☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

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☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No No☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. On November ~~3, 2021,~~4, 2022, ~~80,200,236~~5,369,460 shares of beneficial interest, par value $1.00 per share, of the Registrant were outstanding.

Except as the context otherwise requires, references in this Quarterly Report on Form 10-Q to “we,” “our,” “us,” the “Company” and “PREIT” refer to Pennsylvania Real Estate Investment Trust and its subsidiaries, including our operating partnership, PREIT Associates, L.P. References in this Quarterly Report on Form 10-Q to “PREIT Associates” or the “Operating Partnership” refer to PREIT Associates, L.P.

(1) The Company had net losses used to calculate earnings per share for the three and nine months ended September 30, ~~2021~~2022 and ~~2020.~~2021. Therefore, the effects of common share equivalents are excluded from the calculation of diluted loss per share for these periods because they would be antidilutive.

Our restricted cash consists of cash held in escrow by banks for real estate taxes and other purposes.

As we did not have any derivatives which were not designated in hedging relationships, our non-designated swaps had no impact on the financial statements for the three and nine months ended September 30, 2022. The impact of our non-designated swaps resulted in a loss of approximately $35 thousand and $129 thousand for the three and nine months ended September 30, 2021, respectively, which is recognized in interest expense, net in the consolidated statement of operations.

We have agreements with some of our derivative counterparties that contain a provision pursuant to which, if our entity that originated such derivative instruments defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then we could also be declared to be in default on our derivative obligations. As of September 30, ~~2021,~~2022, we were not in default on any of our derivative obligations.

We have an agreement with a derivative counterparty that incorporates the loan covenant provisions of our loan agreement with a lender affiliated with the derivative counterparty. Failure to comply with the loan covenant provisions would result in our being in default on any derivative instrument obligations covered by the agreement.

As of September 30, ~~2021,~~2022, the ~~fair value of~~Company did not have any derivatives in a net liability ~~position, which excludes accrued interest but includes any adjustment for nonperformance risk related to these agreements, was $13.1~~ million. If we had breached any of the default provisions in these agreements as of September 30, 2021, we might have been required to settle our obligations under the agreements at their termination value (including accrued interest) of $~~14.8~~ ~~million. We had not breached any of these provisions as of September 30, 2021.~~position.

7. LEASES

As Lessee

We have entered into ground leases for portions of the land at Springfield Town Center and Plymouth Meeting Mall. We have also entered into an office lease for our headquarters location, as well as vehicle, solar panel and equipment leases as a lessee. The initial terms of these agreements generally range from three to 40 years, with certain agreements containing extension options for up to an additional 60 years. Upon lease execution, the Company measures a liability for the present value of future lease payments over the noncancelable period of the lease and any renewal option period we are reasonably certain of exercising. Certain agreements require that we pay a portion of reimbursable expenses such as CAM, utilities, insurance and real estate taxes. These payments are not included in the calculation of the lease liability and are presented as variable lease costs.

Our leases do not provide a readily determinable implicit interest rate; therefore, we estimate our incremental borrowing rate to calculate the present value of remaining lease payments. In determining our incremental borrowing rate, we considered the lease term, market interest rates and estimates regarding our implied credit rating using market data with adjustments to determine an appropriate incremental borrowing rate.

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The following ~~tables present~~table presents additional information pertaining to the Company’s leases:


	Three Months Ended September 30,																Three Months Ended September 30,
	2021								2020								2022								2021
(in thousands of dollars)	Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total		Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total		Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total		Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total
Finance lease cost:
Amortization of right-of-use assets	$	202	$	—	$	—	$	202	$	209	$	—	$	—	$	209	$	200	$	—	$	—	$	200	$	202	$	—	$	—	$	202
Interest on lease liabilities		59		—		—		59		68		—		—		68		52		—		—		52		59		—		—		59
Operating lease costs		—		436		306		742		—		436		333		769		—		586		61		647		—		436		306		742
Variable lease costs		—		45		217		262		—		44		60		104		—		46		216		262		—		45		217		262
Total lease costs	$	261	$	481	$	523	$	1,265	$	277	$	480	$	393	$	1,150	$	252	$	632	$	277	$	1,161	$	261	$	481	$	523	$	1,265

	Nine Months Ended September 30,																Nine Months Ended September 30,
	2021								2020								2022								2021
(in thousands of dollars)	Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total		Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total		Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total		Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total
Finance lease cost:
Amortization of right-of-use assets	$	607	$	—	$	—	$	607	$	621	$	—	$	—	$	621	$	604	$	—	$	—	$	604	$	607	$	—	$	—	$	607
Interest on lease liabilities		184		—		—		184		215		—		—		215		183		—		—		183		184		—		—		184
Operating lease costs		—		1,309		944		2,253		—		1,309		1,008		2,317		—		1,757		197		1,954		—		1,309		944		2,253
Variable lease costs		—		135		387		522		—		129		142		271		—		137		639		776		—		135		387		522
Total lease costs	$	791	$	1,444	$	1,331	$	3,566	$	836	$	1,438	$	1,150	$	3,424	$	787	$	1,894	$	836	$	3,517	$	791	$	1,444	$	1,331	$	3,566

Other information related to leases as of and for the nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 are as follows:


(in thousands of dollars)	2021			2020			2022			2021
Cash paid for the amounts included in the measurement of lease liabilities
Operating cash flows used for finance leases	$	184		$	208		$	182		$	184
Operating cash flows used for operating leases	$	2,028		$	1,552		$	1,961		$	2,028
Financing cash flows used for finance leases	$	560		$	526		$	561		$	560
Weighted average remaining lease term-finance leases (months)		77			89			66			77
Weighted average remaining lease term-operating leases (months)		292			300			285			292
Weighted average discount rate-finance leases		4.33	%		4.35	%		4.37	%		4.33	%
Weighted average discount rate-operating leases		6.43	%		6.43	%		6.45	%		6.43	%

Future payments against lease liabilities, which are recorded in Accrued expenses and other liabilities, as of September 30, 2022 are as follows:


(in thousands of dollars)	Finance leases			Operating leases			Total
October 1 to December 31, 2022	$	247		$	645		$	892
2023		985			2,556			3,541
2024		950			2,471			3,421
2025		929			2,427			3,356
2026		926			2,429			3,355
Thereafter		1,147			48,658			49,805
Total undiscounted lease payments		5,184			59,186			64,370
Less imputed interest		(586	)		(30,236	)		(30,822	)
Total lease liabilities	$	4,598		$	28,950		$	33,548

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~~Future payments against lease liabilities as of September 30, 2021 are as follows:~~

(in thousands of dollars)

Finance leases

Operating leases

Total

October 1 to December 31, 2021

$
247

$
708

$
955

2022

988

2,605

3,593

2023

983

2,556

3,539

2024

949

2,471

3,420

2025

929

2,362

3,291

Thereafter

2,072

51,152

53,224

Total undiscounted lease payments

6,168

61,854

68,022

Less imputed interest

(799
)

(32,079
)

(32,878
)
Total lease liabilities

$
5,369

$
29,775

$
35,144

As Lessor

As of September 30, ~~2021,~~2022, the fixed contractual lease payments, including minimum rents and fixed CAM amounts, to be received over the next five years pursuant to the terms of noncancelable operating leases with initial terms greater than one year are included in the table below. The amounts presented assume that no leases are renewed and no renewal options are exercised. Additionally, the table does not include variable lease payments that may be received under certain leases for percentage rents or the reimbursement of operating costs, such as common area expenses, utilities, insurance and real estate taxes. These variable lease payments are recognized in the period when the applicable expenditures are incurred or, in the case of percentage rents, when the sales data is made available. Except for utility reimbursements, the fixed and variable lease payments are included with lease revenue in the consolidated statements of operations. Utility reimbursements are included within expense reimbursements as a separate line item in the consolidated statement of operations as their pattern of transfer is not aligned with the other payments.


(in thousands of dollars)			Lease Payment
October 1 to December 31, 2021	$	66,295
2022		246,661
October 1 to December 31, 2022			$	56,077
2023		220,588		199,618
2024		191,663		171,869
2025		157,493		136,809
2026				114,658
Thereafter		474,733		314,716
	$	1,357,433	$	993,747

8. COMMITMENTS AND CONTINGENCIES

Contractual Obligations

As of September 30, ~~2021,~~2022, we had ~~unaccrued~~ contractual and other commitments related to our capital improvement projects and development projects of $~~5.4~~5.2 million, including $~~2.6~~1.2 million of commitments related to the redevelopment of Fashion District Philadelphia, in the form of tenant allowances and contracts with general service providers and other professional service providers. For purposes of this disclosure, the contractual obligations and other commitments related to Fashion District Philadelphia are included at 100% of the obligation and not at our 50% ownership share.

Preferred Dividend Arrearages

We have aggregate authorized preferred shares of 25.0 million, where each series of authorized preferred shares is equal to the number of preferred shares outstanding of that series. Dividends on the Series B, Series C and Series D preferred shares are cumulative and therefore will continue to accrue at an annual rate of $1.8436 per share, $1.80 per share and $1.7188 per share, respectively. As of September 30, ~~2021,~~2022, the cumulative amount of unpaid dividends on our issued and outstanding preferred shares totaled $$6~~34.2~~1.6 million. This consisted of unpaid dividends per share on the Series B, Series C and Series D preferred shares of $~~2.30~~4.15 per share, $~~2.25~~4.05 per share and $~~2.15~~3.87 per share, respectively.

~~Property Damage from Natural and Other Disasters~~

~~During~~ On August 2, 2022, our preferred shareholders elected two independent trustees to our Board of Trustees in accordance with the ~~nine months ended September 30, 2021, we recorded net insurance recoveries of $0.7~~ ~~million as a result of recoveries received to repair damages that occurred in 2020.~~

During the nine months ended September 30, 2020, Cherry Hill Mall in Cherry Hill, New Jersey experienced a power outage due to the failure of an underground high voltage cable, which required the use of backup generator power. We recorded net costs of approximately $~~0.6~~ ~~million during the nine months ended September 30, 2020 as a result~~provisions of the ~~power outage,~~designating amendments of the Company's Amended and ~~received recoveries of $0.6~~ ~~million in April 2020.~~Restated Trust Agreement.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following analysis of our consolidated financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and the notes thereto included elsewhere in this report. The disclosures in this report are complementary to those made in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

OVERVIEW

PREIT, a Pennsylvania business trust founded in 1960 and one of the first equity real estate investment trusts (“REITs”) in the United States, has a primary investment focus on shopping malls located in the eastern half of the United States, primarily in the Mid-Atlantic region.

We ~~currently own~~owned interests in 2524 retail properties as of September 30, 2022, of which 2423 are operating properties and one is a development property. The 2423 operating properties include 20 shopping malls and ~~four~~three other retail properties, have a total of ~~19.7~~19.3 million square feet and are located in eight states. We and partnerships in which we hold an interest ~~own 15.2~~owned 14.8 million square feet at these properties (excluding space owned by anchors or third parties). In October 2022, we sold Cumberland Mall, a shopping mall located in Vineland, New Jersey.

~~There~~As of September 30, 2022, there are 17 operating retail properties in our portfolio that we consolidate for financial reporting purposes. These consolidated properties have a total of ~~14.8~~14.7 million square feet, of which we own ~~11.6~~11.5 million square feet. The ~~seven~~six operating retail properties that are owned by unconsolidated partnerships with third parties have a total of ~~4.9~~4.6 million square feet of which ~~3.6~~3.3 million square feet are owned by such partnerships. When we refer to “Same Store” properties, we are referring to properties that have been owned for the full periods presented and exclude properties acquired or disposed of, under redevelopment or designated as a non-core property during the periods presented. Core properties include all operating retail properties except for Exton Square Mall. Valley View Mall was previously designated as a non-core ~~property. As~~property as discussed further in ~~Notes~~Note 2 ~~and 4~~ to our consolidated financial statements, a foreclosure sale judgment with respect to Valley View Mall was ordered by the ~~court after~~court. We conveyed the property ~~operations~~pursuant to foreclosure proceedings for that were ~~assumed by a receiver on behalf of the lender under the mortgage loan secured by Valley View Mall and we no longer operate the property.~~completed in May 2022. “Core Malls” ~~also excludes Exton Square Mall and Valley View Mall as well as~~consists of core proprieties other than power ~~centers and Gloucester Premium Outlets.~~centers.

We have one property in our portfolio that is classified as under development; however, we do not currently have any activity occurring at this property.

Our primary business is owning, operating and redeveloping shopping malls, which we do primarily through our operating partnership, PREIT Associates, L.P. (“PREIT Associates” or the “Operating Partnership”). We believe our distinctive real estate is at the forefront of enabling communities to flourish through the built environment by providing opportunities to create vibrant multi-use destinations. In general, our malls include carefully curated retail and lifestyle offerings, including national and regional department stores, large format retailers and other anchors, mixed with destination dining and entertainment experiences. In recent years, we have increased the portion of our mall properties that are leased to non-traditional mall tenants, including life sciences, healthcare, supermarkets ~~fulfillment centers~~ and self-storage facilities.

We provide management, leasing and real estate development services through PREIT Services, LLC (“PREIT Services”), which generally develops and manages properties that we consolidate for financial reporting purposes, and PREIT-RUBIN, Inc. (“PRI”), which generally develops and manages properties that we do not consolidate for financial reporting purposes, including properties owned by partnerships in which we own an interest, and properties that are owned by third parties in which we do not have an interest. PRI is a taxable REIT subsidiary, as defined by federal tax laws, which means that it is able to offer additional services to tenants without jeopardizing our continuing qualification as a REIT under federal tax law.

Our revenue consists primarily of fixed rental income, additional rent in the form of expense reimbursements, and percentage rent (rent that is based on a percentage of our tenants’ sales or a percentage of sales in excess of thresholds that are specified in the leases) derived from our income producing properties. We also receive income from our real estate partnership investments and from the management and leasing services PRI provides.

The COVID-19 global pandemic that began in early 2020 has adversely impacted and continues to impact our business, financial condition, liquidity and operating results, as well as our tenants’ businesses. The prolonged spread of COVID-19 has also led to unprecedented global economic disruption and volatility in financial markets. Some of our tenants’ financial health and business viability have been adversely impacted and their creditworthiness has deteriorated. We anticipate that our future business, financial condition, liquidity and results of operations, including throughout the remainder of 2021 and potentially in future periods, will continue to be materially impacted by the COVID-19 pandemic. Significant uncertainty remains with regard to the duration and impact of the COVID-19 pandemic and its resulting impact on the economy and day-to-day life and business operations. In particular, the duration and impact of COVID-19 will depend on a variety of factors as conditions continue to fluctuate around the country, with vaccination rates, spikes in infections and restrictions on activities and recommended protocols continuing to vary and evolve. Given these factors, so long as the lingering effects of COVID-19 remain, the virus may continue to impact us or our tenants, or our ability or the ability of our tenants to resume more normal operations.

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COVID-19 closures of our properties began on March 12, 2020 and continued through the reopening of our last property on July 3, 2020. These closures impacted most of our properties for the full second quarter of 2020 with traffic and tenant reopenings increasing through the third quarter of 2021. New or renewed restrictions in the jurisdictions where our properties are located may be implemented in response to evolving conditions and overall uncertainty about the timing and widespread availability, acceptance, and efficacy of vaccines and booster requirements, including in response to new, and potentially more aggressive, strains and variants. In some instances, certain markets have independently implemented new restrictions as a result of break-through cases and the increased spread of such new strains and variants, including the Delta variant. As such, as the pandemic continues and potentially intensifies or we experience resurgences, it is possible that additional closures will occur or limitations on operations will be imposed.

All of our properties have remained open since the third quarter of 2020 and are employing safety and sanitation measures designed to address the risks posed by COVID-19, with some of our tenants still operating at reduced capacity. Following the pandemic-related closures, approximately 4% of our tenants failed to re-open (inclusive of tenants that filed for bankruptcy protection in the aftermath). As a result of the challenging environment created by COVID-19, primarily beginning in the second quarter of 2020, many of our tenants have sought rent relief and deferral and several have failed to pay rent due. Although we continue to make progress in collecting COVID-19-period rents, we have also initiated legal proceedings against certain tenants for failure to pay. As of September 30, 2021, we had cash receipts of 92% of billed third quarter 2021 rents, an increase from cash receipts of 88% and 81% of billed rents as of June 30, 2021 and March 31, 2021, respectively. Including collections of other months’ rents, we collected 119% of our billed third quarter 2021 rents. We believe that our rent collections are probable, but expect that collections will continue to be below our tenants’ rent obligations as long as the effects of COVID-19 affect the financial strength of our tenants. The significance of COVID-19 on our business, however, will continue to depend on, among other things, the extent and duration of the pandemic, the severity of the disease and the number of people infected with the virus, and certain variants thereof, vaccination rates in regions in which our properties are located, further effects on the economy of the pandemic and of the measures taken by governmental authorities and other third parties restricting daily activities and the length of time that such measures remain in place or are renewed, implementation of governmental programs to assist businesses and consumers impacted by the COVID-19 pandemic, and the effect of any changes to current restrictions or recommended protocols, all of which could vary by geographic region in which our properties are located. We continue to experience uncertainty as to whether government authorities will maintain the relaxation of current restrictions on businesses in the regions in which our properties are located, if these restrictions have been relaxed at all, and whether government authorities will issue recommendations or impose requirements on landlords like us to further enhance health and safety protocols, or whether we will voluntarily adopt any of these requirements ourselves, which could result in increased operating costs and demands on our property management teams to ensure compliance with any of these requirements.

Net loss for the three months ended September 30, ~~2021~~2022, was ~~$38.4~~$71.3 million compared to net loss of ~~$29.6~~$38.4 million for the three months ended September 30, ~~2020. This $8.8~~2021. The $ 32.9 million increase in net loss was primarily due to: (a) an increase in ~~general and administrative expenses~~impairment of ~~$4.9~~assets of $42.1 million; (b) an increase in interest expense of $12.2 million driven by higher overall outstanding debt balances and higher interest rates in connection with our debt modifications in 2020; and (c) a decrease in gain on derecognition of property of $7.0 million. These decreases were$4.1 million; partially offset by, (c) an increase in real estate revenue of ~~$7.8 million,~~$1.1 million; (d) an increase in gain on sales of interest in real estate of $7.7 million; (e) a decrease in ~~equity in loss of partnerships of $1.8 million,~~general and ~~a decrease in depreciation and amortization~~administrative expenses of ~~$5.3~~$3.5 million: and, (f) an increase in gain on sales of non-operating real estate $1.8 million.

Net loss for the nine months ended September 30, ~~2021~~2022, was ~~$107.8~~$115.3 million compared to net loss of ~~$66.2~~$107.8 million for the nine months ended September 30, ~~2020. This $41.6~~2021. The $ 7.5 million increase in net loss was primarily due to: (a) an increase in ~~general and administrative expenses~~the impairment of ~~$9.0~~assets of $40.7 million; (b) an increase of $5.3 million in interest ~~expense of $40.8 million driven~~expense; offset by, ~~higher overall outstanding debt balances and higher interest rates in connection with our debt modifications in 2020; and~~ (c) ~~a decrease in gain on derecognition of property of $7.0 million. These decreases were partially offset by~~ an increase in real estate revenue of ~~$16.4~~$4.2 million resulting from the recovering economic conditions following the impact of COVID-19 on our tenants; (d) an increase in gain on sales of interest in real estate of $10.4 million; (e) an increase on gain on sales of equity method investment of $9.0 million; (f) an increase in gain on sales of non-operating real estate of $10.5 million; and, (g) an increase due to gain on sale of preferred equity interest of $3.7 million.

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We evaluate operating results and allocate resources on a property-by-property basis, and do not distinguish or evaluate our consolidated operations on a geographic basis. Due to the nature of our operating properties, which involve retail shopping, dining and entertainment, we have concluded that our individual properties have similar economic characteristics and meet all other aggregation criteria. Accordingly, we have aggregated our individual properties into one reportable segment. In addition, no single tenant accounts for 10% or more of our consolidated revenue, and none of our properties are located outside the United States.

Current Economic and Industry Conditions and Impact of COVID-19

Conditions in the economy have caused fluctuations and variations in business and consumer confidence, retail sales, and consumer spending on retail goods, destination dining and entertainment. In particular, current conditions in the economy have caused fluctuations in unemployment rates, and together with supply chain challenges, the current inflationary environment, have impacted consumer confidence and spending. The economic factors have had corresponding effects on tenant business performance, prospects, solvency and leasing decisions. Further, traditional mall tenants, including department store anchors and smaller format retail tenants face significant challenges resulting from changing consumer expectations, the convenience of e-commerce shopping, ~~competition from fast fashion retailers,~~ the expansion of outlet centers, and declining mall traffic, among other factors. In recent years, there has been an increased level of tenant bankruptcies and store closings by tenants who have been significantly impacted by these factors. We anticipate that our future business, financial condition, liquidity and results of operations, including for the reminder of 2022 and potentially in future periods, will continue to be materially impacted by these conditions. All of these factors have been exacerbated by the ongoing impact of the COVID-19 pandemic, ~~beginning~~the ongoing impact of which remains highly uncertain, and more recently by inflationary pressures and substantial increase in ~~early 2020 and continuing in 2021.~~

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interest rates.

The table below sets forth information related to our tenants in bankruptcy for our consolidated and unconsolidated properties (excluding tenants in bankruptcy at sold properties):


	Pre-bankruptcy								Units Closed						Pre-bankruptcy								Units Closed
Year	Number of Tenants (1)		Number of locations impacted		GLA(2)		PREIT’s Share of Annualized Gross Rent(3) (in thousands)		Number of locations closed		GLA(2)		PREIT’s Share of Annualized Gross Rent(3) (in thousands)		Number of Tenants (1)		Number of locations impacted		GLA(2)		PREIT’s Share of Annualized Gross Rent(3) (in thousands)		Number of locations closed		GLA(2)		PREIT’s Share of Annualized Gross Rent(3) (in thousands)
2021 (through September 30, 2021)
2022 (through September 30, 2022)
Consolidated properties		5		10		331,314	$	1,589		4		17,759	$	370		2		5		210,235	$	4,990		1		5,100	$	202
Unconsolidated properties		1		1		4,046		57		1		4,046		57		—		—		—		—		—		—		—
Total		5		11		335,360	$	1,646		5		21,805	$	427		2		5		210,235	$	4,990		1		5,100	$	202
2020 (Full Year)
2021 (Full Year)
Consolidated properties		17		91		2,068,153	$	18,604		39		389,696	$	6,771		5		10		331,314	$	1,589		5		18,344	$	380
Unconsolidated properties		18		31		468,164		3,747		13		162,378		2,093		1		1		4,046		57		1		4,046		57
Total		23		122		2,536,317	$	22,351		52		552,074	$	8,864		5		11		335,360	$	1,646		6		22,390	$	437

(1)Total represents unique tenants and includes both tenant-owned and landlord-owned stores. As a result, amounts may not total.

(2)Gross Leasable Area (“GLA”) in square feet.

(3)Includes our share of tenant gross rent from partnership properties based on PREIT’s ownership percentage in the respective equity method investments as of September 30, ~~2021.~~2022.

