PEI - Earnings call transcript Q1 2018 | Pennsylvania Real Estate Investment Trust

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Operator

Good morning. My name is Stephanie, and I will be your conference operator today. At this time, I would like to welcome everyone to the PREIT First Quarter 2018 Earnings Conference Call. [Operator Instructions]. Heather Crowell, Senior Vice President of Strategy and Communication, you may begin your conference.

Heather Crowell

you. Thank you Call. us thank Quarter PREIT's for Earnings XXXX all morning, for joining First Good

call, make only SEC statements today this that to the results. beliefs, During risks are we'll trends X, are federal PREIT meaning set within the such accurate projections, company's risks that and securities might of not May the and historical Descriptions laws. are makes other forth statements. PREIT uncertainties These these filings. of and of relate or that XXXX, facts expectations, events makes certain to matters forward-looking future subject to statements affect Statements today, no as be update in and undertaking might any

PREIT to release SEC. such Coradino, has included McCadden, now While turn and call certain with the documents on Coradino. there's reconsideration CFO. the CEO; the I'll and its are, earnings GAAP today over discussed, member Joe measures and in to other of management call the filed Joe non-GAAP measures Members be our Chairman comparable of PREIT's Bob will

Joseph Coradino

and to Heather, only the is business to term. quarter its An over our earnings it you you, time not for Thank morning, us everyone. a update as future long the and our on good strategy, relates Welcome. call but for

room strong the at the about a We with just themselves. has business. We're continue proof in always XXX critical per call a properties you $XXX to and business opportunities the not markets, where really that threshold the A strategy, increase ago portfolio good "Hungry square view with company, to long of square that our or and and certain quality epitomizes were reliant. we're this were faster.'' feel own going last which strategy Our We approach we to been if there one in forward. a We've four XX% foot. surpassed sales years dogs that proven years differentiates four we're now created a and our powerful NOI-weighted strong headed. started run point that takes foot, quote, avail

improve paying are shed proactively way which with spreads attendance. with traffic, efforts off driving sales Our to as We weaker portfolio occupancy, and and foot properties stores leases department strong coupled worst gives of to pipeline we've growth. replaced NOI executive our with renewal their and strong our

but We'll broad We have portfolio demonstrated well can't I about is narrative grow a profiles. strong positioned our and did. located properties company be in impressive not a thrive future, let markets into tell false in of great be. portfolio to with won't it is a and It tale she top growth the hunger and fundamentally with a

an strong redefine are that accomplishments. sales and Consider off. are traditional our negative While the what pushing accomplished sales been envelope to embracing it constantly in We speed the execution. a our headlines stale, mall are and of indicator by these proud has efforts we've to - paying are business, challenging recent tenant we experience and time believe tireless getting our the strong tenant

foot, in sales to per stand QX now room sales alone. Our square in run. NOI-weighted sales XXX We've by square by per up foot X.X%. at grown were Same-tenant March X.X% with

square We foot go have property $XXX exceeding first a our and apart. we'll

all while occurred $XXX NOI, sales. per And the square of assets, has for these there Our are of number stores foot in nearly in first averaged of which top time our transition. X XX% department generate over

our with of fill size particularly signed occupancy. of take tenants and as the We've Our XX performance we're five the department will tenants the A remaining cusp executing given and achievement, on noteworthy placement now XX for of box. available, to only stores we scale leases the improve leases had the portfolio.

boxes, recapturing replacing you announced As in know, stores underperforming very were ahead closures. of department been we've active

we opened tenants in the at And reflective open five open year, anchor former in Anchor market XXXX, opportunity tenants provided facts cases many least - avoided exciting quite have shoppers are three anchor former former high-supply and in we'll new So impressive. in XX we bring competing our four lifestyle. And Last we'll environment. This destinations wealth new health defendants entertainment, spaces. an a XX that seven year, spaces. for in closures to department dining, retail, in to successfully are tenants and store boxes. of

continued new our previous existing the the expect generate portfolio, new increase our tenants. we at did, to that anchors, will Xx disparaged tenants and have draw customers We volumes through the least opportunity highlighting sales for the productivity

gross These we're boxes XXXX. As we're what in economic with of credit another by definition, and benefit, $X and again are, of challenging market portfolio revenue tenants locations. of This the million diversifying we anchor boxes stream. generating results on of incremental breaking Xx $X.X and our the better a million the year, up traditional will the reflective the power generating our previously. average, rents and generate results high-quality reminder We're that it a income of into doing are were

