INVESTMENT ADVISORY AGREEMENT FOR DISCRETIONARY ACCOUNTS

This INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made and entered into as
of this 31st day of July, 2003 and between Inland retail Real Estate Trust, Inc.
("Client") and Inland Investment Advisors, Inc., an Illinois corporation
("Adviser"), an investment adviser registered under the Investment Advisers Act
of 1940, as amended (the "Advisers Act"), for the purpose of setting forth the
terms and conditions pursuant to which Adviser will manage Client's assets
designed for management hereunder.

NOW, THEREFORE, in consideration of the promises and the mutual covenants
contained herein, the parties hereto agree as follows:

 1.  APPOINTMENT AS INVESTMENT ADVISER.

     Client hereby appoints and retains Adviser as investment adviser and
     attorney-in-fact on the terms and conditions set forth in this Agreement
     for those assets which Client may from time to time place with Adviser, and
     any appreciation, income or proceeds thereon (the "Account"). Adviser
     accepts the appointment as investment adviser and agrees to manage and
     direct the investments of the Account, subject to any Investment Guidelines
     (defined in Section 9 below) communicated to Adviser in advance and in
     writing. Adviser assumes responsibility for the investment management of,
     and all trading decisions for, the Account as of the date assets are placed
     in the Account.

 2.  AUTHORITY OF ADVISER.

     Adviser has full discretionary authority with respect to the investment and
     reinvestment of the assets of the Account, subject to the Investment
     Guidelines. Adviser, when it deems appropriate, without prior consultation
     with or notification of Client, may, (a) purchase, sell, exchange, convert
     and otherwise trade in securities, including but not limited to money
     market instruments, mutual funds, stocks, options and warrants, on margin
     or otherwise, (collectively, "Investments"), for such prices, at such times
     and on such terms as Adviser, in its sole discretion, deems advisable; (b)
     place orders for the execution of transactions with or through brokers,
     dealers or issuers Adviser selects in its sole discretion, including
     broker-dealer with whom Adviser is related; (c) render, furnish and provide
     advice, analyses and other information concerning the retention,
     monitoring, performance or termination of other investment advisers or
     asset managers; (d) negotiate, on Client's behalf, the terms and
     conditions, and execute and deliver all agreements and ancillary documents
     incidental thereto, necessary to open accounts in the name, or for the
     benefit, of Client with such brokers, dealers, advisers, managers, issuers
     or custodians as Adviser may select with respect to the Account; and (e)
     act on Client's behalf in all matters necessary or incidental to servicing
     the Account, including all transactions for the Account. Client will
     furnish Adviser with all additional powers of attorney and other
     documentation, if any, necessary to appoint Adviser as agent and
     attorney-in-fact with respect to the Account, but such powers shall not be
     construed to authorize Adviser to take any action not authorized by this
     Agreement.

     The foregoing authority shall remain in full force and effect until; (a)
     revoked by Client pursuant to written notice to Adviser, or (b) the
     termination of this Agreement pursuant to the terms of Section 14 below.
     Revocation shall not affect transactions entered into prior to such
     revocation.

 3.  CUSTODIANSHIP.

     The assets of the Account will be held by the clearinghouse, broker-dealer,
     bank, trust company or other entity designed and appointed by Adviser, and
     acceptable to Client, as custodian of the Account ("Custodian"). All
     Investments held in the Account may be registered in the name of Client or
     its nominee or held in street name. Custodian is responsible for the
     physical custody of the assets of the Account; for the collection of any
     interest, dividends or other income attributable to the assets of the
     Account; and for the exercise of rights and tenders on assets of the
     Account. Adviser is not responsible for any loss incurred by reason of any
     act or omission of Custodian; provided, however, that Adviser will make
     reasonable efforts to require that Custodian perform its obligations with
     respect to the Account.

 4.  BROKERAGE/RESEARCH.
      A. Selection of Broker-dealer.
     
         Adviser may allocate the execution of transactions for the Account to
         any broker-dealer at prices and commission rates as Adviser, in its
         good faith judgment, believes are in the best interest of the Account.
         Client understands that other brokerage entities may be willing to
         execute transactions at prices and commission rates that are lower than
         or different from those charged by the entity selected by Adviser.
         Client further understands and acknowledges that Adviser has a
         relationship with Inland Securities Corporation, a broker-dealer
         registered with the Securities and Exchange Commission, and that
         certain transactions on behalf of the Account may be executed through
         Inland Securities Corporation, and as a result, Adviser as a part of
         the Inland Group of companies, may benefit from the brokerage
         commissions from these transactions. Although Adviser intends to treat
         Client fairly and act in the best interests of Client and the Account
         in accordance with Adviser's fiduciary duty, Client understands that
         Adviser has an incentive to execute transactions through Inland
         Securities Corporation to generate brokerage commissions.
     
