Exhibit 99
Pennsylvania Real Estate Investment Trust
[GRAPHIC OMITTED] 200 South Broad Street
Philadelphia, PA 19102
www.preit.com
Phone: 215-875-0700
Fax: 215-546-7311
FOR FURTHER INFORMATION:
AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD
Edward A. Glickman Joe Calabrese Pamela King Judith Sylk-Siegel
Executive Vice President and CFO (General Info) (Analyst Info) (Media Info)
(215) 875-0700 (212) 661-8030 (212) 661-8030 (212) 661-8030
FOR IMMEDIATE RELEASE
May 13, 1999
Pennsylvania Real Estate Investment Trust
Philadelphia, PA, May 13, 1999 -- Pennsylvania Real Estate Investment Trust
(NYSE:PEI) announced today the results of its operations for the first quarter
ended March 31, 1999.
First Quarter Highlights
o Increased FFO by 12.5% to $0.63 per share on 14.6 million shares/OP units
outstanding from $0.56 per share on 13.9 million shares/OP units outstanding
during the first quarter of 1998
o Funds from operations for the quarter increased 18.2% to $9.2 million from
$7.7 million in 1998
o Increased combined net operating income 41.2% to $18.3 million from $13.0
million in 1998
o Retail net operating income increased 68.7% from the 1998 first quarter
o Multifamily net operating income grew 17.8% from the 1998 first quarter
o Acquired an interest in Creekview shopping center, a 64-acre power center
site in Warrington, PA
First Quarter Results
Funds from operations (FFO) for the three months ended March 31, 1999 totaled
$9,155,000, an 18.2% increase over FFO of $7,744,000 for the comparable
three-month period ended March 31, 1998. The growth was driven by acquisitions
and development projects completed in 1998 and improved operating results in the
Company's portfolio. First quarter FFO was $0.63 per share on 14,582,000
weighted average share equivalents outstanding (including Operating Partnership
[OP] units), compared to $0.56 per share on 13,938,000 weighted average share
equivalents for the three months ended March 31, 1998. As calculated by NAREIT,
FFO is defined as net income excluding extraordinary and unusual items, gain (or
loss) on the sale of property, plus depreciation and amortization.
Net operating income from wholly-owned properties and the Company's
proportionate share of partnerships and joint venture properties increased 41.2%
to $18,316,000 for the three months
PREIT Announces First Quarter 1999 Results
May 13, 1999
Page 2
ended March 31, 1999, from $12,971,000 for the three months ended March 31,
1998. The increase is mainly due to acquisitions completed in the second half of
1998 and the completion of two development properties in the fourth quarter of
1998.
Net income for the three months ended March 31, 1999 was $5,870,000, or $0.44
per basic share, on total weighted average shares outstanding of 13,309,000
compared to $4,593,000, or $0.35 per basic share, on 13,292,000 total weighted
average shares outstanding for the three months ended March 31, 1998. Net income
for the 1999 period included gains on sales of 135 Commerce Drive, Fort
Washington, PA and a land parcel at Crest Plaza, Allentown, PA, totaling
$1,346,000 or $0.10 per share.
Comments from Management
Ronald Rubin, Chief Executive Officer of PREIT, said, "We continue to be pleased
with our operating results, demonstrating the integration of several accretive
acquisitions over the past year, the recent completion of two development
projects and strong internal growth. During the 1999 first quarter we achieved
double digit increases in FFO, combined net operating income as well as solid
performance from our multifamily portfolio, reflecting the effectiveness of our
long-term growth strategies."
Mr. Rubin continued, "Our primary focus in early 1999 is maintaining the growth
of our development pipeline, and obtaining adequate funding for such purpose."
Same Store NOI Growth Continues - Multifamily & Shopping Center Portfolios
Same store net operating income for the Company's portfolio of multifamily
properties increased 4.7% over the first quarter of 1998, primarily driven by an
increase in revenues and improved occupancy. Same store net operating income for
the first quarter of 1999 for the Company's shopping center portfolio increased
by 0.5% over the comparable quarter. The Company's same store analysis of the
retail portfolio is negatively impacted by the Company's revised policy of not
accruing percentage rental income until all contingencies have been removed
(consistent with the Emerging Issues Task Force (EITF) 98-9). This policy causes
some percentage rental income to be recognized later in the calendar year when
compared with the policy in effect in the first quarter of 1998.