Anchor Replacements

In recent years, through property dispositions, proactive store recaptures, lease terminations and other activities, we have made efforts to reduce our risks associated with certain department store concentrations. In

During 2021, we opened Power Warehouse and during the first quarter of 2022, we opened HomeGoods at Cumberland Mall in Vineland, New Jersey. Construction was completed in the first quarter of 2020 ~~Dick’s Sporting Goods at Valley Mall opened. At Plymouth Meeting Mall, we opened Michael’s~~giving way to the opening of Burlington in ~~2020 and Shake Shack and Ideal Image in 2021. In the second quarter~~place of ~~2021, we opened Power Warehouse at Cumberland Mall. We also opened an Aldi~~a former Sears at Dartmouth Mall in Dartmouth, Massachusetts. Aldi also opened in the ~~third~~space adjacent to Burlington in September 2021. We expect to continue to move forward with several outparcels at Dartmouth Mall resulting from the Sears recapture and to work with large format prospects for the additional space adjacent to Burlington.

In January 2020, the Lord & Taylor store at Moorestown Mall in Moorestown, New Jersey closed and we executed a lease with Turn 7, which opened in the fourth quarter of 2021. Sears closed its stores at Moorestown Mall in Moorestown, New Jersey and Jacksonville Mall in Jacksonville, North Carolina in April 2020. Sears continues to be financially obligated pursuant to the lease at the Jacksonville Mall location. In July 2021, the former Sears site at Moorestown Mall was sold to Cooper University Health Care. In May 2020, J.C. Penney filed for bankruptcy and announced the closure of its stores at The Mall at Prince George's in Hyattsville, Maryland, and Magnolia Mall in Florence, South Carolina. The Magnolia Mall location has been leased to Tilt Studio, an entertainment concept that opened in October 2021.

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In response to anchor store closings and other trends in the retail space, we have been changing the mix of tenants at our properties. ~~We believe our distinctive real estate is at the forefront of enabling communities to flourish through the built environment by providing opportunities to create vibrant multi-use destinations.~~ In general, our malls include ~~carefully curated retail and lifestyle offerings, including~~ national and regional department stores, large format retailers and other anchors, mixed with destination dining and entertainment ~~experiences. In~~experiences, however, in recent years, we have been reducing the percentage of traditional mall tenants and increasing the share of space dedicated to non-traditional mall ~~tenants, including life sciences, healthcare, supermarkets, fulfillment centers and self-storage facilities.~~tenants. Approximately ~~30%~~29% of our mall space is committed to non-traditional tenants offering services such as dining and entertainment, health and wellness, off-price retail and fast fashion. ~~Some of these changes may result in the redevelopment of all or a portion of our properties.~~ See “— Capital Improvements, Redevelopment and Development Projects.”

To fund the capital necessary to replace anchors and to maintain a reasonable level of leverage, we expect to use a variety of means available to us, subject to and in accordance with the terms of our Credit Agreements. These steps might include (i) making additional borrowings under our Credit Agreements (assuming the extension of the 2022 maturity date, as well as availability and continued compliance with the financial covenants thereunder), (ii) obtaining construction loans on specific projects, (iii) selling properties or interests in properties with values in excess of their mortgage loans (if applicable) and applying the excess proceeds to fund capital expenditures or for debt reduction, or (iv) obtaining capital from joint ventures or other partnerships or arrangements involving our contribution of assets with institutional investors, private equity investors or other REITs.

Capital Improvements, Redevelopment and Development Projects

We might engage in various types of capital improvement projects at our operating properties. Such projects vary in cost and complexity and can include building out new or existing space for individual tenants, upgrading common areas or exterior areas such as parking lots, or redeveloping the entire property, among other projects. Project costs are accumulated in “Construction in progress” on our consolidated balance sheet until the asset is placed into service and amounted to ~~$44.7~~$41.2 million as of September 30, ~~2021.~~2022.

As of September 30, ~~2021,~~2022, we had ~~unaccrued~~ contractual and other commitments related to our capital improvement projects and development projects at our consolidated and unconsolidated properties of ~~$5.4~~$5.2 million, including ~~$2.6~~$1.2 million of commitments related to the redevelopment of Fashion District Philadelphia, in the form of ~~tenant allowances and~~ contracts with general service providers and other professional service providers.

In 2014, we entered into a 50/50 joint venture with The Macerich Company (“Macerich”) to redevelop Fashion District Philadelphia. As we redevelop Fashion District Philadelphia, operating results in the short term, as measured by sales, occupancy, real estate revenue, property operating expenses, Net Operating Income (“NOI”) and depreciation, will continue to be affected until the newly constructed space is completed, leased and occupied.

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In January 2018, wethe Company and Macerich entered into a $250.0 million term loan (as amended in July 2019 to increase the total maximum potential borrowings to $350.0 million) to fund the ongoing redevelopment of Fashion District Philadelphia and to repay capital contributions to the venture previously made by the partners. A total of $51.0 million was drawn during the third quarter of 2019 and we received aggregate distributions of $25.0 million as our share of the draws. On December 10, 2020, PM Gallery LP, together with certain other subsidiaries owned indirectly by us and Macerich (including the fee and leasehold owners of the properties that are part of the Fashion District Philadelphia project), entered into an Amended and Restated Term Loan Agreement (the “FDP Loan Agreement”). In connection with the execution of the FDP Loan Agreement, a $100.0 million principal payment was made (and funded indirectly by Macerich, the “Partnership Loan”) to pay down the existing loan, reducing the outstanding principal under the FDP Loan Agreement from $301.0 million to $201.0 million. The joint venture must repay the Partnership Loan plus 15% accrued interest to Macerich, in its capacity as the lender, prior to the resumption of 50/50 cash distributions to us and Macerich. In connection with the execution of the FDP Loan Agreement, the governing structure of PM Gallery LP was modified such that, effective as of January 1, 2021, Macerich is responsible for the entity’s operations and, subject to limited exceptions, controls major decisions. The Company considered the changes to the governing structure of PM Gallery LP and determined the investment qualifies as a variable interest entity and would continue to be accounted for under the equity method of accounting.

We also own ~~one~~an interest in a development property, but we do not expect to make any significant investment at this property in the short term.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Critical Accounting Policies are those that require the application of management’s most difficult, subjective, or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that might change in subsequent periods. In preparing the unaudited consolidated financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. In preparing the unaudited consolidated financial statements, management has utilized available information, including our past history, industry standards and the current economic environment, among other factors, in forming its estimates and judgments, giving due consideration to materiality. Management has also considered events and changes in property, market and economic conditions, estimated future cash flows from property operations and the risk of loss on specific accounts or amounts in determining its estimates and judgments. Actual results may differ from these estimates. In addition, other companies may utilize different estimates, which may affect comparability of our results of operations to those of companies in a similar business. The estimates and assumptions made by management in applying critical accounting policies have not changed materially during ~~2021~~2022 and ~~2020,~~2021, except as otherwise noted, and none of these estimates or assumptions have proven to be materially incorrect or resulted in our recording any significant adjustments relating to prior periods. We will continue to monitor the key factors underlying our estimates and judgments, but no change is currently expected.

For additional information regarding our Critical Accounting Policies, see “Critical Accounting Policies and Estimates” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Asset Impairment

Real estate investments and related intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the property might not be ~~recoverable.~~recoverable, which is referred to as a "triggering event.". A property to be held and used is considered impaired only if management’s estimate of the aggregate future cash flows, less estimated capital expenditures, to be generated by the property, undiscounted and without interest charges, are less than the carrying value of the property. This estimate takes into consideration factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors.

If there is a triggering event in relation to a property to be held and used, we will estimate the aggregate future cash flows, less estimated capital expenditures, to be generated by the property, undiscounted and without interest charges. In addition, this estimate may consider a probability weighted cash flow estimation approach when alternative courses of action to recover the carrying amount of a long-lived asset are under consideration or when a range of possible values is estimated.

The determination of undiscounted cash flows requires significant estimates by management, including the expected course of action at the balance sheet date that would lead to such cash flows. Subsequent changes in estimated undiscounted cash flows arising from changes in the

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anticipated action to be taken with respect to the property could impact the determination of whether an impairment exists and whether the effects could materially affect our net income. To the extent estimated undiscounted cash flows are less than the carrying value of the property, the loss will be measured as the excess of the carrying amount of the property over the estimated fair value of the property. Our intent is to hold and operate our properties long-term, which reduces the likelihood that our carrying value is not recoverable. A shortened holding period would increase the likelihood that the carrying value is not recoverable.

Assessment of our ability to recover certain lease related costs must be made when we have a reason to believe that the tenant might not be able to perform under the terms of the lease as originally expected. This requires us to make estimates as to the recoverability of such costs.

An other-than-temporary impairment of an investment in an unconsolidated joint venture is recognized when the carrying value of the investment is not considered recoverable based on evaluation of the severity and duration of the decline in value. To the extent impairment has occurred, the excess carrying value of the asset over its estimated fair value is ~~charged~~recorded as reduction to income.

During the three and nine months ended September 30, 2022, as a result of reduced holding period assumptions we recorded impairment losses of $37.5 million and $4.8 million in connection with Plymouth Meeting Mall and Cumberland Mall, respectively. During the three months ended September 30, 2021, we recorded an impairment loss of $0.3 million in connection with the purchase and sale agreement of Monroe Marketplace, in which there was an excess of carrying value over the sale price. During the nine months ended September 30, 2021, we recorded an impairment loss of $1.3 million in connection with our classification of Valley View Center as held for sale as of June 30, 2021 and eventual sale in August 2021 (see Note 2 to our unaudited consolidated financial statements for details). Valley View Center is a retail property adjacent to Valley View Mall that we previously owned. The impairment loss is included in impairment of assets in the consolidated statement of operations for the nine months ended September 30, 2021.

During the three months ended September 30, 2021, we entered into a purchase and sale agreement to sell a parcel of land at Monroe Marketplace. In connection with this transaction, we recorded an impairment loss of $0.3 million due to excess carrying value over the sale price. The asset was classified as held for sale as of September 30, 2021 as we concluded that we will likely complete the sale transaction within one year. These assets are included in assets held for sale in the consolidated balance sheet and the impairment loss is included in impairment of assets in the consolidated statement of operationssale. Impairment losses for the three and nine months ended September 30, ~~2021.~~

2022 and 2021 are included in the consolidated statement of operations.

Revenue and Receivables

We derive over 95% of our revenue from tenant rent and other tenant-related activities. Tenant rent includes base rent, percentage rent, expense reimbursements (such as reimbursements of costs of common area maintenance (“CAM”), real estate taxes and utilities), and the amortization of above-market and below-market lease intangibles.

We accrue revenue under leases, provided that it is probable that we will collect substantially all of the lease revenue that is due under the terms of the lease both at inception and on an ongoing basis. When collectability of lease revenue is not probable, leases are prospectively accounted for on a cash basis and any difference between the revenue that has been accrued and the cash collected from the tenant over the life of the lease is recognized as a current period adjustment to lease revenue. We review the collectability of our tenant receivables related to tenant rent

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including base rent, straight-line rent, expense reimbursements and other revenue or income by specifically analyzing billed and unbilled revenues, including straight-line rent receivable, and considering historical collection issues, tenant creditworthiness and current economic and industry trends. Our revenue recognition and receivables collectability analysis places particular emphasis on past-due accounts and considers the nature and age of the receivables, the payment history and financial condition of the payor, the basis for any disputes or negotiations with the payor, and other information that could affect collectability.

We record base rent on a straight-line basis, which means that the monthly base rent revenue according to the terms of our leases with our tenants is adjusted so that an average monthly rent is recorded for each tenant over the term of its lease. When tenants vacate prior to the end of their lease, we accelerate amortization of any related unamortized straight-line rent balances, and unamortized above-market and below-market intangible balances are amortized as a decrease or increase to real estate revenue, respectively.

Percentage rent represents rental revenue that the tenant pays based on a percentage of its sales, either as a percentage of its total sales or as a percentage of sales over a certain threshold. In the latter case, we do not record percentage rent until the sales threshold has been reached.

Revenue for rent received from tenants prior to their due dates is deferred until the period to which the rent applies.

In addition to base rent, certain lease agreements contain provisions that require tenants to reimburse a fixed or pro rata share of certain CAM costs, real estate taxes and utilities. Tenants generally make monthly expense reimbursement payments based on a budgeted amount determined at the beginning of the year. ~~We recognize fixed CAM revenue prospectively on a straight-line basis.~~

Certain lease agreements contain co-tenancy clauses that can change the amount of rent or the type of rent that tenants are required to pay, or, in some cases, can allow the tenant to terminate their lease, in the event that certain events take place, such as a decline in property occupancy levels below certain defined levels or the vacating of an anchor store. Co-tenancy clauses do not generally have any retroactive effect when they are triggered. The effect of co-tenancy clauses is applied on a prospective basis to recognize the new rent that is in effect.

Payments made to tenants as inducements to enter into a lease are treated as deferred costs that are amortized as a reduction of rental revenue over the term of the related lease.

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Lease termination fee revenue is recognized in the period when a termination agreement is signed, collectability is assured, and the tenant has vacated the space. In the event that a tenant is in bankruptcy when the termination agreement is signed, termination fee income is deferred and recognized when it is received.

Utility reimbursement revenue is presented separate from rental revenue based on actual usage as the pattern of transfer is not aligned with the use of the property.

We also generate revenue by providing management services to third parties, including property management, brokerage, leasing and development. Management fees generally are a percentage of managed property revenue or cash receipts. Leasing fees are earned upon the consummation of new leases. Development fees are earned over the time period of the development activity and are recognized on the percentage of completion method. These activities are collectively included in “Other income” in the consolidated statements of operations.

Revenue from the reimbursement of marketing expenses is generated through tenant leases that require tenants to reimburse a defined amount of property marketing expenses. Our contractual performance obligations are fulfilled as marketing expenditures are made. Tenant payments are received monthly as required by the respective lease terms. We defer income recognition if the reimbursements exceed the aggregate marketing expenditures made through that date. Deferred marketing reimbursement revenue is recorded in tenants’ deposits and deferred rent on the consolidated balance sheet. The marketing reimbursements are recognized as ~~revenue~~"Other real estate revenue" in the consolidated statements of operations at the time that the marketing expenditures occur.

Property management revenue from management and development activities is generated through contracts with third party owners of real estate properties or with certain of our joint ventures, and is recorded in other income in the consolidated statements of operations. In the case of management fees, our performance obligations are fulfilled over time as the management services are performed and the associated revenues are recognized on a monthly basis when the customer is billed. In the case of development fees, our performance obligations are fulfilled over time as we perform certain stipulated development activities as set forth in the respective development agreements and the associated revenues are recognized on a monthly basis when the customer is billed.

New Accounting Developments

See Note 1 to our unaudited consolidated financial statements for descriptions of new accounting developments.

~~OFF BALANCE SHEET ARRANGEMENTS~~

We have no material off-balance sheet items other than (i) the partnerships described in Note 3 to our unaudited consolidated financial statements and in the “Overview” section above, (ii) unaccrued contractual commitments related to our capital improvement and development projects at our consolidated and unconsolidated properties, and (iii) specifically with respect to our joint venture formed with Macerich, our operating partnership, PREIT Associates, has jointly and severally guaranteed its 50% share of the FDP Term Loan (see Note 3 to our unaudited consolidated financial statements), which currently has $194.6 million outstanding (our share of which is $97.3 million). If our Fashion District Philadelphia joint venture were unable to satisfy its obligations under the FDP Term Loan and we were required to satisfy its payment obligations under the guarantee, this could have a material impact on our liquidity and available capital resources. The FDP Term Loan balance will become due in 2023.

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RESULTS OF OPERATIONS

Overview

Net loss for the nine months ended September 30, ~~2021~~2022, was ~~$107.8~~$115.3 million compared to net loss of ~~$66.2~~$107.8 million for the nine months ended September 30, ~~2020. This $41.6~~2021. The $7.5 million increase in net loss was primarily due to: (a) an increase in ~~general and administrative expenses~~the impairment of ~~$9.0~~assets of $40.7 million; (b) an increase of $5.3 million in interest expense of $40.8 million driven by higher overall outstanding debt balances and higher interest rates in connection with our debt modifications in 2020; and (c) a decrease in gain on derecognition of property of $7.0 million. These decreases wereexpense; partially offset by, (c) an increase in real estate revenue of ~~$16.4~~$4.2 million resulting from the recovering economic conditions following the impact of COVID-19 on our tenants; (d) an increase in gain on sales of interest in real estate of $10.4 million; (e) an increase on gain on sales of equity method investment of $9.0 million; (f) an increase in gain on sales of non-operating real estate of $10.5 million; and, (g) an increase due to gain on sale of preferred equity interest of $3.7 million.

Occupancy

The table below sets forth certain occupancy statistics for our properties as of September 30, ~~2021~~2022 and ~~2020:~~2021:


	Occupancy(1) at September 30,																		Occupancy(1) at September 30,
	Consolidated Properties						Unconsolidated Properties						Combined(2)						Consolidated Properties						Unconsolidated Properties						Combined(2)
	2021			2020			2021			2020			2021			2020			2022			2021			2022			2021			2022			2021
Retail portfolio weighted average: (3)
Retail portfolio weighted average (3):
Total excluding anchors		88.3	%		88.1	%		83.0	%		85.0	%		86.7	%		87.2	%		91.3	%		88.3	%		88.6	%		83.0	%		90.6	%		86.7	%
Total including anchors		89.6	%		92.3	%		86.2	%		87.9	%		88.8	%		91.3	%		92.8	%		89.6	%		91.0	%		86.2	%		92.4	%		88.8	%
Core Malls weighted average: (4)
Total excluding anchors		90.4	%		90.0	%		84.0	%		81.9	%		89.7	%		89.1	%		93.6	%		90.4	%		81.5	%		78.9	%		91.4	%		88.3	%
Total including anchors		90.5	%		93.8	%		89.0	%		87.6	%		90.3	%		93.2	%		95.9	%		90.5	%		86.5	%		84.6	%		94.4	%		89.6	%

(1) Occupancy for all periods presented includes all tenants irrespective of the term of their agreement.

(2) Combined occupancy is calculated by using occupied gross leasable area (“GLA”) for consolidated and unconsolidated properties and dividing by total GLA for consolidated and unconsolidated properties.

(3) Retail portfolio includes all retail properties including Fashion District Philadelphia.

(4) Core Malls excludes Exton Square Mall and power ~~centers and Gloucester Premium Outlets.~~centers.

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Leasing Activity

The table below sets forth summary leasing activity information with respect to our consolidated and unconsolidated properties for the three months ended September 30, ~~2021:~~2022:


	Number		GLA		Term		Initial Rent per square foot ("psf")		Previous Rent psf		Initial Gross Rent Renewal Spread(1)						Average Rent Renewal Spread(2)			Annualized Tenant Improvements psf(3)		Number		GLA		Term		Initial Rent per square foot ("psf")		Previous Rent psf		Initial Gross Rent Renewal Spread(1)						Average Rent Renewal Spread(2)			Annualized Tenant Improvements psf(3)
											$			%			%															$			%			%
Non Anchor
New Leases
Under 10k square feet ("sf")		33		59,939		4.6	$	47.45	N/A		N/A						N/A				7.06		31		95,022		6.3	$	42.99	N/A		N/A			N/A			N/A			$	7.11
Over 10k sf		3		38,292		3.8		6.61	N/A		N/A			N/A			N/A				0.07		2		33,657		10.7		13.96	N/A		N/A			N/A			N/A				2.96
Total New Leases		36		98,231		4.3		31.53	N/A		N/A			N/A			N/A				4.63		33		128,679		7.4	$	35.40	N/A		N/A			N/A			N/A			$	5.55

Renewal Leases
Under 10k sf		14		42,711		3.7		43.81		45.00		(1.19	)		(2.6	%)		(2.3	%)		-		31		66,913		3.1	$	51.62	$	49.98	$	1.64			3.3	%		6.8	%	$	-
Over 10k sf		-		-		-		-		-		-			0.0	%		0.0	%		-		5		95,277		4.4		24.59		22.92		1.67			7.3	%		11.3	%		-
Total Fixed Rent		14		42,711		3.7		43.81		45.00		(1.19	)		(2.6	%)		(2.3	%)		-		36		162,190		3.9	$	35.75	$	34.09	$	1.66			4.9	%		8.7	%	$	-
Total Percentage in Lieu		6		18,403		2.4		24.56		23.18		1.38			6.0	%		0.0	%		-		20		84,339		1.9		31.47		40.54		(9.07	)		(22.4	%)	N/A				-
Total Renewal Leases		20		61,114		3.3		38.01		38.43		(0.42	)		(1.1	%)	N/A				-		56		246,529		3.2	$	34.28	$	36.29	$	(2.01	)		(5.5	%)	N/A			$	-
Total Non Anchor (4)		56		159,345		3.9		34.01															89		375,208		4.7	$	34.66

Anchor
New Leases		2		224,594		5.7		4.50	N/A		N/A			N/A			N/A				1.45		-		-		-	$	-	$	-	$	-		N/A			N/A			$	-
Renewal Leases		1		40,332		2.0		23.12		25.00		(1.88	)		(7.5	%)	N/A				-		1		99,029		5.0		1.20		3.96		(2.76	)		(69.7	%)	N/A				-
Total		3		264,926		4.5	$	7.33															1		99,029		5.0	$	1.20

(1) Initial gross rent renewal spread is computed by comparing the initial rent per square foot in the new lease to the final rent per square foot amount in the expiring lease. For purposes of this computation, the rent amount includes minimum rent, common area maintenance (“CAM”) charges, estimated real estate tax reimbursements and marketing charges, but excludes percentage rent. In certain cases, a lower rent amount may be payable for a period of time until specified conditions in the lease are satisfied.

(2) Average rent renewal spread is computed by comparing the average rent per square foot over the new lease term to the final rent per square foot amount in the expiring lease. For purposes of this computation, the rent amount includes minimum rent and fixed CAM charges, but excludes pro rata CAM charges, estimated real estate tax reimbursements, marketing charges and percentage rent.

(3) These leasing costs are presented as annualized amounts per square foot and are spread uniformly over the initial lease term.

(4)Includes 68 leases and ~~11,084~~36,076 square feet of GLA with respect to our unconsolidated partnerships. We own a ~~25%~~40% to 50% interest in each of our unconsolidated properties and do not control such properties. Our percentage ownership is not necessarily indicative of the legal and economic implications of our ownership interest. See “— Non-GAAP Supplemental Financial Measures” for further details on our ownership interests in our unconsolidated properties.

