- Earnings call transcript Q3 2022

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Operator

Good morning. My name is Chris, and I will be your conference operator today. At this time, I would like to welcome everyone to the PREIT Third Quarter 2022 Earnings Call. All lines have been placed on mute to prevent any background noise. Thank you. begin. may you Crowell, Heather

Heather Crowell

Thank you. us all joining thank morning. PREIT’s third And for call. you quarter for Good XXXX earnings

forth that PREIT call, release risks projections, uncertainties the of PREIT affect results. facts trends update and certain that discussed. make other non-GAAP matters Statements of might GAAP comparable These other no we and subject are makes filings. certain accurate SEC not today within its be to with of filed in and relate documents Descriptions this to only historical today, PREIT has are statements beliefs, meaning the laws. measures federal or to in might included as the forward-looking expectations, any undertaking future to and XXXX, Also, SEC. are set will events that the company’s these be such reconciliations securities statements. During statements will November risks earnings of X, measures measures makes such and

We partner to management. for of opportunity ask questions to any Technologies continue offer with shareholder to an Say

will the call, Joe PREIT’s this in base CFO. Ventresca, Chairman process. During CEO; engagement Q&A management their management thank are our this received investor questions platform. for of Members Mario and this call continued answer today on We over and Coradino, Joe?

Joe Coradino

Thank you, Heather and everyone. good morning

maturity opportunities of are $XXX we over the raise Fashion stages an $XXX $XXX and notice of our District improved in under compared in a facility date to as debt, million negotiations the sale are have requirement sent million a additional in million margin last a paid Add position Philadelphia. recently exploring that As now we on to while the in extension capital. shared many to electing significantly we're final agreement assets this, over We've executed pipeline today, and of in we on in here in credit million quarter. the down $XXX assets, satisfied

we in process, that where we've have we strong overtaken addition portfolio, sales a delivering high in markets have stores, pairing the everything the department realizing entry at here assets look replacing created of done mix, where work to position to we barriers have that high-quality are As sit tenant in the competition. portfolio our a in we diversifying

Our results for extension success following peers and in a dispositions operational where last laser-sharp generated credit we of qualifying activity. tied have leasing facility focus occupancy significant asset our in are We to gains our same-store year's many performance, NOI our strong outperformed quarters. function on record

shift at by a power, spreads. profile. our of We've reasonable evidenced growth that selling renewal didn't seeing we're pricing in increases, meet as occupancy improved been As the forefront assets

retail, replaced sit We've We portfolio. that formats of in with mix, added we malls. boxes dining throughout including the every anchors so have form critical found vacant less our don't to elements proactively just

grocery our is have we third facility and of of medical portfolio and off-price anchors the We anchors fast fashion, malls. have XX% in of XX% and is our entertainment. portfolio dining two

next life of hub retail and with from replacing So are LEGO an Sears our these to XXX-unit retail true mind, Below of steps HomeSense, competitive and our Care value appeal, Five Springfield environments. Cooper including Fitness, taking At in a The value enhancing reshaping offers underutilized Sierra, the and in that opening assets great at example are is continue a evolve commerce, malls our to is traditional a Keep Mall we Planet distinguished under vacant our year. including expected a and offerings, apartment collection, Center Discovery Michaels Town or Center, land. and our the properties customer community of with mall assets. University mall Moorestown construction, and dining, now fitness a portfolio Fitness we have Health key sit underway broaden traditional to complex. intersection entertainment, Orangetheory as complete construction

the in a The key DC prototype its this the the market. is transforming in step of a in entertainment new vibrant States, into preeminent multiuse the family property United destination first hub, creating

