UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-Q


[X] Quarterly Report pursuant to Section 13 or 15 (d) of the Securities
    Exchange Act of 1934

                 For the Quarterly Period Ended June 30, 1999

                                      or

[ ] Transition Report pursuant to Section 13 or 15 (d) of the Securities
    Exchange Act of 1934

          For the transition period from             to


                          Commission File #333-64391


                     Inland Retail Real Estate Trust, Inc.
            (Exact name of registrant as specified in its charter)


          Maryland                              #36-4246655
(State or other jurisdiction        (I.R.S. Employer Identification Number)
 of incorporation or organization)


2901 Butterfield Road, Oak Brook, Illinois                 60523
(Address of principal executive office)                   (Zip code)


       Registrant's telephone number, including area code:  630-218-8000


                                       N/A
                (Former name, former address and former fiscal
                      year, if changed since last report)


Indicate by  check  mark  whether  the  registrant  (1)  has  filed all reports
required to be filed by Section 13 or  15 (d) of the Securities Exchange Act of
1934 during the  preceding  12  months  (or  for  such  shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes  X  No

As of August 6, 1999, there were 2,147,244 Shares of Common Stock outstanding.




                                      -1-



                        PART I - Financial Information

Item 1.  Consolidated Financial Statements


                     INLAND RETAIL REAL ESTATE TRUST, INC.
                           (a Maryland corporation)

                          Consolidated Balance Sheet

                                 June 30, 1999
                                  (unaudited)


                                    Assets
                                    ------
Investment Properties:
  Land............................................ $ 3,998,887
  Building and site improvements..................  16,282,139
                                                   ------------
                                                    20,281,026
  Less accumulated depreciation...................      86,618
                                                   ------------
Net investment properties.........................  20,194,408

Cash and cash equivalents.........................   7,403,226
Restricted cash...................................     232,711
Accounts and rents receivable.....................     263,166
Real estate and insurance escrow deposits.........     328,343
Furniture and equipment (net of accumulated
  depreciation of $1,201 at June 30, 1999)........      10,804
Loan fees (net of accumulated amortization of
  $199 at June 30, 1999)..........................      10,300
Other assets......................................      43,961
                                                   ------------
Total assets...................................... $28,486,919
                                                   ============


















         See accompanying notes to consolidated financial statements.


                                      -2-



                     INLAND RETAIL REAL ESTATE TRUST, INC.
                           (a Maryland corporation)

                          Consolidated Balance Sheet

                                 June 30, 1999
                                  (unaudited)


                     Liabilities and Stockholders' Equity
                     ------------------------------------
Liabilities:
  Liability for subscriptions received............ $   232,711
  Accounts payable................................      86,673
  Accrued offering costs to Affiliates............   1,118,932
  Accrued offering costs to non-affiliates........   1,266,176
  Accrued interest payable to non-affiliates......      90,969
  Accrued real estate taxes.......................     138,650
  Distributions payable...........................      66,296
  Security Deposits...............................      54,567
  Mortgages payable...............................  14,379,884
  Unearned income.................................      19,336
  Other liabilities...............................       2,480
  Due to Affiliates...............................     361,036
                                                   ------------
    Total liabilities.............................  17,817,710
                                                   ------------
  Minority interest in partnerships...............       2,000

Stockholders' Equity:
  Preferred Stock, $.01 par value, 10,000,000
   shares authorized, none outstanding............        -
  Common stock, $.01 par value, 100,000,000 Shares
    authorized; 1,399,971 issued and outstanding..      13,980
  Additional paid-in capital (net of costs of
   offering of $3,185,726 at June 30, 1999
   amount to Affiliate)...........................  10,778,469
  Accumulated distributions in excess of
    net income....................................    (125,240)
                                                   ------------
    Total stockholders' equity....................  10,667,209
                                                   ------------

Commitments and contingencies


Total liabilities and stockholders' equity........ $28,486,919
                                                   ============







         See accompanying notes to consolidated financial statements.


                                      -3-



                     INLAND RETAIL REAL ESTATE TRUST, INC.
                           (a Maryland corporation)

                     Consolidated Statements of Operations

               For the three and six months ended June 30, 1999
                                  (unaudited)

                                                 Three and Six months
                                                        ended
                                                   June 30, 1999
                                                -------------------
Income:
  Rental income..................................... $   379,788
  Additional rental income..........................     226,698
  Interest income...................................      35,592
                                                     ------------
                                                         642,078
Expenses:                                            ------------
  Professional services to Affiliates...............      10,242
  Professional services to non-affiliates...........      29,033
  General and administrative to Affiliates..........      40,186
  General and administrative expenses to
    non-affiliates..................................      39,704
  Property operating expenses to Affiliates.........      17,194
  Property operating expenses to non-affiliates.....     255,656
  Mortgage interest to Affiliates...................       1,445
  Mortgage interest to non-affiliates...............     155,246
  Acquisition costs expensed........................      11,443
  Depreciation......................................      87,819
  Amortization......................................         199
                                                     ------------
                                                         648,167
                                                     ------------
Net loss............................................ $    (6,089)
                                                     ============

Net loss per weighted average common stock
  shares outstanding, basic and diluted (517,231
  for the six months ended June 30, 1999)........... $      (.01)
                                                     ============















         See accompanying notes to consolidated financial statements.