cheesecake now we including portion for ceilings. complement property. with the with this equipped $XXX and foot, the experience restaurant and the and among allow well boasts square screens rate and border mix reserves additional sales that former experience, extraordinary grows, others. full with XX the JCPenney claim this signed space, entertainment luxury dining the We'll tenant the deal top-performing Occupying movie Primark, a theatre during and week premium Bloomingdale's, and of in movie Apple to As top-performing factory property, per that includes a with theater a which recently

liquidation are anchor minimal, recognized dispositions. and exposure of result And repented a forward. is in our disposition both we our our boxes the recapture program effort, bid are As Bon-Ton to And stores. successful maximized and of only retenanting with two widely spanning interest evaluating have options

XX% tenants in leases our in totaling executed million of noteworthy signed XXX,XXX It's $XX We laser with have that health XX% and of feet. are and Entertainment, forever feet square square mall future portfolio. just XX revenue with leases a experience off-price, portfolio same-store fashion, growth, strong XX% pipeline the with the NOI and for same-store foundation XX% we've representing wellness. for new Dining XX% and a our XX,XXX fast X

and recently differently to with below another portfolio retailers. addition five leases itself Burlington indicator the executed In presents to stores, express that our today

renewal quarter Our having X%, increases the secured tenants. spreads of for during the all were percentage for

of the quarter-to-quarter our from longer spreads the retail While position bearing improving tell story landscape. our the across term, over

continue compelling retailers. to challenges, As grow portfolio rents confront grew as able to our retailers attract those to tenants we're new and

QX our to results. Moving

as and sign NOI the new an to with open line an stores. top in was activity we continue incrementally impacted Our revenue Same-store line was expectations by growth in long Northeast. our unexpectedly

sales guidance our the debt, And year Excluding the snow, indicative the same-store expectations QX environment we of full of to be pleased our we're 'XX. were and to compared utilities the seeing. for reaffirm flat improving impact NOI able are bankruptcy-related same-store to

on with the anchor continuing And District, projects, reminder, continues commitments as in we're and Now XX% from we of progress at through a construction redevelopment XXXX. revenue our and all have line well along $X the Fashion moving continuum including of leases incremental is from replacement of space. where replacements approximately coming million anchor

we in future. affiliations the located a With evolve square continue estate the maximize the have use high-barriered the strong unique our compact assets. mix over of of foot portfolio the entry of to into in to generating and $XXX strong a sales, portfolio household with value underlying redefine with population enhance markets assets, real the opportunity to incomes, profile and Look

have and we position distinctive continue We us also compelling retail properties. of MSAs, limiting to additions to as and we makes, can our high replacing to digital exploit and advantage create provides several identified a X,XXX opportunities. evolve and that add increasingly our multifamily opportunity strong between of truly estimate will the Because top concentration world. at our with units experiences, social locations the residential covered underperformers the X,XXX them we multifamily hotel with take This more in and

intensify it our value Bob. over and structure, our estate. enhance diversify capital to real With stream, our the that, - revenue With can right further turn I'll position and add to we

Robert McCadden

I our our plan. first. results on Thanks, quarter operating progress and earnings the Move want to capital for the that against made Joe. review guidance to we've

our GAAP XXX Market of with expected $X.XX. $X.XX per As and adjusting adjustments FFO to between on share reaffirming and earnings, FFO XXXX take our effect expense. Joe depreciation sale guidance gain for we're Street of We're be mentioned, to final the

quarter share. quarter to We've in be mitigate We two diluted expectations NOI expect the the quarter a the $X.XX of that GAAP loss first unanticipated between We're $X.XX to would weakest. and same-store in also our on first telegraphed in impact one expected we the of events. the the we based percent, range our quarter per reaffirming guidance

in impact material you the of recall, have quarter a XXXX 'XX. did bankruptcies first If the

revenues operating joint impact we tenants by anticipated million Babies the to toys in two replacements For stores million properties. adjustments are at from $X $X.X higher expected the the closings year-end, bankrupt an of closings. XXXX full $X.X approximately be venture and incremental Bon-Ton's, Bon-Ton top impact on million full progresses. to the anchor is debt of year, to reflecting we number reflecting Reaching incremental from two of expenses, reduce $XXX,XXX That the compared of of closings. $X.X two number bad up revenues, also That about XXXX. as experienced million Co-tenancy stores our including expected NOI year XXXX, reflecting in the year-end, the is debts, are approximately million up the GAAP, year the anticipate $X.X normalization our in impact XXXX

