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PREIT Closes on Sale of Paxton Towne Centre

  PREIT Closes on Sale of Paxton Towne Centre

    Sale of Paxton Towne Centre resulted in net proceeds of $24.9 million

    PREIT secures non-refundable deposit towards sale of Christiana Center

Business Wire

PHILADELPHIA -- January 14, 2013

Pennsylvania Real Estate Investment Trust (PREIT/NYSE: PEI) has completed the
previously announced sale of Paxton Towne Centre, a power center in
Harrisburg, Pennsylvania, for $76.8 million, representing a gain on sale of
approximately $33.6 million. The sale marks another key step in PREIT
executing its business plan.

PREIT developed Paxton Towne Centre in 2001 for approximately $55 million and
the property had a book value of $57.9 million as of September 30, 2012. The
717,000 square foot property is anchored by Target, Costco, Kohl’s, and Weis
Markets. Other key retailers at the property include H.H. Gregg, Michael’s,
Books-A-Million, Babies“R”Us and Bed, Bath and Beyond. The property secured a
mortgage loan with an outstanding balance of $50.0 million. In connection with
the transaction, the Company used $50.0 million in proceeds to repay this
mortgage, yielding net proceeds of $24.9 million after closing costs and
before certain post-closing obligations. The Company intends to use the
proceeds to make further reductions in debt and for general corporate
purposes.

“By completing the sale of Paxton Towne Centre, PREIT is improving its balance
sheet by reducing debt, while creating more focus on our core mall portfolio,”
said Joseph F. Coradino, CEO of PREIT. “Market fundamentals have led to
increased demand for high quality power centers, making this an ideal time to
harvest the value created through development, management and leasing of this
property.”

PREIT also has received a non-refundable deposit to sell another non-core
power center, Christiana Center in Newark, Delaware, to an affiliate of the
Paxton Towne Centre buyer. This transaction is expected to close by the end of
the first quarter of 2013. The contract price for the sale of Christiana
Center is $75.0 million. The property currently secures a mortgage loan with
an outstanding balance of $49.9 million as of September 30, 2012.

The blended capitalization rate on the sale of Paxton Towne Centre and the
scheduled sale of Christiana Center would be approximately 6.7%.

About Pennsylvania Real Estate Investment Trust

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 retail
shopping malls. Currently, the Company's portfolio of 47 properties comprises
37 shopping malls, seven community and power centers, and three development
properties. The Company’s properties are located in 13 states in the eastern
half of the United States, primarily in the Mid-Atlantic region. The operating
retail properties have approximately 31.9 million total square feet of space.
PREIT, headquartered in Philadelphia, Pennsylvania, is publicly traded on the
NYSE under the symbol PEI. The Company's website can be found at
www.preit.com.

Forward Looking Statements

This press release contains certain “forward-looking statements” within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Forward-looking statements relate to expectations, beliefs,
projections, future plans, strategies, anticipated events, trends and other
matters that are not historical facts. These forward-looking statements
reflect our current views about future events, achievements or results and are
subject to risks, uncertainties and changes in circumstances that might cause
future events, achievements or results to differ materially from those
expressed or implied by the forward-looking statements. In particular, our
business might be materially and adversely affected by uncertainties affecting
real estate businesses generally as well as the following, among other
factors: our substantial debt and our high leverage ratio; constraining
leverage, interest and tangible net worth covenants under our 2010 Credit
Facility; potential losses on impairment of certain long-lived assets, such as
real estate, or of intangible assets, such as goodwill; potential losses on
impairment of assets that we might be required to record in connection with
any dispositions of assets; recent changes to our corporate management team
and any resulting modifications to our business strategies; our ability to
refinance our existing indebtedness when it matures, on favorable terms or at
all, due in part to the effects on us of dislocations and liquidity
disruptions in the capital and credit markets; our ability to raise capital,
including through the issuance of equity or equity-related securities if
market conditions are favorable, through joint ventures or other partnerships,
through sales of properties or interests in properties, or through other
actions; our short- and long-term liquidity position; current economic
conditions and their effect on employment, consumer confidence and spending
and the corresponding effects on tenant business performance, prospects,
solvency and leasing decisions and on our cash flows, and the value and
potential impairment of our properties; general economic, financial and
political conditions, including credit market conditions, changes in interest
rates or unemployment; changes in the retail industry, including consolidation
and store closings, particularly among anchor tenants; our ability to maintain
and increase property occupancy, sales and rental rates, in light of the
relatively high number of leases that have expired or are expiring in the next
two years; increases in operating costs that cannot be passed on to tenants;
risks relating to development and redevelopment activities; the effects of
online shopping and other uses of technology on our retail tenants;
concentration of our properties in the Mid-Atlantic region; changes in local
market conditions, such as the supply of or demand for retail space, or other
competitive factors; potential dilution from any capital raising transactions;
possible environmental liabilities; our ability to obtain insurance at a
reasonable cost; and existence of complex regulations, including those
relating to our status as a REIT, and the adverse consequences if we were to
fail to qualify as a REIT. Additional factors that might cause future events,
achievements or results to differ materially from those expressed or implied
by our forward-looking statements include those discussed in the section of
our Annual Report on Form 10-K in the section entitled “Item 1A. Risk Factors”
and in our Quarterly Reports on Form 10-Q. We do not intend to update or
revise any forward-looking statements to reflect new information, future
events or otherwise.

Contact:

Pennsylvania Real Estate Investment Trust
Robert McCadden, EVP & CFO
215-875-0735
OR
Heather Crowell, VP, Corporate Communications and Investor Relations
215-875-0735
 
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