x
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Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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o
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Pennsylvania
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23-6216339
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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200 South Broad Street
Philadelphia, PA
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19102
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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x
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Accelerated filer
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o
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Non-accelerated filer
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o
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(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Emerging growth company
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o
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Not Applicable
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—
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Item 4.
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Not Applicable
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—
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Item 5.
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Not Applicable
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—
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Item 6.
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||
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(in thousands, except per share amounts)
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September 30,
2017 |
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December 31,
2016 |
||||
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(unaudited)
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ASSETS:
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INVESTMENTS IN REAL ESTATE, at cost:
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|
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Operating properties
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$
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3,084,759
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$
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3,196,529
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Construction in progress
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129,614
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97,575
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Land held for development
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5,881
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5,910
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Total investments in real estate
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3,220,254
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3,300,014
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Accumulated depreciation
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(1,082,840
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)
|
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(1,060,845
|
)
|
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Net investments in real estate
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2,137,414
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|
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2,239,169
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INVESTMENTS IN PARTNERSHIPS, at equity:
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201,000
|
|
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168,608
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OTHER ASSETS:
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|
|
|
||||
Cash and cash equivalents
|
76,942
|
|
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9,803
|
|
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Tenant and other receivables (net of allowance for doubtful accounts of $6,599 and $6,236 at September 30, 2017 and December 31, 2016, respectively)
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34,745
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|
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39,026
|
|
||
Intangible assets (net of accumulated amortization of $12,643 and $11,064 at September 30, 2017 and December 31, 2016, respectively)
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18,167
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|
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19,746
|
|
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Deferred costs and other assets, net
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107,304
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|
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93,800
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Assets held for sale
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49,074
|
|
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46,680
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|
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Total assets
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$
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2,624,646
|
|
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$
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2,616,832
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LIABILITIES:
|
|
|
|
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Mortgage loans payable, net
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$
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1,032,578
|
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$
|
1,222,859
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Term Loans, net
|
547,567
|
|
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397,043
|
|
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Revolving Facility
|
—
|
|
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147,000
|
|
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Tenants’ deposits and deferred rent
|
12,234
|
|
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13,262
|
|
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Distributions in excess of partnership investments
|
59,871
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61,833
|
|
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Fair value of derivative liabilities
|
445
|
|
|
1,520
|
|
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Liabilities related to assets held for sale
|
32,295
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|
|
2,658
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|
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Accrued expenses and other liabilities
|
58,542
|
|
|
68,251
|
|
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Total liabilities
|
1,743,532
|
|
|
1,914,426
|
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COMMITMENTS AND CONTINGENCIES (Note 6):
|
|
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|
||||
EQUITY:
|
|
|
|
||||
Series A Preferred Shares, $.01 par value per share; 25,000 preferred shares authorized; 4,600 shares of Series A Preferred Shares issued and outstanding at each of September 30, 2017 and December 31, 2016; liquidation preference of $115,000
|
46
|
|
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46
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|
||
Series B Preferred Shares, $.01 par value per share; 25,000 preferred shares authorized; 3,450 shares of Series B Preferred Shares issued and outstanding at each of September 30, 2017 and December 31, 2016; liquidation preference of $86,250
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35
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35
|
|
||
Series C Preferred Shares, $.01 par value per share; 25,000 preferred shares authorized; 6,900 shares of Series C Preferred Shares issued and outstanding at September 30, 2017; liquidation preference of $172,500
|
69
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|
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—
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|
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Series D Preferred Shares, $.01 par value per share; 25,000 preferred shares authorized; 4,800 shares of Series D Preferred Shares issued and outstanding at September 30, 2017; liquidation preference of $120,000
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48
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|
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—
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|
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Shares of beneficial interest, $1.00 par value per share; 200,000 shares authorized; issued and outstanding 69,888 shares at September 30, 2017 and 69,553 shares at December 31, 2016
|
69,888
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|