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The table below sets forth summary leasing activity information with respect to our consolidated and unconsolidated properties for the nine months ended September 30, ~~2021:~~2022:


	Number		GLA		Term		Initial Rent per square foot ("psf")		Previous Rent psf		Initial Gross Rent Renewal Spread(1)						Average Rent Renewal Spread(2)			Annualized Tenant Improvements psf(3)		Number		GLA		Term		Initial Rent per square foot ("psf")		Previous Rent psf		Initial Gross Rent Renewal Spread(1)						Average Rent Renewal Spread(2)			Annualized Tenant Improvements psf(3)
											$			%			%															$			%			%
Non Anchor
New Leases
Under 10k square feet ("sf")		114		256,188		4.9	$	42.83	N/A		N/A			N/A			N/A			$	4.95		115		302,981		5.6	$	37.24	N/A			-			-			-		$	6.29
Over 10k sf		8		225,747		17.5		8.85	N/A		N/A			N/A			N/A				1.09		6		108,353		11.2		16.04	N/A		N/A			N/A			N/A				6.56
Total New Leases		122		481,935		10.8	$	26.91	N/A		N/A				0.0	%		0.0	%	$	2.02		121		411,334		7.0	$	31.66	N/A		N/A			N/A			N/A			$	6.40

Renewal Leases
Under 10k sf		120		239,438		3.7		59.82		65.11		(5.28	)		(8.1	%)		(5.3	%)		-		94		218,234		3.6	$	58.40	$	58.23	$	0.17			0.3	%		5.2	%	$	0.69
Over 10k sf		8		302,597		4.7		21.23		19.68		1.55			7.9	%		10.1	%		-		11		252,443		3.6		20.38		20.25		0.13			0.6	%		2.0	%		1.10
Total Fixed Rent		128		542,035		4.3		38.28		39.75		(1.47	)		(3.7	%)		(1.1	%)		-		105		470,677		3.6	$	38.01	$	37.86	$	0.15			0.4	%		4.2	%	$	0.91
Total Percentage in Lieu		59		260,956		1.6		23.48		25.79		(2.31	)		(8.9	%)					-		55		179,999		2.2		31.73		36.10		(4.37	)		(12.1	%)					0.45
Total Renewal Leases(4)		187		802,991		3.4		33.47		35.21		(1.74	)		(4.9	%)					-		160		650,676		3.2	$	36.27	$	37.37	$	(1.10	)		(2.9	%)				$	0.82
Total Non Anchor ~~(4)~~		309		1,284,926		6.2		31.01															281		1,062,010		4.7	$	34.49

Anchor
New Leases		4		409,684		6.1		3.40	N/A		N/A			N/A			N/A				0.95		-		-		-	$	-	N/A		N/A			N/A			N/A			$	-
Renewal Leases		6		690,850		4.5		5.51		5.61		(0.10	)		(1.8	%)	N/A				-		3		546,929		7.3		4.36		4.86		(0.50	)		(10.3	%)	N/A				-
Total		10		1,100,534		5.1	$	4.72															3		546,929		7.3	$	4.36

(3) These leasing costs are presented as annualized amounts per square foot and are spread uniformly over the initial lease term.

(4)Includes 2620 leases and ~~91,038~~69,411 square feet of GLA with respect to our unconsolidated partnerships. ~~We own~~During the nine months ended September 30, 2022, we owned a 25% to 50% interest in each of our unconsolidated properties and do not control such properties. Our percentage ownership is not necessarily indicative of the legal and economic implications of our ownership interest. See “— Non-GAAP Supplemental Financial Measures” for further details on our ownership interests in our unconsolidated properties.

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The following table sets forth our results of operations for the three and nine months ended September 30, ~~2021~~2022 and ~~2020.~~2021:


	Three Months Ended September 30,						% Change 2020 to 2021				Nine Months Ended September 30,						% Change 2020 to 2021				Three Months Ended September 30,						% Change 2021 to 2022				Nine Months Ended September 30,						% Change 2021 to 2022
(in thousands of dollars)	2021			2020							2021			2020							2022			2021							2022			2021
Real estate revenue	$	71,593		$	63,849			12.1		%	$	210,827		$	194,437			8.4		%	$	72,746		$	71,593			1.6		%	$	214,998		$	210,827			2.0		%
Property operating expenses		(32,129	)		(33,045	)		(2.8	)	%		(96,052	)		(95,088	)		1.0		%		(33,190	)		(32,129	)		3.3		%		(98,565	)		(96,052	)		2.6		%
Other income		143			340			(57.9	)	%		430			764			(43.7	)	%		67			143			(53.1	)	%		377			430			(12.3	)	%
Depreciation and amortization		(29,142	)		(34,420	)		(15.3	)	%		(88,667	)		(95,597	)		(7.2	)	%		(28,032	)		(29,142	)		(3.8	)	%		(85,524	)		(88,667	)		(3.5	)	%
General and administrative expenses		(14,453	)		(9,526	)		51.7		%		(39,819	)		(30,790	)		29.3		%		(10,965	)		(14,453	)		(24.1	)	%		(32,192	)		(39,819	)		(19.2	)	%
Provision for employee separation expenses		(39	)		(60	)		(35.0	)	%		(279	)		(1,173	)		(76.2	)	%
Insurance recoveries, net		—			—			0.0		%		670			586			14.3		%
Project costs and other expenses		(27	)		(124	)		(78.2	)	%		(206	)		(287	)		(28.2	)	%
Other expenses																						(65	)		(66	)		(1.5	)	%		(143	)		185			(177.3	)	%
Interest expense, net		(32,426	)		(20,260	)		60.0		%		(95,135	)		(54,300	)		75.2		%		(36,481	)		(32,426	)		12.5		%		(100,473	)		(95,135	)		5.6		%
Reorganization expenses		—			—			100.0		%		(267	)		—			100.0		%		—			—			0.0		%		—			(267	)		(100.0	)	%
Gain on debt extinguishment, net		—			—			100.0		%		4,587			—			100.0		%		—			—			0.0		%		—			4,587			(100.0	)	%
Gain on derecognition of property		—			7,006			(100.0	)	%		—			7,006			(100.0	)	%
Impairment of assets		(262	)		—			100.0		%		(1,564	)		—			100.0		%		(42,271	)		(262	)		16,034.0		%		(42,271	)		(1,564	)		2,602.7		%
Equity in loss of partnerships		(1,429	)		(3,259	)		(56.2	)	%		(2,429	)		(2,798	)		(13.2	)	%		(2,356	)		(1,429	)		64.9		%		(3,939	)		(2,429	)		62.2		%
(Loss) on sales of real estate by equity method investee		(10	)		—			100.0		%		1,337			—			100.0		%
(Loss) gain on sales of real estate, net		(217	)		(94	)		130.9		%		(1,191	)		11,169			(110.7	)	%
Gain on sales of interests in non operating real estate		—			16			(100.0	)	%		—			(174	)		(100.0	)	%
Gain (loss) on sales of interests in real estate																						7,509			(217	)		(3,560.4	)	%		9,210			(1,191	)		(873.3	)	%
Gain (loss) on sale of equity method investment																						(77	)		—			100.0		%		8,976			—			100.0		%
Gain (loss) on sales of real estate by equity method investee																						—			(10	)		(100.0	)	%		—			1,337			(100.0	)	%
Gain on sales of non operating real estate																						1,772			—			0.0		%		10,527			—			0.0		%
Gain on sale of preferred equity interest																						—			—			100.0		%		3,688			—			100.0		%
Net loss	$	(38,398	)	$	(29,577	)		29.8		%	$	(107,758	)	$	(66,245	)		62.7		%	$	(71,343	)	$	(38,398	)		85.8		%	$	(115,331	)	$	(107,758	)		7.0		%

The amounts in the preceding tables reflect our consolidated properties and our unconsolidated properties. Our unconsolidated properties are presented under the equity method of accounting in the line item “Equity in ~~loss~~(loss) income of partnerships.”

Real Estate Revenue

We include all rental income earned pursuant to tenant leases under the “Lease revenue” line item in the consolidated statements of operations. Utility reimbursements are presented separately in “Expense ~~reimbursements.”~~reimbursements” as the pattern of transfer is not aligned with the use of the property. We review the collectability of both billed and unbilled lease revenues each reporting period, taking into consideration the tenant’s payment history, credit profile and other factors, including the tenant’s operating performance. For any tenant receivable balance deemed to be uncollectible, we record an offset for credit losses directly to Lease revenue in the consolidated statements of operations.

The following table reports the breakdown of real estate revenues based on the terms of the lease contracts for the three and nine months ended September 30, ~~2021~~2022 and ~~2020:~~2021:


	Three Months Ended September 30,						Nine Months Ended September 30,					Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands of dollars)	2021			2020			2021		2020			2022		2021			2022		2021
Contractual lease payments:
Base rent	$	47,998		$	47,258		$	143,529	$	136,085		$	48,557	$	47,998		$	144,663	$	143,529
CAM reimbursement income		8,485			8,974			25,146		29,043
Real estate tax income		6,941			7,999			20,562		25,015
CAM reimbursement													8,556		8,485			25,339		25,146
Real estate tax reimbursement													7,010		6,941			21,331		20,562
Percentage rent		1,376			84			1,581		84			1,527		1,376			2,112		1,581
Lease termination revenue		829			2,011			1,487		2,236			50		829			1,589		1,487
		65,629			66,326			192,305		192,463			65,700		65,629			195,034		192,305
Less: credit (losses) recoveries		(86	)		(7,853	)		1,259		(14,149	)
Less: credit losses													96		(86	)		854		1,258
Lease revenue		65,543			58,473			193,564		178,314			65,796		65,543			195,888		193,563
Expense reimbursements		4,650			4,040			12,436		11,321			4,864		4,650			13,223		12,436
Other real estate revenue		1,400			1,336			4,828		4,802			2,086		1,400			5,887		4,828
Total real estate revenue	$	71,593		$	63,849		$	210,828	$	194,437		$	72,746	$	71,593			214,998	$	210,827

Real Estate Revenue

Real estate revenue increased by ~~$7.8~~$1.2 million, or ~~12.1%~~2%, ~~for~~in the three months ended September 30, ~~2021~~2022 compared to the three months ended September 30, ~~2020,~~2021, primarily due to:

•

an increase of $1.4 million in same store base rent due to an increase of $1.7 million from net new store openings over the previous twelve months, partially offset by a decrease of $0.2 million from comparable tenants paying a percentage of sales in lieu of minimum rent and a $0.1 million decrease from the treatment and amortization of COVID-related rent credits;

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•

~~a decrease~~an increase of ~~$7.5~~$0.6 million in same store ~~credit losses~~other real estate revenue due to ~~substantial credit losses compared~~marketing revenues and promotional revenues related to activities in the ~~prior year period due to non-payment of charges for the three months ended September 30, 2020;~~common areas and parking lots;

•

an increase of ~~$1.3 million in same store percentage rent;~~



an increase of $1.1 million in same store base rent resulting from a $2.2 million increase associated with the COVID-19 related mall closures and associated rent abatements and reduced percent of sales revenue in the three months ended September 30, 2020, partially offset by a decrease of $0.6 million from net new store openings and lease modifications over the previous twelve months and a decrease of $0.5 million related to tenant bankruptcies in 2020 and 2021;



~~an increase of $0.6~~$0.3 million in same store utility reimbursements related to the increase in same store utility expense (see “-Property Operating Expenses”) ~~compared to the prior year period when stores reopened with reduced operating hours; and~~;

•

an increase of $0.2 million in same store percentage rent;

•

an increase of $0.1 ~~million in same store other real estate revenue due to promotional revenues in the common areas and parking lots; partially offset by~~



a decrease of $1.3 million in same store lease termination revenue, including $2.0 million from the termination of leases with five tenants during 2020, partially offset by $0.7 million received from four tenants during 2021;



~~a decrease of $1.0~~ million in same store real estate tax reimbursements due to ~~bankruptcy~~increased occupancy; and COVID-related store closings and rental concessions to some tenants whereby the terms of the leases were modified to no longer require expense reimbursements, and a decrease in same store real estate tax expense (see “-Property Operating Expenses”);

•

~~a decrease~~an increase of ~~$0.4~~$0.1 million in same store common area expense reimbursements ~~including a decrease in same store common area reimbursements of $0.3 million~~ due to ~~bankruptcy and COVID-related store closings and rental concessions no longer requiring expense reimbursements, as well as~~increased occupancy, offset by a decrease of $0.1 million associated with the straight lining of fixed common area expense reimbursements; ~~and~~partially offset by

•

a decrease of ~~$0.1~~$0.9 million at non-same store properties Valley View Mall and Exton Square Mall due to lower occupancy and the ~~derecognition~~timing of ~~assets~~collection from the resolution of COVID-19 related issues with tenants for the three months ended September 30, 2021 at ~~Valley View~~Exton Square Mall, ~~during the third quarter of 2020 as a result of a receiver being assigned to manage the property~~ and the sale of the strip center at Valley View Mall in the third quarter of 2021; and

•

a decrease of $0.6 million in lease termination revenue, including $0.7 million from the termination of leases with four tenants during 2021, partially offset by ~~a decrease in credit losses at Exton Square Mall.~~$0.1 million received from one tenant during 2022.

Real estate revenue increased by ~~$16.3~~$4.2 million, or ~~8.4%~~2%, in the nine months ended September 30, ~~2021~~2022 compared to the nine months ended September 30, ~~2020,~~2021, primarily due to:

•

an increase of $2.7 million in same store base rent due to an increase of $4.5 million from net new store openings over the previous twelve months and an increase of $0.1 million from comparable tenants paying a percentage of sales in lieu of minimum rent, partially offset by a decrease of $1.9 million from the treatment and amortization of COVID-related rent credits;

•

an increase of $1.1 million in same store other real estate revenue due to marketing revenues and promotional revenues related to activities in the common areas and parking lots;

•

an increase of $1.0 million in same store utility reimbursements related to the increase in same store utility expense (see “-Property Operating Expenses”);

•

an increase of $0.9 million in same store real estate tax reimbursements due to increased occupancy and abatements recorded in the prior year;

•

an increase of $0.3 million in same store percentage rent;

•

an increase of $0.3 million in same store common area expense reimbursements due to increased occupancy and abatements recorded in the prior year, partially offset by a decrease of $0.4 million associated with the straight lining of fixed common area expense reimbursements; and

•

an increase of $0.2 million in same store lease termination revenue, including $1.5 million from the termination of leases with four tenants during 2022, partially offset by $1.3 million received from nine tenants during 2021; partially offset by

•

a decrease of ~~$14.5~~$1.9 million at non-same store properties Valley View Mall and Exton Square Mall due to lower occupancy and the collection of receivables from the resolution of COVID-19 related issues with tenants for the nine months ended September 30, 2021 at Exton Square Mall, and the sale of the strip center at Valley View Mall in the third quarter of 2021; and

•

an increase of $0.4 million in same store credit losses due to credit losses due to the collection of receivables from the resolution of COVID-19 related issues with tenants across our portfolio ~~in comparison to substantial credit losses due to non-payment of charges~~ for the nine months ended September 30, ~~2020;~~



an increase of $9.6 million in same store base rent due to a $16.8 million increase related to the COVID-19 mall closures and associated rent abatements and reduced percent of sales revenue in the nine months ended September 30, 2020, partially offset by a decrease of $3.9 million from net new store openings and lease modifications over the previous twelve months and a decrease of $3.3 million resulting from tenant bankruptcies in 2020 and 2021;



~~an increase of $1.5 million in same store percentage rent; and~~



an increase of $1.2 million from an increase in same store utility expense (see “-Property Operating Expenses”) compared to the prior year period when stores were closed and then reopened with reduced operating hours due to COVID-19 during the nine months ended September 30, 2020; partially offset by



a decrease of $4.1 million in same store real estate tax reimbursements due to bankruptcy and COVID-related store closings and rental concessions to some tenants whereby the terms of the leases were modified such that expense reimbursements were no longer required, and a decrease in same store real estate tax expense (see “-Property Operating Expenses”);



a decrease of $3.2 million in same store common area expense reimbursements, including a decrease in same store common area reimbursements of $2.7 million due to bankruptcy and COVID-related store closings and rental concessions to some tenants under which the terms of their leases were modified and no longer need to pay expense reimbursements, as well as a decrease of $0.5 million associated with the straight lining of fixed common area expense reimbursements;



a decrease of $2.2 million at non-same store properties Valley View Mall and Exton Square Mall due to the derecognition of assets at Valley View Mall during the third quarter of 2020 as a result of a receiver being assigned to manage the property and the sale of the strip center in the third quarter of 2021, partially offset by a decrease in credit losses at Exton Square Mall; and



a decrease of $0.9 million in same store lease termination revenue, including $2.2 million from the termination of leases with seven tenants during 2020, partially offset by $1.3 million received from nine tenants during 2021;

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Property Operating Expenses

Property operating expenses ~~decreased~~increased by ~~$0.9~~$1.1 million, or ~~2.8%~~3%, ~~for~~in the three months ended September 30, ~~2021~~2022 compared to the three months ended September 30, ~~2020,~~2021, primarily due to:

•

~~a decrease~~an increase of ~~$1.2~~$0.6 million in same store ~~real estate tax~~tenant utility expense due to a ~~decrease in real estate tax assessments at some properties;~~combination of higher electricity usage and electricity rates;



~~a decrease of $0.6 million at non-same store properties Valley View Mall and Exton Square Mall; partially offset by~~

•

an increase of $0.5 million in same store common area maintenance expense, including a $0.2 million increase in ~~utilities~~utility expense due to a combination of higher electricity usage and electricity rates, a $0.1 million increase in cleaning expense due to contractual rate increases, a $0.1 million increase in repairs and maintenance and a ~~$0.2~~$0.1 million increase in insurance expense;

•

an increase of $0.3 million in same store ~~tenant utility expense~~other property operating expenses due to ~~higher electricity usage~~an increase in ~~comparison to the prior year period when our properties reopened with reduced operating hours;~~marketing expenses; and

•

an increase of $0.1 ~~million in same store other property operating expenses.~~

~~Property operating expenses increased by $1.0 million, or 1.0%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to:~~



an increase of $3.6 million in same store common area maintenance expense, including a $1.1 million increase in snow removal expense due to higher snowfall amounts during the nine months ended September 30, 2021 across the Mid-Atlantic States, where many of our properties are located, a $0.8 million increase in cleaning expense and a $0.3 million increase in security expense due to negotiated credits with our vendors for the nine months ended September 30, 2020 while properties were closed, and a $0.7 million increase in insurance expense;



an increase of $0.9 million in same store tenant utility expense due to higher electricity usage in comparison to the prior year period when our properties were closed and then reopened with reduced operating hours; and



~~an increase of $0.8 million in same store other property operating expenses including a $0.3 million increase in property legal expense; partially offset by~~



~~a decrease of $2.5~~ million in same store real estate tax expense due to a ~~decrease~~combination of increases in the real estate tax assessment value ~~at some properties;~~ and the real estate tax rate; partially offset by

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•

a decrease of ~~$1.7~~$0.4 million at non-same store properties Valley View Mall and Exton Square Mall.

Property operating expenses increased by $2.5 million, or 3%, in the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, primarily due to:

•

an increase of $1.8 million in same store tenant utility expense due to a combination of higher electricity usage and electricity rates;

•

an increase of $0.9 million in same store common area maintenance expense, including a $0.7 million increase in utility expense due to a combination of higher electricity usage and electricity rates, a $0.4 million increase in insurance expense and a $0.3 million increase in repairs and maintenance, partially offset by a $0.5 million decrease in security expense due to negotiated credits with our vendor and a $0.1 million decrease in snow removal expense due to higher snowfall amounts during 2021 across the Mid-Atlantic States; and

•

an increase of $0.5 million in same store real estate tax expense due to a combination of increases in the real estate tax assessment value and the real estate tax rate; and

•

an increase of $0.1 million in same store other property operating expenses due to an increase in marketing expenses partially offset by a decrease in property legal expense; partially offset by

•

a decrease of $0.8 million at non-same store properties Valley View Mall and Exton Square Mall.

Depreciation and Amortization

Depreciation and amortization expense decreased by ~~$5.3~~$1.1 million, or ~~15.3%~~4%, ~~for~~in the three months ended September 30, ~~2021~~2022 compared to the three months ended September 30, ~~2020,~~2021, primarily due to:

•

a decrease of ~~$4.7~~$0.7 million resulting from accelerated amortization of capital improvements associated with store closings during ~~the three months ended September 30, 2020, partially offset by~~2021 and a ~~higher~~lower net asset base resulting from ~~capital improvements related to new tenants at our same store properties;~~fully amortized assets; and

•

a decrease of ~~$0.6 million at non-same store properties Exton Square Mall and Valley View Mall.~~

~~Depreciation and amortization expense decreased by $6.9 million, or 7.2%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to:~~



a decrease of $5.5 million from accelerated amortization of capital improvements associated with store closings during the six months ended September 30, 2020, partially offset by a higher asset base resulting from capital improvements related to new tenants at our same store properties; and



~~a decrease of $1.4~~$0.4 million at non-same store properties Exton Square Mall and Valley View Mall.

Depreciation and amortization expense decreased by $3.1 million, or 4%, in the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, primarily due to:

•

~~Table~~

a decrease of ~~Contents~~$2.1 million resulting from accelerated amortization of capital improvements associated with store closings during 2021 and a lower net asset base resulting from fully amortized assets; and

•

a decrease of $1.0 million at non-same store properties Exton Square Mall and Valley View Mall.

General and Administrative Expenses

General and administrative expenses ~~increased~~decreased by ~~$4.9~~$3.5 million, or ~~51.7%~~24.1%, ~~for~~in the three months ended September 30, ~~2021~~2022 compared to the three months ended September 30, ~~2020~~2021 primarily due to lower incentive compensation expenses in 2022 partially offset by higher professional fees ~~incurred and incentive compensation expenses related to increased costs for equity compensation plans.~~in 2022.

General and administrative expenses ~~increased~~decreased by ~~$9.0~~$7.6 million, or ~~29.3%~~19.2%, ~~for~~in the nine months ended September 30, ~~2021~~2022 compared to the nine months ended September 30, ~~2020~~2021 primarily due to the same factors driving the variance for the three months ended September 30 comparison.

Interest Expense

Interest expense increased by ~~$12.2~~$4.1 million, or ~~60.0%~~12.5%, ~~for~~in the three months ended September 30, ~~2021~~2022 compared to the three months ended September 30, ~~2020.~~2021. This increase was primarily due to higher weighted average interest rates and higher weighted average debt ~~balances and~~balances. Our weighted average effective borrowing rate was 8.14% for the three months ended September 30, 2022 compared to 7.00% for the three months ended September 30, 2021. Our weighted average debt balance was $1,795.9 million for the three months ended September 30, 2022, compared to $1,854.3 million for the three months ended September 30, 2021.

Interest expense increased by $5.3 million, or 5.6%, in the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This increase was primarily due to higher weighted average interest rates. Our weighted average effective borrowing rate was 7.00% for the three months ended September 30, 2021 compared to 4.45% for the three months ended September 30, 2020. Our weighted average debt balance was $1,854.3 million for the three months ended September 30, 2021, compared to $1,820.0 million for the three months ended September 30, 2020.

~~Interest expense increased by $40.8 million, or 75.2%,~~7.30% for the nine months ended September 30, ~~2021~~2022 compared to the nine months ended September 30, 2020. This increase was primarily due to higher weighted average debt balances and higher weighted average interest rates. Our weighted average effective borrowing rate was 6.85% for the nine months ended September 30, ~~2021 compared to 4.20%~~2021. Our weighted average debt balance was $1.837.5 million for the nine months ended September 30, ~~2020. Our weighted average debt balance was~~2022, compared to $1,855.4 million for the nine months ended September 30, ~~2021, compared to $1,768.8 million for~~2021.

Reorganization Expenses

For the three and nine months ended September 30, 2022, we have not incurred any reorganization expenses.