redevelopment contributes and initially Capital $X.X and we year, the are million spending, $XXX of still higher-end impacted We also expect Capex record to unexpected to be anticipate at closings. in to be the We growth expenditures, we million including million to of million. termination lease to for some later $XXX expected this range. $X.X bankruptcy This leasing expect year. range space, allowances of by recurring revenues FFO our tenant that the to temporary and recoveries the assumed

ordinary operating does other business. sales the Finally, other asset than our transactions guidance assume capital financings in any of or not course market

timing share below NOI Turning expenses. to and reported $X.XX, of FFO streak, G&A to cadence which is of We the due primarily operations. per the and

impacted expect previously, debts $XXX,XXX to of within Same-store and for to X.X% bankruptcy-related of $X.XX be expenses year. bad was initial range mentioned FFO at we weather-related by $XXX,XXX. the NOI $X.XX our As of still minus guidance full

plan $X.X for up was expectations these revenue contributed line at top the revenue adjustments. nonanchor our compared year XX.X%, modestly points internal The first tenant of budget line in-line lease the you NOI points and occupancy with was openings quarter's and in the due replacements from occupancy XX same-store performance of our mall and occupancy. occupancy quarter. items, XX normalize of the signed new We of quarter for XX.X%, occupancy not in with reflecting impact from offset and include, several negative with was the lease basis large-format openings operating from revenue If basis ended growth, to takeaways to above tenants. XXXX million up and cotenancy Key incremental pipeline anchor of last early was 'XX. March levels occupancy same-store to bankruptcies XX.X%, XX.X%. yet leases strong Total the Nonanchor by

The for forward respect leases unrecognized our XXXX which capital employee the quarter a tenants bonus to The same-store of through this As early XXXX totaling first paying our at in of A impact continued our contribute amount, feet XXX,XXX [indiscernible] among certain and to year, have value the results was square XXXX. primarily company's million were we in timing $XX also annualized issued had we amortization issued the divorce, With from grants increase XXXX accrual we of end with reflected our in pipeline $X.X in - long-term unusually to short we XXXX. since due to asset relate this a annualized year-end in later our million plan. late open open Since stock costs. various year. year-end, refinancings adjustment favorable share. we've approximately as were of expenses our sales. asset next tap and words portion look the rent rents properties, compensation balance incentive at Of and will in XXXX, G&A that of will

Fashion million XX proceeds of and share. Our at District our approximate venture Market Street, a joint $X.X generating million $XX at gain

$XX unsecured initial & that and venture Dick's, a two to We term than of opening the of the $XXX have loan, out million the credit complete board, my March, for to mortgage Field in of financing until XXXX. facility July it's scheduled date recast and of the In mortgage no more lender By XXXX Outlets XXXX expect refinanced we ahead now. maturities proceeds the now the previous maturities Premium received successful XXXX. this and of quarter, also following the We earned unsecured years mortgage our extending Stream within Gloucester million of million HomeGoods. of new end to maturity loans of from $XXX

progress We to continue land the sales the of to Mall. opened on parcels, newly plane several including parcel make the adjacent

As approximately a generate million units site. housing develop third-party joint is $XXX In available available under venture end under $XXX we term million XXX expected capacity its hand of quarter. year. close part on new borrowing approximately credit initiatives, remaining the This March, At District this our million loan, totaling multifamily amount of distributions during the cash received later of will $XX facility. the of $XXX we and the proceeds venture five-year of our million densification on had and million to transaction March, from the - Fashion its and $XXX over

be remains XX.X%, our either our through net approximately the to well X.Xx, XX% end bank share continue for rising position - dividend interest quarter. that swapped, fixed was liquidity At or approved second of ratio of last positioned week, rates. debt With announced had strong. over $X.XX we and to board in-line the with a the our March, period our And we Our debt-to-EBITDA common was XX% leverage expectations. manage

XX-month is is payout XX%. FDA ratio FFO XX%, our payout Our rolling and ratio basis, our

with over this guidance. Finally, to replacement $XXX our spend of redevelopment with development, million program expect year remainder $XXX quarter, the another prior $XX in first on and in-line invested and respect anchor million million to to we the our

So open to it for Joe. I want up before back turn we questions, to

Joseph Coradino

valuation price. disconnect our our There's of clearly company between a in share

inordinately price pressured is confident share interest. solid. business Our by We're improving. is short Fundamentals our are

maintaining executing to think a We JV the our capital even access ways underway, and portfolio. within plan influence over guidance refinancing our increasing projects. which densification are is partners facility, have business dividend including there when time, our credit range, great our the to bringing it We in short-sellers

questions. Now, we'll for up open it

Operator

[Operator Instructions].

