Exhibit 99.1
Pennsylvania Real Estate Investment Trust
Supplemental Financial and Operating Information
Quarter Ended September 30, 2009
www.preit.com
NYSE: PEI
Pennsylvania Real Estate Investment Trust
Supplemental Financial and Operating Information
September 30, 2009
Table of Contents
Introduction | ||
Company Information | 1 | |
Press Release Announcements | 2 | |
Market Capitalization and Capital Resources | 3 | |
Operating Results | ||
Income Statement-Proportionate Consolidation Method - Three Months Ended September 30, 2009 and September 30, 2008 | 4 | |
Income Statement-Proportionate Consolidation Method - Nine Months Ended September 30, 2009 and September 30, 2008 | 5 | |
Net Operating Income - Three Months Ended September 30, 2009 and September 30, 2008 | 6 | |
Net Operating Income - Nine Months Ended September 30, 2009 and September 30, 2008 | 7 | |
Computation of Earnings per Share | 8 | |
Funds From Operations and Funds Available for Distribution | 9 | |
Operating Statistics | ||
Leasing Activity Summary | 10 | |
Summarized Rent Per Square Foot and Occupancy Percentages | 11 | |
Mall Sales and Rent Per Square Foot | 12 | |
Mall Occupancy - Owned GLA | 13 | |
Strip and Power Center Rent Per Square Foot and Occupancy Percentages | 14 | |
Top Twenty Tenants | 15 | |
Lease Expirations | 16 | |
Gross Leasable Area Summary | 17 | |
Property Information | 18 | |
Balance Sheet | ||
Balance Sheet - Proportionate Consolidation Method | 21 | |
Balance Sheet - Property Type | 22 | |
Investment in Real Estate | 23 | |
Property Redevelopment and Repositioning Summary | 25 | |
Development Property Summary | 26 | |
Capital Expenditures | 27 | |
Debt Analysis | 28 | |
Debt Schedule | 29 | |
Selected Debt Ratios | 30 | |
Shareholder Information | 31 | |
Definitions | 32 |
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; the current economic downturn and its effect on PREIT’s existing and potential tenants and their ability to make and meet their obligations to PREIT; 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 estimates 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, as amended, for the year ended December 31, 2008. 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, founded in 1960 and one of the first equity REITs in the U.S., has a primary investment focus on retail shopping malls and power centers. As of September 30, 2009, the Company’s 55 properties include 38 shopping malls, 14 strip and power centers, and three properties under development. These properties are located in 13 states in the eastern half of the United States, primarily in the Mid-Atlantic region. The operating retail properties have a total of approximately 34.9 million square feet. PREIT is headquartered in Philadelphia, Pennsylvania.
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
Research Coverage
Company | Analyst | Phone Number | ||
Bank of America/Merrill Lynch | Craig Schmidt | (646) 855-3640 | ||
Jeffrey Spector | (646) 855-1363 | |||
Lindsay Schroll | (646) 855-1829 | |||
Barclays Capital | Ross Smotrich | (212) 526-2306 | ||
Ryan Bennett | (212) 526-5309 | |||
Citi Investment Research | Michael Bilerman | (212) 816-1383 | ||
Quentin Velleley | (212) 816-6981 | |||
Green Street Advisors | Jim Sullivan | (949) 640-8780 | ||
JP Morgan | Michael W. Mueller | (212) 622-6689 | ||
Sarah King | (212) 622-5670 | |||
Macquarie Capital | David Wigginton | (212) 231-6380 | ||
Stifel Nicolaus | Nathan Isbee | (443) 224-1346 | ||
David M. Fick | (443) 224-1308 |
Page 1
Pennsylvania Real Estate Investment Trust
Press Release Announcements
Dividends and Distributions:
October 23, 2009PREIT announced the Board of Trustees of the Company declared a quarterly cash dividend of $0.15 per common share.
July 27, 2009PREIT announced the Board of Trustees of the Company declared a quarterly cash dividend of $0.15 per common share.
Other activities:
October 5, 2009PREIT scheduled its Third Quarter 2009 earnings call for Wednesday, October 28, 2009.
July 29, 2009PREIT reported its Second Quarter 2009 financial results.
July 1, 2009PREIT scheduled its Second Quarter 2009 earnings call for Wednesday, July 29, 2009.
NOTE: The press release announcements are available on the Company’s website at www.preit.com.
Page 2
Pennsylvania Real Estate Investment Trust
Market Capitalization and Capital Resources
Quarter Ended September 30, | Year Ended December 31, | |||||||||||||||
2009 | 2008 | 2008 | 2007 | |||||||||||||
TRADING INFORMATION | ||||||||||||||||
High Price | $ | 9.13 | $ | 24.29 | $ | 29.70 | $ | 50.39 | ||||||||
Low Price | $ | 3.87 | $ | 16.57 | $ | 2.21 | $ | 28.48 | ||||||||
Average Daily Trading Volume | 593,288 | 656,615 | 768,718 | 395,718 | ||||||||||||
MARKET CAPITALIZATION (in thousands, except per share amounts) | ||||||||||||||||
EQUITY CAPITALIZATION | ||||||||||||||||
Common Shares Outstanding | 43,302 | 39,397 | 39,468 | 38,953 | ||||||||||||
OP Units Outstanding | 2,329 | 2,238 | 2,201 | 2,395 | ||||||||||||
TOTAL Shares and OP Units Outstanding | 45,631 | 41,635 | 41,669 | 41,348 | ||||||||||||
Market Price (closing price at end of period) | $ | 7.61 | $ | 18.85 | $ | 7.45 | $ | 29.68 | ||||||||
Equity Market Capitalization—Shares and OP Units | $ | 347,251 | $ | 784,830 | $ | 310,437 | $ | 1,227,216 | ||||||||
DEBT CAPITALIZATION(1) | ||||||||||||||||
Unsecured Debt Balance(2) (3) | 857,400 | 837,500 | 811,500 | 617,500 | ||||||||||||
Secured Debt Balance | 1,978,191 | 1,866,730 | 1,940,334 | 1,831,211 | ||||||||||||
Debt Capitalization | 2,835,591 | 2,704,230 | 2,751,834 | 2,448,711 | ||||||||||||
TOTAL MARKET CAPITALIZATION | $ | 3,182,842 | $ | 3,489,060 | $ | 3,062,271 | $ | 3,675,927 | ||||||||
Equity Capitalization/Total Market Capitalization | 10.9 | % | 22.5 | % | 10.1 | % | 33.4 | % | ||||||||
Debt Capitalization/Total Market Capitalization | 89.1 | % | 77.5 | % | 89.9 | % | 66.6 | % | ||||||||
Unsecured Debt Balance/Total Debt | 30.2 | % | 31.0 | % | 29.5 | % | 25.2 | % | ||||||||
DISTRIBUTIONS PER COMMON SHARE | ||||||||||||||||
Ordinary Income | (4) | $ | 0.564 | $ | 2.254 | $ | 2.105 | |||||||||
Section 1250 Gain | (4) | — | — | — | ||||||||||||
Return of Capital/Non-Taxable | (4) | 0.006 | 0.026 | 0.175 | ||||||||||||
Distributions per share | $ | 0.150 | $ | 0.570 | $ | 2.280 | $ | 2.280 | ||||||||
Annualized Dividend Yield(5) | 7.9 | % | 12.1 | % | 30.6 | % | 7.7 | % | ||||||||
CAPITAL RESOURCES | ||||||||||||||||
Cash and Cash Equivalents | $ | 94,443 | $ | 25,205 | $ | 12,711 | $ | 33,227 | ||||||||
Credit Facility | 500,000 | 500,000 | 500,000 | 500,000 | ||||||||||||
Amount Outstanding | (485,000 | ) | (380,000 | ) | (400,000 | ) | (330,000 | ) | ||||||||
Letters of Credit | (3,030 | ) | (10,967 | ) | (6,428 | ) | (16,686 | ) | ||||||||
Available Credit Facility(6) | 11,970 | 109,033 | 93,572 | 153,314 | ||||||||||||
TOTAL | $ | 106,413 | $ | 134,238 | $ | 106,283 | $ | 186,541 | ||||||||
Shelf Registration | $ | 1,000,000 | $ | 1,000,000 | $ | 1,000,000 | $ | 1,000,000 | ||||||||
Amount used | — | (344,146 | ) | (344,146 | ) | (344,146 | ) | |||||||||
Available shelf | $ | 1,000,000 | $ | 655,854 | $ | 655,854 | $ | 655,854 |
(1) | Amounts exclude debt discount on exchangeable notes and debt premium on mortgages. |
(2) | The unsecured debt balance includes exchangeable notes payable of $202,400 as of September 30, 2009, $241,500 as of December 31, 2008, and $287,500 as of September 30, 2008 and December 31, 2007, respectively. |
(3) | The unsecured debt balance includes $170,000 in senior unsecured Term Loan as of September 30, 2009, December 31, 2008 and September 30, 2008, respectively. |
(4) | Tax status of 2009 dividend payments will be available in January 2010. |
(5) | Based on closing share price at the end of the period. |
(6) | The available Credit Facility is subject to covenants that may restrict amounts that can be borrowed. |
Page 3
Pennsylvania Real Estate Investment Trust
Income Statement - Three Months Ended September 30, 2009 and 2008
Proportionate Consolidation Method
(in thousands)
Three months ended September 30, 2009 | Three months ended September 30, 2008 | |||||||||||||||||||||||||||||||
GAAP | Share of unconsolidated partnerships (1) | Discontinued operations | Total | GAAP (2) | Share of unconsolidated partnerships (1) | Discontinued operations | Total | |||||||||||||||||||||||||
REVENUE: | ||||||||||||||||||||||||||||||||
Real estate revenue: | ||||||||||||||||||||||||||||||||
Base rent | $ | 74,230 | $ | 6,244 | $ | 203 | $ | 80,677 | $ | 72,780 | $ | 6,312 | $ | 329 | $ | 79,421 | ||||||||||||||||
Expense reimbursements | 34,050 | 2,400 | 78 | 36,528 | 35,387 | 2,739 | 90 | 38,216 | ||||||||||||||||||||||||
Percentage rent | 918 | 39 | — | 957 | 1,060 | 44 | — | 1,104 | ||||||||||||||||||||||||
Lease termination revenue | 300 | — | — | 300 | 320 | — | — | 320 | ||||||||||||||||||||||||
Other real estate revenue | 3,306 | 406 | — | 3,712 | 3,719 | 430 | — | 4,149 | ||||||||||||||||||||||||
Interest and other income | 862 | — | — | 862 | 1,470 | — | — | 1,470 | ||||||||||||||||||||||||
Total revenue | 113,666 | 9,089 | 281 | 123,036 | 114,736 | 9,525 | 419 | 124,680 | ||||||||||||||||||||||||
EXPENSES: | ||||||||||||||||||||||||||||||||
Property operating expenses: | ||||||||||||||||||||||||||||||||
CAM and real estate taxes | (35,159 | ) | (1,950 | ) | (72 | ) | (37,181 | ) | (33,478 | ) | (1,993 | ) | (99 | ) | (35,570 | ) | ||||||||||||||||
Utilities | (6,774 | ) | (236 | ) | (16 | ) | (7,026 | ) | (7,009 | ) | (247 | ) | (9 | ) | (7,265 | ) | ||||||||||||||||
Other property operating expenses | (6,796 | ) | (647 | ) | 10 | (7,433 | ) | (7,153 | ) | (795 | ) | 4 | (7,944 | ) | ||||||||||||||||||
Total property operating expenses | (48,729 | ) | (2,833 | ) | (78 | ) | (51,640 | ) | (47,640 | ) | (3,035 | ) | (104 | ) | (50,779 | ) | ||||||||||||||||
Depreciation and amortization | (41,702 | ) | (1,983 | ) | (105 | ) | (43,790 | ) | (38,270 | ) | (1,970 | ) | (166 | ) | (40,406 | ) | ||||||||||||||||
Other expenses: | ||||||||||||||||||||||||||||||||
General and administrative expenses | (9,583 | ) | — | — | (9,583 | ) | (10,364 | ) | — | — | (10,364 | ) | ||||||||||||||||||||
Impairment of assets | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Abandoned project costs, income taxes and other expenses | (200 | ) | — | — | (200 | ) | (311 | ) | — | — | (311 | ) | ||||||||||||||||||||
Total other expenses | (9,783 | ) | — | — | (9,783 | ) | (10,675 | ) | — | — | (10,675 | ) | ||||||||||||||||||||
Interest expense, net(3) | (33,589 | ) | (1,918 | ) | — | (35,507 | ) | (29,329 | ) | (2,351 | ) | — | (31,680 | ) | ||||||||||||||||||
Gain on extinguishment of debt | 4,167 | — | — | 4,167 | — | — | — | — | ||||||||||||||||||||||||
Total expenses | (129,636 | ) | (6,734 | ) | (183 | ) | (136,553 | ) | (125,914 | ) | (7,356 | ) | (270 | ) | (133,540 | ) | ||||||||||||||||
Loss before equity in income of partnerships and discontinued operations | (15,970 | ) | 2,355 | 98 | (13,517 | ) | (11,178 | ) | 2,169 | 149 | (8,860 | ) | ||||||||||||||||||||
Equity in income of partnerships | 2,355 | (2,355 | ) | — | — | 2,169 | (2,169 | ) | — | — | ||||||||||||||||||||||
Net loss from continuing operations | (13,615 | ) | — | 98 | (13,517 | ) | (9,009 | ) | — | 149 | (8,860 | ) | ||||||||||||||||||||
Discontinued operations: | ||||||||||||||||||||||||||||||||
Income from discontinued operations | 98 | — | (98 | ) | — | 149 | — | (149 | ) | — | ||||||||||||||||||||||
Gain on disposition of discontinued operations | 3,398 | — | — | 3,398 | — | — | — | — | ||||||||||||||||||||||||
Income from discontinued operations | 3,496 | — | (98 | ) | 3,398 | 149 | — | (149 | ) | — | ||||||||||||||||||||||
Net loss | (10,119 | ) | — | — | (10,119 | ) | (8,860 | ) | — | — | (8,860 | ) | ||||||||||||||||||||
Less: net loss attributable to the noncontrolling interest | 477 | — | — | 477 | 397 | — | — | 397 | ||||||||||||||||||||||||
Net loss attributable to Pennsylvania Real Estate Investment Trust | $ | (9,642 | ) | $ | — | $ | — | $ | (9,642 | ) | $ | (8,463 | ) | $ | — | $ | — | $ | (8,463 | ) | ||||||||||||
(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) | Prior period reflects current accounting change for debt discount on exchangeable notes in interest expense. |
(3) | Net of capitalized interest expense of $1,287 and $4,145 for the three months ended September 30, 2009 and September 30, 2008, respectively. |
Page 4
Pennsylvania Real Estate Investment Trust
Income Statement - Nine Months Ended September 30, 2009 and 2008
Proportionate Consolidation Method
(in thousands)
Nine months ended September 30, 2009 | Nine months ended September 30, 2008 | |||||||||||||||||||||||||||||||
GAAP | Share of unconsolidated partnerships (1) | Discontinued operations | Total | GAAP (2) | Share of unconsolidated partnerships (1) | Discontinued operations | Total | |||||||||||||||||||||||||
REVENUE: | ||||||||||||||||||||||||||||||||
