FIRST AMENDMENT TO
                          TRO CONTRIBUTION AGREEMENT


                  THIS FIRST AMENDMENT TO TRO CONTRIBUTION AGREEMENT is made
as of September 30, 1997 by and among PENNSYLVANIA REAL ESTATE INVESTMENT
TRUST, a Pennsylvania business trust, PREIT ASSOCIATES, L.P., a Delaware
limited partnership, PREIT-RUBIN, INC., a Pennsylvania corporation formerly
known as The Rubin Organization, Inc., THE RUBIN ORGANIZATION-ILLINOIS, INC.,
an Illinois corporation, the persons identified on Schedule A hereto, and the
entities identified on Schedule B hereto.

                                  Background

                  The parties hereto are parties to the TRO Contribution
Agreement dated as of July 30, 1997 (the "Original Agreement").

                  The parties desire to enter into this Agreement to (i)
correct a mutual mistake in the Original Agreement relating to the earn-out
units issuable in the event that Closing occurs on or prior to September 30,
1997, (ii) modify the plan of contribution set forth in Exhibit 5.24 to the
Original Agreement, (iii) amend certain provisions in Section 5.24 of the
Original Agreement, and (iv) provide for a post-closing adjustment.

                  NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements contained herein,
the parties hereto, intending to be legally bound, hereby agree as follows:

                  1.       Definitions.  All capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the
Original Agreement.

                  2.       Correcting Amendment.

                           (a)      The definition of "Base Earn-Out Units" set
forth in Section 2.1 of the Original Agreement is hereby amended by the
insertion of the following clause between the number "5,000" and prior to the
word "and" that follows the number "5,000":

                  ", Base Earn-Out Units for the Second Earn-
                  Out Period means 20,000, Base Earn-Out Units
                  for the Third through Fifth Earn-Out Periods
                  means 57,500,"








                           (b)      The definition of "Maximum Earn-Out Units"
set forth in Section 2.1 of the Original Agreement is hereby amended by the
insertion of the following clause between the number "32,500" and the word
"and" that follows the number "32,500":

                  ", Maximum Earn-Out Units for the Second
                  Earn-Out Period means 130,000, Maximum Earn-
                  Out Units for the Third through Fifth Earn-
                  Out Periods means 167,500,"

                  3. Amendment relating to PREIT Contributions.

                           (a)      Exhibit 5.24 to the Original Agreement is
hereby deleted and replaced in its entirety with Exhibit 5.24
attached hereto.

                           (b)      The first sentence in Section 5.24 of the
Original Agreement is hereby amended by the insertion of the words "or its
subsidiaries" immediately after the word "Partnership" where it appears in
such sentence.

                           (c)      The second sentence in Section 5.24 of the
Original Agreement is hereby amended and restated in its entirety as follows:

                  "In exchange for such contribution, the Partnership shall
                  issue: (i) to PREIT, a number of general partner interests
                  in the Partnership equal to 1% of the sum of (x) the number
                  of outstanding PREIT Shares as of the Closing, (y) the
                  aggregate number of Class A Units issued on the Closing Date
                  to the TRO Shareholders and TRO Affiliates pursuant to this
                  Agreement and the Court at Oxford Valley Contribution
                  Agreement and (z) the aggregate number of Class B Units of
                  limited partner interest in the Partnership issued on the
                  Closing Date and (ii) to PREIT Subsidiary, that number of
                  Class A Units such that following such issuance PREIT
                  Subsidiary owns a number of Class A Units equal to the
                  number of outstanding PREIT Shares as of the Closing minus
                  the number of general partner interests issued to PREIT
                  pursuant to the foregoing subclause (i)."

                  4.       Post-Closing Adjustment.  Section 5 of the Original 
Agreement is hereby amended by the addition of a new Section 5.30 to read in 
its entirety as follows:

                           "Section 5.30  Statement of Working Capital; Post-
Closing Adjustment.

                           (a)      Prior to Closing, the TRO Shareholders shall
cause to be prepared and delivered to PREIT: (i) a statement of

                                      -2-






consolidated working capital (showing total current assets and total current
liabilities, calculated and presented in accordance with GAAP, provided that
the only accounts receivable of the Companies as of the Closing that shall be
taken into account for this purpose shall be those that satisfy the
requirements of Section 5.26 and that do not constitute rent roll receivables,
tenant deposits or funds held on behalf of others and provided further that no
account receivable with respect to the approximately $177,394 of development
fees owed by Oxford Valley Road Associates to TRO as of the Closing Date shall
be included as a current asset (all such accounts receivable that are
includable in such calculation, collectively, the "Creditable Accounts
Receivable")) for the Companies as of the Closing based upon TRO's good faith
estimates of all such working capital items as of Closing and (ii) a statement
listing each of the accounts receivable that are to be distributed prior to
Closing in accordance with Section 5.20(a)(ii).