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69,553
|
|
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Capital contributed in excess of par
|
1,768,540
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1,481,787
|
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Accumulated other comprehensive income
|
3,534
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|
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1,622
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|
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Distributions in excess of net income
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(1,098,547
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)
|
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(997,789
|
)
|
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Total equity—Pennsylvania Real Estate Investment Trust
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743,613
|
|
|
555,254
|
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Noncontrolling interest
|
137,501
|
|
|
147,152
|
|
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Total equity
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881,114
|
|
|
702,406
|
|
||
Total liabilities and equity
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$
|
2,624,646
|
|
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$
|
2,616,832
|
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PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|||||||||||||||
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Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands of dollars)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
REVENUE:
|
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|
||||||||
Real estate revenue:
|
|
|
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Base rent
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$
|
56,874
|
|
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$
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60,188
|
|
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$
|
171,078
|
|
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$
|
188,424
|
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Expense reimbursements
|
26,900
|
|
|
29,059
|
|
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81,981
|
|
|
89,063
|
|
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Percentage rent
|
593
|
|
|
825
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|
|
1,223
|
|
|
1,661
|
|
||||
Lease termination revenue
|
7
|
|
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3,012
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|
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2,279
|
|
|
3,263
|
|
||||
Other real estate revenue
|
2,345
|
|
|
3,176
|
|
|
6,992
|
|
|
8,044
|
|
||||
Total real estate revenue
|
86,719
|
|
|
96,260
|
|
|
263,553
|
|
|
290,455
|
|
||||
Other income
|
2,492
|
|
|
2,600
|
|
|
4,172
|
|
|
4,630
|
|
||||
Total revenue
|
89,211
|
|
|
98,860
|
|
|
267,725
|
|
|
295,085
|
|
||||
EXPENSES:
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Property operating expenses:
|
|
|
|
|
|
|
|
||||||||
CAM and real estate taxes
|
(25,772
|
)
|
|
(29,373
|
)
|
|
(83,985
|
)
|
|
(94,058
|
)
|
||||
Utilities
|
(4,444
|
)
|
|
(4,753
|
)
|
|
(12,407
|
)
|
|
(13,216
|
)
|
||||
Other property operating expenses
|
(3,087
|
)
|
|
(3,123
|
)
|
|
(9,117
|
)
|
|
(10,618
|
)
|
||||
Total property operating expenses
|
(33,303
|
)
|
|
(37,249
|
)
|
|
(105,509
|
)
|
|
(117,892
|
)
|
||||
Depreciation and amortization
|
(29,966
|
)
|
|
(26,820
|
)
|
|
(94,652
|
)
|
|
(92,217
|
)
|
||||
General and administrative expenses
|
(8,288
|
)
|
|
(8,244
|
)
|
|
(26,561
|
)
|
|
(25,713
|
)
|
||||
Provision for employee separation expenses
|
—
|
|
|
(162
|
)
|
|
(1,053
|
)
|
|
(1,355
|
)
|
||||
Project costs and other expenses
|
(150
|
)
|
|
(1,080
|
)
|
|
(547
|
)
|
|
(1,374
|
)
|
||||
Total operating expenses
|
(71,707
|
)
|
|
(73,555
|
)
|
|
(228,322
|
)
|
|
(238,551
|
)
|
||||
Interest expense, net
|
(14,342
|
)
|
|
(17,198
|
)
|
|
(44,098
|
)
|
|
(53,611
|
)
|
||||
Impairment of assets
|
(1,825
|
)
|
|
(9,865
|
)
|
|
(55,742
|
)
|
|
(24,589
|
)
|
||||
Total expenses
|
(87,874
|
)
|
|
(100,618
|
)
|
|
(328,162
|
)
|
|
(316,751
|
)
|
||||
Income (loss) before equity in income of partnerships, gain on sale of real estate by equity method investee, gains on sales of interests in non operating real estate and (losses) gains on sales of real estate
|
1,337
|
|
|
(1,758
|
)
|
|
(60,437
|
)
|
|
(21,666
|
)
|
||||
Equity in income of partnerships
|
4,254
|
|
|
4,643
|
|
|
12,144
|
|
|
12,718
|
|
||||
Gain on sale of real estate by equity method investee
|
6,718
|
|
|
—
|
|
|
6,718
|
|
|
—
|
|
||||
Gains on sales of interests in non operating real estate
|
—
|
|
|
—
|
|
|
486
|
|
|
9
|
|
||||
(Losses) gains on sales of interests in real estate, net
|
(9
|
)
|
|
31
|
|
|
(374
|
)
|
|
22,953
|
|
||||
Net income (loss)
|
12,300
|
|
|
2,916
|
|
|
(41,463
|
)
|
|
14,014
|
|
||||
Less: net (income available) loss attributable to noncontrolling interest
|
(1,305
|
)
|
|
(312
|
)
|
|
4,416
|
|
|
(1,502
|
)
|
||||
Net income available (loss attributable) to PREIT
|
10,995
|
|
|
2,604
|
|
|
(37,047
|
)
|
|
12,512
|
|
||||
Less: preferred share dividends
|
(7,525
|
)
|
|
(3,962
|
)
|
|
(20,797
|
)
|
|
(11,886
|
)
|
||||
Net income (loss) attributable to PREIT common shareholders
|
$
|
3,470
|
|
|
$
|
(1,358
|
)
|
|
$
|
(57,844
|
)
|
|
$
|
626
|
|
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|||||||||||||||
(in thousands of dollars, except per share amounts)
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Net income (loss)
|
$
|
12,300
|
|
|
$
|
2,916
|
|
|
$
|
(41,463
|
)
|
|
$
|
14,014
|
|
Noncontrolling interest
|
(1,305
|
)
|
|
(312
|
)
|
|
4,416
|
|
|
(1,502
|
)
|
||||
Dividends on preferred shares
|
(7,525
|
)
|
|
(3,962
|
)
|
|
(20,797
|
)
|
|
(11,886
|
)
|
||||
Dividends on unvested restricted shares
|
(87
|
)
|
|
(81
|
)
|
|
(272
|
)
|
|
(241
|
)
|
||||
Net income (loss) loss used to calculate loss per share—basic and diluted
|
$
|
3,383
|
|
|
$
|
(1,439
|
)
|
|
$
|
(58,116
|
)
|
|
$
|
385
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted income (loss) per share:
|
$
|
0.05
|
|
|
$
|
(0.02
|
)
|
|
$
|
(0.84
|
)
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
||||||||
(in thousands of shares)
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding—basic
|
69,424
|
|
|
69,129
|
|
|
69,319
|
|
|
69,065
|
|
||||
Effect of common share equivalents
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
386
|
|
||||
Weighted average shares outstanding—diluted
|
69,424
|
|
|
69,129
|
|
|
69,319
|
|
|
69,451
|
|
(1)
|
There were no common share equivalents for the three months ended September 30, 2017. The Company had net losses used to calculate earnings per share for the three months ended September 30, 2016 and the nine months ended September 30, 2017, therefore, the effects of common share equivalents of
361
and
51
, respectively, are excluded from the calculation of diluted loss per share for these periods because they would be antidilutive.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands of dollars)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
12,300
|
|
|
$
|
2,916
|
|
|
$
|
(41,463
|
)
|
|
$
|
14,014
|
|
Unrealized gain (loss) on derivatives
|
266
|
|
|
3,823
|
|
|
1,544
|
|
|
(4,755
|
)
|
||||
Amortization of losses on settled swaps, net of gains
|
259
|
|
|
123
|
|
|
597
|
|
|
375
|
|
||||
Total comprehensive income (loss)
|
12,825
|
|
|
6,862
|
|
|
(39,322
|
)
|
|
9,634
|
|
||||
Less: comprehensive (income) loss attributable to noncontrolling interest
|
(1,361
|
)
|
|
(729
|
)
|
|
4,187
|
|
|
(1,029
|
)
|
||||
Comprehensive income (loss) PREIT
|
$
|
11,464
|
|
|
$
|
6,133
|
|
|
$
|
(35,135
|
)
|
|
$
|
8,605
|
|
|
|
|
PREIT Shareholders
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
Preferred Shares $.01 par
|
|
Shares of
Beneficial
Interest,
$1.00 Par
|
|
Capital
Contributed
in Excess of
Par
|
|
Accumulated
Other
Comprehensive
Income
|
|
Distributions
in Excess of
Net Income
|
|
|
||||||||||||||||||||||||||
(in thousands of dollars, except per share amounts)
|
Total
Equity
|
|
Series
A
|
|
Series
B
|
|
Series
C
|
|
Series D
|
|
|
|
|
|
Non-
controlling
interest
|
||||||||||||||||||||||||
Balance December 31, 2016
|
$
|
702,406
|
|
|
$
|
46
|
|
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
69,553
|
|
|
$
|
1,481,787
|
|
|
$
|
1,622
|
|
|
$
|
(997,789
|
)
|
|
$
|
147,152
|
|
Net loss
|
(41,463
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37,047
|
)
|
|
(4,416
|
)
|
||||||||||
Other comprehensive income
|
2,141
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
1,912
|
|
|
—
|
|
|
229
|
|
|||||||||||
Preferred shares issued in 2017 Series C and D preferred share offerings, net
|
282,005
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|
48
|
|
|
—
|
|
|
281,888
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Shares issued upon redemption of Operating Partnership units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
199
|
|
|
—
|
|
|
—
|
|
|
(220
|
)
|
||||||||||