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For the nine months ended September 30, ~~2020.~~2021, we incurred costs and fees of $0.3 million in connection with our efforts to finalize our Financial Restructuring that were directly attributable to our bankruptcy proceedings, which we classified within reorganization expenses in the consolidated statement of operations.

Gain on Debt Extinguishment

~~During~~For the ~~second quarter,~~three and nine months ended September 30, 2022, we did not record any gain on debt extinguishment.

On June 10, 2021, we were notified that the full principal balance and accrued interest on our loan under the Paycheck Protection Program (PPP) of the Coronavirus Aid, Relief, and Economic Security (CARES) Act was forgiven. As a result of the forgiveness, we recorded a gain on debt extinguishment of $4.6 million ~~which is included in our results of operations for~~during the nine months ended September 30, 2021.

Impairment of Assets

During the third quarter of 2022, we entered into a purchase and sale agreement for Cumberland Mall in September 2022 that resulted in a reduced holding period for the property. In September 2022, we also made the determination to reduce the holding period for Plymouth Meeting Mall as a result of our expectation to sell the property. These events triggered an indication of potential impairment. An impairment review and assessment of undiscounted cash flows resulted in impairment losses of $4.8 million and $37.4 million being recorded for Cumberland Mall and Plymouth Meeting Mall, respectively.

During the second quarter of 2021, we entered into a purchase and sale agreement to sell Valley View Center. In connection with this transaction, we recorded an impairment loss of $1.3 million due to excess carrying value over the sale price. In August 2021, we closed on the sale of Valley View Center for $3.5 million with net proceeds of $3.2 million. During the three months ended September 30, 2021, we entered into a purchase and sale agreement to sell a parcel of land next to Monroe Marketplace. In connection with this transaction, we recorded an impairment loss of $0.3 million due to excess carrying value over the sale price.

~~Reorganization Expenses~~

~~During the nine months end~~ed September 30, 2021, we incurred costs of $0.3 million in connection with our efforts to finalize our Financial Restructuring that were directly attributable to our bankruptcy proceedings, which we classified within reorganization expenses in the consolidated statements of operations.

Equity in Loss of Partnerships

Equity in loss of partnerships was ~~$1.4~~a loss of $2.4 million in the three months ended September 30, ~~2021~~2022 compared to a loss of ~~$3.3~~$1.4 million in the prior year period, reflecting ~~a change~~an increase of ~~$1.9~~$1.0 million, or ~~56.2%,~~64.9%. The increase in loss was primarily due to higher interest expense and the sale of Gloucester Premium Outlets in the prior quarter offset by higher real estate ~~revenues~~revenue across the remainder of our partnership ~~properties.~~properties in 2022 due to the economic rebound following COVID-19 impact.

Equity in loss of partnerships was ~~$2.4~~a loss of $3.9 million in the nine months ended September 30, ~~2021~~2022 compared to a loss of ~~$2.8~~$2.4 million in the prior year period, reflecting ~~a change~~an increase of ~~$0.4~~$1.5 million, or ~~13.2%, primarily resulting from lower real estate revenues across all of our partnership properties~~62.2% due to ~~COVID-19, and higher property operating expenses and interest expense primarily~~a lease termination in 2021 at Fashion District ~~Philadelphia.~~Philadelphia and the same factors driving the variance for the three months ended September 30 comparison.

Gain (Loss) ~~Gain~~ on Sales of Real Estate

During the quarter ended September 30, 2022, we closed on the sale of five outparcels for $11.8 million and recorded a gain on sale of $7.4 million in connection with the sales. In June 2022, we closed on the sale of an outparcel at Francis Scott Key Mall for $2.4 million and recorded a gain on sales of real estate of $1.7 million.

In May 2021, we closed on the sale of a parcel of property at Moorestown Mall for $10.1 million. In connection with the sale, we paid a $9.0 million lease termination fee for a portion of the property that was under a lease agreement ~~for~~along with closing costs that resulted in net proceeds of $0.8 million. We recorded a loss on sale of real estate of $1.0 million in connection with the sale. In August 2021, we closed on the sale of Valley View Center for $3.5 million, and recorded a loss on sale of real estate of approximately $0.2 million in connection with the transaction. For the nine months ended September 30, 2021, we recorded a loss on sales of real estate of $1.2 million in connection with the sale.

Gain on Sale of Equity Method Investment

During the nine months ended September 30, 2022, there was a $9.0 million net gain on sale of equity method investment. In ~~January 2020,~~June 2022, we ~~completed~~closed on the sale of ~~an outparcel at Woodland Mall~~our 25% interest in ~~Grand Rapids, Michigan~~Gloucester Premium Outlets for ~~total consideration of $5.2 million. In March 2020, we completed the sale of two outparcels at Magnolia Mall in Florence, South Carolina~~$35.4 million for ~~total consideration of $2.9 million. In connection with the March sale,~~which we recorded a gain ~~of $2.0 million.~~ ~~In June 2020, we completed the~~on sale of ~~six outparcels~~equity method investment of $9.1 million and a subsequent working capital adjustment loss of $0.1 million was recorded in the third quarter of 2022.

There was no gain on sale of equity method investment for the three and nine months ended September 30, 2021.

Gain on Sales of Interests in Non Operating Real Estate

During the three months ended September 30, 2022, we sold an outparcel at ~~Magnolia Mall, Jacksonville Mall and Valley~~the Moorestown Mall for ~~total consideration of $14.4~~$3.4 million and ~~net~~recorded a gain on sale of ~~$9.3~~$1.8 million.

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During the nine months ended September 30, 2022, there was an $10.6 million gain on sales of interests in non-operating real estate. In June 2022, we sold a parcel of land adjacent to Moorestown Mall for $11.8 million for residential development purposes. The gain resulting from the sale was $8.8 million.

There was no gain on sale of interest in non operating real estate for the three and nine months ended September 30, 2021.

Gain on Sale of Preferred Equity Interest

During the three months ended September 30, 2022 there was no gain on sale of preferred equity interest. During the nine months ended September 30, 2022, there was a $3.7 million gain on sale of preferred equity interest in a property that we received in exchange for the sale of a property we previously owned.

There was no gain on sale of preferred equity interest for the three and nine months ended September 30, 2021.

NON-GAAP SUPPLEMENTAL FINANCIAL MEASURES

Overview

The preceding discussion analyzes our financial condition and results of operations in accordance with generally accepted accounting principles, or GAAP, for the periods presented. We also use Net Operating Income (“NOI”) and Funds from Operations (“FFO”) which are non-GAAP financial measures, to supplement our analysis and discussion of our operating performance:

•

We believe that NOI is helpful to management and investors as a measure of operating performance because it is an indicator of the return on property investment and provides a method of comparing property performance over time. When we use and present NOI, we also do so on a same store (“Same Store NOI”) and non-same store (“Non Same Store NOI”) basis to differentiate between properties that we have owned for the full periods presented and properties acquired, sold or under redevelopment during those periods. Furthermore, our use and presentation of NOI combines NOI from our consolidated properties and NOI attributable to our share of unconsolidated properties in order to arrive at total NOI. We believe that this is also helpful information because it reflects the pro rata contribution from our unconsolidated properties that are owned through investments accounted for under GAAP as equity in income of partnerships. See “Unconsolidated Properties and Proportionate Financial Information” below.

•

We believe that FFO is also helpful to management and investors as a measure of operating performance because it excludes various items included in net loss that do not relate to or are not indicative of operating performance, such as gains on sales of operating real estate and depreciation and amortization of real estate, among others. In addition to FFO and FFO per diluted share and OP Unit, when applicable, we also present FFO, as adjusted and FFO per diluted share and OP Unit, as adjusted, which we believe is helpful to management and investors because they adjust FFO to exclude items that management does not believe are indicative of operating performance, such as gain on debt extinguishment and insurance recoveries.

•

We use both NOI and FFO, or related terms like Same Store NOI and, when applicable, Funds From Operations, as adjusted, for determining incentive compensation amounts under certain of our performance-based executive compensation programs.

NOI and FFO are commonly used non-GAAP financial measures of operating performance in the real estate industry, and we use them as supplemental non-GAAP measures to compare our performance between different periods and to compare our performance to that of our industry peers. Our computation of NOI, FFO and other non-GAAP financial measures, such as Same Store NOI, Non Same Store NOI, NOI attributable to our share of unconsolidated properties, and FFO, as adjusted, may not be comparable to other similarly titled measures used by our industry peers. None of these measures are measures of performance in accordance with GAAP, and they have limitations as analytical tools. They should not be considered as alternative measures of our net loss, operating performance, cash flow or liquidity. They are not indicative of funds available for our cash needs, including our ability to make cash distributions. Please see below for a discussion of these non-GAAP measures and their respective reconciliation to the most directly comparable GAAP measure.

Unconsolidated Properties and Proportionate Financial Information

The non-GAAP financial measures presented below incorporate financial information attributable to our share of unconsolidated properties. This proportionate financial information is non-GAAP financial information, but we believe that it is helpful information because it reflects the pro rata contribution from our unconsolidated properties that are owned through investments accounted for under GAAP using the equity method of accounting. Under such method, earnings from these unconsolidated partnerships are recorded in our statements of operations prepared in accordance with GAAP under the caption entitled “Equity in (loss) income of partnerships.”

To derive the proportionate financial information reflected in the tables below as “unconsolidated,” we multiplied the percentage of our economic interest in each partnership on a property-by-property basis by each line item. Under the partnership agreements relating to our current unconsolidated partnerships with third parties, we own a ~~25%~~40% to 50% economic interest in such partnerships, and there are generally no provisions in such partnership agreements relating to special non-pro rata allocations of income or loss, and there are no preferred or priority returns of capital or other similar provisions. While this method approximates our indirect economic interest in our pro rata share of the

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revenue and expenses of our unconsolidated partnerships, we do not have a direct legal claim to the assets, liabilities, revenues or expenses of the unconsolidated partnerships beyond our rights as an equity owner in the event of any liquidation of such entity. Our percentage ownership is not necessarily indicative of the legal and economic implications of our ownership interest. Accordingly, NOI and FFO results based on our share of the results of unconsolidated partnerships do not represent cash generated from our investments in these partnerships.

We have determined that we hold a noncontrolling interest in each of our unconsolidated partnerships, and account for such partnerships using the equity method of accounting, because:

•

Except for one property that we co-manage with our partner, all of the other entities are managed on a day-to-day basis by one of our other partners as the managing general partner in each of the respective partnerships. In the case of the co-managed property, all decisions in the ordinary course of business are made jointly.

•

The managing general partner is responsible for establishing the operating and capital decisions of the partnership, including budgets, in the ordinary course of business.

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•

All major decisions of each partnership, such as the sale, refinancing, expansion or rehabilitation of the property, require the approval of all partners.

•

Voting rights and the sharing of profits and losses are generally in proportion to the ownership percentages of each partner.

We hold legal title to a property owned by one of our unconsolidated partnerships through a tenancy in common arrangement. For this property, such legal title is held by us and another entity, and each has an undivided interest in title to the property. With respect to this property, under the applicable agreements between us and the entity with ownership interests, we and such other entity have joint control because decisions regarding matters such as the sale, refinancing, expansion or rehabilitation of the property require the approval of both us and the other entity owning an interest in the property. Hence, we account for this property like our other unconsolidated partnerships using the equity method of accounting. The balance sheet items arising from this property appear under the caption “Investments in partnerships, at equity.”

For further information regarding our unconsolidated partnerships, see note 3 to our unaudited consolidated financial statements.

Net Operating Income (“NOI”)

NOI (a non-GAAP measure) is derived from real estate revenue (determined in accordance with GAAP, including lease termination revenue), minus property operating expenses (determined in accordance with GAAP), plus our pro rata share of revenue and property operating expenses of our unconsolidated partnership investments. NOI does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net loss (determined in accordance with GAAP) as an indication of our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity. It is not indicative of funds available for our cash needs, including our ability to make cash distributions. We believe NOI is helpful to management and investors as a measure of operating performance because it is an indicator of the return on property investment, and provides a method of comparing property performance over time. We believe that net loss is the most directly comparable GAAP measure to NOI. NOI excludes other income, depreciation and amortization, general and administrative expenses, ~~insurance recoveries, net,~~other expenses (which includes provision for employee separation ~~expenses,~~expense and project ~~costs and other expenses,~~costs), interest expense, reorganization expenses, impairment of assets, equity in loss/income of partnerships, gain on extinguishment of debt, gain/loss on ~~sale~~sales of real estate, gain on sale of activity method investee and gain/loss on ~~sales~~sale of ~~non-operating real estate.~~preferred equity interest.

Same Store NOI is calculated using retail properties owned for the full periods presented and excludes properties acquired or disposed of, under redevelopment, or designated as non-core during the periods presented. Non Same Store NOI is calculated using the retail properties excluded from the calculation of Same Store NOI.

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The table below reconciles net loss to NOI of our consolidated properties for the three and nine months ended September 30, ~~2021~~2022 and ~~2020:~~2021:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands of dollars)	2021			2020			2021			2020			2022			2021			2022			2021
Net loss	$	(38,398	)	$	(29,577	)	$	(107,758	)	$	(66,245	)	$	(71,343	)	$	(38,398	)	$	(115,331	)	$	(107,758	)
Other income		(143	)		(338	)		(430	)		(765	)		(67	)		(143	)		(377	)		(430	)
Depreciation and amortization		29,142			34,420			88,667			95,597			28,032			29,142			85,524			88,667
General and administrative expenses		14,453			9,526			39,819			30,790			10,965			14,453			32,192			39,819
Insurance recoveries, net		—			—			(670	)		(586	)
Provision for employee separation expenses		39			60			279			1,173
Project costs and other expenses		27			124			205			287
Other expenses														65			66			143			(186	)
Interest expense, net		32,426			20,260			95,135			54,300			36,481			32,426			100,473			95,135
Reorganization expenses		—			—			267			—			—			—			—			267
Impairment of assets		262			—			1,564			—			42,271			262			42,271			1,564
Equity in loss of partnerships		1,429			3,259			2,429			2,798
Equity in loss (income) of partnerships														2,356			1,429			3,939			2,429
Gain on extinguishment of debt		—			—			(4,587	)		—			—			—			—			(4,587	)
Gain on decrecognition of property		—			(7,006	)		—			(7,006	)
Loss (gain) on sales of real estate by equity method investee		10			—			(1,337	)		-
Loss (gain) on sales of real estate, net		217			94			1,191			(11,169	)
(Gain) loss on sales of non-operating real estate		—			(16	)		—			174
(Gain) loss on sales of interests in real estate														(7,509	)		217			(9,210	)		1,191
Gain on sale of equity method investment														77			—			(8,976	)		—
Gain on sales of real estate by equity method investee														—			10			—			(1,337	)
Gain on sales of non-operating real estate														(1,772	)		—			(10,527	)		—
Gain on sale of preferred equity interest														—			—			(3,688	)		—
NOI from consolidated properties	$	39,464		$	30,806		$	114,774		$	99,348		$	39,556		$	39,464		$	116,433		$	114,774

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The table below reconciles equity in ~~loss~~(loss) income of partnerships to NOI of our share of unconsolidated properties for the three and nine months ended September 30, ~~2021~~2022 and ~~2020:~~2021:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands of dollars)	2021			2020			2021			2020			2022			2021			2022			2021
Equity in loss of partnerships	$	(1,429	)	$	(3,259	)	$	(2,429	)	$	(2,798	)
Equity in (loss) income of partnerships													$	(2,356	)	$	(1,429	)	$	(3,939	)	$	(2,429	)
Other income		—			(12	)		—			(38	)		—			—						—
Depreciation and amortization		3,095			5,095			9,257			12,396			2,678			3,095			8,673			9,257
Impairment of assets		—			—			265			—			—			—			—			265
Interest and other expenses		5,568			2,942			16,384			8,733			6,363			5,568			18,215			16,384
NOI from equity method investments at ownership share	$	7,234		$	4,766		$	23,477		$	18,293		$	6,685		$	7,234		$	22,949		$	23,477

The table below presents total NOI and total NOI excluding lease termination revenue for the three months ended September 30, ~~2021~~2022 and ~~2020:~~2021:


	Same Store				Non Same Store				Total (non-GAAP)				Same Store				Non Same Store					Total (non-GAAP)
(in thousands of dollars)	2021		2020		2021		2020		2021		2020		2022		2021		2022			2021		2022		2021
NOI from consolidated properties	$	38,966	$	30,662	$	498	$	144	$	39,464	$	30,806	$	39,536	$	38,966	$	20		$	498	$	39,556	$	39,464
NOI from equity method investments at ownership share		7,226		4,759	��	7		6		7,233		4,766		6,688		6,480		(3	)		754		6,685		7,234
Total NOI		46,192		35,421		505		150		46,697		35,572		46,224		45,446		17			1,252		46,241		46,698
Less: lease termination revenue		740		2,011		138		—		878		2,011		50		733		—			146		50		879
Total NOI excluding lease termination revenue	$	45,452	$	33,410	$	367	$	150	$	45,819	$	33,561	$	46,174	$	44,713	$	17		$	1,106	$	46,191	$	45,819

Total NOI ~~increased~~decreased by ~~$11.1~~$0.5 million in the three months ended September 30, ~~2021~~2022 compared to the three months ended September 30, ~~2020~~2021 due to ~~the same~~(a) a $0.8 million increase in Same Store NOI and (b) a decrease of $1.2 million in Non Same Store NOI. ~~This~~The increase in Same Store NOI and decrease in Non Same Store NOI is primarily due the reasons described in “— Real Estate Revenue” and “— Property Operating Expenses.” ~~See “—~~

~~Real Estate Revenue~~36

~~” and “—~~ Table of Contents~~Property Operating Expenses~~

~~” above for further information about the factors affecting NOI from our consolidated properties.~~

The table below presents total NOI and total NOI excluding lease termination revenue for the nine months ended September 30, ~~2021~~2022 and ~~2020:~~2021:


	Same Store				Non Same Store					Total (non-GAAP)				Same Store				Non Same Store					Total (non-GAAP)
(in thousands of dollars)	2021		2020		2021			2020		2021		2020		2022		2021		2022			2021		2022		2021
NOI from consolidated properties	$	114,289	$	98,169	$	485		$	1,180	$	114,774	$	99,349	$	117,126	$	114,289	$	(693	)	$	485	$	116,433	$	114,774
NOI from equity method investments at ownership share		23,482		18,273		(5	)		22		23,477		18,295		21,790		21,499		1,159			1,977		22,949		23,476
Total NOI		137,771		116,442		480			1,202		138,251		117,644		138,916		135,788		466			2,462		139,382		138,250
Less: lease termination revenue		3,911		2,236		138			—		4,049		2,236		2,395		3,903		49			146		2,444		4,049
Total NOI excluding lease termination revenue	$	133,860	$	114,206	$	342		$	1,202	$	134,202	$	115,408	$	136,521	$	131,885	$	417		$	2,316	$	136,938	$	134,201

Total NOI increased by ~~$20.6~~$1.1 million in the nine months ended September 30, ~~2021~~2022 compared to the nine months ended September 30, ~~2020~~2021 due to (a) a ~~$21.3~~$3.1 million increase in Same Store NOI ~~offset by~~and (b) and a $2.0 million decrease ~~of $0.7 million~~ in Non Same Store NOI. The increase in Same Store NOI and decrease in Non Same Store NOI is primarily due the reasons described in “— Real Estate Revenue” and “— Property Operating ~~Expenses~~Expenses.”~~. The decrease in NOI from Non Same Store properties is due to the conveyance of Wyoming Valley Mall and derecognition of Valley View Mall in the third quarter of 2020. See “—~~ ~~Real Estate Revenue” and “—~~ ~~Property Operating Expenses” above for further information about the factors affecting NOI from our consolidated properties.~~

Funds From Operations (“FFO”)

The National Association of Real Estate Investment Trusts (“NAREIT”) defines Funds From Operations (“FFO”), which is a non-GAAP measure commonly used by REITs, as net income (computed in accordance with GAAP) excluding (i) depreciation and amortization of real estate, (ii) gains and losses on sales of certain real estate assets, (iii) gains and losses from change in control and (iv) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. We compute FFO in accordance with standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition, or that interpret the current NAREIT definition differently than we do. NAREIT’s established guidance provides that excluding impairment write downs of depreciable real estate is consistent with the NAREIT definition.

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FFO is a commonly used measure of operating performance and profitability among REITs. We use FFO and FFO per diluted share and unit of limited partnership interest in our operating partnership (“OP Unit”) in measuring our performance against our peers and have used it as one of the performance measures for determining incentive compensation amounts earned under certain of our performance-based executive compensation programs.

FFO does not include gains and losses on sales of operating real estate assets or impairment write downs of depreciable real estate (including development land parcels), which are included in the determination of net loss in accordance with GAAP. Accordingly, FFO is not a comprehensive measure of our operating cash flows. In addition, since FFO does not include depreciation on real estate assets, FFO may not be a useful performance measure when comparing our operating performance to that of other non-real estate commercial enterprises. We compensate for these limitations by using FFO in conjunction with other GAAP financial performance measures, such as net loss and net cash used in operating activities, and other non-GAAP financial performance measures, such as NOI. FFO does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net loss (determined in accordance with GAAP) as an indication of our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions. We believe that net loss is the most directly comparable GAAP measurement to FFO.

When applicable, we also present FFO, as adjusted, and FFO per diluted share and OP Unit, as adjusted, which are non-GAAP measures, for the three and nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, to show the effect of such items as gain or loss on debt extinguishment (including accelerated amortization of financing costs), impairment of assets, provision for employee separation expense, insurance recoveries or losses, net, ~~gain on derecognition of property, gain or~~ gain/loss on hedge ineffectiveness, gain on sale of preferred equity interest and reorganization expenses which had an effect on our results of operations, but are not, in our opinion, indicative of our ongoing operating performance.

We believe that FFO is helpful to management and investors as a measure of operating performance because it excludes various items included in net loss that do not relate to or are not indicative of operating performance, such as gains on sales of operating real estate and depreciation and amortization of real estate, among others. We believe that Funds From Operations, as adjusted, is helpful to management and investors as a measure of operating performance because it adjusts FFO to exclude items that management does not believe are indicative of our operating performance, such as provision for employee separation expense, gain on hedge ineffectiveness and reorganization expenses.

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The following table presents a reconciliation of net loss determined in accordance with GAAP to FFO attributable to common shareholders and OP Unit holders, FFO attributable to common shareholders and OP Unit holders per diluted share and OP Unit, FFO attributable to common shareholders and OP Unit holders, as adjusted and FFO attributable to common shareholders and OP Unit holders, as adjusted per diluted share and OP Unit, for the three and nine months ended September 30, ~~2021~~2022 and ~~2020:~~2021:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands, except per share amounts)	2021			2020			2021			2020			2022			2021			2022			2021
Net loss	$	(38,398	)	$	(29,577	)	$	(107,758	)	$	(66,245	)	$	(71,343	)	$	(38,398	)	$	(115,331	)	$	(107,758	)
Depreciation and amortization on real estate:
Consolidated properties		28,812			34,053			87,653			94,538			27,752			28,812			84,628			87,653
PREIT’s share of equity method investments		3,095			5,095			9,257			12,396			2,678			3,095			8,673			9,257
(Gain) loss on sales of interests in real estate														(7,509	)		217			(9,210	)		1,191
Gain on sale of equity method investment														77			—			(8,976	)		—
Gain on sales of real estate by equity method investee		10			—			(1,337	)		—			—			10			—			(1,337	)
Loss (gain) on sales of real estate, net		217			94			1,191			(11,169	)
Impairment of Assets:
Consolidated properties		262			—			1,564			—			42,271			262			42,271			1,564
PREIT’s share of equity method investments		—			—			265			—			—			—			—			265
Preferred share dividends declared and paid (1)		—			—			—			(13,688	)
Funds from operations attributable to common shareholders and OP Unit holders		(6,002	)		9,665			(9,165	)		15,832			(6,074	)		(6,002	)		2,055			(9,165	)
Provision for employee separation expense		39			60			279			1,173			(5	)		39			(6	)		279
Gain on hedge ineffectiveness		(532	)		—			(2,329	)		—			—			(532	)		—			(2,329	)
Gain on debt extinguishment		—			—			(4,587	)		—			—			—			—			(4,587	)
Gain on derecognition of property		—			(7,006	)		—			(7,006	)
Insurance recoveries, net		—			—			(670	)		(586	)		2			—			2			(670	)
Reorganization expenses		—			—			267			—			—			—			—			267
Gain on sale of preferred equity interest														—			—			(3,688	)		—
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders	$	(6,495	)	$	2,719		$	(16,205	)	$	9,413		$	(6,077	)	$	(6,495	)	$	(1,637	)	$	(16,205	)
Funds from operations attributable to common shareholders and OP Unit holders per diluted share and OP Unit (1)	$	(0.07	)	$	0.12		$	(0.12	)	$	0.20		$	(1.13	)	$	(1.10	)	$	0.38		$	(1.70	)
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders per diluted share and OP Unit (1)	$	(0.08	)	$	0.03		$	(0.21	)	$	0.12		$	(1.13	)	$	(1.20	)	$	(0.30	)	$	(3.00	)
Weighted average number of shares outstanding		79,184			77,401			78,330			77,149			5,317			5,279			5,313			5,222
Weighted average effect of full conversion of OP Units		1,226			2,023			(1,723	)		2,023			69			82			69			115
Effect of common share equivalents		1,081			357			897			411			—			72			—			60
Total weighted average shares outstanding, including OP Units		81,490			79,781			77,504			79,583			5,386			5,433			5,382			5,397

(1) Does not include the impact of $6.8 million and $20.5 million of accrued, undeclared and unpaid preferred share dividends for the three and nine months ended September 30, 2022 and 2021, respectively. The Company cannot declare and pay cash dividends on common shares while there exists a preferred dividend arrearage.

FFO attributable to common shareholders and OP Unit holders was a loss of $6.1 million for the three months ended September 30, 2022, an increase of $0.1 million, or 1.2%, compared to a loss of $6.0 million for the three months ended September 30, ~~2021,~~2021.

FFO attributable to common shareholders and OP Unit holders was $2.1 million for the nine months ended September 30, 2022, a ~~decrease~~change of ~~$15.7~~$11.2 million, or ~~162.1%~~122.4%, compared to a loss of $9.2 million for the nine months ended September 30, 2021. This change was primarily due to:

•

a $3.1 million increase in Same Store NOI primarily due to an increase in net new store openings and lease modifications over the previous twelve months;

•

a $7.6 million decrease in general and administrative expense primarily due to decreased incentive compensation partially offset by increased professional service costs;

•

a $4.6 million decrease on gain on debt extinguishment; and,

•

a $3.7 million increase in gain on sale of ~~$9.7 million~~preferred equity interest.

FFO attributable to common shareholders and OP Unit holders per diluted share and OP Unit was $(1.13) and $(1.10) for the three months ended September 30, ~~2020.~~2022 and 2021, respectively.

FFO attributable to common shareholders and OP Unit holders per diluted share and OP Unit was ~~$(0.07)~~$0.38 and ~~$0.12~~$(1.70) for the ~~three~~nine months ended September 30, 2022 and 2021, ~~and 2020,~~ respectively.

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FFO, as adjusted, attributable to common shareholders and OP Unit holders per diluted share and OP Unit was ~~$(0.08)~~$(1.13) and ~~$0.03~~$(1.20) for the three months ended September 30, ~~2021~~2022 and ~~2020, respectively.~~

~~FFO attributable to common shareholders and OP Unit holders was a loss of $9.2 million for the nine months ended September 30,~~ 2021, ~~a decrease of $25.0 million or 157.9%, compared to a gain of $15.8 million for the nine months ended September 30, 2020.~~

~~FFO attributable to common shareholders and OP Unit holders per diluted share and OP Unit was $(0.12) and $0.20 for the nine months ended September 30, 2021 and 2020,~~ respectively.

FFO, as adjusted, attributable to common shareholders and OP Unit holders per diluted share and OP Unit was ~~$(0.21)~~$(0.30) and ~~$0.12~~$(3.00) for the nine months ended September 30, 2022 and 2021, ~~and 2020,~~ respectively.

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LIQUIDITY AND CAPITAL RESOURCES

This “Liquidity and Capital Resources” section contains certain “forward-looking statements” that relate to expectations and projections that are not historical facts. These forward-looking statements reflect our current views about our future liquidity and capital resources, and are subject to risks and uncertainties that might cause our actual liquidity and capital resources to differ materially from the forward-looking statements. Additional factors that might affect our liquidity and capital resources include those discussed herein and in the section entitled “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 filed with the SEC. We do not intend to update or revise any forward-looking statements about our liquidity and capital resources to reflect new information, future events or otherwise.

Capital Resources

We currently expect to meet certain of our short-term liquidity requirements, except for the Fashion District Philadelphia debt that is discussed below, including operating expenses, recurring capital expenditures, tenant improvements and leasing commissions, generally through our available working capital and our First Lien Revolving Facility, assuming extension of the 2022 maturity date and otherwise subject to the terms and conditions of our First Lien Credit Agreement. See “Credit Agreements—Similar terms of the Credit Agreements” below ~~and Note 4 to our unaudited consolidated financial statements~~ for ~~more information about the covenants contained in our Credit Agreements.~~covenant information. We expect to spend approximately ~~$5.4~~$5.2 million related to our ~~unaccrued contractual obligations for~~ capital improvements and development projects in ~~2021 and~~ 2022. We believe that our net cash provided by operations will be sufficient to allow us to make any distributions necessary to enable us to continue to qualify as a REIT under the Internal Revenue Code of 1986, as amended. Our Credit Agreements limit our ability to declare and pay dividends on our common and preferred shares, subject to certain exceptions. We have deferred payments on our preferred shares and suspended payments on our common shares since the third quarter of 2020. Other than as may be required to maintain our status as a REIT, we do not anticipate that we will pay any cash dividends to holders of our common or preferred shares for the foreseeable future.

As a result of the existing cumulative unpaid dividends on our preferred shares and our bankruptcy filing, we are no longer able to register the offer and sale of securities on Form S-3. This creates additional limitations on our ability to raise capital in the capital markets, potentially increasing our costs of raising capital in the future. Our ability to raise capital in the capital markets may also be impacted by market fluctuations more generally, including as a result of the COVID-19 pandemic and related economic downturn.

We have availability under our revolving facility of ~~$75.2~~$103.9 million as of September 30, ~~2021.~~2022. We have been focused on improving operational efficiency and driving stable and increasing cash flows from operations while advancing our portfolio, including by undertaking, with the assistance of outside advisors, a thorough review of our business and capital structure and evaluating a wide range of opportunities to further strengthen our balance sheet and financial flexibility. We are actively seeking to raise additional capital, including through asset dispositions identified through our portfolio property reviews. Disposing of these properties can enable us to redeploy or recycle our capital to other uses. In many cases, we are marketing land parcels for development for a variety of different nontraditional, non-retail uses, including hotel, multifamily residential and healthcare uses, which we believe can also help position our portfolio within differentiated mixed-use environments. ~~During 2020 and through the third quarter of 2021,~~In 2022, we executed agreements of sale ~~for five land parcels for~~a number of properties including Cumberland Mall, various outparcels across multiple properties and a former Sears TBA location. The proceeds from the anticipated ~~multifamily development, one land parcel for anticipated hotel development, a development land parcel~~property sales pursuant to these mall and ~~an anchor box at a property, which~~retail space sale agreements, along with previously executed sale agreements that have not yet closed are expected to provide ~~an aggregate of up to~~ approximately ~~$105.4~~$130.0 million in gross proceeds ~~through 2023. We also closed on the sale of a property during the third quarter of 2021. The proceeds from our anticipated property sales~~which will primarily be used to repay amounts outstanding under our Credit Agreements. We are also in various stages of negotiations for the sale of land parcels for multifamily residential development, the sale of operating retail and outparcel assets and the sale of land parcels for hotel development. Each of ~~the~~these transactions is subject to numerous closing conditions, including the completion of due diligence and securing of entitlements, which in ~~several~~most cases ~~has been delayed due to the effects~~requires zoning variances and similar approvals. We have entered into certain purchase and sales agreements that were subsequently terminated, including an agreement for sale of ~~COVID-19 on business operations~~Exton Square Mall, and ~~availability of financing. Closing~~closing of the transactions cannot be ~~assured or~~assured. Additionally, the timing of the transaction completion ~~yet~~cannot be estimated with ~~certainty.~~certainty, in particular not all transactions are expected to close in 2022, and many of them are expected to extend into 2023 and 2024.

The following are some of the factors that could affect our cash flows and require the funding of future cash distributions, recurring capital expenditures, tenant improvements or leasing commissions with sources other than operating cash flows:

•

adverse changes or prolonged downturns in general, local or retail industry economic, financial, credit or capital market or competitive conditions, as a result of the COVID-19 pandemic, inflationary pressure or otherwise, leading to a reduction in real estate revenue or cash flows or an increase in expenses;

•

continued deterioration in our tenants’ business operations and financial stability, particularly in light of the COVID-19 pandemic, ~~and unsettled recovery,~~ including anchor or non-anchor tenant bankruptcies, leasing delays or terminations, or lower sales, causing deferrals or declines in rent, percentage rent and cash flows;

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•

inability to achieve targets for, or decreases in, property occupancy and rental rates, resulting in lower or delayed real estate revenue and operating income;

•

costs associated with negotiating and implementing asset dispositions, particularly if delays are experienced or agreements are terminated and new transactions must be pursued;

•

increases in operating costs, including ~~those related to improved health and safety protocols, and~~ increases that cannot be passed on to tenants, resulting in reduced operating income and cash flows; and

•

increases in interest rates, resulting in higher borrowing costs.

In addition, we are continuing to monitor the COVID-19 pandemic and the related restrictions and changes to behavior intended to reduce its spread, and its impact on our tenants, their supply chains and customers and the retail industry. Thus far, the pandemic and the actions taken to address it and the related overall worsening of economic conditions have had an adverse effect on our business, operations, liquidity and financial condition.

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As of September 30, 2021, all of our malls had re-opened while adhering to social distancing and sanitation and safety protocols designed to address the risks posed by COVID-19, however, many of our tenants continue to operate at reduced capacity. The pandemic’s effect ~~primarily beginning in the second quarter of 2020,~~ had a significant impact on our operations, financial condition, liquidity and results of operations in 2020, 2021, and the ~~early part~~first three quarters of ~~2021~~2022 and its impact is expected to continue through future periods. As of September 30, 2021, we had cash receipts of 92% of billed third quarter 2021 rents, an increase from cash receipts of 88% and 81% of billed rents as of June 30, 2021 and March 31, 2021, respectively. Including collections of other months’ rents, we collected 119% of our billed third quarter 2021 rents, and generally, collections of billed rents are improving when compared to prior periods since the beginning of the COVID-19 pandemic. We believe that our rent collections are probable, but expect that collections will continue to be below our tenants’ rent obligations as long as lingering effects of COVID-19, including continued outbreaks with the emergence of new ~~or renewed restrictions and business closures,~~variants, affect the return of customers to malls and the financial strength of our tenants. While we continue to record rental revenue, the reduced collection levels ~~have~~had impacted our liquidity position and may continue to do so. The extent and duration of such effects are uncertain, continuously changing and ~~continue to evolve and remain~~ difficult to predict. Additionally, the future outbreak of any other highly infectious or contagious diseases may materially and adversely affect our business, financial condition, liquidity and operating results.

We expect to meet certain of our longer-term requirements, such as obligations to fund redevelopment and development projects, certain capital requirements, renovations, expansions and other non-recurring capital improvements, through a variety of capital sources, subject to the terms and conditions of our Credit Agreements, as further described below.

LIBOR Alternative

In July 2017, the Financial Conduct Authority (“FCA”), which is the authority that regulates LIBOR, announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. The Alternative Reference Rates Committee (“ARRC”) has identified the Secured Overnight Financing Rate (“SOFR”) as the rate that represents best practice as the alternative to USD-LIBOR for use in derivatives and other financial contracts that are currently indexed to USD-LIBOR. WeThe FCA no longer publishes one-week and two-month U.S. dollar LIBOR rates and plans to cease publishing all other LIBOR tenors (overnight, one-month, three-month, six-month and 12-month) on June 30, 2023. It is not presently known whether SOFR or any other alternative reference rates will attain broad market acceptance as replacements of LIBOR. There remains uncertainty as to how the financial services industry will address the discontinuance of LIBOR in financial instruments that are ~~not able~~indexed to ~~predict when~~LIBOR. Further, various financial instruments indexed to LIBOR ~~will cease~~could experience different outcomes based on their contractual terms, ability to ~~be available~~amend those terms, market or ~~when there will be sufficient liquidity in the SOFR markets. Any changes adopted by FCA~~product type, legal or regulatory jurisdiction, and other ~~governing bodies in the method used for determining~~factors. Alternative reference rates that replace LIBOR may ~~result in a sudden~~not yield the same or ~~prolonged increase or decrease in reported LIBOR. If that were to occur, our interest payments~~similar economic results over the lives of the financial instruments, which could ~~change, perhaps substantially. In addition, uncertainty about~~adversely affect the ~~extent~~value of and ~~manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form.~~return on these instruments.

We have material contracts that are indexed to LIBOR and are monitoring and evaluating the related risks, which include interest on loans or amounts received and paid on derivative instruments. These risks arise in connection with transitioning contracts to a new alternative rate, including any resulting value transfer that may occur. The value of loans, securities, and derivative instruments tied to LIBOR could also be affected if LIBOR is limited or discontinued. For some instruments, the method of transitioning to an alternative rate may be challenging, as they may require negotiation with the respective counterparty.

If a contract is not transitioned to an alternative rate and LIBOR is discontinued, the impact on our contracts is likely to vary by contract. IfWhen LIBOR is ~~discontinued or if the methods of calculating LIBOR change from their current form,~~phased out and changes implemented, interest rates on our current or future indebtedness may be adversely affected.

While we expect LIBOR to be available in substantially its current form until the end of ~~2021,~~2022, it is possible that LIBOR will become unavailable prior to that point. This could occur, for example, if a requisite number of banks decline to make submissions to the LIBOR administrator. In that case, the risks associated with the transition to an alternative reference rate would be accelerated and magnified.

Credit Agreements

We have entered into two secured credit agreements (collectively, as amended, the “Credit Agreements”): (a) the First Lien Credit Agreement, which, as described in more detail below, includes (i) the $130.0 million First Lien Revolving Facility, and (ii) the $384.5 million First Lien Term Loan Facility, and (b) the Second Lien Credit Agreement, which, as described in more detail below, includes the $535.2 million Second Lien Term Loan Facility. The First Lien Term Loan Facility and the Second Lien Term Loan Facility are collectively referred to as the “Term Loans.” The Credit Agreements refinanced our previously existing credit agreements in effect prior to the effective date, including our secured term loan under the Credit Agreement dated as of August 11, 2020 (as amended, the “Bridge Credit Agreement”), our Seven-Year Term Loan

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Agreement entered into on January 8, 2014 (as amended, the “7-Year Term Loan”), and our 2018 Amended and Restated Credit Agreement entered into on May 24, 2018 (as amended, the “2018 Credit Agreement”).

As of September 30, ~~2021,~~2022, we had borrowed ~~$953.8~~$973.3 million under the Term Loans and ~~$54.8~~$26.1 million under the First Lien Revolving Facility. The carrying value of the Term Loans on our consolidated balance sheet as of September 30, ~~2021~~2022 is net of ~~$8.3~~$1.2 million of unamortized debt issuance costs. The maximum amount that was available to ~~us to~~ be borrowed by us under the First Lien Revolving Facility as of September 30, ~~2021~~2022 was ~~$75.2~~$103.9 million.

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Our obligations under the Credit Agreements are guaranteed by certain of our subsidiaries. Our obligations under the Credit Agreements and the guaranties are secured by mortgages and deeds of trust on a portfolio of 1210 of our subsidiaries’ properties, including nine malls and ~~three~~one additional ~~parcels.~~parcel. The obligations are further secured by a lien on substantially all of our personal property pursuant to collateral agreements and a pledge of substantially all of the equity interests held by us and the guarantors, pursuant to pledge agreements, in each case subject to limited exceptions.

The maturity date of the Credit Agreements is December 10, 2022 (or such earlier date that the obligations under the applicable Credit Agreement have been accelerated), unless extended by one year until December 10, 2023 at our option (the “Maturity Date”). Any such extension would be subject to our fulfillment of certain conditions including maintaining minimum liquidity of $35.0 million, a minimum corporate debt yield of 8.0% and a maximum loan-to-value ratio of 105% for the total first lien and second lien loans and letters of credit and the Borrowing Base Properties as determined by an appraisal (provided that we may obtain a second appraisal of each Borrowing Base Property prepared by a nationally recognized appraisal firm and use the highest appraised value), and provided that no default or event of default exists and our representations and warranties are true in all material respects. In September 2022, we provided notice of our intention to extend the maturity date under the Credit Agreements through December 2023. We believe that we have demonstrated compliance with the criteria above for extension, subject to recalculation of certain debt yield covenants and payment of certain extension fees.

First Lien Credit Agreement

On December 10, 2020, we entered into an Amended and Restated First Lien Credit Agreement (the “First Lien Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo Bank”) and the other financial institutions signatory thereto and their assignees, for secured loan facilities consisting of: (i) a secured first lien revolving credit facility allowing for borrowings up to $130.0 million, including a sub-facility for letters of credit to be issued thereunder in an aggregate stated amount of up to $10.0 million (collectively, the “First Lien Revolving Facility”), and (ii) a $384.5 million secured first lien term loan facility (the “First Lien Term Loan Facility”).

Amounts borrowed under the First Lien Credit Agreement may be either Base Rate Loans or LIBOR Loans. Base Rate Loans bear interest at the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) the LIBOR Market Index Rate plus 1.0%, provided that the Base Rate will not be less than 1.50% per annum, in each case plus (w) for revolving loans, 2.50% per annum, and (x) for term loans, 4.74% per annum. LIBOR Loans bear interest at LIBOR plus (y) for revolving loans, 3.50% per annum, and (z) for term loans, 5.74% per annum, in each case, provided that LIBOR will not be less than 0.50% per annum. Interest is due to be paid in cash on the last day of each applicable interest period (with rolling 30-day interest periods) and on the Maturity Date. We must pay certain fees to the administrative agent for the account of the lenders in connection with the First Lien Credit Agreement, including an unused fee for the account of the revolving lenders, which will accrue (i) 0.35% per annum on the daily amount of the unused revolving commitments when that amount is greater than or equal to 50% of the aggregate amount of revolving commitments, and (ii) 0.25% when that amount is less than 50% of the aggregate amount of revolving commitments. Accrued and unpaid unused fees will be payable quarterly in arrears during the term of the First Lien Credit Agreement and on the Revolving Termination Date (or any earlier date of termination of the revolving commitments or reduction of the revolving commitments to zero).

Letters of credit and the proceeds of revolving loans may be used (i) to refinance indebtedness under the Bridge Credit Agreement (which agreement was ~~cancelled~~canceled and refinanced upon our entry into the Credit ~~Agreement)~~Agreements), (ii) for working capital and general corporate purposes (subject to certain exceptions set forth in the First Lien Credit Agreement, including limitations on investments in non-Borrowing Base Properties), and (iii) to fund professional fee payments and other fees and expenses subject to the provisions of the Plan and related confirmation order and for other uses permitted by the provisions of the First Lien Credit Agreement, Plan and confirmation order, in each case consistent with an approved annual business plan. The proceeds of term loans may only be used to refinance existing indebtedness under the 2018 Credit Agreement and the 7-Year Term Loan. We may terminate or reduce the amount of the revolving commitments at any time and from time to time without penalty or premium, subject to the terms of the First Lien Credit Agreement.

Second Lien Credit Agreement

On December 10, 2020, we also entered into a Second Lien Credit Agreement (the “Second Lien Credit Agreement”) with Wells Fargo Bank and the other financial institutions signatory thereto and their assignees for a $535.2 million secured second lien term loan facility (the “Second Lien Term Loan Facility”).

Amounts borrowed under the Second Lien Credit Agreement may be either Base Rate Loans or LIBOR Loans. Base Rate Loans bear interest at the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) the LIBOR Market Index Rate plus 1.0%, provided that the Base Rate will not be less than 1.50% per annum, in each case plus 7.00% per annum. LIBOR Loans bear interest at LIBOR plus 8.00% per

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annum, provided that LIBOR will not be less than 0.50% per annum. Interest is due to be paid in kind on the last day of each applicable interest period (with rolling 30-day interest periods) by adding the accrued and unpaid amount thereof to the principal balance of the loans under the Second Lien Credit Agreement and then accruing interest on the increased principal amount (provided that after the discharge of our Senior Debt Obligations, interest will be paid in cash). We must pay certain fees to the administrative agent for the account of the lenders in connection with the Second Lien Credit Agreement.

The proceeds of loans under the Second Lien Credit Agreement may only be used to refinance existing indebtedness under the 2018 Credit Agreement and the 7-Year Term Loan.

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On February 8, 2021, the Company entered into the first amendment to the Second Lien Credit Agreement (“First Amendment”). The First Amendment provided for elimination of approximately $5.3 million of the disputed default interest that was capitalized into the principal balance of the Second Lien Term Loan Facility, reducing the outstanding principal amount of loans outstanding under the Second Lien Credit Agreement, retroactively as of December 10, 2020, to $535.2 million. The First Amendment also eliminated the disputed PIK interest that was capitalized through the date of the amendment.

~~On April 13, 2021, we entered into Agency Resignation, Appointment, Acceptance and Waiver Agreements pursuant to which Wells Fargo Bank resigned as Administrative Agent and~~ Wilmington Savings Fund Society, FSB ~~was appointed successor~~is Administrative Agent under the First Lien Credit Agreement, the Second Lien Credit Agreement and, in each case, the related loan documents. There is currently no ~~successor~~ letter of credit issuer under the First Lien Revolving Facility, accordingly, ~~the Company~~we cannot currently access the letters of credit sub-facility.

See our Annual Report on Form 10-K for the year ended December 31, ~~2020 and Note 4 to our unaudited consolidated financial statements~~2021 for additional information on the Credit Agreements.

