Document:

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                                                                  Exhibit 10.198

                                                 Allstate Life Insurance Company
                                                     Loan Nos. 122498 and 122499

                               FIRST AMENDMENT TO
                          ESCROW AND LEASING AGREEMENT

       THIS FIRST AMENDMENT TO ESCROW AND LEASING AGREEMENT (the "Amendment") is
entered into as of June 28, 2004, among INLAND WESTERN LAKEWOOD, L.L.C., a
Delaware limited liability company ("Buyer"), ALLSTATE LIFE INSURANCE COMPANY,
an Illinois insurance corporation ("Lender") and CHICAGO TITLE INSURANCE COMPANY
("Escrow Agent").

                                    RECITALS

       A.     Buyer and MBK NORTHWEST, LLC, a Washington limited liability
company ("Seller") are parties to an AGREEMENT OF PURCHASE AND SALE dated as of
May 12, 2004 (the "Purchase Agreement"), pursuant to which Buyer acquired the
real and personal property commonly known as Lakewood Towne Center, SWC of
Gravelly Lake Drive and 100th Street SW, Lakewood, Washington (the "Property").

       B.     Seller, Buyer and Escrow Agent are parties to that certain ESCROW
AND LEASING AGREEMENT dated as of June ___, 2004, as amended (the "Escrow
Agreement").

       C.     Pursuant to the Purchase Agreement and the Escrow Agreement,
Seller deposited the sum of $3,260,503.73 (the "Escrow Deposit") in escrow with
Escrow Agent, to be held and disbursed in accordance with the terms of the
Escrow Agreement.

       D.     Pursuant to a Commitment Letter from Lender to Borrower, Lender
agreed to make a loan to Borrower in the principal sum of $51,260,000. The Loan
is evidenced and secured by, INTER ALIA, (1) a Deed of Trust Note A of even date
herewith ("Note A") from Borrower in the principal amount of $44,000,000, (2) a
Deed of Trust Note B of even date herewith ("Note B" and together with Note A,
the "Note") from Borrower in the principal amount of $7,260,000, (3) a Deed of
Trust, Assignment of Leases, Rents and Contracts, Security Agreement and Fixture
Filing of even date herewith (the "Deed of Trust") from Borrower on the
Property, and (4) the Related Agreements (as defined in the Deed of Trust, and,
together with the Note and the Deed of Trust, the "Loan Documents").

       E.     The Collateral in which a security interest has been granted by
Buyer to Lender under the Deed of Trust includes all of Buyer's right, title and
interest in and to the Escrow Deposit and the Escrow Agreement.

       F.     Buyer, Escrow Agent and Lender are entering into this Amendment to
acknowledge the security interest granted by Buyer to Lender and to specify
circumstances under which Lender will accede to Buyer's right to receive and
direct disbursement of the Escrow Deposit.

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                                   Agreements

       NOW THEREFORE, in order to induce Lender to enter into the Loan and to
disburse the proceeds of the Loan, and in consideration of the matters described
in the foregoing Recitals, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

       1.     RECITALS; DEFINITIONS. The Recitals are incorporated herein by
this reference. Initially capitalized terms used but not otherwise defined in
this Amendment have the same meanings given them in the Escrow Agreement.

       2.     DISBURSEMENT OF THE ESCROW DEPOSIT. The Escrow Deposit shall be
disbursed subject to and in accordance with the Escrow Agreement; provided,
however, that if Lender delivers to Escrow Agent a notice stating that an Event
of Default (under or as defined in the Loan Documents) has occurred or an event
has occurred which with notice the passage of time or both could result in an
Event of Default, then (a) Escrow Agent shall distribute to or at the written
direction of Lender any amounts that would otherwise be distributed to or at the
direction of Borrower under the Escrow Agreement, and (b) no direction from
Borrower shall thereafter be required to authorize or direct Escrow Agent to
disburse any portion of the Escrow Deposit or take any action under or to amend,
modify or supplement the Escrow Agreement, and to the extent the Escrow
Agreement requires the direction of Borrower as a condition to any disbursement
of or from the Escrow Deposit, then the direction of Lender shall thereafter be
required in lieu of Borrower's direction.

