Exhibit 99.1
[GRAPHIC OMITTED] Pennsylvania Real Estate Investment Trust
200 South Broad Street
Philadelphia, PA 19102
www.preit.com
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Phone: 215-875-0700
Fax: 215-546-7311
Toll Free: 866-875-0700
AT THE COMPANY AT KCSA PUBLIC RELATIONS WORLDWIDE
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Edward A. Glickman Todd Fromer Evan Smith, CFA
Executive Vice President and CFO (Investor Relations) (Media Relations)
(215) 875-0700 (212) 896-1215 (212) 896-1251
FOR IMMEDIATE RELEASE
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April 29, 2003
Pennsylvania Real Estate Investment Trust Completes The Acquisition
Of Four Shopping Malls From The Rouse Company
PHILADELPHIA, PA, April 29, 2003 - Pennsylvania Real Estate Investment Trust
("PREIT") (NYSE: PEI), today announced that it has completed the acquisition of
four shopping malls relating to the Company's agreement to purchase six shopping
malls from The Rouse Company (NYSE: RSE) announced on March 6, 2003. The
remaining two properties are expected to be acquired during this quarter.
PREIT acquired Cherry Hill Mall, Moorestown Mall, The Gallery at Market East and
Exton Square Mall, totaling approximately 3.6 million square feet of retail
space. The aggregate purchase price for the four properties was $469 million,
including approximately $157 million in cash, the assumption of $277 million in
non-recourse mortgage debt and $35 million in operating partnership units issued
to certain partners of New Castle Associates of which $17.8 million is expected
to be issued in the second quarter of 2004.
New Castle Associates, a partnership whose partners include Ronald Rubin, PREIT
Chairman and Chief Executive Officer, and George Rubin, President of PREIT's
management subsidiaries and a PREIT Trustee, acquired Cherry Hill Mall from
Rouse in exchange for its interest in Christiana Mall, cash and the assumption
of mortgage debt.
PREIT acquired 49% of the aggregate partnership interests in New Castle
Associates in exchange for approximately 585,000 PREIT operating partnership
units issued at $29.285 per share and increased its aggregate ownership interest
to approximately 73% by acquiring an additional ownership interest directly from
New Castle Associates in exchange for a cash investment of approximately $31
million. Substantially all of the cash was applied by New Castle Associates
toward the cash portion of the purchase price of Cherry Hill Mall and costs of
the transaction. PREIT intends to purchase the remaining equity of New Castle
Associates in exchange for approximately 609,000 operating partnership units at
$29.285 per share, in approximately 12 months.
PREIT Announces the Acquisition of Four Shopping Malls
April 29, 2003
Page 2
Ronald Rubin, PREIT chairman and chief executive officer, said, "The closing of
Cherry Hill, Moorestown, The Gallery and Exton Square shopping malls is an
important step in strengthening our position as the largest retail property
owner and operator in the Greater Philadelphia metropolitan area, the fourth
largest retail market in the United States. The addition of these four premier
assets increases our retail portfolio to 26 properties totaling 15.4 million
square feet, an increase of 30%. We look forward to closing the remaining two
Rouse properties, Plymouth Meeting Mall and Echelon Mall, during the second
quarter."
Additionally, PREIT received a brokerage fee of approximately $2 million from
New Castle Associates upon the sale of Christiana Mall and PREIT's management
and leasing agreement for Christiana Mall was terminated. PREIT also entered
into a new management and leasing agreement with New Castle Associates for
Cherry Hill Mall.
Cherry Hill Mall, Cherry Hill, NJ, has 1.28 million square feet with an
occupancy rate of 94.5% and in-line tenant sales of $404 per square foot;
Moorestown Mall, Moorestown, NJ, has 1.03 million square feet with an occupancy
rate of 93.9% and in-line tenant sales of $312 per square foot; The Gallery at
Market East, Philadelphia, PA, totals 0.19 million square feet with an occupancy
rate of 98.9% and in-line tenant sales of $419 per square foot; and Exton Square
Mall, Exton, PA, has 1.09 million square feet with an occupancy rate of 89.7%
and in-line tenant sales of $361 per square foot.
PREIT funded the cash portion of the aggregate purchase price through an
unsecured acquisition loan in the amount of $200 million from Wells Fargo Bank.
The acquisition loan is comprised of a $175 million term loan and a $25 million
revolving line of credit. PREIT expects to repay the acquisition loan primarily
through the cash proceeds from the sale of its multifamily portfolio, expected
to close during the second quarter of 2003. A substantial portion of the
expected gain from the sale of the Company's multifamily portfolio is expected
to meet the requirements for a tax deferred exchange with the Rouse transaction.