Real estate revenue: | ||||||||||||||||||||||||||||||||
Base rent | $ | 220,997 | $ | 18,662 | $ | 882 | $ | 240,541 | $ | 218,978 | $ | 18,961 | $ | 974 | $ | 238,913 | ||||||||||||||||
Expense reimbursements | 102,357 | 7,595 | 280 | 110,232 | 103,109 | 7,638 | 308 | 111,055 | ||||||||||||||||||||||||
Percentage rent | 2,378 | 72 | — | 2,450 | 3,526 | 162 | — | 3,688 | ||||||||||||||||||||||||
Lease termination revenue | 1,636 | 120 | — | 1,756 | 2,618 | — | — | 2,618 | ||||||||||||||||||||||||
Other real estate revenue | 10,075 | 1,210 | — | 11,285 | 10,950 | 1,291 | — | 12,241 | ||||||||||||||||||||||||
Interest and other income | 2,092 | — | — | 2,092 | 3,663 | — | — | 3,663 | ||||||||||||||||||||||||
Total revenue | 339,535 | 27,659 | 1,162 | 368,356 | 342,844 | 28,052 | 1,282 | 372,178 | ||||||||||||||||||||||||
EXPENSES: | ||||||||||||||||||||||||||||||||
Property operating expenses: | ||||||||||||||||||||||||||||||||
CAM and real estate taxes | (103,814 | ) | (6,023 | ) | (292 | ) | (110,129 | ) | (98,525 | ) | (5,915 | ) | (321 | ) | (104,761 | ) | ||||||||||||||||
Utilities | (18,572 | ) | (660 | ) | (34 | ) | (19,266 | ) | (19,283 | ) | (709 | ) | (24 | ) | (20,016 | ) | ||||||||||||||||
Other property operating expenses | (19,260 | ) | (1,941 | ) | (6 | ) | (21,207 | ) | (18,997 | ) | (2,036 | ) | (5 | ) | (21,038 | ) | ||||||||||||||||
Total property operating expenses | (141,646 | ) | (8,624 | ) | (332 | ) | (150,602 | ) | (136,805 | ) | (8,660 | ) | (350 | ) | (145,815 | ) | ||||||||||||||||
Depreciation and amortization | (122,243 | ) | (6,056 | ) | (440 | ) | (128,739 | ) | (110,958 | ) | (5,987 | ) | (497 | ) | (117,442 | ) | ||||||||||||||||
Other expenses: | ||||||||||||||||||||||||||||||||
General and administrative expenses | (28,436 | ) | — | — | (28,436 | ) | (31,777 | ) | — | — | (31,777 | ) | ||||||||||||||||||||
Impairment of assets | (70 | ) | — | — | (70 | ) | — | — | — | — | ||||||||||||||||||||||
Abandoned project costs, income taxes and other expenses | (598 | ) | — | — | (598 | ) | (1,815 | ) | — | — | (1,815 | ) | ||||||||||||||||||||
Total other expenses | (29,104 | ) | — | — | (29,104 | ) | (33,592 | ) | — | — | (33,592 | ) | ||||||||||||||||||||
Interest expense, net(3) | (99,346 | ) | (5,448 | ) | — | (104,794 | ) | (83,413 | ) | (7,667 | ) | — | (91,080 | ) | ||||||||||||||||||
Gain on extinguishment of debt | 13,971 | — | — | 13,971 | — | — | — | — | ||||||||||||||||||||||||
Total expenses | (378,368 | ) | (20,128 | ) | (772 | ) | (399,268 | ) | (364,768 | ) | (22,314 | ) | (847 | ) | (387,929 | ) | ||||||||||||||||
Loss before equity in income of partnerships, gains on sales of real estate | (38,833 | ) | 7,531 | 390 | (30,912 | ) | (21,924 | ) | 5,738 | 435 | (15,751 | ) | ||||||||||||||||||||
Equity in income of partnerships | 7,531 | (7,531 | ) | — | — | 5,738 | (5,738 | ) | — | — | ||||||||||||||||||||||
Gains on sales of real estate | 1,654 | — | — | 1,654 | — | — | — | — | ||||||||||||||||||||||||
Net loss from continuing operations | (29,648 | ) | — | 390 | (29,258 | ) | (16,186 | ) | — | 435 | (15,751 | ) | ||||||||||||||||||||
Discontinued operations | ||||||||||||||||||||||||||||||||
Income from discontinued operations | 390 | — | (390 | ) | — | 435 | — | (435 | ) | — | ||||||||||||||||||||||
Gain on disposition of discontinued operations | 3,398 | — | 3,398 | — | — | — | — | |||||||||||||||||||||||||
Income from discontinued operations | 3,788 | — | (390 | ) | 3,398 | 435 | — | (435 | ) | — | ||||||||||||||||||||||
Net loss | (25,860 | ) | — | — | (25,860 | ) | (15,751 | ) | — | — | (15,751 | ) | ||||||||||||||||||||
Less: net loss attributable to the noncontrolling interest | 1,215 | — | — | 1,215 | 638 | — | — | 638 | ||||||||||||||||||||||||
Net loss attributable to Pennsylvania Real Estate Investment Trust | $ | (24,645 | ) | $ | — | $ | — | $ | (24,645 | ) | $ | (15,113 | ) | $ | — | $ | — | $ | (15,113 | ) | ||||||||||||
(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) | Prior period reflects current accounting change for debt discount on exchangeable notes in interest expense. |
(3) | Net of capitalized interest expense of $4,527 and $11,584 for the nine months ended September 30, 2009 and September 30, 2008, respectively. |
Page 5
Pennsylvania Real Estate Investment Trust
Net Operating Income(1) - Three Months Ended September 30, 2009 and 2008
(in thousands)
Three months ended September 30, 2009 | Three months ended September 30, 2008 | ||||||||||||||||||||||||||||||
SAME STORE RETAIL/NEW/OTHER | Same | New | Other | Total | Same | New | Other | Total | |||||||||||||||||||||||
Real estate revenue: | |||||||||||||||||||||||||||||||
Base rent | $ | 79,105 | $ | 945 | $ | 627 | $ | 80,677 | $ | 78,642 | $ | — | $ | 779 | $ | 79,421 | |||||||||||||||
Expense reimbursements | 36,228 | 207 | 93 | 36,528 | 38,115 | — | 101 | 38,216 | |||||||||||||||||||||||
Percentage rent | 957 | — | — | 957 | 1,104 | — | — | 1,104 | |||||||||||||||||||||||
Lease termination revenue | 300 | — | — | 300 | 320 | — | — | 320 | |||||||||||||||||||||||
Other real estate revenue | 3,515 | 2 | 195 | 3,712 | 3,961 | — | 188 | 4,149 | |||||||||||||||||||||||
TOTAL REAL ESTATE REVENUE | 120,105 | 1,154 | 915 | 122,174 | 122,142 | — | 1,068 | 123,210 | |||||||||||||||||||||||
Property operating expenses: | |||||||||||||||||||||||||||||||
CAM and real estate taxes | (36,472 | ) | (270 | ) | (439 | ) | (37,181 | ) | (35,119 | ) | — | (451 | ) | (35,570 | ) | ||||||||||||||||
Utilities | (7,010 | ) | — | (16 | ) | (7,026 | ) | (7,256 | ) | — | (9 | ) | (7,265 | ) | |||||||||||||||||
Other property operating expenses | (7,299 | ) | (27 | ) | (107 | ) | (7,433 | ) | (7,895 | ) | — | (49 | ) | (7,944 | ) | ||||||||||||||||
TOTAL PROPERTY OPERATING EXPENSES | (50,781 | ) | (297 | ) | (562 | ) | (51,640 | ) | (50,270 | ) | — | (509 | ) | (50,779 | ) | ||||||||||||||||
NET OPERATING INCOME | $ | 69,324 | $ | 857 | $ | 353 | $ | 70,534 | $ | 71,872 | $ | — | $ | 559 | $ | 72,431 | |||||||||||||||
Three months ended September 30, 2009 | Three months ended September 30, 2008 | |||||||||||||||||||||||
SAME STORE RETAIL COMPARISON | Malls | Strip and Power Centers | Total | Malls | Strip and Power Centers | Total | ||||||||||||||||||
Real estate revenue: | ||||||||||||||||||||||||
Base rent | $ | 71,340 | $ | 7,765 | $ | 79,105 | $ | 70,503 | $ | 8,139 | $ | 78,642 | ||||||||||||
Expense reimbursements | 34,478 | 1,750 | 36,228 | 36,295 | 1,820 | 38,115 | ||||||||||||||||||
Percentage rent | 921 | 36 | 957 | 1,066 | 38 | 1,104 | ||||||||||||||||||
Lease termination revenue | 300 | — | 300 | 320 | — | 320 | ||||||||||||||||||
Other real estate revenue | 3,432 | 83 | 3,515 | 3,905 | 56 | 3,961 | ||||||||||||||||||
TOTAL REAL ESTATE REVENUE | 110,471 | 9,634 | 120,105 | 112,089 | 10,053 | 122,142 | ||||||||||||||||||
Property operating expenses: | ||||||||||||||||||||||||
CAM and real estate taxes | (34,637 | ) | (1,835 | ) | (36,472 | ) | (33,384 | ) | (1,735 | ) | (35,119 | ) | ||||||||||||
Utilities | (6,932 | ) | (78 | ) | (7,010 | ) | (7,185 | ) | (71 | ) | (7,256 | ) | ||||||||||||
Other property operating expenses | (7,008 | ) | (291 | ) | (7,299 | ) | (7,670 | ) | (225 | ) | (7,895 | ) | ||||||||||||
TOTAL PROPERTY OPERATING EXPENSES | (48,577 | ) | (2,204 | ) | (50,781 | ) | (48,239 | ) | (2,031 | ) | (50,270 | ) | ||||||||||||
NET OPERATING INCOME | $ | 61,894 | $ | 7,430 | $ | 69,324 | $ | 63,850 | $ | 8,022 | $ | 71,872 | ||||||||||||
(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 6
Pennsylvania Real Estate Investment Trust
Net Operating Income(1) - Nine Months Ended September 30, 2009 and 2008
(in thousands)
Nine months ended September 30, 2009 | Nine months ended September 30, 2008 | ||||||||||||||||||||||||||||||
SAME STORE RETAIL/NEW/OTHER | Same | New | Other | Total | Same | New | Other | Total | |||||||||||||||||||||||
Real estate revenue: | |||||||||||||||||||||||||||||||
Base rent | $ | 235,969 | $ | 2,393 | $ | 2,179 | $ | 240,541 | $ | 236,687 | $ | — | $ | 2,226 | $ | 238,913 | |||||||||||||||
Expense reimbursements | 109,292 | 620 | 320 | 110,232 | 110,703 | — | 352 | 111,055 | |||||||||||||||||||||||
Percentage rent | 2,450 | — | — | 2,450 | 3,657 | — | 31 | 3,688 | |||||||||||||||||||||||
Lease termination revenue | 1,756 | — | — | 1,756 | 2,618 | — | — | 2,618 | |||||||||||||||||||||||
Other real estate revenue | 10,714 | 5 | 566 | 11,285 | 11,622 | — | 619 | 12,241 | |||||||||||||||||||||||
TOTAL REAL ESTATE REVENUE | 360,181 | 3,018 | 3,065 | 366,264 | 365,287 | — | 3,228 | 368,515 | |||||||||||||||||||||||
Property operating expenses: | |||||||||||||||||||||||||||||||
CAM and real estate taxes | (107,991 | ) | (756 | ) | (1,382 | ) | (110,129 | ) | (103,353 | ) | — | (1,408 | ) | (104,761 | ) | ||||||||||||||||
Utilities | (19,232 | ) | — | (34 | ) | (19,266 | ) | (19,992 | ) | — | (24 | ) | (20,016 | ) | |||||||||||||||||
Other property operating expenses | (20,866 | ) | (65 | ) | (276 | ) | (21,207 | ) | (20,898 | ) | — | (140 | ) | (21,038 | ) | ||||||||||||||||
TOTAL PROPERTY OPERATING EXPENSES | (148,089 | ) | (821 | ) | (1,692 | ) | (150,602 | ) | (144,243 | ) | — | (1,572 | ) | (145,815 | ) | ||||||||||||||||
NET OPERATING INCOME | $ | 212,092 | $ | 2,197 | $ | 1,373 | $ | 215,662 | $ | 221,044 | $ | — | $ | 1,656 | $ | 222,700 | |||||||||||||||
Nine months ended September 30, 2009 | Nine months ended September 30, 2008 | |||||||||||||||||||||||
SAME STORE RETAIL COMPARISON | Malls | Strip and Power Centers | Total | Malls | Strip and Power Centers | Total | ||||||||||||||||||
Real estate revenue: | ||||||||||||||||||||||||
Base rent | $ | 212,413 | $ | 23,556 | $ | 235,969 | $ | 212,441 | $ | 24,246 | $ | 236,687 | ||||||||||||
Expense reimbursements | 104,017 | 5,275 | 109,292 | 105,636 | 5,067 | 110,703 | ||||||||||||||||||
Percentage rent | 2,376 | 74 | 2,450 | 3,520 | 137 | 3,657 | ||||||||||||||||||
Lease termination revenue | 1,756 | — | 1,756 | 2,618 | — | 2,618 | ||||||||||||||||||
Other real estate revenue | 10,459 | 255 | 10,714 | 11,454 | 168 | 11,622 | ||||||||||||||||||
TOTAL REAL ESTATE REVENUE | 331,021 | 29,160 | 360,181 | 335,669 | 29,618 | 365,287 | ||||||||||||||||||
Property operating expenses: | ||||||||||||||||||||||||
CAM and real estate taxes | (102,419 | ) | (5,572 | ) | (107,991 | ) | (98,600 | ) | (4,753 | ) | (103,353 | ) | ||||||||||||
Utilities | (19,039 | ) | (193 | ) | (19,232 | ) | (19,782 | ) | (210 | ) | (19,992 | ) | ||||||||||||
Other property operating expenses | (20,134 | ) | (732 | ) | (20,866 | ) | (20,134 | ) | (764 | ) | (20,898 | ) | ||||||||||||
TOTAL PROPERTY OPERATING EXPENSES | (141,592 | ) | (6,497 | ) | (148,089 | ) | (138,516 | ) | (5,727 | ) | (144,243 | ) | ||||||||||||
NET OPERATING INCOME | $ | 189,429 | $ | 22,663 | $ | 212,092 | $ | 197,153 | $ | 23,891 | $ | 221,044 | ||||||||||||
(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 7
Pennsylvania Real Estate Investment Trust
Computation of
Earnings Per Share
(in thousands, except per share amounts)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2009 | 2008(1) | 2009 | 2008(1) | |||||||||||||
Net loss from continuing operations | $ | (13,615 | ) | $ | (9,009 | ) | $ | (29,648 | ) | $ | (16,186 | ) | ||||
Dividends on unvested restricted shares | (162 | ) | (304 | ) | (635 | ) | (918 | ) | ||||||||
Net loss from continuing operations used to calculate earnings per share - basic and diluted | $ | (13,777 | ) | $ | (9,313 | ) | $ | (30,283 | ) | $ | (17,104 | ) | ||||
Income from discontinued operations | $ | 3,496 | $ | 149 | $ | 3,788 | $ | 435 | ||||||||
Income from discontinued operation used to calculate earnings per share - basic and diluted | $ | 3,496 | $ | 149 | $ | 3,788 | $ | 435 | ||||||||
Basic loss per share | ||||||||||||||||
Loss from continuing operations | $ | (0.32 | ) | $ | (0.24 | ) | $ | (0.75 | ) | $ | (0.44 | ) | ||||
Income from discontinued operations | 0.08 | 0.00 | 0.09 | 0.01 | ||||||||||||
$ | (0.24 | ) | $ | (0.24 | ) | $ | (0.66 | ) | $ | (0.43 | ) | |||||
Diluted loss per share | ||||||||||||||||
Loss from continuing operations | $ | (0.32 | ) | $ | (0.24 | ) | $ | (0.75 | ) | $ | (0.44 | ) | ||||
Income from discontinued operations | 0.08 | 0.00 | 0.09 | 0.01 | ||||||||||||
$ | (0.24 | ) | $ | (0.24 | ) | $ | (0.66 | ) | $ | (0.43 | ) | |||||
Weighted average of common shares outstanding | 43,277 | 39,374 | 41,038 | 39,306 | ||||||||||||
Weighted average of unvested restricted shares | (1,082 | ) | (534 | ) | (894 | ) | (525 | ) | ||||||||
Weighted average shares outstanding - basic | 42,195 | 38,840 | 40,144 | 38,781 | ||||||||||||
Weighted average effect of common share equivalents (2) | — | — | — | — | ||||||||||||
Total weighted average shares outstanding - diluted | 42,195 | 38,840 | 40,144 | 38,781 | ||||||||||||
(1) | Certain prior period amounts have been reclassified to conform with the current presentation. |
