PHILADELPHIA, July 28, 2015 /PRNewswire/ -- Pennsylvania
Real Estate Investment Trust (NYSE: PEI) announced today that it
has entered into an Agreement of Sale for three malls to an
institutional buyer. The assets under agreement of sale,
which are subject to customary closing conditions, are: Gadsden
Mall in Gadsden, AL, Wiregrass
Commons Mall in Dothan, AL and New
River Valley Mall in Christiansburg,
VA.
Sales per square foot for the assets under agreement of sale
follow:
- New River Valley Mall: $279
- Wiregrass Commons Mall: $297
- Gadsden Mall: $310
Excluding these properties, and Uniontown Mall, the sale of
which is expected imminently, sales per square foot as of
June 30, 2015 were $431.
The three assets are expected to be sold in one transaction for
$95.4 million. This would
constitute a total of 10 malls sold under the Company's disposition
program. Total funds raised through assets sales including
malls, power centers and various parcels would total over
$560 million.
In addition to these transactions, the Company is also
negotiating agreements of sale on two additional non-core malls,
which it hopes to execute within the next several weeks. Upon
completion of these transactions and assuming the sale of Palmer
Park Mall, the portfolio composition would be modified as
follows:
|
June 30,
2012
|
Post
Disposition
|
Sales
PSF
|
$378
|
> $450
|
Occupancy
Costs
|
12.2%
|
12.9%
|
Same Store Mall
Non-anchor occupancy
|
86.8%
|
91.7%
|
Percentage of
properties in Top 10 MSAs
|
30%
|
50%
|
# of Sears stores
in Portfolio
|
29
|
16
|
# of JC Penney
stores in Portfolio
|
30
|
20
|
CAM Recovery
Ratio
|
56.0%
|
65.8%
|
"Upon completion of these transactions, our evolution into a
high-quality mall REIT is nearly complete," said Joseph F. Coradino, CEO of PREIT. "Our methodic
and efficient disposition program, coupled with our disciplined
capital allocation strategy, has transformed our platform into one
which is expected to generate sales exceeding $450 per square foot resulting in an enhanced
relationship with retailers, a cultural shift within the Company
and opportunity to drive future growth and enhance shareholder
value."
About PREIT
PREIT is a real estate investment
trust specializing in the ownership and management of
differentiated retail shopping malls designed to fit the dynamic
communities they serve. Founded in 1960 as Pennsylvania Real Estate
Investment Trust, the Company owns and operates
approximately 28 million square feet of space in properties in
12 states in the eastern half of the
United States with concentration in the Mid-Atlantic region
and Greater Philadelphia. PREIT is headquartered in
Philadelphia, Pennsylvania, and is
publicly traded on the NYSE under the symbol PEI. Information
about the Company can be found at preit.com or on Twitter or
LinkedIn.
Forward Looking Statements
This press release, together with other
statements and information publicly disseminated by us, contain
certain "forward-looking statements" within the meaning of the
federal securities laws. Forward-looking statements relate to
expectations, beliefs, projections, future plans, strategies,
anticipated events, trends and other matters that are not
historical facts. These forward-looking statements reflect our
current views about future events, achievements or results and are
subject to risks, uncertainties and changes in circumstances that
might cause future events, achievements or results to differ
materially from those expressed or implied by the forward-looking
statements. In particular, our business might be materially and
adversely affected by uncertainties affecting real estate
businesses generally as well as the following, among other factors:
our substantial debt and stated value of preferred shares and our
high leverage ratio; constraining leverage, unencumbered debt
yield, interest and tangible net worth covenants under our 2013
Revolving Facility and our Term Loans; potential losses on
impairment of certain long-lived assets, such as real estate, or of
intangible assets, such as goodwill, including such losses that we
might be required to record in connection with any dispositions of
assets; changes in the retail industry, including consolidation and
store closings, particularly among anchor tenants; our ability to
sell properties that we seek to dispose of or our ability to obtain
estimated sale prices; the effects of online shopping and other
uses of technology on our retail tenants; risks relating to
development and redevelopment activities; current economic
conditions and the state of employment growth and consumer
confidence and spending, and the corresponding effects on tenant
business performance, prospects, solvency and leasing decisions and
on our cash flows, and the value and potential impairment of our
properties; our ability to refinance our existing indebtedness when
it matures, on favorable terms or at all; our ability to raise
capital, including through the issuance of equity or equity-related
securities if market conditions are favorable, through joint
ventures or other partnerships, through sales of properties or
interests in properties, or through other actions; our ability to
identify and execute on suitable acquisition opportunities and to
integrate acquired properties into our portfolio; our partnerships
and joint ventures with third parties to acquire or develop
properties; our short and long-term liquidity position; general
economic, financial and political conditions, including credit and
capital market conditions, changes in interest rates or
unemployment; our ability to maintain and increase property
occupancy, sales and rental rates, in light of the relatively high
number of leases that have expired or are expiring in the next two
years; acts of violence at malls, including our properties, or at
other similar spaces, and the potential effect on traffic and
sales; changes to our corporate management team and any resulting
modifications to our business strategies; increases in operating
costs that cannot be passed on to tenants; concentration of our
properties in the Mid-Atlantic region; changes in local market
conditions, such as the supply of or demand for retail space, or
other competitive factors; and potential dilution from any capital
raising transactions or other equity issuances. Additional
factors that might cause future events, achievements or results to
differ materially from those expressed or implied by our
forward-looking statements include those discussed in our Annual
Report on Form 10-K for the year ended December 31, 2014 in
the section entitled "Item 1A. Risk Factors." We do not intend to
update or revise any forward-looking statements to reflect new
information, future events or otherwise.
CONTACTS:
Robert McCadden
EVP & CFO
(215) 875-0735
Heather Crowell
VP, Corporate Communications and Investor Relations
(215) 454-1241
crowellh@preit.com
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SOURCE PREIT