to transactions in which at least 90% of the consideration paid for our common stock, excluding cash payments for fractional shares and cash payments made in respect of dissenters’ appraisal rights, in a merger or similar transaction is publicly traded common stock. In addition, we will not be required to repurchase New Notes upon a change in control if our stock price exceeds 105% of the conversion price during specified periods following: (1) the later of the change in control date or the public announcement thereof (for changes of control relating to acquisitions of capital stock); or (2) the change in control date (for changes of control relating to mergers, consolidations or asset sales). As a result, our obligation to repurchase the New Notes upon a change in control may not preserve the value of the New Notes in the event of a highly leveraged transaction, reorganization, merger or similar transaction. See “Description of the New Notes — Repurchase at Option of Holders upon a Change in Control.”

Upon conversion of the New Notes, holders may receive less consideration than expected because the value of our common stock may decline over the period in which the conversion value is determined.

The conversion value that holders will receive upon conversion of New Notes will be determined on the basis of the closing sale price of our common stock on the New York Stock Exchange for each of the 20 consecutive trading days beginning on the third trading day following the date the New Notes are tendered for conversion.  Accordingly, if the price of our common stock decreases after the conversion right is exercised, the conversion value will be adversely affected.

The net share settlement feature of the New Notes may have adverse consequences.

The net share settlement feature of the New Notes, as described under “Description of the New Notes — Conversion Rights” and “Description of the New Notes — Conversion Settlement” in this prospectus, may:

·                                          result in holders receiving no shares upon conversion or fewer shares relative to the conversion value of the New Notes;

·                                          reduce our liquidity because we will be required to pay the principal return in cash and the net amount, if any, may be paid, at our option, in cash as well;

·                                          delay holders’ receipt of the proceeds upon conversion; and

·                                          subject holders to market risk before receiving any shares upon conversion.

The accounting for convertible debt securities is subject to uncertainty.

The accounting for convertible debt securities is subject to frequent scrutiny by the accounting authorities and is subject to change.  We cannot predict whether or when any change could be made, and any change could have an adverse effect on our reported or future financial results.  These effects could adversely affect the trading prices of our common stock and the New Notes.

For example, the Financial Accounting Standards Board (‘‘FASB’’) in 2008 posted FASB Staff Position (‘‘FSP’’) No. APB 14-1 “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlements)” (previously FSP APB 14-a), which changes the accounting treatment for net share settled convertible securities.  Under the proposal, cash settled convertible securities are separated into their debt and equity components.  The value assigned to the debt component is the estimated fair value, as of the issuance date, of a similar debt instrument without the conversion feature, and the difference between the proceeds for the convertible debt and the amount reflected as a debt liability is recorded as additional

26

Table of Contents

paid-in capital.  As a result, the debt is recorded at a discount reflecting its below market coupon interest rate.  The debt is subsequently accreted to its par value over its expected life, with the rate of interest that reflects the market rate at issuance being reflected on the income statement.

Restrictions on ownership and transfer in our charter may impair the ability of holders to convert New Notes for shares of our common stock.

Our charter contains provisions which are intended, among other purposes, to help preserve our status as a REIT for federal income tax purposes. If our board of directors determines that the direct or indirect ownership of shares of our capital stock has, or may, become concentrated to an extent that would prevent us from qualifying as a REIT, our charter permits us to redeem those shares at any time. Similarly, our charter grants us the power to prevent any proposed transfer of our capital stock if the transfer would jeopardize our status as a REIT. Our charter provides that, subject to certain exceptions, no person or entity may beneficially own, or be deemed to own by virtue of the applicable constructive ownership provisions of the Code, more than 9.8% of the number of our outstanding shares or value of our outstanding capital stock as a result of his, her or its ownership of our capital stock. Notwithstanding any other provision of the New Notes, if our board of directors determines in good faith that the conversion by a holder of its New Notes into common stock would prevent us from qualifying as a REIT or would cause a holder of our capital stock (together with the holder’s affiliates) to exceed the ownership limit contained in our charter, we will elect not to issue shares of common stock to this holder upon conversion but will instead satisfy our obligation to this holder to pay the conversion value upon conversion, which includes the value of the New Notes in excess of the principal amount, solely in cash. See “Description of New Notes — Ownership Limit.”

27

Table of Contents

STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this prospectus and the documents incorporated by reference constitute “forward-looking statements.”  Forward-looking statements are statements that are not historical, including statements regarding management’s intentions, beliefs, expectations, representations, plans or predictions of the future and are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may,” “will,” “should” and “could.”  Similarly, statements that describe or contain information related to matters such as management’s intent, belief or expectation with respect to our financial performance, investment strategy and portfolio, our ability to address debt maturities, our cash flows, our growth prospects, the value of our assets, our joint venture commitments and the amount and timing of anticipated future cash distributions are forward-looking statements. These forward-looking statements are not historical facts but are the intent, belief or current expectations of our management based on their knowledge and understanding of the business and industry, the economy and other future conditions. These statements are not guarantees of future performance, and investors should not place undue reliance on forward-looking statements. Actual results may differ materially from those expressed or forecasted in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to the factors listed and described under “Risk Factors” in this prospectus, our Annual Report on Form 10-K for the year ended December 31, 2009, as filed with the SEC on February 26, 2010 and subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.  These factors include, but are not limited to: market and economic challenges experienced by the U.S. economy or real estate industry as a whole, including dislocations and liquidity disruptions in the credit markets; the inability of tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business; competition for real estate assets and tenants; impairment charges; the availability of cash flow from operating activities for distributions and capital expenditures; our ability to refinance maturing debt or to obtain new financing on attractive terms; future increases in interest rates; actions or failures by our joint venture partners, including development partners; and other factors that could affect our ability to qualify as a real estate investment trust.  We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.