                           (b)      Following Closing, the Partnership shall
cause a statement of consolidated working capital for the Companies as of
Closing (the "Working Capital Statement") to be prepared in accordance with
GAAP (provided that the only accounts receivable of the Companies includable
therein shall be Creditable Accounts Receivable which shall be valued at their
net realizable value in accordance with GAAP, but with no reserve or other
offset in respect of possible uncollectibility) and the Companies shall
cooperate with the Partnership and its representatives in the preparation of
such statement and provide full access to their respective books and records
in connection therewith. The Partnership shall use all reasonable efforts to
deliver a copy of the Working Capital Statement to TRO Liquidating L.L.C., a
Delaware limited liability company, within 60 days of the Closing Date. Unless
TRO Liquidating L.L.C. notifies the Special Committee within 10 days after
receipt of the Working Capital Statement of any objections thereto (specifying
in reasonable detail the basis therefor), such Working Capital Statement shall
be deemed the definitive Working Capital Statement. If TRO Liquidating L.L.C.
timely notifies the Special Committee of any such objection, TRO Liquidating
L.L.C. and the Special Committee shall attempt in good faith to reach an
agreement as to the matters in dispute. If TRO Liquidating L.L.C. and the
Special Committee shall have failed to resolve such disputed matter within 10
business days after receipt of timely notice of such objection, then any such
disputed matter shall, at the instance of the Special Committee or TRO
Liquidating L.L.C., be submitted to and resolved by any nationally recognized
accounting firm mutually acceptable to the Special Committee and TRO
Liquidating L.L.C. The fees and expenses of such accounting firm incurred in
resolving the disputed matters shall be equitably apportioned by such
accountants based upon the extent to which the Special Committee, on the one
hand, or TRO Liquidating L.L.C., on the other hand, is

                                      -3-






determined by such accountants to be the prevailing party in the resolution of
such disputed matters. The Working Capital Statement shall, after resolution
of any disputes pursuant to this Section 5.30(b), be deemed to be the
definitive Working Capital Statement.

                           (c)      If there is a Net Deficit (as defined below)
as of the Closing Date, determined based upon the definitive Working Capital
Statement, then the TRO Shareholders shall cause TRO Liquidating L.L.C. either
(i) to pay TRO cash in an amount equal to the aggregate amount of the Net
Deficit or (ii) to assign to TRO, free and clear of all Encumbrances, an
amount of fully-collectible accounts receivable that satisfy the requirements
of Section 5.26 and that were distributed out of TRO prior to Closing in
accordance with Section 5.20(a) equal to the aggregate amount of the Net
Deficit, and such accounts receivable shall thereafter be subject to the
collectibility guarantee of the TRO Shareholders set forth in Section 5.29(b).
If there is a Net Surplus (as defined below) as of the Closing Date,
determined based upon the definitive Working Capital Statement, then the
Partnership shall pay TRO Liquidating L.L.C. cash in an amount equal to the
aggregate amount of such Net Surplus.

                           (d)      Any payment or assignment pursuant to
subparagraph (c) above shall be made within 5 days following the date on which
the Working Capital Statement becomes the definitive Working Capital Statement
as contemplated above, provided, however, that if at any time prior to the
time the Working Capital Statement becomes definitive the Special Committee
and TRO Liquidating L.L.C. mutually agree that following final determination
of the Working Capital Statement (and the relevant calculation based thereon)
a payment or an assignment will be required to be made pursuant to
subparagraph (c), the amount of such payment or assignment that the parties do
not dispute shall then be paid.

                           (e)      Payments made pursuant to this Section 5.30
shall be made by certified check or wire transfer of immediately available
funds in accordance with instructions provided by the party to be paid.

                           (f)      For purposes of this Section 5.30, "Net
Deficit" means the excess, if any, of (x) the sum of the amounts described in
Section 3.9(b)(II) and Section 3.9(b)(IV) through (IX) over (y) the total
current assets (i.e., cash, cash equivalents and accounts receivable) of the
Companies, the amount of such current assets and the current liabilities
described in subclause (VI) being calculated in accordance with GAAP (provided
that the only accounts receivable of the Companies includable therein shall be
Creditable Accounts Receivable, which shall be valued at their net realizable
value in accordance with GAAP, but with no reserve or other offset in respect
of possible

                                      -4-






uncollectibility), and "Net Surplus" means the excess, if any, of (i) the
total current assets (i.e., cash, cash equivalents and accounts receivable) of
the Companies as of the Closing over (ii) the sum of the amounts described in
Section 3.9(b)(II) and Section 3.9(b)(IV) through (IX), the amount of such
current assets and the current liabilities described in subclause (VI) being
calculated in accordance with GAAP (provided that the only accounts receivable
of the Companies includable therein shall be Creditable Accounts Receivable,
which shall be valued at their net realizable value in accordance with GAAP,
but with no reserve or other offset in respect of possible uncollectibility).