Shares issued under employee compensation plans, net of shares retired
|
462
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
314
|
|
|
148
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Amortization of deferred compensation
|
4,518
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,518
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Distributions paid to common shareholders ($0.63 per share)
|
(43,959
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43,959
|
)
|
|
—
|
|
||||||||||
Distributions paid to Series A preferred shareholders ($1.5498 per share)
|
(7,116
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,116
|
)
|
|
—
|
|
||||||||||
Distributions paid to Series B preferred shareholders ($1.3827 per share)
|
(4,770
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,770
|
)
|
|
—
|
|
||||||||||
Distributions paid to Series C preferred shareholders ($1.14 per share)
|
(7,866
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,866
|
)
|
|
—
|
|
||||||||||
Noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Distributions paid to Operating Partnership unit holders ($0.63 per unit)
|
(5,232
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,232
|
)
|
||||||||||
Other distributions to noncontrolling interests, net
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|||||||||||
Balance September 30, 2017
|
$
|
881,114
|
|
|
$
|
46
|
|
|
$
|
35
|
|
|
$
|
69
|
|
|
$
|
48
|
|
|
$
|
69,888
|
|
|
$
|
1,768,540
|
|
|
$
|
3,534
|
|
|
$
|
(1,098,547
|
)
|
|
$
|
137,501
|
|
|
Nine Months Ended
September 30, |
||||||
(in thousands of dollars)
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net (loss) income
|
$
|
(41,463
|
)
|
|
$
|
14,014
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
87,963
|
|
|
93,561
|
|
||
Amortization
|
8,695
|
|
|
686
|
|
||
Straight-line rent adjustments
|
(1,908
|
)
|
|
(1,953
|
)
|
||
Provision for doubtful accounts
|
1,281
|
|
|
1,513
|
|
||
Amortization of deferred compensation
|
4,518
|
|
|
4,518
|
|
||
Loss on hedge ineffectiveness
|
—
|
|
|
143
|
|
||
Gain on sale of real estate by equity method investee
|
(6,718
|
)
|
|
—
|
|
||
Gains on sales of interests in real estate and non operating real estate, net
|
(112
|
)
|
|
(22,962
|
)
|
||
Equity in income of partnerships in excess of distributions
|
(3,024
|
)
|
|
(5,070
|
)
|
||
Amortization of historic tax credits
|
(1,768
|
)
|
|
(1,768
|
)
|
||
Impairment of assets
|
55,742
|
|
|
24,589
|
|
||
Change in assets and liabilities:
|
|
|
|
||||
Net change in other assets
|
(5,682
|
)
|
|
1,753
|
|
||
Net change in other liabilities
|
(4,556
|
)
|
|
(4,872
|
)
|
||
Net cash provided by operating activities
|
92,968
|
|
|
104,152
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Additions to construction in progress
|
(93,178
|
)
|
|
(48,312
|
)
|
||
Investments in real estate improvements
|
(36,850
|
)
|
|
(32,846
|
)
|
||
Cash proceeds from sales of real estate
|
77,778
|
|
|
154,764
|
|
||
Cash distributions from partnerships of proceeds from real estate sold
|
30,265
|
|
|
—
|
|
||
Additions to leasehold improvements and corporate fixed assets
|
(511
|
)
|
|
(449
|
)
|
||
Investments in partnerships
|
(56,778
|
)
|
|
(9,995
|
)
|
||
Capitalized leasing costs
|
(4,633
|
)
|
|
(4,394
|
)
|
||
Decrease in cash escrows
|
2,311
|
|
|
3,098
|
|
||
Cash distributions from partnerships in excess of equity in income
|
1,895
|
|
|
6,014
|
|
||
Net cash (used in) provided by investing activities
|
(79,701
|
)
|
|
67,880
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Net proceeds from issuance of preferred shares
|
282,005
|
|
|
—
|
|
||
Net borrowings from revolving facility
|
3,000
|
|
|
50,000
|
|
||
Proceeds from mortgage loans
|
—
|
|
|
139,000
|
|
||
Principal installments on mortgage loans
|
(12,581
|
)
|
|
(12,711
|
)
|
||
Repayments of mortgage loans
|
(150,000
|
)
|
|
(280,327
|
)
|
||
Payment of deferred financing costs
|
(71
|
)
|
|
(3,335
|
)
|
||
Dividends paid to common shareholders
|
(43,959
|
)
|
|
(43,769
|
)
|
||
Dividends paid to preferred shareholders
|
(19,752
|
)
|
|
(11,886
|
)
|
||
Distributions paid to Operating Partnership unit holders and noncontrolling interest
|
(5,232
|
)
|
|
(5,245
|
)
|
||
Value of shares of beneficial interest issued
|
1,790
|
|
|
947
|
|
||
Value of shares retired under equity incentive plans, net of shares issued
|
(1,328
|
)
|
|
(2,177
|
)
|
||
Net cash provided by (used in) financing activities
|
53,872
|
|
|
(169,503
|
)
|
||
Net change in cash and cash equivalents
|
67,139
|
|
|
2,529
|
|
||
Cash and cash equivalents, beginning of period
|
9,803
|
|
|
22,855
|
|
||
Cash and cash equivalents, end of period
|
$
|
76,942
|
|
|
$
|
25,384
|
|
(in thousands of dollars)
|
As of September 30,
2017 |
|
As of December 31,
2016 |
||||
Buildings, improvements and construction in progress
|
$
|
2,727,880
|
|
|
$
|
2,794,213
|
|
Land, including land held for development
|
492,374
|
|
|
505,801
|
|
||
Total investments in real estate
|
3,220,254
|
|
|
3,300,014
|
|
||
Accumulated depreciation
|
(1,082,840
|
)
|
|
(1,060,845
|
)
|
||
Net investments in real estate
|
$
|
2,137,414
|
|
|
$
|
2,239,169
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands of dollars)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Development/Redevelopment Activities:
|
|
|
|
|
|
|
|
||||||||
Interest
|
$
|
2,209
|
|
|
$
|
851
|
|
|
$
|
5,358
|
|
|
$
|
2,221
|
|
Salaries and benefits
|
362
|
|
|
339
|
|
|
1,058
|
|
|
880
|
|
||||
Real estate taxes
|
496
|
|
|
176
|
|
|
651
|
|
|
202
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Leasing Activities:
|
|
|
|
|
|
|
|
||||||||
Salaries, commissions and benefits
|
1,536
|
|
|
1,378
|
|
|
4,633
|
|
|
4,394
|
|
Sale Date
|
|
Property and Location
|
|
Description of Real Estate Sold
|
|
Capitalization Rate
|
|
Sale Price
|
|
Gain
|
|||||
|
|
|
|
(in millions)
|
|||||||||||
2017 Activity:
|
|
|
|
|
|
|
|
|
|
|
|||||
January
|
|
Beaver Valley Mall,
Monaca, Pennsylvania
|
|
Mall
|
|
15.6
|
%
|
|
$
|
24.2
|
|
|
$
|
—
|
|
|
|
Crossroads Mall,
Beckley, West Virginia
|
|
Mall
|
|
15.5
|
%
|
|
24.8
|
|
|
—
|
|
||
August
|
|
Logan Valley Mall
Altoona, Pennsylvania
|
|
Mall
|
|
16.5
|
%
|
|
33.2
|
|
|
—
|
|
(in thousands of dollars)
|
As of September 30, 2017
|
|
As of December 31, 2016
|
||||
ASSETS:
|
|
|
|
||||
Investments in real estate, at cost:
|
|
|
|
||||
Operating properties
|
$
|
612,623
|
|
|
$
|
649,960
|
|
Construction in progress
|
261,735
|
|
|
160,699
|
|
||
Total investments in real estate
|
874,358
|
|
|
810,659
|
|
||
Accumulated depreciation
|
(201,964
|
)
|
|
(207,987
|
)
|
||
Net investments in real estate
|
672,394
|
|
|
602,672
|
|
||
Cash and cash equivalents
|
47,431
|
|
|
27,643
|
|
||
Deferred costs and other assets, net
|
34,218
|
|
|
37,705
|
|
||
Total assets
|
754,043
|
|
|
668,020
|
|
||
LIABILITIES AND PARTNERS’ INVESTMENT:
|
|
|
|
||||
Mortgage loans payable, net
|
440,315
|
|
|
445,224
|
|
||
Other liabilities
|
54,079
|
|
|
23,945
|
|
||
Total liabilities
|
494,394
|
|
|
469,169
|
|
||
Net investment
|
259,649
|
|
|
198,851
|
|
||
Partners’ share
|
130,627
|
|
|
101,045
|
|
||
PREIT’s share
|
129,022
|
|
|
97,806
|
|
||
Excess investment
(1)
|
12,107
|
|
|
8,969
|
|
||
Net investments and advances
|
$
|
141,129
|
|
|
$
|
106,775
|
|
|
|
|
|
||||
Investment in partnerships, at equity
|
$
|
201,000
|
|
|
$
|
168,608
|
|
Distributions in excess of partnership investments
|
(59,871
|
)
|
|
(61,833
|
)
|
||
Net investments and advances
|
$
|
141,129
|
|
|
$
|
106,775
|
|
(1)
|
Excess investment represents the unamortized difference between our investment and our share of the equity in the underlying net investment in the unconsolidated partnerships. The excess investment is amortized over the life of the properties, and the amortization is included in “Equity in income of partnerships.”
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands of dollars)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Real estate revenue
|
$
|
29,395
|
|
|
$
|
29,475
|
|
|
$
|
87,089
|
|
|
$
|
85,867
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Property operating and other expenses
|
(7,885
|
)
|
|
(8,198
|
)
|
|
(25,098
|
)
|
|
(25,220
|
)
|
||||
Interest expense
|
(5,460
|
)
|
|
(5,388
|
)
|
|
(16,266
|
)
|
|
(16,165
|
)
|
||||
Depreciation and amortization
|
(6,496
|
)
|
|
(5,840
|
)
|
|
(19,151
|
)
|
|
(17,367
|
)
|
||||
Total expenses
|
(19,841
|
)
|
|
(19,426
|
)
|
|
(60,515
|
)
|
|
(58,752
|
)
|
||||
Net income
|
9,554
|
|
|
10,049
|
|
|
26,574
|
|
|
27,115
|
|
||||
Less: Partners’ share
|
(5,321
|
)
|
|
(5,397
|
)
|
|
(14,567
|
)
|
|
(14,496
|
)
|
||||
PREIT’s share
|
4,233
|
|
|
4,652
|
|
|
12,007
|
|
|
12,619
|
|
||||
Amortization of and adjustments to excess investment
|
21
|
|
|
(9
|
)
|
|
137
|
|
|
99
|
|
||||
Equity in income of partnerships
|
$
|
4,254
|
|
|
$
|
4,643
|
|
|
$
|
12,144
|
|
|
$
|
12,718
|
|
|
|
As of
|
|
||||||
(in thousands of dollars)
|
|
September 30, 2017
|
|
December 31, 2016
|
|
||||
Summarized balance sheet information
|
|
|
|
|
|
||||
Total assets
|
|
$
|
46,280
|
|
|
$
|
49,264
|
|
|
Mortgage loan payable
|
|
124,653
|
|
|
126,520
|
