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 19, 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 99.1 is a copy of a letter to be sent by Inland Retail Real Estate Trust, Inc. (the “Company”) to its shareholders on or about December 20, 2006, in connection with the Company’s effort to convert certificates representing shares of the Company’s common stock to book-entry form, which letter is incorporated into this filing in its entirety.

Attached to this Form 8-K as Exhibit 99.2 is a copy of an email distribution to be provided to the Inland Securities Corporation sales network and broker/dealer firms by the Company on or about December 19, 2006, relating to the certificate conversion 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.  As previously announced, the Company and Developers Diversified Realty Corporation (“DDR”) have entered into an Agreement and Plan of Merger, dated October 20, 2006.  In connection with the proposed transaction, 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

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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. As a result of the proposed merger, the Company does not intend to hold an annual stockholder meeting and instead will hold a special meeting to vote on the proposed merger.

Section 9 -             Financial Exhibits and Exhibits

Item 9.01(d)           Exhibits.

Exhibit Number	Description
99.1	Letter to shareholders of Inland Retail Real Estate Trust, Inc.
99.2	Informational E-Mail Broadcast to the Inland Securities Corporation Sales Network and Broker/Dealer Firms

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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 19, 2006

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EXHIBIT INDEX

Exhibit Number	Description
99.1	Letter to shareholders of Inland Retail Real Estate Trust, Inc.
99.2	Informational E-Mail Broadcast to the Inland Securities Corporation Sales Network and Broker/Dealer Firms

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EX-99.1

Exhibit 99.1

IMMEDIATE ACTION REQUIRED — DO NOT DELAY

Name
Address Line 1
Address Line 2
City, State ZIP

December 2006

RE: INLAND RETAIL OUTSTANDING STOCK CERTIFICATES

Dear Inland Retail Real Estate Trust, Inc. Shareholder:

As we previously announced, Inland Retail Real Estate Trust, Inc. (“Inland Retail”) and Developers Diversified Realty Corporation (“DDR”) entered into a definitive merger agreement on October 20, 2006.  Under the agreement, DDR will acquire the outstanding shares of Inland Retail for $14.00 per share, subject to certain conditions.  A proxy requesting your vote on the merger transaction will be mailed to you shortly.

Subject to shareholder approval and other closing conditions, we anticipate the completion of this transaction to occur in the first quarter of 2007.  In order to assist in the closing process and minimize any delays in the potential final payment of your investment, we strongly urge that you return your outstanding Inland Retail certificates so that your shares may be converted to “book-entry”.  A book-entry transaction signifies securities that are not represented by certificates of ownership, but are recorded directly on the company’s formal shareholder records.  This method eliminates the requirement of delivering a stock certificate at the time of any sale or transfer of ownership.

Returning your certificate(s) does not impact your investment or your distributions.  You will continue to own the same number of shares.  Your ownership will simply be converted to book-entry.   A confirmation will be sent to you upon receipt of your certificate(s) and conversion to book-entry.  As the merger has not yet occurred, surrendering your certificates at this time will not result in any payments to you.  Surrendering your stock certificate(s) will assist in making the final payout process more efficient and could prevent delays in payment.  The final payment will not occur until after the closing of this merger. 

PLEASE SEE THE REVERSE SIDE OF THIS LETTER FOR A LISTING OF THE CERTIFICATES THAT HAVE BEEN ISSUED IN YOUR NAME AND ARE CURRENTLY OUTSTANDING.  Return these certificate(s) in the enclosed postage-paid envelope.  You do not need to sign the back of the certificate(s).  If a certificate is lost, please complete the enclosed Affidavit of Lost Certificate and return it in the enclosed postage paid envelope.  This lost certificate form does require a notarized signature.  Should you wait until the time of the merger to report a certificate as lost, please note that a fee may be imposed.

Please do not delay in surrendering your certificate(s).  If you have any questions, please contact your registered representative or Inland Retail Investor Relations at (800) 348-9192.  Thank you for your prompt attention to this matter.  Your cooperation is greatly appreciated.

Sincerely,

INLAND RETAIL REAL ESTATE TRUST, INC.

