Exhibit 99.1
Pennsylvania Real Estate Investment Trust
Supplemental Financial and Operating Information
Quarter Ended June 30, 2008
www.preit.com
NYSE common shares (PEI)
Pennsylvania Real Estate Investment Trust
Supplemental Financial and Operating Information
June 30, 2008
Table of Contents
Introduction | ||
Company Information | 3 | |
Press Release Announcements | 4 | |
Market Capitalization and Capital Resources | 5 | |
Operating Results | ||
Income Statement-Proportionate Consolidation Method-Three Months Ended June 30, 2008 and June 30, 2007 | 6 | |
Income Statement-Proportionate Consolidation Method-Six Months Ended June 30, 2008 and June 30, 2007 | 7 | |
Net Operating Income-Three Months Ended June 30, 2008 and June 30, 2007 | 8 | |
Net Operating Income-Six Months Ended June 30, 2008 and June 30, 2007 | 9 | |
Computation of Earnings per Share | 10 | |
Funds From Operations and Funds Available for Distribution | 11 | |
Operating Statistics | ||
Leasing Activity Summary | 12 | |
Summarized Rent Per Square Foot and Occupancy Percentages | 13 | |
Mall Sales and Rent Per Square Foot | 14 | |
Mall Occupancy-Owned GLA | 15 | |
Strip and Power Center Rent Per Square Foot and Occupancy Percentages | 16 | |
Top Twenty Tenants | 17 | |
Lease Expirations | 18 | |
Gross Leasable Area Summary | 19 | |
Property Information | 20 | |
Vacant Anchor Summary | 23 | |
Balance Sheet | ||
Balance Sheet-Proportionate Consolidation Method | 24 | |
Balance Sheet-Property Type | 25 | |
Investment in Real Estate | 26 | |
Property Redevelopment and Repositioning Summary | 28 | |
Development Property Summary | 29 | |
Capital Expenditures | 30 | |
Debt Analysis | 31 | |
Debt Schedule | 32 | |
Shareholder Information | 33 | |
Definitions | 34 |
FORWARD-LOOKING STATEMENTS
This Quarterly Supplemental Financial and Operating Information contains certain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements relate to expectations, beliefs, projections, future plans, strategies, anticipated events, trends and other matters that are not historical facts. These forward-looking statements reflect PREIT’s current views about future events 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. More specifically, PREIT’s business might be affected by uncertainties affecting real estate businesses generally as well as the following, among other factors: general economic, financial and political conditions, including credit market conditions, changes in interest rates or the possibility of war or terrorist attacks; changes in local market conditions or other competitive or retail industry factors in the regions where our properties are concentrated; PREIT’s ability to maintain and increase property occupancy and rental rates, and risks relating to development or redevelopment activities, including construction, obtaining entitlements and managing multiple projects simultaneously. In particular, the successful development or redevelopment of any property is subject to a number of risks, including, among others, that PREIT’s development or redevelopment plans might change, its development or redevelopment activities might be delayed and anticipated project costs might increase. Unanticipated expenses or delays would also adversely affect PREIT’s investment returns on a development or redevelopment project. Additionally, there can be no assurance that PREIT’s actual results will not differ significantly from the estimates set forth above, or that PREIT’s returns on its developments, redevelopments or acquisitions will be consistent with the estimates outlined in the related press releases or other disclosures. Investors are also directed to consider the risks and uncertainties discussed in documents PREIT has filed with the Securities and Exchange Commission and, in particular, PREIT’s Annual Report on Form 10-K for the year ended December 31, 2007. PREIT does not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.
Pennsylvania Real Estate Investment Trust
Company Information
Background
Pennsylvania Real Estate Investment Trust (“PREIT” or “the Company”), founded in 1960 and one of the first equity REITs in the U.S., has a primary investment focus on retail shopping malls and strip and power centers. As of June 30, 2008, the Company’s retail portfolio, which was approximately 34.1 million square feet, consisted of 55 properties including 38 shopping malls, 13 strip and power centers, and four properties under development. The Company’s properties are located in 13 states in the eastern half of the United States, primarily in the Mid-Atlantic region.
If you would like to participate in our quarterly conference call or would like additional information about PREIT, please contact:
Nurit Yaron, Vice President - Investor Relations
200 South Broad Street
Philadelphia, PA 19102
Telephone: (215) 875-0735
Fax: (215) 546-2504
Email: yaronn@preit.com
Reporting Calendar
Results for 2008 will be announced as follows (tentative dates):
Third Quarter 2008 | October 28, 2008 | |||
Fourth Quarter 2008 | February 24, 2009 |
Research Coverage
Company | Analyst | Phone Number | ||||
Citi Investment Research | Michael Bilerman | (212) 816-1383 | ||||
Ambika Goel | (212) 816-6981 | |||||
Green Street Advisors | Jim Sullivan | (949) 640-8780 | ||||
Ben Yang | (949) 640-8780 | |||||
JP Morgan | Michael W. Mueller | (212) 622-6689 | ||||
Sarah E. King | (212) 622-5670 | |||||
Merrill Lynch | Craig Schmidt | (212) 449-1944 | ||||
Steve Sakwa | (212) 449-0335 | |||||
David Wiggington | (212) 449-2729 | |||||
Stifel Nicolaus | Nathan Isbee | (443) 224-1346 | ||||
David M. Fick | (443) 224-1308 | |||||
UBS Securities | Jeffrey Spector | (212) 713-6144 |
Page 3
Pennsylvania Real Estate Investment Trust
Press Release Announcements
Dividends and Distributions:
July 28, 2008 PREIT announced the Board of Trustees of the Company declared a quarterly cash dividend of $0.57 per common share.
April 9, 2008 PREIT announced the Board of Trustees of the Company declared a quarterly cash dividend of $0.57 per common share.
Acquisitions, dispositions, development and redevelopment activities:
June 24, 2008PREIT announced that it has agreed to terms with the Commonwealth of Pennsylvania to lease the fourth, fifth and sixth floor of the former Strawbridge’s location at 8th and Market Streets in Philadelphia, PA.
Financing activities:
July 24, 2008PREIT announced that it has completed financing of Paxton Towne Centre in Harrisburg, Pennsylvania.
June 23, 2008PREIT announced that it has completed financing of Christiana Center in Newark, Delaware, and Creekview Center in Warrington, Pennsylvania.
Other activities:
July 21, 2008PREIT scheduled its Second Quarter 2008 earnings call for Thursday, August 7, 2008.
June 4, 2008PREIT presented at REITWeek™ 2008 NAREIT Investor Forum.
May 6, 2008PREIT reported its First Quarter 2008 financial results.
April 8, 2008PREIT presented at the 2008 Credit Suisse Global Real Estate Conference in New York on April 9, 2008.
April 8, 2008 PREIT scheduled its First Quarter 2008 earnings call for Tuesday, May 6, 2008.
Page 4
Pennsylvania Real Estate Investment Trust
Market Capitalization and Capital Resources
Quarter Ended June 30, | Year Ended December 31, | |||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | ||||||||||||||||
TRADING INFORMATION | ||||||||||||||||||||
High Price | $ | 27.88 | $ | 50.39 | $ | 50.39 | $ | 44.53 | $ | 50.20 | ||||||||||
Low Price | $ | 23.00 | $ | 42.64 | $ | 28.48 | $ | 36.75 | $ | 35.24 | ||||||||||
Average Daily Trading Volume | 391,406 | 577,372 | 402,381 | 223,686 | 209,537 | |||||||||||||||
MARKET CAPITALIZATION (in thousands, except per share amounts) | ||||||||||||||||||||
EQUITY CAPITALIZATION | ||||||||||||||||||||
Common Shares Outstanding | 39,367 | 38,714 | 38,953 | 36,947 | 36,521 | |||||||||||||||
OP Units Outstanding | 2,238 | 2,714 | 2,395 | 4,297 | 4,156 | |||||||||||||||
TOTAL Shares and OP Units | 41,605 | 41,428 | 41,348 | 41,244 | 40,677 | |||||||||||||||
Market Price (closing price at end of period) | $ | 23.14 | $ | 44.33 | $ | 29.68 | $ | 39.38 | $ | 37.36 | ||||||||||
Equity Market Capitalization—Shares and OP Units | $ | 962,752 | $ | 1,836,485 | $ | 1,227,216 | $ | 1,606,325 | $ | 1,519,679 | ||||||||||
Preferred Shares, Nominal Value | — | 123,750 | — | 123,750 | 123,750 | |||||||||||||||
Total Equity Market Capitalization | 962,752 | 1,960,235 | 1,227,216 | 1,730,075 | 1,643,429 | |||||||||||||||
DEBT CAPITALIZATION | ||||||||||||||||||||
Unsecured Debt Balance(1) (2) | 642,500 | 323,648 | 617,500 | 333,148 | 436,900 | |||||||||||||||
Secured Debt Balance | 1,946,100 | 1,843,748 | 1,831,211 | 1,789,511 | 1,523,745 | |||||||||||||||
Debt Capitalization | 2,588,600 | 2,167,396 | 2,448,711 | 2,122,659 | 1,960,645 | |||||||||||||||
TOTAL MARKET CAPITALIZATION | $ | 3,551,352 | $ | 4,127,631 | $ | 3,675,927 | $ | 3,852,734 | $ | 3,604,074 | ||||||||||
Shares and OP Units/Total Market Capitalization | 27.1 | % | 44.5 | % | 33.4 | % | 41.7 | % | 42.2 | % | ||||||||||
Preferred Shares/Total Market Capitalization | 0.0 | % | 3.0 | % | 0.0 | % | 3.2 | % | 3.4 | % | ||||||||||
Equity Capitalization/Total Market Capitalization | 27.1 | % | 47.5 | % | 33.4 | % | 44.9 | % | 45.6 | % | ||||||||||
Debt Capitalization/Total Market Capitalization | 72.9 | % | 52.5 | % | 66.6 | % | 55.1 | % | 54.4 | % | ||||||||||
Unsecured Debt Balance/Total Debt | 24.8 | % | 14.9 | % | 25.2 | % | 15.7 | % | 22.3 | % | ||||||||||
DISTRIBUTIONS PER COMMON SHARE | ||||||||||||||||||||
Ordinary Income | (3) | $ | 0.526 | $ | 2.105 | $ | 1.935 | $ | 2.075 | |||||||||||
Section 1250 Gain | (3) | — | — | 0.037 | — | |||||||||||||||
Return of Capital/Non-Taxable | (3) | 0.044 | 0.175 | 0.308 | 0.175 | |||||||||||||||
Distributions per share | $ | 0.570 | $ | 0.570 | $ | 2.280 | $ | 2.280 | $ | 2.250 | ||||||||||
Annualized Dividend Yield (4) | 9.9 | % | 5.1 | % | 7.7 | % | 5.8 | % | 6.0 | % | ||||||||||
CAPITAL RESOURCES | ||||||||||||||||||||
Cash and Cash Equivalents | $ | 28,444 | $ | 12,578 | $ | 33,227 | $ | 18,727 | $ | 25,828 | ||||||||||
Credit Facility | 500,000 | 500,000 | 500,000 | 500,000 | 500,000 | |||||||||||||||
Amount Outstanding | (355,000 | ) | (35,000 | ) | (330,000 | ) | (332,000 | ) | (342,500 | ) | ||||||||||
Letters of Credit | (17,806 | ) | (14,839 | ) | (16,686 | ) | (24,803 | ) | (10,485 | ) | ||||||||||
Available Line of Credit(5) | 127,194 | 450,161 | 153,314 | 143,197 | 147,015 | |||||||||||||||
Shelf Registration | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||||||||
Amount Used | (344,146 | ) | (344,146 | ) | (344,146 | ) | (344,146 | ) | (344,146 | ) | ||||||||||
Available Shelf | 655,854 | 655,854 | 655,854 | 655,854 | 655,854 | |||||||||||||||
TOTAL CAPITAL RESOURCES | $ | 811,492 | $ | 1,118,593 | $ | 842,395 | $ | 817,778 | $ | 828,697 | ||||||||||
(1) | The unsecured debt balance includes $1,148, $1,148 and $94,400 of corporate notes payable as of June 30, 2007, December 31, 2006 and December 31, 2005, respectively. |
(2) | The unsecured debt balance includes $287,500 in exchangeable senior notes as of June 30, 2008, December 31, 2007 and June 30, 2007. |
(3) | Tax status of 2008 dividend payments will be available in January 2009. |
(4) | Based on closing share price at the end of the period. |
(5) | The available line of credit is subject to covenants that may restrict amounts that can be borrowed. |
Page 5
Pennsylvania Real Estate Investment Trust
Income Statement - Three Months Ended June 30, 2008 and 2007
Proportionate Consolidation Method
(in thousands)
Three months ended June 30, 2008 | Three months ended June 30, 2007 | ||||||||||||||||||||||||||||||
GAAP | Share of unconsolidated partnerships (1) | Discontinued operations | Total | GAAP | Share of unconsolidated partnerships (1) | Discontinued operations | Total | ||||||||||||||||||||||||
Real estate revenue: | |||||||||||||||||||||||||||||||
Base rent | $ | 73,025 | $ | 6,410 | $ | — | $ | 79,435 | $ | 70,854 | $ | 5,878 | $ | (1 | ) | $ | 76,731 | ||||||||||||||
Expense reimbursements | 33,512 | 2,643 | — | 36,155 | 32,885 | 2,319 | 16 | 35,220 | |||||||||||||||||||||||
Percentage rent | 978 | 115 | — | 1,093 | 1,542 | 11 | — | 1,553 | |||||||||||||||||||||||
Lease termination revenue | 1,413 | — | — | 1,413 | 243 | (1 | ) | — | 242 | ||||||||||||||||||||||
Other real estate revenue | 3,641 | 695 | — | 4,336 | 3,996 | 254 | — | 4,250 | |||||||||||||||||||||||
TOTAL REAL ESTATE REVENUE | 112,569 | 9,863 | — | 122,432 | 109,520 | 8,461 | 15 | 117,996 | |||||||||||||||||||||||
Property operating expenses: | |||||||||||||||||||||||||||||||
CAM and real estate taxes | (32,397 | ) | (2,206 | ) | — | (34,603 | ) | (30,992 | ) | (1,735 | ) | (7 | ) | (32,734 | ) | ||||||||||||||||
Utilities | (6,312 | ) | (242 | ) | — | (6,554 | ) | (5,910 | ) | (238 | ) | — | (6,148 | ) | |||||||||||||||||
Other property operating expenses | (6,275 | ) | (571 | ) | — | (6,846 | ) | (5,679 | ) | (501 | ) | (24 | ) | (6,204 | ) | ||||||||||||||||
TOTAL PROPERTY OPERATING EXPENSES | (44,984 | ) | (3,019 | ) | — | (48,003 | ) | (42,581 | ) | (2,474 | ) | (31 | ) | (45,086 | ) | ||||||||||||||||
NET OPERATING INCOME | 67,585 | 6,844 | — | 74,429 | 66,939 | 5,987 | (16 | ) | 72,910 | ||||||||||||||||||||||
Management company revenue | 917 | — | — | 917 | 533 | — | — | 533 | |||||||||||||||||||||||
Interest and other income | 135 | — | — | 135 | 484 | — | — | 484 | |||||||||||||||||||||||
Other expenses: | |||||||||||||||||||||||||||||||
General and administrative expenses | (10,907 | ) | — | — | (10,907 | ) | (10,682 | ) | — | — | (10,682 | ) | |||||||||||||||||||
Abandoned project costs, income taxes and other expenses | (235 | ) | — | — | (235 | ) | (98 | ) | — | — | (98 | ) | |||||||||||||||||||
Total other expenses | (11,142 | ) | — | — | (11,142 | ) | (10,780 | ) | — | — | (10,780 | ) | |||||||||||||||||||
Interest expense, net(2) | (25,375 | ) | (2,646 | ) | — | (28,021 | ) | (23,661 | ) | (3,107 | ) | — | (26,768 | ) | |||||||||||||||||
Depreciation and amortization | (37,205 | ) | (2,091 | ) | — | (39,296 | ) | (32,453 | ) | (1,711 | ) | — | (34,164 | ) | |||||||||||||||||
Subtotal | (5,085 | ) | 2,107 | — | (2,978 | ) | 1,062 | 1,169 | (16 | ) | 2,215 | ||||||||||||||||||||
Equity in income of partnerships | 2,107 | (2,107 | ) | — | — | 1,169 | (1,169 | ) | — | — | |||||||||||||||||||||
Gain on sale of interest in real estate | — | — | — | — | 579 | — | — | 579 | |||||||||||||||||||||||