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands of dollars)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Summarized statement of operations information
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
$
|
8,355
|
|
|
$
|
9,023
|
|
|
$
|
25,811
|
|
|
$
|
27,192
|
|
Property operating expenses
|
|
(2,169
|
)
|
|
(2,204
|
)
|
|
(6,653
|
)
|
|
(6,386
|
)
|
||||
Interest expense
|
|
(1,851
|
)
|
|
(1,888
|
)
|
|
(5,582
|
)
|
|
(5,691
|
)
|
||||
Net income
|
|
3,449
|
|
|
4,066
|
|
|
10,710
|
|
|
12,544
|
|
||||
PREIT’s share of equity in income
|
|
|
|
|
|
|
|
|
||||||||
of partnership
|
|
1,724
|
|
|
2,033
|
|
|
5,355
|
|
|
6,272
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||||
(in thousands of dollars)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||
2013 Revolving Facility
|
|
|
|
|
|
|
|
|
|||||||||
|
Interest expense
|
|
$
|
601
|
|
|
$
|
805
|
|
|
$
|
2,011
|
|
|
$
|
2,277
|
|
|
Deferred financing amortization
|
|
199
|
|
|
199
|
|
|
597
|
|
|
596
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Term Loans
|
|
|
|
|
|
|
|
|
|||||||||
|
Interest expense
|
|
4,205
|
|
|
3,125
|
|
|
10,752
|
|
|
9,162
|
|
||||
|
Deferred financing amortization
|
|
191
|
|
|
191
|
|
|
568
|
|
|
431
|
|
|
|
Applicable Margin
|
|
||
Level
|
Ratio of Total Liabilities
to Gross Asset Value |
2013 Revolving Facility
|
|
Term Loans
|
|
1
|
Less than 0.450 to 1.00
|
1.20%
|
|
1.35%
|
|
2
|
Equal to or greater than 0.450 to 1.00 but less than 0.500 to 1.00
|
1.25%
|
(1)
|
1.45%
|
(1)
|
3
|
Equal to or greater than 0.500 to 1.00 but less than 0.550 to 1.00
|
1.30%
|
|
1.60%
|
|
4
|
Equal to or greater than 0.550 to 1.00
|
1.55%
|
|
1.90%
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||
(in millions of dollars)
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Mortgage loans
(1)
|
$
|
1,032.6
|
|
|
$
|
1,035.7
|
|
|
$
|
1,222.9
|
|
|
$
|
1,189.6
|
|
(in millions of dollars)
Notional Value
|
|
Fair Value at
September 30, 2017 (1) |
|
Fair Value at
December 31, 2016
(1)
|
|
Interest
Rate
|
|
Effective Date of Forward Starting Swap
|
|
Maturity Date
|
|
|||||
Interest Rate Swaps
|
|
|
|
|
|
|
|
|
|
|
|
|||||
28.1
|
|
N/A
|
|
|
$
|
—
|
|
|
1.38
|
%
|
|
|
|
January 2, 2017
|
|
|
48.0
|
|
$
|
—
|
|
|
(0.1
|
)
|
|
1.12
|
%
|
|
|
|
January 1, 2018
|
|
|
7.6
|
|
—
|
|
|
—
|
|
|
1.00
|
%
|
|
|
|
January 1, 2018
|
|
||
55.0
|
|
—
|
|
|
(0.1
|
)
|
|
1.12
|
%
|
|
|
|
January 1, 2018
|
|
||
30.0
|
|
—
|
|
|
(0.3
|
)
|
|
1.78
|
%
|
|
|
|
January 2, 2019
|
|
||
25.0
|
|
0.2
|
|
|
0.3
|
|
|
0.70
|
%
|
|
|
|
January 2, 2019
|
|
||
20.0
|
|
—
|
|
|
(0.2
|
)
|
|
1.78
|
%
|
|
|
|
January 2, 2019
|
|
||
20.0
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
1.78
|
%
|
|
|
|
January 2, 2019
|
|
||
20.0
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
1.79
|
%
|
|
|
|
January 2, 2019
|
|
||
20.0
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
1.79
|
%
|
|
|
|
January 2, 2019
|
|
||
20.0
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
1.79
|
%
|
|
|
|
January 2, 2019
|
|
||
25.0
|
|
0.1
|
|
|
0.1
|
|
|
1.16
|
%
|
|
|
|
January 2, 2019
|
|
||
25.0
|
|
0.1
|
|
|
0.1
|
|
|
1.16
|
%
|
|
|
|
January 2, 2019
|
|
||
25.0
|
|
0.1
|
|
|
0.1
|
|
|
1.16
|
%
|
|
|
|
January 2, 2019
|
|
||
20.0
|
|
0.1
|
|
|
—
|
|
|
1.16
|
%
|
|
|
|
January 2, 2019
|
|
||
20.0
|
|
0.3
|
|
|
0.2
|
|
|
1.23
|
%
|
|
|
|
June 26, 2020
|
|
||
20.0
|
|
0.3
|
|
|
0.2
|
|
|
1.23
|
%
|
|
|
|
June 26, 2020
|
|
||
20.0
|
|
0.3
|
|
|
0.2
|
|
|
1.23
|
%
|
|
|
|
June 26, 2020
|
|
||
20.0
|
|
0.3
|
|
|
0.2
|
|
|
1.23
|
%
|
|
|
|
June 26, 2020
|
|
||
20.0
|
|
0.3
|
|
|
0.2
|
|
|
1.24
|
%
|
|
|
|
June 26, 2020
|
|
||
9.0
|
|
0.1
|
|
|
0.2
|
|
|
1.19
|
%
|
|
|
|
February 1, 2021
|
|
||
35.0
|
|
0.8
|
|
|
0.9
|
|
|
1.01
|
%
|
|
|
|
March 1, 2021
|
|
||
35.0
|
|
0.8
|
|
|
0.9
|
|
|
1.02
|
%
|
|
|
|
March 1, 2021
|
|
||
20.0
|
|
0.5
|
|
|
0.5
|
|
|
1.01
|
%
|
|
|
|
March 1, 2021
|
|
||
20.0
|
|
0.5
|
|
|
0.5
|
|
|
1.02
|
%
|
|
|
|
March 1, 2021
|
|
||
20.0
|
|
0.5
|
|
|
0.5
|
|
|
1.02
|
%
|
|
|
|
March 1, 2021
|
|
||
50.0
|
|
0.1
|
|
|
N/A
|
|
|
1.75
|
%
|
|
|
|
December 29, 2021
|
|
||
25.0
|
|
0.1
|
|
|
N/A
|
|
|
1.75
|
%
|
|
|
|
December 29, 2021
|
|
||
25.0
|
|
0.1
|
|
|
N/A
|
|
|
1.75
|
%
|
|
|
|
December 29, 2021
|
|
||
25.0
|
|
0.1
|
|
|
N/A
|
|
|
1.75
|
%
|
|
|
|
December 29, 2021
|
|
||
25.0
|
|
0.1
|
|
|
N/A
|
|
|
1.75
|
%
|
|
|
|
December 29, 2021
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Forward Starting Swap
|
|
|
|
|
|
|
|
|
|
|||||||
48.0
|
|
0.5
|
|
|
0.7
|
|
|
1.42
|
%
|
|
January 2, 2018
|
|
February 1, 2021
|
|
||
|
|
$
|
5.9
|
|
|
$
|
4.3
|
|
|
|
|
|
|
|
|
(1)
|
As of
September 30, 2017
and
December 31, 2016
, derivative valuations in their entirety were classified in Level 2 of the fair value hierarchy and we did not have any significant recurring fair value measurements related to derivative instruments using significant unobservable inputs (Level 3).
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
Consolidated
Statements of
Operations
Location
|
||||||||||||
(in millions of dollars)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|||||||||
Derivatives in cash flow hedging relationships:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate products
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gain (loss) recognized in Other Comprehensive Income (Loss) on derivatives
|
|
$
|
0.1
|
|
|
$
|
2.6
|
|
|
$
|
0.2
|
|
|
$
|
(8.1
|
)
|
|
N/A
|
Loss reclassified from Accumulated Other Comprehensive Income into income (effective portion)
|
|
$
|
0.4
|
|
|
$
|
1.3
|
|
|
$
|
1.9
|
|
|
$
|
3.9
|
|
|
Interest expense
|
Loss recognized in income on derivatives (ineffective portion and amount excluded from effectiveness testing)
|
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
(0.1
|
)
|
|
Interest expense
|
|
|
Pre-bankruptcy
|
|
Units Closed
|
|||||||||||||||||||
Year
|
|
Number of Tenants
(1)
|
|
Number of locations impacted
|
|
GLA
(2)
|
|
PREIT’s Share of Annualized Gross Rent
(2)
(in thousands)
|
|
Number of locations closed
|
|
GLA
(2)
|
|
PREIT’s Share of Annualized Gross Rent
(3)
(in thousands)
|
|||||||||
2017 (Nine Months)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Consolidated properties
|
|
13
|
|
|
69
|
|
|
310,585
|
|
|
$
|
9,541.6
|
|
|
17
|
|
|
90,508
|
|
|
$
|
2,959.7
|
|
Unconsolidated properties
|
|
8
|
|
|
15
|
|
|
183,956
|
|
|
2,021.5
|
|
|
6
|
|
|
81,531
|
|
|
949.3
|
|
||
Total
|
|
14
|
|
|
84
|
|
|
494,541
|
|
|
$
|
11,563.1
|
|
|
23
|
|
|
172,039
|
|
|
$
|
3,909.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2016 (Full Year)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Consolidated properties
|
|
7
|
|
|
38
|
|
|
137,111
|
|
|
$
|
6,738.7
|
|
|
20
|
|
|
73,011
|
|
|
$
|
3,181.5
|
|
Unconsolidated properties
|
|
6
|
|
|
10
|
|
|
86,012
|
|
|
1,166.9
|
|
|
4
|
|
|
64,809
|
|
|
471.4
|
|
||
Total
|
|
9
|
|
|
48
|
|
|
223,123
|
|
|
$
|
7,905.6
|
|
|
24
|
|
|
137,820
|
|
|
$
|
3,652.9
|
|
(1)
|
Principal replacement tenants opened and remaining portion still in progress
|
(2)
|
Property is PREIT owned
|
(3)
|
Property was purchased by PREIT in April 2017
|
(4)
|
Property was purchased by PREIT in July 2017
|
(5)
|
Property is third-party owned
|
(6)
|
Purchased by PREIT in the fourth quarter of 2016
|
(7)
|
Closed in July 2017
|
|
Occupancy
(1)
at September 30,
|
||||||||||||||||
|
Consolidated
Properties
|
|
Unconsolidated
Properties
(2)
|
|
Combined
(2)(3)
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||
Retail portfolio weighted average:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total excluding anchors
|
91.7
|
%
|
|
92.0
|
%
|
|
92.1
|
%
|
|
93.8
|
%
|
|
91.8
|
%
|
|
92.4
|
%
|
Total including anchors
|
93.9
|
%
|
|
94.4
|
%
|
|
93.5
|
%
|
|
95.0
|
%
|
|
93.8
|
%
|
|
94.6
|
%
|
Malls weighted average:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total excluding anchors
|
92.3
|
%
|
|
92.1
|
%
|
|
89.5
|
%
|
|
94.8
|
%
|
|
92.0
|
%
|
|
92.4
|
%
|
Total including anchors
|
94.2
|
%
|
|
94.5
|
%
|
|
92.9
|
%
|
|
96.4
|
%
|
|
94.1
|
%
|
|
94.8
|
%
|
Other retail properties
|
36.7
|
%
|
|
83.1
|
%
|
|
94.0
|
%
|
|
93.8
|
%
|
|
91.3
|
%
|
|
93.3
|
%
|
(1)
|
Occupancy for both periods presented includes all tenants irrespective of the term of their agreements. Retail portfolio and mall occupancy for all periods presented includes a property classified as held for sale in 2017 because the Company has not yet entered into a purchase and sale agreement with respect to this property and excludes properties sold or classified as held for sale in 2016. Fashion District Philadelphia is excluded for 2016 and 2017 because the property is currently partially closed and undergoing a major reconstruction.
|
(2)
|
We own a 25% to 50% interest in each of our unconsolidated properties, and do not control such properties. Our percentage ownership is not necessarily indicative of the legal and economic implications of our ownership interest. See "—Use of Non GAAP Measures" for further details on our ownership interests in our unconsolidated properties.
|
(3)
|
Combined occupancy is calculated by using occupied gross leasable area (“GLA”) for consolidated and unconsolidated properties and dividing by total GLA for consolidated and unconsolidated properties.