Your comes first Citigroup. from McElroy Christy with question

Christine McElroy

getting Just that of reaffirmation guidance.

coming You weakest, expectations? pieces quarter below you your expecting your of is? the be mentioned QX stream you're the where did the own what do major but think And

Joseph Coradino

kind our in few internal So with we nonappealable Christy, other than the items, line expectations. were of

line top first were spot think I We the internal growth. for principally, our focused our on revenue on quarter. budget basically

NOI. terms of think both just of I missed The Street cadence may have in our

did seasonal opening a and the NOI expect anchor the year, year, bit of in we FFO with little first the up. think half have I to ramp-up in and of of of year, second probably we other than last lease the half following the replacements

Christine McElroy

for have the what So XXXX, nonanchor that just for slated commencements one Okay. just on QX. you again, sort currently long that and that the in just commence what But for quarter, to number give negative are? And spread nonanchor know on done everything the I for some spreads X.X% renewal spreads, you just that? context then the what is slip, of can regarding quarter. of the all a number That continues comparable leases So are X.X% XXXX? to it's you're but - in us is

Joseph Coradino

average balance We're our based spreads the in the pipeline. expecting rent we mid-single digits of have the to on year be on what our for

Christine McElroy

digit Mid-single positive?

Joseph Coradino

Right.

Christine McElroy

converting And then being leases spreads so where on XX%. of the clarification triggered, the around percentage deals, for Does percentage co-tenancies leases? the just represent that to have the negative

Joseph Coradino

renegotiate set. just In some other yes. it's leases cases, In cases, for tenants

at you the the If term, one-year look typically terms.

as place identify we in tenants keeping essentially So replacements. the

Operator

comes Your with Kim Ki next from question SunTrust. Bin

Ki Bin Kim

we full just guidance It midpoint. of back NOI X.XX% seems in like go your your Can year. to

couple mentioned your that bankruptcies in opening think were you things, obviously. think mentioned well. I weather a of But unexpected you've as like there I remarks

of unforeseen hitting on of the we end? midpoint because how Given guess that some come should in comfortable - guidance a to or expect the are events you shouldn't that with I at lower

Robert McCadden

think point, much we're what are. place. a this we were weren't we comfortable year at still where a ago, At And we we different when

outperform Although, expect more this we to year. challenging much had second quarter, we which a

we're ask where at look kind to our you June, the when of of reassess performance. your end expectation of think I So you at I'd

we're I think in at comfortable we feel pretty where time. point this

Joseph Coradino

this of levers et push feel There's as specialty about ups, Ki can Bin, it we marketing there's and leasing, at cetera. deal we that to good relates top partnership it. good a still Yes, point -

Ki Bin Kim

the Okay. we bit the still anchor year? of losses? think reducing proactively. cadence how said you - of throughout and for little job should $X And carries by cotenancy that How this of good the cotenancy spaces how done you the quarter, guys we should And year. Yet, a think you've hit something around yourself losses the about I million

Robert McCadden

of you as down rolldown back an open it see probably come of some in quarter the in third fourth quarter the that we the kind uptick And some anchor to quarter. You're and up the of going really replacements. see then in fourth

Ki Bin Kim

if spreads. does if and going that is life spreads? I I really would or impact And of about to lease included, not First back guess question that And question. not to report that amendment lease the remember the correct? lease lease Okay. Christie's that amendment If - renewal correctly, renewal reportedly was the lease. And to second, is spreads, extend how lease you're

Robert McCadden

The relatively for volume that total pieces quarter. de-minimis for relative we number did that of to the are leasing

that but spreads. it materially our have So wouldn't be impacting we I reported to expect don't information,

Operator

comes Karin Securities. with question Ford MUFG from next Your

Karin Ford

It the sounds the about additional going fees. by from of and $X.X Is you're more Just termination same-store cotenancy in back million sort like changed to $X and of takes that that's guidance that the NOI going December impact impact, of think million the about way offset same-store? what's to have the and for bankruptcy perhaps lease then year. out are puts to