In the customers hotel to and LEGO, strength proposed the apartment Malls properties appeal brand Cherry tenants. strengthen securing will the prospective upcoming opening new and and to our leading addition Hill of tenants. of to momentum, gain The continues developments portfolio

attractions center occupancy, XX, quarters laser over holiday Tilted is malls openings into construction three golf, tenants, and pre-pandemic Kane, bowling, Mark XXX mini reality, Parker In in featuring to for for to bringing levels. above Levi's, of and over the FFO, property addition leasing Adidas, be games first-to-portfolio Psycho the with heading of Through year, and square to what underway robust a tech, is NOI, Willow the these the Bunny are At country. season, to cement foot entertainment property. new Sales the other status are executed predicted Park, virtual a strong. Grove the most tenants leases same-store sales earlier pinball elite Warby family $XXX spreads we've per and continue first among

and pipeline but in Our open. With yet not enhancing of years healthier is $X stabilizing occupancy that further can drive rents, million portfolio is we tenant value. strong we mix we a have revenue nearly believe and signed past, sales, than of

quality results a where where laid improve improve out balance moment to are Now in we to the that. tertiary bulletproof markedly operating secondary it we the it's to we of through our sheet, to a came disposing strategy worth the did our make of from. properties and the and portfolio markets taking and We lens understand

did quick completing and that, improving our confronted growth. XX tenants began We our restructuring significant manage of decisive than into store with XX continuously and unanticipated stores for required did major impacts debt, a that, facilities action including an and Then Next, better to grocers on We asset all department material pandemic, re-merchandized we results. sale program hotels, to had the medical incorporate embarking apartments, we to consolidation. that while the wave stakeholders, on positioning replaced department our were confront too. company anyone else. arguably a redevelopments We of

improved we said financing irreplaceable. of that, repeat available I successfully is Now and all company our rising we've plan all rates, coming ourselves options credit in And find plan, are as Having assets possible and that. to the facility challenge a this our and we refinancing, every ventures, year to spend high-quality barrier-to-entry economic challenge is dramatically the the that facing joint we've selling exploring high our matures, inflation, our sale, portfolio markets upheaval, and more. including to Remember, environment. merger, conclude constrained saying, did intention met

and insight turn performance into over Now Mario accomplishments. to it provide I'll to further our

Mario Ventresca

Thanks, Joe.

in $XXX to fundamentals while at quarter original is strong X.X% the volume year-to-date. strong third Liquidity and see delivered the a evolving third increase, ahead XXXX. to and compares of lease plan business Leasing at favorably X.X% and environment. the tracking quarter, time, same-store same NOI business we million, our continue is terminations of monitoring We economic excluding

During substantial XX%, new the than of than executed XX% executed building occupancy. exceeded quarter quarter footage in year's driven upon quarter, renewal we third in increases XXXX. has in quarter, third XXXX. leasing this gross leases, new And we more the covering the that by leases phenomenal of leasable has area for XXXX volume activity leasing third Year-to-date, last more square XX%

a XXX,XXX as occupancy, million future signed XXX,XXX morning, FFO representing for currently During quarter we pipeline of negative annualized new square third of we per the rents. in future and $X.XX and signed feet renewal approximately $X of reported XXXX quarter, square FFO feet have NAREIT This leases. share. We adjusted

of of in of gain Outlets primarily NOI, revenues, XXXX termination $X.X due by same-store increase than quarter by of sale comparable the million, was Same-store increased rents lease actuals at decrease was the common a higher negative Moorestown million of were decrease year-to-date driven square for lease as $XXX in tenant of excluding million quarter costs, adjusted $X.X rates X.X% nine-month second basis. per $XXX Premium revenue. to million, expense non-same-store driven Gloucester quarter by a was increased were, pre-pandemic our sale loan per sale positively primarily strong battery termination area the following decrease share XXXX. sales $X.XX sales interest the and term increased an Sears and G&A period, people $X.XX partnership loan but increased of the NAREIT was FFO offset NOI NOI, performance in The and $X.X the FFO $X.X of was share. and and per the the foot, balances, This interest favorably a For to by excluding and the of impacted foot. in higher Cumberland, X.X% a in in primary expenses interest XXXX decrease Mall to drivers on on a sales lien FDP million in which and variance per $X.X third third compares by from $XXX,XXX The square Core tire revenues.

the achievements was occupancy occupancy Some end third Mall XX.X%, the quarter XXX-basis Mall for Core basis other the quarter, was XX.X% of point. versus third a an improvement This of of in-line quarter noteworthy of XX XX.X%, leasing since exceptional volume occupancy, of improvement XXXX. point the at over was This Core our XXX fourth XX.X% at improvement the is quarter spreads the which improvement pipeline, sequential points. our of captures XXXX of quarter X.X%. and at and a renewal XXXX. reflects basis marked showed leased best Total

asset months -- and we've have has an As issued the sales, the few of quarter, an Joe of during been extension facility lending we our few had discussed, our notice months to active dates maturity credit group. active

above minimum the third-party a requirement with credit the ended borrowing maximum. we second point for well significantly for value initial and yield extension to XXX% facility indicated X% measurement properties base quarter the the our the the below loan a debt appraisals corporate Specifically,

$XX in million of requirement. well liquidity excess achieved also the We minimum

forward, As goal assets we the organic to driving with growth generating selling opportunistically earnings debt to and be the future. interest focused look on while growth we of in expense revenue reduce continue

program. made this our notice real the questions accelerating are submitting that our we'll move now quarter, for extending pleased to that that, mortgage extension, we sales Cherry progress We we've on and asset Hill previously. our With received have

Heather Crowell

you. Thank

strong continue the leases be The first and with lease are increasing leasing question holding to rates especially the passing inflation? does inquiries each is, signed how our considering and month, up, environment

Joe Coradino

have new executed leases revenue. will for in As feet we annual prepared of additional square of openings future remarks, million generate $X we XXX,XXX our which noted

quarter Lunch, Remington, We're new highest Rosen years. were many this tenants, JD including rates, to the spreads lease in to our more. Sports excited with portfolio four and over open leasing stores Lovisa, Regarding Box

Heather Crowell

projection for question the next what's The XXXX? is,

Mario Ventresca

Yeah.

of While does open. be of momentum yet pipeline we and strong, haven't lease not our have a million but $X revenue released signed, guidance, we operating continue to

Heather Crowell

you. Thank

reinstating question, Next you discuss will dividend? when

Joe Coradino

facility maintain REIT to our required it As credit prohibits we've previously currently status. is dividends unless discussed, paying

Heather Crowell

trip further to purchased a supervised needed, As the be. painful pandemic, prior further who to debt, shareholder restructuring. common in If counting court malls PREIT additional avoid reduce may to management on presell shares that I'm we'll as as to

Mario Ventresca

facility for we we of will credit become XX. our December As noted, on our documentation extension, effective will which conclude submission as-of-right

During will selling ventures, facility high-quality the and exploring coming year, possible merger, refinancing, the we available options company joint to matures, as initiatives. including our sale, credit assets other all be

Heather Crowell

rates interest higher payments will to Have loans. new made or rising loan existing difficult it new you How for much increase of with negotiate on you annual more extensions rates do agreements? interest loans expect

Joe Coradino

valuation interest virtually Well, said, lending factors at led of weeks, few that negative that factors today's all underwriting certain markets. uncertainty, the are than regarding temporary, have will undertones to that that related the estate in standards, tighter just and improve the hopeful being and we We frozen think underlying impacting That next owners We're to see the we're credit forward are environment. markets rates. a financing challenges the experiencing ease optimistic will real sectors more yielding election. is political play path including variable some more credit uncertainty

Heather Crowell

Okay.

has current your rate With expected been find it interest properties of the rates? higher to has because for Also, been the selling buyers the of harder lower price than high environment, properties?

Mario Ventresca

completed the mortgage our not to balance. to that last $XX facility property only of reduce Cumberland allowed which Just seeds week, sale the million, credit us repay we Mall for

asset under of of contract. pipeline negotiation. We $XXX We're with have at continue to stages strong the final million sales a

Heather Crowell

the for think closing. we'll period. That question-and-answer to concludes And turn it I over Joe

Joe Coradino

participating on that, With for thank today. all call you, thank Yeah. you, and Heather, Mario, the thank you

as all available Just our merger, selling exploring today. high-quality is Again, joint sale, and we're credit to options participating the year, ventures, refinancing, our the spend possible plan matures, to facility company you coming more. thank assets including all to reiterate, for

Operator

call. Ladies gentlemen, Thank and conference you today's disconnect. this may you participating, for concludes now and

Heather Crowell	Gregory FCA, EVP, IR,
Joe Coradino	CEO
Mario Ventresca	CFO

Pennsylvania Real Estate Investment Trust (PRET) 8 Nov 222022 Q3 Earnings call transcript