Gains on sales of non-operating real estate | — | — | — | — | 1,484 | — | — | 1,484 | |||||||||||||||||||||||
Minority interest | 80 | — | — | 80 | (405 | ) | — | — | (405 | ) | |||||||||||||||||||||
TOTAL CONTINUING OPERATIONS | (2,898 | ) | — | — | (2,898 | ) | 3,889 | — | (16 | ) | 3,873 | ||||||||||||||||||||
Discontinued Operations: | |||||||||||||||||||||||||||||||
Operating results from discontinued operations | — | — | — | — | (16 | ) | — | 16 | — | ||||||||||||||||||||||
Minority interest | — | — | — | — | 2 | — | — | 2 | |||||||||||||||||||||||
TOTAL DISCONTINUED OPERATIONS | — | — | — | — | (14 | ) | — | 16 | 2 | ||||||||||||||||||||||
NET (LOSS) INCOME | (2,898 | ) | — | — | (2,898 | ) | 3,875 | — | — | 3,875 | |||||||||||||||||||||
Dividends on preferred shares | — | — | — | — | (3,403 | ) | — | — | (3,403 | ) | |||||||||||||||||||||
NET (LOSS ALLOCABLE) INCOME AVAILABLE TO COMMON SHAREHOLDERS | $ | (2,898 | ) | $ | — | $ | — | $ | (2,898 | ) | $ | 472 | $ | — | $ | — | $ | 472 | |||||||||||||
(1) | PREIT’s proportionate share of partnership operations is “grossed up” to reflect the Company’s share of the total revenue and expenses of the underlying properties. |
(2) | Capitalized interest expense of $3,583 and $3,884 is not included for the three months ended June 30, 2008 and June 30, 2007, respectively. |
Page 6
Pennsylvania Real Estate Investment Trust
Income Statement - Six Months Ended June 30, 2008 and 2007
Proportionate Consolidation Method
(in thousands)
Six months ended June 30, 2008 | Six months ended June 30, 2007 | ||||||||||||||||||||||||||||||
GAAP | Share of unconsolidated partnerships (1) | Discontinued operations | Total | GAAP | Share of unconsolidated partnerships (1) | Discontinued operations | Total | ||||||||||||||||||||||||
Real estate revenue: | |||||||||||||||||||||||||||||||
Base rent | $ | 146,842 | $ | 12,648 | $ | — | $ | 159,490 | $ | 141,753 | $ | 11,822 | $ | 543 | $ | 154,118 | |||||||||||||||
Expense reimbursements | 67,940 | 4,899 | — | 72,839 | 67,659 | 4,474 | 436 | 72,569 | |||||||||||||||||||||||
Percentage rent | 2,466 | 119 | — | 2,585 | 3,633 | 38 | — | 3,671 | |||||||||||||||||||||||
Lease termination revenue | 2,298 | — | — | 2,298 | 718 | 2 | — | 720 | |||||||||||||||||||||||
Other real estate revenue | 7,232 | 862 | — | 8,094 | 7,653 | 447 | 82 | 8,182 | |||||||||||||||||||||||
TOTAL REAL ESTATE REVENUE | 226,778 | 18,528 | — | 245,306 | 221,416 | 16,783 | 1,061 | 239,260 | |||||||||||||||||||||||
Property operating expenses: | |||||||||||||||||||||||||||||||
CAM and real estate taxes | (65,269 | ) | (3,922 | ) | — | (69,191 | ) | (63,496 | ) | (3,523 | ) | (489 | ) | (67,508 | ) | ||||||||||||||||
Utilities | (12,289 | ) | (462 | ) | — | (12,751 | ) | (12,169 | ) | (446 | ) | (259 | ) | (12,874 | ) | ||||||||||||||||
Other property operating expenses | (11,854 | ) | (1,241 | ) | — | (13,095 | ) | (11,295 | ) | (1,097 | ) | (99 | ) | (12,491 | ) | ||||||||||||||||
TOTAL PROPERTY OPERATING EXPENSES | (89,412 | ) | (5,625 | ) | — | (95,037 | ) | (86,960 | ) | (5,066 | ) | (847 | ) | (92,873 | ) | ||||||||||||||||
NET OPERATING INCOME | 137,366 | 12,903 | — | 150,269 | 134,456 | 11,717 | 214 | 146,387 | |||||||||||||||||||||||
Management company revenue | 1,811 | — | — | 1,811 | 973 | — | — | 973 | |||||||||||||||||||||||
Interest and other income | 382 | — | — | 382 | 1,788 | — | — | 1,788 | |||||||||||||||||||||||
Other expenses: | |||||||||||||||||||||||||||||||
General and administrative expenses | (21,414 | ) | — | — | (21,414 | ) | (21,168 | ) | — | — | (21,168 | ) | |||||||||||||||||||
Abandoned project costs, income taxes and other expenses | (1,503 | ) | — | — | (1,503 | ) | (669 | ) | — | — | (669 | ) | |||||||||||||||||||
Total other expenses | (22,917 | ) | — | — | (22,917 | ) | (21,837 | ) | — | — | (21,837 | ) | |||||||||||||||||||
Interest expense, net(2) | (52,366 | ) | (5,317 | ) | — | (57,683 | ) | (47,472 | ) | (6,180 | ) | (136 | ) | (53,788 | ) | ||||||||||||||||
Depreciation and amortization | (73,020 | ) | (4,017 | ) | — | (77,037 | ) | (64,227 | ) | (3,413 | ) | (215 | ) | (67,855 | ) | ||||||||||||||||
Subtotal | (8,744 | ) | 3,569 | — | (5,175 | ) | 3,681 | 2,124 | (137 | ) | 5,668 | ||||||||||||||||||||
Equity in income of partnerships | 3,569 | (3,569 | ) | — | — | 2,124 | (2,124 | ) | — | — | |||||||||||||||||||||
Gains on sales of interests in real estate | — | — | — | — | 579 | — | — | 579 | |||||||||||||||||||||||
Gains on sales of non-operating real estate | — | — | — | — | 1,484 | — | — | 1,484 | |||||||||||||||||||||||
Minority interest | 149 | — | — | 149 | (780 | ) | — | — | (780 | ) | |||||||||||||||||||||
TOTAL CONTINUING OPERATIONS | (5,026 | ) | — | — | (5,026 | ) | 7,088 | — | (137 | ) | 6,951 | ||||||||||||||||||||
Discontinued Operations: | |||||||||||||||||||||||||||||||
Operating results from discontinued operations | — | — | — | — | (137 | ) | — | 137 | — | ||||||||||||||||||||||
Gain on sale of discontinued operations | — | — | — | — | 6,699 | — | — | 6,699 | |||||||||||||||||||||||
Minority interest | — | — | — | — | (690 | ) | — | — | (690 | ) | |||||||||||||||||||||
TOTAL DISCONTINUED OPERATIONS | — | — | — | — | 5,872 | — | 137 | 6,009 | |||||||||||||||||||||||
NET (LOSS) INCOME | (5,026 | ) | — | — | (5,026 | ) | 12,960 | — | — | 12,960 | |||||||||||||||||||||
Dividends on preferred shares | — | — | — | — | (6,806 | ) | — | — | (6,806 | ) | |||||||||||||||||||||
NET (LOSS ALLOCABLE) INCOME AVAILABLE TO COMMON SHAREHOLDERS | $ | (5,026 | ) | $ | — | $ | — | $ | (5,026 | ) | $ | 6,154 | $ | — | $ | — | $ | 6,154 | |||||||||||||
(1) | PREIT’s proportionate share of partnership operations is “grossed up” to reflect the Company’s share of the total revenue and expenses of the underlying properties. |
(2) | Capitalized interest expense of $7,439 and $7,429 is not included for the six months ended June 30, 2008 and June 30, 2007, respectively. |
Page 7
Pennsylvania Real Estate Investment Trust
Net Operating Income(1) - Three Months Ended June 30, 2008 and 2007
(in thousands)
Three months ended June 30, 2008 | Three months ended June 30, 2007 | |||||||||||||||||||||||||||||||
SAME STORE RETAIL/NEW/OTHER | Same | New | Other | Total | Same | New | Other | Total | ||||||||||||||||||||||||
Real estate revenue: | ||||||||||||||||||||||||||||||||
Base rent | $ | 78,075 | $ | 871 | $ | 489 | $ | 79,435 | $ | 76,680 | $ | 3 | $ | 48 | $ | 76,731 | ||||||||||||||||
Expense reimbursements | 36,060 | 71 | 24 | 36,155 | 35,205 | — | 15 | 35,220 | ||||||||||||||||||||||||
Percentage rent | 1,062 | — | 31 | 1,093 | 1,553 | — | — | 1,553 | ||||||||||||||||||||||||
Lease termination revenue | 1,413 | — | — | 1,413 | 242 | — | — | 242 | ||||||||||||||||||||||||
Other real estate revenue | 3,903 | — | 433 | 4,336 | 4,249 | — | 1 | 4,250 | ||||||||||||||||||||||||
TOTAL REAL ESTATE REVENUE | 120,513 | 942 | 977 | 122,432 | 117,929 | 3 | 64 | 117,996 | ||||||||||||||||||||||||
Property operating expenses: | ||||||||||||||||||||||||||||||||
CAM and real estate taxes | (33,978 | ) | (55 | ) | (570 | ) | (34,603 | ) | (32,717 | ) | (3 | ) | (14 | ) | (32,734 | ) | ||||||||||||||||
Utilities | (6,543 | ) | (10 | ) | (1 | ) | (6,554 | ) | (6,148 | ) | — | — | (6,148 | ) | ||||||||||||||||||
Other property operating expenses | (6,773 | ) | (23 | ) | (50 | ) | (6,846 | ) | (6,178 | ) | — | (26 | ) | (6,204 | ) | |||||||||||||||||
TOTAL PROPERTY OPERATING EXPENSES | (47,294 | ) | (88 | ) | (621 | ) | (48,003 | ) | (45,043 | ) | (3 | ) | (40 | ) | (45,086 | ) | ||||||||||||||||
NET OPERATING INCOME | $ | 73,219 | $ | 854 | $ | 356 | $ | 74,429 | $ | 72,886 | $ | — | $ | 24 | $ | 72,910 | ||||||||||||||||
Three months ended June 30, 2008 | Three months ended June 30, 2007 | |||||||||||||||||||||||
SAME STORE COMPARISON | Malls | Strip and Power Centers | Total | Malls | Strip and Power Centers | Total | ||||||||||||||||||
Real estate revenue: | ||||||||||||||||||||||||
Base rent | $ | 70,554 | $ | 7,521 | $ | 78,075 | $ | 69,158 | $ | 7,522 | $ | 76,680 | ||||||||||||
Expense reimbursements | 34,354 | 1,706 | 36,060 | 33,678 | 1,527 | 35,205 | ||||||||||||||||||
Percentage rent | 984 | 78 | 1,062 | 1,542 | 11 | 1,553 | ||||||||||||||||||
Lease termination revenue | 1,413 | — | 1,413 | 242 | — | 242 | ||||||||||||||||||
Other real estate revenue | 3,840 | 63 | 3,903 | 4,193 | 56 | 4,249 | ||||||||||||||||||
TOTAL REAL ESTATE REVENUE | 111,145 | 9,368 | 120,513 | 108,813 | 9,116 | 117,929 | ||||||||||||||||||
Property operating expenses: | ||||||||||||||||||||||||
CAM and real estate taxes | (32,448 | ) | (1,530 | ) | (33,978 | ) | (31,083 | ) | (1,634 | ) | (32,717 | ) | ||||||||||||
Utilities | (6,470 | ) | (73 | ) | (6,543 | ) | (6,102 | ) | (46 | ) | (6,148 | ) | ||||||||||||
Other property operating expenses | (6,573 | ) | (200 | ) | (6,773 | ) | (5,897 | ) | (281 | ) | (6,178 | ) | ||||||||||||
TOTAL PROPERTY OPERATING EXPENSES | (45,491 | ) | (1,803 | ) | (47,294 | ) | (43,082 | ) | (1,961 | ) | (45,043 | ) | ||||||||||||
NET OPERATING INCOME | $ | 65,654 | $ | 7,565 | $ | 73,219 | $ | 65,731 | $ | 7,155 | $ | 72,886 | ||||||||||||
(1) | PREIT’s proportionate share of partnership operations is “grossed up” to reflect the Company’s share of the total revenue and expenses of the underlying properties. |
Page 8
Pennsylvania Real Estate Investment Trust
Net Operating Income(1) - Six Months Ended June 30, 2008 and 2007
(in thousands)
Six months ended June 30, 2008 | Six months ended June 30, 2007 | |||||||||||||||||||||||||||||||
SAME STORE RETAIL/NEW/OTHER | Same | New | Other | Total | Same | New | Other | Total | ||||||||||||||||||||||||
Real estate revenue: | ||||||||||||||||||||||||||||||||
Base rent | $ | 156,947 | $ | 1,741 | $ | 802 | $ | 159,490 | $ | 153,470 | $ | 6 | $ | 642 | $ | 154,118 | ||||||||||||||||
Expense reimbursements | 72,660 | 148 | 31 | 72,839 | 72,133 | — | 436 | 72,569 | ||||||||||||||||||||||||
Percentage rent | 2,553 | — | 32 | 2,585 | 3,671 | — | — | 3,671 | ||||||||||||||||||||||||
Lease termination revenue | 2,298 | — | — | 2,298 | 720 | — | — | 720 | ||||||||||||||||||||||||
Other real estate revenue | 7,661 | — | 433 | 8,094 | 8,099 | — | 83 | 8,182 | ||||||||||||||||||||||||
TOTAL REAL ESTATE REVENUE | 242,119 | 1,889 | 1,298 | 245,306 | 238,093 | 6 | 1,161 | 239,260 | ||||||||||||||||||||||||
Property operating expenses: | ||||||||||||||||||||||||||||||||
CAM and real estate taxes | (68,326 | ) | (130 | ) | (735 | ) | (69,191 | ) | (66,998 | ) | (6 | ) | (504 | ) | (67,508 | ) | ||||||||||||||||
Utilities | (12,729 | ) | (21 | ) | (1 | ) | (12,751 | ) | (12,614 | ) | — | (260 | ) | (12,874 | ) | |||||||||||||||||
Other property operating expenses | (12,951 | ) | (62 | ) | (82 | ) | (13,095 | ) | (12,391 | ) | — | (100 | ) | (12,491 | ) | |||||||||||||||||
TOTAL PROPERTY OPERATING EXPENSES | (94,006 | ) | (213 | ) | (818 | ) | (95,037 | ) | (92,003 | ) | (6 | ) | (864 | ) | (92,873 | ) | ||||||||||||||||
NET OPERATING INCOME | $ | 148,113 | $ | 1,676 | $ | 480 | $ | 150,269 | $ | 146,090 | $ | — | $ | 297 | $ | 146,387 | ||||||||||||||||
Six months ended June 30, 2008 | Six months ended June 30, 2007 | |||||||||||||||||||||||
SAME STORE COMPARISON | Malls | Strip and Power Centers | Total | Malls | Strip and Power Centers | Total | ||||||||||||||||||
Real estate revenue: | ||||||||||||||||||||||||
Base rent | $ | 141,936 | $ | 15,011 | $ | 156,947 | $ | 138,519 | $ | 14,951 | $ | 153,470 | ||||||||||||
Expense reimbursements | 69,341 | 3,319 | 72,660 | 68,749 | 3,384 | 72,133 | ||||||||||||||||||
Percentage rent | 2,454 | 99 | 2,553 | 3,628 | 43 | 3,671 | ||||||||||||||||||
Lease termination revenue | 2,298 | — | 2,298 | 718 | 2 | 720 | ||||||||||||||||||
Other real estate revenue | 7,550 | 111 | 7,661 | 7,982 | 117 | 8,099 | ||||||||||||||||||
TOTAL REAL ESTATE REVENUE | 223,579 | 18,540 | 242,119 | 219,596 | 18,497 | 238,093 | ||||||||||||||||||
Property operating expenses: | ||||||||||||||||||||||||
CAM and real estate taxes | (65,216 | ) | (3,110 | ) | (68,326 | ) | (63,515 | ) | (3,483 | ) | (66,998 | ) | ||||||||||||
Utilities | (12,597 | ) | (132 | ) | (12,729 | ) | (12,528 | ) | (86 | ) | (12,614 | ) | ||||||||||||
Other property operating expenses | (12,464 | ) | (487 | ) | (12,951 | ) | (11,919 | ) | (472 | ) | (12,391 | ) | ||||||||||||
TOTAL PROPERTY OPERATING EXPENSES | (90,277 | ) | (3,729 | ) | (94,006 | ) | (87,962 | ) | (4,041 | ) | (92,003 | ) | ||||||||||||
NET OPERATING INCOME | $ | 133,302 | $ | 14,811 | $ | 148,113 | $ | 131,634 | $ | 14,456 | $ | 146,090 | ||||||||||||
(1) | PREIT’s proportionate share of partnership operations is “grossed up” to reflect the Company’s share of the total revenue and expenses of the underlying properties. |
Page 9
Pennsylvania Real Estate Investment Trust
Computation of
Earnings Per Share
(in thousands, except per share amounts)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Net (loss) income from continuing operations | $ | (2,898 | ) | $ | 3,889 | $ | (5,026 | ) | $ | 7,088 | ||||||
Dividends on preferred shares | — | (3,403 | ) | — | (6,806 | ) | ||||||||||
Net (loss) income from continuing operations allocable to common shareholders | (2,898 | ) | 486 | (5,026 | ) | 282 | ||||||||||
Dividends on unvested restricted shares | (305 | ) | (272 | ) | (614 | ) | (543 | ) | ||||||||
(Loss) income from continuing operations used to calculate earnings per share - basic | (3,203 | ) | 214 | (5,640 | ) | (261 | ) | |||||||||
Minority interest in properties-continuing operations | — | — | — | — | ||||||||||||
(Loss) income from continuing operations used to calculate earnings per share - diluted | $ | (3,203 | ) | $ | 214 | $ | (5,640 | ) | $ | (261 | ) | |||||
(Loss) income from discontinued operations | $ | — | $ | (14 | ) | $ | — | $ | 5,872 | |||||||
Basic (loss) earnings per share: | ||||||||||||||||
(Loss) income from continuing operations | $ | (0.08 | ) | $ | 0.01 | $ | (0.15 | ) | $ | (0.01 | ) | |||||
Income from discontinued operations | — | — | — | 0.16 | ||||||||||||
$ | (0.08 | ) | $ | 0.01 | $ | (0.15 | ) | $ | 0.15 | |||||||
Diluted (loss) earnings per share: | ||||||||||||||||
(Loss) income from continuing operations | $ | (0.08 | ) | $ | 0.01 | $ | (0.15 | ) | $ | (0.01 | ) | |||||
Income from discontinued operations | — | — | — | 0.16 | ||||||||||||
$ | (0.08 | ) | $ | 0.01 | $ | (0.15 | ) | $ | 0.15 | |||||||