Dione K. McConnell
Assistant Vice President
Director of Investor Relations

2901 Butterfield Road Oak Brook, IL 60523

CERTIFICATE NUMBER NUMBER OF SHARES

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 DDR, Inland Retail 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 Inland Retail, 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, DDR and Inland Retail 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 DDR and Inland Retail 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 Inland Retail 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 Inland Retail 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.

DDR and Inland Retail and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Inland Retail in connection with the merger. Information about DDR and its directors and executive officers, and their ownership of DDR 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 Inland Retail and its directors and executive officers, and their ownership of Inland Retail  securities, is set forth in the proxy statement for the 2006 Annual Meeting of Stockholders of Inland Retail, 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, Inland Retail does not intend to hold an annual stockholder meeting and instead will hold a special meeting to vote on the proposed merger.

EX-99.2

Exhibit 99.2

IMMEDIATE ACTION REQUIRED
INLAND RETAIL OUTSTANDING STOCK CERTIFICATES

December 2006

Dear Registered Representative:

As we previously announced, Inland Retail Real Estate Trust, Inc. (“Inland Retail”) and Developers Diversified Realty Corporation (“DDR”) entered into a definitive merger agreement on October 20, 2006.  Under the agreement, DDR will acquire the outstanding shares of Inland Retail for $14.00 per share, subject to certain conditions.  A proxy requesting shareholder vote on the merger transaction will be mailed shortly.

Subject to shareholder approval and other closing conditions, we anticipate the completion of this transaction to occur in the first quarter of 2007.  In order to assist in the closing process and minimize any delays in the potential final payment of payments to shareholders, we strongly urge shareholders to return their outstanding Inland Retail certificates so that they may be converted to “book-entry”.  A book-entry transaction signifies securities that are not represented by certificates of ownership, but are recorded directly on the company’s formal shareholder records.  This method eliminates the requirement of delivering a stock certificate at the time of any sale or transfer of ownership.

Returning certificate(s) does not impact a shareholder’s investment or distributions.  Shareholders will continue to own the same number of shares.  Their ownership will simply be converted to book-entry.   A confirmation will be sent to shareholders upon receipt of their certificate(s) and conversion to book-entry.  As the merger has not yet occurred, surrendering certificates at this time will not result in any payments.  The surrender of stock certificates will assist in making the final payout process more efficient and could prevent delays in payment.  The final payment will not occur until after the closing of this merger. 

We are sending the attached letter only to shareholders with outstanding certificates.  In the next couple of days, you will receive a hard copy of the letter with a report detailing your Inland Retail shareholders with outstanding certificates.  You do not need to attend to custodial accounts such as IRA and SEP accounts.  We will work directly with the custodians to retrieve such certificates.

If a shareholder has lost a certificate, an Affidavit of Lost Certificate must be completed. A notarized signature is required.  SHOULD SHAREHOLDERS WAIT UNTIL THE TIME OF THE MERGER TO REPORT A CERTIFICATE AS LOST, A FEE MAY BE IMPOSED.  Along with the letter, shareholders will receive an Affidavit of Lost Certificate and a postage-paid return envelope.

Please encourage your shareholders to promptly return their certificates and/or Affidavit of Lost Certificate to:

Investor Relations
Inland Retail Real Estate Trust, Inc.
2901 Butterfield Road
Oak Brook, IL 60523

Thank you for your prompt attention to this matter.  If you have any questions, please contact your Inland regional sales team at the telephone number listed below 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

Sincerely,

INLAND RETAIL REAL ESTATE TRUST, INC.

Dione K. McConnell
Assistant Vice President
Director of Investor Relations

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 DDR, Inland Retail 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 Inland Retail, 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, DDR and Inland Retail 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 DDR and Inland Retail 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 Inland Retail 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 Inland Retail 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.

DDR and Inland Retail and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Inland Retail in connection with the merger. Information about DDR and its directors and executive officers, and their ownership of DDR 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 Inland Retail and its directors and executive officers, and their ownership of Inland Retail securities, is set forth in the proxy statement for the 2006 Annual Meeting of Stockholders of Inland Retail, 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, Inland Retail 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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