SECOND AMENDMENT TO FIRST AMENDED AND RESTATED AGREEMENT OF
                               LIMITED PARTNERSHIP


                  This Second Amendment to First Amended and Restated Agreement
of Limited Partnership (the "Amendment") is made as of this 15th day of July,
1998, by Pennsylvania Real Estate Investment Trust, a Pennsylvania business
trust ("PREIT").

                                   Background

                  PREIT is the general partner of PREIT Associates, L.P., a
Delaware limited partnership (the "Limited Partnership").

                  Pursuant to Section 16.15(A) and 16.15(C) of the First Amended
and Restated Agreement of Limited Partnership of PREIT Associates, L.P. dated as
of September 30, 1997 (as previously amended, the "Partnership Agreement"),
PREIT is authorized to amend certain sections of the Partnership Agreement in
its sole discretion and without the consent of any other partner of the Limited
Partnership, unless a partner in the Limited Partnership would be adversely
affected by such amendment.

                  PREIT has determined that this Amendment will not adversely
affect any partner of the Limited Partnership.

                  NOW, THEREFORE, PREIT, acting as the sole general partner of
the Limited Partnership, hereby amends the Partnership Agreement by amending and
restating Section 12.3.A. thereof in its entirety as follows:

                  "A. GENERAL. Prior to the first anniversary of the Issuance
Date, no Limited Partner shall Transfer all or any portion of its Limited
Partner Units to any Person without the consent of the General Partner, which
consent may be withheld in its sole discretion; except for (i) Transfers to a
Family Member pursuant to the laws of descent or devise or to either a trust
established for the benefit of such Partner or such Partner's Family Members or
to any entity all of the beneficial interests of which are owned by such Partner
or such Partner's Family Members, (ii) Transfers by partnerships and other
entities owning interests in Units to Limited Partners or other beneficial
owners of such entities; and the transferees in each such case described in this
subpart (ii) or in subpart (i) shall be admitted as Additional Limited Partners
simultaneously with such transfer and (iii) pledges by any Limited Partner of
all or any portion of its Limited Partner Units to financial institutions as
collateral or security for a bona fide loan or other obligations ("Pledges"),
and Transfers of such pledged Limited Partner Units to such lending institutions
in connection with the exercise of remedies under such loan or other obligations
(any such Transfer, a "Permitted Transfer"); provided, that, in each and every
case, such Transfers shall comply with all other provisions of this Article XII.
Except as limited by the preceding sentence or any other agreement among the
pertinent parties, each holder of record of Limited Partner Units shall have the



right to Transfer all or any portion of such Units to any Person, subject to the
provisions of Section 12.6 hereof and to satisfaction of each of the conditions
set forth herein."

                  The Partnership Agreement, as amended hereby, is hereby
ratified and confirmed in all respects.

                  IN WITNESS WHEREOF, PREIT has caused this Amendment to be
executed by its duly authorized representative as of the date first written
above.

                                   PENNSYLVANIA REAL ESTATE INVESTMENT TRUST


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