RATIO OF EARNINGS TO FIXED CHARGES

The following table sets forth our ratio of earnings to fixed charges for each of the periods indicated.

The ratio of earnings to fixed charges is computed by dividing: (1) income (loss) before income taxes, plus fixed charges; by (2) fixed charges. Fixed charges consist of interest expense on borrowings, including amortization of deferred financing charges and the portion of operating lease rental expense that is representative of the interest factor.

28

Table of Contents

PRICE RANGE OF COMMON STOCK

Our common stock is traded on the New York Stock Exchange under the symbol “IRC.” The last reported closing sales price of our common stock on the New York Stock Exchange was $8.05 per share on May 21, 2010. As of May 21, 2010, we had approximately 4,740 holders of record. The following table shows the high and low bid prices per share of our common stock for the periods indicated.

DISTRIBUTION POLICY

In order to maintain our status as a REIT, we must distribute at least 90% of our taxable income, subject to certain adjustments, to our stockholders.  For the years ended December 31, 2009 and 2008, our taxable income was approximately $52,529,000 and $57,613,000, respectively.  We declared monthly cash distributions to stockholders totaling $53,874,000 and $64,782,000 or $0.69 and $0.98 on an annual basis per share for the years ended December 31, 2009 and 2008, respectively.  Future distributions will be determined by our board of directors.  We intend to continue paying distributions on a monthly basis.  We will, however, periodically review this policy in light of our future liquidity needs, including monies needed to retire maturing debt, our operating fundamentals and the overall economy.  We annually notify our stockholders of the taxability of distributions paid during the proceeding year.

In accordance with the board of directors’ decision, we reduced the amount we paid as distributions in 2009 to an annualized amount equal to our estimated taxable income for 2009.  This change in policy resulted in a monthly distribution amount of $0.0475 per common share.  At this time, we expect to continue to pay monthly cash dividends at this rate during 2010.  Our board of directors will periodically review the current dividend policy as it evaluates our liquidity needs and monitors the impact of market conditions on operating fundamentals.

29

Table of Contents

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

You should read the data set forth below in conjunction with our consolidated financial statements and related notes, our Management’s Discussion and Analysis of Financial Condition and Results of Operations and other financial information, incorporated by reference to our Annual Report on Form 10-K as of and for the year ended December 31, 2009 and our Quarterly Report on Form 10-Q as of and for the period ended March 31, 2010. The following tables show selected portions of our audited historical consolidated financial data as of and for the five years ended December 31, 2009.  We derived our selected consolidated financial data as of and for the five years ended December 31, 2009 from our audited consolidated financial statements, which have been audited by KPMG LLP, independent registered public accounting firm. The selected consolidated financial data as of and for the three months ended March 31, 2010 and 2009 are derived from our unaudited financial statements included in our Quarterly Report on Form 10-Q as of and for the period ended March 31, 2010, which is incorporated by reference in this prospectus, and have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information, and in our opinion, reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of our results of operations and financial position. The results of operations for the three months ended March 31, 2010 are not necessarily indicative of the results of operations to be expected for the full year or any future period.

30

Table of Contents

CAPITALIZATION

The following table shows our cash and cash equivalents and our consolidated historical capitalization as of March 31, 2010 and as adjusted to give effect to the consummation of the tender/exchange offer. For purposes of the “as adjusted” information in the following table, we have assumed $125 million principal amount of Old Notes are tendered in the tender/exchange offer, with $110 million tendered for exchange under the Exchange Option and $15 million tendered for purchase under the Tender Option.  We also have presented scenarios in which (1) all holders have exercised the Exchange Option such that we have issued $125 million in New Notes, and no holders have exercised the Tender Option and (2) the holders have exercised the Tender Option such that we have satisfied the Cash Payment Limit, and paid $15 million in cash consideration, but where no holders have exercised the Exchange Option or been treated as if they had exercised the Exchange Option due to the receipt of tenders in excess of the Cash Payment Limit by holders exercising the Tender Option.  We cannot assure you that all $125 million principal amount of Old Notes will be tendered in the tender/exchange offer.  The “as adjusted” information is not intended to provide any indication of what our actual financial position, including actual cash balances and borrowings, would have been had the tender/exchange offer been completed as of March 31, 2010 or to project our financial position for any future date.

This table should be read in conjunction with “Selected Historical Consolidated Financial Data” and with our consolidated financial statements, which are incorporated by reference into this prospectus.

(1) We intend to fund the cash consideration necessary to purchase Old Notes tendered pursuant to the Tender Option, or a combination of the Tender Option and the Exchange Option, with cash on hand or with funds drawn under our credit facility. The presentation above assumes that the consideration used to complete the Tender Option has been funded entirely from funds drawn under our credit facility.