      B. Research Services.
     
         In determining what is in the Account's best interest, Adviser will
         consider the available prices and rates of brokerage commissions, and
         other relevant factors including, without limitation, execution
         capabilities, the value of ongoing relationships Adviser may have with
         various broker-dealer and research and other services, as defined in
         Section 28(e)(3) of the Securities Exchange Act of 1934. In addition,
         Adviser may receive equipment, subscriptions and reimbursement for
         professional memberships from broker-dealer, and may purchase research
         and other services directly from vendors, obtaining reimbursement from
         broker-dealer. Adviser need not demonstrate that the research and other
         services are of a direct benefit to the Account. The commissions paid
         to the broker-dealer may exceed the amount of commissions another
         broker-dealer would charge for the same transaction. Such research and
         other services, moreover, may be available to Adviser on a cash basis.
         Adviser will be required to determine, in good faith, that the amount
         of commissions paid is reasonable in relation to the value of the
         brokerage, research and other services provided by the broker-dealer,
         viewed in terms of either the particular transaction or Adviser's
         overall responsibilities to all of its clients. The research and other
         services provided may relate to a specific transaction placed with the
         broker-dealer, but for the most part will consist of a wide variety of
         information useful to the Account, Adviser and Adviser's other clients.
         Adviser's ability to obtain research and other services is an integral
         factor in establishing the fees charged by Adviser under this
         Agreement.
     
      C. Execution of Transactions by Broker-Dealer.

     In effecting transactions at the direction of Adviser, broker-dealer
     selected by Adviser may effect similar transactions in the same Investment
     Account and for the accounts of other clients of Adviser. Broker-dealer may
     bunch transaction orders and will allocate the Investments so purchased or
     sold in a bunched order among the participating accounts (including the
     Account) as Adviser determines to be reasonable. Adviser may be charged a
     lesser per unit commission on bunched orders than would otherwise be
     charged for a non-bunched order, with the savings allocated to Client and
     Adviser's other clients whose orders are bunched. In the case of bunched
     orders, the brokerage commission paid by Client will be equal to a pro rata
     portion of the entire commission charged, determined by multiplying the
     entire commission by a fraction, the numerator of which is the number of
     shares allocated to the Account and the denominator of which is the total
     number of shares purchased or sold in the bunched transaction.

 5.  SERVICES TO OTHERS.

     Client understands that Adviser performs investment advisory services for
     various clients. Adviser will allocate investment opportunities over a
     period of time on a fair and equitable basis relative to all clients. These
     allocations will be made on a basis determined by Adviser to be reasonable,
     including a determination that some clients may not purchase or sell the
     same Investments at the same time as others. Client acknowledges that
     Adviser and its principals, employees and affiliates may purchase or sell
     Investments for their own accounts and that Adviser shall not have any
     obligation to purchase or sell, or to recommend for purchase or sale, for
     the Account, any Investments that Adviser, its principals, employees or
     affiliates may purchase or sell for its or their own accounts or for the
     account of any other client.

 6.  PROXIES AND RELATED MATTERS.

     In connection with the services to be rendered by Adviser under this
     Agreement, Adviser hereby is granted the power as Client's proxy and
     attorney-in-fact to vote, tender or direct the voting or tendering of all
     Investments held in the Account and to take actions on behalf of Client
     with respect to Investments including, but not limited to, executing on
     behalf of Client, any consent, request, direction, approval, waiver,
     objection, appointment or other instrument required or permitted to be
     signed or executed by the holder of Investments.

 7.  REPRESENTATIONS AND WARRANTIES.
      A. Client's Representations and Warranties.
     
         Client hereby represents and warrants to Adviser that: (i) Client has
         the requisite legal capacity and authority to execute, deliver and to
         perform its obligations under this Agreement; (ii) this Agreement has
         been duly authorized, executed and delivered by Client and is the
         legal, valid and binding agreement of Client, enforceable against
         Client in accordance with its terms; (iii) Client's execution of this
         Agreement and the performance of its obligations hereunder do not
         conflict with or violate any provisions of the governing documents of
         Client or any obligations by which Client is bound, whether arising by
         contract, operation of law or otherwise; (iv) Client will deliver to
         Adviser evidence of Client's authority in compliance with such
         governing documents upon Adviser's request; and (v) the Client is the
         owner of all cash, Investments and other assets in the Account, and
         there are no restrictions on the pledge, hypothecation, transfer, sale
         or public distribution of such cash, securities or assets.
     
      B. Adviser's Representations and Warranties.

     Adviser hereby represents and warrants to Client that: (i) Adviser is a
     corporation, duly organized under the laws of the State of Illinois; (ii)
     this Agreement has been duly authorized, executed and delivered by Client
     and is the legal, valid and binding agreement of Adviser, enforceable
     against Adviser in accordance with its terms; (iii) Adviser is an
     investment adviser registered with the appropriate state and federal
     regulatory authorities pursuant to the Advisers Act; (iv) Adviser will
     notify Client of any material change in Adviser's investment adviser
     registration within a reasonable time after such change; and (v) Adviser
     will not engage in any principal or agency cross transactions with respect
     to the Account without obtaining the prior consent of Client.

 8.  VALUATION OF ASSETS.

     In computing the market value of any Investments in the Account, each
     Investment listed on any exchange or quoted on the Nasdaq interdealer
     quotation system shall be valued at the last quoted sale price on the
     valuation date on the principal exchange or the Nasdaq interdealer
     quotation system on which the Investment is listed or included for
     quotation. Any other Investment or assets shall be valued in a manner
     determined in good faith by Adviser to reflect its or their fair market
     value.

 9.  INVESTMENT GUIDELINES.

     Client is responsible for informing Adviser, in advance and in writing, of
     any investment or other guidelines, objectives, restrictions, conditions,
     limitations or directions applicable to, as well as any cash needs of, the
     Account, from time to time ("Investment Guidelines"), and of any changes or
     modifications to any such Investment Guidelines; provided, that any change
     or modification to the Investment Guidelines shall become effective only
     after at least fifteen (15) days' advance notice to Adviser (unless Adviser
     expressly consents to a shorter time period). Client must give Adviser
     prompt written notice if Client deems any Investments made or actions taken
     on behalf of the Account to be in violation of the Investment Guidelines.
     Compliance with the Investment Guidelines shall be determined on the date
     of purchase for an Investment, based upon the price and characteristics of
     the Investment on the date of purchase compared to the value of the Account
     as of the most recent valuation date; the Investment Guidelines shall not
     be deemed breached as a result of changes in value or status of an
     Investment following purchase. Client agrees to furnish promptly, or to
     cause Client's Custodian or agent to furnish, to Adviser, all data and
     information furnished to Adviser hereunder. Adviser shall have no
     responsibility with respect to the prudence of the Investment Guidelines
     relative to the Client's investment portfolio, the overall diversification
     of Client's assets or with respect to any assets of Client other than those
     in the Account.

 10. CLIENT REPORTS AND MEETINGS.

     Adviser will be responsible for ensuring that Custodian sends to Client a
     report, as promptly as practical after the end of each calendar month,
     reflecting: (i) all transactions for the Account during such month; (ii)
     the aggregate market value of all assets for the Account on the last day of
     such month; and (iii) such other information relating to the Account as
     reasonably agreed to by Adviser and Client. Adviser is not responsible for
     the content of reports furnished to Client by the Custodian or any
     broker-dealer for the Account.

     Adviser will meet with Client and such other persons as Client may
     designate, on reasonable notice and at reasonable locations, as requested
     by Client, for the purpose of discussing general economic conditions,
     portfolio performance, investment strategy and other matters relating to
     the Account.

 11. FEES AND EXPENSES.

     Client will pay Adviser for the services to be rendered by Adviser under
     this Agreement in accordance with the fee schedule attached hereto as
     Schedule A, which may be amended by Adviser from time to time as agreed by
     Adviser and Client. All expenses relating to the investment of the assets
     of the Account, including without limitation, brokerage commissions,
     transfer taxes and other fees and expenses in the purchase, sale or other
     disposition of such assets, shall be the sole responsibility of Client and
     will be payable from the Account.

 12. ADVISER'S DUTY OF CARE.

     Neither Adviser nor any of its principals, employees or affiliates will be
     responsible hereunder for any action, performed or omitted to be performed
     in good faith or at the direction of Client, or for any errors in judgment
     in managing the Account. Adviser and its principals, employees and
     affiliates will not be responsible for any loss incurred by reason of any
     act or omission of any broker-dealer or Custodian; provided, however, that
     Adviser shall make reasonable efforts to require that broker-dealer and
     Custodians perform their respective obligations. Adviser, in maintaining
     its records, does not assume responsibility for the accuracy of information
     furnished by the Client, Custodian or any other third-party over which
     Adviser does not have control. Except as expressly set forth in this
     Agreement, Adviser shall have no discretion, duty or responsibility
     whatsoever with respect to the control, management or administration of the
     Account. Nothing herein in any way constitutes a waiver or limitation of
     any of the obligations that Adviser may have under federal and state
     securities laws.

 13. CONFIDENTIAL RELATIONSHIP.

     Adviser agrees not to disclose any "confidential information" provided to
     it by the Client. The term "confidential information" shall not include
     information which: (a) was in the public domain prior to disclosure by
     publication or otherwise through no action of Adviser; (b) was already
     known to Adviser; or (c) was received by Adviser through a source other
     than Client which is or was not under an obligation of confidentiality to
     Client. Further, notwithstanding anything to the contrary herein, Adviser
     may disclose "confidential information" to its agents and advisors whenever
     Adviser determines that disclosure is necessary or advisable to provide the
     services contemplated hereunder. Adviser shall inform all parties who
     receive disclosure of "confidential information" or who have access to such
     information of the confidentiality obligations set forth herein, and shall
     inform the Client of disclosure of "confidential information" to any party
     other than Adviser's independent public accountants or attorneys.

 14. TERMINATION

     This Agreement may be terminated by Client or Adviser at any time on thirty
     (30) days' prior written notice. Furthermore, Client may terminate this
     Agreement within five (5) business days after execution without penalty.
     Except with respect to termination by Client during the five (5) business
     days after execution, termination of this Agreement will not, in any case,
     affect or prevent the consummation of any transaction initiated prior to
     such notice of termination. All fees will be prorated to the date of
     termination.

 15. ASSIGNMENT.

     No assignment of this Agreement will be made by Adviser without the prior
     written consent of Client.

 16. AMENDMENT.

     This Agreement may be amended from time to time with the mutual written
     consent of the parties hereto.

 17. GOVERNANCE.

     This Agreement amends and is in substitution of all prior agreements, if
     any, between the parties with respect to the Account. This Agreement will
     be governed by the internal laws of the State of Illinois without regard it
     choice of law rules.

 18. NOTICES.

     If to Adviser:

     Inland Investment Advisors, Inc.
     2901 Butterfield Road
     Oak Brook, Illinois 60523
     Telephone: (630) 218-8000
     Fax: (630) 218-4955
     Attn: Roberta S. Matlin

     If to Client:

     Inland Retail Real Estate Trust, Inc.
     2901 Butterfield Road
     Oak Brook, IL 60523
     Telephone: (630) 218-8000
     Fax: (630) 218-4956
     Attn: Barry Lazarus, President

 19. RECEIPT OF FORM ADV.

     Client acknowledges receipt of Part II of Form ADV completed by Adviser, a
     disclosure statement containing the equivalent information or the
     information required by Schedule H of Form ADV if the Client is entering
     into a wrap fee program sponsored by the Adviser. If the appropriate
     disclosure statement was not delivered to the Client at least 48 hours
     prior to the Client entering into any written or oral advisory contract,
     then the Client has the right to terminate the contract without penalty
     within five business days after entering into this Agreement. For the
     purposes of this provision, a contract is considered entered into when all
     parties to the contract have signed the contract, or in the case of an oral
     contract, have otherwise signified their acceptance, any other provisions
     of this contract notwithstanding.

 20. SUCCESSORS.

This Agreement inures to the benefit of Adviser and Client and their respective
successors and assigns and binds Client and any permitted assignees or
successors in interest with respect to all transactions, trades, dealings and
actions by Adviser after Client's insolvency, dissolution or liquidation until
such time as Client (or its legal representatives) notifies Adviser, in the
manner set forth herein, of its intention to terminate this Agreement.

IN WITNESS WHEREOF, the parties hereof have executed this Agreement on the date
first written above.

CLIENT

By: _______________________
Barry L. Lazarus
Its: President

ADVISER

:

INLAND INVESTMENT ADVISORS, INC.

By:__________________________
Roberta S. Matlin
Its: President

 

 

 

SCHEDULE A

TO INVESTMENT ADVISORY AGREEMENT

DATED July 31, 2003

BETWEEN

INLAND INVESTMENT ADVISORS, INC ("Adviser")

AND

Inland Retail Real Estate Trust, Inc.("Client")

1. This Schedule A may be amended from time to time by Adviser upon 30 days'
written notice to Client.

2. Fee Schedule:

Client shall pay or cause to be paid to Adviser as remuneration for its services
under this Agreement a 0.75 percent (0.75%) per annum investment management fee
on all assets under management. In addition, Client will be responsible for all
fees and charges as described in Section 11 of the Agreement.

The fee will be computed and due monthly based on the average daily net asset
value. The fee will be deducted from cash available in the account, and if there
is no cash available, assets will be sold in an amount equal to the payment due.