Weighted average of common shares outstanding | 39,330 | 37,547 | 39,272 | 37,279 | ||||||||||||
Weighted average of unvested restricted shares | (540 | ) | (477 | ) | (520 | ) | (461 | ) | ||||||||
Weighted average shares outstanding - basic | 38,790 | 37,070 | 38,752 | 36,818 | ||||||||||||
Weighted average effect of common share equivalents (1) | — | 437 | — | — | ||||||||||||
Total weighted average shares outstanding - diluted | 38,790 | 37,507 | 38,752 | 36,818 | ||||||||||||
(1) | For the three and six month periods ended June 30, 2008 and the six month period ended June 30, 2007, respectively, there are net losses allocable to common shareholders from continuing operations, so the effect of common share equivalents is excluded from the calculation of diluted loss per share for these periods. |
Page 10
Pennsylvania Real Estate Investment Trust
Funds From Operations and Funds Available for Distribution
(in thousands, except per share amounts)
Three months ended June 30, | Six months ended June 30, | Year Ended December 31, | ||||||||||||||||||
2008 | 2007 | 2008 | 2007 | 2007 | ||||||||||||||||
FUNDS FROM OPERATIONS (FFO) | ||||||||||||||||||||
Net (loss) income | $ | (2,898 | ) | $ | 3,875 | $ | (5,026 | ) | $ | 12,960 | $ | 23,161 | ||||||||
Redemption of preferred shares | — | — | — | — | 13,347 | |||||||||||||||
Dividends on preferred shares | — | (3,403 | ) | — | (6,806 | ) | (7,941 | ) | ||||||||||||
Minority interest | (80 | ) | 403 | (149 | ) | 1,470 | 2,105 | |||||||||||||
Gain on sale of interests in real estate | — | (579 | ) | — | (579 | ) | (579 | ) | ||||||||||||
Gain on sale of interests in discontinued operations | — | — | — | (6,699 | ) | (6,699 | ) | |||||||||||||
Depreciation and amortization: (1) | ||||||||||||||||||||
Wholly owned and consolidated partnerships | 36,541 | 31,881 | 71,717 | 63,096 | 129,924 | |||||||||||||||
Unconsolidated partnerships | 2,091 | 1,711 | 4,017 | 3,413 | 7,130 | |||||||||||||||
Discontinued operations | — | — | — | 215 | 215 | |||||||||||||||
FFO | $ | 35,654 | $ | 33,888 | $ | 70,559 | $ | 67,070 | $ | 160,663 | ||||||||||
FUNDS AVAILABLE FOR DISTRIBUTION (FAD) | ||||||||||||||||||||
FFO | $ | 35,654 | $ | 33,888 | $ | 70,559 | $ | 67,070 | $ | 160,663 | ||||||||||
Adjustments: | ||||||||||||||||||||
Straight line rent | (1,094 | ) | (389 | ) | (1,760 | ) | (955 | ) | (2,484 | ) | ||||||||||
Recurring capital expenditures | (4,219 | ) | (2,993 | ) | (4,905 | ) | (3,628 | ) | (17,579 | ) | ||||||||||
Tenant allowances | (2,608 | ) | (3,457 | ) | (4,366 | ) | (5,299 | ) | (14,294 | ) | ||||||||||
Capitalized leasing costs | (1,521 | ) | (1,188 | ) | (2,806 | ) | (2,492 | ) | (4,830 | ) | ||||||||||
Amortization of debt premium | (3,082 | ) | (3,152 | ) | (6,181 | ) | (6,599 | ) | (12,843 | ) | ||||||||||
Amortization of above- and below- market lease intangibles | 244 | (85 | ) | 238 | (80 | ) | (171 | ) | ||||||||||||
Redemption of preferred shares | — | — | — | — | (13,347 | ) | ||||||||||||||
FAD | $ | 23,374 | $ | 22,624 | $ | 50,779 | $ | 48,017 | $ | 95,115 | ||||||||||
Weighted average of common shares outstanding | 38,790 | 37,070 | 38,752 | 36,818 | 37,577 | |||||||||||||||
Weighted average of OP Units outstanding | 2,238 | 3,861 | 2,239 | 4,075 | 3,308 | |||||||||||||||
Weighted average effect of common share equivalents | 36 | 437 | 22 | 445 | 325 | |||||||||||||||
Total weighted average shares outstanding, including OP Units | 41,064 | 41,368 | 41,013 | 41,338 | 41,210 | |||||||||||||||
Net (loss) income per diluted share | $ | (0.08 | ) | $ | 0.01 | $ | (0.15 | ) | $ | 0.15 | $ | 0.73 | ||||||||
FFO per diluted share | $ | 0.87 | $ | 0.82 | $ | 1.72 | $ | 1.62 | $ | 3.90 | ||||||||||
FAD per diluted share | $ | 0.57 | $ | 0.55 | $ | 1.24 | $ | 1.16 | $ | 2.31 | ||||||||||
Dividend per common share | $ | 0.57 | $ | 0.57 | $ | 1.14 | $ | 1.14 | $ | 2.28 | ||||||||||
PAYOUT RATIOS | ||||||||||||||||||||
Payout Ratio of FFO | 57.8 | %(2) | ||||||||||||||||||
Payout Ratio of FAD | 97.8 | %(2) |
(1) | Excludes depreciation of non-real estate assets and amortization of deferred financing costs. |
(2) | Twelve months ended June 30, 2008 |
Page 11
Pennsylvania Real Estate Investment Trust
2008 Leasing Activity Summary
Number | GLA | Average Base Rent psf | Change in Base Rent psf | Annualized Tenant Improvements psf (1) | |||||||||||||||
Previous | New | Dollar | Percentage | ||||||||||||||||
New Leases - Previously Leased Space: | |||||||||||||||||||
1st Quarter | 21 | 86,749 | $ | 27.00 | $ | 30.36 | $ | 3.36 | 12.5 | % | $ | 3.15 | |||||||
2nd Quarter | 22 | 70,048 | 20.02 | 24.47 | 4.45 | 22.2 | % | 2.46 | |||||||||||
Total/Average | 43 | 156,797 | $ | 23.88 | $ | 27.73 | $ | 3.85 | 16.8 | % | $ | 2.84 | |||||||
New Leases - Previously Vacant Space:(2) | |||||||||||||||||||
1st Quarter | 43 | 151,731 | $ | — | $ | 25.86 | $ | 25.86 | N/A | $ | 2.94 | ||||||||
2nd Quarter | 29 | 126,747 | — | 26.73 | 26.73 | N/A | 4.95 | ||||||||||||
Total/Average | 72 | 278,478 | $ | — | $ | 26.25 | $ | 26.25 | N/A | $ | 3.86 | ||||||||
Renewal:(3) | |||||||||||||||||||
1st Quarter | 112 | 343,485 | $ | 20.86 | $ | 23.27 | $ | 2.41 | 11.6 | % | $ | 0.20 | |||||||
2nd Quarter | 97 | 245,646 | 25.91 | 28.35 | 2.43 | 9.4 | % | 0.07 | |||||||||||
Total/Average | 209 | 589,131 | $ | 22.97 | $ | 25.39 | $ | 2.42 | 10.6 | % | $ | 0.15 | |||||||
Anchor Renewal: | |||||||||||||||||||
1st Quarter | 2 | 205,869 | $ | 0.64 | $ | 0.64 | $ | — | 0.0 | % | $ | — | |||||||
2nd Quarter | 3 | 231,277 | 3.32 | 3.32 | — | 0.0 | % | — | |||||||||||
Total/Average | 5 | 437,146 | $ | 2.06 | $ | 2.06 | $ | — | 0.0 | % | $ | — | |||||||
Anchor Other:(4) | |||||||||||||||||||
1st Quarter | 7 | 518,887 | $ | 1.87 | $ | 6.31 | N/A | N/A | $ | 1.46 | |||||||||
2nd Quarter | 0 | — | — | — | N/A | N/A | — | ||||||||||||
Total/Average | 7 | 518,887 | $ | 1.87 | $ | 6.31 | N/A | N/A | $ | 1.46 |
(1) | These leasing costs are presented as annualized costs per square foot and are spread uniformly over the initial lease term. |
(2) | This category includes newly constructed and recommissioned space. |
(3) | This category includes expansions, relocations and lease extensions. |
(4) | This category includes previously leased and newly constructed space. |
Page 12
Pennsylvania Real Estate Investment Trust
Summarized Rent Per Square Foot and Occupancy Percentages
June 30, 2008 | June 30, 2007 | Change | |||||||||||||||||||||||||
Avg Base Rent | Occupancy | Avg Base Rent | Occupancy | Avg Base Rent | Occupancy | ||||||||||||||||||||||
Total (1) | Non-Anchor | Total (1) | Non-Anchor | Total | Non-Anchor | ||||||||||||||||||||||
Enclosed Malls weighted average(2) | $ | 30.89 | 87.8 | % | 86.6 | % | $ | 30.29 | 89.5 | % | 86.5 | % | 2.0 | % | -1.7 | % | 0.1 | % | |||||||||
Strip and Power Centers weighted average | $ | 16.10 | 97.1 | % | 95.4 | % | $ | 16.04 | 96.0 | % | 93.8 | % | 0.3 | % | 1.1 | % | 1.6 | % | |||||||||
Retail Portfolio weighted average | $ | 27.26 | 89.1 | % | 88.0 | % | $ | 27.06 | 90.3 | % | 87.6 | % | 0.8 | % | -1.1 | % | 0.4 | % | |||||||||
Consolidated Properties | $ | 28.41 | 88.4 | % | 87.2 | % | $ | 28.27 | 89.7 | % | 86.7 | % | 0.5 | % | -1.4 | % | 0.5 | % | |||||||||
Unconsolidated Properties | $ | 22.49 | 94.9 | % | 92.8 | % | $ | 21.95 | 95.0 | % | 92.9 | % | 2.5 | % | -0.1 | % | -0.1 | % | |||||||||
Same Properties | $ | 27.51 | 89.0 | % | 87.9 | % | $ | 27.06 | 90.3 | % | 87.6 | % | 1.7 | % | -1.3 | % | 0.3 | % | |||||||||
New Properties | $ | 14.61 | 99.2 | % | 98.5 | % | N/A | N/A | N/A | N/A | N/A | N/A |
(1) | Includes approximately 1.2 million square feet of vacant anchor space, as of June 30, 2008, of which 0.8 million square feet has been leased but is not occupied. As of June 30, 2007 total vacant anchor space was approximately 0.8 million square feet. |
(2) | Average base rent for tenants that lease individual spaces of 10,000 square feet or less and pay fixed rent. Average base rent for tenants greater than 10,000 square feet that pay fixed rent was $13.50/sq ft as of June 30, 2008 and $13.14/sq ft as of June 30, 2007. |
Page 13
Pennsylvania Real Estate Investment Trust
Mall Sales and Rent Per Square Foot
% of Current Quarter Mall NOI | June 30, 2008 | June 30, 2007 | Change | |||||||||||||||||||||||||||
Avg Base Rent(1) | Avg Comp Sales(2) | Occup. Cost Ratio(2) | Avg Base Rent(1) | Avg Comp Sales(2) | Occup. Cost Ratio(2) | Avg Base Rent(1) | Avg Comp Sales(2) | Occup. Cost Ratio(2) | ||||||||||||||||||||||
Sales per square foot over $400 | 38.7 | % | ||||||||||||||||||||||||||||
Cherry Hill Mall | $ | 43.39 | $ | 477 | 14.5 | % | $ | 41.20 | $ | 478 | 13.7 | % | 5.3 | % | -0.4 | % | 0.8 | % | ||||||||||||
Jacksonville Mall | 30.49 | 474 | 9.6 | % | 30.20 | 450 | 9.6 | % | 1.0 | % | 5.2 | % | 0.0 | % | ||||||||||||||||
Woodland Mall | 42.08 | 471 | 14.3 | % | 42.96 | 451 | 15.5 | % | -2.1 | % | 4.3 | % | -1.2 | % | ||||||||||||||||
Lehigh Valley Mall | 39.55 | 470 | 12.6 | % | 39.29 | 490 | 11.8 | % | 0.7 | % | -4.1 | % | 0.8 | % | ||||||||||||||||
Patrick Henry Mall | 37.08 | 457 | 11.5 | % | 36.65 | 477 | 10.1 | % | 1.2 | % | -4.2 | % | 1.4 | % | ||||||||||||||||
Willow Grove Park(3) (4) | 42.00 | 432 | 14.2 | % | 41.00 | 438 | 13.7 | % | 2.5 | % | -1.3 | % | 0.5 | % | ||||||||||||||||
Moorestown Mall | 35.14 | 423 | 13.9 | % | 36.77 | 433 | 13.8 | % | -4.4 | % | -2.4 | % | 0.1 | % | ||||||||||||||||
The Mall at Prince Georges | 32.74 | 408 | 13.2 | % | 32.14 | 435 | 12.6 | % | 1.9 | % | -6.3 | % | 0.6 | % | ||||||||||||||||
Sales per square foot between $350 - $400 | 22.5 | % | ||||||||||||||||||||||||||||
Capital City Mall | 32.31 | 383 | 10.8 | % | 31.80 | 365 | 11.1 | % | 1.6 | % | 5.2 | % | -0.3 | % | ||||||||||||||||
Springfield Mall | 31.73 | 378 | 13.6 | % | 31.97 | 392 | 12.9 | % | -0.7 | % | -3.5 | % | 0.7 | % | ||||||||||||||||
Dartmouth Mall | 29.43 | 378 | 12.0 | % | 28.48 | 408 | 11.4 | % | 3.3 | % | -7.4 | % | 0.6 | % | ||||||||||||||||
Viewmont Mall | 30.26 | 377 | 12.1 | % | 29.40 | 380 | 11.5 | % | 2.9 | % | -0.8 | % | 0.6 | % | ||||||||||||||||
The Gallery at Market East(3) (4) | 34.68 | 376 | 13.3 | % | 35.80 | 419 | 11.9 | % | -3.1 | % | -10.3 | % | 1.4 | % | ||||||||||||||||
Valley View Mall | 29.59 | 372 | 11.9 | % | 29.16 | 365 | 11.4 | % | 1.5 | % | 1.8 | % | 0.5 | % | ||||||||||||||||
Exton Square Mall | 36.73 | 368 | 14.4 | % | 36.23 | 394 | 14.3 | % | 1.4 | % | -6.6 | % | 0.1 | % | ||||||||||||||||
Francis Scott Key Mall(4) | 25.91 | 359 | 10.2 | % | 25.48 | 356 | 9.6 | % | 1.7 | % | 0.8 | % | 0.6 | % | ||||||||||||||||
Sales per square foot between $300 - $349 | 16.0 | % | ||||||||||||||||||||||||||||
Wyoming Valley Mall | 29.09 | 349 | 12.2 | % | 29.27 | 354 | 11.6 | % | -0.6 | % | -1.1 | % | 0.6 | % | ||||||||||||||||
Valley Mall | 24.47 | 333 | 11.6 | % | 25.02 | 361 | 10.2 | % | -2.2 | % | -7.6 | % | 1.4 | % | ||||||||||||||||
Cumberland Mall(4) | 27.34 | 310 | 12.1 | % | 25.93 | 327 | 11.8 | % | 5.4 | % | -5.2 | % | 0.3 | % | ||||||||||||||||
Logan Valley Mall | 25.88 | 307 | 12.0 | % | 24.49 | 301 | 11.6 | % | 5.7 | % | 2.0 | % | 0.4 | % | ||||||||||||||||
Palmer Park Mall | 23.95 | 304 | 12.1 | % | 24.08 | 322 | 11.2 | % | -0.5 | % | -5.7 | % | 0.9 | % | ||||||||||||||||
South Mall | 24.40 | 302 | 11.4 | % | 23.04 | 304 | 10.3 | % | 5.9 | % | -0.8 | % | 1.1 | % | ||||||||||||||||
Magnolia Mall | 25.49 | 300 | 13.0 | % | 25.35 | 311 | 12.2 | % | 0.6 | % | -3.4 | % | 0.8 | % | ||||||||||||||||
Sales per square foot under $300 | 22.8 | % | ||||||||||||||||||||||||||||
Nittany Mall | 22.13 | 289 | 10.9 | % | 21.22 | 289 | 10.9 | % | 4.3 | % | -0.2 | % | 0.0 | % | ||||||||||||||||
North Hanover Mall | 24.02 | 288 | 12.3 | % | 23.34 | 301 | 10.8 | % | 2.9 | % | -4.2 | % | 1.5 | % | ||||||||||||||||
Wiregrass Commons Mall | 24.56 | 285 | 10.9 | % | 25.05 | 303 | 10.5 | % | -1.9 | % | -5.7 | % | 0.4 | % | ||||||||||||||||
New River Valley Mall | 25.80 | 285 | 9.5 | % | 24.63 | 295 | 9.8 | % | 4.7 | % | -3.5 | % | -0.3 | % | ||||||||||||||||
Gadsden Mall | 24.08 | 281 | 11.0 | % | 24.03 | 286 | 10.1 | % | 0.2 | % | -1.9 | % | 0.9 | % | ||||||||||||||||
Uniontown Mall(4) | 21.17 | 277 | 10.8 | % | 21.09 | 280 | 10.5 | % | 0.4 | % | -1.0 | % | 0.3 | % | ||||||||||||||||
Crossroads Mall | 21.04 | 277 | 9.4 | % | 20.38 | 285 | 9.8 | % | 3.3 | % | -2.8 | % | -0.4 | % | ||||||||||||||||
Orlando Fashion Square | 35.40 | 276 | 16.3 | % | 35.16 | 319 | 14.3 | % | 0.7 | % | -13.5 | % | 2.0 | % | ||||||||||||||||
Washington Crown Center | 22.21 | 275 | 11.4 | % | 21.77 | 294 | 11.9 | % | 2.0 | % | -6.5 | % | -0.5 | % | ||||||||||||||||
Plymouth Meeting Mall | 31.79 | 272 | 13.5 | % | 30.24 | 278 | 13.2 | % | 5.1 | % | -2.0 | % | 0.3 | % | ||||||||||||||||
Beaver Valley Mall | 24.92 | 263 | 13.9 | % | 23.60 | 267 | 14.2 | % | 5.6 | % | -1.5 | % | -0.3 | % | ||||||||||||||||
Phillipsburg Mall | 25.00 | 258 | 13.9 | % | 25.14 | 277 | 12.6 | % | -0.5 | % | -6.7 | % | 1.3 | % | ||||||||||||||||
Lycoming Mall(4) | 20.47 | 254 | 11.8 | % | 19.85 | 259 | 11.0 | % | 3.1 | % | -1.8 | % | 0.8 | % | ||||||||||||||||
Chambersburg Mall(4) | 24.63 | 238 | 11.0 | % | 19.90 | 241 | 11.2 | % | 23.8 | % | -1.2 | % | -0.2 | % | ||||||||||||||||
Voorhees Town Center | 29.78 | 201 | 14.8 | % | 29.25 | 206 | 14.3 | % | 1.8 | % | -2.7 | % | 0.5 | % | ||||||||||||||||
Enclosed Malls weighted average | $ | 30.89 | $ | 355 | 12.6 | % | $ | 30.29 | $ | 363 | 12.1 | % | 2.0 | % | -2.1 | % | 0.5 | % | ||||||||||||
Consolidated Properties | $ | 30.39 | $ | 348 | 12.6 | % | $ | 29.81 | $ | 356 | 12.1 | % | 1.9 | % | -2.3 | % | 0.5 | % | ||||||||||||
Unconsolidated Properties | $ | 36.67 | $ | 438 | 12.9 | % | $ | 36.42 | $ | 451 | 12.2 | % | 0.7 | % | -2.9 | % | 0.7 | % | ||||||||||||
Same Properties | $ | 30.89 | $ | 355 | 12.6 | % | $ | 30.29 | $ | 363 | 12.1 | % | 2.0 | % | -2.1 | % | 0.5 | % |
(1) | Average base rent includes all non-anchor space owned by the Company and leased to tenants that lease individual spaces of 10,000 square feet or less and pay fixed rent. |
(2) | Based on reported sales by all comparable non-anchor tenants that lease individual spaces of 10,000 square feet or less and have occupied the space for at least 24 months. |
(3) | Property contains a vacant anchor space as of June 30, 2007. |
(4) | Property contains a vacant anchor space as of June 30, 2008. |
Page 14
Pennsylvania Real Estate Investment Trust
Mall Occupancy - Owned GLA
June 30, 2008 | June 30, 2007 | Change | ||||||||||||||||