       3.     LIENABLE WORK. If any portion of the Escrow Deposit is to be paid
to any party that would have lien rights against the Property, Escrow Agent
shall, prior to making any such payment, comply with the following:

              (a)    Escrow Agent shall have first received lien waivers,
       contractor's sworn statements and/or such other documents and
       certificates as may be required to evidence that all lien rights related
       to the work, item or service being paid for have been waived or released
       under applicable mechanic's, materialman's, broker's or other similar
       lien laws; and

              (b)    Escrow Agent shall have first provided Lender with an
       endorsement (which shall be paid for by Borrower) to Lender's title
       policy insuring against any such lien.

       4.     RIGHTS OF LENDER. Borrower and Escrow Agent hereby acknowledge
that all of Borrower's, rights in, to and under the Escrow Agreement and the
Escrow Deposit have been pledged to Lender as additional security for the Loan.
Escrow Agent and Borrower shall deliver to Lender a copy of any notice or other
communication it receives or gives in connection with the Escrow Agreement or
Escrow Deposit.

                                        2
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       5.     NOTICES. Notices to Lender under and in accordance with the Escrow
Agreement shall be addressed as follows:

              Allstate Life Insurance Company
              Allstate Plaza South, Suite G5C
              3075 Sanders Road
              Northbrook, Illinois 60062
              Attention:     Commercial Mortgage Division
                             Servicing Manager

       with a copy to:

              Allstate Life Insurance Company
              Allstate Plaza South, Suite G5A
              3075 Sanders Road
              Northbrook, Illinois 60062
              Attention:     Investment Law Division

or to such other address(es) or addressee(s) as Lender shall designate to the
others in the manner provided herein for the service of notices.

       6.     SUCCESSORS AND ASSIGNS. The Escrow Agreement, as amended, shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

       7.     COUNTERPARTS AND FACSIMILE SIGNATURES. This Amendment may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument. This
Amendment may also be executed by way of facsimile signature and such signature
shall be sufficient to bind the party so executing this Amendment.

       8.     FULL FORCE AND EFFECT. The Escrow Agreement, as amended hereby, is
and remains in full force and effect.

       9.     NO DEFAULT; BALANCE OF ESCROW DEPOSIT. Buyer represents and
warrants to Lender that it is not aware of any breach or default under the
Escrow Agreement by any party thereto. Escrow Agent represents that as of the
date hereof, the total amount of the Escrow Deposit is $___________.

       10.    AMENDMENTS. The Escrow Agreement may not be modified except in a
document executed by Seller and all the parties hereto, unless Lender has given
Escrow Agent a notice described in Section 2 above, then the Escrow Agreement
may be modified in a document executed only by Seller, Lender and Escrow Agent.

                                        3
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       IN WITNESS WHEREOF, this Amendment has been executed as of the date first
above written.

                             BUYER:

                             INLAND WESTERN LAKEWOOD, L.L.C.,
                             a Delaware limited liability company

                             By: INLAND WESTERN RETAIL REAL ESTATE
                                 TRUST, INC., a Maryland corporation,
                                 Its sole member

                                 By:  /s/ Debra A. Palmer
                                     --------------------------------------
                                 Its:    Asst Secretary
                                     --------------------------------------

                             LENDER:

                             ALLSTATE LIFE INSURANCE COMPANY, an Illinois
                             insurance corporation

                             By:
                                -------------------------------------------

                             By:
                                -------------------------------------------
                                   Its Authorized Signatories

                             CHICAGO TITLE INSURANCE COMPANY

                             By:
                                -------------------------------------------
                                   Its Authorized Signatory

                                        4<Page>

                                                                  EXHIBIT 10.199

                                                                 REVISED 6/30/04

                                  MASTER LEASE
                                ESCROW AGREEMENT

     This MASTER LEASE ESCROW AGREEMENT is made and entered into as of the 30th
day of June, 2004, by and among Paradise Shoppes of Prominence Point Ltd., a
Florida limited partnership (hereinafter referred to as "Seller"), Inland
Western Canton Paradise, L.L.C., a Delaware limited liability company
(hereinafter referred to as "Buyer"), and Chicago Title and Trust Company
(hereinafter referred to as "Escrow Agent") having as its address Attention:
Nancy Castro, 171 North Clark Street, Chicago, Illinois.