31

Table of Contents

THE TENDER/EXCHANGE OFFER AND CONSENT SOLICITATION

As used in this section, the terms “we,” “us,” “our” and Inland Real Estate Corporation (“IRC”) refer only to IRC and not to any of our subsidiaries.

Reasons for the Tender/Exchange Offer and Consent Solicitation

Holders of the Old Notes have the right to require us to repurchase their Old Notes for cash in whole or in part, at par, beginning on November 15, 2011.  Therefore, we are conducting the tender/exchange offer to improve our financial flexibility by extending the repurchase (at the option of the holder) and maturity dates of our convertible senior indebtedness and reducing our overall indebtedness by retiring some of the Old Notes.  The dates on which holders have the right to require us to repurchase the New Notes will be changed (in comparison to the Old Notes) to November 15, 2014, November 15, 2016, November 15, 2019 and November 15, 2024, and the maturity date will be extended to November 15, 2029.  The initial conversion rate for each $1,000 principal amount of New Notes will be            shares of our common stock (compared to 48.2824 shares of our common stock for the Old Notes), equivalent to $         per share (compared to $20.71 per share for the Old Notes).   In addition, the interest rate on the New Notes will increase from 4.625% per annum to         % per annum.  Finally, the threshold for a cross-acceleration will be $100 million.  Other than these changes, the terms of the New Notes will be substantially similar to the Old Notes.

In connection with the tender/exchange offer, we are also soliciting consents to a proposed amendment to the Old Note Indenture to amend the default provisions contained therein to mirror the New Note Indenture Currently, a default by us or one of our consolidated subsidiaries on indebtedness which results in the acceleration of that debt, or which constitutes a failure to pay that debt at maturity or other scheduled payment date, will constitute an event of default under the Old Note Indenture if the amount accelerated or not paid equals or exceeds $20 million.  If the proposed amendment is approved by holders of a majority in aggregate principal amount of the Old Notes, the threshold for a cross-acceleration will be increased to $100 million.  We believe that, if effected, the proposed amendment will provide us with additional flexibility to negotiate with our lenders, and the lenders of our subsidiary debt, to the extent it becomes necessary.

Securities Subject to the Tender/Exchange Offer

We are offering to exchange or purchase for cash, subject to the Cash Payment Limit, any and all of the outstanding Old Notes, upon the terms and subject to the conditions described in this prospectus.

Deciding Whether to Participate

Neither we, our board of directors, the exchange agent, the information agent nor the dealer manager is making any recommendation as to whether you should tender all or any portion of your Old Notes pursuant to the tender/exchange offer, or consent to the Indenture Amendment.  Further, we have not authorized anyone to make any recommendation.

You should make your own decision after reading this prospectus, including the “Risk Factors” and the information incorporated by reference herein, and consulting with your advisors, if any, based on your own financial position and requirements.

Terms of the Tender/Exchange Offer and Consent Solicitation

Pursuant to the tender/exchange offer, eligible holders may elect to receive:

(1)                                  New Notes in an amount equal to $1,000 principal amount of New Notes for each $1,000 principal amount of Old Notes exchanged.  The New Notes will be issued in principal denominations of $1,000 and integral multiples of $1,000 in excess thereof.  If, under the terms of the tender/exchange offer, a tendering holder is entitled to receive New Notes in a principal amount that is not an integral multiple of $1,000, we will round downward that principal amount of New

32

Table of Contents

Notes to the nearest integral multiple of $1,000.  This rounded amount will be the principal amount of New Notes that the holder will receive, and no additional cash will be paid in lieu of any principal amount of New Notes not received as a result of rounding down;

(2)                                  cash, subject to the Cash Payment Limit, in an amount equal to $1,000 for each $1,000 principal amount of Old Notes tendered.  If the cash required to purchase all of the Old Notes tendered under the Tender Option exceeds the Cash Payment Limit, we will accept the Old Notes tendered for purchase on a pro rata basis.  Unless withdrawn as described herein, the balance of any Old Notes tendered under the Tender Option but not accepted for purchase for cash will be treated as if they had been tendered for exchange under the Exchange Option and will be exchanged for New Notes; or

(3)                                  a combination of the Exchange Option and the Tender Option, subject to the Cash Payment Limit.

In accordance with the instructions contained in the Letter of Transmittal and Consent, a participating holder may elect to tender all or a portion of the principal amount of its Old Notes for purchase by us for cash pursuant to the Tender Option.  To properly tender Old Notes pursuant to the Tender Option, a participating holder must specify in the appropriate section in the Letter of Transmittal and Consent the principal amount of Old Notes for which it wishes to receive cash.  A participating holder must separately specify the principal amount of Old Notes for which it wishes to receive New Notes and not receive any cash in lieu thereof.

We also are soliciting consents to the Indenture Amendment.  Any holder that tenders the Old Notes, and whose Old Notes are accepted for exchange or purchase by us, will be deemed to have delivered a valid consent to the Indenture Amendment.   The Indenture Amendment will become effective only if we receive valid consents from holders of a majority in aggregate principal amount of the Old Notes.

We will be deemed to have accepted validly tendered Old Notes when, as, and if we have given oral or written notice thereof to the exchange agent (sometimes referred to herein as the “acceptance date”). The exchange agent will act as agent for the tendering holders for the purpose of receiving the New Notes and cash from us. If any tendered Old Notes are not accepted because of an invalid tender, the occurrence of other events described under the heading “—  Conditions to the Tender/Exchange Offer and Consent Solicitation” or otherwise, Old Notes will be credited to the holder’s account maintained with DTC, without expense, promptly after the expiration date, unless the tender/exchange offer is extended.