Portfolio Highlights
o Creekview (Warrington, PA) -- PREIT announced that it acquired a 64-acre
power center site in conjunction with the center's two major tenants,
Target and Lowe's. Ownership of the 387,000 square foot shopping center is
in the form of a retail condominium in which PREIT, Target and Lowe's own
100% of the condominium. PREIT, whose share of the purchase price was $1.3
million, plans to develop 100,000 square feet of stores complementary to
Target and Lowe's at a total cost of approximately $10 million.
o Development Pipeline - During the second quarter, the Company expects
construction will commence on two retail development projects, Paxton Towne
Center (582,000 square feet) in Harrisburg, PA and Blue Route Metroplex
(760,000 square feet) in Plymouth Meeting, PA. Funding for these projects
is expected to come from the Company's line of credit and construction
financing.
PREIT Announces First Quarter 1999 Results
May 13, 1999
Page 3
o Dispositions - The Company sold a non-core asset from its industrial
portfolio (135 Commerce Drive in Fort Washington, PA) to the property's
tenant and a surplus land parcel at Crest Plaza in Allentown, PA for total
capital gains of $1,346,000, or $0.10 per share.
Jonathan B. Weller, President and Chief Operating Officer of PREIT, commented,
"We remain highly committed to our development efforts, providing PREIT with
opportunities to leverage its development expertise while offering the potential
for FFO growth. Currently, PREIT's development and redevelopment pipeline
includes five power centers, three strip centers and one enclosed mall," Mr.
Weller added. "Consistent with the Company's strategy of selling non-core
assets, PREIT sold one of its industrial properties as well as a surplus land
parcel at Crest Plaza during the quarter. Looking forward, we will continue to
prune our portfolio by selling properties that do not meet PREIT's long-term
ownership criteria."
Benefits of New Long-Term Financing
As previously announced in April, PREIT closed on the financing of eight
multifamily communities with $108 million of permanent, fixed-rate, long-term
debt. With the financing, PREIT replaced short-term floating rate debt with
mortgage debt with a 10 year maturity and a weighted average interest cost of
6.77%. A portion of the proceeds from the transaction were used to pay off a
short-term, floating rate loan of $17 million, which was secured by the recently
acquired Northeast Tower Center in Philadelphia, PA. The balance of the
proceeds, approximately $88 million, was used to pay down the Company's line of
credit. After the paydown, approximately $60 million was outstanding under the
Company's line of credit.
Edward Glickman, Chief Financial Officer of PREIT, added, "To position PREIT for
future growth, we recently took steps to strengthen our financial resources and
our capability to continue building our portfolio. Importantly, the proceeds
from the $108 million long-term financing provide the Company with additional
financial flexibility to facilitate its 1999 development projects and other high
value-added opportunities. We are confident of the Company's prospects for
continued profitable growth."
Quarterly Dividend Declared
The Company declared a quarterly dividend of $0.47 per share payable on June 15,
1999 to shareholders and unitholders of record as of May 28, 1999. The June 15,
1999 dividend payment will be PREIT's 89th consecutive distribution since its
initial dividend paid in August of 1962. Throughout its history, the Company has
never omitted or reduced a shareholder dividend.
PREIT Announces First Quarter 1999 Results
May 13, 1999
Page 4
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 shopping centers
(8.0 million square feet) and apartment communities (7,241 units) located
primarily in the eastern United States. The Company's portfolio currently
consists of interests in 47 properties in 10 states. In addition, there are 5
retail properties under development. Pennsylvania Real Estate Investment Trust
is headquartered in Philadelphia, PA.
With the exception of the historical information contained in the release, the
matters described herein contain forward-looking statements that are made
pursuant to the Safe Harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such statements involve various risks and may cause actual
results to differ materially. These risks include, but are not limited to, the
ability of the Company to grow internally or by acquisition and to integrate
acquired businesses, the availability of adequate funds at reasonable cost,
changing industry and competitive conditions, and other risks outside the
control of the company referred to in the Company's registration statement and
periodic reports filed with the Securities and Exchange Commission.
[Financial Tables Follow]
# # #
** A supplemental quarterly financial package **
is available on the Company's web site at www.preit.com.
To receive additional information on Pennsylvania Real Estate Investment Trust
via fax at no charge, please dial 1-800-PRO-INFO
and enter the ticker symbol PEI.
PREIT Announces First Quarter 1999 Results
May 13, 1999
Page 5
Pennsylvania Real Estate Investment Trust
Selected Financial Data
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FUNDS FROM OPERATIONS
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Three Months Ended
----------------------------------------------------
March 31, 1999 March 31, 1998
----------------------------------------------------
Income before minority interest in operating partnership $ 6,432,000 $ 4,817,000
Less: Gains on sales of interests in real estate (1,346,000) -
Add: Wholly owned & consolidated partnership, net 3,156,000 2,088,000
Unconsolidated partnerships & joint ventures 1,059,000 998,000
Excess purchase price over net asset acquired 53,000 29,000
Less: Depreciation of non-real estate assets (60,000) (58,000)
Amortization of deferred financing assets (139,000) (130,000)
----------- -----------
FUNDS FROM OPERATIONS $ 9,155,000 (1) $ 7,744,000 (1)
=========== ===========
FUNDS FROM OPERATIONS PER SHARE AND OP UNITS $0.63 $0.56
=========== ===========
Weighted average number of shares outstanding 13,309,000 13,292,000
Weighted average effect of full conversion of OP units 1,273,000 646,000
----------- -----------
Total weighted average shares of outstanding including OP units 14,582,000 13,938,000
----------- -----------
(1) Includes the non-cash effect of straight-line rent of $295,000 and $225,000 for the 1st quarter of 1999 and 1998, respectively.