FDP Loan Agreement

As described in note 4 of our consolidated financial statements, PM Gallery LP, a Delaware limited partnership and joint venture entity owned indirectly by us and The Macerich Company (“Macerich”), previously entered into a $250.0 million term loan in January 2018 (as amended in July 2019 to increase the total maximum potential borrowings to $350.0 million) to fund the ongoing redevelopment of Fashion District Philadelphia and to repay capital contributions to the venture previously made by the partners. On December 10, 2020, PM Gallery LP, together with certain other subsidiaries owned indirectly by us and Macerich (including the fee and leasehold owners of the properties that are part of the Fashion District Philadelphia project), entered into an Amended and Restated Term Loan Agreement (the “FDP Loan Agreement”). In connection with the execution of the FDP Loan Agreement, a $100.0 million principal payment was made (and funded indirectly by Macerich) to pay down the existing loan, reducing the outstanding principal under the FDP Loan Agreement from $301.0 million to $201.0 million. In connection with the execution of the FDP Loan Agreement, the governing structure of PM Gallery LP was modified such that, effective as of January 1, 2021, Macerich is responsible for the entity’s operations and, subject to limited exceptions, controls major decisions.

The FDP Loan Agreement provides for (i) a maturity date of January 22, 2023, with the potential for a one-year extension upon the borrowers’ satisfaction of certain conditions, (ii) an interest rate at the borrowers’ option with respect to each advance of either (A) the Base Rate (defined as the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50%, and (c) the LIBOR Market Index Rate plus 1.00%) plus 2.50% or (B) LIBOR for the applicable period plus 3.50%, (iii) a full recourse guarantee of 50% of the borrowers’ obligations by PREIT Associates, L.P., on a several basis, (iv) a full recourse guarantee of certain of the borrowers’ obligations by The Macerich Partnership, L.P., up to a maximum of $50.0 million, on a several basis, (v) a pledge of the equity interests of certain indirect subsidiaries of PREIT and Macerich, as well as of PREIT-RUBIN, Inc. and one of its subsidiaries, that have a direct or indirect ownership interest in the borrowers, (vi) a non-recourse carve-out guaranty and a hazardous materials indemnity by each of PREIT Associates, L.P. and The Macerich Partnership, L.P., and (vii) mortgages of the borrowers’ fee and leasehold interests in the properties that are part of the Fashion District Philadelphia project and certain other properties. The FDP Loan Agreement contains certain covenants typical for loans of its type. The partnership paid down the FDP Loan Agreement balance by $83.1 million in August 2022. As noted above, PREIT Associates L.P. has severally guaranteed its 50% share of the FDP Term Loan (see Note 3 to our consolidated financial statements), which had $111.5 million outstanding as of September 30, 2022 (our share of which is $55.8 million). The joint venture also has the outstanding Partnership Loan of $119.1 million outstanding as of September 30, 2022 (our share of which is $59.5 million) and the majority of the proceeds were used to pay down the FDP Term Loan in December 2020 and the remainder was used to fund ongoing capital expenditures at the property as well as accrued interest. We monitor the joint venture's cash flow and its ability to meet its debt service requirements and to comply with the financial covenants under the FDP Loan Agreement. If the joint venture were unable to satisfy its obligations under the FDP Term Loan, and we were required to satisfy the payment obligations under the guarantee, we anticipate that we would not be able to satisfy such obligation and that these events would have a material impact on our liquidity and available capital resources. There are also circumstances in which a default of the FDP Term Loan could give rise to an event of default under our Credit Agreements. See Going Concern Considerations section in Note 1 of our audited consolidated financial statements for further information.

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Preferred Shares

We have 3,450,000 7.375% Series B Cumulative Redeemable Perpetual Preferred Shares (the “Series B Preferred Shares”) outstanding, 6,900,000 7.20% Series C Cumulative Redeemable Perpetual Preferred Shares (the “Series C Preferred Shares”) outstanding and 5,000,000 6.875% Series D Cumulative Redeemable Perpetual Preferred Shares (the “Series D Preferred Shares”) outstanding. Upon 30 days’ notice, we may redeem any or all of the Series B Preferred Shares or Series C Preferred Shares at $25.00 per share plus any accrued and unpaid dividends. We may not redeem the Series C Preferred Shares and the Series D Preferred Shares before January 27, 2022 and September 15, 2022, respectively, except to preserve our status as a REIT or upon the occurrence of a Change of Control, as defined in the Trust Agreement addendums designating the Series C and Series D Preferred Shares, respectively. On and after January 27, 2022 and September 15, 2022, we may redeem any or all of the Series C Preferred Shares or the Series D Preferred Shares, respectively, at $25.00 per share plus any accrued and unpaid dividends. In addition, upon the occurrence of a Change of Control, we may redeem any or all of ~~the Series C Preferred Shares or~~ the Series D Preferred Shares for cash within 120 days after the first date on which such Change of Control occurs at $25.00 per share plus any accrued and unpaid dividends. The Series B Preferred Shares, the Series C Preferred Shares and the Series D Preferred Shares have no stated maturity, are not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless we redeem or otherwise repurchase them or they are converted.

In 2020, the Company suspended payment of its preferred share dividends. Dividends on the Series B, Series C and Series D preferred shares are cumulative and therefore will continue to accrue at an annual rate of $1.8436 per share, $1.80 per share and $1.7188 per share, respectively. As of September 30, ~~2021,~~2022, the cumulative amount of unpaid dividends on our issued and outstanding preferred shares totaled ~~$34.2~~$61.6 million.

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This consisted of unpaid dividends per share on the Series B, Series C and Series D preferred shares of ~~$2.30~~$4.15 per share, ~~$2.25~~$4.05 per share and ~~$2.15~~$3.87 per share, respectively.

Both the First Lien Credit Agreement and the Second Lien Credit Agreement prohibit any redemption of preferred shares so long as such agreements remain in effect.

Mortgage Loan Activity—Consolidated Properties

~~Francis Scott Key Mall~~

On ~~June 25,~~December 10, 2021, certain of our consolidated subsidiaries entered into an amendment to our mortgage loan secured by our property at Francis Scott Key Mall, in Frederick, Maryland, which provided for a reduction in principal balance from property cash on hand to $60.5 million, an extension of the maturity date until June 25, 2024, with an option to extend an additional year if certain criteria are met. Among other things, the amendment also provides for a variable interest rate of one month LIBOR plus 3.6% with interest only payments. Also, the amendment provides for excess cash flow from the property to be deposited into a cash collateral account which will be used at the administrative agent’s discretion to pay down the loan balance until certain requirements are met. The Company capitalized $0.3 million of lender fees as additional debt issuance costs in connection with the amendment.

~~Viewmont Mall~~

On June 25, 2021, certain of our consolidated subsidiaries entered into an amendment to our $67.2 million mortgage loan secured by our property at Viewmont Mall in Scranton, Pennsylvania, which provides for an extension of the maturity date until June 25, 2024, with an option to extend an additional year if certain criteria are met. Among other things, the amendment also provides for a variable interest rate of one month LIBOR plus 3.6% with interest only payments. Also, the amendment provides for excess cash flow from the property to be deposited into a cash collateral account which will be used at the administrative agent’s discretion to pay down the loan balance until certain requirements are met. The Company capitalized $0.5 million of lender fees as additional debt issuance costs in connection with the amendment.

~~Woodland Amendment~~

~~On February 8, 2021, certain of our consolidated subsidiaries~~we entered into an amendment to our mortgage loan secured by the property at Woodland Mall in Grand Rapids, Michigan, which ~~provides~~provided for an extension of the maturity date until December 10, ~~2021, with~~2022 and had an option to extend an additional year if certain criteria are met. Among other things, the amendment also (i) reduces the cap on guarantor liability for PREIT Associates, L.P. to $10.0 million; (ii) restricts the lenders from exercising their rights and remedies under the guaranty until December 10, 2022, unless there is a bankruptcy filing with respect to the borrowers or guarantor; (iii) adjusts the interest rate; (iv) provides for the pledgeoutstanding balance of ~~additional collateral~~$110.7 million as security for the borrowers’ obligations (including the anchor parcel at Woodland Mall which was released as collateral from our senior secured credit facilities); and (v) requires the borrowers to pay to the lenders a $5.0 million remargin payment.of September 30, 2022. We capitalized $0.3 million of lender fees as additional debt issuance costs in connection with the amendment.

~~Forbearance Agreements~~

During the year ended December 31, 2020, we entered into forbearance and loan modification agreements for our consolidated properties Cherry Hill Mall, Cumberland Mall, Dartmouth Mall, Francis Scott Key Mall, Viewmont Mall, and Woodland Mall and for our unconsolidated partnership properties Metroplex and Springfield Mall. These arrangements allowed us to defer principal payments, and in some cases interest as well, on the mortgages between May and August of 2020 depending on the terms of the contract. At the end of each deferment period, the repayment period spans from four to six months to pay back the deferred amounts. The repayment periods ranged from August 2020 through February 2021 depending on the terms of the specific agreements. As of September 30, ~~2021,~~2022, we had repaid all principal and interest deferrals.

~~Valley View Mall~~

In the second quarter of 2020, we defaulted on the mortgage loan secured by Valley View Mall due to a missed payment on June 1, 2020, and not paying the balloon payment of ~~$27.3~~$27.2 million. In the third quarter of 2020, the operations of the property were transferred to a receiver and foreclosure was filed. ~~We recorded a gain on derecognition of property during~~In May 2022, the ~~third quarter 2020~~foreclosure proceedings were completed and ~~have recorded~~both the mortgage balance and ~~an offsetting~~ contract asset related to this mortgage loan were written off. As such, no mortgage balance or contract asset in relation to Valley View Mall remains on our consolidated balance ~~sheets~~sheet as of September 30, ~~2021~~2022.

In the third quarter of 2022, we defaulted on the mortgage loan secured by Cumberland Mall due to a missed balloon payment of $38.2 million on August 1, 2022. In October 2022, we sold Cumberland Mall and ~~December~~the mortgage loan was paid off in full using net proceeds from the sale.

On August 31, ~~2020, both~~2022, certain of ~~which will be eliminated when~~our consolidated subsidiaries entered into an amendment and extension to our mortgage loan secured by the property at Cherry Hill Mall, which had a maturity date of September 1, 2022. The maturity date was extended by one month and subsequently for an additional month through November 1, 2022. As of September 30, 2022, the mortgage loan outstanding balance was $246.5 million. On October 31, 2022, certain of our consolidated subsidiaries entered into a second amendment and extension agreement to extend the maturity date for three months through February 1, 2023 with one option to extend by an additional three month period through May 1, 2023. See Part II, Item 1.A, Risk Factors “Secured indebtedness exposes us to the possibility of foreclosure, ~~sale is completed.~~which could result in the loss of our investment in certain of our subsidiaries or in a property or group of properties or other assets subject to the indebtedness.”

Mortgage Loans

Our mortgage loans, which are secured by ~~nine~~eight of our consolidated properties, are due in installments over various terms extending to the year 2025. Our nine properties include Valley View Mall, which was assigned to a receiver in the third quarter 2020. Although we have not yet conveyed Valley View Mall because foreclosure proceedings are ongoing, we no longer control or operate the property as a result of a court order assigning the receiver. The mortgage principal balance of Valley View Mall was $27.2 million at September 30, 2021 and December 31, 2020, which we will continue to recognize until the foreclosure process is completed. SixSeven of these mortgage loans bear interest at fixed interest rates that range from 3.88% to ~~5.95%~~7.19% and had a weighted average interest rate of ~~4.09%~~4.48% at September 30, ~~2021.~~2022. Three of our mortgage loans ~~bear~~bears interest at a variable rates, a portion of which has been swapped to fixed rates, and ~~had~~has a weighted average interest rate of ~~3.72%~~6.67% at September 30, ~~2021.~~2022. The weighted average interest rate of all consolidated mortgage loans was ~~3.98%~~4.84% at September 30, ~~2021.~~2022. Mortgage loans for properties owned by unconsolidated partnerships are

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accounted for in “Investments in partnerships, at equity” and “Distributions in excess of partnership investments,” and are not included in the table below.

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The following table outlines the timing of principal payments and balloon payments pursuant to the terms of our mortgage loans on our consolidated properties as of September 30, ~~2021:~~2022:


(in thousands of dollars)	Total		Remainder of 2022			2023-2024		2025-2026		Thereafter
Principal payments	$	19,316	$	1,918		$	12,992	$	4,406	$	—
Balloon payments		743,033		357,165	(1)		174,523		211,345		—
Total		762,349	$	359,083		$	187,515	$	215,751	$	—
Less: unamortized debt issuance costs		1,119
Carrying value of mortgage notes payable	$	761,230

(1) Includes Cherry Hill Mall mortgage for which, subsequent to the end of the quarter ended September 30, 2022, the maturity was extended through February 1, 2023.

(in thousands of dollars)

Total

Remainder of
2021

2022-2023

2024-2025

Principal payments

$
35,370

$
4,701

$
19,858

$
10,811

Balloon payments

822,971

141,363

342,577

339,031

Total

858,340

$
146,064

$
362,435

$
349,842

Less: unamortized debt issuance costs

1,354

Carrying value of mortgage notes payable

$
856,986

Contractual Obligations

The following table presents our aggregate contractual obligations as of September 30, ~~2021~~2022 for the periods presented:


(in thousands of dollars)	Total		Remainder of 2021			2022-2023			2024-2025		Thereafter		Total		Remainder of 2022			2023-2024		2025-2026		Thereafter
Mortgage loans	$	858,341	$	146,064	(1)	$	362,435		$	349,842	$	—	$	762,349	$	359,083	(1)	$	187,515	$	215,751	$	—
Term Loans		953,782		—			953,782	(2)		—		—		973,388		973,388	(2)				—		—
First Lien Revolving Facility		54,830		—			54,830			—		—		26,078		26,078			—		—		—
Interest on indebtedness(3)		94,215		15,521			61,016			17,678		—		57,466		21,565			29,520		6,381		—
Operating leases		9,890		284			1,993			1,730		5,883		8,834		249			1,859		1,688		5,038
Ground leases		51,964		424			3,168			3,103		45,269		50,352		396			3,168		3,168		43,620
Finance leases		6,168		247			1,971			1,878		2,072		5,184		247			1,935		1,855		1,147
Development and redevelopment commitments(4)		5,403		4,364			1,039			—		—		5,226		4,631			595		—		—
Total	$	2,034,593	$	166,904		$	1,440,234		$	374,231	$	53,224	$	1,888,877	$	1,385,637		$	224,592	$	228,843	$	49,805

(1) ~~The 2021 balance includes $27.2 million~~Includes Cherry Hill Mall mortgage for ~~our mortgage loan secured by Valley View Mall,~~ which, ~~was in default as~~subsequent to the end of the quarter ended September 30, ~~2021. We do not expect to pay~~2022, the ~~principal balance remaining.~~maturity was extended through February 1, 2023.

(2) Includes our First Lien Term Loan of ~~$380.1~~$345.1 million and the anticipated maturity date balance of our Second Lien Term Loan Facility of ~~$573.7~~$628.2 million, which includes estimated capitalized PIK interest based on current interest rates. In September 2022, we provided notice of our intention to extend the maturity date under the Credit Agreements through December 2023.

(3) Includes interest payments expected to be made on consolidated debt, including those in connection with interest rate swap agreements.

(4) The timing of the payments of these amounts is uncertain. We expect that a significant majority of such payments (of which we include 100% of our obligations related to Fashion District Philadelphia, which opened in September 2019) will be made prior to December 31, ~~2021,~~2022, but cannot provide any assurance that changed circumstances at these projects will not delay the settlement of these obligations.

Interest Rate Derivative Agreements

As of September 30, ~~2021,~~2022, we had interest rate swap agreements designated in qualifying hedging relationships outstanding with a weighted average base interest rate of ~~2.57%~~2.92% on a notional amount of ~~$439.8~~$400.0 million, maturing ~~on various dates through~~in May 2023. As of September 30, 2021, our non-designated swaps outstanding with a weighted average base interest rate of 1.85% on a notional amount of $175.0 million, maturing on various dates through December 2021.2023 or May 2024. We originally entered into these interest rate swap agreements in order to hedge the interest payments associated with our issuances of variable interest rate long term debt. The interest rate swap agreements are net settled monthly.

For derivatives that have been designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in “Accumulated other comprehensive (loss) income” and subsequently reclassified into “Interest expense, net” in the same periods during which the hedged transaction affects earnings. Through December 10, 2020, all of our derivatives were designated and qualified as cash flow hedges of interest rate risk.

On December 10, 2020 as a result of the ~~Financial Restructuring,~~financial restructuring, we de-designated seven of our interest rate swaps which were previously designated cash flow hedges against the 2018 Credit Facility and 7-year Term Loan, as the hedged forecasted transactions were no longer probable to occur during the hedged time period due to the ~~Financial Restructuring~~financial restructuring as described in Note 1. As such, the Company accelerated the reclassification of a portion of the amounts in other comprehensive (loss) income to earnings which resulted in a loss of $2.8 million that was recorded within interest expense, net in the consolidated statement of operations. Additionally, on December 10, 2020, the Company voluntarily de-designated the remaining thirteen interest swaps that were also previously designated as cash flow hedges against the 2018 Credit Facility and 7-year Term Loan. Upon de-designation, the accumulated other comprehensive (loss) income balance of each of these de-designated derivatives will be separately reclassified to earnings as the originally hedged forecasted transactions affect earnings. Through

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December 10, 2020, the changes in fair value of the derivatives were recorded to accumulated other comprehensive (loss) income in the consolidated balance sheets.

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On December 22, 2020, we re-designated nine interest rate swaps with a notional amount of $375.0 million as cash flow hedges of interest rate risk against the First Lien Term Loan Facility. These interest rate swaps qualified for hedge accounting treatment with changes in the fair value of the derivatives recorded through accumulated other comprehensive (loss) income.

~~During~~On August 24, 2022, we entered into two interest rate swap agreements with a weighted average interest swap rate of 3.59% on a notional amount of $100.0 million maturing on May 24, 2024. We entered into these interest rate swap agreements to hedge the ~~nine months ended September 30, 2021, we had three designated swaps mature.~~ interest payments associated with our variable interest rate mortgage loans. We have assessed the effectiveness of these interest rate swap agreements as hedges at inception and will do so on a quarterly basis.

As of September 30, ~~2021,~~2022, we had 109 total derivatives which were designated as cash flow hedges.

We recognize all derivatives at fair value as either assets or liabilities in the accompanying consolidated balance sheets. Our derivative assets are recorded in “Deferred costs and other assets” and our derivative liabilities are recorded in “Fair value of derivative instruments.”

Over the next twelve months we estimate that ~~$8.4~~$3.5 million will be reclassified as ~~an increase~~a decrease to interest expense in connection with our designated derivatives. The recognition of these amounts could be accelerated in the event that we repay amounts outstanding on the debt instruments and do not replace them with new borrowings.

Derivatives not designated as hedges are not speculative and are also used to manage the Company’s exposure to interest rate movements and other identified risks but do not meet the strict hedge accounting requirements. For swaps that were not re-designated subsequent to December 10, 2020, changes in the fair value of derivatives are recorded directly in earnings as interest expense in the consolidated statement of operations. During the nine months ended September 30, ~~2021,~~2022 we had ~~four~~no non-designated swaps mature. As of September 30, ~~2021,~~2022, we had ~~seven total~~no derivatives which were non-designated.

CASH FLOWS

Net cash provided by operating activities totaled $38.4 million for the nine months ended September 30, 2022 compared to net cash provided by operating activities of $38.2 million for the nine months ended September 30, ~~2021 compared to net cash used in operating activities of $8.8 million for the nine months ended September 30, 2020.~~2021. This ~~increase~~decrease in cash provided by operating activities was due to changes in working capital between periods primarily as a result of strong ~~collection efforts~~collections of ~~our~~ outstanding accounts receivable in the ~~nine months ended September 30, 2021,~~first half of the prior year, which are included in change in other assets in our statement of cash flows.

Cash flows provided by investing activities were $26.6 million for the nine months ended September 30, 2022 compared to cash flows used in investing activities ~~were~~of $15.2 million for the nine months ended September 30, ~~2021 compared to cash~~2021. Cash flows ~~used in~~provided by investing activities ~~of $61.2 million~~ for the nine months ended September 30, ~~2020.~~ 2022 included $28.1 million in proceeds from sales of real estate and equity method investment, and $2.4 million of proceeds from sale of preferred equity interest partially offset by $2.9 million of additions to construction in progress and $11.5 million of investments in real estate improvements.

Cash flows used in investing activities for the nine months ended September 30, 2021 included $5.5 million of additions to construction in progress and $12.6 million of investments in real estate improvements.

Cash flows used in ~~investing~~financing activities were $88.7 million for the nine months ended September 30, 2022 compared to cash flows used in financing activities of $88.7 million for the nine months ended September 30, 2021. Cash flows used in financing activities for the nine months ended September 30, ~~2020~~2022 included ~~$22.0~~$24.8 million of ~~proceeds from asset sales including the sale~~principal payments on mortgage loans, along with $0.4 million of ~~three outparcels. Cash flows used in investing activities included additions to construction in progress of $31.5~~deferred financing costs paid for our Woodland Mall mortgage extension. Aggregate repayments on our First Lien Revolving Facility and Term Loans were $39.7 million ~~investments in partnerships of $30.2~~and $11.5 million, ~~(primarily at Fashion District Philadelphia), and real estate improvements of $16.4 million (primarily related to ongoing improvements at our properties).~~

~~Cash flows used in financing activities were $33.4 million for~~respectively, during the nine months ended September 30, ~~2021 compared to cash flows provided by financing activities~~2022. Additionally, the value of ~~$92.9 million for~~shares retired under the ~~nine months ended September 30, 2020.~~ equity incentive plan, net of shares issued, was $0.8 million.

Cash flows used in financing activities for the nine months ended September 30, 2021 included a $4.0 million pay down of our First Lien Term Loan, $19.7 million of principal payments on mortgage loans, $135.2 million in paydowns of Francis Scott Key and Viewmont Malls’ mortgages, along with $1.0 million of deferred financing costs paid for our Woodland Mall, Francis Scott Key Mall, and Viewmont Mall mortgage extensions. These were offset by $127.7 million proceeds from refinancing of the Francis Scott Key and Viewmont Malls mortgages. We also had $0.6 million of shares retired under our equity compensation plan, net of shares issued.

Cash flows provided by financing activities were $92.9 million for the nine months ended September 30, 2020 and included $120.0 in net borrowings under our 2018 Revolving Facility, $22.5 million of net borrowing under our Bridge Facility, and $4.5 million of proceeds from the note payable described in Note 4 to our unaudited financial statements. These were offset by aggregate dividends and distributions of $32.2 million, principal installments on mortgage loans of $9.5 million, and net repayments of term loans of $12.0 million.

ENVIRONMENTAL

We are aware of certain environmental matters at some of our properties. We have, in the past, performed remediation of such environmental matters, and we are not aware of any significant remaining potential liability relating to these environmental matters or of any obligation to satisfy requirements for further remediation. We may be required in the future to perform testing relating to these matters. We have insurance coverage for certain environmental claims up to $10.0 million per occurrence and up to $10.0 million in the aggregate over our two year policy term. See our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, in the section entitled “Item 1A. Risk Factors— Risks

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Related to Our Business and Our Properties—We might incur costs to comply with environmental laws, which could have an adverse effect on our results of operations.”