Total | Non-Anchor | Total | Non-Anchor | Total | Non-Anchor | |||||||||||||
Beaver Valley Mall | 91.8 | % | 82.3 | % | 90.1 | % | 77.4 | % | 1.7 | % | 4.9 | % | ||||||
Capital City Mall | 99.3 | % | 98.8 | % | 96.9 | % | 94.8 | % | 2.4 | % | 4.0 | % | ||||||
Chambersburg Mall(1) | 69.2 | % | 67.1 | % | 88.9 | % | 76.4 | % | -19.7 | % | -9.3 | % | ||||||
Cherry Hill Mall | 88.7 | % | 88.7 | % | 92.0 | % | 92.0 | % | -3.2 | % | -3.3 | % | ||||||
Crossroads Mall | 92.5 | % | 82.7 | % | 92.1 | % | 81.8 | % | 0.4 | % | 0.9 | % | ||||||
Cumberland Mall(1) | 82.0 | % | 94.8 | % | 97.6 | % | 95.9 | % | -15.6 | % | -1.2 | % | ||||||
Dartmouth Mall | 96.3 | % | 93.9 | % | 96.3 | % | 93.9 | % | 0.0 | % | 0.0 | % | ||||||
Exton Square Mall | 93.0 | % | 84.7 | % | 92.6 | % | 83.9 | % | 0.4 | % | 0.8 | % | ||||||
Francis Scott Key Mall(2) | 84.1 | % | 92.3 | % | 95.5 | % | 90.9 | % | -11.4 | % | 1.4 | % | ||||||
Gadsden Mall(3) | 87.4 | % | 74.1 | % | 91.7 | % | 80.6 | % | -4.3 | % | -6.5 | % | ||||||
The Gallery at Market East(4) | 42.8 | % | 84.3 | % | 41.5 | % | 80.9 | % | 1.3 | % | 3.4 | % | ||||||
Jacksonville Mall | 94.8 | % | 89.6 | % | 94.6 | % | 89.1 | % | 0.2 | % | 0.5 | % | ||||||
Lehigh Valley Mall | 95.4 | % | 93.7 | % | 95.8 | % | 93.8 | % | -0.4 | % | -0.1 | % | ||||||
Logan Valley Mall | 96.8 | % | 92.2 | % | 97.3 | % | 93.6 | % | -0.5 | % | -1.4 | % | ||||||
Lycoming Mall(1) | 87.3 | % | 94.8 | % | 96.6 | % | 93.8 | % | -9.3 | % | 1.0 | % | ||||||
Magnolia Mall | 97.1 | % | 93.5 | % | 94.2 | % | 86.8 | % | 2.9 | % | 6.7 | % | ||||||
Moorestown Mall | 89.5 | % | 76.3 | % | 87.6 | % | 70.9 | % | 1.9 | % | 5.4 | % | ||||||
New River Valley Mall | 94.2 | % | 90.4 | % | 91.7 | % | 86.1 | % | 2.5 | % | 4.3 | % | ||||||
Nittany Mall | 91.9 | % | 83.5 | % | 94.0 | % | 87.8 | % | -2.1 | % | -4.3 | % | ||||||
North Hanover Mall | 92.7 | % | 82.9 | % | 89.2 | % | 78.4 | % | 3.5 | % | 4.5 | % | ||||||
Orlando Fashion Square | 91.3 | % | 81.5 | % | 91.0 | % | 80.8 | % | 0.3 | % | 0.7 | % | ||||||
Palmer Park Mall | 97.3 | % | 91.3 | % | 97.3 | % | 91.3 | % | 0.0 | % | 0.0 | % | ||||||
Patrick Henry Mall | 98.4 | % | 96.8 | % | 97.9 | % | 95.9 | % | 0.5 | % | 0.9 | % | ||||||
Phillipsburg Mall | 90.7 | % | 78.8 | % | 92.4 | % | 82.6 | % | -1.7 | % | -3.8 | % | ||||||
Plymouth Meeting Mall | 80.5 | % | 71.4 | % | 80.2 | % | 71.1 | % | 0.3 | % | 0.3 | % | ||||||
The Mall at Prince Georges | 98.5 | % | 96.8 | % | 97.1 | % | 93.9 | % | 1.4 | % | 2.9 | % | ||||||
South Mall | 90.6 | % | 82.4 | % | 90.8 | % | 82.7 | % | -0.2 | % | -0.3 | % | ||||||
Springfield Mall | 88.3 | % | 88.3 | % | 85.9 | % | 85.9 | % | 2.4 | % | 2.4 | % | ||||||
Uniontown Mall(1) | 82.1 | % | 85.1 | % | 94.2 | % | 85.3 | % | -12.1 | % | -0.2 | % | ||||||
Valley Mall | 98.2 | % | 96.9 | % | 97.5 | % | 95.6 | % | 0.7 | % | 1.3 | % | ||||||
Valley View Mall | 92.1 | % | 89.0 | % | 92.7 | % | 89.9 | % | -0.6 | % | -0.9 | % | ||||||
Viewmont Mall | 97.0 | % | 92.3 | % | 98.7 | % | 96.6 | % | -1.7 | % | -4.3 | % | ||||||
Voorhees Town Center | 54.4 | % | 53.5 | % | 66.3 | % | 65.7 | % | -11.9 | % | -12.2 | % | ||||||
Washington Crown Center | 90.1 | % | 81.7 | % | 90.4 | % | 82.3 | % | -0.3 | % | -0.6 | % | ||||||
Willow Grove Park(4) | 69.9 | % | 94.5 | % | 68.7 | % | 94.5 | % | 1.2 | % | 0.0 | % | ||||||
Wiregrass Commons Mall | 80.9 | % | 80.9 | % | 83.3 | % | 83.3 | % | -2.5 | % | -2.5 | % | ||||||
Woodland Mall | 87.2 | % | 84.9 | % | 87.0 | % | 84.8 | % | 0.2 | % | 0.1 | % | ||||||
Wyoming Valley Mall | 92.0 | % | 77.3 | % | 92.7 | % | 79.4 | % | -0.7 | % | -2.1 | % | ||||||
Enclosed Malls weighted average | 87.8 | % | 86.6 | % | 89.5 | % | 86.5 | % | -1.7 | % | 0.1 | % | ||||||
Consolidated Properties | 87.5 | % | 86.2 | % | 89.3 | % | 86.2 | % | -1.8 | % | 0.0 | % | ||||||
Unconsolidated Properties | 93.8 | % | 92.2 | % | 93.3 | % | 91.2 | % | 0.5 | % | 1.0 | % | ||||||
Same Properties | 87.8 | % | 86.6 | % | 89.5 | % | 86.5 | % | -1.7 | % | 0.1 | % |
(1) | The total occupancy percentages as of June 30, 2008 for these properties include the former Value City store locations that are currently vacant. The vacant store locations have been leased to Burlington Coat Factory, which is expected to open new stores between 3rd Quarter 2008 and 1st Quarter 2009. |
(2) | The total occupancy percentage as of June 30, 2008 for this property includes the former Value City store location that is currently vacant. The vacant store location has been leased to Value City Furniture and DSW, which are expected to open in 4th Quarter 2008 and 1st Quarter 2009, respectively. |
(3) | The total occupancy percentage as of June 30, 2008 reflects the decommissioning of the former Belk store, pending redevelopment. This vacant department store, which has been leased to JC Penney, represents 12.7% of the owned mall GLA. |
(4) | The total occupancy percentages for The Gallery at Market East and Willow Grove Park include the former Strawbridge’s stores that are currently vacant, pending redevelopment. These vacant department stores represents 51.5% and 27.7% of the owned mall GLA for The Gallery at Market East and Willow Grove Park, respectively. |
Page 15
Pennsylvania Real Estate Investment Trust
Strip and Power Center Rent Per Square Foot and Occupancy Percentages
June 30, 2008 | June 30, 2007 | Change | |||||||||||||||||||||||||
Avg Base Rent | Occupancy | Avg Base Rent | Occupancy | Avg Base Rent | Occupancy | ||||||||||||||||||||||
Total | Non-Anchor | Total | Non-Anchor | Total | Non-Anchor | ||||||||||||||||||||||
Christiana Center | $ | 20.83 | 100.0 | % | 100.0 | % | $ | 20.83 | 100.0 | % | 100.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | |||||||||
Creekview Center | 15.16 | 100.0 | % | 100.0 | % | 15.11 | 100.0 | % | 100.0 | % | 0.4 | % | 0.0 | % | 0.0 | % | |||||||||||
Crest Plaza | 17.66 | 97.9 | % | 96.0 | % | 16.94 | 96.6 | % | 93.6 | % | 4.2 | % | 1.3 | % | 2.4 | % | |||||||||||
The Commons at Magnolia | 14.45 | 97.9 | % | 95.8 | % | 13.10 | 90.6 | % | 81.6 | % | 10.2 | % | 7.3 | % | 14.2 | % | |||||||||||
Metroplex Shopping Center | 19.10 | 100.0 | % | 100.0 | % | 19.10 | 100.0 | % | 100.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | |||||||||||
New River Valley Center | 14.45 | 100.0 | % | 100.0 | % | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||
Northeast Tower Center | 15.32 | 96.6 | % | 94.4 | % | 15.28 | 96.6 | % | 94.4 | % | 0.3 | % | 0.0 | % | 0.0 | % | |||||||||||
The Court at Oxford Valley | 16.43 | 98.3 | % | 97.2 | % | 16.07 | 97.1 | % | 95.3 | % | 2.2 | % | 1.2 | % | 1.9 | % | |||||||||||
Paxton Towne Centre | 15.76 | 100.0 | % | 100.0 | % | 15.52 | 93.5 | % | 90.3 | % | 1.5 | % | 6.5 | % | 9.7 | % | |||||||||||
Red Rose Commons | 13.86 | 99.2 | % | 99.2 | % | 13.86 | 99.2 | % | 99.2 | % | 0.0 | % | 0.0 | % | 0.0 | % | |||||||||||
Springfield Park | 21.79 | 90.9 | % | 73.5 | % | 21.73 | 90.9 | % | 73.5 | % | 0.3 | % | 0.0 | % | 0.0 | % | |||||||||||
Sunrise Plaza | 20.37 | 98.2 | % | 64.8 | % | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||
Whitehall Mall | 11.81 | 88.5 | % | 75.7 | % | 11.62 | 90.9 | % | 80.6 | % | 1.7 | % | -2.4 | % | -4.9 | % | |||||||||||
Weighted Average | $ | 16.10 | 97.1 | % | 95.4 | % | $ | 16.04 | 96.0 | % | 93.8 | % | 0.3 | % | 1.1 | % | 1.6 | % | |||||||||
Consolidated Properties | $ | 16.02 | 99.0 | % | 98.2 | % | $ | 16.12 | 96.2 | % | 93.7 | % | -0.6 | % | 2.8 | % | 4.5 | % | |||||||||
Unconsolidated Properties | $ | 16.15 | 95.5 | % | 93.2 | % | $ | 15.99 | 95.9 | % | 93.8 | % | 1.0 | % | -0.4 | % | -0.6 | % | |||||||||
Same Properties | $ | 16.22 | 96.9 | % | 95.2 | % | $ | 16.04 | 96.0 | % | 93.8 | % | 1.1 | % | 0.9 | % | 1.4 | % | |||||||||
New Properties | $ | 14.61 | 99.2 | % | 98.5 | % | N/A | N/A | N/A | N/A | N/A | N/A |
Page 16
Pennsylvania Real Estate Investment Trust
Top Twenty Tenants (by share of PREIT’s Annualized Minimum Rent)
(dollars in thousands)
Tenant(1) | Paying Minimum Rent | Paying Percentage of Sales in lieu of Minimum Rent (2) | Total | Minimum Rent | |||||||||||||||||
Number of Stores | GLA | Number of Stores | GLA | Total Number of Stores | Total GLA | Annualized Minimum Rent | PREIT’s share of Annualized Minimum Rent (3) | Percent of PREIT’s Total Retail Minimum Rent | |||||||||||||
Gap, Inc. | 50 | 645,193 | 5 | 40,855 | 55 | 686,048 | $ | 13,382 | $ | 12,465 | 4.08 | % | |||||||||
Foot Locker, Inc. | 78 | 405,232 | 3 | 9,745 | 81 | 414,977 | 9,093 | 8,590 | 2.81 | % | |||||||||||
JCPenney Company, Inc. | 23 | 2,281,660 | 6 | 824,327 | 29 | 3,105,987 | 6,999 | 6,999 | 2.29 | % | |||||||||||
Limited Brands, Inc. | 57 | 272,528 | 15 | 47,059 | 72 | 319,587 | 7,258 | 6,824 | 2.23 | % | |||||||||||
Zale Corporation | 80 | 62,878 | 1 | 289 | 81 | 63,167 | 5,738 | 5,414 | 1.77 | % | |||||||||||
American Eagle Outfitters, Inc. | 36 | 196,694 | 1 | 5,013 | 37 | 201,707 | 5,569 | 5,358 | 1.75 | % | |||||||||||
Sears Holding Corporation | 24 | 2,796,396 | 6 | 881,839 | 30 | 3,678,235 | 5,445 | 5,302 | 1.73 | % | |||||||||||
Sterling Jewelers, Inc. | 44 | 67,216 | 0 | — | 44 | 67,216 | 5,015 | 4,825 | 1.58 | % | |||||||||||
Dick’s Sporting Goods | 9 | 435,893 | 0 | — | 9 | 435,893 | 5,505 | 4,628 | 1.51 | % | |||||||||||
Luxottica Group S.p.A. | 53 | 125,849 | 1 | 548 | 54 | 126,397 | 4,227 | 3,892 | 1.27 | % | |||||||||||
Regis Corporation | 99 | 123,368 | 0 | — | 99 | 123,368 | 3,779 | 3,635 | 1.19 | % | |||||||||||
The Finish Line, Inc. | 34 | 158,984 | 3 | 13,022 | 37 | 172,006 | 3,557 | 3,506 | 1.15 | % | |||||||||||
Golden Gate Private Equity (4) | 15 | 135,985 | 2 | 16,472 | 17 | 152,457 | 3,687 | 3,449 | 1.13 | % | |||||||||||
The Children’s Place Retail | 31 | 137,244 | 1 | 3,898 | 32 | 141,142 | 3,726 | 3,430 | 1.12 | % | |||||||||||
Abercrombie & Fitch Co. | 19 | 130,211 | 0 | — | 19 | 130,211 | 3,775 | 3,408 | 1.11 | % | |||||||||||
Borders Group, Inc. | 25 | 193,564 | 3 | 15,476 | 28 | 209,040 | 3,504 | 3,324 | 1.09 | % | |||||||||||
Transworld Entertainment Corp. | 32 | 146,614 | 3 | 13,026 | 35 | 159,640 | 3,572 | 3,323 | 1.09 | % | |||||||||||
Hallmark Cards, Inc. | 38 | 151,834 | 5 | 21,607 | 43 | 173,441 | 3,389 | 3,280 | 1.07 | % | |||||||||||
Genesco Inc. | 59 | 73,461 | 0 | — | 59 | 73,461 | 3,118 | 3,052 | 1.00 | % | |||||||||||
Pacific Sunwear of California, Inc. | 31 | 112,746 | 3 | 10,564 | 34 | 123,310 | 3,036 | 2,882 | 0.94 | % | |||||||||||
Total Top 20 Tenants | 837 | 8,653,550 | 58 | 1,903,740 | 895 | 10,557,290 | $ | 103,374 | $ | 97,586 | 31.92 | % | |||||||||
Total Retail Leases | 3,381 | $ | 305,756 | 100.00 | % | ||||||||||||||||
(1) | Tenant includes all brands and concepts of the tenant. |
(2) | Income from lease(s) in which tenant pays percentage of sales in lieu of minimum rent or common area costs are not included in annualized minimum rent. |
(3) | Includes PREIT’s proportionate share of tenant rents from partnership properties based on PREIT’s ownership percentage in the respective partnerships. |
(4) | Consists of 17 Express stores. |
17
Pennsylvania Real Estate Investment Trust
Lease Expirations as of June 30, 2008
(dollars in thousands except psf amounts)
Non-Anchors(1)
Lease Expiration Year | Number of Leases Expiring | Gross Leasable Area | Annualized Minimum Rent | ||||||||||||||||
Expiring GLA | Percent of Total | Min Rent in Expiring Year | PREIT’s Share of Min Rent in Expiring Year(2) | Percent of PREIT’s Total | Average Expiring Minimum Rent psf | ||||||||||||||
Holdover | 127 | 340,439 | 2.7 | % | $ | 8,628 | $ | 7,365 | 2.7 | % | $ | 25.34 | |||||||
2008 | 203 | 422,221 | 3.4 | % | 11,146 | 10,340 | 3.8 | % | 26.40 | ||||||||||
2009 | 522 | 1,371,040 | 11.0 | % | 33,839 | 29,246 | 10.8 | % | 24.68 | ||||||||||
2010 | 469 | 1,642,730 | 13.2 | % | 37,236 | 34,518 | 12.7 | % | 22.67 | ||||||||||
2011 | 454 | 1,602,197 | 12.9 | % | 39,888 | 35,475 | 13.1 | % | 24.90 | ||||||||||
2012 | 303 | 1,160,261 | 9.3 | % | 30,524 | 27,722 | 10.2 | % | 26.31 | ||||||||||
2013 | 224 | 803,508 | 6.5 | % | 18,715 | 16,970 | 6.3 | % | 23.29 | ||||||||||
2014 | 158 | 603,789 | 4.8 | % | 15,671 | 13,376 | 4.9 | % | 25.95 | ||||||||||
2015 | 183 | 824,808 | 6.6 | % | 20,921 | 18,434 | 6.8 | % | 25.36 | ||||||||||
2016 | 243 | 1,053,963 | 8.5 | % | 29,237 | 26,399 | 9.7 | % | 27.74 | ||||||||||
Thereafter | 384 | 2,630,848 | 21.1 | % | 55,512 | 51,623 | 19.0 | % | 21.10 | ||||||||||
Total/Average | 3,270 | 12,455,804 | 100.0 | % | $ | 301,317 | $ | 271,468 | 100.0 | % | $ | 24.19 | |||||||
Anchors(1)
Lease Expiration | Number of Leases Expiring (3) | Gross Leasable Area | Annualized Minimum Rent | ||||||||||||||||
Expiring GLA | Percent of Total | Min Rent in Expiring Year | PREIT’s Share of Min Rent in Expiring Year(2) | Percent of PREIT’s Total | Average Expiring Minimum Rent psf | ||||||||||||||
2009 | 8 | 785,760 | 7.1 | % | $ | 2,177 | $ | 1,785 | 5.2 | % | $ | 2.77 | |||||||
2010 | 18 | 1,681,789 | 15.3 | % | 4,867 | 4,867 | 14.2 | % | 2.89 | ||||||||||
2011 | 23 | 1,893,066 | 17.2 | % | 6,546 | 5,423 | 15.8 | % | 3.46 | ||||||||||
2012 | 9 | 889,626 | 8.1 | % | 2,155 | 1,701 | 5.0 | % | 2.42 | ||||||||||
2013 | 14 | 1,087,218 | 9.9 | % | 4,697 | 4,697 | 13.7 | % | 4.32 | ||||||||||
2014 | 8 | 872,346 | 7.9 | % | 2,731 | 2,731 | 8.0 | % | 3.13 | ||||||||||
2015 | 2 | 220,398 | 2.0 | % | 769 | 769 | 2.2 | % | 3.49 | ||||||||||
2016 | 3 | 455,432 | 4.1 | % | 863 | 863 | 2.5 | % | 1.89 | ||||||||||
Thereafter | 26 | 3,105,012 | 28.2 | % | 13,075 | 11,452 | 33.4 | % | 4.21 | ||||||||||
Total/Average | 111 | 10,990,647 | 100.0 | % | $ | 37,880 | $ | 34,288 | 100.0 | % | $ | 3.45 | |||||||
(1) | Only includes owned space. |
(2) | Includes PREIT’s proportionate share of tenant rents from partnership properties based on PREIT’s ownership percentage in the respective partnerships. |
(3) | Accounts for all contiguous anchor space as one lease. |
Page 18
Pennsylvania Real Estate Investment Trust
Retail Gross Leasable Area Summary as of June 30, 2008
Owned GLA | ||||||||||
Anchors | Non-anchors | Total | GLA Not Owned | TOTAL GLA | ||||||
Malls | ||||||||||
Beaver Valley Mall | 511,267 | 445,662 | 956,929 | 204,770 | 1,161,699 | |||||
Capital City Mall | 204,301 | 284,816 | 489,117 | 120,000 | 609,117 | |||||
Chambersburg Mall(1) | 241,690 | 212,660 | 454,350 | — | 454,350 | |||||
Cherry Hill Mall | — | 560,908 | 560,908 | 478,885 | 1,039,793 | |||||
Crossroads Mall | 256,248 | 195,528 | 451,776 | — | 451,776 | |||||
Cumberland Mall(1) | 283,365 | 385,585 | 668,950 | 273,230 | 942,180 | |||||