|
|
|
Initial Gross Rent Spread
(1)
|
|
Avg Rent Spread
(2)
|
|
Annualized Tenant Improvements psf
(3)
|
|||||||||||||||||||||||
|
|
Number
|
|
GLA
(in square feet)
|
|
Term
(years)
|
|
Initial Rent psf
|
|
Previous Rent psf
|
|
$
|
|
%
|
|
%
|
|
||||||||||||
Non Anchor
|
|||||||||||||||||||||||||||||
New Leases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Under 10,000 sf
|
|
29
|
|
|
60,419
|
|
|
7.7
|
|
|
$
|
52.50
|
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
$
|
10.72
|
|
||||
Over 10,000 sf
|
|
3
|
|
|
92,448
|
|
|
10.0
|
|
|
16.90
|
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
6.02
|
|
||||||
Total New Leases
|
|
32
|
|
|
152,867
|
|
|
7.9
|
|
|
$
|
30.97
|
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
$
|
7.88
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Renewal Leases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Under 10,000 sf
|
|
49
|
|
|
110,385
|
|
|
3.4
|
|
|
$
|
56.86
|
|
|
$
|
57.84
|
|
|
$
|
(0.98
|
)
|
|
(1.7)%
|
|
0.1%
|
|
$
|
0.21
|
|
Over 10,000 sf
|
|
6
|
|
|
114,589
|
|
|
4.0
|
|
|
22.12
|
|
|
24.55
|
|
|
(2.43
|
)
|
|
(9.9)%
|
|
(6.4)%
|
|
—
|
|
||||
Total Fixed Rent
|
|
55
|
|
|
224,974
|
|
|
3.5
|
|
|
$
|
39.17
|
|
|
$
|
40.88
|
|
|
$
|
(1.71
|
)
|
|
(4.2)%
|
|
(1.9)%
|
|
$
|
0.10
|
|
Percentage in Lieu
|
|
0
|
|
|
—
|
|
|
0.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
N/A
|
|
N/A
|
|
N/A
|
|
$
|
—
|
|
||
Total Renewal Leases
|
|
55
|
|
|
224,974
|
|
|
3.5
|
|
|
$
|
39.17
|
|
|
$
|
40.88
|
|
|
$
|
(1.71
|
)
|
|
(4.2)%
|
|
(1.9)%
|
|
$
|
—
|
|
Total Non Anchor
(4)
|
|
87
|
|
|
377,841
|
|
|
5.1
|
|
|
$
|
35.85
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Anchor
|
|||||||||||||||||||||||||||||
New Leases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
$
|
—
|
|
||||
Renewal Leases
|
|
4
|
|
|
336,207
|
|
|
6.3
|
|
|
$
|
6.78
|
|
|
$
|
6.69
|
|
|
$
|
0.09
|
|
|
1.3%
|
|
N/A
|
|
$
|
—
|
|
Total
|
|
4
|
|
|
336,207
|
|
|
6.3
|
|
|
$
|
6.78
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Initial gross rent renewal spread is computed by comparing the initial rent per square foot in the new lease to the final rent per square foot amount in the expiring lease. For purposes of this computation, the rent amount includes minimum rent, common area maintenance (“CAM”) charges, estimated real estate tax reimbursements and marketing charges, but excludes percentage rent. In certain cases, a lower rent amount may be payable for a period of time until specified conditions in the lease are satisfied.
|
(2)
|
Average renewal spread is computed by comparing the average rent per square foot over the new lease term to the final rent per square foot amount in the expiring lease. For purposes of this computation, the rent amount includes minimum rent and fixed CAM charges, but excludes pro rata CAM charges, estimated real estate tax reimbursements, marketing charges and percentage rent.
|
(3)
|
Tenant improvements and certain other leasing costs are presented as annualized amounts per square foot and are spread uniformly over the initial lease term.
|
(4)
|
Includes
13
leases and
112,466
square feet of GLA with respect to our unconsolidated partnerships. Excluding these leases, the initial gross rent spread was
3.3%
for leases under 10,000 square feet and
3.8%
for all non anchor leases. Excluding these leases, the average rent spread was
4.6%
for leases under 10,000 square feet and
5.5%
for all non anchor leases. We own a 25% to 50% interest in each of our unconsolidated properties and do not control such properties. Our percentage ownership is not necessarily indicative of the legal and economic implications of our ownership interest. See "—Use of Non GAAP Measures" for further details on our ownership interests in our unconsolidated properties.
|
(1)
|
Initial gross rent renewal spread is computed by comparing the initial rent per square foot in the new lease to the final rent per square foot amount in the expiring lease. For purposes of this computation, the rent amount includes minimum rent, common area maintenance (“CAM”) charges, estimated real estate tax reimbursements and marketing charges, but excludes percentage rent. In certain cases, a lower rent amount may be payable for a period of time until specified conditions in the lease are satisfied.
|
(2)
|
Average renewal spread is computed by comparing the average rent per square foot over the new lease term to the final rent per square foot amount in the expiring lease. For purposes of this computation, the rent amount includes minimum rent and fixed CAM charges, but excludes pro rata CAM charges, estimated real estate tax reimbursements, marketing charges and percentage rent.
|
(3)
|
Tenant improvements and certain other leasing costs are presented as annualized amounts per square foot and are spread uniformly over the initial lease term.
|
(4)
|
Includes
32
leases and
381,880
square feet of GLA with respect to our unconsolidated partnerships. We own a 25% to 50% interest in each of our unconsolidated properties and do not control such properties. Excluding these leases, the initial gross rent spread was
2.8%
for leases under 10,000 square feet and
2.9%
for all non anchor leases. Excluding these leases, the average rent spread was
5.3%
for leases under 10,000 square feet and
5.8%
for all non anchor leases.Our percentage ownership is not necessarily indicative of the legal and economic implications of our ownership interest. See "—Use of Non GAAP Measures" for further details on our ownership interests in our unconsolidated properties.
|
|
|
Three Months Ended
September 30, |
|
% Change
2016 to 2017 |
|
Nine Months Ended
September 30, |
|
% Change
2016 to 2017 |
|
||||||||||||||
(in thousands of dollars)
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
||||||||||||
Real estate revenue
|
|
$
|
86,719
|
|
|
$
|
96,260
|
|
|
(10
|
)%
|
|
$
|
263,553
|
|
|
$
|
290,455
|
|
|
(9
|
)%
|
|
Property operating expenses
|
|
(33,303
|
)
|
|
(37,249
|
)
|
|
(11
|
)%
|
|
(105,509
|
)
|
|
(117,892
|
)
|
|
(11
|
)%
|
|
||||
Other income
|
|
2,492
|
|
|
2,600
|
|
|
(4
|
)%
|
|
4,172
|
|
|
4,630
|
|
|
(10
|
)%
|
|
||||
Depreciation and amortization
|
|
(29,966
|
)
|
|
(26,820
|
)
|
|
12
|
%
|
|
(94,652
|
)
|
|
(92,217
|
)
|
|
3
|
%
|
|
||||
General and administrative expenses
|
|
(8,288
|
)
|
|
(8,244
|
)
|
|
1
|
%
|
|
(26,561
|
)
|
|
(25,713
|
)
|
|
3
|
%
|
|
||||
Provision for employee separation expense
|
|
—
|
|
|
(162
|
)
|
|
(100
|
)%
|
|
(1,053
|
)
|
|
(1,355
|
)
|
|
(22
|
)%
|
|
||||
Project costs and other expenses
|
|
(150
|
)
|
|
(1,080
|
)
|
|
(86
|
)%
|
|
(547
|
)
|
|
(1,374
|
)
|
|
(60
|
)%
|
|
||||
Interest expense, net
|
|
(14,342
|
)
|
|
(17,198
|
)
|
|
(17
|
)%
|
|
(44,098
|
)
|
|
(53,611
|
)
|
|
(18
|
)%
|
|
||||
Impairment of assets
|
|
(1,825
|
)
|
|
(9,865
|
)
|
|
(82
|
)%
|
|
(55,742
|
)
|
|
(24,589
|
)
|
|
127
|
%
|
|
||||
Equity in income of partnerships
|
|
4,254
|
|
|
4,643
|
|
|
(8
|
)%
|
|
12,144
|
|
|
12,718
|
|
|
(5
|
)%
|
|
||||
Gain on sale of real estate by equity method investee
|
|
6,718
|
|
|
—
|
|
|
|
|
6,718
|
|
|
—
|
|
|
|
|
||||||
Gain on sales of interests in non operating real estate
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
486
|
|
|
9
|
|
|
5,300
|
%
|
|
||||
(Losses) gains on sales of interests in real estate, net
|
|
(9
|
)
|
|
31
|
|
|
(129
|
)%
|
|
(374
|
)
|
|
22,953
|
|
|
(102
|
)%
|
|
||||
Net income (loss)
|
|
$
|
12,300
|
|
|
$
|
2,916
|
|
|
322
|
%
|
|
$
|
(41,463
|
)
|
|
$
|
14,014
|
|
|
(396
|
)%
|
|
•
|
a decrease of $6.7 million in real estate revenue related to properties sold in 2016 and 2017;
|
•
|
a decrease of $2.9 million in same store lease terminations, including the effect of a $2.9 million lease termination fee received from one tenant for two locations during the three months ending September 30, 2016;
|
•
|
a decrease of $0.7 million in same store common area expense reimbursements, due to a decrease in common area expense (see “—Property Operating Expenses”), as well as lower occupancy at some properties and rental concessions made to some tenants under which the terms of their leases were modified such that they no longer pay expense reimbursements;
|
•
|
a decrease of $0.2 million in same store utility reimbursements due to a combination of lower tenant electric billing rates as set by a public utility commission, as well as a decrease in electric consumption; and
|
•
|
a decrease of $0.2 million in same store percentage rent, including $0.1 million received from one tenant during the three months ending September 30, 2016; partially offset by
|
•
|
an increase of $1.1 million in same store base rent due to $1.7 million from net new store openings over the previous twelve months, partially offset by a $0.5 million decrease related to tenant bankruptcies in 2016 and 2017, as well as a $0.1 million decrease related to co-tenancy concessions due to anchor closings in 2016 and 2017.
|
•
|
a decrease of $24.9 million in real estate revenue related to properties sold in 2016 and 2017;
|
•
|
a decrease of $1.6 million in same store common area expense reimbursements, due to a decrease in common area expense (see “—Property Operating Expenses”), as well as lower occupancy at some properties and rental concessions made to some tenants under which the terms of their leases were modified such that they no longer pay expense reimbursements;
|
•
|
a decrease of $0.9 million in same store utility reimbursements due to a combination of lower tenant electric billing rates as set by the Public Utility Commission, as well as a decrease in electric consumption;
|
•
|
a decrease of $0.9 million in lease termination revenue, including the effect of a $2.9 million lease termination fee received from one tenant for two locations during the nine months ending September 30, 2016; and
|
•
|
A decrease of $0.5 million in same store percentage rent due to lease renewals with higher base rents and corresponding higher sales breakpoints for calculating percentage rent, as well as lower sales from some tenants that paid percent rent during the nine months ending September 30, 2016; partially offset by
|
•
|
an increase of $1.4 million in same store base rent due to $3.1 million from net new store openings over the previous twelve months, partially offset by a $1.4 million decrease related to tenant bankruptcies in 2016 and 2017, as well as a $0.3 million decrease related to co-tenancy concessions due to anchor closings in 2016 and 2017.
|
•
|
a decrease of $2.4 million in property operating expenses related to properties sold in 2016 and 2017;
|
•
|
a decrease of $1.1 million in same store common area maintenance expense, including a $0.7 million decrease in personnel costs and a $0.3 million decrease in common area utilities;
|
•
|
a decrease of $0.4 million in same store real estate tax expense due to real estate tax appeal refunds received at one property, partially offset by higher real estate tax expense at several other properties due to a combination of increases in the real estate tax assessment value and the real estate tax rate; and
|
•
|
a decrease of $0.2 million in same store tenant utility expense as a result of cooler temperatures across the Mid-Atlantic States, where many of our properties are located, resulting in lower electricity usage compared to the three months ended September 30, 2016; partially offset by
|
•
|
an increase of $0.3 million in same store bad debt expense due to the collection of previously reserved amounts from a tenant
|
•
|
a decrease of $11.0 million in property operating expenses related to properties sold in 2016 and 2017;
|
•
|
a decrease of $2.2 million in same store common area maintenance expense, including a $2.0 million decrease in personnel costs, and
|
•
|
a decrease of $0.4 million in same store tenant utility expense due to a combination of lower electricity usage and lower electricity rates; partially offset by
|
•
|
an increase of $1.1 million in same store real estate tax expense due to a combination of increases in the real estate tax assessment value and the real estate tax rate; partially offset by real estate tax appeal refunds received at one property.
|
•
|
an increase of $6.7 million due to a change in an estimated contingent liability during the three months ended September 30, 2016 that was originally recognized in connection with a property acquisition in 2015; partially offset by
|
•
|
a decrease of $3.0 million related to properties sold in 2016 and 2017 and one property classified as held for sale effective June 30, 2017; and
|
•
|
a decrease of $0.6 million due to accelerated amortization of capital improvements associated with store closings in the three months ended September 30, 2016.
|
•
|
an increase of $8.7 million due to a change in an estimated contingent liability during the nine months ended September 30, 2016 that was originally recognized in connection with a property acquisition in 2015; and
|
•
|
an increase of $0.8 million due to a higher asset base resulting from capital improvements related to new tenants at our same store properties, as well as accelerated amortization of capital improvements associated with store closings in the nine months ended September 30, 2017; partially offset by
|
•
|
a decrease of $7.1 million related to properties sold in 2016 and 2017 and one property classified as held for sale effective June 30, 2017.
|
•
|
We believe that NOI is helpful to management and investors as a measure of operating performance because it is an indicator of the return on property investment and provides a method of comparing property performance over time. When we use and present NOI, we also do so on a same store (Same Store NOI) and non-same store (Non Same Store NOI) basis to differentiate between properties that we have owned for the full periods presented and properties acquired, sold or under redevelopment during those periods. Furthermore, our use and presentation of NOI combines NOI from our consolidated properties and NOI attributable to our share of unconsolidated properties in order to arrive at total NOI. We believe that this is also helpful information because it reflects the pro rata contribution from our unconsolidated properties that are owned through investments accounted for under GAAP as equity in income of partnerships. See “Unconsolidated Properties and Proportionate Financial Information” below.
|
•
|
We believe that FFO is also helpful to management and investors as a measure of operating performance because it excludes various items included in net income that do not relate to or are not indicative of operating performance, such as gains on sales of operating real estate and depreciation and amortization of real estate, among others. In addition to FFO and FFO per diluted share and OP Unit, we also present FFO, as adjusted and FFO per diluted share and OP Unit, as adjusted to show the effect of items such as provision for employee separation expense and loss on hedge ineffectiveness.
|
•
|
Except for two properties that we co-manage with our partner, all of the other entities are managed on a day-to-day basis by one of our other partners as the managing general partner in each of the respective partnerships. In the case of the co-managed properties, all decisions in the ordinary course of business are made jointly.
|
•
|
The managing general partner is responsible for establishing the operating and capital decisions of the partnership, including budgets, in the ordinary course of business.
|
•
|
All major decisions of each partnership, such as the sale, refinancing, expansion or rehabilitation of the property, require the approval of all partners.
|
•
|
Voting rights and the sharing of profits and losses are generally in proportion to the ownership percentages of each partner.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income (loss)
|
$
|
12,300
|
|
|
$
|
2,916
|
|
|
$
|
(41,463
|
)
|
|
$
|
14,014
|
|
Other income
|
(2,492
|
)
|
|
(2,600
|
)
|
|
(4,172
|
)
|
|
(4,630
|
)
|
||||
Depreciation and amortization
|
29,966
|
|
|
26,820
|
|
|
94,652
|
|
|
92,217
|
|
||||
General and administrative expenses
|
8,288
|
|
|
8,244
|
|
|
26,561
|
|
|
25,713
|
|
||||
Employee separation expenses
|
—
|
|
|
162
|
|
|
1,053
|
|
|
1,355
|
|
||||
Project costs and other expenses
|
150
|
|
|
1,080
|
|
|
547
|
|
|
1,374
|
|
||||
Interest expense, net
|
14,342
|
|
|
17,198
|
|
|
44,098
|
|
|
53,611
|
|
||||
Impairment of assets
|
1,825
|
|
|
9,865
|
|
|
55,742
|
|
|
24,589
|
|
||||
Equity in income of partnerships
|
(4,254
|
)
|
|
(4,643
|
)
|
|
(12,144
|
)
|
|
(12,718
|
)
|
||||
Gain on sale of real estate by equity method investee
|
(6,718
|
)
|
|
—
|
|
|
(6,718
|
)
|
|
—
|
|
||||
Gains on sales of non operating real estate
|
—
|
|
|
—
|
|
|
(486
|
)
|
|
(9
|
)
|
||||
Losses (gains) on sales of interests in real estate, net
|
9
|
|
|
(31
|
)
|
|
374
|
|
|
(22,953
|
)
|
||||
NOI - consolidated properties
|
$
|
53,416
|
|
|
$
|
59,011
|
|
|
$
|
158,044
|
|
|
$
|
172,563
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Equity in income of partnerships
|
$
|
4,254
|
|
|
$
|
4,643
|
|
|
$
|
12,144
|
|
|
$
|
12,718
|
|
Other income
|
(20
|
)
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
||||
Depreciation and amortization
|
2,902
|
|
|
2,571
|
|
|
8,493
|
|
|
7,591
|
|
||||
Interest and other expenses
|
2,566
|
|
|
2,571
|
|
|
7,683
|
|
|
7,729
|
|
||||
Net operating income from equity method investments at ownership share
|
$
|
9,702
|
|
|
$
|
9,785
