425

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

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report:  December 1, 2006
(Date of earlier event reported)

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

Maryland	333-85666	36-4246655
(State or other jurisdiction	(Commission File Number)	(IRS Employer I.D. No.)
of incorporation)

2901 Butterfield Road
Oak Brook, Illinois 60523
(Address of Principal Executive Offices)

(630) 218-8000
(Registrant’s telephone number including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

x           Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-22(b)

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.23e-4(c)

Section 8 — Other Events

Item 8.01                Other Events.

Attached to this Form 8-K as Exhibit No. 99.1 is a copy of the cover letter attached to the financial report for the third quarter of 2006 on Form 10-Q for Inland Retail Real Estate Trust, Inc. (the “Company”) sent by the Company on or about November 30, 2006, to its shareholders, which cover letter is incorporated into this filing in its entirety.

Attached to this Form 8-K as Exhibit 99.2 is a copy of a letter to shareholders of the Company to be sent by the Company on or about December 7, 2006, which letter is incorporated into this filing in its entirety, in connection with the Company’s December 7, 2006 shareholder distribution.

Attached to this Form 8-K as Exhibit No. 99.3 is a copy of an email distribution to be provided to the Inland Securities Corporation sales network and broker/dealer firms by the Company in connection with the December 7 shareholder distribution letter described above, which email distribution is incorporated into this filing in its entirety.

This Form 8-K filing contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect our management’s current views with respect to future events and financial performance. The words “believes”, “expects”, “anticipates”, “estimates”, and similar words or expressions are generally intended to identify forward-looking statements.  Actual results may differ materially from those expected because of various risks and uncertainties, including, but not limited to, changes in general economic conditions, adverse changes in real estate markets as well as other risks and uncertainties included from time to time in the Company’s filings with the Securities and Exchange Commission.

This filing does not constitute an offer of any securities for sale.  In connection with the proposed transaction, Developers Diversified Realty Corporation (“DDR”) and the Company expect to file a proxy statement/prospectus as part of a Registration Statement regarding the proposed merger with the SEC. Investors and security holders are urged to read the proxy statement/prospectus because it will contain important information about DDR and the Company and the proposed merger. Investors and security holders may obtain a free copy of the definitive proxy statement/prospectus and other documents filed by DDR and the Company with the SEC at the SEC’s website at www.sec.gov. The definitive proxy statement/prospectus and other relevant documents may also be obtained free of charge from DDR and the Company by directing such request to: Developers Diversified Realty Corporation, Attention: Investor Relations, 3300 Enterprise Parkway, Beachwood, Ohio 44122 or Inland Retail Real Estate Trust, Inc., Attention: Investor Relations, 2901 Butterfield Road, Oak Brook, Illinois 60523. Investors and security holders are urged to read the proxy statement, prospectus and other relevant material when they become available before making any voting or investment decisions with respect to the merger.

DDR and the Company and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of the Company in connection

with the merger. Information about DDR and its directors and executive officers, and their ownership of DDR’s securities, is set forth in the proxy statement for the 2006 Annual Meeting of Stockholders of DDR, which was filed with the SEC on April 3, 2006. Information about the Company and its directors and executive officers, and their ownership of the Company’s securities, is set forth in the proxy statement for the 2006 Annual Meeting of Stockholders of the Company, which was filed with the SEC on October 14, 2006. Additional information regarding the interests of those persons may be obtained by reading the proxy statement/prospectus when it becomes available.

Section 9.01 - Financial Exhibits and Exhibits

Item 9.01(d)           Exhibits.

Exhibit
Number	Description
99.1	Cover letter for Third Quarter Financial Report of Inland Retail Real
	Estate Trust, Inc.
99.2	Letter to Shareholders of Inland Retail Real Estate Trust, Inc.
99.3	Informational E-Mail Broadcast to the Inland Securities Corporation Sales
	Network and Broker/Dealer Firms

SIGNATURE

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 hereunto duly authorized.