                              W I T N E S S E T H:

     WHEREAS, pursuant to that certain Agreement of Purchase and Sale of
Shopping Center dated as of the 4th day of June, 2004 (the "Contract"), Buyer
acquired on and as of the date hereof from Seller certain real property commonly
known as Paradise Shoppes of Prominence Point shopping center located in Canton,
Georgia, as more particularly described by the Contract (the "Property"); and

     WHEREAS, Seller has agreed to deposit with Escrow Agent the sum of
Fifty-One Thousand Five Hundred Thirty-One and 41/100 Dollars ($51,531.41) (the
("Vacant Space Escrow Deposit") with respect to Seller's obligation to pay rent
and reimbursable expenses to Buyer for Property vacant spaces: B-1, B-6 and C-11
not fulfilling the Tenant Conditions (as hereinafter defined) and as more
particularly described upon Exhibit A, attached hereto and made a part hereof
(collectively, the "Vacant Space") space at the Property; and

     WHEREAS, Seller has agreed to deposit with Escrow Agent the sum of [______]
and no/100 Dollars ($00.00) (the "Leased Space Escrow Deposit") with respect to
Seller's obligation to pay rent and reimbursable expenses to Buyer for the
Property tenant spaces under lease; N/A, either not yet fulfilling the Tenant
Conditions (and/or more than 30-days overdue in payment of rent) and as more
particularly described upon Exhibit A, (collectively, the "Leased Space not
Fulfilling Tenant Conditions"); and

     WHEREAS, Seller has agreed to deposit with Escrow Agent the sum of Thirty
Thousand Eight Hundred and no/100 Dollars ($30,800.00) (the "TI/LC Escrow
Deposit") with respect to Seller's obligations to pay for tenant improvement
allowances and leasing commissions for Vacant Space and as more particularly
described upon Exhibit A; and

     WHEREAS, Escrow Agent is willing to accept the Leased Space Escrow Deposit,
and the Vacant Space Escrow Deposit, and the TI/LC Escrow Deposit, and hold and
disburse same in accordance with the terms and conditions set forth below.

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     NOW, THEREFORE, for and in consideration of the premises hereto, the
covenants and agreements hereinafter made, and for Ten Dollars ($10.00) in hand
paid to Escrow Agent, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     1. Seller hereby deposits with Escrow Agent, and Escrow Agent hereby
acknowledges receipt of the Leased Space Escrow Deposit, and the Vacant Space
Escrow Deposit, and the TI/LC Escrow Deposit. Escrow Agent hereby agrees to
deposit the Leased Space Escrow Deposit, and the Vacant Space Escrow Deposit,
and the TI/LC Escrow Deposit into an interest bearing account with a bank
reasonably satisfactory to Buyer, Seller and Escrow Agent with interest accruing
for the benefit of Seller. The federal taxpayer identification of Seller is as
follows: 82-0558275.