                           (g)      The provisions of this Section 5.30 shall in
no way limit or alter any of the representations, warranties and covenants of
the parties made herein and following the preparation of the Working Capital
Statement and the payment of any amounts due pursuant to this Section 5.30,
PREIT and the Partnership shall continue, inter alia, to have all rights
available to them pursuant to Section 10 hereof.

                           (h)      Notwithstanding anything to the contrary in
this Agreement, TRO shall not distribute, assign or otherwise transfer on or
prior to Closing any rights it has to be paid approximately $177,394 of
development fees by Oxford Valley Road Associates."

                  5. Schedule C. Schedule C to the Original Agreement is
hereby deleted and replaced in its entirety with Schedule C attached hereto.

                  6. Schedule 10.1. The Original Agreement is hereby amended
by the addition of Schedule 10.1 in the form attached hereto.

                  7. Confirmation. The Original Agreement, as amended hereby,
is ratified and confirmed in all respects.


                                      -5-






                  IN WITNESS WHEREOF, each of the parties hereto has duly
executed this Agreement, all as of the date first above written.

                       PENNSYLVANIA REAL ESTATE
                            INVESTMENT TRUST


                       By: /s/ Jonathan B. Weller
                           ----------------------
                            Name:
                            Title:



                       PREIT ASSOCIATES, L.P.

                            By:  Pennsylvania Real Estate
                                 Investment Trust, its
                                 general partner

                                By: /s/ Jonathan B. Weller
                                   ------------------------
                                    Name:
                                    Title:



                       PREIT-RUBIN, INC.


                            By: /s/ Ronald Rubin
                                ------------------
                                 Name:
                                 Title:


                            THE RUBIN ORGANIZATION-ILLINOIS,
                                 INC.


                            By: /s/ Alan Feldman
                                -------------------
                                 Name:
                                 Title:

                                      -6-






                                  SCHEDULE A
                                      to
                                FIRST AMENDMENT
                                      TO
                          TRO CONTRIBUTION AGREEMENT


                  Each Current TRO Shareholder, by executing this Schedule A,
evidences that such person has become a party to, and is bound by, the First
Amendment to TRO Contribution Agreement.

                  All signatures need not appear on the same copy of this
Schedule A.


/s/ Ronald Rubin                            */s/ Joseph Straus, Jr.
- ------------------------------              ----------------------------
    Ronald Rubin                                 Joseph Straus, Jr.


*/s/ George Rubin                           */s/ Alan Feldman
- ------------------------------              ----------------------------
     George Rubin                                Alan Feldman


*/s/ Leonard Shore                          */s/ Doug Grayson
- ------------------------------              ----------------------------
     Leonard Shore                               Doug Grayson


*/s/ Joseph Coradino                        */s/ Eric Mallory
- ------------------------------              ----------------------------
     Joseph Coradino                             Eric Mallory


*/s/ Lewis Stone                            */s/ James Paterno
- ------------------------------              ----------------------------
     Lewis Stone                                 James Paterno


*/s/ Gerry Broker                           */s/ Judith Garfinkel
- ------------------------------              ----------------------------
     Gerry Broker                                Judith Garfinkel


*/s/ Patricia Berns                         */s/ David Bryant
- ------------------------------              ----------------------------
     Patricia Berns                              David Bryant


/s/ Edward Glickman                         */s/ Susan Valentine
- ------------------------------              ----------------------------
    Edward Glickman                              Susan Valentine


* By: /s/ Edward Glickman
- ------------------------------              
          Attorney-in-Fact






                                  SCHEDULE B
                                      to
                                FIRST AMENDMENT
                                      TO
                          TRO CONTRIBUTION AGREEMENT

                  Each Former TRO Debtholder, by executing this Schedule B,
evidences that it has become a party to, and is bound by, the First Amendment
to TRO Contribution Agreement.

                  All signatures need not appear on the same copy of this
Schedule B.


                                               DELAWARE ASSOCIATES


                                               /s/ Ronald Rubin
                                               -----------------------------
                                               Ronald Rubin, General Partner



                                               RICHARD I. RUBIN & CO., INC.


                                               By:  /s/ George Rubin
                                                    ------------------------
                                                        Name:
                                                        Title:


                                               RR LOANCO ASSOCIATES


                                               By:  Richard I Rubin & Co.,
                                                    Inc., its Managing Partner


                                               By:  /s/ George Rubin
                                                    ------------------------
                                                         Name:
                                                         Title: