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                                ESCROW AGREEMENT


         THIS AGREEMENT is made and entered into as of the 31st day of
January, 2001, by and among INLAND RETAIL REAL ESTATE TRUST, INC., a Maryland
corporation (the "Company"), INLAND SECURITIES CORPORATION, an Illinois
Corporation (the "Dealer Manager"), and LASALLE BANK NATIONAL ASSOCIATION,
CHICAGO, ILLINOIS (the "Escrow Agent").

         1.       The Company does hereby open this escrow and Escrow Agent's
sole concern and duties shall be as specifically set forth herein:

                  1.1     From time to time during the course of this escrow, in
         connection with the Company's offering (the "Offering") of up to
         50,000,000 shares of common stock on a "best efforts" basis (the
         "Shares") (exclusive of Shares offered and sold pursuant to the
         Company's distribution reinvestment program), Escrow Agent will receive
         from subscribers deposits to be held in escrow in accordance with the
         terms hereof. All such funds received by Escrow Agent shall be placed
         into an interest-bearing account entitled "Inland Retail Real Estate
         Trust, Inc. Subscription Account" (the "Escrow Account").

         2.       All deposits from each subscriber shall be accompanied by the
subscriber name, social security number, current address and investment amount.

         3.       Checks deposited in the Escrow Accountfrom the various
subscribers  shall be made payable to "LBNA, Escrow Agent for IRRET."

         4.       All parties understand and are aware that all funds received
during the course of the escrow and deposited in the Escrow Account must clear
the normal banking channels prior to the release of any funds.

         5.       The Company understands that it is not entitled to any funds
received into escrow in the event of cancellation of the Offering and in such
event, deposits shall be returned to the subscribers.

         6.       The parties agree that this is an impound escrow between the
Company, the Dealer Manager and the Escrow Agent. The Company and the Dealer
Manager agree that the subscribers who deposit into the "Escrow Account" are not
a party to this escrow.

         7.       All documents, including any instrument necessary for the
negotiation or other transfer of escrow assets, deposited simultaneously with
the execution of this Agreement are approved by the Company, and the Escrow
Agent shall not be obligated to inquire as to the form, manner of execution or
validity of these documents or any document hereafter deposited pursuant to the
provisions hereof, nor shall the Escrow Agent be obligated to inquire as to the
identity, authority or rights of the persons executing the same. The Escrow
Agent shall be liable under this Agreement only for its gross negligence or
willful misconduct in the performance of its duties expressly set forth in this
Agreement. The Escrow Agent shall have a lien on all securities, monies

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and documents deposited in this escrow by each subscriber to secure Escrow
Agent's reasonable compensation and expenses and for judgments, attorneys' fees
and other liabilities which the Escrow Agent may incur or sustain by reason of
this escrow, and the undersigned agrees to pay to Escrow Agent, upon demand,
amounts to satisfy all such liabilities, fees and expenses. In case of
conflicting demands upon it, the Escrow Agent may withhold performance of this
escrow until such time as the conflicting demands shall have been withdrawn or
the rights of the respective parties shall have been settled by court
adjudication, arbitration, joint order or otherwise.

         8.       Until the termination of the Offering, the Company shall
notify the Escrow Agent of the Company's acceptance or rejection of each
subscription agreement as promptly as practicable, but in any event within ten
(10) days of its receipt, and of any subscription which is rescinded within five
(5) days of such rescission. If the Escrow Agent receives notice that a
subscription is rejected by the Company, the subscriber's deposit will be
returned by the Escrow Agent to the subscriber, without interest or deduction,
as promptly as practicable, but in any event within ten (10) days after its
receipt of notice from the Company that the subscription has been rejected. If a
subscription is rescinded, the Escrow Agent shall return to the subscriber the
subscriber's deposit, without interest or deduction, within seven (7) days of
being notified by the Company of such rescission. In the event the check of a
subscriber whose subscription has been rescinded has been negotiated (and if the
funds represented thereby have been disbursed to the Company), the Company shall
deposit with the Escrow Agent an amount of funds equal to the amount necessary
to be returned to the subscriber (or the Escrow Agent may deduct such amount
from any funds due to the Company under this Agreement). The Escrow Agent shall
not be liable for the failure to return a rejected or rescinded subscription if
the Company fails to notify the Escrow Agent of the rejection of rescission of
the corresponding subscription agreement.