In connection with the acquisition loan, PREIT also entered into an amendment of
its existing credit facility, including a covenant to maintain a ratio of Total
Liabilities to Gross Asset Value of not more than 0.70:1 (rather than the
previous ratio of 0.65:1), and a modification of the definition of Total
Liabilities to exclude the mark-up of assumed debt on the acquired properties
resulting from the above-market interest rates on the assumed debt. In addition,
the floating rate debt limitation was increased from $200 million to $400
million. As consideration for these modifications, PREIT agreed to a provision
requiring that, if its ratio of Total Liabilities to Gross Asset Value exceeds
0.65:1, the spread over LIBOR will be increased to 1.90%. PREIT also agreed to
pay each lender under the credit facility an amendment fee of 0.15% of each
lender's existing commitment amount.
PREIT Announces the Acquisition of Four Shopping Malls
April 29, 2003
Page 3
About Pennsylvania Real Estate Investment Trust
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 (approximately 15.4 million square feet) located in the
eastern United States. The Company's portfolio currently consists of 49
properties in 10 states. The Company's portfolio includes 19 apartment
communities (approximately 7,242 units) that are held for sale, 12 shopping
malls, 14 strip and power centers and 4 industrial properties. In addition,
there are 2 retail properties under development, which PREIT expects will add
approximately 0.8 million square feet to its portfolio. PREIT is headquartered
in Philadelphia, Pennsylvania.
This press release contains certain "forward-looking statements" within the
meaning of Section 21E of the Securities Exchange Act of 1934 and the U.S.
Private Securities Litigation Reform Act of 1995. Forward-looking statements
relate to expectations, beliefs, projections, future plans and strategies,
anticipated events or 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, assumptions and changes in
circumstances that may cause future events, achievements or results to differ
materially from those expressed by the forward-looking statements. In
particular, PREIT may not be able to consummate the sale of its multifamily
portfolio or, consequently, to repay the acquisition loan with the proceeds
therefrom, and may not be able to consummate the acquisition of Echelon Mall and
Plymouth Meeting Mall on previously announced terms, favorable terms to PREIT,
or at all, or if such transactions are consummated, PREIT's actual results may
differ significantly from those expressed in any forward-looking statement.
Certain factors that could cause PREIT not to consummate such transactions or
could cause PREIT's actual results to differ materially from expected results
include, without limitation, the satisfaction of closing conditions applicable
to such transactions (some of which are beyond PREIT's control). In addition,
PREIT's business is subject to uncertainties regarding the revenues, operating
expenses, leasing activities, occupancy rates, and other competitive factors
relating to PREIT's portfolio and the properties proposed to be acquired and
changes in local market conditions as well as general economic, financial and
political conditions, including the possibility of outbreak or escalation of war
or terrorist attacks, any of which may cause future events, achievements or
results to differ materially from those expressed by the forward-looking
statements. PREIT does not intend to and disclaims any duty or obligation to
update or revise any forward-looking statements or industry information set
forth in this press release to reflect new information, future events or
otherwise.
[Exhibit I follow]
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PREIT Announces the Acquisition of Four Shopping Malls
April 29, 2003
Page 4
Pennsylvania Real Estate Investment Trust
Property Information
EXHIBIT I
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Total Square Total Owned
Feet Square Feet % Lease Mortgage
(in (in Occupied Sales per Expiration Balance
Mall Name thousands) thousands) In-Line(1) SF(1) Major Tenants (2) (in millions)
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Cherry Hill Mall 1,282 533 94.5% $404 JCPenney's N/A $ 74
Cherry Hill, NJ Macy's N/A 60
Strawbridge's N/A
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Moorestown Mall 1,036 716 93.9% 312 Boscov's 2005 42
Moorestown, NJ Lord & Taylor N/A
Sears 2022
Strawbridge's N/A
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Exton Square 1,098 463 89.7% 361 Boscov's N/A 101
Exton, PA Sears N/A
JCPenney N/A
Strawbridge's N/A
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The Gallery at Market East 191 191 98.9% 419 K-Mart N/A
Philadelphia, PA Strawbridge's N/A
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TOTAL/AVERAGE 3,607 1,903 93.7% $373 $277
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[RESTUBBED TABLE]
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Mortgage
Interest Date of Date Last
Mall Name Rate Maturity Built Renovated
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Cherry Hill Mall 10.6% 10/1/2005 1961 1990
Cherry Hill, NJ 5.0% 10/1/2005
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Moorestown Mall LIBOR 12/31/2003 1963 2000
Moorestown, NJ +125 bps.
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Exton Square 6.95% 12/1/2008 1973 2000
Exton, PA
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The Gallery at Market East 1977 1983
Philadelphia, PA
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TOTAL/AVERAGE
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(1) Information is as of 12/31/02.
(2) The lease expiration date for tenants that own their own store is noted as
N/A.