(2) | For all periods presented, there are net losses, so the effect of common share equivalents is excluded from the calculation of diluted loss per share for these periods because it would be antidilutive. |
Page 8
Pennsylvania Real Estate Investment Trust
Funds From Operations and Funds Available for Distribution
(in thousands, except per share amounts)
Three months ended September 30, | Nine months ended September 30, | Year Ended December 31, | ||||||||||||||||||
2009 | 2008(1) | 2009 | 2008(1) | 2008(1) | ||||||||||||||||
FUNDS FROM OPERATIONS (FFO) | ||||||||||||||||||||
Net loss | $ | (10,119 | ) | $ | (8,860 | ) | $ | (25,860 | ) | $ | (15,751 | ) | $ | (16,356 | ) | |||||
Gain on sale of interests in real estate | — | — | (923 | ) | — | — | ||||||||||||||
Gain on sale of discontinued operations | (3,398 | ) | — | (3,398 | ) | — | — | |||||||||||||
Depreciation and amortization:(2) | ||||||||||||||||||||
Wholly owned and consolidated partnerships | 41,220 | 37,601 | 120,604 | 108,986 | 148,342 | |||||||||||||||
Unconsolidated partnerships | 1,983 | 1,970 | 6,056 | 5,987 | 8,361 | |||||||||||||||
Discontinued operations | 105 | 166 | 440 | 497 | 664 | |||||||||||||||
FFO | $ | 29,791 | $ | 30,877 | $ | 96,919 | $ | 99,719 | $ | 141,011 | ||||||||||
FUNDS AVAILABLE FOR DISTRIBUTION (FAD) | ||||||||||||||||||||
FFO | $ | 29,791 | $ | 30,877 | $ | 96,919 | $ | 99,719 | $ | 141,011 | ||||||||||
Adjustments: | ||||||||||||||||||||
Straight line rent | (465 | ) | (575 | ) | (1,228 | ) | (2,334 | ) | (2,016 | ) | ||||||||||
Recurring capital expenditures | (4,671 | ) | (5,782 | ) | (8,463 | ) | (10,686 | ) | (16,833 | ) | ||||||||||
Tenant allowances | (1,830 | ) | (7,788 | ) | (7,561 | ) | (12,155 | ) | (15,520 | ) | ||||||||||
Capitalized leasing costs | (999 | ) | (1,166 | ) | (3,149 | ) | (3,971 | ) | (5,313 | ) | ||||||||||
Amortization of debt premium | (333 | ) | (3,016 | ) | (988 | ) | (9,197 | ) | (9,794 | ) | ||||||||||
Amortization of above- and below- market lease intangibles | 16 | 117 | (504 | ) | 355 | 344 | ||||||||||||||
Amortization of exchangeable notes debt discount | 682 | 880 | 2,175 | 2,596 | 3,485 | |||||||||||||||
Impairment of assets | — | — | 70 | — | 27,592 | |||||||||||||||
Gain on extinguishment of debt | (4,167 | ) | — | (13,971 | ) | — | (27,075 | ) | ||||||||||||
FAD | $ | 18,024 | $ | 13,547 | $ | 63,300 | $ | 64,327 | $ | 95,881 | ||||||||||
Weighted average of common shares outstanding | 42,195 | 38,840 | 40,144 | 38,781 | 38,807 | |||||||||||||||
Weighted average of OP Units outstanding | 2,329 | 2,238 | 2,248 | 2,239 | 2,236 | |||||||||||||||
Weighted average effect of common share equivalents | — | 12 | — | 18 | 14 | |||||||||||||||
Total weighted average shares outstanding, including OP Units | 44,524 | 41,090 | 42,392 | 41,038 | 41,057 | |||||||||||||||
Net loss per diluted share | $ | (0.24 | ) | $ | (0.24 | ) | $ | (0.66 | ) | $ | (0.43 | ) | $ | (0.30 | ) | |||||
FFO per diluted share | $ | 0.67 | $ | 0.75 | $ | 2.29 | $ | 2.43 | $ | 3.43 | ||||||||||
FAD per diluted share | $ | 0.40 | $ | 0.33 | $ | 1.49 | $ | 1.57 | $ | 2.34 | ||||||||||
Dividend per common share | $ | 0.15 | $ | 0.57 | $ | 0.59 | $ | 1.71 | $ | 2.28 | ||||||||||
PAYOUT RATIOS | ||||||||||||||||||||
Payout Ratio of FFO | 35.2 | %(3) | 66.4 | % | ||||||||||||||||
Payout Ratio of FAD | 51.3 | %(3) | 97.6 | % |
(1) | Certain prior period amounts have been reclassified to conform with the current presentation. |
(2) | Excludes depreciation of non-real estate assets and amortization of deferred financing costs. |
(3) | Twelve months ended September 30, 2009 |
Page 9
Pennsylvania Real Estate Investment Trust
2009 Leasing Activity Summary
Average Base Rent psf | Change in Base Rent psf | Annualized Tenant Improvements psf (1) | ||||||||||||||||||
Number | GLA | Previous | New | Dollar | Percentage | |||||||||||||||
New Leases - Previously Leased Space: | ||||||||||||||||||||
1st Quarter | 18 | 59,174 | $ | 21.12 | $ | 26.32 | $ | 5.20 | 24.6 | % | $ | 3.09 | ||||||||
2nd Quarter | 14 | 47,076 | 32.74 | 43.86 | 11.12 | 34.0 | % | 3.96 | ||||||||||||
3rd Quarter | 23 | 154,279 | 22.40 | 17.97 | (4.43 | ) | -19.8 | % | 2.40 | |||||||||||
Total/Average | 55 | 260,529 | $ | 23.98 | $ | 24.55 | $ | 0.57 | 2.4 | % | $ | 2.84 | ||||||||
New Leases - Previously Vacant Space:(2) | ||||||||||||||||||||
1st Quarter | 14 | 33,995 | N/A | $ | 32.18 | $ | 32.18 | N/A | $ | 5.84 | ||||||||||
2nd Quarter | 17 | 89,159 | N/A | 22.91 | 22.91 | N/A | 1.42 | |||||||||||||
3rd Quarter | 19 | 143,617 | N/A | 18.20 | 18.20 | N/A | 2.09 | |||||||||||||
Total/Average | 50 | 266,771 | N/A | $ | 21.56 | $ | 21.56 | N/A | $ | 2.34 | ||||||||||
Renewal:(3) | ||||||||||||||||||||
1st Quarter | 139 | 376,497 | $ | 25.92 | $ | 26.42 | $ | 0.50 | 1.9 | % | $ | 0.06 | ||||||||
2nd Quarter | 56 | 161,913 | 24.32 | 24.86 | 0.54 | 2.2 | % | 0.31 | ||||||||||||
3rd Quarter | 86 | 304,513 | 19.70 | 19.35 | (0.35 | ) | -1.8 | % | — | |||||||||||
Total/Average | 281 | 842,923 | $ | 23.36 | $ | 23.57 | $ | 0.21 | 0.9 | % | $ | 0.08 | ||||||||
Anchor Renewal: | ||||||||||||||||||||
1st Quarter | 2 | 251,476 | $ | 2.06 | $ | 2.06 | $ | — | 0.0 | % | $ | — | ||||||||
2nd Quarter | 4 | 503,349 | 2.67 | 2.57 | (0.10 | ) | -3.7 | % | — | |||||||||||
3rd Quarter | 2 | 480,041 | 3.15 | 3.15 | — | 0.0 | % | — | ||||||||||||
Total/Average | 8 | 1,234,866 | $ | 2.73 | $ | 2.69 | $ | (0.04 | ) | -1.5 | % | $ | — |
(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. |
Page 10
Pennsylvania Real Estate Investment Trust
Summarized Rent Per Square Foot and Occupancy Percentages
September 30, 2009 | September 30, 2008 | Change | |||||||||||||||||||||||||
Avg Base Rent | Occupancy | Avg Base Rent | Occupancy | Avg Base Rent | Occupancy | ||||||||||||||||||||||
Total | Non-Anchor | Total | Non-Anchor | Total | Non-Anchor | ||||||||||||||||||||||
Enclosed Malls weighted average (1) | $ | 32.51 | 88.9 | % | 83.8 | % | $ | 31.06 | 88.8 | % | 86.5 | % | 4.7 | % | 0.1 | % | -2.7 | % | |||||||||
Strip and Power Centers weighted average | $ | 16.32 | 92.3 | % | 88.3 | % | $ | 16.05 | 97.0 | % | 95.2 | % | 1.7 | % | -4.7 | % | -6.9 | % | |||||||||
Retail Portfolio weighted average | $ | 28.34 | 89.4 | % | 84.6 | % | $ | 27.42 | 89.9 | % | 87.8 | % | 3.3 | % | -0.5 | % | -3.2 | % | |||||||||
Consolidated Properties | $ | 29.52 | 89.2 | % | 84.1 | % | $ | 28.59 | 89.2 | % | 87.0 | % | 3.2 | % | 0.0 | % | -2.9 | % | |||||||||
Unconsolidated Properties | $ | 23.63 | 90.8 | % | 87.4 | % | $ | 22.61 | 95.0 | % | 92.9 | % | 4.5 | % | -4.2 | % | -5.5 | % | |||||||||
Same Properties | $ | 28.45 | 89.2 | % | 84.4 | % | $ | 27.43 | 89.8 | % | 87.8 | % | 3.7 | % | -0.6 | % | -3.4 | % | |||||||||
New Properties | $ | 14.69 | 100.0 | % | 100.0 | % | N/A | N/A | N/A | N/A | N/A | N/A |
(1) | 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 $14.65/sq ft as of September 30, 2009 and $13.83/sq ft as of September 30, 2008. |
Page 11
Pennsylvania Real Estate Investment Trust
Mall Sales and Rent Per Square Foot
September 30, 2009 | September 30, 2008 | Change | ||||||||||||||||||||||||||||
% of Current Quarter Mall NOI | 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 | 27.4 | % | ||||||||||||||||||||||||||||
Jacksonville Mall | $ | 31.84 | $ | 484 | 9.7 | % | $ | 31.14 | $ | 463 | 9.7 | % | 2.2 | % | 4.5 | % | 0.0 | % | ||||||||||||
Lehigh Valley Mall | 43.75 | 466 | 13.6 | % | 40.11 | 484 | 12.3 | % | 9.1 | % | -3.7 | % | 1.3 | % | ||||||||||||||||
Woodland Mall | 43.73 | 445 | 15.4 | % | 41.84 | 481 | 14.1 | % | 4.5 | % | -7.5 | % | 1.3 | % | ||||||||||||||||
Patrick Henry Mall | 37.43 | 422 | 12.9 | % | 37.64 | 457 | 11.8 | % | -0.6 | % | -7.7 | % | 1.1 | % | ||||||||||||||||
Cherry Hill Mall | 47.18 | 419 | 16.2 | % | 42.65 | 450 | 14.8 | % | 10.6 | % | -6.9 | % | 1.4 | % | ||||||||||||||||
Moorestown Mall | 36.48 | 403 | 14.6 | % | 35.37 | 424 | 13.9 | % | 3.1 | % | -5.0 | % | 0.7 | % | ||||||||||||||||
Sales per square foot between $350 - $400 | 22.9 | % | ||||||||||||||||||||||||||||
Willow Grove Park(3) (4) | 42.79 | 389 | 15.8 | % | 42.31 | 428 | 14.2 | % | 1.1 | % | -9.1 | % | 1.6 | % | ||||||||||||||||
The Mall at Prince Georges | 35.76 | 377 | 15.2 | % | 35.01 | 401 | 13.5 | % | 2.1 | % | -6.0 | % | 1.7 | % | ||||||||||||||||
Viewmont Mall | 30.42 | 356 | 12.9 | % | 30.36 | 375 | 12.1 | % | 0.2 | % | -5.1 | % | 0.8 | % | ||||||||||||||||
Capital City Mall | 32.70 | 354 | 11.7 | % | 32.87 | 388 | 10.8 | % | -0.5 | % | -8.8 | % | 0.9 | % | ||||||||||||||||
Valley View Mall | 31.44 | 353 | 12.2 | % | 29.00 | 364 | 12.1 | % | 8.4 | % | -3.0 | % | 0.1 | % | ||||||||||||||||
The Gallery at Market East(3) (4) | 37.62 | 351 | 14.3 | % | 35.43 | 384 | 13.0 | % | 6.2 | % | -8.6 | % | 1.3 | % | ||||||||||||||||
Sales per square foot between $300 - $349 | 20.2 | % | ||||||||||||||||||||||||||||
Wyoming Valley Mall | 31.04 | 349 | 12.8 | % | 30.00 | 351 | 12.4 | % | 3.5 | % | -0.6 | % | 0.4 | % | ||||||||||||||||
Dartmouth Mall | 29.62 | 340 | 12.3 | % | 28.90 | 372 | 12.2 | % | 2.5 | % | -8.6 | % | 0.1 | % | ||||||||||||||||
Springfield Mall(3) (4) | 31.30 | 326 | 15.4 | % | 31.71 | 373 | 14.8 | % | -1.3 | % | -12.6 | % | 0.6 | % | ||||||||||||||||
Francis Scott Key Mall | 26.78 | 322 | 11.9 | % | 26.42 | 355 | 10.5 | % | 1.4 | % | -9.3 | % | 1.4 | % | ||||||||||||||||
Exton Square Mall | 38.84 | 318 | 15.7 | % | 37.37 | 359 | 14.8 | % | 3.9 | % | -11.4 | % | 0.9 | % | ||||||||||||||||
Valley Mall | 25.31 | 312 | 13.0 | % | 24.76 | 326 | 12.4 | % | 2.2 | % | -4.3 | % | 0.6 | % | ||||||||||||||||
Crossroads Mall | 22.43 | 306 | 9.1 | % | 21.00 | 275 | 9.5 | % | 6.8 | % | 11.3 | % | -0.4 | % | ||||||||||||||||
Magnolia Mall | 25.69 | 301 | 13.5 | % | 25.39 | 302 | 12.9 | % | 1.2 | % | -0.3 | % | 0.6 | % | ||||||||||||||||
Sales per square foot under $300 | 29.5 | % | ||||||||||||||||||||||||||||
Cumberland Mall(3) | 27.02 | 297 | 14.2 | % | 27.10 | 308 | 12.3 | % | -0.3 | % | -3.6 | % | 1.9 | % | ||||||||||||||||
Logan Valley Mall | 26.23 | 296 | 12.4 | % | 26.34 | 296 | 12.5 | % | -0.4 | % | 0.0 | % | -0.1 | % | ||||||||||||||||
Nittany Mall | 23.19 | 288 | 10.9 | % | 22.57 | 289 | 10.6 | % | 2.7 | % | -0.3 | % | 0.3 | % | ||||||||||||||||
Palmer Park Mall | 25.66 | 284 | 11.9 | % | 24.28 | 309 | 11.7 | % | 5.7 | % | -8.1 | % | 0.2 | % | ||||||||||||||||
Uniontown Mall | 23.03 | 279 | 11.6 | % | 20.93 | 273 | 10.7 | % | 10.0 | % | 2.2 | % | 0.9 | % | ||||||||||||||||
Wiregrass Commons Mall | 26.38 | 278 | 11.1 | % | 24.80 | 276 | 11.3 | % | 6.4 | % | 0.7 | % | -0.2 | % | ||||||||||||||||
North Hanover Mall | 28.03 | 274 | 12.8 | % | 23.42 | 287 | 12.4 | % | 19.7 | % | -4.5 | % | 0.4 | % | ||||||||||||||||
Gadsden Mall | 25.06 | 259 | 11.7 | % | 24.24 | 275 | 11.3 | % | 3.4 | % | -5.8 | % | 0.4 | % | ||||||||||||||||
South Mall(4) | 24.64 | 254 | 12.7 | % | 24.50 | 292 | 11.4 | % | 0.6 | % | -13.0 | % | 1.3 | % | ||||||||||||||||
New River Valley Mall | 25.09 | 253 | 9.6 | % | 24.60 | 268 | 10.0 | % | 2.0 | % | -5.6 | % | -0.4 | % | ||||||||||||||||
Beaver Valley Mall | 23.68 | 252 | 14.8 | % | 24.72 | 264 | 14.0 | % | -4.2 | % | -4.5 | % | 0.8 | % | ||||||||||||||||
Plymouth Meeting Mall | 34.52 | 246 | 13.1 | % | 32.33 | 259 | 13.3 | % | 6.8 | % | -5.0 | % | -0.2 | % | ||||||||||||||||
Washington Crown Center | 21.98 | 244 | 12.4 | % | 22.25 | 274 | 11.4 | % | -1.2 | % | -10.9 | % | 1.0 | % | ||||||||||||||||
Orlando Fashion Square | 36.50 | 239 | 17.8 | % | 35.47 | 262 | 17.1 | % | 2.9 | % | -8.8 | % | 0.7 | % | ||||||||||||||||
Lycoming Mall | 20.89 | 238 | 12.2 | % | 20.58 | 257 | 11.7 | % | 1.5 | % | -7.4 | % | 0.5 | % | ||||||||||||||||
Phillipsburg Mall | 26.06 | 231 | 14.3 | % | 25.05 | 255 | 13.6 | % | 4.0 | % | -9.4 | % | 0.7 | % | ||||||||||||||||
Chambersburg Mall | 28.82 | 225 | 11.0 | % | 25.87 | 242 | 10.4 | % | 11.4 | % | -7.0 | % | 0.6 | % | ||||||||||||||||
Voorhees Town Center | 32.46 | 206 | 12.0 | % | 29.69 | 199 | 13.1 | % | 9.3 | % | 3.5 | % | -1.1 | % | ||||||||||||||||
Enclosed Malls weighted average | $ | 32.51 | $ | 335 | 13.5 | % | $ | 31.06 | $ | 351 | 12.7 | % | 4.7 | % | -4.6 | % | 0.8 | % | ||||||||||||
Consolidated Properties | $ | 31.86 | $ | 326 | 13.4 | % | $ | 30.55 | $ | 342 | 12.7 | % | 4.3 | % | -4.7 | % | 0.7 | % | ||||||||||||
Unconsolidated Properties | $ | 39.52 | $ | 419 | 14.1 | % | $ | 37.03 | $ | 446 | 13.0 | % | 6.7 | % | -6.1 | % | 1.1 | % | ||||||||||||
Same Properties | $ | 32.51 | $ | 335 | 13.5 | % | $ | 31.06 | $ | 351 | 12.7 | % | 4.7 | % | -4.8 | % | 0.8 | % |
(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 September 30, 2008. |
(4) | Property contains a vacant anchor space as of September 30, 2009. |
Page 12
Pennsylvania Real Estate Investment Trust
Mall Occupancy - Owned GLA
September 30, 2009 | September 30, 2008 | Change | ||||||||||||||||
Total | Non-Anchor | Total | Non-Anchor | Total | Non-Anchor | |||||||||||||