                                      -4-



                     INLAND RETAIL REAL ESTATE TRUST, INC.
                           (a Maryland corporation)

                Consolidated Statement of Stockholders' Equity

                                 June 30, 1999
                                  (unaudited)

                                                    Accumulated
                                         Additional Distributions
                               Common     Paid-in   in excess of
                                Stock     Capital    net income      Total
                             ---------- ----------- ------------ ------------

Balance at
  December 31, 1998......... $     200      199,800         -        200,000

Net loss....................      -            -         (6,089)      (6,089)

Distributions declared
  ($.23 for the six months
  ended June 30, 1999 per
  weighted average common
  stock shares outstanding).      -            -       (119,151)    (119,151)

Proceeds from Offering (net
  of Offering costs of
  $3,185,726)...............    13,780   10,578,669        -      10,592,449
                             ---------- ----------- ------------ ------------
Balance June 30, 1999....... $  13,980   10,778,469    (125,240)  10,667,209
                             ========== =========== ============ ============























         See accompanying notes to consolidated financial statements.


                                      -5-



                     INLAND RETAIL REAL ESTATE TRUST, INC.
                           (a Maryland corporation)

                     Consolidated Statement of Cash Flows

                    For the six months ended June 30, 1999
                                  (unaudited)

                                                        1999
Cash flows from operating activities:                   ----
  Net loss........................................ $     (6,089)
  Adjustments to reconcile net loss to net
    cash provided by operating activities:
    Depreciation..................................       87,819
    Amortization..................................          199
    Straight line rental income...................       (9,645)
    Changes in assets and liabilities:
      Accounts and rents receivable...............     (253,521)
      Other assets................................      (43,961)
      Real estate tax and insurance escrows.......     (328,343)
      Accrued interest payable....................       90,969
      Accrued real estate taxes...................      138,650
      Accounts payable............................       86,673
      Unearned income.............................       19,336
      Other liabilities...........................        2,480
      Due to Affiliates...........................      361,036
      Security deposits...........................       54,567
                                                   -------------
Net cash provided by operating activities.........      200,170
                                                   -------------
Cash flows from investing activities:
  Purchase of investment properties...............   (5,884,581)
  Furniture and equipment.........................      (12,005)
                                                   -------------
Net cash used in investing activities.............   (5,896,586)
                                                   -------------
Cash flows from financing activities:
  Proceeds from offering..........................   13,778,175
  Payments of offering costs......................     (800,618)
  Principal payments on debt......................      (16,561)
  Loan fees.......................................      (10,499)
  Distributions paid..............................      (52,855)
                                                   -------------
Net cash provided by financing activities.........   12,897,642
                                                   -------------
Net increase in cash and cash equivalents.........    7,201,226

Cash and cash equivalents at beginning of period..      202,000
                                                   -------------
Cash and cash equivalents at end of period........ $  7,403,226
                                                   =============




         See accompanying notes to consolidated financial statements.


                                      -6-



                     INLAND RETAIL REAL ESTATE TRUST, INC.
                           (a Maryland corporation)

                     Consolidated Statement of Cash Flows
                                  (continued)

                    For the six months ended June 30, 1999
                                  (unaudited)


Supplemental schedule of noncash investing and financing activities:

Purchase of investment properties................. $ (20,281,026)
Assumption of mortgage debt.......................    14,396,445
                                                   --------------
                                                   $  (5,884,581)
                                                   ==============


Distributions payable............................. $      66,296
                                                   ==============

Cash paid for interest............................ $     156,691
                                                   ==============































         See accompanying notes to consolidated financial statements.


                                      -7-



                     INLAND RETAIL REAL ESTATE TRUST, INC.
                           (a Maryland corporation)

                  Notes to Consolidated Financial Statements

                                 June 30, 1999
                                  (unaudited)

The  accompanying  consolidated  financial  statements  have  been  prepared  in
accordance with Generally  Accepted  Accounting  Principles ("GAAP") for interim
financial information and  with  instructions  to  Form  10-Q  and Article 10 of
Regulation S-X.

(1)    Organization and Basis of Accounting

Inland Retail Real Estate Trust, Inc. (the "Company") was formed on September 3,
1998 to acquire and  manage  a  diversified  portfolio of real estate, primarily
multi-tenant shopping centers. It is anticipated that the Company will initially
focus on acquiring properties  in  the  southeastern states, primarily  Florida,
Georgia, North Carolina  and  South  Carolina.    The  Company  may also acquire
single-user retail properties in locations throughout the United States, certain
of which may be  sale  and  leaseback  transactions,  net leased to creditworthy
tenants.  Inland Retail Real Estate  Advisory Services, Inc. (the "Advisor"), an
affiliate of the Company, is the advisor  to the Company.  On February 11, 1999,
the Company commenced an initial public offering ("Offering"), on a best efforts
basis of 50,000,000 Shares  of  common  stock  ("Shares")  at  $10 per Share and
4,000,000 Shares at $9.50 per  Share  which  may  be distributed pursuant to the
Company's Distribution Reinvestment Program ("DRP").    As of June 30, 1999, the
Company had received subscriptions for a total of 1,397,818 Shares.  In addition
the Company has distributed 2,153 shares  pursuant  to the Company's DRP.  As of
June 30, 1999, escrowed  funds  of  $232,711  were reflected as restricted cash,
along with  the  corresponding  liability  for  subscriptions  received,  in the
accompanying Consolidated Financial Statements.   The escrowed funds of $232,711
represents subscriptions for  Shares  from  Pennsylvania residents.  Subscribers
residing in Pennsylvania may  not  be  admitted  as  Stockholders to the Company
until  subscriptions  have  been  received  and  accepted  for  2,500,000 Shares
($25,000,000) from all sources.    Funds  received  from subscribers residing in
Pennsylvania are currently included in  restricted  cash and will be released to
the Company  from  the  escrow  immediately  after  subscriptions  for  at least
$25,000,000 have been received from all sources.