         9.       Commencing with the date paid subscriptions have been received
and accepted for at least 200,000 Shares or $2,000,000 (the "Minimum Offering"),
provided such date is within six months of the initial date of the Company's
prospectus (such initial date of the Company's prospectus being the "Effective
Date"), and ending on the Termination Date (the "Offering Period"), the Escrow
Agent shall (i) disburse to the Company on a weekly basis any funds received by
the Escrow Agent for accepted subscriptions (but not those funds of a subscriber
whose subscription has been rejected or rescinded of which the Escrow Agent has
been notified by the Company, or otherwise in accordance with the Company's
written request; and (ii) invest any funds held in the escrow subject to
paragraph 10 hereof, in such instruments as the Company may direct. Upon
termination of the Offering, which shall occur not later than 12 months after
the Effective Date, provided however that, subject to requalification in certain
states, the Company may extend the Offering Period from time to time, but in no
event more than two years after the Effective Date (the "Termination Date"), all
amounts theretofore undistributed shall be distributed to the Company, and this
escrow shall close and be consummated in its entirety. If subscriptions for at
least the Minimum Offering have not been received, accepted and paid for within
six months of the Effective Date, all funds received will be promptly returned
in full to subscribers, together with their pro rata share of any interest
earned thereon pursuant to instructions made by the Company, upon which the
Escrow Agent may conclusively rely. If such refund is made, Inland Real Estate
Investment Corporation will pay any escrow fees.

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         10.      The funds deposited herein shall be invested in federally
insured bank accounts (E.G., savings accounts), short-term certificates of
deposit issued by a bank, short-term securities issued or guaranteed by the
United States government and any other investments permitted under Rule 15c2-4
of the Securities Exchange Act of 1934, as amended, at the direction of the
Company. The interest on such investments shall, on a monthly basis while
subscribers' deposits remain in escrow and, if all conditions herein are met,
when such deposits are disbursed to the Company, be disbursed by the Escrow
Agent to the Company in accordance with paragraph 9 hereof.

         11.      The Company agrees to disburse to the Dealer Manager any funds
due to it for the Offering in accordance with the terms and conditions of the
Dealer Manager Agreement dated January 31, 2001 between the Company and the
Dealer Manager, provided that the Escrow Agent has disbursed to the Company the
funds due to the Company for the related subscriptions. The Dealer Manager shall
assist the Company in connection with the Company's compliance with this
Agreement. The Dealer Manager shall not have any lien on or security interest in
any securities, monies or documents deposited in this escrow.

         12.     Any notices which are required or desired to be given hereunder
to the parties hereto shall be in writing and may be given by mailing the same
to the address indicated below (or to such other address as either of the
parties may have theretofore substituted therefor by written notification to the
other party hereto), by registered or certified United States mail, postage
prepaid. For all purposes hereof, any notice so mailed by the Escrow Agent shall
be treated as though served upon the party to whom it was mailed at the time it
is deposited in the United States mail by the Escrow Agent whether or not such
party thereafter actually receives such notice. Notices to the Escrow Agent
shall be in writing and shall not be deemed to be given until actually received
by the Escrow Agent's trust department. Whenever under the terms hereof the time
for giving a notice or performing an act falls upon a Saturday, Sunday or bank
holiday, such time shall be extended to the Escrow Agent's next business day.

         13.      The Escrow Agent, when acting as the Escrow Agent undertakes
to perform only such duties as are expressly set forth herein and the Escrow
Agent shall not be subject to, nor obliged to recognize, any other agreement
between, or direction or instruction of, the Company even though reference
thereto may be made herein; provided, however, this Agreement may be amended at
any time or times by an instrument in writing signed by the Company, the Dealer
Manager and Escrow Agent. In the event the Escrow Agent becomes involved in or
is threatened with litigation by reason hereof, it is hereby authorized to and
may deposit with the clerk of a court of competent jurisdiction any and all
funds held by it pursuant hereto, and thereupon the Escrow Agent shall stand
fully relieved and discharged of any further duties hereunder.

         14.      If any property subject hereto is at any time attached,
garnished or levied upon, under any court order, or in case the payment,
assignment, transfer, conveyance or delivery of any such property shall be
stayed or enjoined by any court order, or in any case any order, judgment or
decree shall be made or entered by any court affecting such property, or any
part thereof, then in any of such events, the Escrow Agent is authorized, in its
sole discretion, to rely upon and comply with any such order, writ, judgment or
decree, which it is advised by legal counsel of its own choosing is binding upon
it, and if it complies with any such order, writ, judgment or decree, it shall
not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such

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compliance, even though such order, writ, judgment or decree may be subsequently
reversed, modified, annulled, set aside or vacated.

         15.      This Agreement shall be construed, enforced and administered
in accordance with the internal laws, as opposed to the conflicts of laws
provisions, of the State of Illinois.

         16.      The Escrow Agent shall be entitled to reasonable fees in
connection with this Escrow, which fees shall be payable by the Company.

         17.      The Escrow Agent may resign at any time upon giving at least
thirty (30) days prior written notice to the Company; provided, however, that no
such resignation shall become effective until the appointment of a successor
escrow agent which shall be accomplished as follows: The Company shall use its
best efforts to select a successor escrow agent within thirty (30) days after
receiving such notice. If the Company fails to appoint a successor escrow agent
within such time, the Escrow Agent shall have the right to appoint a successor
escrow agent. The successor escrow agent shall execute and deliver an instrument
accepting such appointment and it shall, without further acts, be vested with
all the estates, properties, rights, powers, and duties of the predecessor
escrow agent as if originally named as escrow agent. Upon delivery of such
instrument, the Escrow Agent shall be discharged from any further duties and
liability under this Agreement. The Escrow Agent shall be paid any outstanding
fees and expenses prior to transferring assets to a successor escrow agent.