Dartmouth Mall | 208,460 | 322,621 | 531,081 | 140,000 | 671,081 | |||||
Exton Square Mall | 440,301 | 369,143 | 809,444 | 277,468 | 1,086,912 | |||||
Francis Scott Key Mall(1) | 291,620 | 280,087 | 571,707 | 139,333 | 711,040 | |||||
Gadsden Mall | 213,266 | 203,116 | 416,382 | — | 416,382 | |||||
The Gallery at Market East(2) | 683,471 | 397,313 | 1,080,784 | — | 1,080,784 | |||||
Jacksonville Mall | 242,115 | 247,813 | 489,928 | — | 489,928 | |||||
Lehigh Valley Mall | 212,000 | 573,367 | 785,367 | 371,986 | 1,157,353 | |||||
Logan Valley Mall | 454,387 | 320,765 | 775,152 | — | 775,152 | |||||
Lycoming Mall(1) | 321,441 | 381,825 | 703,266 | 120,000 | 823,266 | |||||
Magnolia Mall | 343,118 | 278,052 | 621,170 | — | 621,170 | |||||
Moorestown Mall | 408,356 | 326,311 | 734,667 | 321,200 | 1,055,867 | |||||
New River Valley Mall | 175,306 | 263,193 | 438,499 | — | 438,499 | |||||
Nittany Mall | 221,462 | 215,697 | 437,159 | 95,000 | 532,159 | |||||
North Hanover Mall | 206,792 | 154,424 | 361,216 | — | 361,216 | |||||
Orlando Fashion Square | 491,999 | 433,884 | 925,883 | 155,576 | 1,081,459 | |||||
Palmer Park Mall | 314,235 | 143,459 | 457,694 | — | 457,694 | |||||
Patrick Henry Mall | 279,619 | 295,053 | 574,672 | 140,000 | 714,672 | |||||
Phillipsburg Mall | 326,170 | 252,377 | 578,547 | — | 578,547 | |||||
Plymouth Meeting Mall | 188,429 | 405,991 | 594,420 | 214,635 | 809,055 | |||||
The Mall at Prince Georges | 479,619 | 434,323 | 913,942 | — | 913,942 | |||||
South Mall | 188,858 | 216,375 | 405,233 | — | 405,233 | |||||
Springfield Mall | — | 221,781 | 221,781 | 367,176 | 588,957 | |||||
Uniontown Mall(1) | 421,378 | 276,786 | 698,164 | — | 698,164 | |||||
Valley Mall | 280,549 | 382,351 | 662,900 | 243,400 | 906,300 | |||||
Valley View Mall | 96,357 | 247,191 | 343,548 | 254,596 | 598,144 | |||||
Viewmont Mall | 386,262 | 243,605 | 629,867 | 120,000 | 749,867 | |||||
Voorhees Town Center | 4,404 | 232,208 | 236,612 | 396,783 | 633,395 | |||||
Washington Crown Center | 245,401 | 290,460 | 535,861 | 140,095 | 675,956 | |||||
Willow Grove Park(3) | 443,430 | 345,989 | 789,419 | 413,121 | 1,202,540 | |||||
Wiregrass Commons Mall | — | 212,162 | 212,162 | 426,838 | 639,000 | |||||
Woodland Mall | 71,000 | 412,978 | 483,978 | 725,186 | 1,209,164 | |||||
Wyoming Valley Mall | 592,110 | 321,693 | 913,803 | — | 913,803 | |||||
Total Malls (38 properties) | 10,728,786 | 11,787,552 | 22,516,338 | 6,139,278 | 28,655,616 | |||||
Strip and Power Centers | ||||||||||
Christiana Center | 190,814 | 111,595 | 302,409 | — | 302,409 | |||||
Creekview Center | — | 136,086 | 136,086 | 288,916 | 425,002 | |||||
Crest Plaza | 53,445 | 60,826 | 114,271 | 143,130 | 257,401 | |||||
The Commons at Magnolia | 50,571 | 52,723 | 103,294 | 126,200 | 229,494 | |||||
Metroplex Shopping Center | 67,185 | 410,276 | 477,461 | 300,729 | 778,190 | |||||
New River Valley Center | — | 163,891 | 163,891 | — | 163,891 | |||||
Northeast Tower Center | 119,388 | 182,536 | 301,924 | 175,311 | 477,235 | |||||
The Court at Oxford Valley | 176,831 | 280,072 | 456,903 | 247,623 | 704,526 | |||||
Paxton Towne Centre | 151,627 | 277,833 | 429,460 | 273,058 | 702,518 | |||||
Red Rose Commons | — | 263,452 | 263,452 | 199,590 | 463,042 | |||||
Springfield Park | 83,539 | 43,432 | 126,971 | 145,669 | 272,640 | |||||
Sunrise Plaza | 132,874 | 7,100 | 139,974 | — | 139,974 | |||||
Whitehall Mall | 294,635 | 262,443 | 557,078 | — | 557,078 | |||||
Total Strip and Power Centers (13 properties) | 1,320,909 | 2,252,265 | 3,573,174 | 1,900,226 | 5,473,400 | |||||
CONSOLIDATED PROPERTIES | 11,215,505 | 11,984,994 | 23,200,499 | 6,406,731 | 29,607,230 | |||||
UNCONSOLIDATED PROPERTIES | 834,190 | 2,054,823 | 2,889,013 | 1,632,773 | 4,521,786 | |||||
TOTAL PROPERTIES | 12,049,695 | 14,039,817 | 26,089,512 | 8,039,504 | 34,129,016 |
(1) | Includes vacant former Value City locations, totaling 392,518 square feet. |
(2) | Includes 556,200 square feet of anchor space subject to redevelopment plans. |
(3) | Includes 218,430 square feet of anchor space under redevelopment. |
Page 19
Pennsylvania Real Estate Investment Trust
Property Information as of June 30, 2008
Properties | Ownership Interest | Date Acquired | Year Built/Last Renovated | Anchors / Major Tenants | Lease Expiration | |||||
MALLS | ||||||||||
Beaver Valley Mall Monaca, PA | 100% | 2002 | 1970/1991 | Boscov’s JCPenney Macy’s Sears | 9/30/18 9/30/17 (1) 8/15/11 | |||||
Capital City Mall Camp Hill, PA | 100% | 2003 | 1974/2005 | JCPenney Macy’s Sears | 11/30/10 (1) 7/28/09 | |||||
Chambersburg Mall Chambersburg, PA | 100% | 2003 | 1982 | Bon-Ton JCPenney Sears | 1/28/11 3/31/12 2/9/10 | |||||
Cherry Hill Mall Cherry Hill, NJ | 100% | 2003 | 1961/1990 | The Container Store Crate and Barrel JCPenney Macy’s | 2/28/18 1/31/23 (1) (1) | |||||
Crossroads Mall (2) Beckley, WV | 100% | 2003 | 1981 | Belk JCPenney Sears | 11/4/09 12/31/11 3/31/11 | |||||
Cumberland Mall Vineland, NJ | 100% | 2005 | 1973/2003 | Best Buy Boscov’s BJ’s Home Depot JCPenney | 1/31/16 (1) (1) 10/31/19 11/30/13 | |||||
Dartmouth Mall Dartmouth, MA | 100% | 1997 | 1971/2000 | JCPenney Macy’s Sears | 7/31/14 (1) 4/12/16 | |||||
Exton Square Mall (2) Exton, PA | 100% | 2003 | 1973/2000 | Boscov’s JCPenney K-Mart Macy’s Sears | 10/31/19 5/31/20 (1) (1) 1/31/20 | |||||
Francis Scott Key Mall Frederick, MD | 100% | 2003 | 1978/1991 | Barnes and Noble JCPenney Macy’s Sears | 4/30/17 9/30/11 (1) 7/31/13 | |||||
Gadsden Mall Gadsden, AL | 100% | 2005 | 1974/1990 | Belk Sears | 7/31/14 3/5/09 | |||||
The Gallery at Market East (2) Philadelphia, PA | 100% | 2003 | 1977/1990 | Burlington Coat Factory | 2/28/32 | |||||
Jacksonville Mall Jacksonville, NC | 100% | 2003 | 1981/1998 | Belk JCPenney Sears | 8/21/11 8/31/10 8/4/11 | |||||
Lehigh Valley Mall(3) Allentown, PA | 50% | 1973 | 1977/2007 | Barnes and Noble Boscov’s JCPenney Macy’s | 10/31/17 (1) (1) 7/31/12 | |||||
Logan Valley Mall Altoona, PA | 100% | 2003 | 1960/1997 | JCPenney Macy’s Sears | 1/31/17 1/31/10 10/31/16 | |||||
Lycoming Mall Pennsdale, PA | 100% | 2003 | 1978/1990 | Best Buy Bon-Ton Borders Dick’s Sporting Goods JCPenney Macy’s Sears | 1/31/17 7/31/11 1/31/17 1/31/17 10/31/10 (1) 7/31/13 | |||||
Magnolia Mall Florence, SC | 100% | 1997 | 1979/2007 | Belk JCPenney Sears | 1/31/11 3/31/12 10/16/09 | |||||
Moorestown Mall Moorestown, NJ | 100% | 2003 | 1963/2000 | Boscov’s Lord & Taylor Macy’s Sears | 10/31/10 (1) (1) 10/5/22 | |||||
New River Valley Mall Christiansburg, VA | 100% | 2003 | 1988/2007 | Belk Dick’s Sporting Goods JCPenney Regal Cinemas Sears | 4/19/11 1/31/17 3/31/13 4/30/22 8/2/13 | |||||
Nittany Mall State College, PA | 100% | 2003 | 1968/1990 | Bon-Ton JCPenney Macy’s Sears | 1/31/13 7/31/10 (1) 8/31/10 |
Page 20
Pennsylvania Real Estate Investment Trust
Property Information as of June 30, 2008 (continued)
Properties | Ownership Interest | Date Acquired | Year Built/Last Renovated | Anchors / Major Tenants | Lease Expiration | |||||
North Hanover Mall Hanover, PA | 100% | 2003 | 1967/1999 | Dick’s Sporting Goods JCPenney Sears | 1/31/18 1/31/11 11/30/09 | |||||
Orlando Fashion Square (2) Orlando, FL | 100% | 2004 | 1973/2003 | Dillard’s JCPenney Macy’s Sears | 1/31/14 4/30/13 10/31/71 (1) | |||||
Palmer Park Mall Easton, PA | 100% | 1972/2003 | 1972/1998 | Bon-Ton Boscov’s | 7/25/14 10/31/18 | |||||
Patrick Henry Mall Newport News, VA | 100% | 2003 | 1988/2005 | Borders Dick’s Sporting Goods Dillard’s JCPenney Macy’s | 1/31/20 1/31/22 9/22/13 1/31/15 (1) | |||||
Phillipsburg Mall Phillipsburg, NJ | 100% | 2003 | 1989/2003 | Bon-Ton JCPenney Kohl’s Sears | 1/31/10 3/31/10 1/31/25 4/30/14 | |||||
Plymouth Meeting Mall (2) Plymouth Meeting, PA | 100% | 2003 | 1966/1999 | AMC Theater Boscov’s Macy’s | 12/31/18 10/31/16 (1) | |||||
The Mall at Prince Georges Hyattsville, MD | 100% | 1998 | 1959/2004 | JCPenney Macy’s Marshalls Ross Dress for Less Target | 7/31/11 10/31/18 9/30/16 1/31/18 1/31/15 | |||||
South Mall Allentown, PA | 100% | 2003 | 1975/1992 | Bon-Ton Stein Mart Steve & Barry’s | 1/28/11 10/31/11 1/31/11 | |||||
Springfield Mall Springfield, PA | 50% | 2005 | 1974/1997 | Macy’s | (1) | |||||
Uniontown Mall(2) Uniontown, PA | 100% | 2003 | 1972/1990 | Bon-Ton JCPenney Roomful Express Furn. Sears Teletech Customer Care | 1/29/11 10/31/10 3/31/10 2/25/13 6/30/13 | |||||
Valley Mall Hagerstown, MD | 100% | 2003 | 1974/1999 | Bon-Ton JCPenney Macy’s Sears | 1/31/14 10/3/09 (1) (1) | |||||
Valley View Mall La Crosse, WI | 100% | 2003 | 1980/2001 | Barnes and Noble Herberger’s JCPenney Macy’s Sears | 11/30/16 (1) 7/31/10 (1) (1) | |||||
Viewmont Mall Scranton, PA | 100% | 2003 | 1968/2006 | JCPenney Macy’s Sears | 10/31/10 (1) 12/31/10 | |||||
Voorhees Town Center (2) Voorhees, NJ | 100% | 2003 | 1970/2007 | Boscov’s Macy’s | (1) (1) | |||||
Washington Crown Center Washington, PA | 100% | 2003 | 1969/1999 | Bon-Ton Gander Mountain Sports Macy’s Sears | 1/31/10 7/24/13 (1) 8/17/09 | |||||
Willow Grove Park Willow Grove, PA | 100% | 2000/2003 | 1982/2001 | Bloomingdale’s The Cheesecake Factory Macy’s Sears | (1) 1/31/28 1/31/22 (1) | |||||
Wiregrass Commons Mall (2) Dothan, AL | 100% | 2003 | 1986/1999 | Dillard’s JCPenney McRae’s Parisian | (1) (1) (1) (1) | |||||
Woodland Mall Grand Rapids, MI | 100% | 2005 | 1968/1998 | Apple JCPenney Kohl’s Macy’s Sears | 6/30/15 (1) 1/31/19 (1) (1) | |||||
Wyoming Valley Mall Wilkes-Barre, PA | 100% | 2003 | 1974/2006 | Bon-Ton JCPenney Macy’s Sears | 1/31/12 4/30/12 1/31/12 8/1/11 |
Page 21
Pennsylvania Real Estate Investment Trust
Property Information as of June 30, 2008 (continued)
Properties | Ownership Interest | Date Acquired | Year Built/Last Renovated | Anchors / Major Tenants | Lease Expiration | |||||
POWER CENTERS | ||||||||||
Christiana Center Newark, DE | 100% | 1998 | 1998 | Costco Dick’s Sporting Goods | 9/30/18 11/30/13 | |||||
Creekview Center Warrington, PA | 100% | 1999 | 2001 | Genuardi’s Lowe’s Target | 12/31/21 (1) (1) | |||||
Metroplex Shopping Center (3) Plymouth Meeting, PA | 50% | 1999 | 2001 | Giant Food Store Lowe’s Target | 2/28/21 (1) (1) | |||||
New River Valley Center Christiansburg, VA | 100% | 2005 | 2007 | Bed, Bath & Beyond Best Buy Staples | 1/31/18 1/31/17 11/30/17 | |||||
Northeast Tower Center Philadelphia, PA | 100% | 1998 | 1997 | Home Depot Raymour & Flanigan Wal-Mart | (1) (1) 1/31/14 | |||||
The Court at Oxford Valley(3) Langhorne, PA | 50% | 1997 | 1996 | Best Buy BJ’s Dick’s Sporting Goods Home Depot Linens ‘n Things | 12/31/11 (1) 4/30/11 (1) 2/28/17 | |||||
Paxton Towne Centre Harrisburg, PA | 100% | 1999 | 2001 | Costco Kohl’s Target Weis Markets | (1) 1/25/21 (1) 11/30/20 | |||||
Red Rose Commons (3) Lancaster, PA | 50% | 1998 | 1998 | Home Depot Weis Markets | (1) (1) | |||||
Sunrise Plaza Forked River, NJ | 100% | 2005 | 2007 | Home Depot | 1/31/38 | |||||
Whitehall Mall(3) Allentown, PA | 50% | 1964 | 1964/1998 | Bed, Bath & Beyond Kohl’s Sears | 1/31/10 3/9/17 9/18/11 | |||||
STRIP CENTERS | ||||||||||
Crest Plaza Allentown, PA | 100% | 1964 | 1959/2003 | Target Weis Market | (1) 10/31/14 | |||||
The Commons at Magnolia Florence, SC | 100% | 1999 | 1991/2002 | Bed, Bath & Beyond Goody’s Target | 1/31/13 5/31/12 (1) | |||||
Springfield Park Springfield, PA | 50% | 1997/1998 | 1997/1998 | Bed, Bath & Beyond LA Fitness Target | 1/31/09 3/31/17 (1) |
(1) | Space is not owned by PREIT. |
(2) | Property is subject to a ground lease. |
(3) | Property is managed by a third party. |
Page 22
Pennsylvania Real Estate Investment Trust
2008 Vacant Anchor Summary
Former Tenant | Replacement Tenant(s) | |||||||||||||
Property | Name | GLA | Date Vacated | Name | GLA | Expected/Actual Occupancy Date | Date Decommissioned | |||||||
Current Temporary Vacancy | ||||||||||||||
Chambersburg Mall | Value City | 70,070 | 1Q08 | Burlington Coat Factory | 70,070 | 3Q08 | N/A | |||||||
Cumberland Mall | Value City | 100,000 | 1Q08 | Burlington Coat Factory | 80,000 | 1Q09 | N/A | |||||||
Francis Scott Key Mall | Value City | 69,444 | 1Q08 | Value City Furniture | 53,160 | 4Q08 | N/A | |||||||
DSW Shoe Warehouse | 17,587 | 1Q09 | N/A | |||||||||||
Gadsden Mall | Belk | 60,794 | 3Q07 | JCPenney | 88,156 | 3Q08 | 2Q08 | |||||||
Lycoming Mall | Value City | 69,444 | 1Q08 | Burlington Coat Factory | 81,416 | 3Q08 | N/A | |||||||
North Hanover Mall | Bon-Ton | 60,000 | 3Q06 | Boscov’s | 131,408 | 1Q09 | 1Q07 | |||||||
Springfield Mall | Strawbridge’s (1) | 179,176 | 1Q06 | Target(1) | 195,899 | 4Q09 | N/A | |||||||
The Gallery at Market East | Strawbridge’s | 560,000 | 3Q06 | Commonwealth of Pennsylvania | 224,000 | 3Q09 | N/A | |||||||
Uniontown Mall | Value City | 83,560 | 1Q08 | Burlington Coat Factory | 83,560 | 3Q08 | N/A | |||||||
Willow Grove Park | Strawbridge’s | 228,740 | 1Q06 | Boscov’s | 190,354 | 4Q09 | N/A | |||||||
The Cheesecake Factory | 10,310 | 3Q07 | N/A | |||||||||||
Future Temporary Vacancy | ||||||||||||||
Wiregrass Commons Mall | McRae’s | 94,686 | 4Q08 | Burlington Coat Factory | 94,686 | 2Q09 | N/A |
(1) | Anchor is not owned by PREIT. |
Page 23
Pennsylvania Real Estate Investment Trust
Balance Sheet
Proportionate Consolidation Method (1)
(in thousands, except per share amounts)
June 30, 2008 | December 31, 2007 | |||||||||||||||||||||||
GAAP | Share of Unconsolidated Partnerships | Total | GAAP | Share of Unconsolidated Partnerships | Total | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Investments in real estate, at cost | ||||||||||||||||||||||||
Operating properties | $ | 3,148,280 | $ | 204,801 | $ | 3,353,081 | $ | 3,074,562 | $ | 203,671 | $ | 3,278,233 | ||||||||||||
Construction in progress | 387,960 | 2,712 | 390,672 | 287,116 | 1,834 | 288,950 | ||||||||||||||||||
Land held for development | 5,616 | 172 | 5,788 | 5,616 | 172 | 5,788 | ||||||||||||||||||
TOTAL INVESTMENTS IN REAL ESTATE | 3,541,856 | 207,685 | 3,749,541 | 3,367,294 | 205,677 | 3,572,971 | ||||||||||||||||||
Accumulated depreciation | (456,530 | ) | (48,886 | ) | (505,416 | ) | (401,502 | ) | (45,458 | ) | (446,960 | ) | ||||||||||||
Net investments in real estate | 3,085,326 | 158,799 | 3,244,125 | 2,965,792 | 160,219 | 3,126,011 | ||||||||||||||||||
Investments in partnerships, at equity | 36,451 | (36,451 | ) | — | 36,424 | (36,424 | ) | — | ||||||||||||||||
Other assets: | ||||||||||||||||||||||||
Cash and cash equivalents | 23,409 | 5,035 | 28,444 | 27,925 | 5,302 | 33,227 | ||||||||||||||||||