Beaver Valley Mall | 88.0 | % | 74.3 | % | 92.8 | % | 84.6 | % | -4.8 | % | -10.3 | % | ||||||
Capital City Mall | 98.2 | % | 96.9 | % | 98.2 | % | 97.0 | % | 0.0 | % | -0.1 | % | ||||||
Chambersburg Mall(1) | 82.3 | % | 62.2 | % | 83.9 | % | 65.6 | % | -1.6 | % | -3.4 | % | ||||||
Cherry Hill Mall | 94.0 | % | 92.7 | % | 88.4 | % | 88.4 | % | 5.6 | % | 4.3 | % | ||||||
Crossroads Mall | 84.3 | % | 63.9 | % | 89.0 | % | 74.6 | % | -4.7 | % | -10.7 | % | ||||||
Cumberland Mall(1) | 92.2 | % | 91.2 | % | 81.9 | % | 94.5 | % | 10.3 | % | -3.3 | % | ||||||
Dartmouth Mall | 92.1 | % | 86.9 | % | 96.4 | % | 94.1 | % | -4.3 | % | -7.2 | % | ||||||
Exton Square Mall | 90.7 | % | 79.7 | % | 92.5 | % | 83.6 | % | -1.8 | % | -3.9 | % | ||||||
Francis Scott Key Mall (1) | 94.5 | % | 89.4 | % | 84.1 | % | 92.3 | % | 10.4 | % | -2.9 | % | ||||||
Gadsden Mall | 90.2 | % | 75.8 | % | 91.4 | % | 78.5 | % | -1.2 | % | -2.7 | % | ||||||
The Gallery at Market East (2) | 60.5 | % | 75.3 | % | 42.0 | % | 82.1 | % | 18.5 | % | -6.8 | % | ||||||
Jacksonville Mall | 97.4 | % | 94.8 | % | 96.4 | % | 92.9 | % | 1.0 | % | 1.9 | % | ||||||
Lehigh Valley Mall | 93.7 | % | 91.4 | % | 95.7 | % | 94.1 | % | -2.0 | % | -2.7 | % | ||||||
Logan Valley Mall | 95.1 | % | 88.2 | % | 96.2 | % | 90.9 | % | -1.1 | % | -2.7 | % | ||||||
Lycoming Mall (1) | 95.7 | % | 91.9 | % | 97.2 | % | 94.8 | % | -1.5 | % | -2.9 | % | ||||||
Magnolia Mall | 96.1 | % | 91.1 | % | 97.3 | % | 93.9 | % | -1.2 | % | -2.8 | % | ||||||
Moorestown Mall | 88.8 | % | 74.9 | % | 89.5 | % | 76.7 | % | -0.7 | % | -1.8 | % | ||||||
New River Valley Mall | 96.1 | % | 93.6 | % | 96.1 | % | 93.5 | % | 0.0 | % | 0.1 | % | ||||||
Nittany Mall | 91.5 | % | 82.7 | % | 93.4 | % | 86.7 | % | -1.9 | % | -4.0 | % | ||||||
North Hanover Mall | 88.5 | % | 72.6 | % | 92.6 | % | 83.0 | % | -4.1 | % | -10.4 | % | ||||||
Orlando Fashion Square | 86.3 | % | 70.9 | % | 91.2 | % | 81.3 | % | -4.9 | % | -10.4 | % | ||||||
Palmer Park Mall | 95.5 | % | 85.6 | % | 96.3 | % | 88.3 | % | -0.8 | % | -2.7 | % | ||||||
Patrick Henry Mall | 98.0 | % | 96.2 | % | 97.9 | % | 95.8 | % | 0.1 | % | 0.4 | % | ||||||
Phillipsburg Mall | 90.4 | % | 77.9 | % | 90.8 | % | 78.8 | % | -0.4 | % | -0.9 | % | ||||||
Plymouth Meeting Mall | 82.2 | % | 75.3 | % | 83.0 | % | 75.7 | % | -0.8 | % | -0.4 | % | ||||||
The Mall at Prince Georges | 95.8 | % | 91.1 | % | 96.7 | % | 93.1 | % | -0.9 | % | -2.0 | % | ||||||
South Mall | 78.2 | % | 81.9 | % | 91.3 | % | 83.7 | % | -13.1 | % | -1.8 | % | ||||||
Springfield Mall | 86.1 | % | 86.1 | % | 88.1 | % | 88.1 | % | -2.0 | % | -2.0 | % | ||||||
Uniontown Mall (1) | 91.5 | % | 78.5 | % | 94.2 | % | 85.3 | % | -2.7 | % | -6.8 | % | ||||||
Valley Mall | 97.1 | % | 95.0 | % | 98.2 | % | 96.9 | % | -1.1 | % | -1.9 | % | ||||||
Valley View Mall | 91.9 | % | 88.8 | % | 93.2 | % | 90.5 | % | -1.3 | % | -1.7 | % | ||||||
Viewmont Mall | 97.8 | % | 94.3 | % | 97.1 | % | 92.5 | % | 0.7 | % | 1.8 | % | ||||||
Voorhees Town Center | 61.9 | % | 61.2 | % | 62.3 | % | 61.7 | % | -0.4 | % | -0.5 | % | ||||||
Washington Crown Center | 83.6 | % | 69.7 | % | 85.4 | % | 73.1 | % | -1.8 | % | -3.4 | % | ||||||
Willow Grove Park (3) | 69.7 | % | 93.8 | % | 69.6 | % | 93.8 | % | 0.1 | % | 0.0 | % | ||||||
Wiregrass Commons Mall | 85.0 | % | 78.4 | % | 82.9 | % | 82.9 | % | 2.1 | % | -4.5 | % | ||||||
Woodland Mall | 85.8 | % | 85.8 | % | 86.7 | % | 84.4 | % | -0.9 | % | 1.4 | % | ||||||
Wyoming Valley Mall | 92.0 | % | 77.3 | % | 91.0 | % | 74.5 | % | 1.0 | % | 2.8 | % | ||||||
Enclosed Malls weighted average | 88.9 | % | 83.8 | % | 88.8 | % | 86.5 | % | 0.1 | % | -2.7 | % | ||||||
Consolidated Properties | 88.7 | % | 83.4 | % | 88.5 | % | 86.0 | % | 0.2 | % | -2.6 | % | ||||||
Unconsolidated Properties | 92.0 | % | 89.9 | % | 94.0 | % | 92.4 | % | -2.0 | % | -2.5 | % | ||||||
Same Properties | 88.9 | % | 83.8 | % | 88.8 | % | 86.5 | % | 0.1 | % | -2.7 | % |
(1) | The total occupancy percentages for these properties include the former Value City store locations that were vacant as of September 30, 2008. |
(2) | The total occupancy percentage for The Gallery at Market East includes 328,390 sf of the former Strawbridge’s store that is currently vacant, pending redevelopment. This vacant department store represents 30.4% and 51.5% of the owned mall GLA as of September 30, 2009 and September 30, 2008, respectively. |
(3) | The total occupancy percentage for Willow Grove Park includes the former Strawbridge’s store that is currently vacant, pending redevelopment. This vacant department store represents 27.6% and 27.7% of the owned mall GLA as of September 30, 2009 and September 30, 2008, respectively. |
Page 13
Pennsylvania Real Estate Investment Trust
Strip and Power Center Rent Per Square Foot and Occupancy Percentages
September 30, 2009 | September 30, 2008 | Change | |||||||||||||||||||||||||
Avg Base Rent | Occupancy | Avg Base Rent | Occupancy | Avg Base Rent | Occupancy | ||||||||||||||||||||||
Total | Non-Anchor | Total | Non-Anchor | Total | Non-Anchor | ||||||||||||||||||||||
Christiana Center | $ | 21.94 | 88.1 | % | 67.7 | % | $ | 20.53 | 98.8 | % | 96.8 | % | 6.9 | % | -10.7 | % | -29.1 | % | |||||||||
Creekview Center | 15.16 | 100.0 | % | 100.0 | % | 15.16 | 100.0 | % | 100.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | |||||||||||
The Commons at Magnolia | 11.95 | 66.4 | % | 88.9 | % | 14.26 | 95.5 | % | 91.1 | % | -16.2 | % | -29.1 | % | -2.2 | % | |||||||||||
Metroplex Shopping Center | 19.10 | 100.0 | % | 100.0 | % | 19.10 | 100.0 | % | 100.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | |||||||||||
Monroe Marketplace | 14.69 | 100.0 | % | 100.0 | % | 19.09 | 100.0 | % | 100.0 | % | -23.0 | % | 0.0 | % | 0.0 | % | |||||||||||
New River Valley Center | 14.37 | 100.0 | % | 100.0 | % | 14.45 | 100.0 | % | 100.0 | % | -0.5 | % | 0.0 | % | 0.0 | % | |||||||||||
Northeast Tower Center(1) | 14.91 | 97.4 | % | 95.6 | % | 15.32 | 96.6 | % | 94.4 | % | -2.7 | % | 0.8 | % | 1.2 | % | |||||||||||
The Court at Oxford Valley | 16.41 | 91.3 | % | 88.1 | % | 16.43 | 98.3 | % | 97.2 | % | -0.2 | % | -7.0 | % | -9.1 | % | |||||||||||
Paxton Towne Centre | 16.04 | 90.8 | % | 86.1 | % | 15.88 | 100.0 | % | 100.0 | % | 1.1 | % | -9.2 | % | -13.9 | % | |||||||||||
Pitney Road Plaza | N/A | 100.0 | % | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||
Red Rose Commons | 14.16 | 72.5 | % | 72.5 | % | 13.86 | 99.2 | % | 99.2 | % | 2.2 | % | -26.7 | % | -26.7 | % | |||||||||||
Springfield Park | 21.22 | 100.0 | % | 100.0 | % | 21.79 | 90.9 | % | 73.5 | % | -2.6 | % | 9.1 | % | 26.5 | % | |||||||||||
Sunrise Plaza | 14.70 | 97.6 | % | 77.8 | % | 20.37 | 98.2 | % | 64.8 | % | -27.9 | % | -0.6 | % | 13.0 | % | |||||||||||
Whitehall Mall | 11.29 | 86.8 | % | 72.0 | % | 11.82 | 88.5 | % | 75.7 | % | -4.5 | % | -1.7 | % | -3.7 | % | |||||||||||
Weighted Average | $ | 16.32 | 92.3 | % | 88.3 | % | $ | 16.05 | 97.0 | % | 95.2 | % | 1.7 | % | -4.7 | % | -6.9 | % | |||||||||
Consolidated Properties | $ | 16.30 | 94.1 | % | 91.1 | % | $ | 15.91 | 98.7 | % | 97.8 | % | 2.4 | % | -4.6 | % | -6.7 | % | |||||||||
Unconsolidated Properties | $ | 16.34 | 90.1 | % | 85.9 | % | $ | 16.16 | 95.5 | % | 93.2 | % | 1.1 | % | -5.4 | % | -7.3 | % | |||||||||
Same Properties | $ | 16.02 | 91.3 | % | 87.6 | % | $ | 16.04 | 96.9 | % | 95.2 | % | -0.1 | % | -5.6 | % | -7.6 | % | |||||||||
New Properties | $ | 14.69 | 100.0 | % | 100.0 | % | N/A | N/A | N/A | N/A | N/A | N/A |
(1) | Property was sold in October 2009 |
Page 14
Pennsylvania Real Estate Investment Trust
Top Twenty Tenants (by share of PREIT’s Annualized Minimum Rent)
(dollars in thousands)
Paying Minimum Rent | Paying Percentage of Sales in lieu of Minimum Rent(2) | Total | Minimum Rent | ||||||||||||||||||
Tenant(1) | Number of Locations | GLA | Number of Locations | 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. | 48 | 619,130 | 4 | 33,316 | 52 | 652,446 | $ | 13,382 | $ | 12,421 | 4.21 | % | |||||||||
Foot Locker, Inc. | 68 | 341,857 | 5 | 16,633 | 73 | 358,490 | 8,378 | 7,840 | 2.66 | % | |||||||||||
JCPenney Company, Inc. | 24 | 2,369,736 | 6 | 824,327 | 30 | 3,194,063 | 7,593 | 7,593 | 2.58 | % | |||||||||||
Limited Brands, Inc. | 59 | 282,485 | 13 | 40,012 | 72 | 322,497 | 7,588 | 7,142 | 2.42 | % | |||||||||||
American Eagle Outfitters, Inc. | 41 | 221,636 | 1 | 5,013 | 42 | 226,649 | 6,706 | 6,404 | 2.17 | % | |||||||||||
Sears Holding Corporation | 24 | 2,796,396 | 5 | 880,777 | 29 | 3,677,173 | 5,445 | 5,302 | 1.80 | % | |||||||||||
Zale Corporation | 75 | 59,555 | 1 | 289 | 76 | 59,844 | 5,447 | 5,113 | 1.73 | % | |||||||||||
Sterling Jewelers, Inc. | 44 | 67,216 | 0 | — | 44 | 67,216 | 5,043 | 4,875 | 1.65 | % | |||||||||||
Dick’s Sporting Goods | 9 | 436,528 | 1 | 50,484 | 10 | 487,012 | 5,475 | 4,598 | 1.56 | % | |||||||||||
Luxottica Group S.p.A. | 52 | 125,345 | 0 | — | 52 | 125,345 | 4,324 | 4,006 | 1.36 | % | |||||||||||
Golden Gate Capital(4) | 15 | 133,715 | 3 | 21,742 | 18 | 155,457 | 4,013 | 3,623 | 1.23 | % | |||||||||||
Abercrombie & Fitch Co. | 20 | 136,727 | 0 | — | 20 | 136,727 | 3,932 | 3,564 | 1.21 | % | |||||||||||
Regis Corporation | 97 | 119,393 | 2 | 3,006 | 99 | 122,399 | 3,698 | 3,552 | 1.20 | % | |||||||||||
Hallmark Cards, Inc. | 39 | 152,194 | 6 | 24,634 | 45 | 176,828 | 3,419 | 3,252 | 1.10 | % | |||||||||||
Best Buy Co, Inc. | 11 | 236,401 | 0 | — | 11 | 236,401 | 4,180 | 3,183 | 1.08 | % | |||||||||||
Genesco Inc. | 58 | 75,257 | 2 | 1,782 | 60 | 77,039 | 3,305 | 3,171 | 1.08 | % | |||||||||||
Transworld Entertainment Corp. | 30 | 137,813 | 3 | 13,026 | 33 | 150,839 | 3,353 | 3,166 | 1.07 | % | |||||||||||
Commonwealth of Pennsylvania | 2 | 234,210 | 0 | — | 2 | 234,210 | 3,117 | 3,117 | 1.06 | % | |||||||||||
Borders Group, Inc. | 23 | 180,867 | 2 | 10,879 | 25 | 191,746 | 3,161 | 3,055 | 1.04 | % | |||||||||||
Aeropostale, Inc. | 33 | 115,280 | 1 | 3,891 | 34 | 119,171 | 3,183 | 3,019 | 1.02 | % | |||||||||||
Total Top 20 Tenants | 772 | 8,841,741 | 55 | 1,929,811 | 827 | 10,771,552 | $ | 104,742 | $ | 97,996 | 33.23 | % | |||||||||
Total Retail Leases | 3,244 | $ | 294,860 | 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 and one J. Jill store. |
Page 15
Pennsylvania Real Estate Investment Trust
Lease Expirations as of September 30, 2009
(dollars in thousands except psf amounts)
Non-Anchors(1)
Number of Leases Expiring | Gross Leasable Area | Annualized Minimum Rent | Average Expiring Minimum Rent psf | ||||||||||||||||
Lease Expiration | 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 | ||||||||||||||
Holdover | 136 | 299,514 | 2.4 | % | $ | 8,323 | $ | 8,072 | 2.8 | % | $ | 27.79 | |||||||
2009 | 86 | 182,270 | 1.5 | % | 4,860 | 4,571 | 1.6 | % | 26.67 | ||||||||||
2010 | 524 | 1,669,324 | 13.6 | % | 37,864 | 36,148 | 12.7 | % | 22.68 | ||||||||||
2011 | 554 | 1,858,744 | 15.2 | % | 45,428 | 41,440 | 14.6 | % | 24.44 | ||||||||||
2012 | 370 | 1,328,796 | 10.8 | % | 34,265 | 31,399 | 11.0 | % | 25.79 | ||||||||||
2013 | 281 | 953,630 | 7.8 | % | 22,767 | 21,340 | 7.5 | % | 23.87 | ||||||||||
2014 | 190 | 671,639 | 5.5 | % | 17,727 | 16,031 | 5.6 | % | 26.39 | ||||||||||
2015 | 181 | 902,437 | 7.4 | % | 22,026 | 19,760 | 6.9 | % | 24.41 | ||||||||||
2016 | 223 | 976,146 | 8.0 | % | 27,175 | 24,685 | 8.7 | % | 27.84 | ||||||||||
2017 | 192 | 821,503 | 6.7 | % | 22,815 | 21,189 | 7.4 | % | 27.77 | ||||||||||
2018 | 200 | 1,001,304 | 8.2 | % | 26,463 | 24,737 | 8.7 | % | 26.43 | ||||||||||
Thereafter | 193 | 1,593,788 | 12.9 | % | 36,893 | 35,433 | 12.5 | % | 23.15 | ||||||||||
Total/Average | 3,130 | 12,259,095 | 100.0 | % | $ | 306,605 | $ | 284,806 | 100.0 | % | $ | 25.01 | |||||||
Anchors(1)
Number of Leases Expiring (3) | Gross Leasable Area | Annualized Minimum Rent | Average Expiring Minimum Rent psf | ||||||||||||||||
Lease Expiration | 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 | ||||||||||||||
2010 | 11 | 1,033,912 | 8.6 | % | $ | 3,008 | $ | 3,008 | 6.9 | % | 2.91 | ||||||||
2011 | 19 | 1,843,899 | 15.3 | % | 6,219 | 5,096 | 11.8 | % | 3.37 | ||||||||||
2012 | 6 | 859,686 | 7.1 | % | 1,837 | 1,800 | 4.2 | % | 2.14 | ||||||||||
2013 | 14 | 1,185,975 | 9.8 | % | 5,137 | 5,137 | 11.9 | % | 4.33 | ||||||||||
2014 | 14 | 1,483,236 | 12.3 | % | 4,027 | 3,565 | 8.2 | % | 2.71 | ||||||||||
2015 | 9 | 889,288 | 7.4 | % | 2,803 | 2,803 | 6.5 | % | 3.15 | ||||||||||
2016 | 3 | 455,432 | 3.8 | % | 863 | 863 | 2.0 | % | 1.90 | ||||||||||
2017 | 4 | 381,158 | 3.2 | % | 2,058 | 1,695 | 3.9 | % | 5.40 | ||||||||||
2018 | 6 | 777,965 | 6.4 | % | 4,062 | 4,062 | 9.4 | % | 5.22 | ||||||||||
Thereafter | 28 | 3,163,425 | 26.1 | % | 15,915 | 15,251 | 35.2 | % | 5.03 | ||||||||||
Total/Average | 114 | 12,073,976 | 100.0 | % | $ | 45,929 | $ | 43,280 | 100.0 | % | $ | 3.80 | |||||||
(1) | Only includes owned space. |
(2) | Includes PREIT’s proportionate share of tenant rent from partnership properties based on PREIT’s ownership percentage in the respective partnerships. |