|
|
|
$
|
28,300
|
|
|
$
|
28,038
|
|
|
|
Same Store
|
|
Non Same Store
|
|
Total (non GAAP)
|
||||||||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||
NOI from consolidated properties
|
|
$
|
52,676
|
|
|
$
|
53,982
|
|
|
$
|
740
|
|
|
$
|
5,029
|
|
|
$
|
53,416
|
|
|
$
|
59,011
|
|
NOI from equity method investments at ownership share
|
|
7,604
|
|
|
8,347
|
|
|
2,098
|
|
|
1,438
|
|
|
9,702
|
|
|
9,785
|
|
||||||
Total NOI
|
|
60,280
|
|
|
62,329
|
|
|
2,838
|
|
|
6,467
|
|
|
63,118
|
|
|
68,796
|
|
||||||
Less: lease termination revenue
|
|
282
|
|
|
3,805
|
|
|
—
|
|
|
55
|
|
|
282
|
|
|
3,860
|
|
||||||
Total NOI - excluding lease termination revenue
|
|
$
|
59,998
|
|
|
$
|
58,524
|
|
|
$
|
2,838
|
|
|
$
|
6,412
|
|
|
$
|
62,836
|
|
|
$
|
64,936
|
|
|
|
Same Store
|
|
Non Same Store
|
|
Total (non GAAP)
|
||||||||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||
NOI from consolidated properties
|
|
$
|
153,740
|
|
|
$
|
154,391
|
|
|
$
|
4,304
|
|
|
$
|
18,172
|
|
|
$
|
158,044
|
|
|
$
|
172,563
|
|
NOI from equity method investments at ownership share
|
|
22,339
|
|
|
23,533
|
|
|
5,961
|
|
|
4,505
|
|
|
28,300
|
|
|
28,038
|
|
||||||
Total NOI
|
|
176,079
|
|
|
177,924
|
|
|
10,265
|
|
|
22,677
|
|
|
186,344
|
|
|
200,601
|
|
||||||
Less: lease termination revenue
|
|
2,629
|
|
|
4,048
|
|
|
71
|
|
|
110
|
|
|
2,700
|
|
|
4,158
|
|
||||||
Total NOI - excluding lease termination revenue
|
|
$
|
173,450
|
|
|
$
|
173,876
|
|
|
$
|
10,194
|
|
|
$
|
22,567
|
|
|
$
|
183,644
|
|
|
$
|
196,443
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands, except per share amounts)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income (loss)
|
$
|
12,300
|
|
|
$
|
2,916
|
|
|
$
|
(41,463
|
)
|
|
$
|
14,014
|
|
Depreciation and amortization on real estate
|
|
|
|
|
|
|
|
||||||||
Consolidated properties
|
29,589
|
|
|
26,448
|
|
|
93,529
|
|
|
91,109
|
|
||||
PREIT’s share of equity method investments
|
2,902
|
|
|
2,571
|
|
|
8,493
|
|
|
7,591
|
|
||||
Gain on sale of real estate by equity method investee
|
(6,718
|
)
|
|
—
|
|
|
(6,718
|
)
|
|
—
|
|
||||
Losses (gains) on sales of interests in real estate, net
|
9
|
|
|
(31
|
)
|
|
374
|
|
|
(22,953
|
)
|
||||
Impairment of assets
|
1,825
|
|
|
9,865
|
|
|
55,742
|
|
|
24,589
|
|
||||
Dividends on preferred shares
|
(7,525
|
)
|
|
(3,962
|
)
|
|
(20,797
|
)
|
|
(11,886
|
)
|
||||
Funds from operations attributable to common shareholders and OP Unit holders
|
32,382
|
|
|
37,807
|
|
|
89,160
|
|
|
102,464
|
|
||||
Provision for employee separation expense
|
—
|
|
|
162
|
|
|
1,053
|
|
|
1,355
|
|
||||
Loss on hedge ineffectiveness
|
—
|
|
|
—
|
|
|
—
|
|
|
143
|
|
||||
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders
|
$
|
32,382
|
|
|
$
|
37,969
|
|
|
$
|
90,213
|
|
|
$
|
103,962
|
|
Funds from operations attributable to common shareholders and OP Unit holders per diluted share and OP Unit
|
$
|
0.42
|
|
|
$
|
0.49
|
|
|
$
|
1.15
|
|
|
$
|
1.32
|
|
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders per diluted share and OP Unit
|
$
|
0.42
|
|
|
$
|
0.49
|
|
|
$
|
1.16
|
|
|
$
|
1.34
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares outstanding
|
69,424
|
|
|
69,129
|
|
|
69,319
|
|
|
69,065
|
|
||||
Weighted average effect of full conversion of OP Units
|
8,291
|
|
|
8,319
|
|
|
8,303
|
|
|
8,328
|
|
||||
Effect of common share equivalents
(1)
|
—
|
|
|
361
|
|
|
51
|
|
|
386
|
|
||||
Total weighted average shares outstanding, including OP Units
|
77,715
|
|
|
77,809
|
|
|
77,673
|
|
|
77,779
|
|
•
|
adverse changes or prolonged downturns in general, local or retail industry economic, financial, credit or capital market or competitive conditions, leading to a reduction in real estate revenue or cash flows or an increase in expenses;
|
•
|
deterioration in our tenants’ business operations and financial stability, including anchor or non anchor tenant bankruptcies, leasing delays or terminations, or lower sales, causing deferrals or declines in rent, percentage rent and cash flows;
|
•
|
inability to achieve targets for, or decreases in, property occupancy and rental rates, resulting in lower or delayed real estate revenue and operating income;
|
•
|
increases in operating costs, including increases that cannot be passed on to tenants, resulting in reduced operating income and cash flows; and
|
•
|
increases in interest rates resulting in higher borrowing costs.
|
(in thousands of dollars)
|
Total
|
|
Remainder of 2017
|
|
2018-2019
|
|
2020-2021
|
|
Thereafter
|
||||||||||
Principal payments
|
$
|
113,591
|
|
|
$
|
5,229
|
|
|
$
|
36,855
|
|
|
$
|
38,635
|
|
|
$
|
32,872
|
|
Balloon payments
|
922,453
|
|
|
—
|
|
|
68,469
|
|
|
178,600
|
|
|
675,384
|
|
|||||
Total
|
$
|
1,036,044
|
|
|
$
|
5,229
|
|
|
$
|
105,324
|
|
|
$
|
217,235
|
|
|
$
|
708,256
|
|
Less: unamortized debt issuance costs
|
3,466
|
|
|
|
|
|
|
|
|
|
|||||||||
Carrying value of mortgage notes payable
|
$
|
1,032,578
|
|
|
|
|
|
|
|
|
|
(in thousands of dollars)
|
Total
|
|
Remainder of 2017
|
|
2018-2019
|
|
2020-2021
|
|
Thereafter
|
||||||||||
Principal payments
|
$
|
1,598
|
|
|
$
|
91
|
|
|
$
|
1,189
|
|
|
$
|
318
|
|
|
$
|
—
|
|
Balloon payments
|
27,161
|
|
|
—
|
|
|
—
|
|
|
27,161
|
|
|
—
|
|
|||||
Total
|
$
|
28,759
|
|
|
$
|
91
|
|
|
$
|
1,189
|
|
|
$
|
27,479
|
|
|
$
|
—
|
|
Less: unamortized debt issuance costs
|
153
|
|
|
|
|
|
|
|
|
|
|||||||||
Carrying value of mortgage notes payable
|
$
|
28,606
|
|
|
|
|
|
|
|
|
|
(in thousands of dollars)
|
Total
|
|
Remainder of 2017
|
|
2018-2019
|
|
2020-2021
|
|
Thereafter
|
||||||||||
Mortgage loan principal payments
|
$
|
1,036,044
|
|
|
$
|
5,229
|
|
|
$
|
105,324
|
|
|
$
|
217,235
|
|
|
$
|
708,256
|
|
Mortgage loan principal payments related to assets held for sale
|
28,759
|
|
|
91
|
|
|
1,189
|
|
|
27,479
|
|
|
—
|
|
|||||
Term Loans
|
550,000
|
|
|
—
|
|
|
150,000
|
|
|
400,000
|
|
|
—
|
|
|||||
2013 Revolving Facility
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest on indebtedness
(1)(2)
|
263,909
|
|
|
14,822
|
|
|
108,357
|
|
|
86,978
|
|
|
53,752
|
|
|||||
Operating leases
|
4,713
|
|
|
528
|
|
|
3,779
|
|
|
406
|
|
|
—
|
|
|||||
Ground leases
|
7,280
|
|
|
140
|
|
|
1,120
|
|
|
1,120
|
|
|
4,900
|
|
|||||
Development and redevelopment commitments
(3)
|
115,878
|
|
|
49,601
|
|
|
66,277
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
2,006,583
|
|
|
$
|
70,411
|
|
|
$
|
436,046
|
|
|
$
|
733,218
|
|
|
$
|
766,908
|
|
•
|
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;
|
•
|
current economic conditions and the state of employment growth and 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;
|
•
|
the effects of online shopping and other uses of technology on our retail tenants;
|
•
|
risks related to our development and redevelopment activities;
|
•
|
acts of violence at malls, including our properties, or at other similar spaces, and the potential effect on traffic and sales;
|
•
|
our ability to identify and execute on suitable acquisition opportunities and to integrate acquired properties into our portfolio;
|
•
|
our partnerships and joint ventures with third parties to acquire or develop properties;
|
•
|
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;
|
•
|
changes to our corporate management team and any resulting modifications to our business strategies;
|
•
|
our ability to sell properties that we seek to dispose of or our ability to obtain prices we seek;
|
•
|
potential losses on impairment of certain long-lived assets, such as real estate, or of intangible assets, such as goodwill, including such losses that we might be required to record in connection with any dispositions of assets;
|
•
|
our substantial debt and the liquidation preference value of our preferred shares and our high leverage ratio;
|
•
|
constraining leverage, unencumbered debt yield, interest and tangible net worth covenants under our principal credit agreements;
|
•
|
our ability to refinance our existing indebtedness when it matures, on favorable terms or at all;
|
•
|
our ability to raise capital, including through joint ventures or other partnerships, through sales of properties or interests in properties, through the issuance of equity or equity-related securities if market conditions are favorable, or through other actions;
|
•
|
our short- and long-term liquidity position;
|
•
|
potential dilution from any capital raising transactions or other equity issuances; and
|
•
|
general economic, financial and political conditions, including credit and capital market conditions, changes in interest rates or unemployment.