Rents and other receivables(2) | 44,910 | 9,085 | 53,995 | 49,094 | 9,755 | 58,849 | ||||||||||||||||||
Intangible assets, net | 88,570 | 756 | 89,326 | 104,136 | 873 | 105,009 | ||||||||||||||||||
Deferred costs and other assets, net | 80,657 | 8,023 | 88,680 | 80,703 | 8,452 | 89,155 | ||||||||||||||||||
TOTAL OTHER ASSETS | 273,997 | (13,552 | ) | 260,445 | 298,282 | (12,042 | ) | 286,240 | ||||||||||||||||
TOTAL ASSETS | $ | 3,359,323 | $ | 145,247 | $ | 3,504,570 | $ | 3,264,074 | $ | 148,177 | $ | 3,412,251 | ||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Mortgage notes payable | $ | 1,758,981 | $ | 187,119 | $ | 1,946,100 | $ | 1,643,122 | $ | 188,089 | $ | 1,831,211 | ||||||||||||
Debt premium on mortgage notes payable | 7,639 | — | 7,639 | 13,820 | — | 13,820 | ||||||||||||||||||
Exchangeable senior notes | 287,500 | — | 287,500 | 287,500 | — | 287,500 | ||||||||||||||||||
Credit Facility | 355,000 | — | 355,000 | 330,000 | — | 330,000 | ||||||||||||||||||
Distributions in excess of partnership investments | 46,787 | (46,787 | ) | — | 49,166 | (49,166 | ) | — | ||||||||||||||||
Other liabilities | 136,189 | 4,915 | 141,104 | 127,591 | 9,254 | 136,845 | ||||||||||||||||||
TOTAL LIABILITIES | 2,592,096 | 145,247 | 2,737,343 | 2,451,199 | 148,177 | 2,599,376 | ||||||||||||||||||
Minority interest | 56,106 | — | 56,106 | 55,256 | — | 55,256 | ||||||||||||||||||
Shareholders’ equity: | ||||||||||||||||||||||||
Shares of beneficial interest at $1 par | 39,367 | — | 39,367 | 39,134 | — | 39,134 | ||||||||||||||||||
Capital contributed in excess of par | 824,273 | — | 824,273 | 818,966 | — | 818,966 | ||||||||||||||||||
Accumulated other comprehensive loss | (9,164 | ) | — | (9,164 | ) | (6,968 | ) | — | (6,968 | ) | ||||||||||||||
Distributions in excess of net income | (143,355 | ) | — | (143,355 | ) | (93,513 | ) | — | (93,513 | ) | ||||||||||||||
TOTAL SHAREHOLDERS’ EQUITY | 711,121 | — | 711,121 | 757,619 | — | 757,619 | ||||||||||||||||||
TOTAL LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS’ EQUITY | $ | 3,359,323 | $ | 145,247 | $ | 3,504,570 | $ | 3,264,074 | $ | 148,177 | $ | 3,412,251 | ||||||||||||
(1) | Total includes PREIT’s proportionate share of partnership assets and liabilities “grossed up” to reflect the Company’s share of the total assets and liabilities of the underlying properties. The consolidated financial statements, which are presented in accordance with GAAP, reflect only the Company’s equity in these properties. |
(2) | Total includes straight line rent of $26.8 million ($23.5 million wholly owned, $3.3 million partnership) as of June 30, 2008 and $25.1 million ($21.8 million wholly owned, $3.3 million partnership) as of December 31, 2007. |
Page 24
Pennsylvania Real Estate Investment Trust
Balance Sheet
Property Type(1)
(in thousands, except per share amounts)
June 30, 2008 | December 31, 2007 | |||||||||||||||||||||||||||||||
Malls | Strip and Power Centers | Corporate, Development and Other Properties | Total | Malls | Strip and Power Centers | Corporate, Development and Other Properties | Total | |||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||
Investments in real estate: | ||||||||||||||||||||||||||||||||
Investments in real estate, at cost | $ | 2,996,257 | $ | 324,864 | $ | 37,748 | $ | 3,358,869 | $ | 2,943,305 | $ | 318,541 | $ | 22,175 | $ | 3,284,021 | ||||||||||||||||
Construction in progress | 262,829 | 16,538 | 111,305 | 390,672 | 176,607 | 18,718 | 93,625 | 288,950 | ||||||||||||||||||||||||
TOTAL INVESTMENT IN REAL ESTATE | 3,259,086 | 341,402 | 149,053 | 3,749,541 | 3,119,912 | 337,259 | 115,800 | 3,572,971 | ||||||||||||||||||||||||
Accumulated depreciation | (432,043 | ) | (71,600 | ) | (1,773 | ) | (505,416 | ) | (379,637 | ) | (66,210 | ) | (1,113 | ) | (446,960 | ) | ||||||||||||||||
Net investments in real estate | 2,827,043 | 269,802 | 147,280 | 3,244,125 | 2,740,275 | 271,049 | 114,687 | 3,126,011 | ||||||||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | 17,829 | 2,049 | 8,566 | 28,444 | 19,076 | 1,723 | 12,428 | 33,227 | ||||||||||||||||||||||||
Rents and other receivables(2) | 33,251 | 12,117 | 8,627 | 53,995 | 42,095 | 12,370 | 4,384 | 58,849 | ||||||||||||||||||||||||
Intangible assets, net | 76,964 | — | 12,362 | 89,326 | 93,204 | — | 11,805 | 105,009 | ||||||||||||||||||||||||
Deferred costs and other assets, net | 50,681 | 10,704 | 27,295 | 88,680 | 49,889 | 9,847 | 29,419 | 89,155 | ||||||||||||||||||||||||
Total other assets | 178,725 | 24,870 | 56,850 | 260,445 | 204,264 | 23,940 | 58,036 | 286,240 | ||||||||||||||||||||||||
TOTAL ASSETS | $ | 3,005,768 | $ | 294,672 | $ | 204,130 | $ | 3,504,570 | $ | 2,944,539 | $ | 294,989 | $ | 172,723 | $ | 3,412,251 | ||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Mortgage notes payable | $ | 1,784,075 | $ | 154,025 | $ | 8,000 | $ | 1,946,100 | $ | 1,741,022 | $ | 90,189 | $ | — | $ | 1,831,212 | ||||||||||||||||
Debt premium on mortgage notes payable | 7,553 | 86 | — | 7,639 | 13,561 | 259 | — | 13,820 | ||||||||||||||||||||||||
Exchangeable senior notes | — | — | 287,500 | 287,500 | — | — | 287,500 | 287,500 | ||||||||||||||||||||||||
Credit Facility | — | — | 355,000 | 355,000 | — | — | 330,000 | 330,000 | ||||||||||||||||||||||||
Other liabilities | 59,323 | 1,487 | 80,294 | 141,104 | 63,998 | 1,693 | 71,154 | 136,845 | ||||||||||||||||||||||||
TOTAL LIABILITIES | 1,850,951 | 155,598 | 730,794 | 2,737,343 | 1,818,581 | 92,141 | 688,654 | 2,599,376 | ||||||||||||||||||||||||
Minority interest | — | — | 56,106 | 56,106 | — | — | 55,256 | 55,256 | ||||||||||||||||||||||||
Shareholders’ equity: | ||||||||||||||||||||||||||||||||
Shares of beneficial interest at $1 par | — | — | 39,367 | 39,367 | — | — | 39,134 | 39,134 | ||||||||||||||||||||||||
Capital contributed in excess of par | — | — | 824,273 | 824,273 | — | — | 818,966 | 818,966 | ||||||||||||||||||||||||
Accumulated other comprehensive loss | — | — | (9,164 | ) | (9,164 | ) | — | — | (6,968 | ) | (6,968 | ) | ||||||||||||||||||||
Distributions in excess of net income | — | — | (143,355 | ) | (143,355 | ) | — | — | (93,513 | ) | (93,513 | ) | ||||||||||||||||||||
Net investment | 1,154,817 | 139,074 | (1,293,891 | ) | — | 1,125,958 | 202,848 | (1,328,806 | ) | — | ||||||||||||||||||||||
TOTAL SHAREHOLDERS’ EQUITY | 1,154,817 | 139,074 | (582,770 | ) | 711,121 | 1,125,958 | 202,848 | (571,187 | ) | 757,619 | ||||||||||||||||||||||
TOTAL LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS’ EQUITY | $ | 3,005,768 | $ | 294,672 | $ | 204,130 | $ | 3,504,570 | $ | 2,944,539 | $ | 294,989 | $ | 172,723 | $ | 3,412,251 | ||||||||||||||||
(1) | Total includes PREIT’s proportionate share of partnership assets and liabilities “grossed up” to reflect the Company’s share of the total assets and liabilities of the underlying properties. The consolidated financial statements, which are presented in accordance with GAAP, reflect only the Company’s equity in these properties. |
(2) | Total includes straight line rent of $26.8 million ($23.5 million wholly owned, $3.3 million partnership) as of June 30, 2008 and $25.1 million ($21.8 million wholly owned, $3.3 million partnership) as of December 31, 2007. |
Page 25
Pennsylvania Real Estate Investment Trust
Investment in Real Estate(1)
(in thousands)
June 30, 2008 | December 31, 2007 | |||||||||||||||||||||||
Operating Properties and Land Held for Development | Construction in Progress | Accumulated Depreciation | Net Real Estate | Operating Properties and Land Held for Development | Construction in Progress | Accumulated Depreciation | Net Real Estate | |||||||||||||||||
Consolidated Malls | ||||||||||||||||||||||||
Beaver Valley Mall | $ | 67,218 | $ | 38 | $ | 11,988 | $ | 55,268 | $ | 66,992 | $ | 30 | $ | 10,482 | $ | 56,540 | ||||||||
Capital City Mall | 94,634 | 1 | 12,853 | 81,782 | 94,265 | 384 | 11,100 | 83,549 | ||||||||||||||||
Chambersburg Mall | 36,692 | 644 | 5,035 | 32,301 | 36,356 | — | 4,260 | 32,096 | ||||||||||||||||
Cherry Hill Mall | 242,081 | 70,096 | 29,254 | 282,923 | 233,449 | 33,621 | 25,144 | 241,926 | ||||||||||||||||
Crossroads Mall | 34,215 | — | 5,381 | 28,834 | 34,094 | — | 4,754 | 29,340 | ||||||||||||||||
Cumberland Mall | 58,807 | 6,623 | 4,640 | 60,790 | 58,385 | — | 3,871 | 54,514 | ||||||||||||||||
Dartmouth Mall | 61,075 | — | 20,501 | 40,574 | 61,088 | — | 19,178 | 41,910 | ||||||||||||||||
Exton Square Mall | 146,310 | — | 17,927 | 128,383 | 146,247 | — | 16,256 | 129,991 | ||||||||||||||||
Francis Scott Key Mall | 70,501 | 4,807 | 9,323 | 65,985 | 70,056 | — | 8,038 | 62,018 | ||||||||||||||||
Gadsden Mall | 54,805 | 1,888 | 4,314 | 52,379 | 52,262 | 1,522 | 3,667 | 50,117 | ||||||||||||||||
The Gallery at Market East | 80,308 | 36,502 | 10,176 | 106,634 | 80,273 | 30,210 | 9,002 | 101,481 | ||||||||||||||||
Jacksonville Mall | 72,753 | 524 | 9,436 | 63,841 | 68,594 | 3,255 | 8,193 | 63,656 | ||||||||||||||||
Logan Valley Mall | 94,670 | — | 14,437 | 80,233 | 93,781 | — | 12,802 | 80,979 | ||||||||||||||||
Lycoming Mall | 73,894 | 377 | 8,861 | 65,410 | 72,843 | 357 | 7,555 | 65,645 | ||||||||||||||||
Magnolia Mall | 86,045 | — | 17,136 | 68,909 | 82,063 | 3,036 | 15,338 | 69,761 | ||||||||||||||||
Moorestown Mall | 85,095 | 3,374 | 15,486 | 72,983 | 80,669 | 3,637 | 13,805 | 70,501 | ||||||||||||||||
New River Valley Mall | 56,770 | 17 | 7,069 | 49,718 | 56,562 | 123 | 5,499 | 51,186 | ||||||||||||||||
Nittany Mall | 42,245 | — | 5,737 | 36,508 | 41,964 | — | 5,073 | 36,891 | ||||||||||||||||
North Hanover Mall | 38,577 | 15,780 | 4,700 | 49,657 | 37,075 | 15,758 | 4,017 | 48,816 | ||||||||||||||||
Orlando Fashion Square | 113,356 | 128 | 10,999 | 102,485 | 113,134 | 154 | 9,412 | 103,876 | ||||||||||||||||
Palmer Park Mall | 34,483 | — | 10,093 | 24,390 | 34,484 | — | 9,606 | 24,878 | ||||||||||||||||
Patrick Henry Mall | 138,434 | 8 | 18,795 | 119,647 | 138,263 | — | 16,143 | 122,120 | ||||||||||||||||
Phillipsburg Mall | 52,380 | 64 | 6,629 | 45,815 | 52,304 | 21 | 5,822 | 46,503 | ||||||||||||||||
Plymouth Meeting Mall | 69,227 | 62,039 | 12,260 | 119,006 | 64,699 | 38,473 | 10,894 | 92,278 | ||||||||||||||||
The Mall at Prince Georges | 99,917 | 106 | 24,039 | 75,984 | 99,641 | — | 22,192 | 77,449 | ||||||||||||||||
South Mall | 29,100 | — | 3,706 | 25,394 | 28,905 | — | 3,268 | 25,637 | ||||||||||||||||
Uniontown Mall | 36,797 | 155 | 5,961 | 30,991 | 36,782 | — | 5,275 | 31,507 | ||||||||||||||||
Valley Mall | 90,772 | 121 | 13,352 | 77,541 | 89,003 | 995 | 11,786 | 78,212 | ||||||||||||||||
Valley View Mall | 66,628 | 2 | 8,122 | 58,508 | 66,570 | — | 7,073 | 59,497 | ||||||||||||||||
Viewmont Mall | 85,951 | — | 9,888 | 76,063 | 85,520 | 36 | 8,519 | 77,037 | ||||||||||||||||
Voorhees Town Center | 35,907 | 22,373 | 4,596 | 53,684 | 24,104 | 18,659 | 3,407 | 39,356 | ||||||||||||||||
Washington Crown Center | 40,188 | — | 8,568 | 31,620 | 40,183 | — | 7,536 | 32,647 | ||||||||||||||||
Westgate Anchor Pad | 3,450 | — | — | 3,450 | 3,450 | — | — | 3,450 | ||||||||||||||||
Willow Grove Park | 187,448 | 27,793 | 30,847 | 184,394 | 186,092 | 25,204 | 27,888 | 183,408 | ||||||||||||||||
Wiregrass Commons Mall | 37,452 | 7,565 | 4,920 | 40,097 | 37,031 | 234 | 4,357 | 32,908 | ||||||||||||||||
Woodland Mall | 179,954 | 271 | 14,316 | 165,909 | 179,785 | 45 | 11,398 | 168,432 | ||||||||||||||||
Wyoming Valley Mall | 103,826 | 360 | 12,424 | 91,762 | 102,861 | 420 | 10,628 | 92,653 | ||||||||||||||||
Total Consolidated Malls | 2,901,965 | 261,656 | 413,769 | 2,749,852 | 2,849,829 | 176,174 | 363,238 | 2,662,765 | ||||||||||||||||
Unconsolidated Malls | ||||||||||||||||||||||||
Lehigh Valley Mall | 39,816 | 374 | 12,740 | 27,450 | 39,011 | 143 | 11,841 | 27,313 | ||||||||||||||||
Springfield Mall | 54,476 | 799 | 5,534 | 49,741 | 54,465 | 290 | 4,558 | 50,197 | ||||||||||||||||
Total Unconsolidated Malls | 94,292 | 1,173 | 18,274 | 77,191 | 93,476 | 433 | 16,399 | 77,510 | ||||||||||||||||
TOTAL MALLS | $ | 2,996,257 | $ | 262,829 | $ | 432,043 | $ | 2,827,043 | $ | 2,943,305 | $ | 176,607 | $ | 379,637 | $ | 2,740,275 | ||||||||
(1) | Total includes PREIT’s proportionate share of partnership assets and liabilities “grossed up” to reflect the Company’s share of the total assets and liabilities of the underlying properties. The consolidated financial statements, which are presented in accordance with GAAP, reflect only the Company’s equity in these properties. |
Page 26
Pennsylvania Real Estate Investment Trust
Investment in Real Estate(1) (continued)
(in thousands)
June 30, 2008 | December 31, 2007 | |||||||||||||||||||||||
Operating Property and Land Held for Development | Construction in Progress | Accumulated Depreciation | Net Real Estate | Operating Property and Land Held for Development | Construction in Progress | Accumulated Depreciation | Net Real Estate | |||||||||||||||||
Consolidated Strip and Power Centers | ||||||||||||||||||||||||
Christiana Center | $ | 40,935 | $ | — | $ | 9,366 | $ | 31,569 | $ | 40,935 | $ | — | $ | 8,796 | $ | 32,139 | ||||||||
Creekview Center | 19,098 | — | 6,063 | 13,035 | 19,098 | — | 5,605 | 13,493 | ||||||||||||||||
Crest Plaza | 16,483 | — | 4,124 | 12,359 | 16,432 | — | 3,801 | 12,631 | ||||||||||||||||
The Commons at Magnolia | 10,119 | — | 2,842 | 7,277 | 10,119 | — | 2,526 | 7,593 | ||||||||||||||||
New River Valley Center | 26,580 | 3 | 684 | 25,899 | 21,378 | 4,816 | 164 | 26,030 | ||||||||||||||||
Northeast Tower Center | 33,630 | — | 6,235 | 27,395 | 33,630 | — | 5,804 | 27,826 | ||||||||||||||||
Paxton Towne Centre | 54,214 | 1,342 | 11,854 | 43,702 | 54,056 | 9 | 11,062 | 43,003 | ||||||||||||||||
Sunrise Plaza | 19,395 | 15,191 | 636 | 33,950 | 18,519 | 13,893 | 199 | 32,213 | ||||||||||||||||
Total Consolidated Strip and Power Centers | 220,454 | 16,536 | 41,804 | 195,186 | 214,167 | 18,718 | 37,957 | 194,928 | ||||||||||||||||
Unconsolidated Strip and Power Centers | ||||||||||||||||||||||||
Metroplex Shopping Center | 42,025 | — | 11,424 | 30,601 | 42,025 | — | 10,656 | 31,369 | ||||||||||||||||
The Court at Oxford Valley | 27,847 | 2 | 7,064 | 20,785 | 27,847 | — | 6,757 | 21,090 | ||||||||||||||||
Red Rose Commons | 11,753 | — | 2,777 | 8,976 | 11,753 | — | 2,613 | 9,140 | ||||||||||||||||
Whitehall Mall | 15,689 | — | 7,407 | 8,282 | 15,689 | — | 7,166 | 8,523 | ||||||||||||||||
Springfield Park | 7,096 | — | 1,124 | 5,972 | 7,060 | — | 1,061 | 5,999 | ||||||||||||||||
Total Unconsolidated Strip and Power Centers | 104,410 | 2 | 29,796 | 74,616 | 104,374 | — | 28,253 | 76,121 | ||||||||||||||||
TOTAL STRIP AND POWER CENTERS | $ | 324,864 | $ | 16,538 | $ | 71,600 | $ | 269,802 | $ | 318,541 | $ | 18,718 | $ | 66,210 | $ | 271,049 | ||||||||
Development Properties | ||||||||||||||||||||||||
The Plaza at Magnolia | $ | — | $ | 1,353 | $ | — | $ | 1,353 | $ | — | $ | 523 | $ | — | $ | 523 | ||||||||
Monroe Marketplace | — | 37,782 | — | 37,782 | — | 23,559 | — | 23,559 | ||||||||||||||||
Springhills | — | 30,119 | — | 30,119 | — | 29,378 | — | 29,378 | ||||||||||||||||
White Clay Point(2) | — | 40,513 | — | 40,513 | — | 38,764 | — | 38,764 | ||||||||||||||||
Total Development Properties | — | 109,767 | — | 109,767 | — | 92,224 | — | 92,224 | ||||||||||||||||
Unconsolidated Development Properties | ||||||||||||||||||||||||
Pavilion at Market East | 6,100 | 1,538 | 817 | 6,821 | 5,821 | 1,401 | 806 | 6,416 | ||||||||||||||||
Total Unconsolidated Development Properties | 6,100 | 1,538 | 817 | 6,821 | 5,821 | 1,401 | 806 | 6,416 | ||||||||||||||||
Other Properties | ||||||||||||||||||||||||
One Cherry Hill Plaza | 15,265 | — | 504 | 14,761 | — | — | — | — | ||||||||||||||||
P&S Building | 1,339 | — | 362 | 977 | 1,339 | — | 307 | 1,032 | ||||||||||||||||
Plymouth Commons | 9,256 | — | 90 | 9,166 | 9,227 | — | — | 9,227 | ||||||||||||||||
Land held for development - consolidated | 5,616 | — | — | 5,616 | 5,616 | — | — | 5,616 | ||||||||||||||||
Land held for development - unconsolidated | 172 | — | — | 172 | 172 | — | — | 172 | ||||||||||||||||
Total Other Properties | $ | 31,648 | $ | — | $ | 956 | $ | 30,692 | $ | 16,354 | $ | — | $ | 307 | $ | 16,047 | ||||||||
TOTAL INVESTMENT IN REAL ESTATE | $ | 3,358,869 | $ | 390,672 | $ | 505,416 | $ | 3,244,125 | $ | 3,284,021 | $ | 288,950 | $ | 446,960 | $ | 3,126,011 | ||||||||
CONSOLIDATED PROPERTIES | $ | 3,153,895 | $ | 387,959 | $ | 456,529 | $ | 3,085,325 | $ | 3,080,178 | $ | 287,116 | $ | 401,502 | $ | 2,965,792 | ||||||||
UNCONSOLIDATED PROPERTIES | 204,974 | 2,713 | 48,887 | 158,800 | 203,843 | 1,834 | 45,458 | 160,219 | ||||||||||||||||
TOTAL INVESTMENT IN REAL ESTATE | $ | 3,358,869 | $ | 390,672 | $ | 505,416 | $ | 3,244,125 | $ | 3,284,021 | $ | 288,950 | $ | 446,960 | $ | 3,126,011 | ||||||||
(1) | Total includes PREIT’s proportionate share of partnership assets and liabilities “grossed up” to reflect the Company’s share of the total assets and liabilities of the underlying properties. The consolidated financial statements, which are presented in accordance with GAAP, reflect only the Company’s equity in these properties. |
(2) | Formerly New Garden Town Center. |
Page 27
Pennsylvania Real Estate Investment Trust
Property Redevelopment and Repositioning Summary as of June 30, 2008
NAME OF PROJECT | PREIT’s PROJECTED SHARE OF COST | PREIT’S INVESTMENT TO DATE | EXPECTED RETURN ON INCREMENTAL INVESTMENT | CONSTRUCTION START DATE | EXPECTED CONSTRUCTION COMPLETION | |||||
(in millions) | (in millions) | |||||||||
ENCLOSED MALL | ||||||||||
Cherry Hill Mall Cherry Hill, NJ | $202.2 | $102.1 | 7.1% | 2007 | 2009 | |||||
-Opened Crate & Barrel and The Container Store in November 2007 on two outparcels totaling 59,000 sf; -Opening a two-level, 138,000 sf Nordstrom (anticipated spring of 2009); -Opening 88,000 sf of new in-line retail space in the former food court and Strawbridge’s area; -Opening 72,000 sf from a combination of a Bistro Row and restaurants; -Net increase in total property GLA will be approximately 95,000 sf. | ||||||||||
Gadsden Mall Gadsden, AL | 5.1 | 1.9 | 8.0% | 2007 | 2008 | |||||
-Opening 88,000 sf JCPenney in 4th quarter 2008 in former 61,000 sf Belk store; -Net increase in total property GLA will be approximately 27,000 sf. | ||||||||||
Jacksonville Mall Jacksonville, NC | 7.7 | 4.9 | 8.4% | 2007 | 2008 | |||||
-Phase I - Opened 28,000 sf Barnes & Noble (13,000 sf of new GLA) in April 2008; -Phase II - Opening 6,000 sf Red Robin restaurant in 3rd Quarter 2008 and 10,000 sf of retail in 4th Quarter 2008; exterior mall renovation, new mall entrance and pedestrian plaza. | ||||||||||
Moorestown Mall Moorestown, NJ | 13.7 | 10.0 | 8.2% | 2007 | 2008 | |||||
-Opened 16,000 sf Lane Furniture in September 2007 (8,000 sf of new GLA); -Opened 15,000 sf Eastern Mountain Sports in May 2008 (4,000 sf of new GLA); -Opened Pei Wei Asian Diner and Potbelly Sandwich Works, totaling approximately 6,000 sf of outparcel space, in July 2008; -Creating three spaces with exterior frontage totaling approximately 6,000 sf of recommissioned space (new GLA); -Updating the entrances and facades; -Net increase in property GLA will be approximately 24,000 sf. | ||||||||||
North Hanover Mall Hanover, PA | 35.1 | 23.8 | 7.8% | 2007 | 2009 | |||||
-Opening 172,000 sf Boscov’s in the former 70,000 sf Bon-Ton anchor and absorbing 12,000 sf of existing in-line space (90,000 sf of new GLA); -Opened 50,000 sf Dick’s Sporting Goods in October 2007 in the former 63,000 sf Black Rose Antiques location (net decrease in GLA of 13,000 sf); -Relocated and downsized Black Rose Antiques to 15,000 sf of previously vacant space in adjacent strip center; -Net increase in property GLA will be approximately 77,000 sf. | ||||||||||
Plymouth Meeting Mall Plymouth Meeting, PA | 96.6 | 69.2 | 8.1% | 2007 | 2009 | |||||
-Opened P.F. Chang’s China Bistro and California Pizza Kitchen, totalling 13,000 sf, in May 2008; -Opened 10,000 sf Redstone American Grill in June 2008; -Opened 35,000 sf Dave and Buster’s in July 2008: -Opening 4,000 sf Citibank outparcel in 4th Quarter 2008; -Opening 10,000 sf Benihana in 4th Quarter 2008; -Opening 39,000 sf of retail space; -Opening 65,000 sf Whole Foods Market; -Net increase in property GLA will be approximately 142,000 sf. | ||||||||||
Willow Grove Park Willow Grove, PA | 40.2 | 35.9 | 6.3% | 2007 | 2009 | |||||
-Opening 190,000 sf Boscov’s and 22,000 sf of restaurants in the former 229,000 sf Strawbridge’s. Included in the 22,000 sf of restaurants is a 10,000 sf The Cheesecake Factory that opened in September 2007; -Net reduction in property GLA will be approximately 13,000 sf. | ||||||||||
Wiregrass Commons Mall Dothan, AL | 12.1 | 8.0 | 8.3% | 2008 | 2009 | |||||
-Purchased 65,000 sf former Parisian store and expanding to an 85,000 sf Belk opening in 4th Quarter 2008; -Former McRae’s anchor will be filled with a 95,000 sf Burlington Coat Factory, with expected delivery in 4th Quarter 2008 and opening in 2nd Quarter 2009; -Interior mall renovation in 4th Quarter 2008. | ||||||||||
MIXED USE | ||||||||||
Voorhees Town Center Voorhees, NJ | 79.3 | 42.9 | 9.2% | 2007 | 2009 | |||||
-Phase I - Reduced mall GLA by 470,000 sf to 654,000 sf, opening 26,000 sf of outparcel space and 50,000 sf office building; -Phase IIA - Opening a mixed use town center of approximately 200,000 sf; -Phase IIB - Opening 425 residential units which are expected to be constructed by our development partners and its affiliates; -Net reduction in property GLA will be approximately 244,000 sf. |
Page 28
Pennsylvania Real Estate Investment Trust
Development Property Summary as of June 30, 2008
NAME OF PROJECT | TOTAL PROJECTED PROPERTY GLA (sq ft)(1) | PREIT’s PROJECTED SHARE OF COST | PREIT’s INVESTMENT | RETURN ON INCREMENTAL INVESTMENT | CONSTRUCTION START DATE | EXPECTED DATE OF COMPLETION | % LEASED | % OCCUPIED | ||||||||
(in millions) | (in millions) | |||||||||||||||
OPERATING PROPERTIES WITH DEVELOPMENT ACTIVITY | ||||||||||||||||
POWER CENTERS | ||||||||||||||||
Sunrise Plaza(2) Forked River, NJ | 274,000 | $39.8 | $34.7 | 6.0% | 2006 | 2009 | 92% | 49% | ||||||||
-Opened 131,000 sf Home Depot in October 2007; -Opening a 96,000 sf Kohls in 4th Quarter 2008 and a 20,000 sf Staples in 1st Quarter 2009; -Balance of the property will be comprised of in-line stores and outparcels. | ||||||||||||||||
DEVELOPMENT PROPERTIES | ||||||||||||||||
POWER CENTERS | ||||||||||||||||
Monroe Marketplace Selinsgrove, PA | 611,000 | 73.3 | 28.0 | 8.0% | 2007 | 2008 | 72% | 0% | ||||||||
-Phase I - Opening approximately 410,000 sf power center anchored by Target, Giant Food Store, Kohl’s, and includes Dick’s Sporting Goods, Best Buy, Bed Bath & Beyond, Starbuck’s, Famous Footwear, and Red Robin opening in the 4th Quarter 2008; -Phase II - The balance of the power center, containing approximately 201,000 sf of outparcel and in-line space, is expected to open in the 1st Quarter 2009. | ||||||||||||||||
MIXED USE | ||||||||||||||||
White Clay Point (Formerly New Garden Town Center) | ||||||||||||||||
Landenberg, PA | 496,000 | 69.9 | 40.5 | 8.9% | 2008 | 2010 | 0% | 0% | ||||||||
-The planned development includes retail and other mixed uses, including a residential component, to be completed in multiple phases. Phase I consists of 496,000 sf of retail use with an expected completion date of 2010. The incremental costs and returns for the remaining phases will be determined when the development plans for these phases are finalized. | ||||||||||||||||
Springhills Gainesville, FL | TBD | TBD | 30.1 | TBD | TBD | TBD | 0% | 0% | ||||||||
-540 acres of land were acquired in 2006. Site development is subject of litigation commenced by the Company in June 2007 following action by the Alachua County Board of Supervisors refusing to authorize the Company’s development plans. | ||||||||||||||||
OTHER | ||||||||||||||||
Pavilion at Market East Philadelphia, PA | TBD | TBD | 1.5 | TBD | TBD | TBD | N/A | 0% | ||||||||
-The Partnership’s development plans for the Pavilion at Market East are under review. The Company retains a 40% interest in the partnership. |
(1) | Includes tenants that purchased their respective land. |
(2) | Sunrise Plaza is considered an operating property, and is not counted as a development property. |
Page 29
Pennsylvania Real Estate Investment Trust
Capital Expenditures
(in thousands)
Three months ended June 30, 2008 | Six months ended June 30, 2008 | |||||||||||||||||
Consolidated | Unconsolidated | Total | Consolidated | Unconsolidated | Total | |||||||||||||
Redevelopment projects with incremental GLA and/or anchor replacement | $ | 73,542 | $ | 1,006 | $ | 74,548 | $ | 129,576 | $ | 1,443 | $ | 131,019 | ||||||
New development projects | 12,810 | 115 | 12,925 | 20,107 | 337 | 20,444 | ||||||||||||
Renovation with no incremental GLA | 340 | — | 340 | 474 | — | 474 | ||||||||||||
Tenant allowances | 2,527 | 81 | 2,608 | 4,278 | 88 | 4,366 | ||||||||||||
Recurring capital expenditures: | — | |||||||||||||||||
CAM expenditures | 3,184 | 50 | 3,234 | 3,764 | 57 | 3,821 | ||||||||||||
Non-CAM expenditures | 985 | — | 985 | 1,078 | 6 | 1,084 | ||||||||||||
Total recurring capital expenditures | 4,169 | 50 | 4,219 | 4,842 | 63 | $ | 3,821 | |||||||||||
Total | $ | 93,388 | $ | 1,252 | $ | 94,640 | $ | 159,277 | $ | 1,931 | $ | 161,208 | ||||||
Page 30
Pennsylvania Real Estate Investment Trust
Debt Analysis as of June 30, 2008
(in thousands)
Outstanding Debt(1) | |||||||||||||||||||||
Fixed Rate (2) | % of Total Indebtedness | Variable Rate | % of Total Indebtedness | Total | % of Total Indebtedness | ||||||||||||||||
Consolidated Mortgage Notes Payable | $ | 1,758,620 | 67.7 | % | $ | 8,000 | 0.3 | % | $ | 1,766,620 | 68.0 | % | |||||||||
Unconsolidated Mortgage Notes Payable | 73,869 | 2.8 | % | 113,250 | 4.4 | % | 187,119 | 7.2 | % | ||||||||||||
Exchangeable Senior Notes | 287,500 | 11.1 | % | — | 0.0 | % | 287,500 | 11.1 | % | ||||||||||||
Credit Facility | — | 0.0 | % | 355,000 | 13.7 | % | 355,000 | 13.7 | % | ||||||||||||
TOTAL OUTSTANDING DEBT | $ | 2,119,989 | 81.7 | % | $ | 476,250 | 18.3 | % | $ | 2,596,239 | 100.0 | % | |||||||||
AVERAGE INTEREST RATE | 5.92 | % | 3.62 | % | 5.50 | % | |||||||||||||||
(1) | Includes debt premium |
(2) | Includes variable rate debt swapped to fixed rate debt. |
Average Debt Balance | ||||||||||||||||||||||||
Mortgage Debt(1) | REMIC (1) (2) | Total Mortgages | Credit Facility | Exchangeable Senior Notes | TOTAL | |||||||||||||||||||
Beginning Balance | 3/31/2008 | $ | 1,488,720 | $ | 409,852 | $ | 1,898,572 | $ | 330,000 | $ | 287,500 | $ | 2,516,072 | |||||||||||
Credit Facility Borrowings, net | — | — | — | 25,000 | — | 25,000 | ||||||||||||||||||
Christiana Center Financing | 45,000 | — | 45,000 | — | — | 45,000 | ||||||||||||||||||
Creekview Center Financing | 20,000 | — | 20,000 | — | — | 20,000 | ||||||||||||||||||
Debt Amortization(3) | (4,976 | ) | (4,857 | ) | (9,833 | ) | — | — | (9,833 | ) | ||||||||||||||
Ending Balance | 6/30/2008 | $ | 1,548,744 | $ | 404,995 | $ | 1,953,739 | $ | 355,000 | $ | 287,500 | $ | 2,596,239 | |||||||||||
Weighted Average Balance | $ | 1,499,679 | $ | 408,236 | $ | 1,907,915 | $ | 354,286 | $ | 287,500 | $ | 2,549,701 | ||||||||||||
(1) | Includes debt premium. |
(2) | In connection with our merger with Crown American Realty Trust in 2003, we assumed from Crown approximately $443.8 million of a 15 property real estate mortgage investment conduit (“REMIC”) with General Electric Capital Corporation that has a final maturity date of September 10, 2025 and is secured by a portfolio of 15 properties at an interest rate of 7.43% per annum. This rate remains in effect until September 10, 2008. The loan can be prepaid without penalty beginning in July 2008. If not prepaid, the interest rate from and after September 10, 2008 will be equal to the greater of (i) 10.43% per annum, or the Treasury Rate, as defined therein, plus 3.0% per annum, and (ii) all cash flow from the properties in excess of funds required to operate the properties and service scheduled payments under the REMIC would be applied to reduce the principal amount outstanding under the REMIC. The mortgage loan had a balance of $402.7 million as of June 30, 2008. |
(3) | Includes the amortization of debt premium and balloon payments. |
Debt Maturities(1) | ||||||||||||||||||
Year | Scheduled Amortization | Debt Premium Amortization | Mortgage Balance at Maturity | Credit Facility | Exchangeable Senior Notes | Total Debt | ||||||||||||
2008 | $ | 11,311 | $ | 3,613 | $ | 549,943 | $ | — | $ | — | $ | 564,867 | ||||||
2009 | 16,452 | 1,283 | 145,434 | 355,000 | — | 518,169 | ||||||||||||
2010 | 17,866 | 1,175 | 20,860 | — | — | 39,901 | ||||||||||||
2011 | 18,348 | 1,152 | 89,788 | — | — | 109,288 | ||||||||||||
2012 | 15,440 | 416 | 363,346 | — | 287,500 | 666,702 | ||||||||||||
2013 | 9,863 | — | 110,458 | — | — | 120,321 | ||||||||||||