The Company intends to qualify as  a real estate investment trust ("REIT") under
the Internal Revenue Code of 1986,  as  amended, for federal income tax purposes
commencing with the tax year ending December 31, 1999.  If the Company qualifies
for taxation as a REIT,  the  Company  generally  will not be subject to federal
income tax  to  the  extent  it  distributes  its  REIT  taxable  income  to its
stockholders.  If the Company fails  to  qualify  as a REIT in any taxable year,
the Company will be  subject  to  federal  income  tax  on its taxable income at
regular corporate tax rates.  Even  if  the  Company qualifies for taxation as a
REIT, the Company may be subject to  certain state and local taxes on its income
and property and federal income and excise taxes on its undistributed income.

The  preparation  of  financial  statements  in  conformity  with  GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and  disclosure  of  contingent assets and liabilities at
the date of the financial  statements  and  the reported amounts of revenues and
expenses during the reporting periods.    Actual results could differ from those
estimates.


                                      -8-



                     INLAND RETAIL REAL ESTATE TRUST, INC.
                           (a Maryland corporation)

                  Notes to Consolidated Financial Statements

                                 June 30, 1999
                                  (unaudited)


Statement of Financial  Accounting  Standards  No.  121  requires the Company to
record an impairment loss on its property to be held for investment whenever its
carrying value cannot be  fully  recovered through estimated undiscounted future
cash flows from operations and sale of properties.  The amount of the impairment
loss to be recognized would  be  the  difference between the property's carrying
value and the property's estimated fair value.  As of June 30, 1999, the Company
does not believe any such impairment of its properties exists.

The Company considers all highly liquid investments purchased with a maturity of
three months or less  to  be  cash  equivalents  and  are carried at cost, which
approximates market.

Depreciation expense is computed using  the straight-line method.  Buildings and
improvements are depreciated based upon  estimated  useful lives of 30 years for
the building and building improvements  and  15 years for the site improvements.
Furniture and equipment is depreciated over five years.

Loan fees are amortized on a  straight  line  basis over the life of the related
loans.

Offering costs are offset against  the Stockholders' equity accounts and consist
principally of printing, selling and registration costs.

Rental income is recognized  on  a  straight-line  basis  over  the term of each
lease.  The difference between rental income earned on a straight-line basis and
the cash rent due under the  provisions  of  the lease agreements is recorded as
deferred rent receivable.  The  Company  recognizes percentage rents as they are
received.

The Company believes  that  the  interest  rates  associated  with the mortgages
payable and notes payable  to  Affiliates  approximate the market interest rates
for these types of debt  instruments,  and  as  such, the carrying amount of the
mortgages payable and notes payable to Affiliates approximate their fair value.

The net loss allocable to  the  minority  interest is immaterial, and therefore,
has not been included in the accompanying Consolidated Financial Statements.

In  the  opinion  of  management,  the  financial  statements  contain  all  the
adjustments necessary, which are of a normal recurring nature, to present fairly
the financial  position  and  results  of  operations  for  the period presented
herein.  Results of interim periods are not necessarily indicative of results to
be expected for the year.






                                      -9-




                     INLAND RETAIL REAL ESTATE TRUST, INC.
                           (a Maryland corporation)

                  Notes to Consolidated Financial Statements
                                  (continued)

                                 June 30, 1999
                                  (unaudited)


(2)    Basis of Presentation

The  accompanying  Consolidated  Balance  Sheet  includes  the  accounts  of the
Company, as well as  the  accounts  of  the  operating partnership, in which the
Company has an  approximately  99%  controlling  general  partner interest.  The
Advisor owns the remaining approximately 1%  limited partner common units in the
operating partnership for which  it  paid  $2,000  and  which  is reflected as a
minority interest in the accompanying Consolidated Balance Sheet.  The effect of
all significant intercompany transactions have been eliminated.


(3)    Transactions with Affiliates

As of June 30,  1999,  the  Company  had  incurred $3,185,726 of offering costs.
Pursuant  to  the  terms  of  the  Offering,  the  Advisor  is  required  to pay
organizational and offering expenses (excluding sales commissions, the marketing
contribution and the due diligence expense  allowance)  in excess of 5.5% of the
gross proceeds of the  Offering  "Gross  Offering Proceeds") or all organization
and offering expenses (including selling  commissions) which together exceed 15%
of Gross Offering Proceeds.  As of  June 30, 1999, offering costs did exceed the
5.5% and 15% limitations, however the  Company anticipates that these costs will
not exceed these  limitations  upon  completion  of  the  Offering.   Any excess
amounts at the completion of the Offering will be reimbursed by the Advisor.