Robert McCadden

you're Joe to include of at we've FFO not certainly do guidance, lease look number levers keep But to we numbers, pull. as mentioned, same-store the that in termination if our we'll that. guess reconcile I looking Well, fees

be there normalization that expenses. some think also We

and an mitigating at winter if predict, later the our we payments but seen but ways So rates across of conservative taken to occurs amounts, you history those last few it off find are to hard different in recoveries easy to years to a not the any recoveries, elsewhere. help get amount of we costs removal utilities, and And get you that have typically on have impact, up write prepetition and full may look our bankruptcy we but both of the through quarter. the that store impact rationalization and that view the in terms we and make

Karin Ford

a Do expenses what to operating the XQ? you estimate nonrecurring rough in have were

Robert McCadden

Sure. And We of bad about removal $XXX,XXX utilities. had and snow bankruptcy-related debts. $XXX,XXX about of

Robert McCadden

And are measured place replace the that the It's and having plans for. that. to team executing. being It's in a there is not plan hold being

Karin Ford

Great.

You clearly anchor think occupancy which the the reconcile in just decline you're substantial mentioned sale to quarter. was you about? something Was due this decline occupancy is Or do the - replacement occupancy we that performance, what in be with to else doing? How sequential that several activity looked good properties? that of should

Robert McCadden

on March basis, kind end sales is a was at of leading points. a indicator. Yes, somewhat of temporary some quarters occupancy the points total going come obviously your thing trends to into then of is fourth fall of is the as up normal occupancy highest and it's again, of be XX XX basis nonanchor And back compared tenants Typically, year. up down the basis quarter. And fact, occupied 'XX, they, occupancy. statistics And the your other to But seasonal occupancy. quarter-to-quarter in cadence out

obviously, expansion can't move in properties source open portfolio the aggressively to capture confidence that we give our benefit it in - but occurs, their to the plans. retailers and same on it of certainly does quarter more increased immediately So sales the

Joseph Coradino

occupancy budget. I is to line add in Karen, And, our with that would that

rising but lag budget to point. We Bob's is occupancy, a are the line with will There it sales in follow. necessarily in between

Karin Ford

your comments and considering residential diversify talking you you in mentioned when and District, Joe, like opportunity stream. possibly ownership Are your the you apartment were in - maintaining of piece that? can Fashion it you about the identification revenue sounded that

Joseph Coradino

of a equity opportunistic would the be use maintain capital some let's we'll in We say sale. realize going in be In giving examples deal In flexible, the as the see and as our that. of relates to that's our opportunity But that ownership. previous it's cases, land one involve position. We script, and it where case different. to we our to again are enhance level an some in $XX the it the as million we

we're of Town Fashion Philadelphia capital that perspective. we value any Springfield where make are in have So if not to major and a created use District going we realize residential investment. want from a the like because but case of we we a rather will to kind of value investment these the or all link, value to And Center minor projects, the at minimize significant any of making in take

Karin Ford

it's I but the me. Got do budget sense Last the it. recent capital any additions know you what might for Bon-Ton one for early, given have you have activity?

Joseph Coradino

now Bon-Ton relates it of options which to to us that, think I could of as Well, lot reconnecting. and include include with front respect don't in dispositions a might stores, right we have and

this looking at is decision my going a best of objectives. our and the So to course options action at think capital given and point our that we're make

Operator

. from with Your next question Caitlin Sachs Goldman comes Burrows

Caitlin Burrows

In your it now then again remarks. in presentation, prepared March you up your brought and

you million the replacements go another during is 'XX and was anchor see 'XX. are $X through if year of Is right? impact timing that XXXX. in maybe I from you an already I $X.X just said million $X versus that You wondering this in incremental to And XXXX. expected for some that expecting impact think could million

Robert McCadden

from that million benefit for quarter, also The from the but replacements tenant openings. was not anchor that just only received, $X.X we new was the first

kind effectively, of expectations. impact and we still line we even So in revenues the though our of with cotenancy bankruptcies, absorb delivered

in in to that. openings, of 'XX really year also benefit full get And fourth - part in you're we Obviously, the fourth some So quarters. XXXX. quarter and the the see incremental we'll going benefit second, the get third

of 'XX. HomeGoods have below in the and we about second think quarter five You opening

third opening number in One We a we opening Mall well Fitness till as of have quarter, others have tenants sense in the the also quarter. and Town as fourth Life at home of

the experienced see be quarter, the in second So an fourth uptick we've of quarter. We'll it. in third larger a the an uptick impact in some and There's might quarter.