(3) | Accounts for all contiguous anchor space as one lease. |
Page 16
Pennsylvania Real Estate Investment Trust
Retail Gross Leasable Area Summary as of September 30, 2009
Owned GLA | GLA Not Owned | Total GLA | ||||||||
Anchors | Non-anchors | Total | ||||||||
Malls | ||||||||||
Beaver Valley Mall | 511,267 | 445,062 | 956,329 | 204,770 | 1,161,099 | |||||
Capital City Mall | 204,301 | 284,610 | 488,911 | 120,000 | 608,911 | |||||
Chambersburg Mall | 241,690 | 212,660 | 454,350 | — | 454,350 | |||||
Cherry Hill Mall | 138,000 | 631,462 | 769,462 | 478,885 | 1,248,347 | |||||
Crossroads Mall | 254,211 | 195,348 | 449,559 | — | 449,559 | |||||
Cumberland Mall | 282,519 | 385,399 | 667,918 | 273,230 | 941,148 | |||||
Dartmouth Mall | 208,460 | 322,461 | 530,921 | 140,000 | 670,921 | |||||
Exton Square Mall | 440,301 | 369,090 | 809,391 | 277,468 | 1,086,859 | |||||
Francis Scott Key Mall | 269,708 | 297,154 | 566,862 | 139,333 | 706,195 | |||||
Gadsden Mall | 300,960 | 202,814 | 503,774 | — | 503,774 | |||||
The Gallery at Market East(1) | 683,471 | 397,230 | 1,080,701 | — | 1,080,701 | |||||
Jacksonville Mall | 242,115 | 247,350 | 489,465 | — | 489,465 | |||||
Lehigh Valley Mall | 212,000 | 573,367 | 785,367 | 371,986 | 1,157,353 | |||||
Logan Valley Mall | 454,387 | 323,998 | 778,385 | — | 778,385 | |||||
Lycoming Mall | 333,413 | 381,825 | 715,238 | 120,000 | 835,238 | |||||
Magnolia Mall | 343,118 | 273,318 | 616,436 | — | 616,436 | |||||
Moorestown Mall | 408,356 | 329,849 | 738,205 | 321,200 | 1,059,405 | |||||
New River Valley Mall | 175,306 | 265,759 | 441,065 | — | 441,065 | |||||
Nittany Mall | 221,462 | 215,698 | 437,160 | 95,000 | 532,160 | |||||
North Hanover Mall | 206,792 | 149,699 | 356,491 | — | 356,491 | |||||
Orlando Fashion Square | 491,999 | 438,076 | 930,075 | 155,576 | 1,085,651 | |||||
Palmer Park Mall | 314,235 | 143,499 | 457,734 | — | 457,734 | |||||
Patrick Henry Mall | 279,619 | 294,691 | 574,310 | 140,000 | 714,310 | |||||
Phillipsburg Mall | 326,552 | 252,373 | 578,925 | — | 578,925 | |||||
Plymouth Meeting Mall | 188,429 | 487,589 | 676,018 | 214,635 | 890,653 | |||||
The Mall at Prince Georges | 479,619 | 430,733 | 910,352 | — | 910,352 | |||||
South Mall | 188,858 | 216,341 | 405,199 | — | 405,199 | |||||
Springfield Mall | — | 221,881 | 221,881 | 367,176 | 589,057 | |||||
Uniontown Mall | 421,378 | 276,634 | 698,012 | — | 698,012 | |||||
Valley Mall | 280,549 | 393,111 | 673,660 | 243,400 | 917,060 | |||||
Valley View Mall | 96,357 | 247,218 | 343,575 | 254,596 | 598,171 | |||||
Viewmont Mall | 386,262 | 240,932 | 627,194 | 120,000 | 747,194 | |||||
Voorhees Town Center | 4,404 | 263,193 | 267,597 | 396,783 | 664,380 | |||||
Washington Crown Center | 245,401 | 290,640 | 536,041 | 140,095 | 676,136 | |||||
Willow Grove Park | 443,430 | 346,872 | 790,302 | 413,121 | 1,203,423 | |||||
Wiregrass Commons | 94,686 | 211,716 | 306,402 | 332,152 | 638,554 | |||||
Woodland Mall | — | 392,816 | 392,816 | 725,186 | 1,118,002 | |||||
Wyoming Valley Mall | 592,110 | 319,917 | 912,027 | — | 912,027 | |||||
Total Malls (38 properties) | 10,965,725 | 11,972,385 | 22,938,110 | 6,044,592 | 28,982,702 | |||||
Strip and Power Centers | ||||||||||
Christiana Center | 190,814 | 111,595 | 302,409 | — | 302,409 | |||||
Creekview Center | — | 136,086 | 136,086 | 288,916 | 425,002 | |||||
The Commons at Magnolia | 50,571 | 57,764 | 108,335 | 126,200 | 234,535 | |||||
Metroplex Shopping Center | 67,185 | 410,276 | 477,461 | 300,729 | 778,190 | |||||
Monroe Marketplace | 195,549 | 127,219 | 322,768 | 126,842 | 449,610 | |||||
New River Valley Center | — | 164,663 | 164,663 | — | 164,663 | |||||
Northeast Tower Center(2) | 119,388 | 172,281 | 291,669 | 175,311 | 466,980 | |||||
The Court at Oxford Valley | 122,735 | 334,168 | 456,903 | 247,623 | 704,526 | |||||
Paxton Towne Centre | 151,627 | 292,833 | 444,460 | 273,058 | 717,518 | |||||
Pitney Road Plaza | 137,933 | — | 137,933 | — | 137,933 | |||||
Red Rose Commons | — | 263,452 | 263,452 | 199,590 | 463,042 | |||||
Springfield Park | 83,539 | 45,272 | 128,811 | 145,669 | 274,480 | |||||
Sunrise Plaza | 226,772 | 27,488 | 254,260 | — | 254,260 | |||||
Whitehall Mall | 294,635 | 262,866 | 557,501 | — | 557,501 | |||||
Total Strip and Power Centers (14 properties) | 1,640,748 | 2,405,963 | 4,046,711 | 1,883,938 | 5,930,649 | |||||
CONSOLIDATED PROPERTIES | 11,826,379 | 12,267,066 | 24,093,445 | 6,295,757 | 30,389,202 | |||||
UNCONSOLIDATED PROPERTIES | 780,094 | 2,111,282 | 2,891,376 | 1,632,773 | 4,524,149 | |||||
TOTAL PROPERTIES | 12,606,473 | 14,378,348 | 26,984,821 | 7,928,530 | 34,913,351 |
(1) | Includes 328,390 sf of anchor space subject to redevelopment plans. |
(2) | Property was sold in October 2009. |
Page 17
Pennsylvania Real Estate Investment Trust
Property Information as of September 30, 2009
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 | 100% | 2003 | 1974/2005 | JCPenney | 11/30/10 | ||||||
Camp Hill, PA | Macy’s Sears | (1) 7/28/14 | |||||||||
Chambersburg Mall | 100% | 2003 | 1982 | Bon-Ton | 1/28/11 | ||||||
Chambersburg, PA | Burlington Coat Factory | 1/31/19 | |||||||||
JCPenney | 3/31/12 | ||||||||||
Sears | 2/9/15 | ||||||||||
Cherry Hill Mall | 100% | 2003 | 1961/2009 | The Container Store | 2/28/18 | ||||||
Cherry Hill, NJ | Crate and Barrel | 1/31/23 | |||||||||
JCPenney | (1) | ||||||||||
Macy’s | (1) | ||||||||||
Nordstrom | 3/31/24 | ||||||||||
Crossroads Mall(2) | 100% | 2003 | 1981 | Belk | 11/5/14 | ||||||
Beckley, WV | JCPenney | 12/31/11 | |||||||||
Sears | 3/31/11 | ||||||||||
Cumberland Mall | 100% | 2005 | 1973/2003 | Best Buy | 1/31/16 | ||||||
Vineland, NJ | BJ’s | (1) | |||||||||
Boscov’s | (1) | ||||||||||
Burlington Coat Factory | 4/30/19 | ||||||||||
Home Depot | 10/31/19 | ||||||||||
JCPenney | 11/30/13 | ||||||||||
Dartmouth Mall | 100% | 1997 | 1971/2000 | JCPenney | 7/31/14 | ||||||
Dartmouth, MA | Macy’s | (1) | |||||||||
Sears | 4/12/16 | ||||||||||
Exton Square Mall(2) | 100% | 2003 | 1973/2000 | Boscov’s | 10/31/19 | ||||||
Exton, PA | JCPenney | 5/31/20 | |||||||||
K-Mart | (1) | ||||||||||
Macy’s | (1) | ||||||||||
Sears | 10/6/19 | ||||||||||
Francis Scott Key Mall | 100% | 2003 | 1978/1991 | Barnes & Noble | 4/30/17 | ||||||
Frederick, MD | JCPenney | 9/30/11 | |||||||||
Macy’s | (1) | ||||||||||
Sears | 7/31/13 | ||||||||||
Value City Furniture | 1/31/19 | ||||||||||
Gadsden Mall | 100% | 2005 | 1974/1990 | Belk | 7/31/14 | ||||||
Gadsden, AL | JCPenney | 1/31/29 | |||||||||
Sears | 3/5/14 | ||||||||||
The Gallery at Market East(2) | 100% | 2003 | 1977/1990 | Burlington Coat Factory | 2/28/32 | ||||||
Philadelphia, PA | Commonwealth of | ||||||||||
Pennsylvania | 6/30/29 | ||||||||||
Jacksonville Mall | 100% | 2003 | 1981/2008 | Barnes & Noble | 5/31/18 | ||||||
Jacksonville, NC | Belk | 8/21/11 | |||||||||
JCPenney | 8/31/10 | ||||||||||
Sears | 8/4/11 | ||||||||||
Lehigh Valley Mall(3) | 50% | 1973 | 1977/2007 | Barnes & Noble | 10/31/17 | ||||||
Allentown, PA | Boscov’s | (1) | |||||||||
JCPenney | (1) | ||||||||||
Macy’s | 7/31/12 | ||||||||||
Logan Valley Mall | 100% | 2003 | 1960/1997 | JCPenney | 1/31/17 | ||||||
Altoona, PA | Macy’s | 1/31/15 | |||||||||
Sears | 10/31/16 | ||||||||||
Lycoming Mall | 100% | 2003 | 1978/2007 | Best Buy | 1/31/17 | ||||||
Pennsdale, PA | Bon-Ton | 7/27/11 | |||||||||
Borders | 1/31/17 | ||||||||||
Burlington Coat Factory | 1/31/19 | ||||||||||
Dick’s Sporting Goods | 1/31/17 | ||||||||||
JCPenney | 10/31/10 | ||||||||||
Macy’s | (1) | ||||||||||
Sears | 7/31/13 | ||||||||||
Magnolia Mall | 100% | 1997 | 1979/2007 | Barnes & Noble | 9/30/17 | ||||||
Florence, SC | Belk | 1/31/11 | |||||||||
Best Buy | 1/31/13 | ||||||||||
Dick’s Sporting Goods | 1/31/18 | ||||||||||
JCPenney | 3/31/12 | ||||||||||
Sears | 10/16/14 | ||||||||||
Moorestown Mall | 100% | 2003 | 1963/2008 | Boscov’s | 10/31/15 | ||||||
Moorestown, NJ | Lord & Taylor | (1) | |||||||||
Macy’s | (1) | ||||||||||
Sears | 10/5/22 | ||||||||||
New River Valley Mall | 100 | % | 2003 | 1988/2007 | Belk | 4/19/11 | |||||
Christiansburg, VA | Dick’s Sporting Goods | 1/31/17 | |||||||||
JCPenney | 3/31/13 | ||||||||||
Regal Cinemas | 4/30/22 | ||||||||||
Sears | 8/2/13 |
Page 18
Pennsylvania Real Estate Investment Trust
Property Information as of September 30, 2009 (continued)
Properties | Ownership Interest | Date Acquired | Year Built/Last Renovated | Anchors / Major Tenants | Lease Expiration | |||||
Nittany Mall | 100% | 2003 | 1968/1990 | Bon-Ton | 1/31/13 | |||||
State College, PA | JCPenney | 7/31/10 | ||||||||
Macy’s | (1) | |||||||||
Sears | 8/28/10 | |||||||||
North Hanover Mall | 100% | 2003 | 1967/1999 | Dick’s Sporting Goods | 1/31/18 | |||||
Hanover, PA | JCPenney | 1/31/11 | ||||||||
Sears | 11/30/14 | |||||||||
Orlando Fashion Square(2) | 100% | 2004 | 1973/2003 | Dillard’s | 1/31/14 | |||||
Orlando, FL | JCPenney | 4/30/13 | ||||||||
Macy’s | 10/30/71 | |||||||||
Sears | (1) | |||||||||
Palmer Park Mall | 100% | 1972/2003 | 1972/1998 | Bon-Ton | 7/25/14 | |||||
Easton, PA | Boscov’s | 10/31/18 | ||||||||
Patrick Henry Mall | 100% | 2003 | 1988/2005 | Borders | 1/31/20 | |||||
Newport News, VA | Dick’s Sporting Goods | 1/31/22 | ||||||||
Dillard’s | 9/22/13 | |||||||||
JCPenney | 10/31/15 | |||||||||
Macy’s | (1) | |||||||||
Phillipsburg Mall | 100% | 2003 | 1989/2003 | Bon-Ton | 1/31/15 | |||||
Phillipsburg, NJ | JCPenney | 3/31/10 | ||||||||
Kohl’s | 1/31/25 | |||||||||
Sears | 4/30/14 | |||||||||
Plymouth Meeting Mall(2) | 100% | 2003 | 1966/1999 | AMC Theater | 12/31/18 | |||||
Plymouth Meeting, PA | Boscov’s | 10/31/16 | ||||||||
Macy’s | (1) | |||||||||
The Mall at Prince Georges | 100% | 1998 | 1959/2004 | JCPenney | 7/31/11 | |||||
Hyattsville, MD | Macy’s | 10/31/18 | ||||||||
Marshalls | 9/30/16 | |||||||||
Ross Dress for Less | 1/31/18 | |||||||||
Target | 1/31/15 | |||||||||
South Mall | 100% | 2003 | 1975/1992 | Bon-Ton | 1/28/11 | |||||
Allentown, PA | Stein Mart | 10/31/11 | ||||||||
Springfield Mall | 50% | 2005 | 1974/1997 | Macy’s | (1) | |||||
Springfield, PA | ||||||||||
Uniontown Mall(2) | 100% | 2003 | 1972/1990 | Bon-Ton | 1/29/11 | |||||
Uniontown, PA | Burlington Coat Factory | 1/31/19 | ||||||||
JCPenney | 10/31/10 | |||||||||
Roomful Express Furn. | 3/31/10 | |||||||||
Sears | 2/25/13 | |||||||||
Teletech Customer Care | 6/30/13 | |||||||||
Valley Mall | 100% | 2003 | 1974/1999 | Bon-Ton | 1/31/14 | |||||
Hagerstown, MD | JCPenney | 10/31/14 | ||||||||
Macy’s | (1) | |||||||||
Sears | (1) | |||||||||
Valley View Mall | 100% | 2003 | 1980/2001 | Barnes & Noble | 11/30/16 | |||||
La Crosse, WI | Herberger’s | (1) | ||||||||
JCPenney | 7/31/15 | |||||||||
Macy’s | (1) | |||||||||
Sears | (1) | |||||||||
Viewmont Mall | 100% | 2003 | 1968/2006 | JCPenney | 10/31/10 | |||||
Scranton, PA | Macy’s | (1) | ||||||||
Sears | 12/31/10 | |||||||||
Voorhees Town Center(2) | 100% | 2003 | 1970/2007 | Boscov’s | (1) | |||||
Voorhees, NJ | Macy’s | (1) | ||||||||
The Star Group | 8/31/28 | |||||||||
Washington Crown Center | 100% | 2003 | 1969/1999 | Bon-Ton | 1/31/15 | |||||
Washington, PA | Gander Mountain Sports | 7/24/13 | ||||||||
Macy’s | (1) | |||||||||
Sears | 8/17/14 | |||||||||
Willow Grove Park | 100% | 2000/2003 | 1982/2001 | Bloomingdale’s | (1) | |||||
Willow Grove, PA | The Cheesecake Factory | 1/31/28 | ||||||||
Macy’s | 1/31/22 | |||||||||
Sears | (1) | |||||||||
Wiregrass Commons Mall | 100% | 2003 | 1986/2008 | Belk | 1/31/37 | |||||
Dothan, AL | Burlington Coat Factory | 1/31/20 | ||||||||
JCPenney | (1) | |||||||||
Woodland Mall | 100% | 2005 | 1968/1998 | Apple | 6/30/15 | |||||
Grand Rapids, MI | JCPenney | (1) | ||||||||
Kohl’s | 1/31/19 | |||||||||
Macy’s | (1) | |||||||||
Sears | (1) | |||||||||
Wyoming Valley Mall | 100% | 2003 | 1971/2006 | Bon-Ton | 1/31/12 | |||||
Wilkes-Barre, PA | JCPenney | 4/30/12 | ||||||||
Macy’s | 1/31/12 | |||||||||
Sears | 8/1/11 |
Page 19
Pennsylvania Real Estate Investment Trust
Property Information as of September 30, 2009 (continued)
Properties | Ownership Interest | Date Acquired | Year Built/Last Renovated | Anchors /Major Tenants | Lease Expiration | |||||
POWER CENTERS | ||||||||||
Christiana Center | 100% | 1998 | 1998 | Costco | 9/30/18 | |||||
Newark, DE | Dick’s SportingGoods | 11/30/13 | ||||||||
Creekview Center | 100% | 1999 | 2001 | Genuardi’s | 12/31/21 | |||||
Warrington, PA | Lowe’s | (1) | ||||||||
Target | (1) | |||||||||
Metroplex Shopping Center(3) | 50% | 1999 | 2001 | Giant Food Store | 2/28/21 | |||||
Plymouth Meeting, PA | Lowe’s | (1) | ||||||||
Target | (1) | |||||||||
Monroe Marketplace | 100% | 2007 | 2008 | Bed, Bath & Beyond | 1/31/19 | |||||
Selinsgrove, PA | Best Buy | 10/31/18 | ||||||||
Dick’s Sporting Goods | 1/31/19 | |||||||||
Giant Food Store | 10/31/28 | |||||||||
Kohl’s | 1/31/29 | |||||||||
Target | (1) | |||||||||
New River Valley Center | 100% | 2005 | 2007 | Bed, Bath & Beyond | 1/31/18 | |||||