The Advisor and its affiliates  are  entitled  to reimbursement for salaries and
expenses of  employees  of  the  Advisor  and  its  affiliates  relating  to the
Offering.  In addition,  an  affiliate  of  the  Advisor  is entitled to receive
selling commissions,  a  marketing  contribution  and  a  due  diligence expense
allowance from the Company in connection with the Offering.

The Advisor and its affiliates  are  entitled  to reimbursement for salaries and
expenses of  employees  of  the  Advisor  and  its  affiliates  relating  to the
administration of the Company.  Such costs are included in professional services
to Affiliates and general and administrative expenses to Affiliates.

The Advisor has contributed $200,000 to the  capital of the Company for which it
received 20,000 Shares.









                                     -10-




                     INLAND RETAIL REAL ESTATE TRUST, INC.
                           (a Maryland corporation)

                  Notes to Consolidated Financial Statements

                                 June 30, 1999
                                  (unaudited)


The Advisor may receive an annual Advisor  Asset Management Fee of not more than
1% of the Average Invested Assets,  paid  quarterly.   For any year in which the
Company qualifies as a REIT, the Advisor must reimburse the Company:  (i) to the
extent that the Advisor Asset Management  Fee plus other operating expenses paid
during the previous calendar year  exceed  2%  of the Company's average invested
assets for the  calendar  year  or  25%  of  the  Company's  Net Income for that
calendar year; and (ii) to  the  extent  that  stockholders have not received an
annual distribution equal to or greater than the 7% current return.  For the six
months ended June 30, 1999, the Company has not incurred any of such fees.

An Affiliate of the Advisor is  entitled to receive property management fees for
management and  leasing  services.    The  Company  incurred  and  paid property
management fees of $17,194 for the six  months ended June 30, 1999, all of which
has been paid.


(4)    Stock Option Plan and Soliciting Dealer Warrants

The Company adopted an Independent Director  Stock Option Plan which, subject to
certain conditions, provides for the  grant  to  each Independent Director of an
option to acquire 3,000 Shares following  their  becoming a Director and for the
grant of additional options to  acquire  500  Shares  on the date of each annual
stockholders'  meeting  commencing  with  the  annual  meeting  in  2000  if the
Independent Director is a member of  the  board  of directors on such date.  The
options for the initial  3,000  Shares  to  be  granted  shall be exercisable as
follows: 1,000 Shares on the date of grant and 1,000 Shares on each of the first
and second anniversaries of the date  of  grant.  The subsequent options will be
exercisable on the second anniversary of the date of grant.  The initial options
will be  exercisable  at  $9.05  per  Share.    The  subsequent  options will be
exercisable at the  fair  market  value  of  a  Share  on  the last business day
preceding the annual meeting of Stockholders, and shall be $9.05 per Share until
the earlier of the termination of the  Offering or February 11, 2001. As of June
30, 1999, no options had been issued.

In addition to  sales  commissions,  soliciting  dealers  will  also receive one
soliciting dealer warrant for  each  25  Shares  sold  by such soliciting dealer
during the Offering, subject to state and federal securities laws and subject to
the issuance of a maximum  of  2,000,000 soliciting dealers warrants to purchase
an equivalent number of Shares.  The  holder of a soliciting dealer warrant will
be entitled to purchase one Share from the  Company at a price of $12 during the
period commencing one year from the  date  of  the  first issuance of any of the
soliciting dealer warrants and ending five years after February 11, 1999.  As of
June 30, 1999, no warrants had been issued.




                                     -11-



<TABLE>                                      INLAND RETAIL REAL ESTATE TRUST, INC.
                                                   (a Maryland corporation)

                                                 Notes to Financial Statements
                                                          (continued)

                                                         June 30, 1999
                                                          (unaudited)


(5) Investment Properties                  Initial Cost (A)                     Gross amount at which carried
    <CAPTION>                        ---------------------------                        at end of period
                                                                     Net      -----------------------------------------
                                                     Buildings   Adjustments                 Buildings,
                              Date                   and Site         to                     and Site
                             Acquired    Land      improvements   Basis (B)       Land      improvements      Total
                             -------- ------------ ------------- ------------ ------------- ------------- -------------
<S>                          <C>      <C>           <C>            <C>         <C>           <C>           <C>
Multi-tenant Retail
-------------------
  Lake Walden Square
    Plant City, FL.......... 05/1999 $  3,006,662    11,532,321        -        3,006,662    11,532,321     14,538,983

  Merchants Square
    Zephyrhills, FL......... 06/1999      992,225     4,749,818        -          992,225     4,749,818      5,742,043
                                     ------------- ------------- ------------ ------------- ------------- -------------
  Totals                             $  3,998,887    16,282,139        -        3,998,887    16,282,139     20,281,026


(A) The initial cost to the Company,  represents the original purchase price of
    the property from an Affiliate  of  our Advisor, including amounts incurred
    subsequent to acquisition, which were contemplated at the time the property
    was acquired.