     2. LEASED SPACE ESCROW DEPOSIT. Escrow Agent shall retain the Leased Space
Escrow Deposit in the account, and shall cause the same to be paid in the manner
described herein. The Leased Space Escrow Deposit is attributable to the Leased
Space not Fulfilling Tenant Conditions. Buyer shall receive a prorated credit
(calculated in accordance with the allocations described in the immediately
following sentence) from the Leased Space Escrow Deposit on the date of Closing
(as defined in the Contract) for the rent and reimbursable expenses attributable
to the Leased Space not Fulfilling Tenant Conditions from the date of Closing
through the end of the month, is which Closing occurs. Thereafter, Buyer shall
receive (and Escrow Agent in hereby authorized to pay to Buyer without further
direction from Seller) monthly payments, in advance, for rent and reimbursable
expenses, from the Leased Space Escrow Deposit, in the monthly amounts described
upon Exhibit A and attributable to each space so described (prorated for any
partial months) (collectively, the "Leased Space Monthly Payment"). The Leased
Space Monthly Payment shall respectively be made by Escrow Agent to Buyer until
such time as the respective tenants under Leased Space not Fulfilling Tenant
Conditions described upon Exhibit A have: (a) accepted its premises, and (b)
opened for business at the Property to the public, and (c) commenced paying rent
and other charges under its lease. and (d) delivered to Buyer evidence that all
leasing commissions and tenant improvement allowances are fully paid, and (e)
delivered a certificate of occupancy to Buyer for the space (collectively, the
"Tenant Conditions"). Buyer shall promptly notify Seller and Escrow Agent of the
date a tenant satisfies the Tenant Conditions. The balance of the Leased Space
Escrow Deposit remaining after satisfaction of the Tenant Conditions for such
space shall then be released to Seller upon the joint direction of Seller and
Buyer with such disbursement to occur within two (2) business days after Escrow
Agent's receipt of notification from Buyer of the tenant's satisfaction of
Tenant Conditions. Any rent and reimbursable expenses received by Buyer from any
Leased Space not Fulfilling Tenant Conditions tenant shall be promptly remitted
by Buyer to Seller (to the extent Buyer has been paid pursuant to the terms to
this Agreement).

     3. VACANT SPACE ESCROW DEPOSIT. Escrow Agent shall retain the Vacant Space
Escrow Deposit in the account, and shall cause the same to be paid in the manner
described herein. The Vacant Space Escrow Deposit is attributable to the Vacant
Space. Buyer shall receive a prorated credit (calculated in accordance with the
allocations described in the immediately following sentence) from the Vacant
Space Escrow Deposit

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on the date of Closing for the rent and reimbursable expenses attributable to
the Vacant Space from the date of Closing through the end of the month in which
Closing occurs. Thereafter, Buyer shall receive (and Escrow Agent is hereby
authorized to pay to Buyer without further direction from Seller) monthly
payments, in advance, for rent and reimbursable expenses, from the Vacant Space
Escrow Deposit, in the monthly amounts described upon Exhibit A and attributable
to each space so described (prorated for any partial months) (collectively, the
"Vacant Space Monthly Payment"). The Vacant Space Monthly Payment shall be made
by Escrow Agent to Buyer until such time as tenants under leases for the Vacant
Space have respectively satisfied the Tenant Conditions. Buyer shall promptly
notify Seller and Escrow Agent of the date any tenant satisfies the Tenant
Conditions. As the Vacant Space is leased during the 12-month period following
the date of Closing, with the Tenant Conditions having then been satisfied, the
balance of the Vacant Space Escrow Deposit attributable to each such leased
Vacant Space shall then be released to Seller upon the joint direction of Seller
and Buyer, with such disbursement to occur within two (2) business days after
Escrow Agent's receipt of notification from Buyer that Vacant Space is leased
with the Tenant Conditions having been satisfied. The balance of the Vacant
Space Escrow Deposit attributable to the Vacant Space not yet leased, if any,
remaining on the 1st day of the 2nd year following the date of Closing, shall be
released to Seller reduced by the following described sums which shall then be
payable to Buyer; any pending (and not yet paid by Escrow Agent) funds
disbursement requests made by Buyer in accordance with the terms of this
Agreement. Any rent and reimbursable expenses received by Buyer from any Vacant
Space tenant shall be promptly remitted by Buyer to Seller (to the extent Buyer
has been paid pursuant to the tenants of this Agreement).

     4. TENANT IMPROVEMENT ALLOWANCES AND LEASING COMMISSIONS DEPOSIT. The TI/LC
Escrow Deposit is applicable to the Vacant Space on the basis of the product of
Eight and no/100 Dollars ($8.00) as and for leasing/brokerage commissions ("LC")
and tenant improvement allowances ("TI"), multiplied by 3850 square feet of
Vacant Space. That portion of the TI/LC Escrow Deposit attributable to LC shall
be released from the Escrow Deposit by Escrow Agent upon the joint direction of
Seller and Buyer accompanied by signed lien walvers and invoices from the
applicable real estate brokers. That portion of the TI/LC Escrow Deposit
attributable to TI shall be released by Escrow Agent upon the joint direction of
Seller and Buyer accompanied by the documentation required by each lease, and in
any event, no less documentation than copies of invoices and mechanics lien
waivers in the amount of each request shall accompany the draw request. As each
portion of the Vacant Space is leased to tenants during the 1-year period
following the date of Closing and the Tenant Conditions are fulfilled as to such
tenant(s) the amount of non-allocated TI/LC Escrow Deposit attributable to each
of such space(s) shall then be released to Seller upon the joint direction of
Seller and Buyer, with such disbursement to occur within two (2) business days
after Escrow Agent's receipt of notification from Buyer that Vacant Space is
leased with the Tenant Conditions having been satisfied. Any non-allocated TI/LC
Escrow Deposit remaining on the 1st day of the 2nd year following the date of
Closing, for any then Vacant Space, shall be released to Buyer.

     5. ESCROW ADMINISTRATION. The costs of administration of this Escrow
Agreement by Escrow Agent in the sum of Seven Hundred Fifty and no/100 Dollars

<Page>

($750.00) per year shall be shared equally by Seller and Buyer. This Escrow
Agreement shall be binding upon and insure to the benefit of the parties hereto
and their respective heirs, principals, successors and assigns and shall be
governed and construed in accordance with the laws of the State of Florida. No
modification, amendment or waiver of the terms hereof shall be valid or
effective unless in writing and signed by all of the parties hereto. This Escrow
Agreement may be executed in multiple counterpart originals, each of which shall
be deemed to be and shall constitute an original. If there is any conflict
between the terms of this Escrow Agreement and the terms of the Contract, the
terms of this Escrow Agreement shall control.

     6. NOTICES. All notices, requests, consents and other communications
hereunder shall be sent to each of the following parties and be in writing and
shall either be: (i) delivered by facsimile transmission, or (ii) personally
delivered, or (iii) sent by Federal Express or other overnight or same day
courier service providing a return receipt, (and shall be effective when
received, when refused or when the same cannot be delivered, as evidenced on the
return receipt) to the following addresses:

If to Seller:               Paradise Shoppes of Prominence Point, Ltd.
                            c/o Paradise Development Group, Inc.
                            2901 Rigsby Lane
                            Safety Harbor, Florida
                            Attention: Mr. Michael T. Wagner
                            Facsimile:  (727) 726-2337
                            Telephone:  (727) 726-1115

Copy to:                    Forlizzo Law Group, P.A.
                            2903 Rigsby Lane
                            Safety Harbor, Florida 34695
                            Attention: Robert A. Forlizzo, Esquire
                            Facsimile:  (727) 669-6929
                            Telephone:  (727) 669-0550

If to Buyer:                Inland Western Canton Paradise, L.L.C.
                            2901 Butterfield Road
                            Oak Brook, Illinois 60523
                            Attention: Rob Barg
                            Facsimile:  (630) 218-4928

Copy to:                    The Inland Group, Inc.
                            2901 Butterfield Road
                            Oak Brook, Illinois 60523
                            Attention: Robert Baurn, General Counsel
                            Facsimile:  (630) 18-4900 and (630) 571-2360

If to Escrow Agent:         Ms. Nancy Castro
                            Chicago Title and Trust Company
                            171 North Clark Street

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                            Chicago, Illinois
                            Facsimile:  312-223-2108
                            Telephone:  312-223-2709

     7. COUNTERPARTS. This Escrow Agreement may be executed in counterparts and
shall constitute an agreement binding on all parties notwithstanding that all
parties are not signatories of the original or the same counterpart.
Furthermore, the signatures from one counterpart may be attached to another to
constitute a fully executed original The Escrow Agreement may be executed by
facsimile.

     8. REPORTING. Escrow Agent agrees to deliver to Buyer and Seller, on a
monthly basis, a copy of the bank statement of account of the Escrow Deposit.
Such monthly statements shall be delivered to: Inland Retail Real Estate Trust,
Inc., 200 Waymore Court, Suite 126, Unit 10, Lake Mary, Florida 32746
(telephone: 407-688-6450; facsimile: 407-688-6543).

     9. POTENTIAL ADUSTMENT TO PURCHASE PRICE. Seller and Buyer shall calculate
an adjustment to the Purchase Price based upon the following described formula:

     The Purchase Price shall be adjusted as follows:

     (i)     as of the date of this Agreement, calculate the total square feet
             of Project Vacant Space and multiply that sum by the base rental
             per square foot values, described on a space-by-space basis upon
             the Rent Roll, to obtain the Project Vacant Space base rent value
             (the "Vacant Space Base Rent Value"). The Vacant Space Base Rent
             Value shall be calculated as to both the aggregate Project Vacant
             Space as well as to Project Vacant Space on a space-by-space basis,
             then

     (ii)    during the twelve (12) month term of this Master Lease Escrow
             Agreement, as an individual unit(s) of Project Vacant Space is
             leased, calculate the square feet of Project Vacant Space on a
             space-by-space basis leased to tenants under Leases (from the date
             of this Agreement to the date of Closing) which are then open for
             business, operating and paying base rent and reimbursable expenses
             per their respective Leases (the "Leased Space"); and then multiply
             the Leased Space by the actual base rent payable by such tenants
             under such Leases (on a space-by-space basis) to obtain, on a
             space-by-space basis, the Leased Space base rental value for each
             individual space (the "Leased Space Base Rent Value"); then

     (iii)   subtract the Vacant Space Base Rent Value attributable to Leased
             Space from the Leased Space Rent Value (on a space-by-space basis),
             and divide the value so obtained by .071, to obtain, on a
             space-by-space basis, the "Adjustment to Purchase Price Value." If
             the Adjustment to Purchase Price Value is a positive number, the
             amount will be added to the Purchase Price and paid by Buyer to
             Seller at such time as the

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             Vacant Space Escrow Deposit related to the individual space of
             Leased Space is disbursed pursuant to Section 3, above.

     In calculating the Leased Space Base Rent Value contemplated by
subparagraph (ii), above, there shall be included in such calculation any rental
income received from tenants occupying individual tenant panels on any shopping
center signage.

                    PLEASE SEE FOLLOWING PAGE FOR SIGNATURES

<Page>

     IN WITNESS WHEREOF, each of the parties hereto has caused this Escrow
Agreement to be signed and delivered as of the day and year first above written.

                              BUYER:

                              INLAND WESTERN CANTON PARADISE,
                              L.L.C., a Delaware limited liability company

                              By: Inland Western Retail Real Estate Trust, Inc.,
                                  a Maryland corporation

                              By:  /s/ [ILLEGIBLE]
                                  ----------------------------------
                              Name: [ILLEGIBLE]
                                    ------------------------------
                              As Its: [ILLEGIBLE]
                                      -------------------------------

                              SELLER:

                              Paradise Shoppes of Prominence Point, Ltd.,
                              a Florida limited partnership

                              By: Paradise Development Group, Inc., a
                                  Florida corporation, its General Partner

                              By: /s/ Michael T. Wagner
                                  ----------------------------------
                                  Michael T. Wagner
                                  Vice President

                              ESCROW AGENT:

                              Chicago Title and Trust Company

                              By:
                                  ----------------------------------
                              Name:
                                    --------------------------------
                              As Its:
                                      ------------------------------

<Page>

                                   EXHIBIT "A"

PARADISE PROMINENCE, LTD.
[ILLEGIBLE] Lease

<Table>
<Caption>
                                            RENT           CAR           TENANT [ILLEGIBLE]   COMBINATION       TOTAL
<S>                          <C>          <C>              <C>                  <C>             <C>            <C>
                                          ????             ????                 ????            ????
                                                                                                               ---------
Total sq. [ILLEGIBLE]        2,185        45,782.95        7,???                11,660.00       19,250.00      ?2,331.41
                                                                                                               ---------
</Table>

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