COMPETITION AND TENANT CREDIT RISK

Competition in the retail real estate market is intense. We compete with other public and private retail real estate companies, including companies that own or manage malls, power centers, strip centers, lifestyle centers, factory outlet centers, theme/festival centers and community centers, as well as other commercial real estate developers and real estate owners, particularly those with properties near our properties, on the basis of several factors, including location and rent charged. We compete with these companies to attract customers to our properties, as well as to attract anchor and non-anchor store and other tenants. Our malls and our other operating properties face competition from similar retail, destination dining and entertainment centers, including more recently developed or renovated centers that are near our properties. We also face competition from a variety of different retail formats, including internet retailers, discount or value retailers, home shopping networks, mail order operators, catalogs, and telemarketers. Our tenants face competition from companies at the same and other properties and from other retail formats as well, including internet retailers. They also face competition for employees in the current ~~highly~~largely constrained labor market, which could impact their operations and ~~operating~~operation costs. This competition could have a material adverse effect on our ability to lease space and on the amount of rent and expense reimbursements that we receive.

The existence or development of competing retail properties and the related increased competition for tenants might, subject to the terms and conditions of the Credit Agreements, require us to make capital improvements to properties that we would have deferred or would not have otherwise planned to make and might also affect the total sales, occupancy and net operating income of such properties. Any such capital improvements, undertaken individually or collectively, would involve costs and expenses that could adversely affect our results of operations.

If we seek to make acquisitions, competitors (such as institutional investors, other REITs and other owner-operators of retail properties) might drive up the price we must pay for properties, parcels, other assets or other companies or might themselves succeed in acquiring those properties, parcels, assets or companies. In addition, our potential acquisition targets might find our competitors to be more attractive suitors if they have greater resources, are willing to pay more, or have a more compatible operating philosophy. We might not succeed in acquiring retail properties or development sites that we seek, or, if we pay a higher price for a property and/or generate lower cash flow from an acquired property than we expect, our investment returns will be reduced, which will adversely affect the value of our securities.

We receive a substantial portion of our operating income as rent under leases with tenants. At any time, any tenant having space in one or more of our properties could experience a downturn in its business that might weaken its financial condition. Such tenants might enter into or renew leases with relatively shorter terms. Such tenants might also defer or fail to make rental payments when due, delay or defer lease commencement, voluntarily vacate the premises or declare bankruptcy, which could result in the termination of the tenant’s lease or preclude the collection of rent in connection with the space for a period of time, and could result in material losses to us and harm to our results of operations. Also, it might take time to terminate leases of underperforming or nonperforming tenants and we might incur costs to remove such tenants. Some of our tenants occupy stores at multiple locations in our portfolio, and so the effect of any bankruptcy or store closings of those tenants might be more significant to us than the bankruptcy or store closings of other tenants. In addition, under many of our leases, our tenants pay rent based, in whole or in part, on a percentage of their sales. Accordingly, declines in these tenants’ sales directly affect our results of operations. Also, if tenants are unable to comply with the terms of their leases, or otherwise seek changes to the terms, including changes to the amount of rent, we might modify lease terms in ways that are less favorable to us. Given current conditions in the economy, certain industries and the capital markets, in some instances retailers that have sought protection from creditors under bankruptcy law have had difficulty in obtaining debtor-in-possession financing, which has decreased the likelihood that such retailers will emerge from bankruptcy protection and has limited their alternatives. All of these factors have been exacerbated by the impact of the ongoing COVID-19 ~~pandemic in 2020 and 2021.~~pandemic.

SEASONALITY

There is seasonality in the retail real estate industry. Retail property leases often provide for the payment of all or a portion of rent based on a percentage of a tenant’s sales revenue, or sales revenue over certain levels. Income from such rent is recorded only after the minimum sales levels have been met. The sales levels are often met in the fourth quarter, during the November/December holiday season. Also, many new and temporary leases are entered into later in the year in anticipation of the holiday season and a higher number of tenants vacate their space early in the year. As a result, our occupancy and cash flows are generally higher in the fourth quarter and lower in the first and second quarters. Our concentration in the retail sector increases our exposure to seasonality and has resulted, and is expected to continue to result, in a greater percentage of our cash flows being received in the fourth quarter.

INFLATION

Inflation can have many effects on financial performance. Retail property leases often provide for the payment of rent based on a percentage of sales, which might increase with inflation. Customers might spend less at our retailers, which might decrease our rent based on a percentage of sales, due to inflation. Leases might also provide for tenants to bear all or a portion of operating expenses, which might reduce the impact of such increases on us. However, rent increases might not keep up with inflation, or if we recover a smaller proportion of property operating expenses, we might bear more costs if such expenses increase because of inflation.

FORWARD LOOKING STATEMENTS

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This Quarterly Report on Form 10-Q for the quarter ended September 30, ~~2021 ,~~2022, together with other statements and information publicly disseminated by us, contain certain forward-looking statements that can be identified by the use of words such as “anticipate,” “believe,” “estimate,” “expect,” “project,” “intend,” “may” or similar expressions. Forward-looking statements relate to expectations, beliefs, projections, future plans, strategies, anticipated events, trends and other matters, including our expectations regarding the impact of COVID-19 on our business, that are not historical facts. These forward-looking statements reflect our current views about future events, achievements, results, cost reductions, dividend payments and the impact of COVID-19 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 the following:

•

the effectiveness of our financial restructuring and any additional strategies that we may employ to address our liquidity and capital resources in the future;

•

our ability to achieve forecasted revenue and pro forma leverage ratio and generate free cash flow to further reduce indebtedness;

•

the COVID-19 global pandemic and the public health and governmental response, which have created periods of significant economic disruption and also have and may continue to exacerbate many of the risks listed herein;

•

changes in the retail and real estate industries, including bankruptcies, consolidation and store closings, particularly among anchor tenants;

•

~~current~~changes in economic conditions, including ~~current high~~unemployment rates ~~of unemployment~~ and its effects on consumer confidence and spending, supply chain challenges, the current inflationary environment, and the corresponding effects on tenant business performance, prospects, solvency and leasing decisions;

•

our inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise;



~~our ability to maintain and increase property occupancy, sales and rental rates;~~



~~increases in operating costs that cannot be passed on to tenants;~~



~~the effects of online shopping and other uses of technology on our retail tenants;~~



~~risks related to our development and redevelopment activities, including delays, cost overruns and our inability to reach projected occupancy or rental rates;~~



~~social unrest and acts of vandalism or violence at malls, including our properties, or at other similar spaces, and the potential effect on traffic and sales;~~



the frequency, severity and potential impact of extreme weather events at or near our properties, including potential property damage, some or all of which may not be covered by insurance, the potential effect on traffic and sales, and the potential increased costs of insurance coverage;

•

our ability to sell properties that we seek to dispose of, ~~or our ability~~which may be delayed by, among other things, the failure to obtain ~~prices we seek;~~zoning, occupancy and other governmental approvals and permits or, to the extent required, approvals of other third parties;

•

potential losses on impairment of certain long-lived assets, such as real estate, including losses that we might be required to record in connection with any disposition of assets;

•

our substantial debt, and our ability to satisfy our obligations or refinance our outstanding debt at or prior to maturity, particularly in light of increasing interest rates, and our ability to remain in compliance with our financial covenants under our debt facilities;

•

our ability to raise capital, including through sales of properties or interests in properties, subject to the terms of our Credit Agreements;

•

our ability to maintain and increase property occupancy, sales and rental rates;

•

increases in operating costs that cannot be passed on to tenants, which may be exacerbated in the current inflationary environment;

•

the effects of online shopping and other uses of technology on our retail tenants;

•

risks related to our development and redevelopment activities, including delays, cost overruns and our inability to reach projected occupancy or rental rates;

•

social unrest and acts of vandalism or violence at malls, including our properties, or at other similar spaces, and the potential effect on traffic and sales; 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 herein and in our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 in the section entitled “Item 1A. Risk Factors” and any subsequent reports we file with the SEC. ~~Any forward-looking statements made by us speak only as of the date on which they are made, and we~~We do not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The analysis below presents the sensitivity of the market value of our financial instruments to selected changes in market interest rates. As of September 30, ~~2021,~~2022, our consolidated debt portfolio consisted of ~~$857.0~~$761.2 million of fixed and variable rate mortgage loans (net of debt issuance ~~costs)~~costs and excluding Cumberland Mall mortgage which was classified as held for sale as of September 30, 2022), ~~$54.8~~$26.1 million outstanding under our First Lien Revolver, which bore interest at a rate of ~~4.0%~~6.1%, ~~$380.1~~$345.1 million borrowed under our First Lien Term Loan Facility, which bore interest at a rate of ~~6.2%~~8.42%, and ~~$573.7~~$628.2 million borrowed under our Second Lien Term Loan Facility, which bore interest at a rate of ~~8.5%~~10.8%.

Our mortgage loans, which are secured by ~~nine~~eight of our consolidated properties, are due in installments over various terms extending to October 2025. Our nine properties include Valley View Mall, which was assigned to a receiver in the third quarter 2020. Although we have not yet conveyed Valley View Mall because foreclosure proceedings are ongoing, we no longer control or operate the property as a result of a court order assigning the receiver. The mortgage principal balance of Valley View Mall was $27.2 million at September 30, 2021 and December 31, 2020, which we will continue to recognize until the foreclosure process is completed. SixSeven of our mortgage loans bear interest at fixed interest rates that range from 3.88% to ~~5.95%~~7.19%, and had a weighted average interest rate of ~~4.09%~~4.48% at September 30, ~~2021.~~2022. Three of our mortgage loans ~~bear~~bears interest at a variable rates, a portion of which has been swapped to fixed rates, and had a weighted average interest rate of ~~3.72%~~6.67% at September 30, ~~2021.~~2022. The weighted average interest rate of all consolidated mortgage loans was ~~3.98%~~4.84% at September 30, ~~2021.~~2022. Mortgage loans for properties owned by unconsolidated partnerships are accounted for in “Investments in partnerships, at equity” and “Distributions in excess of partnership investments” on the consolidated balance sheets and are not included in the table below.

Our interest rate risk is monitored using a variety of techniques. The table below presents the principal amounts of the expected annual maturities due in the respective years and the weighted average interest rates for the principal payments in the specified periods:

Fixed Rate Debt

Variable Rate Debt

(in thousands of dollars)
For the Year Ending December 31,

Principal
Payments

Principal
Payments

Weighted
Average
Interest Rate(1)

2021

$
31,214

4.01%

$
114,850

3.75
%
2022

302,548

3.96%

1,008,613

(2)
7.40
%
2023

59,887

3.99%

—

—

2024

6,405

4.04%

127,685

3.69
%
2025 and thereafter

215,752

4.02%

—

—


	Fixed Rate Debt						Variable Rate Debt
(in thousands of dollars) For the Year Ending December 31,	Principal Payments			Weighted Average Interest Rate(1)			Principal Payments			Weighted Average Interest Rate(1)
2022	$	586,602	(3)/ (4)		5.26	%	$	810,116	(2)		10.42	%
2023		59,886			3.99	%		—			0.00	%
2024		106,189			6.83	%		21,440			1.19	%
2025		215,751			4.02	%		—			0.00	%
2026 and thereafter		—			—			—			—

(1) Based on the weighted average interest rates in effect as of September 30, ~~2021~~2022 and does not include the effect of our interest rate swap derivative instruments as described ~~below~~.below.

(2) Includes term loan debt of ~~$953.8~~$673.3 million under our First Lien Term Loan Facility and Second Lien Term Loan Facility with a weighted average interest rate of ~~7.60%~~10.59% as of September 30, ~~2021.~~2022.

(3) Includes Cumberland Mall mortgage of $38.2 million which was classified as held for sale as of September 30, 2022.

(4) Includes Cherry Hill Mall mortgage of $246.5 million for which, subsequent to the end of the quarter ended September 30, 2022, the maturity was extended through February 1, 2023.

As of September 30, ~~2021,~~2022, we had ~~$1,251.1~~$831.6 million of variable rate debt. To manage interest rate risk and limit overall interest cost, we may employ interest rate swaps, options, forwards, caps and floors, or a combination thereof, depending on the underlying exposure. Interest rate differentials that arise under swap contracts are recognized in interest expense over the life of the contracts. If interest rates rise, the resulting cost of funds is expected to be lower than that which would have been available if debt with matching characteristics was issued directly. Conversely, if interest rates fall, the resulting costs would be expected to be, and in some cases have been, higher. We may also employ forwards or purchased options to hedge qualifying anticipated transactions. Gains and losses are deferred and recognized in net loss in the same period that the underlying transaction occurs, expires or is otherwise terminated. See Note 6 of the notes to our unaudited consolidated financial statements for further information.

As of September 30, ~~2021,~~2022, we had interest rate swap agreements outstanding with a weighted average base interest rate of ~~2.36%~~2.92% on a notional amount of ~~$614.8~~$400.0 million, maturing ~~on various dates through~~in May ~~2023.~~2023 or May 2024. See Item 2. Management’s Discussion and Analysis—Liquidity and Capital Resources—Interest Rate Derivative Agreements for a discussion of changes to the designation of certain of our interest rate swap agreements in ~~2021.~~2020.

Changes in market interest rates have different effects on the fixed and variable rate portions of our debt portfolio. A change in market interest rates applicable to the fixed portion of ~~our~~the debt portfolio affects the fair value, but it has no effect on interest incurred or cash flows. A change in market interest rates applicable to the variable portion of ~~our~~the debt portfolio affects the interest incurred and cash flows, but does not affect the fair value. The following sensitivity analysis related to our debt portfolio, which includes the effects of our interest rate swap agreements, assumes an immediate 100 basis point change in interest rates from their actual September 30, ~~2021~~2022 levels, with all other variables held constant.

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A 100 basis point increase in market interest rates would have resulted in a decrease in our net financial instrument position of ~~$25.3~~$2.9 million at September 30, ~~2021.~~2022. A 100 basis point decrease in market interest rates would have resulted in an increase in our net financial instrument position of ~~$12.6~~$7.0 million at September 30, ~~2021.~~2022. Based on the variable rate debt included in our debt portfolio at September 30, ~~2021,~~2022, a 100 basis point increase in interest rates would have resulted in an additional ~~$6.4~~$8.3 million in interest expense annually. A 100 basis point decrease would have reduced interest incurred by ~~$6.4~~$8.3 million annually.

Because the information presented above includes only those exposures that existed as of September 30, ~~2021,~~2022, it does not consider changes, exposures or positions which have arisen or could arise after that date. The information presented herein has limited predictive value. As a result, the ultimate realized gain or loss or expense with respect to interest rate fluctuations will depend on the exposures that arise during the period, our hedging strategies at the time and interest rates.

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ITEM 4. CONTROLS AND PROCEDURES.

We are committed to providing accurate and timely disclosure in satisfaction of our SEC reporting obligations. In 2002, we established a Disclosure Committee to formalize our disclosure controls and procedures. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that:



• information that we are required to disclose in our reports under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and



• material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

~~Our~~

Management, under the supervision of our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") evaluated our disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, our ~~Chief Executive Officer~~CEO and ~~Chief Financial Officer~~CFO concluded that as of September 30, ~~2021,~~2022, our disclosure controls and procedures were not effective due to athe material ~~weakness~~weaknesses in our internal control over financial reporting.

The ineffectiveness of our internal control over financial reporting was due to ~~the following~~ material ~~weakness~~weaknesses in our internal control over financial reporting which we identified and previously reported in Item 9A of our Annual Report on Form 10-K for the year ended December 31, ~~2020: (i)~~2021.

Management’s Remediation Efforts

Management of the Company and the Board of Trustees are committed to maintaining a strong internal control environment and to making further progress in its remediation efforts during 2022. During 2021 and 2022, we commenced efforts at the remediation of a material weakness identified as of December 31, 2020. Our remediation activities that commenced in 2021 and 2022 resulted in attracting and retaining sufficient personnel with requisite financial expertise ~~(ii) the assessment of the risk~~and appropriately considering risks of fraud, including ~~risks~~the possibility of management override of controls and proper segregation of duties, and ~~(iii) assessing changes in~~our remediation activities are ongoing. The Company's 2021 and 2022 remediation measures included the ~~external environment~~following:

•

The Company hired and retained individuals with the appropriate skills and provided in-depth re-training to control owners related to technical accounting and internal control over financial reporting;

•

The Company has enhanced its reconciliations and management review controls with the added stability of new hires and the ~~potential impact of those changes on the design, operating effectiveness and monitoring of internal controls over financial reporting.~~

~~Management’s Remediation Plan~~

The Company and its Board of Trustees are committed to maintaining a strong internal control environment. In order to remediate the material weakness described above, we intend to continue to implement additional policies and procedures and take necessary actions, which include:



~~The~~ implementation of ~~policies~~technology solutions to automate visibility and ~~procedures to enhance~~enforcement of the independent review and documentation of journal entries, including proper segregation of ~~duties;~~duties, thus mitigating risks of both unintentional errors and fraud; and

•

~~Enhancing our procedures in certain management review controls, including the thresholds utilized for review and the response to outliers;~~



~~Continuing to hire additional finance and accounting staff;~~



~~Developing policies~~Development of processes and procedures to enhance the precision of management review of financial statement information including implementation of an automated workflow for manual journal entry review and ~~control impact~~posting.

Management believes that it is making progress with the ongoing remediation efforts that include completion and implementation of ~~changes~~design to enhance precision of management review controls and ensure reliability of information used in the ~~external environment;~~controls will reduce the risk that a material misstatement to the consolidated financial statements would not be prevented or detected on a timely basis. We will monitor and



~~Reevaluating our monitoring activities for relevant controls.~~

~~Management is continuing~~ evaluate the process of implementing and monitoring the effectiveness of these and other processes, procedures and controls and will make any further changes deemed appropriate. Management believes our planned remedial efforts will effectively remediate the identified material weakness, but remediation ~~will only be deemed complete after the applicable remedial controls operate for a sufficient period of time and management is able~~steps to ~~conclude, through testing, that the controls are operating effectively. As we continue to evaluate and work to improve~~ensure our internal control over financial reporting ~~management may determine it~~ is ~~necessary to take additional measures~~effective to address control deficiencies or as we determine it necessary to modify the remediation plan described above.

~~Table~~ We will continue to report regularly to our Audit Committee on the progress of ~~Contents~~our remediation plan.

Changes in Internal Control over Financial Reporting

Other than ~~the material weakness identified in the fourth quarter of 2020, and designing changes intended~~our actions to remediate the material ~~weakness,~~weaknesses relating to our internal controls over financial reporting as described above, there were no changes in our internal control over financial reporting during the quarter ended September 30, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

In the normal course of business, we have become and might in the future become involved in legal actions relating to our business, including but not limited to commercial disputes, rent collection actions and other matters related to the ownership and operation of our properties and the properties that we manage for third parties. In management’s opinion, the resolution of any such pending legal actions is not expected to have a material adverse effect on our consolidated financial position or results of operations.

On November 1, 2020, we and certain of our wholly owned subsidiaries commenced voluntary cases under chapter 11 of title 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware under the caption In re Pennsylvania Real Estate Investment Trust, et al. and filed our prepackaged chapter 11 plan of reorganization with the Bankruptcy Court. On November 30, 2020, the Bankruptcy Court entered an order confirming the Plan. The Plan became effective and we subsequently emerged from bankruptcy on December 10, 2020. The final decree closing the bankruptcy case was entered by the Bankruptcy Court on March 11, 2021. Refer to Note 1 to our unaudited consolidated financial statements —Financial Restructuring for a detailed description of these matters.

ITEM 1A. RISK FACTORS.

In addition to the other information set forth in this report, you should carefully consider the risks that could materially affect our business, financial condition or results of ~~operations, which are discussed~~operations. The following is an update to the Company's risk factors and should be read in conjunction with the risk factors previously disclosed under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Our common shares and preferred shares could be promptly suspended and delisted from the NYSE if we were to fail to meet certain of the NYSE's continued listing standards, which could have a material adverse effect on our business.

Our common shares and preferred shares are listed on the NYSE and, as such, are subject to the exchange’s listing standards, In June 2022, the Company effected a one-for-fifteen reverse share split of its common shares, primarily to bring the Company into compliance with the minimum bid price requirement for maintaining its listing on the NYSE, and on July 1, 2022, the Company received notice from the NYSE that it had regained compliance with the minimum bid price requirement. Notwithstanding the reverse share split, there is no assurance that the Company’s securities will remain in compliance with the NYSE’s listing standards or that its securities will remain listed on the NYSE. In particular, in light of the Company’s reduced number of common shares outstanding and trading price, there is a risk that our average global market capitalization over a consecutive 30 trading-day period could fall below $15.0 million, in which case we would no longer be in compliance with the NYSE’s minimum average global market capitalization continued listing standards set forth in Section 802.01B of the NYSE’s Listed Company Manual. If our average global market capitalization over a consecutive 30 trading-day period drops below $15.0 million, the NYSE will promptly initiate delisting proceedings with respect to our common shares and preferred shares without providing us with an opportunity to cure such non-compliance. The delisting of our common shares and preferred shares could have a material adverse effect on our business, by, among other things:

•

reducing the liquidity and market price of our common shares and preferred shares;

•

reducing the number of investors willing to hold or acquire our common shares and preferred shares;

•

limiting our ability to issue additional securities or obtain additional financing in the future;

•

causing us reputational harm with investors, our employees, and parties conducting business with us; and

•

reducing our ability to retain, recruit and motivate our trustees, officers and employees.

Secured indebtedness exposes us to the possibility of foreclosure, which could result in the loss of our investment in certain of our subsidiaries or in a property or group of properties or other assets subject to indebtedness.

We have granted our lenders security interests in a portfolio of our assets, including equity interests in certain of our subsidiaries and in certain of our real property. Incurring secured indebtedness, including mortgage indebtedness, increases our risk of asset and property losses because defaults on indebtedness secured by our assets, including equity interests in certain of our subsidiaries and in certain of our real property, may
result in foreclosure actions initiated by lenders and ultimately our loss of the property or other assets securing any loans for which we are in default.

Any foreclosure on a mortgaged property or group of properties could have a material adverse effect on the overall value of our portfolio of properties and more generally on our business. For tax purposes, a foreclosure of any of our properties would be treated as a sale of the property for a purchase price equal to the outstanding balance of the indebtedness secured by the mortgage. If the outstanding balance of the indebtedness secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds, which could materially and adversely affect us. As a result, our substantial secured indebtedness could have a material adverse effect on our business. For example, we have recently been able to extend the maturity of our subsidiaries’ mortgage loan secured by Cherry Hill Mall, but no assurance can be provided that we would be able to do so in the future at its extended maturity date or for other properties when their mortgage loans mature, in which case our subsidiaries may be unable to meet their payment obligations when due and the lenders may seek to exercise remedies, including foreclosing on the applicable property.

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We might not be able to refinance our existing obligations or obtain the capital required to finance our activities.