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OPERATING RESULTS
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Three Months Ended
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March 31, 1999 March 31, 1998
----------------------------------------------------
REVENUES
Gross revenues from real estate $21,100,000 $13,526,000
Interest and other income 163,000 121,000
----------- -----------
21,263,000 13,647,000
----------- -----------
EXPENSES
Property operating expenses 7,377,000 5,093,000
Depreciation and amortization 3,216,000 2,138,000
General & administrative expenses 853,000 738,000
Interest expense 5,105,000 1,978,000
----------- -----------
16,551,000 9,947,000
----------- -----------
Income before equity in unconsolidated entities,
gains on sales of interests in real estate and
minority interest in operating partnership 4,712,000 3,700,000
Equity in loss of PREIT-RUBIN, Inc. (1,092,000) (358,000)
Equity in income of partnerships and joint ventures 1,466,000 1,475,000
Gains on sales of interests in real estate (2) 1,346,000 -
----------- -----------
Income before minority interest in operating partnership 6,432,000 4,817,000
Minority interest in operating partnership (562,000) (224,000)
----------- -----------
NET INCOME $5,870,000 $ 4,593,000
=========== ===========
PER SHARE DATA
Net income before gains on sales of interests in real estate $0.34 $0.35
Gains on sales of interests in real estate 0.10 -
----------- -----------
BASIC INCOME PER SHARE $0.44 $0.35
=========== ===========
DILUTED INCOME PER SHARE $0.44 $0.34
=========== ===========
Weighted average number of shares outstanding 13,309,000 13,292,000
----------- -----------
(2) Gains on sales of 135 Commerce Drive, Fort Washington, PA and land parcel at Crest Plaza, Allentown, PA.
PREIT Announces First Quarter 1999 Results
May 13, 1999
Page 6
Pennsylvania Real Estate Investment Trust
Selected Financial Data
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EQUITY IN INCOME OF PARTNERSHIPS
AND JOINT VENTURES
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Three Months Ended
----------------------------------------------------
March 31, 1999 March 31, 1998
----------------------------------------------------
Gross revenues from real estate 14,158,000 $14,737,000
============ ===========
Expenses:
Property operating expenses 4,852,000 5,403,000
Mortgage and bank loan interest 4,188,000 4,233,000
Depreciation and amortization 2,154,000 2,071,000
------------ -----------
11,194,000 11,707,000
------------ -----------
2,964,000 3,030,000
Partner's Share (1,498,000) (1,555,000)
------------ -----------
EQUITY IN INCOME OF PARTNERSHIPS AND JOINT VENTURES $ 1,466,000 $ 1,475,000
============ ===========
Supplemental Information for Wholly Owned Properties
and the Company's Proportionate Share of Partnerships and Joint Ventures
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EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION
AND AMORTIZATIONS ("EBITDA")
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Three Months Ended
----------------------------------------------------
March 31, 1999 March 31, 1998
----------------------------------------------------
Gross Revenues $ 21,100,000 $ 13,526,000
Operating expenses (7,377,000) (5,093,000)
------------ ------------
Net operating income: Wholly-owned properties 13,723,000 8,433,000
Company's proportionate share of partnerships and
joint ventures net operating income 4,593,000 4,538,000
------------ ------------
Combined net operating income 18,316,000 12,971,000
Interest income 163,000 121,000
Company's proportionate share of PREIT-RUBIN, Inc.
net operating loss (800,000) (221,000)
General and administrative expenses (853,000) (738,000)
------------ ------------
EBITDA $ 16,826,000 $ 12,133,000
============ ============
MORTGAGE NOTES AND BANK LOANS PAYABLE
Wholly-Owned Properties
Mortgage notes payable $166,274,000 $ 65,121,000
Bank Loans payable 142,973,000 49,526,000
------------ ------------
309,247,000 114,647,000
Company's Proportionate Share of
Partnerships and Joint Ventures
Mortgage notes payable 108,861,000 102,704,000
Bank loans payable 2,482,000 4,154,000
------------ ------------
Total mortgage notes and bank loans payable $420,590,000 $221,505,000
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