SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) August 27, 1998
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Pennsylvania Real Estate Investment Trust
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(Exact Name of Registrant as Specified in Charter)
Pennsylvania 1-6300 23-6216339
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
455 Pennsylvania Avenue, Suite 135, Fort Washington, Pennsylvania 19034
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (215) 542-9250
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(Former Name or Former Address, if Changed Since Last Report)
Item 2. Acquisition or Disposition of Assets.
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On August 27, 1998, PR Festival Limited Partnership, a Pennsylvania
limited partnership and an affiliate of Pennsylvania Real Estate Investment
Trust, a Pennsylvania business trust ("PREIT"), acquired a retail shopping
center located in Exton, Pennsylvania commonly known as "Festival at Oaklands"
(the "Oaklands Property") from Oaklands Limited Partnership, a Pennsylvania
limited partnership ("Oaklands Partnership"). The aggregate purchase price for
the transaction was $17,700,000.
The registrant currently intends to continue to operate the Oaklands
Property as a retail shopping center.
As of the closing of the acquisition of the Oaklands Property, the
general partner of Oaklands Partnership was a limited partnership, the general
partner of which was a corporation owned by James J. Gorman and Christopher J.
Knauer. The registrant is not aware of any material relationship between
either of Mr. Gorman or Mr. Knauer and (i) PREIT or any of its affiliates,
(ii) any officer or trustee of PREIT or (iii) any associate of the officers or
trustees of PREIT.
PR Festival Limited Partnership financed the purchase price of the
transaction through a borrowing under PREIT's existing revolving line of
credit with First Union National Bank. The purchase price was determined in
arms-length negotiations among the parties based upon PREIT's valuation of the
cash flow of the Oaklands Property.
Location of the Oaklands Property
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The Oaklands Property is situated on Route 30 (Lancaster Pike) in
Exton, Pennsylvania. The site is on the south side of the highway, one mile
west of the intersection with Route 100 and approximately one-half mile east
of the access ramps to the Route 30 bypass.
Description of the Oaklands Property
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The Oaklands Property is a supermarket-anchored community shopping
center built in 1991 consisting of approximately 140,000 square feet of gross
leasable area. The anchor tenants, comprising approximately 77,000 square
feet, consist of Clemens, Sears Hardware, Rite-Aid and House of Fabrics. Other
major tenants include Avellino's, Applebee's and Sovereign Bank.
The occupancy rate was approximately 95% at the time of closing.
Taxes
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The property taxes for the 1998 fiscal year are expected to be
approximately $170,000.
Competition
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The Oaklands Property competes directly with two supermarket-anchored
shopping centers located within a mile of the Oaklands Property. Secondary
competition consists of a power center and regional mall that share the
Oaklands Property's trade area.
Environmental
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The registrant commissioned a Phase I Environmental Site Assessment
and a follow-up Phase II Environmental Site Assessment for the Oaklands
Property. The purpose of the Phase II assessment was to investigate further
each of the recognized environmental conditions that were identified by the
Phase I assessment. Based upon the Phase II assessment results, the registrant
believes that there are no recognized environmental conditions at the Oaklands
Property that are material.
Management Arrangement
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The Oaklands Property will be managed by PREIT-RUBIN, Inc., an
affiliate of PREIT.
After reasonable inquiry, PREIT is not aware of any material factors
relating to the Oaklands Property, other than those described in the foregoing
discussion, that would cause the financial information reported in Item 7(a)
hereof not to be necessarily indicative of future operating results.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(a) Financial Statements
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The registrant believes that it is impracticable to provide at this
time the required financial information for the acquisition described in Item
2 of this report. The registrant expects to file the required financial
information by November 10, 1998, which is within 75 days after the date of
the earliest event reported.
(b) Pro Forma Financial Information
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The registrant believes that it is impracticable to provide at this
time the required pro forma financial information for the acquisition
described in Item 2 of this report. The registrant expects to file the
required pro forma financial information by November 10, 1998, which is within
75 days after the date of the earliest event reported.
(c) Exhibits
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2.1* Purchase and Sale Agreement dated as of July 24, 1998 by and
between Oaklands Limited Partnership, a Pennsylvania limited partnership, and
PREIT Associates, L.P., a Delaware limited partnership.
* Pursuant to Item 601(b)(2) of Regulation S-K, the schedules and exhibits
to the Purchase and Sale Agreement with Oaklands Limited Partnership and
to the Purchase and Sale Agreement with Project 126A Associates, L.P.
are omitted. Each Purchase and Sale Agreement identifies the contents of
all schedules and exhibits thereto, and the registrant agrees to furnish
supplementally copies of such schedules and exhibits to the Securities
and Exchange Commission upon request.
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
Date: October 8, 1998 By: /s/ Jonathan B. Weller
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Jonathan B. Weller
President and Chief Operating Officer
Exhibit Index
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Number Exhibit Page Number
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2.1 Purchase and Sale Agreement dated as of July 24, 7
1998 by and between Oaklands Limited
Partnership, a Pennsylvania limited partnership,
and PREIT Associates, L.P., a Delaware limited
partnership.