Effective on the settlement date, we will no longer pay interest on any Old Notes that are accepted for exchange or purchase by us pursuant to the tender/exchange offer.  Interest will begin to accrue on the New Notes commencing on the settlement date.  We will pay interest on the New Notes on a semi-annual basis on May 15 and November 15, with the first interest payment being due on November 15, 2010 (assuming a settlement date for the tender/exchange offer prior to November 15, 2010).

We intend to execute the Supplemental Indenture promptly after the acceptance date if we have accepted consents from holders of the Old Notes of at least a majority of the aggregate principal amount of the Old Notes outstanding.  The Indenture Amendment will not become operative until the settlement date.

Proration and Priority of Exchanges

There is no limit on the amount of Old Notes that may be exchanged under the Exchange Option.  However, we are limiting the amount of cash to be paid to purchase the Old Notes to $15 million.  If the aggregate principal amount of the Old Notes tendered under the Tender Option exceeds the Cash Payment Limit, we will prorate the amount of cash paid to each holder based on the ratio of the aggregate principal amount of the Old Notes tendered by a holder to the total of Old Notes tendered pursuant to the Tender Option.  Unless withdrawn as described herein, the balance of any Old Notes tendered under the Tender Option but not accepted for purchase for cash will be treated as if they had been tendered for exchange under the Exchange Option and will be exchanged for New Notes.  See “— Withdrawal and Revocation Rights” below for a discussion of how a holder may withdraw a tender of Old Notes.

33

Table of Contents

Expiration Date; Extensions; Amendments

For purposes of the tender/exchange offer and consent solicitation, the term “expiration date” will mean 5:00 p.m., New York City time, on                       , 2010, subject to our right to extend that date and time in our sole discretion, in which case, the expiration date will mean the latest date and time to which the tender/exchange offer and consent solicitation is extended.

We also reserve the right, in our sole discretion and subject to applicable law, to: (1) extend the tender/exchange offer and consent solicitation; (2) terminate the tender/exchange offer and consent solicitation upon failure to satisfy any of the conditions described under “— Conditions to the Tender/Exchange Offer and Consent Solicitation;” or (3) amend the tender/exchange offer and consent solicitation, in each case by giving oral (promptly confirmed in writing) or written notice of the extension, termination or amendment to the exchange agent. Any extension, termination or amendment will be followed promptly by a public announcement thereof which, in the case of an extension, will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.

If we amend the tender/exchange offer and consent solicitation in a manner that we determine constitutes a material or significant change, we will extend the tender/exchange offer and consent solicitation for a period of five to ten business days, depending upon the significance of the amendment, if the tender/exchange offer and consent solicitation would otherwise have expired during the five to ten business day period. Any change in the consideration offered to holders of Old Notes in the tender/exchange offer will be paid to all holders whose Old Notes have previously been tendered pursuant to the tender/exchange offer and consent solicitation.

Without limiting the manner in which we may choose to make a public announcement, we will comply with applicable securities laws by disclosing the change by means of a supplement that we distribute to the holders of the Old Notes. We will have no other obligation to publish, advertise or otherwise communicate any public announcement other than by making a timely release to any appropriate news agency, including but not limited to Bloomberg Business News and the Dow Jones News Service.

Procedures for Tender

If you are a DTC participant that has Old Notes that are credited to your DTC account and that are held of record by DTC’s nominee, you must directly tender your Old Notes by book-entry transfer as if you were the record holder. Because of this, references herein to registered or record holders include DTC participants with Old Notes credited to their accounts. If you are not a DTC participant, you may tender your Old Notes by book-entry transfer by contacting your broker or opening an account with a DTC participant.  Any holder that tenders the Old Notes, and whose Old Notes are accepted for exchange or purchase by us, pursuant to the tender/exchange offer will be deemed to have delivered a valid consent to the Indenture Amendment.

We have not provided guaranteed delivery procedures in connection with the tender/exchange offer or under this prospectus or any other offer materials provided therewith.  Holders must timely tender their Old Notes in accordance with the procedures described in this prospectus and set forth in the Letter of Transmittal and Consent.

A holder who wishes to tender Old Notes must deliver a fully completed Letter of Transmittal and Consent or transmit an “agent’s message” to the exchange agent, which message must be received by the exchange agent prior to 5:00 p.m., New York City time, on the expiration date. In addition, the exchange agent must receive a timely confirmation of book-entry transfer of the Old Notes into the exchange agent’s account at DTC through ATOP under the procedure for book-entry transfers described herein along with a properly transmitted agent’s message, prior to 5:00 p.m., New York City time, on the expiration date.

The term “agent’s message” means a message, transmitted by DTC to, and received by, the exchange agent, and forming a part of the book-entry confirmation, that states that DTC has received an express acknowledgement from the tendering participant stating that the participant has received and agrees to be bound by the terms and subject to the conditions set forth in this prospectus and the related Letter of Transmittal and Consent,

34

Table of Contents

and that we may enforce the agreement against the participant. To receive confirmation of valid tender of Old Notes, a holder should contact the exchange agent at the telephone number listed on the back cover of this prospectus.

Any valid tender of Old Notes that is not withdrawn prior to 5:00 p.m., New York City time, on the expiration date will constitute a binding agreement between the tendering holder and us upon the terms and subject to the conditions described in this prospectus and set forth in the related Letter of Transmittal and Consent. Only a registered holder of Old Notes may tender the Old Notes in the tender/exchange offer and consent solicitation. Since the Old Notes are outstanding in the form of a global note registered in the name of DTC, if you wish to tender the Old Notes, you should promptly instruct the DTC participant that holds your interest in the Old Notes to tender on your behalf.

We will determine all questions as to the validity, form, eligibility, including time of receipt, and acceptance of Old Notes tendered for exchange or purchase in our sole discretion. Alternative, conditional or contingent tenders of Old Notes will not be considered valid.  We reserve the absolute right to reject any and all tenders of Old Notes not properly tendered or Old Notes our acceptance of which might, in the judgment of our counsel, be unlawful. We also reserve the absolute right to waive any defects, irregularities or conditions of tender as to any particular Old Notes. However, to the extent we waive any conditions of tender with respect to one tender of Old Notes, we will waive that condition for all other tenders as well. Our interpretation of the terms and conditions of the tender/exchange offer will be final and binding on all parties. Unless waived, any defects or irregularities in connection with the tender of Old Notes must be cured within the time period we determine. Neither we, the Dealer Manager, the exchange agent, the information agent nor any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give you notification of defects or irregularities with respect to the tender of your Old Notes.

Tenders of Old Notes involving any irregularities will not be deemed to have been made until any irregularities have been cured or waived. Old Notes received by the exchange agent in connection with the tender/exchange offer that are not validly tendered and as to which the irregularities have not been cured within the time period we determine or waived will be returned by the exchange agent to the DTC participant who delivered the Old Notes by crediting an account maintained at DTC designated by that DTC participant promptly after the expiration date of the tender/exchange offer and consent solicitation or the withdrawal or termination of the tender/exchange offer and consent solicitation.

In addition, we reserve the right in our sole discretion to purchase or make offers for any Old Notes that remain outstanding after the expiration date or, as described under “— Conditions to the Tender/Exchange Offer,” to terminate the tender/exchange offer and, to the extent permitted by applicable law, purchase Old Notes in the open market, in privately negotiated transactions, or otherwise. The terms of any of these purchases or offers could differ from the terms of the tender/exchange offer.

Subject to and effective upon acceptance, a tendering holder of Old Notes will be deemed to:

·                                          have agreed to irrevocably sell, assign and transfer to or upon the order of IRC, all right, title and interest in and to, and all claims in respect of, or arising or having arisen as a result of, the holder’s status as a holder of, the Old Notes;

·                                          have released and discharged us, and the trustee with respect to the Old Notes tendered, from any and all claims the holder may have, now or in the future, arising out of or related to the Old Notes, including, without limitation, any claims that the holder is entitled to participate in any repurchase or redemption of the Old Notes;

·                                          have represented and warranted that the Old Notes tendered were owned as of the date of tender, free and clear of all liens, charges, claims, encumbrances, interests and restrictions of any kind, other than restrictions imposed by applicable securities laws; and

·                                          have irrevocably appointed the exchange agent the true and lawful agent and attorney-in-fact of the holder with respect to any tendered Old Notes, with full powers of substitution and

35

Table of Contents

resubstitution (the power of attorney being deemed to be an irrevocable power coupled with an interest) to cause the Old Notes tendered to be assigned, transferred and exchanged for the applicable consideration.

Tender of Old Notes Held in Physical Form

We believe that all of the Old Notes are held in book-entry form only at DTC.  If you hold Old Notes in physical, certificated form, you will need to deposit those Old Notes into DTC in order to participate in the tender/exchange offer and consent solicitation.  If you need assistance doing so, please contact the Information Agent, whose address and telephone numbers are located on the back cover page of this prospectus.

Acceptance of Old Notes for Tender

Upon satisfaction of all conditions to the tender/exchange offer, and subject to the Cash Payment Limit, we will accept, promptly after the expiration date, all Old Notes properly tendered and will issue the New Notes and pay the cash consideration, as applicable, promptly after acceptance of the Old Notes.

For purposes of the tender/exchange offer, we will be deemed to have accepted validly tendered Old Notes for exchange or purchase when, as and if we have given oral or written notice of that acceptance to the exchange agent.  If we do not accept any tendered Old Notes for any reason set forth in the terms of the tender/exchange offer, we will credit the Old Notes to your account maintained with DTC promptly after the expiration or termination of the tender/exchange offer and consent solicitation.

Withdrawal and Revocation Rights

You may withdraw your tender of Old Notes or revoke your consent to the Indenture Amendment (1) at any time before the expiration date of the tender/exchange offer and (2) after the expiration of 40 business days from the commencement of the tender/exchange offer if we have not completed the tender/exchange offer as of that date.  Consents may be revoked at any time prior to the applicable withdrawal deadline and only by withdrawing the tendered Old Notes to which the consent relates.

If you have tendered Old Notes and delivered a consent to the Indenture Amendment, you may withdraw those Old Notes prior to the applicable withdrawal deadline, and concurrently revoke your consent, by delivering a written notice of withdrawal subject to the limitations described herein.  To be effective, a written or facsimile transmission notice of withdrawal or a properly transmitted agent’s message must:

·                                          be received by the exchange agent at the address specified on the back cover of this prospectus prior to the applicable withdrawal deadline;

·                                          specify the name of the holder of the Old Notes to be withdrawn;

·                                          specify the number of the account at DTC from which the Old Notes were tendered and the aggregate principal amount represented by the Old Notes; and

·                                          be signed by the holder of the Old Notes in the same manner as the original signature on the Letter of Transmittal and Consent or be accompanied by documents of transfer sufficient to have the trustee for the Old Notes register the transfer of the Old Notes into the name of the person withdrawing the Old Notes or revoking a consent.

If the Old Notes to be withdrawn have been delivered or otherwise identified to the exchange agent, a signed notice of withdrawal is effective immediately upon receipt by the exchange agent of written or facsimile transmission of the notice of withdrawal (or receipt of a request via DTC) even if physical release is not yet effected.  A withdrawal of Old Notes, and revocation of consent, can only be accomplished in accordance with the foregoing procedures.

36

Table of Contents

We will determine all questions as to the validity, form and eligibility, including time of receipt, of notices of withdrawal or revocation in our sole discretion. Our determination will be final and binding on all parties. Any Old Notes so withdrawn, and any consents revoked, will be deemed not to have been validly tendered or delivered, respectively, for purposes of the tender/exchange offer and consent solicitation. Any Old Notes withdrawn or revoked will be promptly credited to an account maintained with DTC for the Old Notes. You may later tender any properly withdrawn Old Notes or deliver a new consent by following the procedures described under “— Procedures for Tender” at any time on or before the expiration date.

The Indenture Amendment

Concurrent with the tender/exchange offer, we are soliciting consents to the Indenture Amendment.  The Indenture Amendment, if adopted and effected, will revise Section 7.01(a) of the Old Note Indenture as follows:

(5)           a default under any bond, note, debenture or other evidence of indebtedness of the Company or any of its Subsidiaries, or under any mortgage, indenture or other instrument under which there may be issued or by which there may be secured or evidenced any indebtedness of the Company or any of its Subsidiaries which results in the acceleration of such indebtedness in an aggregate principal amount exceeding $20,000,000$100,000,000 or which constitutes a failure to pay at maturity or other scheduled payment date (after expiration of any applicable grace period) such indebtedness in an aggregate principal amount exceeding $20,000,000$100,000,000, but only if such indebtedness is not discharged or such acceleration is not rescinded or annulled within 10 days after notice to usthe Company by the tTrustee or to the Company and the tTrustee by the holders of at least 25% in aggregate principal amount of the Securities; or

We intend to execute the Supplemental Indenture promptly after the acceptance date if we have accepted consents from holders of at least a majority of the aggregate principal amount of the Old Notes outstanding.  The Indenture Amendment will not become operative until the settlement date.

Each holder of Old Notes will be bound by the Supplemental Indenture even if that holder did not give its consent to the Indenture Amendment.  If the consent solicitation is terminated or withdrawn, the Indenture Amendment will not become effective and all consents will be deemed revoked.

For more complete information regarding the events of default under the Old Indenture, we encourage you to review the Old Indenture.  See “Where You Can Get More Information.”

Transfer Taxes

We will pay all transfer taxes, if any, applicable to the tender of Old Notes to us in the tender/exchange offer. If transfer taxes are imposed for any other reason, such as, for example, if the box entitled “Special Issuance or Payment Instructions” on the Letter of Transmittal and Consent has been completed as described in the instructions thereto, the amount of those transfer taxes, whether imposed on the registered holder or any other persons, will be payable by the tendering holder.

Conditions to the Tender/Exchange Offer and Consent Solicitation

The Indenture Amendment will become effective only if we receive valid consents from holders of at least a majority of the aggregate principal amount of the Old Notes.

Notwithstanding any other provision of the tender/exchange offer and consent solicitation, we will not be required to accept any tendered Old Notes and may extend, terminate or amend the tender/exchange offer and consent solicitation if at any time before the expiration of the tender/exchange offer and consent solicitation, we

37

Table of Contents

determine that the tender/exchange offer or consent solicitation violates applicable law, any applicable interpretation of the staff of the SEC or any order of any governmental agency or court of competent jurisdiction.

In addition, we will not accept for exchange or purchase any Old Notes tendered, or accept any consents delivered, if any stop order is threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture governing the New Notes under the Trust Indenture Act of 1939, as amended. In any of those events, we will use every reasonable effort to obtain the withdrawal of any stop order at the earliest possible time.

We also may not accept Old Notes that have been tendered or any consents that have been delivered and may take the actions listed below if, prior to the expiration date, any of the following events occur:

·                                          any action, proceeding or litigation seeking to enjoin, make illegal or delay completion of the tender/exchange offer or consent solicitation or otherwise relating in any manner to the tender/exchange offer or consent solicitation is instituted or threatened;

·                                          any order, stay, judgment or decree is issued by any court, government, governmental authority or other regulatory or administrative authority and is in effect, or any statute, rule, regulation, governmental order or injunction is proposed, enacted, enforced or deemed applicable to the tender/exchange offer or consent solicitation, any of which would or might restrain, prohibit or delay completion of the tender/exchange offer or consent solicitation or impair the contemplated benefits of the tender/exchange offer and consent solicitation to us;

·                                          any of the following occurs and the adverse effect of the occurrence will, in our reasonable judgment, be continuing:

·                                          any increase or decrease of more than 10%, measured from the close of trading on                     , 2010, in (1) the market price of our common stock or (2) either the Dow Jones Industrial Average or the S&P 500®;

·                                          any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market in the United States;

·                                          any extraordinary or material adverse change in United States financial markets generally;

·                                          a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States;

·                                          any limitation, whether or not mandatory, by any governmental entity on, or any other event that would reasonably be expected to materially adversely affect, the extension of credit by banks or other lending institutions; or

·                                          a commencement of a war, act of terrorism or other national or international calamity directly or indirectly involving the United States, which would reasonably be expected to affect materially and adversely, or to delay materially, the completion of the tender/exchange offer or consent solicitation;

·                                          any of the situations described above existed at the time of commencement of the tender/exchange offer or consent solicitation and that situation deteriorates materially after commencement of the tender/exchange offer and consent solicitation;

·                                          any tender or tender/exchange offer, other than this tender/exchange offer and consent solicitation by us, with respect to some or all of the Old Notes or our outstanding common stock or any

38

Table of Contents

merger, acquisition or other business combination proposal involving us is proposed, announced or made by any person or entity;

·                                          any objection by, or any action taken by, the trustee under the Old Note Indenture that may, in our reasonable judgment, adversely affect the completion of the tender/exchange offer and consent solicitation or that challenges the validity or effectiveness of the procedures used by us in the tender/exchange offer and consent solicitation or the acceptance of the Old Notes tendered for exchange or purchase; or

·                                          any event or events occur that have resulted or may result, in our reasonable judgment, in an actual or threatened change in our business, financial condition, results of operations or prospects, or that materially impair the contemplated benefits of the tender/exchange offer and consent solicitation.

If any of the above events occur, we may:

·                                          terminate the tender/exchange offer and consent solicitation and promptly credit all tendered Old Notes to the tendering holders’ accounts maintained with DTC;

·                                          extend the tender/exchange offer and consent solicitation, subject to the withdrawal rights described in “— Withdrawal and Revocation Rights” herein, and retain all tendered Old Notes until the extended tender/exchange offer expires;

·                                          amend the terms of the tender/exchange offer and consent solicitation, which may result in an extension of the period of time for which the tender/exchange offer and consent solicitation are kept open; or

·                                          waive the unsatisfied condition, subject to any requirement to extend the period of time during which the tender/exchange offer and consent solicitation are open, and complete the tender/exchange offer and consent solicitation.

The foregoing conditions are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to these conditions or may be waived by us in whole or in part at any time and from time to time in our sole discretion. Our failure to exercise any of the foregoing rights at any time is not a waiver of any of these rights and each of these rights will be an ongoing right which may be asserted at any time and from time to time.

Source of Funds

We intend to fund any cash consideration necessary to purchase the Old Notes tendered pursuant to the Tender Option, or a combination of the Tender Option and Exchange Option, with cash on hand or with funds drawn under our credit facility. No material conditions exist concerning our use of cash or the credit facility to fund the cash consideration.  We do not anticipate using any alternative financing arrangements for the tender/exchange offer.

The aggregate commitment under our credit facility is $300 million, on an unsecured basis, which includes a $145 million accordion feature.  The access to the accordion feature is at the discretion of the current lending group.  If approved, the terms for the funds borrowed under the accordion feature would be current market terms and not the terms of the existing line of credit facility.  The lending group is not obligated to approve access to the additional funds.  The credit facility matures on April 20, 2011.  We pay interest only on draws under the credit facility at the rate equal to either (i) zero to 30 basis points over the Prime Rate or (ii) 100 to 150 basis points over LIBOR in effect at the time of borrowing, depending on our leverage and the type of advance.  As of March 31, 2010, the weighted average interest rate on outstanding draws was 1.60% per annum.  We are also required to pay, on a quarterly basis, either 0.15% or 0.20% per annum on the average daily funds remaining under this line.  The outstanding balance under the credit facility was $50 million as of March 31, 2010. We have received non-binding commitments from a syndicate of banks lead by KeyBank N.A. aggregating approximately $300 million which will be used to refinance this line of credit facility and our $140 million term loan expiring in September 2010.  These

39

Table of Contents

loans are subject to, among other things, the lending syndicate completing its due diligence and other closing requirements, including executing definitive agreements.

If we decide to fund all or part of the cash consideration with funds drawn under our credit facility, we expect to repay that indebtedness with one or more of the following: cash on hand, proceeds from one or more new secured financings of our unencumbered assets or proceeds from the sale of our assets.   No final decisions have been made, however, concerning the method we will employ to repay any indebtedness incurred in connection with the tender/exchange offer and consent solicitation.

Other Fees and Expenses

We will not pay any fees or commissions to any broker or dealer, or any other person, other than Macquarie for serving as the Dealer Manager.  Brokers, dealers, commercial banks and trust companies will, upon request, be reimbursed by us for reasonable and necessary costs and expenses incurred by them in forwarding materials to their customers.

The principal solicitation is being made by mail. However, additional solicitations may be made by facsimile transmission, telephone or in person by the Dealer Manager and the information agent, as well as by our officers and other employees.

The total fees and expenses expected to be incurred in connection with the tender/exchange offer and consent solicitation, and assuming all of the Old Notes are tendered for exchange or purchase, are estimated to be approximately $3.3 million.

Accounting Treatment

In the event Old Notes are exchanged for New Notes, we will determine in accordance with GAAP whether the exchange is considered a debt extinguishment or debt modification.  If the exchange is considered an extinguishment, then we may recognize a gain or loss for accounting purposes, and all costs previously recorded with respect to the Old Notes will be written-off.  If it is determined that the exchange is a modification, no gain or loss will be recognized, and the costs previously recorded with respect to the Old Notes exchanged will be amortized through the maturity date of the New Notes.  We will recognize on a bi-annual basis over the term of the New Notes the amount of interest paid to the holders of the New Notes.  All other costs incurred in connection with the exchange will be capitalized and amortized over the term of the New Notes.

Amendment of the Tender/Exchange Offer and Consent Solicitation

We reserve the right to interpret or modify the terms of the tender/exchange offer and consent solicitation, provided that we will comply with applicable laws that may require us to extend the period during which securities may be tendered or withdrawn, and consents delivered or revoked, as a result of changes in the terms of, or information relating to, the tender/exchange offer and consent solicitation.

Effect of Tender

Any valid tender or consent by a holder of Old Notes that is not validly withdrawn prior to 5:00 p.m., New York City time, on the expiration date of the tender/exchange offer will constitute a binding agreement between that holder and us upon the terms and subject to the conditions of the tender/exchange offer and consent solicitation described in this prospectus. The acceptance of the tender/exchange offer by a tendering holder of Old Notes will constitute the agreement by that holder to deliver good and marketable title to the tendered Old Notes, free and clear of all liens, charges, claims, encumbrances, interests and restrictions of any kind.

Absence of Dissenters’ Rights

Holders of Old Notes do not have any appraisal or dissenters’ rights under applicable law in connection with the tender/exchange offer and consent solicitation.

40

Table of Contents

DESCRIPTION OF THE NEW NOTES

The following description summarizes certain terms and provisions of the New Notes and the New Note Indenture that we will enter into if we complete the tender/exchange offer and consent solicitation and if any holders elect the Exchange Option.  This description does not purport to be complete and is subject to, and qualified in its entirety by reference to, the actual terms and provisions of the New Notes and the New Note Indenture, which are filed as exhibits to the registration statement of which this prospectus constitutes a part.  We will provide copies of these documents to you upon request.

Capitalized terms used but not otherwise defined herein will have the meanings given to them in the New Notes or the New Note Indenture, as applicable. Unless otherwise expressly stated or the context otherwise requires, all references to “we,” “us,” “our,” “ourselves” or “IRC” mean Inland Real Estate Corporation, excluding our subsidiaries and unconsolidated joint ventures.

General

The New Notes will be a separate series of debt securities issued pursuant to the indenture between us and Wells Fargo Bank, National Association, as trustee, which we refer to herein as the “New Note Indenture.”  Except as described herein, the New Note Indenture will contain terms substantially identical to the terms contained in the Old Note Indenture.

The terms of the New Notes will include those provisions made a part of the New Notes themselves, and the New Note Indenture and those made part of the New Note Indenture by reference to the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”). The New Notes will be available for inspection at the corporate trust office of the trustee, currently located at 230 W. Monroe Street, Chicago, Illinois 60606.

The New Notes will initially be limited in aggregate principal amount to $125 million. The New Note Indenture does not limit the amount of debt securities that we may issue under the New Note Indenture or otherwise. The New Notes will be our direct, unsecured obligations, and will rank equally in right of payment with all of our other senior unsecured indebtedness from time to time outstanding, including any Old Notes that remain outstanding following the consummation of the tender/exchange offer and consent solicitation.

The New Notes will be exclusively our obligations. Our subsidiaries hold substantially all of our assets, including all of our real property. Accordingly, our cash flow and ability to service debt, including the principal and interest due on the New Notes, depends on the earnings and amounts distributed to us by our consolidated subsidiaries, and distributions from our unconsolidated joint venture investments. The New Notes will be effectively subordinated in right of payment to all existing and future indebtedness, guarantees and other liabilities of our subsidiaries and unconsolidated joint ventures. The New Notes will not be guaranteed by any of our subsidiaries.

The New Notes also will be effectively subordinated to any of our secured indebtedness with respect to any collateral pledged as security therefor.

The New Notes will be issued only in fully registered, book-entry form, in denominations of $1,000 and integral multiples thereof, except under the limited circumstances described below under “— Book-Entry System” in this prospectus.

Holders will have the right to convert New Notes at the office of the conversion agent, present New Notes for registration of transfer at the office of the registrar for the New Notes and present New Notes for payment at maturity at the office of the paying agent. We have appointed the trustee as the initial conversion agent, registrar and paying agent for the New Notes.

If any interest payment date, stated maturity date, redemption date or repurchase date is not a business day, the payment otherwise required to be made on that date will be made on the next business day without any additional payment as a result of the delay. The term “business day” means, with respect to any New Note, any day, other than a Saturday, Sunday or any other day on which the trustee or banking institutions in The City of New

41

Table of Contents