The REIT provisions of the Internal Revenue Code of 1986, as amended, generally require the distribution to shareholders of 90% of a REIT’s net taxable income, excluding net capital gains, which generally leaves insufficient funds to finance major initiatives internally. Due to these requirements, and subject to the terms of the Credit Agreements, we generally fund certain capital requirements, such as the capital for renovations, expansions, redevelopments, other non-recurring capital improvements, scheduled debt maturities, and acquisitions of properties or other assets, through secured and unsecured indebtedness and, when available and market conditions are favorable, the issuance of additional equity securities.

As of September 30, 2022, our mortgage loans are secured by eight of our consolidated properties and are due in installments over various terms extending to the year 2025. Also, we estimate that we will need $5.2 million of additional capital to complete our current redevelopment projects, including the completion of redevelopment at FDP, which opened on September 19, 2019. Our ability to finance growth from financing sources depends, in part, on our creditworthiness, the availability of credit to us from financing sources, or the market for our debt, equity or equity-related securities when we need capital, and on conditions in the capital markets generally. See “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” for information about our available sources of funds. There can be no assurances that we will continue to be able to obtain the financing we need for future growth or to meet our debt service as obligations mature, or that the financing will be available to us on acceptable terms, or at all. A lack of acceptable financing could delay or hinder our growth initiatives, or prevent us from implementing our initiatives on satisfactory terms.

If our mortgage loans and other debts cannot be repaid in full, refinanced or extended at maturity on acceptable terms, or at all, a lender could foreclose upon the mortgaged property and receive an assignment of rent and leases or pursue other remedies, or we might be forced to dispose of one or more of our properties on unfavorable terms. For example, we have recently been able to extend the maturity of our subsidiaries’ mortgage loan secured by Cherry Hill Mall, but no assurance can be provided that we would be able to do so in the future at its extended maturity date or for other properties when their mortgage loans mature, in which case our subsidiaries may be unable to meet their payment obligations when due and the lenders may seek to exercise remedies, including foreclosing on the applicable property. In certain circumstances, any of these events or combination of events, could have a material adverse effect on our business.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Issuer Purchases of Equity Securities

We did not acquire any shares in the three and nine months ended September 30, ~~2021.~~2022.

Limitations upon the Payment of Dividends

The Credit Agreements provide generally that we may only make dividend payments in the minimum amount necessary to maintain our status as a REIT. We must maintain our status as a REIT at all times.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Preferred Dividend Arrearage

Dividends on the Series B, Series C and Series D preferred shares are cumulative and therefore will continue to accrue at an annual rate of ~~$1.8436~~$0.4609 per share, ~~$1.80~~$0.45 per share and ~~$1.7188~~$0.4297 per share, respectively. As of ~~the date of this report,~~November 8, 2022, the cumulative amount of unpaid dividends on our issued and outstanding preferred shares totaled ~~$34.2~~$61.6 million. This consisted of unpaid dividends per share on the Series B, Series C and Series D preferred shares of ~~$2.30~~$4.15 per share, ~~$2.25~~$4.05 per share and ~~$2.15~~$3.87 per share, respectively.

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ITEM 6. EXHIBITS.


3.1	Amended and Restated Trust Agreement dated December 18, 2008, filed as Exhibit 3.1 to PREIT’s Current Report on Form 8-K filed on December 23, 2008, is incorporated herein by reference.

3.2	Amendment, dated June 7, 2012, to Amended and Restated Trust Agreement of Pennsylvania Real Estate Investment Trust dated December 18, 2008, as amended, filed as Exhibit 3.1 to PREIT’s Current Report on Form 8-K filed on June 12, 2012, is incorporated herein by reference.

3.3	Amendment to Amended and Restated Trust Agreement dated December 18, 2008, as amended, dated as of ~~June~~March 30, 2020, filed as Exhibit 3.1 to PREIT’s Current Report on Form 8-K filed on March 31, 2020, is incorporated herein by reference.

3.4	Amendment to Amended and Restated Trust Agreement dated December 18, 2008, as amended, dated as of June 15, 2022, filed as Exhibit 3.1 to PREIT’s Current Report on Form 8-K filed on June 22, 2022, is incorporated herein by reference.

3.5	By-Laws of PREIT (as amended through March 31, 2020), filed as Exhibit 3.2 to PREIT’s Current Report on Form 8-K filed on March 31, 2020, is incorporated herein by reference.

~~3.5~~3.6	Designating Amendment to Trust Agreement, designating the rights, preferences, privileges, qualifications, limitations and restrictions of PREIT’s 8.25% Series A Cumulative Redeemable Perpetual Preferred Shares, liquidation preference $25.00 per share, par value $0.01 per share, filed as Exhibit 3.2 to PREIT’s Form 8-A filed on April 20, 2012, is incorporated herein by reference.

~~3.6~~3.7	Second Designating Amendment to Trust Agreement, designating the rights, preferences, privileges, qualifications, limitations and restrictions of PREIT’s 7.375% Series B Cumulative Redeemable Perpetual Preferred Shares, liquidation preference $25.00 per share, par value $0.01 per share, filed as Exhibit 3.2 to PREIT’s Form 8-A filed on October 11, 2012, is incorporated herein by reference.

~~3.7~~3.8	Third Designating Amendment to Trust Agreement, designating the rights, preferences, privileges, qualifications, limitations and restrictions of PREIT’s 7.20% Series C Cumulative Redeemable Perpetual Preferred Shares, liquidation preference $25.00 per share, par value $0.01 per share, filed as Exhibit 3.4 to PREIT’s Form 8-A filed on January 27, 2017, is incorporated herein by reference.

~~3.8~~3.9	Fourth Designating Amendment to Trust Agreement, designating the rights, preferences, privileges, qualifications, limitations and restrictions of PREIT’s 6.875% Series D Cumulative Redeemable Perpetual Preferred Shares, liquidation preference $25.00 per share, par value $0.01 per share, filed as Exhibit 3.5 to PREIT’s Form 8-A filed on September 11, 2017, is incorporated herein by reference.

~~10.1+~~10.1*	~~Amendment to Employment~~Loan Extension and Modification Agreement, ~~with Mario C. Ventresca, Jr.,~~ dated as of ~~July 28, 2021, filed as Exhibit 10.1 to PREIT’s Current Report on Form 8-K filed on~~ August ~~2, 2021, is incorporated herein~~31, 2022, by ~~reference~~and among PR Cherry Hill STW LLC, Cherry Hill Center, LLC, PREIT Associates, L.P., New York Life Insurance Company and Teachers Insurance and Annuity Association of America (filed herewith).

~~10.2+~~10.2*	~~First Amendment to the Nonqualified Supplemental Executive Retirement~~Second Loan Extension and Modification Agreement, ~~with Joseph F. Coradino,~~ dated as of ~~August 9, 2021, filed as Exhibit 10.1 to PREIT’s Current Report on Form 8-K filed on August 12, 2021, is incorporated herein~~October 31, 2022, by ~~reference.~~and among PR Cherry Hill STW LLC, Cherry Hill Center, LLC, PREIT Associates, L.P., New York Life Insurance Company and Teachers Insurance and Annuity Association of America (filed herewith).

31.1*	Certification pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*	Certification pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*	Inline XBRL Taxonomy Extension Schema Document.

101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document.

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101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document.

~~Table of Contents~~


104*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.INS).

* Filed herewith

** Furnished herewith

+ Management contract or compensatory plan or arrangement.

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SIGNATURE OF REGISTRANT

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.


		PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
~~Date:~~	~~November 5, 2021~~
Date:	November 8, 2022	By:	/s/ Joseph F. Coradino
			Joseph F. Coradino
			Chairman and Chief Executive Officer

Date:	November 8, 2022	By:	/s/ Mario C. Ventresca, Jr.
			Mario C. Ventresca, Jr.
			Executive Vice President and Chief Financial Officer

Date:	November 8, 2022	By:	/s/ Sathana Semonsky
			Sathana Semonsky
			Vice President and Chief Accounting Officer

6155


Pennsylvania		23-6216339
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

One Commerce Square 2005 Market Street, Suite 1000 Philadelphia, PA		19103
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of Exchange on which registered
Shares of Beneficial Interest, par value $1.00 per share	PEI	New York Stock Exchange
Series B Preferred Shares, par value $0.01 per share	PEIPrB	New York Stock Exchange
Series C Preferred Shares, par value $0.01 per share	PEIPrC	New York Stock Exchange
Series D Preferred Shares, par value $0.01 per share	PEIPrD	New York Stock Exchange


			Page
	PART I—FINANCIAL INFORMATION

Item 1.		Financial Statements (Unaudited):	41

		Consolidated Balance Sheets—September 30, ~~2021~~2022 and December 31, ~~2020~~2021	41

		Consolidated Statements of Operations—Three and Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021	52

		Consolidated Statements of Comprehensive Loss—Three and Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021	73

		Consolidated Statements of Equity—Three and Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021	84

		Consolidated Statements of Cash Flows—Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021	105

		Notes to Unaudited Consolidated Financial Statements	116

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	2822

Item 3.		Quantitative and Qualitative Disclosures About Market Risk	5548

Item 4.		Controls and Procedures	5650

		PART II—OTHER INFORMATION

Item 1.		Legal Proceedings	5851

Item 1A.		Risk Factors	5851

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	5852

Item 3.		Defaults Upon Senior Securities	5852

Item 4.		Not Applicable

Item 5.		Not Applicable

Item 6.		Exhibits	5953

Signatures			6155


	September 30, 2021			December 31, 2020
(in thousands, except per share amounts)
ASSETS:
INVESTMENTS IN REAL ESTATE, at cost:
Operating properties	$	3,175,442		$	3,168,536
Construction in progress		44,671			46,285
Land held for development		4,339			5,516
Total investments in real estate		3,224,452			3,220,337
Accumulated depreciation		(1,388,330	)		(1,308,427	)
Net investments in real estate		1,836,122			1,911,910
INVESTMENTS IN PARTNERSHIPS, at equity:		19,947			27,066
OTHER ASSETS:
Cash and cash equivalents		28,975			43,309
Tenant and other receivables		36,102			54,532
Intangible assets (net of accumulated amortization of $20,220 and $19,187 at September 30, 2021 and December 31, 2020, respectively)		10,359			11,392
Deferred costs and other assets, net		134,967			127,593
Assets held for sale		3,626			1,384
Total assets	$	2,070,098		$	2,177,186
LIABILITIES:
Mortgage loans payable, net	$	856,986		$	884,503
Term Loans, net		945,456			908,473
Revolving Facilities		54,830			54,830
Tenants’ deposits and deferred rent		9,075			8,899
Distributions in excess of partnership investments		69,627			76,586
Fair value of derivative instruments		13,060			23,292
Accrued expenses and other liabilities		91,062			93,663
Total liabilities		2,040,096			2,050,246
COMMITMENTS AND CONTINGENCIES (Note 8)
EQUITY:
Series B Preferred Shares, $.01 par value per share; 25,000 shares authorized; 3,450 shares issued and outstanding; liquidation preference of $94,201 and $89,430 at September 30, 2021 and December 31, 2020, respectively		35			35
Series C Preferred Shares, $.01 par value per share; 25,000 shares authorized; 6,900 shares issued and outstanding; liquidation preference of $188,025 and $178,710 at September 30, 2021 and December 31, 2020, respectively		69			69
Series D Preferred Shares, $.01 par value per share; 25,000 shares authorized; 5,000 shares issued and outstanding; liquidation preference of $135,743 and $129,297 at September 30, 2021 and December 31, 2020, respectively		50			50
Shares of beneficial interest, $1.00 par value per share; 200,000 shares authorized; 80,200 and 79,537 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively		80,200			79,537
Capital contributed in excess of par		1,775,959			1,771,777
Accumulated other comprehensive loss		(12,876	)		(20,620	)
Distributions in excess of net income		(1,804,710	)		(1,699,638	)
Total equity – Pennsylvania Real Estate Investment Trust		38,727			131,210
Noncontrolling interest		(8,725	)		(4,270	)
Total equity		30,002			126,940
Total liabilities and equity	$	2,070,098		$	2,177,186


(in thousands, except per share amounts)	September 30, 2022			December 31, 2021
ASSETS:
INVESTMENTS IN REAL ESTATE, at cost:
Operating properties	$	2,980,963		$	3,156,194
Construction in progress		41,218			45,828
Land held for development		2,058			4,339
Total investments in real estate		3,024,239			3,206,361
Accumulated depreciation		(1,407,395	)		(1,405,260	)
Net investments in real estate		1,616,844			1,801,101
INVESTMENTS IN PARTNERSHIPS, at equity:		7,907			16,525
OTHER ASSETS:
Cash and cash equivalents		21,063			43,852
Tenant and other receivables		31,179			42,501
Intangible assets (net of accumulated amortization of $22,578 and $21,598 at September 30, 2022 and December 31, 2021, respectively)		9,074			10,054
Deferred costs and other assets, net		113,569			128,923
Assets held for sale		86,408			8,780
Total assets	$	1,886,044		$	2,051,736
LIABILITIES:
Mortgage loans payable, net	$	761,230		$	851,283
Term Loans, net		972,198			959,137
Revolving Facilities		26,078			54,549
Tenants’ deposits and deferred rent		11,994			10,180
Distributions in excess of partnership investments		89,702			71,570
Fair value of derivative instruments		—			8,427
Accrued expenses and other liabilities		72,876			89,331
Liabilities on assets held for sale		41,689			212
Total liabilities		1,975,767			2,044,689
COMMITMENTS AND CONTINGENCIES (Note 8)
EQUITY:
Series B Preferred Shares, $.01 par value per share; 3,450 shares issued and outstanding; liquidation preference of $100,561 and $95,791 at September 30, 2022 and December 31, 2021, respectively		35			35
Series C Preferred Shares, $.01 par value per share; 6,900 shares issued and outstanding; liquidation preference of $200,445 and $191,130 at September 30, 2022 and December 31, 2021, respectively		69			69
Series D Preferred Shares, $.01 par value per share; 5,000 shares issued and outstanding; liquidation preference of $144,337 and $137,891 at September 30, 2022 and December 31, 2021, respectively		50			50
Shares of beneficial interest, $1.00 par value per share; 13,333 shares authorized; 5,369 and 5,347 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		5,369			5,347
Capital contributed in excess of par		1,858,124			1,851,866
Accumulated other comprehensive loss		3,297			(8,830	)
Distributions in excess of net income		(1,945,988	)		(1,832,375	)
Total equity (deficit) – Pennsylvania Real Estate Investment Trust		(79,044	)		16,162
Noncontrolling interest		(10,679	)		(9,115	)
Total equity (deficit)		(89,723	)		7,047
Total liabilities and equity	$	1,886,044		$	2,051,736


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(in thousands, except per share amounts)	2022			2021			2022			2021
REVENUE:
Real estate revenue:
Lease revenue	$	65,796		$	65,543		$	195,888		$	193,563
Expense reimbursements		4,864			4,650			13,223			12,436
Other real estate revenue		2,086			1,400			5,887			4,828
Total real estate revenue		72,746			71,593			214,998			210,827
Other income		67			143			377			430
Total revenue		72,813			71,736			215,375			211,257
EXPENSES:
Operating expenses:
Property operating expenses:
CAM and real estate taxes		(26,564	)		(26,408	)		(80,511	)		(79,899	)
Utilities		(4,380	)		(3,749	)		(11,469	)		(9,573	)
Other property operating expenses		(2,246	)		(1,972	)		(6,585	)		(6,580	)
Total property operating expenses		(33,190	)		(32,129	)		(98,565	)		(96,052	)
Depreciation and amortization		(28,032	)		(29,142	)		(85,524	)		(88,667	)
General and administrative expenses		(10,965	)		(14,453	)		(32,192	)		(39,819	)
Other expenses		(65	)		(66	)		(143	)		185
Total operating expenses		(72,252	)		(75,790	)		(216,424	)		(224,353	)
Interest expense, net		(36,481	)		(32,426	)		(100,473	)		(95,135	)
Gain on debt extinguishment, net		—			—			—			4,587
Impairment of assets		(42,271	)		(262	)		(42,271	)		(1,564	)
Reorganization expenses		—			—			—			(267	)
Total expenses		(151,004	)		(108,478	)		(359,168	)		(316,732	)
Equity in loss of partnerships		(2,356	)		(1,429	)		(3,939	)		(2,429	)
Gain (loss) on sales of interests in real estate		7,509			(217	)		9,210			(1,191	)
Gain (loss) on sale of equity method investment		(77	)		—			8,976			—
Gain (loss) on sales of real estate by equity method investee		—			(10	)		—			1,337
Gain on sales of non operating real estate		1,772			—			10,527			—
Gain on sale of preferred equity interest		—			—			3,688			—
Net loss		(71,343	)		(38,398	)		(115,331	)		(107,758	)
Less: net loss attributable to noncontrolling interest		989			669			1,718			2,686
Net loss attributable to PREIT		(70,354	)		(37,729	)		(113,613	)		(105,072	)
Less: preferred share dividends		(6,843	)		(6,843	)		(20,531	)		(20,531	)
Net loss attributable to PREIT common shareholders	$	(77,197	)	$	(44,572	)	$	(134,144	)	$	(125,603	)

Basic and diluted loss per share:	$	(14.52	)	$	(8.44	)	$	(25.25	)	$	(24.05	)

Weighted average shares outstanding—basic		5,317			5,279			5,313			5,222
Effect of common share equivalents(1)		—			—			—			—
Weighted average shares outstanding—diluted		5,317			5,279			5,313			5,222


				PREIT Shareholders																								PREIT Shareholders
				Preferred Shares $.01 par						Shares of Beneficial			Capital Contributed			Accumulated Other			Distributions			Non-						Preferred Shares $.01 par						Shares of Beneficial			Capital Contributed			Accumulated Other			Distributions			Non-
(in thousands of dollars, except per share amounts)	Total Equity			Series B		Series C		Series D		Interest, $1.00 Par			in Excess of Par			Comprehensive Loss			in Excess of Net Income			controlling interest			Total Equity			Series B		Series C		Series D		Interest, $1.00 Par			in Excess of Par			Comprehensive Loss			in Excess of Net Income			controlling interest
Balance January 1, 2021	$	126,940		$	35	$	69	$	50	$	79,537		$	1,771,777		$	(20,620	)	$	(1,699,638	)	$	(4,270	)
Balance January 1, 2022																									$	7,047		$	35	$	69	$	50	$	5,347		$	1,851,866		$	(8,830	)	$	(1,832,375	)	$	(9,115	)
Net loss		(43,980	)		—		—		—		—			—			—			(42,746	)		(1,234	)		(32,973	)		—		—		—		—			—			—			(32,469	)		(504	)
Other comprehensive income		2,604			—		—		—		—			—			2,540			—			64			5,807			—		—		—		—			—			5,734			—			73
Shares issued under employee compensation plan, net of shares retired		(647	)		—		—		—		(277	)		(370	)		—			—			—			4,449			—		—		—		28			4,421			—			—			—
Amortization of deferred compensation		1,321			—		—		—		—			1,321			—			—			—			814			—		—		—		—			814			—			—			—
Balance March 31, 2021	$	86,238		$	35	$	69	$	50	$	79,260		$	1,772,728		$	(18,080	)	$	(1,742,384	)	$	(5,440	)
Balance March 31, 2022																										(14,856	)		35		69		50		5,375			1,857,101			(3,096	)		(1,864,844	)		(9,546	)
Net loss		(25,380	)		—		—		—		—			—			—			(24,597	)		(783	)		(11,015	)		—		—		—		—			—			—			(10,790	)		(225	)
Other comprehensive income		2,670			—		—		—		—			—			2,605			—			65			3,617			—		—		—		—			—			3,571			—			46
Shares issued under employee compensation plans, net of shares retired																										(175	)		—		—		—		(6	)		(169	)		—			—			—
Amortization of deferred compensation		1,149			—		—		—					1,149			—			—			—			564			—		—		—					564			—			—			—
Other changes in noncontrolling interest, net		38			—		—		—		—			—			—			—			38
Balance June 30, 2021	$	64,715		$	35	$	69	$	50	$	79,260		$	1,773,877		$	(15,475	)	$	(1,766,981	)	$	(6,120	)
Net loss		(38,398	)		—		—		—		—			—			—			(37,729	)		(669	)
Balance June 30, 2022																									$	(21,865	)	$	35	$	69	$	50	$	5,369		$	1,857,496		$	475		$	(1,875,634	)	$	(9,725	)
Net Loss																										(71,343	)		—		—		—		—			—			—			(70,354	)		(989	)
Other comprehensive income		2,638			—		—		—		—			—			2,599			—			39			2,857			—		—		—		—			—			2,822			—			35
Shares issued under Operating Partnership units		—			—		—		—		940			1,035			—			—			(1,975	)
Proceeds from disgorgement of shareholder's short-swing profits																										25			—		—		—		—			25			—			—			—
Amortization of deferred compensation		1,047			—		—		—		—			1,047			—			—			—			603			—		—		—		—			603			—			—			—
Balance September 30, 2021	$	30,002		$	35	$	69	$	50	$	80,200		$	1,775,959		$	(12,876	)	$	(1,804,710	)	$	(8,725	)
Balance September 30, 2022																									$	(89,723	)	$	35	$	69	$	50	$	5,369		$	1,858,124		$	3,297		$	(1,945,988	)	$	(10,679	)


(in thousands of dollars)	Mortgage
October 1 to December 31, 2022 (1)	$	359,083
2023		59,886
2024		127,629
2025		215,751
2026		-
Thereafter		-
	$	762,349


	September 30,
(in thousands of dollars)	2021		2020
Cash and cash equivalents	$	28,975	$	36,373
Restricted cash included in other assets		11,887		6,087
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	40,862	$	42,460


Maturity Date	Aggregate Notional Value at September 30, 2021 (in millions of dollars)		Aggregate Fair Value at September 30, 2021 (1) (in millions of dollars)			Aggregate Fair Value at December 31, 2020 (1) (in millions of dollars)			Weighted Average Interest Rate
Derivatives in Cash Flow Hedging Relationships
Interest Rate Swaps
2021	$	139.8	$	(0.6	)	$	(3.0	)		2.29	%
2023		300.0		(11.7	)		(17.2	)		2.70	%
Non-designated Hedges
Interest Rate Swaps
2021		175.0		(0.8	)		(3.1	)		1.85	%
Total	$	614.8	$	(13.1	)	$	(23.3	)		2.36	%


Maturity Date	Aggregate Notional Value at September 30, 2022 (in millions of dollars)		Aggregate Fair Value at September 30, 2022 (1) (in millions of dollars)		Aggregate Fair Value at December 31, 2021 (1) (in millions of dollars)			Weighted Average Interest Rate
Derivatives in Cash Flow Hedging Relationships
Interest Rate Swaps
2023	$	300.0	$	2.9	$	(8.1	)		2.70	%
2024		100.0		1.0		-			3.59	%
Total	$	400.0	$	3.9	$	(8.1	)		2.92	%


	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions of dollars)	2021			2020			2021			2020
Total interest expense presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded	$	(32.4	)	$	(20.3	)	$	(95.1	)	$	(54.3	)
Amount of (loss) gain reclassified from accumulated other comprehensive income into interest expense	$	3.0		$	3.7		$	8.6		$	6.4