(B) Adjustments to basis includes additions to investment properties.


</TABLE>





















                                                         -12-


                                     -12-



                     INLAND RETAIL REAL ESTATE TRUST, INC.
                           (a Maryland corporation)

                         Notes to Financial Statements
                                  (continued)

                                 June 30, 1999
                                  (unaudited)


(6) Operating Leases

Certain tenant leases contain provisions  providing for stepped rent increases.
GAAP requires the Company to record  rental  income for the period of occupancy
using the effective monthly rent,  which  is  the  average monthly rent for the
entire period of occupancy  during  the  term  of  the lease.  The accompanying
financial statements include an  increase  of  $9,645  for the six months ended
June 30, 1999, of rental income  for  the period of occupancy for which stepped
rent increases apply and $9,645 in the related accounts and rents receivable as
of June 30, 1999.   The  Company  anticipates collecting these amounts over the
terms of the related leases as scheduled rent payments are made.


(7) Mortgages Payable

Mortgages payable consist of the following at June 30, 1999:

                        Current              Current   Balance at
Property as             Interest   Maturity  Monthly    June 30,
Collateral                Rate       Date   Payment(a)    1999
-------------          ---------- --------- ---------- -----------
Mortgages payable to non-affiliates:

  Lake Walden Square      7.63%    11/2007  $  72,584  $10,100,831
  Merchants Square        7.50%    11/2008     30,066    4,279,053
                                                       ------------
                                                       $14,379,884
                                                       ============


(a) All payments are principal and interest.
















                                     -13-




                     INLAND RETAIL REAL ESTATE TRUST, INC.
                           (a Maryland corporation)

                  Notes to Consolidated Financial Statements
                                  (continued)

                                 June 30, 1999
                                  (unaudited)


(8)  Segment Reporting

The Company owns and seeks to acquire multi-tenant retail centers, neighborhood
and community shopping centers  in  the Southeastern states, primarily Florida,
Georgia, North Carolina, and  South  Carolina.    All of the Company's shopping
centers are located within these  states.    The Company's shopping centers are
typically anchored by  grocery  and  drug  stores  complemented with additional
stores providing a wide range of other goods and services to shoppers.

The Company assesses and measures  operating  results on an individual property
basis for each of its properties  based  on net property operations.  Since all
of the Company's  properties  exhibit  highly similar economic characteristics,
cater  to  the  day-to-day   living   needs  of  their  respective  surrounding
communities, and offer similar degrees of risk and opportunities for growth,the
properties have been aggregated and reported as one operating segment.

The property revenues and  net  property  operations of the reportable segments
are summarized in the following tables  as  of  June  30, 1999, and for the six
month period then ended, along with  a  reconciliation to net income.  Property
asset information is as of June 30, 1999.

                                       1999
                                       ----
Total property revenues.........  $    606,486
Total property operating
  expenses......................       272,850
Mortgage interest................      156,691
                                  -------------
Net property operations..........      176,945
                                  -------------
Interest income..................       35,592
Less non property expenses:
  Professional services..........       39,275
  General and administrative.....       91,333
  Depreciation and amortization..       88,018
                                  -------------
Net loss......................... $     (6,089)
                                  =============

Net investment properties........ $ 20,194,408
                                  =============





                                     -14-




                     INLAND RETAIL REAL ESTATE TRUST, INC.
                           (a Maryland corporation)

                  Notes to Consolidated Financial Statements
                                  (continued)

                                 June 30, 1999
                                  (unaudited)


(9)    Earnings per Share

Basic earnings per share ("EPS")  is  computed  by dividing income available to
common stockholders by the weighted average number of common shares outstanding
for the period.  Diluted EPS  is  computed by reflecting the potential dilution
that could occur if securities  or  other  contracts to issue common stock were
exercised or converted into common stock  or resulted in the issuance of common
stock that then shared in the earnings  of  the  Company.  As of June 30, 1999,
options to purchase 3,000 shares of common  stock at a price of $9.05 per share
were outstanding.


(10)   Subsequent Events

On July 1, 1999, the  Company  purchased  Town  Center Commons by acquiring the
limited  partnership  interests  in   Inland   Southeast  Town  Center  Limited
Partnership, an affiliate of  our  Advisor,  and  acquiring  all of the general
partnership interests in Inland Southeast Town Center Limited Partnership.  The
Company purchased Town Center Commons for  $9,656,381.  The property is located
in Kennesaw, Georgia  and  contains  72,108  gross  leasable  square feet of an
existing 159,758 square foot shopping  center.    Its tenants leasing more than
10% of the  total  gross  leasable  area  are  J.C.  Penney  Home Store, a home
furnishings store, and Baptist Book Store, a religious retail store.

On July 27, 1999, the Company purchased Boynton Commons by acquiring all of the
membership interests in Inland  Boynton  Investment,  L.L.C. and Inland Boynton
Acquisitions, L.L.C., and  affiliate  of  our  Advisor.   The Company purchased
Boynton Commons for $30,563,440.    The  property  is located in Boynton Beach,
Florida and contains  210,772  square  feet  of  leasable  space.   Its tenants
leasing more  than  10%  of  the  total  gross  leasable  area  are  The Sports
Authority, a sporting  goods  store;  Bed,  Bath  &  Beyond, a home furnishings
store; Barnes &  Noble,  a  display  and  retail  sale  and/or rental of books,
magazines and other media store; and  PetSmart,  a pet and pet accessory retail
store.