Caitlin Burrows

Okay. of years, I pretty strong sales terms I continue in growth portfolio frequently was to your know the sales the over And it. just few cash but in that past been early Got growth. in wondering negative. has spread be

I'm these So aren't that we with wondering have why reflecting sales just prayers that seen?

Robert McCadden

think of then term, related to transition, the turnaround with and of have tenants as in longer would be some benefits see interim that won't to part redevelopments many dealing probably the I near-term. it we is worked relatively in But the through our numbers portfolio. of of expect the kind those that

Caitlin Burrows

later one sales seem a on Okay. And rents like when - in bast numbers. while. another to percent the be you And a just that year? percent strong you too the as I that the item lowest sales to was of expect in just rents line then percent out looks wondering - look side. growth XQ at the whether quarter, reported that It improve to how tied in a rents the ratio

Robert McCadden

really results. tenant their of up close in XXXX end the fourth 'XX because of The year, function we had reported the timing. That quarter extended first was at quarter in the an of we a that our sales picked

It percentage issue. rents, was timing amount no really one So of the it it's a significant of timings. in erosion was

Caitlin Burrows

terms going rate. getting digits in that? the average I have know that on on as you're high-single to spreads this and you Okay. think Could our a normalized basis might mid- to in I forward. you And past renewal then touched But confirmed the the you one, just that just is expecting maybe of mentioned last before. maybe

Robert McCadden

is, correct. That

Operator

with Mueller Your next from question Mike Morgan. comes JP

Michael Mueller

Two questions.

on to change back new the the rent percentage on going So leases.

full down like XXXX, For XX%. about it was year

I think it was down low-XXs this time.

that's all, a spread that and of say, as Or should getting for still better? the we back take step is to going just it's level at look down time? and First some persist that at XX%

Robert McCadden

portfolio. through of kind I back that's processing some the is, of tenants No, comment. I mentioned, the see think Again, of to you I as cadence guess, these this referring

a kind number strong this terms properties. sales these we - the of of of many short-term reposition nature. deals, again, are a - more And the as at of you our But We have of in seen these performance at if I phenomena see our tenants they look are temporary portfolio.

So now our portfolio. not to these or see years X in are expect we X tenants that from

Joseph Coradino

on space. Yes, and - mean recapture with question. of in them is button , bit tenants walking a press we're exit and answering walking through will, couple little essentially, a in to you I keeping in the percentage Bob kind on place ability you're a if the this of the

experiencing to So it's be technique in - anchors a way with the occupied new It's being we're into term. auto we're is accomplish can keep finding the something be think is to replacing used. usual space that's sales a bringing that growth to we properties the going fairly easy. while that we're replacements. something are well, with the nothing the And those tenants, it's near going We

Robert McCadden

and Page But at smaller up XX average from at our format the the larger year. the our last if look including format supplemental, rents, average day, were of on you X% end tenants - rents - larger of

the still despite moving we're portfolio. renewal ball you the identify terms may foot rent of fact get spreads. in square specific Overall, So of per forward a we amount increasing in a the

Michael Mueller

Got it.

of the about for balance you're basis year Was being And the Bob, for Okay. that then expectations GAAP basis? cash spreads. or when talking mid-single-digit

Robert McCadden

basis. That's GAAP

Michael Mueller

this Or revenue of annualized on year line was hits this leasing year? mentioned number? Okay. is calendar $X final number And I million re-leasing - think that year what I Yes, in there anchor here. incremental there was it of question then anchor about coming an for terms guess initiatives. Is

Robert McCadden

That's a calendar year number.

Michael Mueller

is? loaded Okay. would And you how say $X million back-end that

Robert McCadden

of come seen seen I Yes, I will the it XXXX mentioned some it in as we've - openings. back-end. earlier, of say half would the think maybe from I we've

Michael Mueller

Okay.

now place later? and you in to come say, is half about is about half So

Robert McCadden

Right. Because the much bigger performance. openings the in 'XX 'XX will have impact on

Operator

question Boenning. van Dijkum next Floris from Your comes with

Floris van Dijkum

well XX I average right have as located better half your your top with are the growth - that bottom appears as - Joe, the to assume XX of your look as Is bottom in portfolio, your tenancies that assets on you list bottom better the it your supplemental. it that Question than in portfolio? at troubled occupancy your sales