INLAND RETAIL REAL ESTATE TRUST, INC.
By:	/s/ Barry L. Lazarus
Name:	Barry L. Lazarus
Title:	President and Chief Operating Officer
Date:	December 4, 2006

EXHIBIT INDEX

Exhibit No.	Description
99.1	Cover letter for Third Quarter Financial Report of Inland Retail Real Estate Trust, Inc.
99.2	Letter to Shareholders of Inland Retail Real Estate Trust, Inc.
99.3	Informational E-Mail Broadcast to the Inland Securities Corporation Sales
	Network and Broker/Dealer Firms

EX-99.1

Exhibit 99.1

November 2006

Dear Shareholder:

We are pleased to provide you with this financial report for the third quarter of 2006 for Inland Retail Real Estate Trust, Inc. (“Inland Retail”).

As previously announced, we entered into a merger agreement with Developers Diversified Realty Corporation (“DDR”) on October 20, 2006. Under this agreement, DDR will acquire the outstanding shares of Inland Retail for $14.00 per share.  DDR may elect to issue up to $4.00 per share of the total merger consideration in the form of DDR common stock.  We will provide more information as it becomes available.

Shareholders should receive a proxy statement soon which details both the merger and the procedure for voting on the transaction. Upon receipt of shareholders’ approval, it is anticipated that this transaction will close during the first quarter of 2007.

We wish you and your family a very happy and healthy holiday season. If you have questions regarding this report or your investment, please contact your Investment Representative or Inland Retail Investor Relations at (800) 348-9192.

Sincerely,

INLAND RETAIL REAL ESTATE TRUST, INC.

Barry L. Lazarus

Chief Executive Officer and President

Please see the reverse side of this page for important information.

This letter contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this announcement are forward-looking statements. All forward-looking statements speak only as of the date of this announcement. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance, achievements or transactions of Developers Diversified, IRRETI and their affiliates or industry results or the benefits of the proposed merger to be materially different from any future results, performance, achievements or transactions expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors relate to, among others, approval of the transaction by the shareholders of IRRETI, the satisfaction of closing conditions to the transaction, difficulties encountered in integrating the companies, the marketing and sale of non-core assets, and the effects of general and local economic and real estate conditions. Additional information or factors which could impact the companies and the forward-looking statements contained herein are included in each company’s filings with the Securities and Exchange Commission. The companies assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

This letter does not constitute an offer of any securities for sale. In connection with the proposed transaction, Developers Diversified and IRRETI expect to file a proxy statement/ prospectus as part of a registration statement regarding the proposed merger with the Securities and Exchange Commission. Investors and security holders are urged to read the proxy statement/prospectus because it will contain important information about Developers Diversified and IRRETI and the proposed merger. Investors and security holders may obtain a free copy of the definitive proxy statement/prospectus and other documents filed by Developers Diversified and IRRETI with the SEC at the SEC’s website at www.sec.gov. The definitive proxy statement/prospectus and other relevant documents may also be obtained free of charge from Developers Diversified and IRRETI by directing such request to:  Developers Diversified Realty Corporation, Attention: Investor Relations, 3300 Enterprise Parkway, Beachwood, Ohio 44122 or Inland Retail Real Estate Trust, Inc., Attention: Investor Relations, 2901 Butterfield Road, Oak Brook, IL 60523. Investors and security holders are urged to read the proxy statement, prospectus and other relevant material when they become available before making any voting or investment decisions with respect to the merger.

Developers Diversified and IRRETI and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of IRRETI in connection with the merger. Information about Developers Diversified and its directors and executive officers, and their ownership of Developers Diversified securities, is set forth in the proxy statement for the 2006 Annual Meeting of Stockholders of Developers Diversified, which was filed with the SEC on April 3, 2006. Information about IRRETI and its directors and executive officers, and their ownership of IRRETI securities, is set forth in the proxy statement for the 2006 Annual Meeting of Stockholders of IRRETI, which was filed with the SEC on October 14, 2006. Additional information regarding the interests of those persons may be obtained by reading the proxy statement/prospectus when it becomes available.