                                     -15-



Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Certain statements in this  "Management's  Discussion and Analysis of Financial
Condition and Results of Operations" and  elsewhere in this quarterly report on
Form 10-Q constitute  "forward-looking  statements"  within  the meaning of the
Federal Private Securities  Litigation  Reform  Act  of  1995.   These forward-
looking statements involve  known  and  unknown  risks, uncertainties and other
factors  which  may  cause   the   Company's  actual  results,  performance  or
achievements to be materially different from any future results, performance or
achievements expressed or implied  by  these forward-looking statements.  These
factors include, among  other  things,  limitations  on  the  area in which the
Company may acquire properties; risks associated with borrowings secured by the
Company's properties; competition for tenants  and customers; federal, state or
local regulations; adverse  changes  in  general  economic or local conditions;
competition for property  acquisitions  with  third  parties  that have greater
financial resources than the  Company;  inability  of lessees to meet financial
obligations; uninsured losses;  risks  of  failing  to  qualify  as a REIT; and
potential  conflicts  of  interest  between  the  Company  and  its  affiliates
including the Advisor.


Liquidity and Capital Resources

The Company was formed on September 3, 1998 to acquire and manage a diversified
portfolio of real estate,  primarily  multi-tenant  shopping  centers.    It is
anticipated that the Company  will  initially  focus on acquiring properties in
the southeastern states, primarily   Florida, Georgia, North Carolina and South
Carolina.   The  Company  may  also  acquire  single-user  retail properties in
locations throughout the  United  States,  certain  of  which  may  be sale and
leaseback transactions, net leased  to  creditworthy  tenants.  On February 11,
1999, the Company commenced the Offering of 50,000,000 shares at a price of $10
per Share and of 4,000,000 Shares at  a  price  of $9.50 per Share which may be
distributed pursuant to the DRP.   Inland Retail Real Estate Advisory Services,
Inc. is the Advisor to the Company.    As of June 30, 1999, subscriptions for a
total of 1,397,818 Shares  had  been  received  from the public, which includes
20,000 Shares issued to the Advisor.    In addition the Company has distributed
2,153 shares pursuant to the Company's DRP.  The Advisor has guaranteed payment
of all public offering  expenses  (excluding selling commissions, the marketing
contribution and the due diligence expense  allowance) in excess of 5.5% of the
Gross Offering Proceeds or  all  organization  and offering expenses (including
such selling  expenses)  which  together  exceeds  15%  of  the  Gross Offering
Proceeds.

The Company will provide the following programs to facilitate investment in the
Shares and to provide limited liquidity  for  Stockholders until such time as a
market for the Shares develops:










                                     -16-



The distribution  reinvestment  program  will  allow  stockholders who purchase
Shares pursuant to  the  Offering  to  automatically  reinvest distributions by
purchasing additional Shares from  the  Company.    Such  purchases will not be
subject to selling commissions or  the marketing contribution and due diligence
expense allowance and will be sold at a price of $9.50 per Share.

The Share Repurchase  Program  will,  subject  to certain restrictions, provide
existing stockholders with limited, interim  liquidity by enabling them to sell
Shares back to the Company at a price  of $9.05 per Share.  Shares purchased by
the Company will not be available for resale.


Cash Flows From Operating Activities

Net cash provided by operating activities generated $200,170 for the six months
ended June 30, 1999.    This  is  due  primarily  to  the operations on the two
properties acquired during May and June, 1999.


Cash Flows From Investing Activities

Cash flows  used  in  investing  activities  were  utilized  primarily  for the
purchase of two properties.

Cash Flows From Financing Activities

For the six months ended  June  30,  1999, the Company generated $12,897,642 of
cash flows from  financing  activities.    This  was  due primarily to proceeds
raised of $13,778,175 from the sale of Shares for the six months ended June 30,
1999. The Company's cash flow from financing activities was partially offset by
an increase in the cash used  to  pay  costs associated with selling Shares for
the six months ended June 30, 1999.    For  the six months ended June 30, 1999,
the Company paid offering costs  totaling  $800,618.   In addition, the Company
also paid distributions for the six  months  ended June 30, 1999 of $52,855 and
paid loan fees of $10,499 for the six months ended June 30, 1999.

The Advisor has guaranteed payment  of  all public offering expenses (excluding
selling commissions, the marketing  contribution  and the due diligence expense
allowance fee)  in  excess  of  5.5%  of  the  Gross  Offering  Proceeds or all
organization and  offering  expenses  (including  such  selling expenses) which
together exceed 15% of  the  Gross  Offering  Proceeds.    As of June 30, 1999,
organizational  and  offering  costs   totaling  $3,285,726  did  exceed  these
limitations, however the Company anticipates  that  these costs will not exceed
these limitations upon completion of the  Offering.   Any excess amounts at the
completion of the Offering will be reimbursed by the Advisor.












                                     -17-



Results of Operations

Through June 30,  1999,  the  Advisor  had  advanced  a  total of approximately
$2,385,000 to the Company for costs incurred with the Offering.  As of June 30,
1999, approximately $1,480,000 remained unpaid.

Rental income, additional rental  income, property operating expenses, mortgage
interest and depreciation are  all  a  result  of  the  operations from the two
properties acquired during the quarter ended June 30, 1999.

Funds from Operations

One of  the  Company's  objectives  is  to  provide  cash  distributions to its
stockholders from cash generated by  the  Company's operations.  Cash generated
from operations is not  equivalent  to  the  Company's  net operating income as
determined under GAAP.  Due to certain unique operating characteristics of real
estate companies, the  National  Association  of  Real Estate Investment Trusts
("NAREIT"), an industry trade group, has promulgated a standard known as "Funds
from Operations" or "FFO" for short, which it believes more accurately reflects
the operating performance of a REIT such as the Company.  As defined by NAREIT,
FFO means net  income  computed  in  accordance  with GAAP, less extraordinary,
unusual  and  non-recurring  items,  excluding  gains  (or  losses)  from  debt
restructuring and sales of  properties  plus  depreciation and amortization and
after adjustments for unconsolidated  partnership  and  joint ventures in which
the REIT holds an interest.  The  Company has adopted the NAREIT definition for
computing FFO  because  management  believes  that,  subject  to  the following
limitations, FFO provides a basis  for comparing the performance and operations
of the Company to those of other  REITs.   The calculation of FFO may vary from
entity to entity since capitalization  and  expense  policies tend to vary from
entity to entity.  Items which are capitalized do not impact FFO, whereas items
that are expensed reduce FFO.    Consequently,  the  presentation of FFO by the
Company may not be comparable  to  other similarly titled measures presented by
other REITs.  FFO is not intended  to  be  an alternative to "Net Income" as an
indicator of  the  Company's  performance  nor  to  "Cash  Flows from Operating
Activities" as determined by GAAP as a measure of the Company's capacity to pay
distributions.  FFO  and  funds  available  for  distribution are calculated as
follows:

                                                     June 30,
                                                       1999
                                                       ----
     Net income................................... $    (6,089)
     Depreciation.................................      87,819
                                                   ------------
     Funds from operations (1)....................      81,730

     Principal amortization of debt...............     (16,561)
     Deferred rent receivable (2).................      (9,645)
     Acquisition costs expenses (3)...............      11,443
                                                   ------------
     Funds available for distribution............. $    66,967
                                                   ============





                                     -18-



  (1) FFO  does  not  represent   cash   generated  from  operating  activities
      calculated in accordance with GAAP  and  is not necessarily indicative of
      cash available to fund cash needs.    FFO  should not be considered as an
      alternative to net  income  as  an  indicator  of the Company's operating
      performance or as an alternative to cash flow as a measure of liquidity.

  (2) Certain tenant  leases  contain  provisions  providing  for  stepped rent
      increases.  GAAP requires  the  Company  to  record rental income for the
      period of  occupancy  using  the  effective  monthly  rent,  which is the
      average monthly rent for the  entire  period of occupancy during the term
      of the lease.

  (3) Acquisition costs expenses  include  costs  and  expenses relating to the
      acquisition of properties.  These costs are  estimated to be up to .5% of
      the Gross  Offering  Proceeds  and  are  paid  from  the  Proceeds of the
      Offering.


The following table  lists  the  approximate  physical  occupancy levels for the
Company's properties as of the end  of  each quarter during 1999.  N/A indicates
the property was not owned by the Company at the end of the quarter.


                                    1999
                          -------------------------
                            at    at    at    at
      Properties           03/31 06/30 09/30 12/31
      ----------           ----- ----- ----- -----
Lake Walden Square          N/A    93%
  Plant City, FL

Merchants Square            N/A   100%
  Zephyrhills, FL

Year 2000 Issues

General

Many computer operating  systems  and  software  applications were designed such
that the year 1999 is the  maximum  date  that  can be processed accurately.  In
conducting business,  the  Company  relies  on  computers  and operating systems
provided by equipment manufacturers, and  also on application software developed
internally and, to a limited extent,  by  outside software vendors.  The Company
has assessed its vulnerability to  the  so-called "Year-2000 Issue" with respect
to its equipment and computer systems.












                                     -19-



State of Readiness

The Company has identified the  following three areas for "Year-2000" compliance
efforts:

Business Computer Systems: The majority  of the Company's information technology
systems were  developed  internally  and  include  accounting, lease management,
investment portfolio tracking,  and  tax  return  preparation.   The Company has
rights to the source code for these applications and employs programmers who are
knowledgeable regarding these systems.   The  Company has conducted tests of its
internal systems  to  determine  year  2000  compliance,  and  these  tests have
demonstrated that the  Company  should  not  experience  any significant adverse
effects to its business as a  result  of  the Year-2000 Issue.  The Company does
not anticipate any  material  costs  relating  to  its business computer systems
regarding  year  2000  compliance  since  the  Company's  critical  hardware and
software systems use four digits  to  represent the applicable year.  Therefore,
the Company is not currently  planning  any  independent testing of its critical
systems; however, should additional facts  present themselves that would make it
prudent for the Company to have  independent testing conducted, the Company will
do so.  The Company does  use  various computers, so-called "PC's", that may run
software that may not use  four  digits  to  represent the applicable year.  The
Company has tested the PC  hardware  to  determine year 2000 compliance, and the
results of these tests have demonstrated  that the Company should not experience
any significant adverse effects to  its  business  as  a result of the Year-2000
Issue.  It should  be  noted  that  such  PC's  are  incidental to the Company's
critical systems.