Christiansburg, VA | Best Buy | 1/31/18 | ||||||||
Staples | 11/30/17 | |||||||||
Northeast Tower Center(4) | 100% | 1998 | 1997 | Home Depot | (1) | |||||
Philadelphia, PA | Raymour & Flanigan | (1) | ||||||||
Wal-Mart | 1/31/14 | |||||||||
The Court at Oxford Valley(3) | 50% | 1997 | 1996 | Best Buy | 5/31/11 | |||||
Langhorne, PA | BJ’s | (1) | ||||||||
Dick’s Sporting Goods | 4/30/11 | |||||||||
Home Depot | (1) | |||||||||
Paxton Towne Centre | 100% | 1999 | 2001 | Costco | (1) | |||||
Harrisburg, PA | Kohl’s | 1/25/21 | ||||||||
Target | (1) | |||||||||
Weis Markets | 11/30/20 | |||||||||
Pitney Road Plaza | 100% | 2009 | 2009 | Lowe’s | 8/20/2029 | |||||
Lancaster, PA | ||||||||||
Red Rose Commons (3) | 50% | 1998 | 1998 | Home Depot | (1) | |||||
Lancaster, PA | Weis Markets | (1) | ||||||||
Sunrise Plaza | 100% | 2005 | 2007 | Home Depot | 1/31/38 | |||||
Forked River, NJ | Kohl’s | 10/31/28 | ||||||||
Staples | 2/28/19 | |||||||||
Whitehall Mall(3) | 50% | 1964 | 1964/1998 | Bed, Bath & Beyond | 1/31/10 | |||||
Allentown, PA | Kohl’s | 3/9/17 | ||||||||
Sears | 9/18/11 | |||||||||
STRIP CENTERS | ||||||||||
The Commons at Magnolia | 100% | 1999 | 1991/2002 | Bed, Bath & Beyond | 1/31/15 | |||||
Florence, SC | Target | (1) | ||||||||
Springfield Park | 50% | 1997/1998 | 1997/1998 | Bed, Bath & Beyond | 1/31/14 | |||||
Springfield, PA | LA Fitness | 3/31/17 | ||||||||
Target | (1) |
(1) | Space is not owned by PREIT. |
(2) | Property is subject to a ground lease. |
(3) | Property is managed by a third party. |
(4) | Property was sold in October 2009. |
Page 20
Pennsylvania Real Estate Investment Trust
Condensed Balance Sheet
Proportionate Consolidation Method(1)
(in thousands, except per share amounts)
September 30, 2009 | December 31, 2008 | |||||||||||||||||||||||
GAAP | Share of Unconsolidated Partnerships | Total | GAAP | Share of Unconsolidated Partnerships | Total | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Investments in real estate, at cost | ||||||||||||||||||||||||
Operating properties | $ | 3,507,172 | $ | 207,668 | $ | 3,714,840 | $ | 3,287,232 | $ | 206,054 | $ | 3,493,286 | ||||||||||||
Construction in progress | 275,618 | 1,173 | 276,791 | 411,479 | 2,495 | 413,974 | ||||||||||||||||||
Land held for development | 9,337 | 179 | 9,516 | 9,337 | 177 | 9,514 | ||||||||||||||||||
Total investments in real estate | 3,792,127 | 209,020 | 4,001,147 | 3,708,048 | 208,726 | 3,916,774 | ||||||||||||||||||
Accumulated depreciation | (608,605 | ) | (57,996 | ) | (666,601 | ) | (516,832 | ) | (52,703 | ) | (569,535 | ) | ||||||||||||
Net investments in real estate | 3,183,522 | 151,024 | 3,334,546 | 3,191,216 | 156,023 | 3,347,239 | ||||||||||||||||||
Investments in partnerships, at equity | 34,142 | (34,142 | ) | — | 36,164 | (36,164 | ) | — | ||||||||||||||||
Other assets: | ||||||||||||||||||||||||
Cash and cash equivalents | 90,248 | 4,195 | 94,443 | 9,786 | 2,925 | 12,711 | ||||||||||||||||||
Rent and other receivables(2) | 47,874 | 7,847 | 55,721 | 57,970 | 8,491 | 66,461 | ||||||||||||||||||
Intangible assets, net | 46,126 | 506 | 46,632 | 68,296 | 645 | 68,941 | ||||||||||||||||||
Deferred costs and other assets, net | 91,068 | 7,656 | 98,724 | 80,845 | 7,841 | 88,686 | ||||||||||||||||||
Total other assets | 309,458 | (13,938 | ) | 295,520 | 253,061 | (16,262 | ) | 236,799 | ||||||||||||||||
Total assets | $ | 3,492,980 | $ | 137,086 | $ | 3,630,066 | $ | 3,444,277 | $ | 139,761 | $ | 3,584,038 | ||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Mortgage notes payable | $ | 1,795,619 | $ | 182,572 | $ | 1,978,191 | $ | 1,756,270 | $ | 184,064 | $ | 1,940,334 | ||||||||||||
Debt premium on mortgage notes payable | 3,039 | — | 3,039 | 4,026 | — | 4,026 | ||||||||||||||||||
Exchangeable notes (net of discount of $7,654 and $11,421 as of September 30, 2009 and December 31, 2008, respectively) | 194,746 | — | 194,746 | 230,079 | — | 230,079 | ||||||||||||||||||
Credit Facility | 485,000 | — | 485,000 | 400,000 | — | 400,000 | ||||||||||||||||||
Senior unsecured term loan | 170,000 | — | 170,000 | 170,000 | — | 170,000 | ||||||||||||||||||
Tenants’ deposits and deferred rent | 14,964 | 3,302 | 18,266 | 13,112 | 3,313 | 16,425 | ||||||||||||||||||
Distributions in excess of partnership investments | 48,004 | (48,004 | ) | — | 48,788 | (48,788 | ) | — | ||||||||||||||||
Accrued construction expenses | 17,770 | — | 17,770 | 38,859 | — | 38,859 | ||||||||||||||||||
Fair value of derivative liabilities | 17,727 | — | 17,727 | 29,169 | — | 29,169 | ||||||||||||||||||
Other liabilities | 55,310 | (752 | ) | 54,558 | 55,711 | 1,172 | 56,883 | |||||||||||||||||
Total liabilities | 2,802,179 | 137,118 | 2,939,297 | 2,746,014 | 139,761 | 2,885,775 | ||||||||||||||||||
Total equity | 690,801 | (32 | ) | 690,769 | 698,263 | — | 698,263 | |||||||||||||||||
Total liabilities and equity | $ | 3,492,980 | $ | 137,086 | $ | 3,630,066 | $ | 3,444,277 | $ | 139,761 | $ | 3,584,038 | ||||||||||||
(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 $28.0 million ($25.1 million wholly owned, $2.9 million partnership) as of September 30, 2009 and $27.1 million ($24.2 million wholly owned, $2.9 million partnership) as of December 31, 2008. |
Page 21
Pennsylvania Real Estate Investment Trust
Condensed Balance Sheet
Property Type(1)
(in thousands, except per share amounts)
September 30, 2009 | December 31, 2008 | |||||||||||||||||||||||||||||||
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 | $ | 3,348,357 | $ | 368,896 | $ | 7,103 | $ | 3,724,356 | $ | 3,136,946 | $ | 359,590 | $ | 6,264 | $ | 3,502,800 | ||||||||||||||||
Construction in progress | 187,362 | 24,105 | 65,324 | 276,791 | 305,773 | 35,383 | 72,818 | 413,974 | ||||||||||||||||||||||||
Total investments in real estate | 3,535,719 | 393,001 | 72,427 | 4,001,147 | 3,442,719 | 394,973 | 79,082 | 3,916,774 | ||||||||||||||||||||||||
Accumulated depreciation | (583,119 | ) | (82,345 | ) | (1,137 | ) | (666,601 | ) | (491,047 | ) | (77,564 | ) | (924 | ) | (569,535 | ) | ||||||||||||||||
Net investments in real estate | 2,952,600 | 310,656 | 71,290 | 3,334,546 | 2,951,672 | 317,409 | 78,158 | 3,347,239 | ||||||||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | 15,942 | 1,231 | 77,270 | 94,443 | 14,888 | 1,999 | (4,176 | ) | 12,711 | |||||||||||||||||||||||
Rent and other receivables(2) | 33,259 | 10,253 | 12,209 | 55,721 | 42,193 | 10,867 | 13,401 | 66,461 | ||||||||||||||||||||||||
Intangible assets, net | 39,148 | — | 7,484 | 46,632 | 61,335 | — | 7,606 | 68,941 | ||||||||||||||||||||||||
Deferred costs and other assets, net | 74,044 | 11,934 | 12,746 | 98,724 | 60,611 | 10,763 | 17,312 | 88,686 | ||||||||||||||||||||||||
Total other assets | 162,393 | 23,418 | 109,709 | 295,520 | 179,027 | 23,629 | 34,143 | 236,799 | ||||||||||||||||||||||||
Total assets | $ | 3,114,993 | $ | 334,074 | $ | 180,999 | $ | 3,630,066 | $ | 3,130,699 | $ | 341,038 | $ | 112,301 | $ | 3,584,038 | ||||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Mortgage notes payable | $ | 1,740,489 | $ | 226,193 | $ | 11,509 | $ | 1,978,191 | $ | 1,740,564 | $ | 191,770 | $ | 8,000 | $ | 1,940,334 | ||||||||||||||||
Debt premium on mortgage notes payable | 3,039 | — | — | 3,039 | 4,026 | — | — | 4,026 | ||||||||||||||||||||||||
Exchangeable notes (net of discount of $7,654 and $11,421 as of September 30, 2009 and December 31, 2008, respectively) | — | — | 194,746 | 194,746 | — | — | 230,079 | 230,079 | ||||||||||||||||||||||||
Credit Facility | — | — | 485,000 | 485,000 | — | — | 400,000 | 400,000 | ||||||||||||||||||||||||
Senior unsecured term loan | — | — | 170,000 | 170,000 | — | — | 170,000 | 170,000 | ||||||||||||||||||||||||
Tenants’ deposits and deferred rent | 15,427 | 2,673 | 166 | 18,266 | 13,380 | 2,884 | 161 | 16,425 | ||||||||||||||||||||||||
Accrued construction expenses | — | — | 17,770 | 17,770 | — | — | 38,859 | 38,859 | ||||||||||||||||||||||||
Fair value of derivative liabilities | — | — | 17,727 | 17,727 | — | — | 29,169 | 29,169 | ||||||||||||||||||||||||
Other liabilities | 35,435 | (1,421 | ) | 20,544 | 54,558 | 37,988 | (1,502 | ) | 20,397 | 56,883 | ||||||||||||||||||||||
Total liabilities | 1,794,390 | 227,445 | 917,462 | 2,939,297 | 1,795,958 | 193,152 | 896,665 | 2,885,775 | ||||||||||||||||||||||||
Total equity | 1,320,603 | 106,629 | (736,463 | ) | 690,769 | 1,334,741 | 147,886 | (784,364 | ) | 698,263 | ||||||||||||||||||||||
Total liabilities and equity | $ | 3,114,993 | $ | 334,074 | $ | 180,999 | $ | 3,630,066 | $ | 3,130,699 | $ | 341,038 | $ | 112,301 | $ | 3,584,038 | ||||||||||||||||
(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 $28.0 million ($25.1 million wholly owned, $2.9 million partnership) as of September 30, 2009 and $27.1 million ($24.2 million wholly owned, $2.9 million partnership) as of December 31, 2008. |
Page 22
Pennsylvania Real Estate Investment Trust
Investment in Real Estate(1)
(in thousands)
September 30, 2009 | December 31, 2008 | |||||||||||||||||||||||
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 | $ | 68,655 | $ | 32 | $ | 15,855 | $ | 52,832 | $ | 68,069 | $ | 26 | $ | 13,748 | $ | 54,347 | ||||||||
Capital City Mall | 94,784 | — | 17,159 | 77,625 | 94,613 | 10 | 14,579 | 80,044 | ||||||||||||||||
Chambersburg Mall | 42,012 | — | 6,524 | 35,488 | 41,993 | — | 5,606 | 36,387 | ||||||||||||||||
Cherry Hill Mall | 411,815 | 29,928 | 49,041 | 392,702 | 314,309 | 89,785 | 36,058 | 368,036 | ||||||||||||||||
Crossroads Mall | 34,760 | 3 | 7,232 | 27,531 | 34,305 | — | 6,257 | 28,048 | ||||||||||||||||
Cumberland Mall | 62,061 | 26 | 6,678 | 55,409 | 59,188 | 7,032 | 5,355 | 60,865 | ||||||||||||||||
Dartmouth Mall | 61,909 | — | 23,840 | 38,069 | 61,660 | — | 21,840 | 39,820 | ||||||||||||||||
Exton Square Mall | 146,758 | — | 22,315 | 124,443 | 146,706 | — | 19,614 | 127,092 | ||||||||||||||||
Francis Scott Key Mall | 79,444 | 73 | 13,226 | 66,291 | 75,646 | 2,780 | 10,747 | 67,679 | ||||||||||||||||
Gadsden Mall | 60,454 | — | 7,081 | 53,373 | 57,094 | 3,007 | 5,510 | 54,591 | ||||||||||||||||
The Gallery at Market East | 126,493 | 40,797 | 13,480 | 153,810 | 80,271 | 58,013 | 11,345 | 126,939 | ||||||||||||||||
Jacksonville Mall | 77,873 | — | 12,750 | 65,123 | 75,772 | 836 | 10,633 | 65,975 | ||||||||||||||||
Logan Valley Mall | 95,656 | — | 18,848 | 76,808 | 95,623 | — | 16,193 | 79,430 | ||||||||||||||||
Lycoming Mall | 76,838 | — | 12,333 | 64,505 | 76,720 | 1 | 10,240 | 66,481 | ||||||||||||||||
Magnolia Mall | 86,771 | 196 | 21,254 | 65,713 | 86,264 | — | 18,918 | 67,346 | ||||||||||||||||
Moorestown Mall | 91,142 | 199 | 20,503 | 70,838 | 87,594 | 2,855 | 17,439 | 73,010 | ||||||||||||||||
New River Valley Mall | 57,662 | — | 11,193 | 46,469 | 57,406 | 6 | 8,775 | 48,637 | ||||||||||||||||
Nittany Mall | 43,184 | — | 7,487 | 35,697 | 42,774 | — | 6,431 | 36,343 | ||||||||||||||||
North Hanover Mall | 38,424 | 17,095 | 6,594 | 48,925 | 38,749 | 16,216 | 5,501 | 49,464 | ||||||||||||||||
Orlando Fashion Square | 114,287 | 234 | 15,088 | 99,433 | 113,861 | 198 | 12,599 | 101,460 | ||||||||||||||||
Palmer Park Mall | 34,527 | — | 11,194 | 23,333 | 34,512 | — | 10,543 | 23,969 | ||||||||||||||||
Patrick Henry Mall | 140,910 | — | 25,704 | 115,206 | 139,272 | — | 21,652 | 117,620 | ||||||||||||||||
Phillipsburg Mall | 53,086 | — | 8,749 | 44,337 | 52,855 | 164 | 7,479 | 45,540 | ||||||||||||||||
Plymouth Meeting Mall | 113,070 | 47,784 | 18,645 | 142,209 | 89,682 | 63,080 | 14,519 | 138,243 | ||||||||||||||||
The Mall at Prince Georges | 100,051 | — | 28,702 | 71,349 | 99,912 | 175 | 26,054 | 74,033 | ||||||||||||||||
South Mall | 33,118 | — | 4,881 | 28,237 | 32,797 | — | 4,173 | 28,624 | ||||||||||||||||
Uniontown Mall | 38,264 | — | 7,789 | 30,475 | 38,003 | — | 6,685 | 31,318 | ||||||||||||||||
Valley Mall | 91,490 | 17 | 17,562 | 73,945 | 91,165 | 165 | 14,965 | 76,365 | ||||||||||||||||
Valley View Mall | 67,259 | — | 10,541 | 56,718 | 67,207 | — | 9,082 | 58,125 | ||||||||||||||||
Viewmont Mall | 88,235 | — | 13,563 | 74,672 | 87,255 | — | 11,371 | 75,884 | ||||||||||||||||
Voorhees Town Center | 56,340 | 22,070 | 8,812 | 69,598 | 45,613 | 25,376 | 6,049 | 64,940 | ||||||||||||||||
Washington Crown Center | 40,241 | — | 11,107 | 29,134 | 40,241 | — | 9,769 | 30,472 | ||||||||||||||||
Willow Grove Park | 189,155 | 23,897 | 39,032 | 174,020 | 188,989 | 23,755 | 34,010 | 178,734 | ||||||||||||||||
Wiregrass Commons Mall | 51,782 | 4 | 6,786 | 45,000 | 41,384 | 9,020 | 5,543 | 44,861 | ||||||||||||||||
Woodland Mall | 179,014 | 4,602 | 21,471 | 162,145 | 180,606 | 2,061 | 17,234 | 165,433 | ||||||||||||||||
Wyoming Valley Mall | 105,826 | — | 17,234 | 88,592 | 104,266 | 185 | 14,310 | 90,141 | ||||||||||||||||
Total Consolidated Malls | 3,253,350 | 186,957 | 560,253 | 2,880,054 | 3,042,376 | 304,746 | 470,826 | 2,876,296 | ||||||||||||||||
Unconsolidated Malls | ||||||||||||||||||||||||