EX-99.2

Exhibit 99.2

December 7, 2006

Dear Inland Retail Real Estate Trust, Inc. Shareholder:

On December 7, 2006, Inland Retail Real Estate Trust, Inc. (“Inland Retail”) paid a distribution of $0.069167 per share to shareholders of record as of November 22, 2006.  This calculation is based upon an annualized rate of $.83 per share divided by 12 months.  The annualized distribution rate of $0.83 per share remains the same.

On October 23, 2006, we announced our entry into a merger agreement with Developers Diversified Realty Corporation (“DDR”).  Please find listed below the answers to some frequently asked questions:

1.I was reinvesting my distributions.  Why am I now receiving a check?

As part of the merger agreement, our Distribution Reinvestment Program was suspended.  Thus, shareholders are no longer able to reinvest monthly distributions.  Effective with the November 7, 2006 distribution, all shareholders began receiving cash distributions.

2.Will I continue to receive a check?

We will continue to pay our monthly distribution on the 7th of each month until the merger transaction is completed.  Please note that Direct Deposit is available.  Enrollment forms are available at www.rtco.com under Inland Stockholders Forms.  The Direct Deposit Enrollment Form is for your monthly distributions and not for your anticipated final cash payout.

3.Why did I not receive a check?  Where did my check go?

If your investment is held in a retirement account, such as an IRA or SEP investment, the IRS requires that any funds be sent directly to your custodian.  You should receive a confirmation statement detailing the distribution amount sent to your custodian on your behalf.  If you have sent us instructions to direct deposit your distribution, you will receive a confirmation statement in lieu of a check.

4.What is a “merger agreement”?

Your Board of Directors concluded that it is in the best interest of the shareholders to consider a range of potential liquidity events.  In considering liquidity alternatives which would maximize shareholder return, the Board beIieves that the offer received from DDR achieves this goal.  The “merger agreement” is the formal legal document or contract which subject to terms and conditions obligates DDR to acquire the outstanding shares of Inland Retail stock.

5.How much will I receive?

If the merger is approved by shareholders, DDR will pay all shareholders $14 per share for each share of Inland Retail that he or she owns.  Shareholders will no longer own shares of Inland Retail.

6.DDR may elect to issue up to $4 per share of the total merger consideration in the form of common shares of stock of DDR.  What does that mean?

DDR will pay shareholders $14 per share for each share of Inland Retail that he or she owns.  The exact composition of the $14 per share payment is yet to be determined.  DDR may pay all $14 per share in cash or they may pay $10 per share in cash and $4 per share in DDR common stock or any combination in between.  All shareholders will receive the same proportionate payout.  Shareholders will not have the option as to whether or not to receive shares of DDR common stock.  We will provide more information on the final payout as it becomes available.

7.How many shares do I own?

The number of shares that you own is printed on the check stub or Statement of Distributions that you receive each month.  Account information is also available on Registrar and Transfer Company’s (“R&T”) website at www.rtco.com.  If you do not already have a log-in, you may apply for one at the bottom of R&T’s homepage.

8.When will this happen?

Subject to shareholder approval, we anticipate that the merger will close during the first quarter of 2007.

9.What will happen to my investment in Inland Retail?

At the time of the closing of the merger agreement, you would no longer own stock in Inland Retail.  You would receive a final payout for your shares of Inland Retail and will no longer have an investment in Inland Retail.

10.What do I need to do?  What is the next step?

You should receive a proxy shortly which will include a request for your vote.  Upon receipt of the proxy, we strongly encourage you to review the materials carefully and promptly vote on the merger agreement.

If you have any additional questions, please contact your financial advisor or Inland Retail Investor Relations at (800) 348-9192.

Sincerely,

INLAND RETAIL REAL ESTATE TRUST, INC.