Tenants and Suppliers: The Company  has surveyed proposed tenants, suppliers and
other parties with  whom  the  Company  intends  to  do  a significant amount of
business to identify the Company's potential  exposure in the event such parties
are not year 2000 compliant.  The survey consists of a questionnaire sent to the
significant tenants and suppliers  of  the  properties  initially intended to be
acquired by  the  Company.  The  Company  is  in  the  process  of reviewing the
responses to such questionnaires.  Since this method involves parties over which
the Company has no control, such  as  public utility companies, it is difficult,
at best, to judge the  status  of  the  outside companies' year 2000 compliance.
The Company will be working closely with  all suppliers of goods and services in
an effort to minimize the impact of  the  failure of any supplier to become year
2000 compliant by December 31, 1999. Currently,  the Company is not aware of any
material impact on its business,  operations  or financial condition due to year
2000 non-compliance by any one of the Company's proposed tenants or suppliers.

Non-Information Technology Systems:  In  the  operation  of  its properties, the
Company   will   acquire   equipment    with   embedded   technology   such   as
microcontrollers,  which  operate  heating,  ventilation,  and  air conditioning
systems, fire alarms, security systems, telephones and other equipment utilizing
time-sensitive technology.  The Company will evaluate its potential exposure and
costs if such non-information technology systems are not year 2000 compliant and
expects to be able to complete its assessment during the third quarter of 1999.








                                     -20-



Year 2000 Costs

As of June 30,  1999,  the  Company's  Advisor  and its affiliates estimate that
costs to achieve year  2000  compliance  will  not  exceed $100,000 for all such
affiliates. However,  as  of  June  30,  1999,  the  Company's  Advisor  and its
affiliates anticipate that only approximately 3% of these costs will be directly
allocated to and paid by the  Company.  The  balance of the year 2000 compliance
costs, approximately 97%,  will  be  paid  by  the  Advisor  and its affiliates.
Total year 2000 compliance costs  incurred  by  such affiliates through June 30,
1999 are estimated at approximately $5,000.

Year 2000 Risks

The most reasonable likely worst case  scenario  for the Company with respect to
the year 2000  non-compliance  of  its  business  computer  systems would be the
inability to access  information  which  could  result  in  the failure to issue
financial reports.   The  most  reasonable  likely  worst  case scenario for the
Company with respect to year  2000  non-compliance  of its tenants is failure to
receive rental income which could  result  in  the  Company being unable to meet
cash requirements for monthly expenses  and distributions.  However, the Company
is permitted to  borrow  funds  to  meet  distribution  requirements.   The most
reasonable likely worst case scenario for  the  Company with respect to the year
2000  non-compliance  of  its  suppliers  is  the  failure  to  supply necessary
utilities;  including,  but  not  limited   to   heating,   as  a  result  of  a
malfunctioning of non-information technology  systems  in  some of the Company's
properties.

Contingency Plan

The Company is in the process  of  formulating  a contingency plan which will be
developed by September 1999.   The  contingency plan may include printing copies
of all computer records during December 1999 to ensure that such records are not
lost  in  the  event  that   the  Company's  internal  computer  systems  become
inoperative due to year 2000 non-compliance.























                                     -21-



                          PART II - Other Information

Items 1 through 5 are omitted  because  of the absence of conditions under which
they are required.

Item 6.  Exhibits and Reports on Form 8-K

         (27)  Financial Data Schedule

    (a)  Exhibits required by the Securities and Exchange Commission Regulations
         S-K. Item 601.  The following documents are incorporated by reference:

         Registration Statement on Form  S-11  and related exhibits, as amended,
         File No. 333-64391, filed under the Securities Act of 1933.

    (b)  Report on Form 8-K dated May 3, 1999
         Item 2.  Acquisition or Disposition of Assets
         Item 7.  Financial Statements and Exhibits

         Report on Form 8-K dated June 4, 1999
         Item 2.  Acquisition or Disposition of Assets
         Item 7.  Financial Statements and Exhibits



































                                     -22-






                                  SIGNATURES



Pursuant to the  requirements  of  the  Securities  Exchange  Act  of 1934, the
Registrant has duly caused  this  report  to  be  signed  on  its behalf by the
undersigned thereunto duly authorized.



                            INLAND RETAIL REAL ESTATE TRUST, INC.



                                  /S/ ROBERT D. PARKS

                            By:   Robert D. Parks
                                  Chairman and Chief Executive Officer
                            Date: August 16, 1999



                                  /S/ BARRY LAZARUS

                            By:   Barry Lazarus
                                  President and Chief Operating Officer
                                  Treasurer and Chief Financial Officer
                            Date: August 16, 1999


























                                     -23-