Lehigh Valley Mall | 40,122 | 60 | 14,949 | 25,233 | 39,810 | 242 | 13,720 | 26,332 | ||||||||||||||||
Springfield Mall | 54,885 | 345 | 7,917 | 47,313 | 54,760 | 785 | 6,501 | 49,044 | ||||||||||||||||
Total Unconsolidated Malls | 95,007 | 405 | 22,866 | 72,546 | 94,570 | 1,027 | 20,221 | 75,376 | ||||||||||||||||
TOTAL MALLS | $ | 3,348,357 | $ | 187,362 | $ | 583,119 | $ | 2,952,600 | $ | 3,136,946 | $ | 305,773 | $ | 491,047 | $ | 2,951,672 | ||||||||
(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 23
Pennsylvania Real Estate Investment Trust
Investment in Real Estate(1)(continued)
(in thousands)
September 30, 2009 | December 31, 2008 | |||||||||||||||||||||||
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 | $ | — | $ | 10,792 | $ | 30,143 | $ | 40,935 | $ | — | $ | 9,937 | $ | 30,998 | ||||||||
Creekview Center | 19,090 | — | 7,207 | 11,883 | 19,090 | — | 6,520 | 12,570 | ||||||||||||||||
The Commons at Magnolia | 11,477 | 483 | 3,848 | 8,112 | 10,119 | 1,837 | 3,437 | 8,519 | ||||||||||||||||
Monroe Marketplace | 44,117 | 10,736 | 1,388 | 53,465 | 32,658 | 22,351 | 315 | 54,694 | ||||||||||||||||
New River Valley Center | 26,744 | — | 1,945 | 24,799 | 26,746 | — | 1,175 | 25,571 | ||||||||||||||||
Northeast Tower Center(2) | 33,639 | — | 7,315 | 26,324 | 33,630 | — | 6,666 | 26,964 | ||||||||||||||||
Paxton Towne Centre | 56,254 | — | 13,943 | 42,311 | 56,115 | 67 | 12,680 | 43,502 | ||||||||||||||||
Pitney Road Plaza | 5,072 | 8,695 | 17 | 13,750 | — | 8,970 | — | 8,970 | ||||||||||||||||
Sunrise Plaza | 25,831 | 4,141 | 1,897 | 28,075 | 18,391 | 11,122 | 829 | 28,684 | ||||||||||||||||
Total Consolidated Strip and Power Centers | 263,159 | 24,055 | 48,352 | 238,862 | 237,684 | 44,347 | 41,559 | 240,472 | ||||||||||||||||
Unconsolidated Strip and Power Centers | ||||||||||||||||||||||||
Metroplex Shopping Center | 42,167 | — | 13,370 | 28,797 | 42,168 | — | 12,203 | 29,965 | ||||||||||||||||
The Court at Oxford Valley | 27,847 | 15 | 7,827 | 20,035 | 27,847 | 6 | 7,370 | 20,483 | ||||||||||||||||
Red Rose Commons | 12,730 | — | 3,491 | 9,239 | 12,562 | — | 3,147 | 9,415 | ||||||||||||||||
Whitehall Mall | 15,719 | 35 | 8,002 | 7,752 | 15,719 | — | 7,644 | 8,075 | ||||||||||||||||
Springfield Park | 7,274 | — | 1,303 | 5,971 | 7,101 | — | 1,194 | 5,907 | ||||||||||||||||
Total Unconsolidated Strip and Power Centers | 105,737 | 50 | 33,993 | 71,794 | 105,397 | 6 | 31,558 | 73,845 | ||||||||||||||||
TOTAL STRIP AND POWER CENTERS | $ | 368,896 | $ | 24,105 | $ | 82,345 | $ | 310,656 | $ | 343,081 | $ | 44,353 | $ | 73,117 | $ | 314,317 | ||||||||
Development Properties | ||||||||||||||||||||||||
Springhills | $ | — | $ | 32,908 | $ | — | $ | 32,908 | $ | — | $ | 31,382 | $ | — | $ | 31,382 | ||||||||
White Clay Point | — | 31,698 | — | 31,698 | — | 31,004 | — | 31,004 | ||||||||||||||||
Total Development Properties | — | 64,606 | — | 64,606 | — | 62,386 | — | 62,386 | ||||||||||||||||
Unconsolidated Development Properties | ||||||||||||||||||||||||
Pavilion at Market East | 6,924 | 718 | 1,137 | 6,505 | 6,087 | 1,462 | 924 | 6,625 | ||||||||||||||||
Total Unconsolidated Development Properties | 6,924 | 718 | 1,137 | 6,505 | 6,087 | 1,462 | 924 | 6,625 | ||||||||||||||||
Other Properties | ||||||||||||||||||||||||
Land held for development - unconsolidated | 179 | — | — | 179 | 177 | — | — | 177 | ||||||||||||||||
Total Other Properties | 179 | — | — | 179 | 177 | — | — | 177 | ||||||||||||||||
TOTAL DEVELOPMENT AND OTHER | $ | 7,103 | $ | 65,324 | $ | 1,137 | $ | 71,290 | $ | 6,264 | $ | 63,848 | $ | 924 | $ | 69,188 | ||||||||
TOTAL INVESTMENT IN REAL ESTATE | $ | 3,724,356 | $ | 276,791 | $ | 666,601 | $ | 3,334,546 | $ | 3,486,291 | $ | 413,974 | $ | 565,088 | $ | 3,335,177 | ||||||||
CONSOLIDATED PROPERTIES | $ | 3,516,509 | $ | 275,618 | $ | 608,605 | $ | 3,183,522 | $ | 3,280,060 | $ | 411,479 | $ | 512,385 | $ | 3,179,154 | ||||||||
UNCONSOLIDATED PROPERTIES | 207,847 | 1,173 | 57,996 | 151,024 | 206,231 | 2,495 | 52,703 | 156,023 | ||||||||||||||||
TOTAL INVESTMENT IN REAL ESTATE | $ | 3,724,356 | $ | 276,791 | $ | 666,601 | $ | 3,334,546 | $ | 3,486,291 | $ | 413,974 | $ | 565,088 | $ | 3,335,177 | ||||||||
(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) | Property was sold in October 2009. |
Page 24
Pennsylvania Real Estate Investment Trust
Property Redevelopment and Repositioning Summary as of September 30, 2009
NAME OF PROJECT LOCATION | PREIT’s PROJECTED SHARE OF COST(1) | 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 | $218.0 | $209.9 | 6.6% | 2007 | 2009 | |||||
-Opened Crate & Barrel and The Container Store in November 2007 on two outparcels totaling 59,000 sf; -Opened a two-level, 138,000 sf Nordstrom in March 2009; -Opened a 16,500 sf Maggiano’s in March 2009; -Opened a 9,200 sf Seasons 52 in April 2009; -Opened an 8,000 sf The Capital Grille in June 2009; -Opened a 5,500 sf California Pizza Kitchen in August 2009; -Opened 45,000 sf of a total 111,000 sf of new in-line retail space; -Net increase in total property GLA will be approximately 95,000 sf; -Incremental return based on estimated net operating income in projected stabilization year of 2011. | ||||||||||
The Gallery at Market East Philadelphia, PA | 81.6 | 79.5 | 7.6% | 2008 | 2011 | |||||
-Opened 223,000 sf of office space on the 4th, 5th, and 6th floors of the vacant former Strawbridge’s store, occupied by the Commonwealth of Pennsylvania, in August 2009; -Remaining 328,390 sf is to be used for future development; -Incremental return based on estimated net operating income in projected stabilization year of 2011. | ||||||||||
Plymouth Meeting Mall Plymouth Meeting, PA | 97.7 | 89.9 | 8.0% | 2007 | 2009 | |||||
-Opened P.F. Chang’s China Bistro and California Pizza Kitchen, totaling 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: -Opened 4,000 sf Citibank outparcel in October 2008; -Opened 6,800 sf Benihana in December 2008; -Opened 22,500 sf of a total of 38,000 sf of new retail space; -Opening a 65,000 sf Whole Foods Market in 2010; -Net increase in property GLA will be approximately 142,000 sf; -Incremental return based on estimated net operating income in projected stabilization year of 2012. | ||||||||||
Wiregrass Commons Mall Dothan, AL | 12.8 | 10.5 | 7.5% | 2008 | 2009 | |||||
-Opened a 85,000 sf Belk in October 2008; -Opened a 95,000 sf Burlington Coat Factory in September 2009; -Completed an interior mall renovation in the 4th Quarter of 2008; -Incremental return based on estimated net operating income in projected stabilization year of 2010. | ||||||||||
MIXED USE | ||||||||||
Voorhees Town Center Voorhees, NJ | 83.0 | 64.0 | 7.8% | 2007 | 2011 | |||||
-Phase I -Reduced mall GLA by 470,000 sf to 654,000 sf; -Opened 50,000 sf office building in May 2008; -Opened 10,000 sf The Learning Center in August 2008; -Phase II -Opening a mixed use town center of approximately 140,000 sf, including: -Opened Rizzieri Masters Salon in April 2009; -Opened Rizzieri Aveda School for Beauty and Wellness in May 2009; -Opening 16,000 sf of outparcel space; -Opened 39 residential units for leasing. A total of approximately 425 residential units to be constructed. The residential units are being constructed by our development partners and their affiliates. -Net reduction in property GLA will be approximately 244,000 sf; -Incremental return based on estimated net operating income in projected stabilization year of 2012. |
(1) | PREIT’s projected share of costs is net of any expected tenant reimbursements, parcel sales, tax credits or other incentives. |
Page 25
Pennsylvania Real Estate Investment Trust
Development Property Summary as of September 30, 2009
NAME OF PROJECT | TOTAL PROJECTED PROPERTY GLA (1) (sq ft) | PREIT’s PROJECTED SHARE OF COST (2) | PREIT’s INVESTMENT TO DATE | EXPECTED RETURN ON INCREMENTAL INVESTMENT | CONSTRUCTION START DATE | EXPECTED DATE OF COMPLETION | % LEASED | % OCCUPIED | ||||||||
(in millions) | (in millions) | |||||||||||||||
OPERATING PROPERTIES WITH DEVELOPMENT ACTIVITY | ||||||||||||||||
POWER CENTERS | ||||||||||||||||
Pitney Road Plaza | ||||||||||||||||
Lancaster, PA | 227,000 | $18.8 | $14.1 | 10.1% | 2008 | 2009 | 95% | 74% | ||||||||
-Opened a 169,000 sf Lowe’s in September 2009; | ||||||||||||||||
-Opened a 46,000 sf Best Buy in October 2009; | ||||||||||||||||
-Balance of the center will be comprised of outparcels totaling approximately 12,000 sf. | ||||||||||||||||
DEVELOPMENT PROPERTIES | ||||||||||||||||
MIXED USE | ||||||||||||||||
White Clay Point (3) | ||||||||||||||||
Landenberg, PA | TBD | TBD | 43.5 | TBD | TBD | TBD | N/A | N/A | ||||||||
-The planned development includes retail and other mixed uses, including a residential component, to be completed in multiple phases. | ||||||||||||||||
Springhills Gainesville, FL | TBD | TBD | 32.9 | TBD | TBD | TBD | N/A | N/A | ||||||||
-540 acres of land were acquired in 2006. Site development is the 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 | 0.7 | TBD | TBD | TBD | N/A | N/A | ||||||||
-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) | PREIT’s projected share of costs is net of any expected tenant reimbursements, parcel sales, tax credits or other incentives. |
(3) | Amount invested as of September 30, 2009 excludes an $11.8 million impairment charge that was recorded in the 4th Quarter of 2008. |
Page 26
Pennsylvania Real Estate Investment Trust
Capital Expenditures
(in thousands)
Three months ended September 30, 2009 | Nine months ended September 30, 2009 | |||||||||||||||||||
Consolidated | Unconsolidated | Total | Consolidated | Unconsolidated | Total | |||||||||||||||
Redevelopment projects with incremental GLA and/or anchor replacement | $ | 12,616 | $ | 158 | $ | 12,774 | $ | 93,795 | $ | (276 | ) | $ | 93,519 | |||||||
New development projects | 2,275 | (1 | ) | 2,274 | 8,473 | 95 | 8,568 | |||||||||||||
Tenant allowances | 1,797 | 33 | 1,830 | 7,290 | 271 | 7,561 | ||||||||||||||
Recurring capital expenditures: | ||||||||||||||||||||
CAM expenditures | 3,901 | 36 | 3,937 | 6,900 | 36 | 6,936 | ||||||||||||||
Non-CAM expenditures | 734 | 734 | 1,526 | 1 | 1,527 | |||||||||||||||
Total recurring capital expenditures | 4,635 | 36 | 4,671 | 8,426 | 37 | 8,463 | ||||||||||||||
Total | $ | 21,323 | $ | 226 | $ | 21,549 | $ | 117,984 | $ | 127 | $ | 118,111 | ||||||||
Page 27
Pennsylvania Real Estate Investment Trust
Debt Analysis as of September 30, 2009
(in thousands)
Outstanding Debt | |||||||||||||||||||||
Fixed Rate(1) | % of Total Indebtedness | Variable Rate | % of Total Indebtedness | Total | % of Total Indebtedness | ||||||||||||||||
Consolidated mortgage notes payable(2) | $ | 1,767,148 | 62.4 | % | $ | 31,509 | 1.0 | % | $ | 1,798,657 | 63.4 | % | |||||||||
Unconsolidated mortgage notes payable | 71,423 | 2.5 | % | 111,150 | 3.9 | % | 182,573 | 6.4 | % | ||||||||||||
Exchangeable notes(3) | 194,746 | 6.9 | % | — | 0.0 | % | 194,746 | 6.9 | % | ||||||||||||
Credit Facility | — | 0.0 | % | 485,000 | 17.1 | % | 485,000 | 17.1 | % | ||||||||||||
Senior unsecured term loan | 170,000 | 6.0 | % | — | 0.0 | % | 170,000 | 6.0 | % | ||||||||||||
TOTAL OUTSTANDING DEBT | $ | 2,203,317 | 77.8 | % | $ | 627,659 | 22.2 | % | $ | 2,830,976 | 100.0 | % | |||||||||
AVERAGE INTEREST RATE | 5.65 | % | 1.75 | % | 4.77 | % | |||||||||||||||
(1) | Includes variable rate debt swapped to fixed rate debt. |
(2) | Includes debt premium of $3,039 |
(3) | Includes debt discount of $7,654 |
Average Debt Balance | ||||||||||||||||||||||||
Mortgage Debt(1) | Credit Facility | Senior Unsecured Term Loan | Exchangeable Notes | Exchangeable Notes Discount | TOTAL | |||||||||||||||||||
Beginning Balance | 6/30/2009 | $ | 1,965,124 | $ | 445,000 | $ | 170,000 | $ | 214,400 | $ | (8,802 | ) | $ | 2,785,722 | ||||||||||
Morgtgage Amortization, net | (5,351 | ) | — | — | — | — | (5,351 | ) | ||||||||||||||||
Pitney Road Plaza Construction Borrowing | 1,457 | — | — | — | — | 1,457 | ||||||||||||||||||
Northeast Tower Center Mortgage Financing | 20,000 | — | — | — | — | 20,000 | ||||||||||||||||||
Credit Facility borrowing, net | — | 40,000 | — | — | — | 40,000 | ||||||||||||||||||
Exchangeable notes discount amortization | — | — | — | — | 1,148 | 1,148 | ||||||||||||||||||
Repurchase of exchangeable notes | — | — | — | (12,000 | ) | — | (12,000 | ) | ||||||||||||||||
Ending Balance | 9/30/2009 | $ | 1,981,230 | $ | 485,000 | $ | 170,000 | $ | 202,400 | $ | (7,654 | ) | $ | 2,830,976 | ||||||||||
Weighted Average Balance | $ | 1,964,638 | $ | 471,902 | $ | 170,000 | $ | 210,617 | $ | (8,427 | ) | $ | 2,808,731 | |||||||||||
(1) | Includes debt premium. |
(2) | Includes the amortization of debt premium and balloon payments. |
Debt Maturities(1) | |||||||||||||||||||||||||
Year | Scheduled Amortization | Debt Premium Amortization | Mortgage Balance at Maturity | Credit Facility | Senior Unsecured Term Loan(2) | Exchangeable Notes | Exchangeable Notes Discount Amortization | Total Debt | |||||||||||||||||