2014 | 9,135 | — | — | — | — | 9,135 | ||||||||||||
Thereafter | 10,024 | — | 557,832 | — | — | 567,856 | ||||||||||||
$ | 108,439 | $ | 7,639 | $ | 1,837,661 | $ | 355,000 | $ | 287,500 | $ | 2,596,239 | |||||||
(1) | The weighted average period to mortgage maturity is 3.98 years. Excludes debt premium. |
Weighted Average Mortgage Interest Rates | ||||||||||||
Interest Rate | Marked to Market Interest Rate (GAAP) | |||||||||||
Year | Balance | Interest Rate | Balance | Interest Rate | ||||||||
2008 | $ | 553,565 | 7.07 | % | $ | 553,565 | 4.93 | % | ||||
2009 | 146,685 | 4.80 | % | 146,685 | 4.71 | % | ||||||
2010 | 21,543 | 5.72 | % | 21,543 | 5.72 | % | ||||||
2011 | 94,206 | 6.74 | % | 94,206 | 6.74 | % | ||||||
2012 | 389,224 | 6.08 | % | 389,224 | 5.69 | % | ||||||
2013 | 123,738 | 4.95 | % | 123,738 | 4.95 | % | ||||||
Thereafter | 617,139 | 5.54 | % | 617,139 | 5.54 | % | ||||||
Total | $ | 1,946,100 | 6.05 | % | $ | 1,946,100 | 5.36 | % | ||||
Interest Rate Hedging Instruments | ||||||||
Type | Notional Amount | Blended Rate | Latest Settlement Date | |||||
10 Year Forward Starting Swaps | $ | 88,000 | 4.81 | % | 12/10/2008 | |||
10 Year Forward Starting Swaps | $ | 150,000 | 5.36 | % | 12/10/2008 | |||
Floating to Fixed | $ | 4,218 | 4.96 | % | 9/1/2009 | |||
Floating to Fixed | $ | 20,000 | 3.41 | % | 6/1/2010 | |||
Floating to Fixed | $ | 45,000 | 4.02 | % | 6/19/2011 |
Page 31
Pennsylvania Real Estate Investment Trust
Debt Schedule as of June 30, 2008
(in thousands)
Proportionate Share(1) | Interest Rate | Marked to Market Interest Rate (GAAP) | Annual Debt Service | Balance at Maturity | Maturity Date | ||||||||||||||||||
Mortgage Debt | Debt Premium | Total | |||||||||||||||||||||
Fixed Rate Mortgage Debt | |||||||||||||||||||||||
REMIC Properties | |||||||||||||||||||||||
Chambersburg Mall | $ | 17,321 | $ | 98 | $ | 17,419 | 7.43 | % | 4.99 | % | $ | 1,763 | $ | 17,200 | 2008 | ||||||||
Francis Scott Key Mall | 30,312 | 171 | 30,483 | 7.43 | % | 4.99 | % | 3,085 | 30,099 | 2008 | |||||||||||||
Jacksonville Mall | 23,384 | 132 | 23,516 | 7.43 | % | 4.99 | % | 2,380 | 23,219 | 2008 | |||||||||||||
Logan Valley Mall | 49,366 | 279 | 49,645 | 7.43 | % | 4.99 | % | 5,024 | 49,018 | 2008 | |||||||||||||
Lycoming Mall | 30,312 | 171 | 30,483 | 7.43 | % | 4.99 | % | 3,084 | 30,099 | 2008 | |||||||||||||
New River Valley Mall | 14,723 | 83 | 14,806 | 7.43 | % | 4.99 | % | 1,498 | 14,619 | 2008 | |||||||||||||
Nittany Mall | 25,982 | 147 | 26,129 | 7.43 | % | 4.99 | % | 2,644 | 25,799 | 2008 | |||||||||||||
North Hanover Mall | 17,321 | 98 | 17,419 | 7.43 | % | 4.99 | % | 1,763 | 17,199 | 2008 | |||||||||||||
Northeast Tower Center | 15,156 | 86 | 15,242 | 7.43 | % | 4.99 | % | 1,542 | 15,049 | 2008 | |||||||||||||
Patrick Henry Mall | 43,736 | 247 | 43,983 | 7.43 | % | 4.99 | % | 4,451 | 43,428 | 2008 | |||||||||||||
Phillipsburg Mall | 25,982 | 147 | 26,129 | 7.43 | % | 4.99 | % | 2,644 | 25,799 | 2008 | |||||||||||||
South Mall | 12,991 | 73 | 13,064 | 7.43 | % | 4.99 | % | 1,322 | 12,899 | 2008 | |||||||||||||
Uniontown Mall | 20,785 | 118 | 20,903 | 7.43 | % | 4.99 | % | 2,115 | 20,639 | 2008 | |||||||||||||
Viewmont Mall | 25,982 | 147 | 26,129 | 7.43 | % | 4.99 | % | 2,644 | 25,799 | 2008 | |||||||||||||
Wyoming Valley Mall | 49,366 | 279 | 49,645 | 7.43 | % | 4.99 | % | 5,024 | 49,018 | 2008 | |||||||||||||
Subtotal REMIC | 402,719 | 2,276 | 404,995 | 7.43 | % | 4.99 | % | 40,983 | 399,883 | 2008 | |||||||||||||
Crossroads Mall | 12,668 | — | 12,668 | 7.39 | % | 5.75 | % | 1,191 | 12,647 | 2008 | |||||||||||||
Exton Square Mall | 93,704 | 669 | 94,373 | 6.95 | % | 5.00 | % | 8,102 | 93,034 | 2008 | |||||||||||||
Whitehall Mall | 6,224 | — | 6,224 | 6.77 | % | 6.77 | % | 641 | 6,129 | 2008 | |||||||||||||
Palmer Park Mall | 15,969 | — | 15,969 | 6.77 | % | 6.77 | % | 1,661 | 15,674 | 2009 | |||||||||||||
Red Rose Commons | 12,678 | — | 12,678 | 7.66 | % | 7.66 | % | 1,220 | 12,425 | 2009 | |||||||||||||
Valley View Mall | 35,038 | 147 | 35,185 | 6.15 | % | 5.75 | % | 2,773 | 34,335 | 2009 | |||||||||||||
Creekview Center(2) | 20,000 | — | 20,000 | 5.56 | % | 5.56 | % | 1,112 | 19,448 | 2010 | |||||||||||||
Springfield Park | 1,543 | — | 1,543 | 7.79 | % | 7.79 | % | 203 | 1,412 | 2010 | |||||||||||||
Christiana Center(2) | 45,000 | — | 45,000 | 5.87 | % | 5.87 | % | 2,639 | 45,000 | 2011 | |||||||||||||
Metroplex Shopping Center | 30,449 | — | 30,449 | 7.25 | % | 7.25 | % | 2,681 | 28,785 | 2011 | |||||||||||||
The Court at Oxford Valley | 18,757 | — | 18,757 | 8.02 | % | 8.02 | % | 2,319 | 16,003 | 2011 | |||||||||||||
Beaver Valley Mall | 44,980 | — | 44,980 | 7.36 | % | 7.36 | % | 3,972 | 42,266 | 2012 | |||||||||||||
Capital City Mall | 50,658 | 3,051 | 53,709 | 7.61 | % | 5.50 | % | 4,603 | 47,898 | 2012 | |||||||||||||
Cherry Hill Mall | 192,370 | — | 192,370 | 5.42 | % | 5.42 | % | 13,510 | 177,689 | 2012 | |||||||||||||
Cherry Hill Mall Supplemental Loan | 55,000 | — | 55,000 | 5.51 | % | 5.51 | % | 3,030 | 53,003 | 2012 | |||||||||||||
Cumberland Mall Loan #1 | 41,998 | 1,496 | 43,494 | 6.50 | % | 5.40 | % | 3,413 | 38,782 | 2012 | |||||||||||||
Pavilion East Associates(2) | 4,218 | — | 4,218 | 7.71 | % | 7.71 | % | 252 | 3,708 | 2012 | |||||||||||||
Dartmouth Mall | 64,519 | — | 64,519 | 4.95 | % | 4.95 | % | 4,484 | 57,594 | 2013 | |||||||||||||
Moorestown Mall | 59,219 | — | 59,219 | 4.95 | % | 4.95 | % | 4,115 | 52,863 | 2013 | |||||||||||||
Magnolia Mall | 63,348 | — | 63,348 | 5.33 | % | 5.33 | % | 4,413 | 54,965 | 2015 | |||||||||||||
Willow Grove Park | 154,529 | — | 154,529 | 5.65 | % | 5.65 | % | 11,083 | 133,548 | 2015 | |||||||||||||
Valley Mall | 89,631 | — | 89,631 | 5.49 | % | 5.49 | % | 5,014 | 78,835 | 2016 | |||||||||||||
Woodland Mall | 156,500 | — | 156,500 | 5.58 | % | 5.58 | % | 8,397 | 140,484 | 2016 | |||||||||||||
Cumberland Mall Loan #2 | 3,131 | — | 3,131 | 5.00 | % | 5.00 | % | 206 | — | 2017 | |||||||||||||
The Mall at Prince Georges | 150,000 | — | 150,000 | 5.51 | % | 5.51 | % | 8,270 | 150,000 | 2017 | |||||||||||||
Total Fixed Rate Mortgage Debt | 1,824,850 | 7,639 | 1,832,489 | 6.22 | % | 5.48 | % | 140,287 | 1,716,410 | ||||||||||||||
Variable Rate Mortgage Debt | |||||||||||||||||||||||
Springfield Mall(3) | 38,250 | — | 38,250 | 3.58 | % | 3.58 | % | 1,370 | 38,250 | 2008 | |||||||||||||
Lehigh Valley Mall(4) | 75,000 | — | 75,000 | 3.38 | % | 3.38 | % | 4,190 | 75,000 | 2009 | |||||||||||||
One Cherry Hill Plaza | 8,000 | — | 8,000 | 3.78 | % | 3.78 | % | 303 | 8,000 | 2009 | |||||||||||||
Total Variable Rate Mortgage Debt | 121,250 | — | 121,250 | 3.47 | % | 3.47 | % | 5,863 | 121,250 | ||||||||||||||
Total Mortgage Debt | $ | 1,946,100 | $ | 7,639 | $ | 1,953,739 | 6.05 | % | 5.36 | % | $ | 146,150 | $ | 1,837,660 | |||||||||
CONSOLIDATED MORTGAGES | $ | 1,758,981 | $ | 7,639 | $ | 1,766,620 | 6.16 | % | 5.39 | % | $ | 133,274 | $ | 1,655,948 | |||||||||
UNCONSOLIDATED MORTGAGES | 187,119 | — | 187,119 | 5.05 | % | 5.05 | % | 12,876 | 181,712 | ||||||||||||||
EXCHANGEABLE SENIOR NOTES | 287,500 | — | 287,500 | 4.00 | % | 4.00 | % | 11,500 | 287,500 | ||||||||||||||
CREDIT FACILITY | 355,000 | — | 355,000 | 3.68 | % | 3.68 | % | 13,057 | — | ||||||||||||||
Total | $ | 2,588,600 | $ | 7,639 | $ | 2,596,239 | 5.50 | % | 4.98 | % | $ | 159,207 | $ | 2,125,160 | |||||||||
(1) | Includes 100% of debt from consolidated properties and our share of debt from unconsolidated properties, based on our ownership percentage. |
(2) | The mortgages for these properties have been swapped to a fixed interest rate presented. |
(3) | Mortgage has three, one-year renewal options. The first option was exercised in December 2007. |
(4) | Mortgage has three, one-year renewal options. The second option was exercised in July 2008 for the period August 10, 2008 to August 9, 2009. |
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Pennsylvania Real Estate Investment Trust
Shareholder Information
Ten Largest Institutional Shareholders: | Common Shares Held (1) | ||
Barclays Global Investors, NA (California) | 3,402,136 | ||
Goldman Sachs Asset Management LP (US) | 3,344,671 | ||
Vanguard Group, Inc | 2,943,105 | ||
ING Clarion Real Estate Securities | 2,151,353 | ||
RREEF America LLC | 1,685,406 | ||
State Street Global Advisors (U.S.) | 1,497,647 | ||
LaSalle Investment Management Securities LP | 875,164 | ||
Catapult Capital Management LLC | 872,500 | ||
Real Estate Management Services LLC | 615,900 | ||
Pacific Heights Asset Management LLC | 600,000 | ||
TOTAL of Ten Largest Institutional: | 17,987,882 | ||
TOTAL of all Institutional Holders: | 32,103,072 | ||
Ten Largest as % of Total Institutional: | 56.0 | % |
(1) | Based on 13F and 13G filings as of 12/31/07 or most recent filings. |
Breakdown of Share & Unit Ownership: Shares Held | Most Recent | % of Outstanding | December 31, 2007 | ||||
Institutional(1) | 32,103,072 | 77.2 | % | 29,753,729 | |||
Retail(2) | 5,355,268 | 12.8 | % | 6,629,028 | |||
Insiders(3) | 4,147,196 | 10.0 | % | 4,965,503 | |||
TOTAL | 41,605,536 | 100.0 | % | 41,348,260 | |||
(1) | Based on 13F and 13G filings as of 12/31/07 or most recent filings. |
(2) | Retail ownership equals total shares outstanding minus institutional and insider ownership. |
(3) | Insider holdings as of April 1, 2008 (Shares and O.P. Units only). Excludes 143,250 exercisable options. See proxy statement dated April 18, 2008 for more details. |
Page 33
Pennsylvania Real Estate Investment Trust
Definitions
Funds From Operations (FFO)
The National Association of Real Estate Investment Trusts (“NAREIT”) defines Funds From Operations, which is a non-GAAP measure, as income before gains (losses) on sales of operating properties and extraordinary items (computed in accordance with GAAP); plus real estate depreciation; plus or minus adjustments for unconsolidated partnerships to reflect funds from operations on the same basis. We compute Funds From Operations by taking the amount determined pursuant to the NAREIT definition and subtracting dividends on preferred shares (“FFO”). Funds From Operations is a commonly used measure of operating performance and profitability in the REIT industry, and we use FFO as a supplemental non-GAAP measure to compare our Company’s performance to that of our industry peers. Similarly, FFO per diluted share is a measure that is useful because it reflects the dilutive impact of outstanding convertible securities. In addition, we use FFO and FFO per diluted share as a performance measure for determining bonus amounts earned under certain of our performance-based executive compensation programs. The Company computes FFO in accordance with standards established by NAREIT, less dividends on preferred shares for periods during which the Company had preferred shares outstanding, 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 the Company.
FFO does not include gains (losses) on operating real estate assets, which are included in the determination of net income 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 income and net cash provided by operating activities, and other non-GAAP financial performance measures such as net operating income. FFO does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net income (determined in accordance with GAAP) as an indication of the Company’s financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company’s liquidity, nor is it indicative of funds available for the Company’s cash needs, including its ability to make cash distributions.
The Company believes that net income is the most directly comparable GAAP measurement to FFO. The Company believes that FFO is helpful to management and investors as a measure of operating performance because it excludes various items included in net income that do not relate to or are not indicative of operating performance, such as various non-recurring items that are considered extraordinary under GAAP, gains on sales of real estate and depreciation and amortization of real estate.
Net Operating Income (NOI)
Net operating income (“NOI”), which is a non-GAAP measure, is derived from revenues (determined in accordance with GAAP) minus property operating expenses (determined in accordance with GAAP). Net operating income is a non-GAAP measure. It does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net income (determined in accordance with GAAP) as an indication of the Company’s financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company’s liquidity; nor is it indicative of funds available for the Company’s cash needs, including its ability to make cash distributions. The Company believes that net income is the most directly comparable GAAP measurement to net operating income.
The Company believes that net operating income 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. Net operating income excludes general and administrative expenses, management company revenues, interest income, interest expense, depreciation and amortization, income from discontinued operations and gains on sales of interests in real estate.
Funds Available for Distribution (FAD)
FAD, which some companies refer to as Cash Available for Distributions (CAD) or Adjusted FFO (AFFO), is a measure of a real estate company’s cash flows generated by operations and capacity to pay dividends. The Company calculates FAD by starting with FFO and subtracting (1) straight-line rents, (2) normalized recurring capital expenditures that are capitalized but necessary to maintain our properties, (3) operational tenant allowances, (4) capitalized leasing costs, (5) amortization of debt premium, and (6) amortization of above- and below-market lease intangibles.
The Company believes that net income is the most directly comparable GAAP measurement to FAD. The Company believes FAD provides a meaningful indicator of its ability to fund cash needs and to make cash distributions to equity owners. In addition, the Company believes that to further understand its liquidity, FAD should be compared with its cash flow from operating activities determined in accordance with GAAP, as presented in its consolidated financial statements. The computation of FAD may not be comparable to FAD reported by other REITs or real estate companies and FAD does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, or as an alternative to net cash flow from operating activities (determined in accordance with GAAP), as a measure of our liquidity.
Page 34