Joseph Coradino

portfolio. Well, top I Certainly, performing XX better. have some that are half of make. to good assets an easy lower quality - assumption we be mean that But assets the throughout would the the

If under Macy's that you where a in added the Sporting a be is - to like currently in and market. Harrisburg back, look Goods. we a about space construction. we're Mall at a going got up to three open the And only Mall mall where that's we've Macy's putting Cap we're examples tenants Dick's City

where square per sales first-to-market the to want successful asset. because is And line the bottom many above that basis, feet. And again, are Patrick tenants. I is exciting portfolio. Mall tenants a the never assessing XX,XXX pretty that's foot the new place bottom five here. throw is I've really Macy's square the at that Mall, been so So of good well sitting another is, comfortable which or the replaced don't on of with going be another

there's say we So got a yes, we've I make because think question, little before being done. to work - your time

Floris van Dijkum

you is composition can share? there that more or things the you Okay. potential board regarding any can other give any And updates corporate us

Joseph Coradino

that, change the at stepping a meeting. Ronald Rubin made Report that's just booked annual down before going we And to And we year new Well, a board. on apps, the member. George our board Alburger. is be to children

a improve look So period. And on new in continue governance we at we'll issues the and four-year three perspectives. to to try company all from have directors

Operator

comes Your Ki from Bin next Kim with question SunTrust.

Ki Bin Kim

questions online expect sense year? FOP we should up for the here. this have coming what Do a Couple of NOI year? And the next of clean from you

Robert McCadden

a included in we a modest our our amount relatively had think 'XX had was I'm XXXX - initial sorry, that I guidance. We guidance, our -

Ki Bin Kim

not or Okay, so much. that a for nonanchor swings timing is occupancy And quarters? occupancy - at you're couple more a just five does malls last the that that swings issue

Robert McCadden

decrease a expect those see end You might narrow. year of gaps the for of we'd to couple some of the some by of those to but quarters,

Ki Bin Kim

of Okay, and the what was cause that?

Robert McCadden

that planning tenants some we're typical replace. we've seasonal - leasing Just and some to

Ki Bin Kim

a of in like far? and prime location Just of those just are base, typically is you finding tenant which jewelry higher in just - This the commentary? kind malls. on looks generally doing, provide creates sales pages the of question are can And color last kind top overall the all just command then know any And on branded Okay. so the things I how

Robert McCadden

up So our extremely X.X%. category jewelry basis, as of in March, a still the month performing you modestly. down well, at it a But look if rolling On group. XX

Operator

Christy comes next Citigroup. question McElroy Your from with

Michael Bilerman

think you the know in ramp $X.XX don't was in terms you I what is do FFO? thought, of for average to Michael but your does just numbers plans Simple is sort handy meet it pretty $X.XX that that of with XXX year. mentioned I It's the if line generally the the $X.XX to XXX in quarter. what implies the steep to have a

a get for part $X Now fourth million to there. do - have seasonality up But seasonal pick to pretty of that rise that, still in the probably $XX even it's while is million accounting you quarter fast you'd that in revenues.

with So either share pretty I a on gap, don't onetime FFO, there's or you share basis I there's or Can $X.XX the to know of a don't there buckets some in you XXXX. help can details? dollars ramp us. if or is that a sort of million the if give of bridge from going that $XX steep effectively anything on recovery know per

Robert McCadden

breakeven right, an perspective a about quarter our less from just We're we the Mike of amount between I that. kind of NOI up. It's the terms ended difference and decreases. recognize in than $X where of talking dollar million,

we So mountain that's insurmountable don't decline. think

about things expect some to think be both of about, and we these self-correcting, I you right. Joe talked If

we as embedded as return fourth has out quarter, to end in early through kind of large they than or to more expectations. tend our at our replacements the opening the big based in second that cost the are out. quarter we mitigate have we one have, And expenses, the weather-related the read often a of level number we quarter, even the earlier, year As on in even expense history those when as third slug quarter. again, then found a of of and savings not kind and I do anchor shown, additional through more

second of I more front have the of certainly, don't we you FFO cadence to and much in also Best see, you expect our - and will share again NOI with information second me, and you the to significant we three the would quarter So quarter those Buy see that mobile that And results. quarters Tijuana. some boasting lease to back-ended. terminations but have will expect FFO