Barry L. Lazarus

Chief Executive Officer

This letter contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this announcement are forward-looking statements. All forward-looking statements speak only as of the date of this announcement. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance, achievements or transactions of Developers Diversified, IRRETI and their affiliates or industry results or the benefits of the proposed merger to be materially different from any future results, performance, achievements or transactions expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors relate to, among others, approval of the transaction by the shareholders of IRRETI, the satisfaction of closing conditions to the transaction, difficulties encountered in integrating the companies, the marketing and sale of non-core assets, and the effects of general and local economic and real estate conditions. Additional information or factors which could impact the companies and the forward-looking statements contained herein are included in each company’s filings with the Securities and Exchange Commission. The companies assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

This letter does not constitute an offer of any securities for sale. In connection with the proposed transaction, Developers Diversified and IRRETI expect to file a proxy statement/ prospectus as part of a registration statement regarding the proposed merger with the Securities and Exchange Commission. Investors and security holders are urged to read the proxy statement/prospectus because it will contain important information about Developers Diversified and IRRETI and the proposed merger. Investors and security holders may obtain a free copy of the definitive proxy statement/prospectus and other documents filed by Developers Diversified and IRRETI with the SEC at the SEC’s website at www.sec.gov. The definitive proxy statement/prospectus and other relevant documents may also be obtained free of charge from Developers Diversified and IRRETI by directing such request to:  Developers Diversified Realty Corporation, Attention: Investor Relations, 3300 Enterprise Parkway, Beachwood, Ohio 44122 or Inland Retail Real Estate Trust, Inc., Attention: Investor Relations, 2901 Butterfield Road, Oak Brook, IL 60523. Investors and security holders are urged to read the proxy statement, prospectus and other relevant material when they become available before making any voting or investment decisions with respect to the merger.

Developers Diversified and IRRETI and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of IRRETI in connection with the merger. Information about Developers Diversified and its directors and executive officers, and their ownership of Developers Diversified securities, is set forth in the proxy statement for the 2006 Annual Meeting of Stockholders of Developers Diversified, which was filed with the SEC on April 3, 2006. Information about IRRETI and its directors and executive officers, and their ownership of IRRETI securities, is set forth in the proxy statement for the 2006 Annual Meeting of Stockholders of IRRETI, which was filed with the SEC on October 14, 2006. Additional information regarding the interests of those persons may be obtained by reading the proxy statement/prospectus when it becomes available. As a result of this transaction, IRRETI does not intend to hold an annual stockholder meeting and instead will hold a special meeting to vote on the proposed merger.

EX-99.3

Exhibit 99.3

Inland Retail Real Estate Trust, Inc.
Update — December 7, 2006

On October 20, 2006 Inland Retail Real Estate Trust, Inc. (“Inland Retail”) and Developers Diversified Realty Corporation (“DDR”) entered into an Agreement and Plan of Merger (“Merger Agreement”).  Under the terms of the agreement, DDR will acquire all of the outstanding shares of Inland Retail for a total merger consideration of $14 per share. DDR may at its option elect to issue up to $4 per share of the total merger consideration in the form of common shares of DDR.  DDR has until 15 calendar days prior to the shareholders’ meeting to make this decision.  The date of the meeting has not yet been set, so we will not know the exact composition of the payout for some time.

This Merger Agreement does not affect Inland American Real Estate Trust, Inc. or Inland Western Retail Real Estate Trust, Inc. stockholders.

On December 7, 2006, Inland Retail will pay a distribution of $0.069167 per share to shareholders of record as of November 22, 2006.  This calculation is based upon an annualized rate of $.83 per share divided by 12 months.  The annualized distribution rate of $0.83 per share remains the same.  Inland Retail shareholders will be receiving the attached distribution letter and Frequently Asked Questions.

IMPORTANT INFORMATION:

DISTRIBUTIONS

The Distribution Reinvestment Program (DRP) has been suspended.  Effective with the November 7, 2006 distribution and going forward, all shareholders will receive cash distributions.  Shareholders may elect to have the monthly distribution electronically deposited to a bank account or the check may be mailed to a third party, such a brokerage account.  To do so, shareholders should complete the Direct Deposit Enrollment Form.  This form is only for the monthly distributions and will not impact payment of the final distribution.  Please note that checks for custodial accounts, such as IRAs and SEPs, will be sent directly to the custodian.