2009 | $ | 5,070 | $ | 295 | $ | 82,792 | $ | — | $ | — | $ | — | $ | (666 | ) | $ | 87,491 | ||||||||
2010 | 21,448 | 1,175 | 107,369 | 485,000 | 170,000 | — | (2,768 | ) | 782,224 | ||||||||||||||||
2011 | 22,126 | 1,153 | 163,177 | — | — | — | (2,941 | ) | 183,515 | ||||||||||||||||
2012 | 19,050 | 416 | 378,679 | — | — | 202,400 | (1,279 | ) | 599,266 | ||||||||||||||||
2013 | 13,535 | — | 402,723 | — | — | — | — | 416,258 | |||||||||||||||||
2014 | 11,917 | — | 92,317 | — | — | — | — | 104,234 | |||||||||||||||||
2015 | 10,903 | — | 270,799 | — | — | — | — | 281,702 | |||||||||||||||||
Thereafter | 2,819 | — | 373,467 | — | — | — | — | 376,286 | |||||||||||||||||
$ | 106,868 | $ | 3,039 | $ | 1,871,323 | $ | 485,000 | $ | 170,000 | $ | 202,400 | $ | (7,654 | ) | $ | 2,830,976 | |||||||||
(1) | The weighted average period to mortgage maturity is 4.24 years excluding options. Excludes debt premium. Includes 100% of debt from consolidated properties and our share of debt from unconsolidated properties, based on our ownership percentage. |
(2) | The senior unsecured term loan has a one year extension option, if certain conditions are met. |
Weighted Average Mortgage Interest Rates | ||||||||||||
Interest Rate | Marked to Market Interest Rate (GAAP) | |||||||||||
Year | Balance | Interest Rate | Balance | Interest Rate | ||||||||
2009 | $ | 82,792 | 4.36 | % | $ | 82,792 | 4.36 | % | ||||
2010 | 107,583 | 2.03 | % | 107,583 | 2.03 | % | ||||||
2011 | 166,569 | 6.50 | % | 166,569 | 6.50 | % | ||||||
2012 | 398,763 | 6.05 | % | 398,763 | 5.68 | % | ||||||
2013 | 412,941 | 5.42 | % | 412,941 | 5.42 | % | ||||||
2014 | 97,587 | 7.31 | % | 97,587 | 7.31 | % | ||||||
Thereafter | 711,956 | 5.66 | % | 711,956 | 5.66 | % | ||||||
Total | $ | 1,978,191 | 5.59 | % | $ | 1,978,191 | 5.51 | % | ||||
Page 28
Pennsylvania Real Estate Investment Trust
Debt Schedule as of September 30, 2009
(in thousands)
Proportionate Share(1) | Interest Rate | Marked to Market Interest Rate (GAAP) | Annual Debt Service | Balance at Maturity | ||||||||||||||||||||
Mortgage Debt | Debt Premium/(Discount) | Total | Maturity Date | |||||||||||||||||||||
Fixed Rate Mortgage Debt | ||||||||||||||||||||||||
Red Rose Commons(2) | $ | 12,307 | $ | — | $ | 12,307 | 7.66 | % | 7.66 | % | $ | 1,220 | $ | 12,306 | May 2009 | |||||||||
Valley View Mall | 34,335 | — | 34,335 | 6.15 | % | 6.15 | % | 2,773 | 34,335 | Oct 2009 | ||||||||||||||
Springfield Park | 1,434 | — | 1,434 | 7.79 | % | 7.79 | % | 203 | 1,412 | Jan 2010 | ||||||||||||||
Creekview Center(3) (4) | 19,640 | — | 19,640 | 5.56 | % | 5.56 | % | 1,104 | 19,448 | June 2010 | ||||||||||||||
Christiana Center(3) (5) | 45,000 | — | 45,000 | 5.87 | % | 5.87 | % | 2,642 | 45,000 | June 2011 | ||||||||||||||
Paxton Towne Centre(3) (5) | 54,000 | — | 54,000 | 5.84 | % | 5.84 | % | 3,152 | 54,000 | July 2011 | ||||||||||||||
The Court at Oxford Valley | 17,694 | — | 17,694 | 8.02 | % | 8.02 | % | 2,319 | 16,003 | July 2011 | ||||||||||||||
Metroplex Shopping Center | 29,875 | — | 29,875 | 7.25 | % | 7.25 | % | 2,681 | 28,785 | Oct 2011 | ||||||||||||||
Capital City Mall | 49,826 | 1,989 | 51,815 | 7.61 | % | 5.50 | % | 4,603 | 47,898 | Feb 2012 | ||||||||||||||
New River Valley Center(3) (5) | 16,131 | — | 16,131 | 5.75 | % | 5.75 | % | 1,241 | 15,334 | Mar 2012 | ||||||||||||||
Beaver Valley Mall | 44,183 | — | 44,183 | 7.36 | % | 7.36 | % | 3,972 | 42,266 | Apr 2012 | ||||||||||||||
Pavilion East Associates(3) | 4,059 | — | 4,059 | 6.15 | % | 6.15 | % | 245 | 3,708 | Aug 2012 | ||||||||||||||
Cherry Hill Mall | 188,398 | — | 188,398 | 5.42 | % | 5.42 | % | 13,510 | 177,689 | Oct 2012 | ||||||||||||||
Cherry Hill Mall Supplemental Loan | 55,000 | — | 55,000 | 5.51 | % | 5.51 | % | 3,030 | 53,003 | Oct 2012 | ||||||||||||||
Cumberland Mall Loan #1 | 41,166 | 1,050 | 42,216 | 6.50 | % | 5.40 | % | 3,413 | 38,782 | Nov 2012 | ||||||||||||||
Dartmouth Mall | 62,922 | — | 62,922 | 4.95 | % | 4.95 | % | 4,484 | 57,594 | June 2013 | ||||||||||||||
Moorestown Mall | 57,754 | — | 57,754 | 4.95 | % | 4.95 | % | 4,115 | 52,863 | June 2013 | ||||||||||||||
Jacksonville Mall(3) (5) | 56,265 | — | 56,265 | 5.83 | % | 5.83 | % | 3,277 | 56,265 | Sept 2013 | ||||||||||||||
Logan Valley Mall(3) (5) | 68,000 | — | 68,000 | 5.79 | % | 5.79 | % | 3,939 | 68,000 | Sept 2013 | ||||||||||||||
Wyoming Valley Mall(3) (5) | 65,000 | — | 65,000 | 5.85 | % | 5.85 | % | 3,803 | 65,000 | Sept 2013 | ||||||||||||||
Francis Scott Key Mall(3) | 55,000 | — | 55,000 | 5.25 | % | 5.25 | % | 2,885 | 55,000 | Dec 2013 | ||||||||||||||
Viewmont Mall(3) | 48,000 | — | 48,000 | 5.25 | % | 5.25 | % | 2,518 | 48,000 | Dec 2013 | ||||||||||||||
Exton Square Mall | 69,619 | — | 69,619 | 7.50 | % | 7.50 | % | 5,873 | 66,733 | Jan 2014 | ||||||||||||||
Lycoming Mall | 27,968 | — | 27,968 | 6.84 | % | 6.84 | % | 2,341 | 25,522 | Jul 2014 | ||||||||||||||
Magnolia Mall | 62,079 | — | 62,079 | 5.33 | % | 5.33 | % | 4,413 | 54,965 | July 2015 | ||||||||||||||
Patrick Henry Mall | 95,500 | — | 95,500 | 6.34 | % | 6.34 | % | 6,133 | 83,210 | Oct 2015 | ||||||||||||||
Willow Grove Park | 151,489 | — | 151,489 | 5.65 | % | 5.65 | % | 11,083 | 132,624 | Dec 2015 | ||||||||||||||
Valley Mall | 88,282 | — | 88,282 | 5.49 | % | 5.49 | % | 5,014 | 78,835 | Mar 2016 | ||||||||||||||
Woodland Mall | 155,722 | — | 155,722 | 5.58 | % | 5.58 | % | 8,397 | 140,484 | Apr 2016 | ||||||||||||||
Cumberland Mall Loan #2 | 2,831 | — | 2,831 | 5.00 | % | 5.00 | % | 206 | — | Feb 2017 | ||||||||||||||
The Mall at Prince Georges | 150,000 | — | 150,000 | 5.51 | % | 5.51 | % | 8,269 | 150,000 | June 2017 | ||||||||||||||
Whitehall Mall | 6,053 | — | 6,053 | 7.00 | % | 7.00 | % | 574 | 4,148 | Nov 2018 | ||||||||||||||
Total Fixed Rate Mortgage Debt | 1,835,532 | 3,039 | 1,838,571 | 5.86 | % | 5.78 | % | 123,432 | 1,729,212 | |||||||||||||||
Variable Rate Mortgage Debt | ||||||||||||||||||||||||
Springfield Mall(6) | 36,150 | — | 36,150 | 1.54 | % | 1.54 | % | 555 | 36,150 | Dec 2009 | ||||||||||||||
Pitney Road Plaza(7) | 5,893 | — | 5,893 | 5.00 | % | 5.00 | % | 295 | 4,436 | May 2010 | ||||||||||||||
Lehigh Valley Mall(8) | 75,000 | — | 75,000 | 0.80 | % | 0.80 | % | 600 | 75,000 | Aug 2010 | ||||||||||||||
One Cherry Hill Plaza(9) | 5,616 | — | 5,616 | 1.55 | % | 1.55 | % | 87 | 5,616 | Aug 2010 | ||||||||||||||
Northeast Tower Center(5) (12) | 20,000 | — | 20,000 | 7.25 | % | 7.25 | % | 1,744 | 19,389 | Sept 2011 | ||||||||||||||
Total Variable Rate Mortgage Debt | 142,659 | — | 142,659 | 2.09 | % | 2.09 | % | 3,281 | 140,591 | |||||||||||||||
Total Mortgage Debt | $ | 1,978,191 | $ | 3,039 | $ | 1,981,230 | 5.59 | % | 5.51 | % | $ | 126,713 | $ | 1,869,803 | ||||||||||
CONSOLIDATED MORTGAGES | $ | 1,795,619 | $ | 3,039 | $ | 1,798,658 | 5.78 | % | 5.70 | % | $ | 118,315 | $ | 1,692,291 | ||||||||||
UNCONSOLIDATED MORTGAGES | 182,572 | — | 182,572 | 3.54 | % | 3.54 | % | 8,397 | 177,512 | |||||||||||||||
EXCHANGEABLE NOTES | 202,400 | (7,654 | ) | 194,746 | 4.00 | % | 4.00 | % | 8,096 | 202,400 | ||||||||||||||
CREDIT FACILITY | 485,000 | — | 485,000 | 1.65 | % | 1.65 | % | 8,022 | — | |||||||||||||||
SENIOR UNSECURED TERM LOAN(10) (11) | 170,000 | — | 170,000 | 5.29 | % | 5.29 | % | 8,987 | 170,000 | |||||||||||||||
Total | $ | 2,835,591 | $ | (4,615 | ) | $ | 2,830,976 | 4.77 | % | 4.72 | % | $ | 151,817 | $ | 2,242,203 | |||||||||
(1) | Includes 100% of debt from consolidated properties and our share of debt from unconsolidated properties, based on our ownership percentage. |
(2) | The partnership and the partners are currently engaged in discussions with the special servicer, following the maturity date of the loan and a default notice. |
(3) | The mortgage has been swapped to a fixed interest rate presented. |
(4) | The mortgage has three, one-year renewal options. |
(5) | The mortgage has two, one-year renewal options. |
(6) | The mortgage has three, one-year renewal options. The second option was exercised in December 2008 for the period December 2008 to December 2009. |
(7) | The construction loan can be drawn on up to $10 million. |
(8) | The mortgage has three, one-year renewal options. The third option was exercised in July 2009 for the period August 2009 to August 2010. |
(9) | The mortgage has two one-year renewal options. The first option was exercised in June 2009 for the period August 2009 to August 2010. |
(10) | The interest rate for the senior unsecured Term Loan was swapped to a fixed rate of 5.29%. |
(11) | The senior unsecured Term Loan has a one year extension option. |
(12) | Property was sold in October 2009. |
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Pennsylvania Real Estate Investment Trust
Selected Debt Ratios(1)
September 30, 2009 | |||
Total Liabilities to Gross Asset Value | 66.10 | % | |
Ratio of Total Liabilities to Gross Asset Value is less than or equal to 65%, provided that such ratio may exceed 65% for a period of two consecutive fiscal quarters but may not exceed 70%. | |||
Secured Debt Limitation | 44.71 | % | |
Secured debt may not exceed 60% of Gross Asset Value | |||
EBITDA to Interest Expense | 1.98 | ||
EBITDA may not be less than 1.70 to 1.00 | |||
Adjusted EBITDA to Fixed Charges | 1.72 | ||
Adjusted EBITDA may not be less than 1.50 to 1.00 | |||
Minimum Debt Yield | 9.74 | % | |
The ratio of EBITDA to total indebtedness may not be less than 9.75%, provided that such ratio may be less than 9.75% for a period of two consecutive fiscal quarters but may not be less than 9.25%. |
(1) | The Credit Facility dated as of November 20, 2003, as amended, and the Term Loan Agreement dated as of September 3, 2008 contain affirmative and negative covenants customarily found in agreements of these types, as well as requirements that the Company maintain, on a consolidated basis, certain financial ratios. (All capitalized terms used on this page have the meanings ascribed to such terms in the Credit Agreement and the Term Loan Agreement.) In addition to the ratios set forth herein, there are several other ratios under these agreements with which the Company must comply, all of which are described in the Company’s Annual Report on Form 10-K, as amended, in the section entitled “Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Liquidity and Capital Resources.” The Company has filed the agreements, as amended, which set forth the definitions of the terms used in the ratios, with the Securities and Exchange Commission. |
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Pennsylvania Real Estate Investment Trust
Shareholder Information
Ten Largest Institutional Shareholders: | Common Shares Held(1) | ||
The Vanguard Group, Inc. | 3,536,311 | ||
Barclays Global Investors N.A. | 2,629,341 | ||
Goldman Sachs Asset Management, L.P. (U.S.) | 1,863,923 | ||
Citigroup Global Markets, Inc. (Broker) | 1,791,850 | ||
State Street Global Advisors (SSgA) | 1,425,091 | ||
Pacific Heights Asset Management, LLC | 900,000 | ||
MFC Global Investment Management (Canada) | 867,392 | ||
OppenheimerFunds, Inc. | 683,542 | ||
Veritable, L.P. | 551,542 | ||
Northern Trust Investments, NA | 529,141 | ||
TOTAL of Ten Largest Institutional: | 14,778,133 | ||
TOTAL of all Institutional Holders: | 24,583,720 | ||
Ten Largest as % of Total Institutional: | 60.1 | % |
(1) | Based on 13F and 13G filings as of September 30, 2009 or most recent filings. |
Breakdown of Share & Unit Ownership: Shares Held | Most Recent | % of Outstanding | December 31, 2008 | ||||
Institutional(1) | 24,583,720 | 53.9 | % | 24,738,712 | |||
Retail(2) | 16,729,720 | 36.6 | % | 12,783,541 | |||
Insiders(3) | 4,317,448 | 9.5 | % | 4,147,196 | |||
TOTAL | 45,630,888 | 100.0 | % | 41,669,449 | |||
(1) | Based on 13F and 13G filings as of September 30, 2009 or most recent filings. |
(2) | Retail ownership equals total shares outstanding minus institutional and insider ownership. |
(3) | Insider holdings as of April 15, 2009 (Shares and OP Units only). Excludes 143,250 exercisable options. See proxy statement dated April 20, 2009 for more details. |
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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. The Company computes Funds From Operations by taking the amount determined pursuant to the NAREIT definition and subtracting dividends on preferred shares (“FFO”) (for periods during which the Company had preferred shares outstanding).
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 Funds From Operations 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 or losses on the sale of 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 operating 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, gains on sales of interests in real estate, other expenses and gain on extinguishment of debt.
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.
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