Michael Bilerman

to what, term year relative quarter? the So are to the that fees for be first projected lease now

Robert McCadden

provided $X.X recently Well, guidance of to million. - we $X.X million we expect

through end I to think numbers be to we're expect upper that of range. leading now those the

Michael Bilerman

activity back when reverse it you of quarter you that hearing you the in the things I I not more But it that doing have be the to guess do that's maintaining that bucket. done? you will - certain been XXX, $X.XX much step things the how those will first response. versus - not sort much rather think Right. sort of and reverse XXX already about of leasing helping - second as in Can doesn't from I'm

Robert McCadden

mentioned, million come coming you not it's that's - terms again skew those be then items That's new But the says store I about again, - of occupancy. of on at in unusual we're annualized of not in will certainly, have, talking XXXX. there's that leases of openings, significant yet and an $X.X full the But stream No, we're - will the of that leases But that - that. scale full couple on not benefit we no. a about results. you at the have talking the rate a of signed if company in amount look

Joseph Coradino

performance. is looked our bottom mean at I Michael, the we've line

be plan form of et a in will divine there, impacts partnership We that they're that in in moving a including marketing. have and failing place the leasing, number some of especially things, cetera, moving earlier includes been a the that at back some pickups with boxes anchors vacant of

are plan a it's and we not there's in place. comfortable hope. So with And

to plan, used. considered a is will carefully guidance. get our that. This word on we maintain not that we Probably, believe caught bad be up let's So it's been And executed.

Robert McCadden

of few the think $X.XX want to Right. of up or back would question just around coming and it's always like, that of the the things next that last And step number thing quarters the number so. a how it's over just $X.XX in And we all pop you to this. for is from quarter. right. And of was the We FFO - I this $X.XX was or itself, get $XX you there realize of million of that

the That's for up year $XXX million quarter. year. for You're $XXX XX% in the to projecting million first the

much How XXXX towards also We're trying a onetime happened. leasing of that larger have the much year benefit end. or implies place the see of that it lease basis, in just ramp the other a will in does XXXX. and basis anchor annualized the pieces all calendar put because you So to how on the expense on items much represent

of much leasing the relative first quarter. how Just its fees to

trying all. about Just in as That's ramp getting into 'XX these very permanent the It lot to understanding a be more perspective things benefit of earnings clearly sounds are and nature. that well. in like

Operator

Tsai with comes from Barclays. Linda Your question last

Linda Tsai

top is. you of diverse? concentration comprising expect the five are of tenants list, you top over the signing Forever the with to take over XX gross materially how this Would your as tenants look have in Do When although at time XX% not Burlington place much mix The XX. a you highlighted on store decline the few you rents. next years? quarter, more below might more rationalization And sense annualized gets

Joseph Coradino

Coast. of our that - think do stores, rationalization growth Forever of larger locations, first that on larger stores something quarter. we with it's moved It's like mostly in former Mervyns format that And the large where XX, positive to think part has a of Linda, noteworthy they into all, when the West sales I had XX you top mentioned XX% is this Well, tenants Joe.

just Our about dozen a half XX,XXX that square for announced total we feet. the - we XXs signed of Forever as

Our occurred they our working that or XX,XXX would we as have issues seemed case actually report size leases X,XXX think feet. is XX,XXX have XX,XXX - with, have to another it. not be come . are up spreads one through feet, and would there from the issues we're list worked - you we average on [indiscernible] - through through Forever we've XX And another, that I your from - getting of one the for through much end probably worked up through and positive worked and will or And that is XX,XXX in and

Linda Tsai

So in view in the term? rest medium forward your going the

Joseph Coradino

through a We much sit think the strong it We for I year. a that the And to significant asset, We we're is don't portfolio but a asset compelling SMA. are is in which our with assets number and this the in that even go part Providence have is, a Boston at Philly forth DC retailers. once which Dark DC markets. are could Philly this concern. and great And is Myth, in better is of putting point, deal markets. by of not the markets

they event, this And come any We're point. concern of degree as So we're a high don't through issues. the have way our navigating we at in pretty up, feeling well.

Operator

this further time. are There questions no at

Joseph Coradino

other rest no enjoy the participating Bye call, now. your for you questions, and thank the of all are there If on day.

Operator

concludes this today's And you. conference call. Thank

now disconnect. You may

Pennsylvania Real Estate Investment Trust (PRET) 2 May 182018 Q1 Earnings call transcript