CERTIFICATES

A mailing will be sent to shareholders with outstanding certificates in the upcoming weeks requesting that shareholders surrender their Inland Retail certificates so that shares may be held in “book-entry”.  Please encourage your shareholders to promptly return their certificates to:

Investor Relations

Inland Retail Real Estate Trust, Inc.

2901 Butterfield Road

Oak Brook, IL 60523

PROXY

We anticipate that shareholders will receive the proxy in December.  Please encourage your shareholders to vote.

SHARE REPURCHASE PROGRAM

The Share Repurchase Program has been suspended.  Accounts may no longer be liquidated through this program.

WARRANTS

We are in the process of working with DDR and the Broker/Dealers on finalizing the process for warrants.

If you have any questions, please contact your Inland regional sales team or Inland Retail Investor Relations at (800) 348-9192:

Inland Regional Sales:	East	888-820-3974
	Midwest	800-323-6122
	North	866-833-5255
	West	866-624-2603

This announcement contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this announcement are forward-looking statements. All forward-looking statements speak only as of the date of this announcement. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance, achievements or transactions of Developers Diversified, IRRETI and their affiliates or industry results or the benefits of the proposed merger to be materially different from any future results, performance, achievements or transactions expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors relate to, among others, approval of the transaction by the shareholders of IRRETI, the satisfaction of closing conditions to the transaction, difficulties encountered in integrating the companies, the marketing and sale of non-core assets, and the effects of general and local economic and real estate conditions. Additional information or factors which could impact the companies and the forward-looking statements contained herein are included in each company’s filings with the Securities and Exchange Commission. The companies assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

This announcement does not constitute an offer of any securities for sale. In connection with the proposed transaction, Developers Diversified and IRRETI expect to file a proxy statement/ prospectus as part of a registration statement regarding the proposed merger with the Securities and Exchange Commission. Investors and security holders are urged to read the proxy statement/prospectus because it will contain important information about Developers Diversified and IRRETI and the proposed merger. Investors and security holders may obtain a free copy of the definitive proxy statement/prospectus and other documents filed by Developers Diversified and IRRETI with the SEC at the SEC’s website at www.sec.gov. The definitive proxy statement/prospectus and other relevant documents may also be obtained free of charge from Developers Diversified and IRRETI by directing such request to:  Developers Diversified Realty Corporation, Attention: Investor Relations, 3300 Enterprise Parkway, Beachwood, Ohio 44122 or Inland Retail Real Estate Trust, Inc., Attention: Investor Relations, 2901 Butterfield Road, Oak Brook, IL 60523. Investors and security holders are urged to read the proxy statement, prospectus and other relevant material when they become available before making any voting or investment decisions with respect to the merger.

Developer Developers Diversified and IRRETI and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of IRRETI in connection with the merger. Information about Developers Diversified and its directors and executive officers, and their ownership of Developers Diversified securities, is set forth in the proxy statement for the 2006 Annual Meeting of Stockholders of Developers Diversified, which was filed with the SEC on April 3, 2006. Information about IRRETI and its directors and executive officers, and their ownership of IRRETI securities, is set forth in the proxy statement for the 2006 Annual Meeting of Stockholders of IRRETI, which was filed with the SEC on October 14, 2006. Additional information regarding the interests of those persons may be obtained by reading the proxy statement/prospectus when it becomes available. As a result of this transaction, IRRETI does not intend to hold an annual stockholder meeting and instead will hold a special meeting to vote on the proposed merger.

For Broker/Dealer Use Only. Dissemination to prospective investors prohibited. This is neither an offer to sell nor a solicitation of an offer to buy any security, which can be made only by a prospectus which has been filed or registered with appropriate state and federal regulatory agencies and sold only by broker/dealers authorized to do so.

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