         18.      Any notice required to be given hereunder by any of the
parties hereto shall be addressed as follows:

                        If to the Company:

                        Inland Retail Real Estate Trust, Inc.
                        2901 Butterfield Road
                        Oak Brook, Illinois  60523
                        Attention:  Ms. Roberta S. Matlin, Vice President

                        If to the Dealer Manager:

                        Inland Securities Corporation
                        2901 Butterfield Road
                        Oak Brook, Illinois 60523
                        Attention:  Ms. Brenda G. Gujral, President

                        If to Escrow Agent:

                        LaSalle Bank National Association
                        135 South LaSalle Street
                        Chicago, Illinois 60603
                        Attention: Ms. Margaret Muir, Corporate Trust Department

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         19.      The foregoing is subject to the following conditions:

         The obligations and duties of the Escrow Agent are confined to those
specifically enumerated in the escrow instructions. The Escrow Agent shall not
be subject to, nor be under any obligation to ascertain or construe the terms
and conditions of any other instrument, whether or not now or hereafter
deposited with or delivered to the Escrow Agent or referred to in the escrow
instructions, nor shall the Escrow Agent be obligated to inquire as to the form,
execution, sufficiency, or validity of any such instrument nor to inquire as to
the identity, authority, or rights of the person or persons executing or
delivering the same.

         The Escrow Agent shall not be personally liable for any act which it
may do or omit to do hereunder in good faith and in the exercise of its own best
judgment. Any act done or omitted by the Escrow Agent pursuant to the advice of
its attorneys shall be deemed conclusively to have been performed or omitted in
good faith by the Escrow Agent.

         If the Escrow Agent should receive or become aware of any conflicting
demands or claims with respect to this Agreement, or the rights of any of the
parties hereto, or any money, property, or instruments deposited herein or
affected hereby, the Escrow Agent shall have the right in its sole discretion,
without liability for interest or damages, to discontinue any or all further
acts on its part until such conflict is resolved to its satisfaction and/or to
commence or defend any action or proceeding for the determination of such
conflict. Notwithstanding any other provision hereof, in the event of any
dispute, disagreement or legal action relating to or arising in connection with
the escrow, the Escrow Fund, or the performance of the Escrow Agent's duties
under this Agreement, the Escrow Agent will not be required to determine the
controversy or to take any action regarding it. The Escrow Agent may hold all
documents and funds and may wait for settlement of any such controversy by final
appropriate legal proceedings, arbitration, or other means as, in the Escrow
Agent's discretion, it may require. In such event, the Escrow Agent will not be
liable for interest or damage. Furthermore, the Escrow Agent may, at its option,
file an action of interpleader requiring the parties to answer and litigate any
claims and rights among themselves. The Escrow Agent is authorized, at its
option, to deposit with the Court in which such interpleader action is filed all
documents and funds held in escrow. The Escrow Agent is further authorized to
withhold from such deposit for its own account an amount sufficient to
compensate itself for all costs, expenses, charges, and reasonable attorneys'
fees incurred by it due to the interpleader action. Upon initiating such action,
the Escrow Agent shall be fully released and discharged of and from all
obligations and liability imposed by the terms of this Agreement.

         The Company and Dealer Manager agree, jointly and severally, to
indemnify and hold the Escrow Agent, its officers, directors and employees
harmless from and against all costs, damages, judgments, attorney's fees
(whether such attorneys shall be regularly retained or specially employed),
expenses, obligations and liabilities of every kind and nature which the Escrow
Agent may incur, sustain, or be required to pay in connection with or arising
out of this Agreement, and to pay the Escrow Agent on demand the amount of all
such costs, damages, judgments, attorney's fees, expenses, obligations, and
liabilities. To secure said indemnification and to satisfy its compensation
hereunder, the Escrow Agent is hereby given a first lien upon and the right to
reimburse itself therefor out of, all of the rights, titles, and interests of
each of said parties in all

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money, property, and instruments deposited hereunder, except for any money,
property or instruments that relate to money received that must be returned
pursuant to the provisions of the second to last sentence of paragraph 9.

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         IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement as of the day and year first above written.

                                  INLAND RETAIL REAL ESTATE TRUST, INC.


                                  By:    /s/ Roberta S. Matlin
                                     -------------------------------------------
                                  Title: Vice President
                                        ----------------------------------------


                                  INLAND SECURITIES CORPORATION


                                  By:    /s/ Brenda G. Gujral
                                     -------------------------------------------
                                  Title: President
                                        ----------------------------------------


                                  LASALLE BANK NATIONAL ASSOCIATION
                                  CHICAGO, IL


                                  By: /s/ Margaret Muir
                                      -----------------------------------------
                                  Title: Vice President
                                        ---------------------------------------


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