|
|
Fixed Rate Debt
|
|
Variable Rate Debt
|
||||||||||
(in thousands of dollars)
For the Year Ending December 31,
|
Principal
Payments
|
|
Weighted
Average
Interest Rate
(1)
|
|
Principal
Payments
|
|
Weighted
Average
Interest Rate
(1)
|
||||||
2017
|
$
|
4,900
|
|
|
4.21
|
%
|
|
$
|
420
|
|
|
3.24
|
%
|
2018
|
16,972
|
|
|
4.25
|
%
|
|
70,149
|
|
|
3.78
|
%
|
||
2019
|
17,713
|
|
|
4.25
|
%
|
|
151,680
|
|
(2)
|
2.34
|
%
|
||
2020
|
45,272
|
|
|
5.03
|
%
|
|
151,680
|
|
(2)
|
2.24
|
%
|
||
2021 and thereafter
|
726,858
|
|
|
4.21
|
%
|
|
429,160
|
|
(2)
|
2.99
|
%
|
(1)
|
Based on the weighted average interest rates in effect as of
September 30, 2017
.
|
(2)
|
Includes Term Loan debt balance of $550.0 million with a weighted average interest rate of
2.69%
as of
September 30, 2017
.
|
•
|
Our disclosure controls and procedures are designed to ensure that the information that we are required to disclose in our reports under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
|
•
|
Our disclosure controls and procedures are effective to ensure that information that we are required to disclose in our Exchange Act reports is accumulated and communicated to management, including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.
|
Period
|
Total Number
of Shares
Purchased
|
|
Average Price
Paid per
Share
|
|
Total Number of
Shares Purchased
as part of Publicly
Announced Plans
or Programs
|
|
Maximum Number
(or Approximate Dollar
Value) of Shares that
May Yet Be Purchased
Under the Plans or
Programs
|
||||||
July 1 - July 31, 2017
|
2,500
|
|
|
$
|
11.59
|
|
|
—
|
|
|
$
|
—
|
|
August 1 - August 31, 2017
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
September 1 - September 30, 2017
|
495
|
|
|
10.26
|
|
|
—
|
|
|
—
|
|
||
Total
|
2,995
|
|
|
$
|
11.37
|
|
|
—
|
|
|
$
|
—
|
|
1.1
|
Purchase Agreement dated September 7, 2017, by and among PREIT, Preit Associates, L.P. and Wells Fargo Securities LLC, as representative of the several Underwriters listed on Schedule A attached thereto, filed as Exhibit 1.1 to PREIT’s Current Report in Form 8-K filed on September 11, 2017, is incorporated herein by reference.
|
|
|
3.1
|
Amended and Restated Trust Agreement dated December 18, 2008, filed as Exhibit 3.1 to PREIT’s Current Report on Form 8-K filed on December 23, 2008, is incorporated herein by reference.
|
|
|
3.2
|
Designating Amendment to Trust Agreement designating the rights, preferences, privileges, qualifications, limitations and restrictions of PREIT’s 8.25% Series A Cumulative Redeemable Perpetual Preferred Shares, liquidation preference $25.00 per share, par value $0.01 per share, filed as Exhibit 3.2 to PREIT’s Form 8-A filed on April 20, 2012, is incorporated herein by reference.
|
|
|
3.3
|
Amendment, dated June 7, 2012, to Amended and Restated Trust Agreement of Pennsylvania Real Estate Investment Trust dated December 18, 2008, as amended, filed as Exhibit 3.1 to PREIT’s Current Report on Form 8-K filed on June 12, 2012, is incorporated herein by reference.
|
|
|
3.4
|
Second Designating Amendment to Trust Agreement designating the rights, preferences, privileges, qualifications, limitations and restrictions of PREIT’s 7.375% Series B Cumulative Redeemable Perpetual Preferred Shares, liquidation preference $25.00 per share, par value $0.01 per share, filed as Exhibit 3.2 to PREIT’s Form 8-A filed on October 11, 2012, is incorporated herein by reference.
|
|
|
3.5
|
Third Designating Amendment to Trust Agreement designating the rights, preferences, privileges, qualifications, limitations and restrictions of PREIT’s 7.20% Series C Cumulative Redeemable Perpetual Preferred Shares, liquidation preference $25.00 per share par value $0.01 per share, filed as Exhibit 3.4 to PREIT’s Form 8-A filed on January 27, 2017, is incorporated by reference.
|
|
|
3.6
|
Fourth Designating Amendment to Trust Agreement designating the rights, preferences, privileges, qualifications, limitations and restrictions of PREIT’s 6.875% Series D Cumulative Redeemable Perpetual Preferred Shares, liquidation preferences $25.00 per share par value $0.01 per share, filed as Exhibit 3.5 to PREIT’s Form 8-A filed on September 11, 2017, is incorporated by reference.
|
|
|
4.1
|
Fourth Addendum to First Amended and Restated Agreement of Limited Partnership of PREIT Associates, L. P. designating the rights, obligations, duties and preferences of the Series D Preferred units, filed as Exhibit 10.1 to PREIT’s Current Report on form 8-K filed on September 11, 2017, is incorporated herein by reference.
|
|
|
10.1
|
2017 - 2019 Restricted Share Unit Program
|
|
|
10.2
|
Form of Restricted Share Unit And Dividend Equivalent Rights Award Agreement
|
|
|
31.1
|
Certification pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2
|
Certification pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.2
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101
|
Pursuant to Rule 405 of Regulation S-T, the following financial information from the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2017 is formatted in XBRL interactive data files: (i) Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and 2016; (ii) Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2017 and 2016; (iii) Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016; (iv) Consolidated Statements of Equity for the nine months ended September 30, 2017; (v) Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016; and (vi) Notes to Unaudited Consolidated Financial Statements.
|
|
|
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
|
|
Date:
|
November 2, 2017
|
|
|
|
|
By:
|
/s/ Joseph F. Coradino
|
|
|
|
Joseph F. Coradino
|
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
|
|
|
By:
|
/s/ Robert F. McCadden
|
|
|
|
Robert F. McCadden
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
By:
|
/s/ Jonathen Bell
|
|
|
|
Jonathen Bell
|
|
|
|
Senior Vice President and Chief Accounting Officer
|
|
|
|
(Principal Accounting Officer)
|
1.1
|
|
|
|
3.1
|
|
|
|
3.2
|
|
|
|
3.3
|
|
|
|
3.4
|
|
|
|
3.5
|
|
|
|
3.6
|
|
|
|
4.1
|
|
|
|
10.1*
|
|
|
|
10.2*
|
|
|
|
31.1*
|
|
|
|
31.2*
|
|
|
|
32.1**
|
|
|
|
32.2**
|
|
|
|
101*
|
Pursuant to Rule 405 of Regulation S-T, the following financial information from the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2017 is formatted in XBRL interactive data files: (i) Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and 2016; (ii) Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2017 and 2016; (iii) Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016; (iv) Consolidated Statements of Equity for the nine months ended September 30, 2017; (v) Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016; and (vi) Notes to Unaudited Consolidated Financial Statements.
|
*
|
filed herewith
|
**
|
furnished herewith
|
|
|
Page
|
1.
|
PURPOSES
|
1
|
2.
|
DEFINITIONS
|
1
|
3.
|
AWARD AGREEMENT
|
4
|
4.
|
PREFORMANCE GOAL; DELIVERY OF SHARES
|
4
|
5.
|
BENEFICIARY DESIGNATIONS
|
7
|
6.
|
DELIVERY TO GUARDIAN
|
7
|
7.
|
SOURCE OF SHARES
|
7
|
8.
|
CAPITAL ADJUSTMENTS
|
7
|
9.
|
TAX WITHOLDING
|
8
|
10.
|
ADMINISTRATION
|
8
|
11.
|
AMENDMENT AND TERMINATION
|
8
|
12.
|
HEADINGS
|
8
|
13.
|
INCORPORATION OF PLAN BY REFERENCE
|
8
|
APPENDIX A
|
A-1
|
|
APPENDIX B
|
B-1
|
|
APPENDIX C
|
C-1
|
|
|
|
|
|
|
|
Date
|
Aggregate
Base Units
|
Deemed
Dividend
|
20-Day
Average Share Price
|
Additional
RSUs Credited
|
1/1/17
|
250.0
|
-
|
-
|
-
|
3/15/17
|
250.0
|
$37.50
|
$16
|
2.3
|
6/15/17
|
252.3
|
$37.85
|
$16
|
2.4
|
9/15/17
|
254.7
|
$38.21
|
$18
|
2.1
|
12/15/17
|
256.8
|
$38.52
|
$19
|
2
|
3/15/18
|
258.8
|
$38.82
|
$19
|
2
|
6/15/18
|
260.8
|
$39.12
|
$20
|
2
|
9/15/18
|
262.8
|
$39.42
|
$21
|
1.9
|
12/15/18
|
264.7
|
$39.71
|
$21
|
1.9
|
3/15/19
|
266.6
|
$39.99
|
$22
|
1.8
|
6/15/19
|
268.4
|
$40.26
|
$23
|
1.8
|
9/15/19
|
270.2
|
$40.53
|
$23
|
1.8
|
12/15/19
|
272
|
$40.80
|
$24
|
1.7
|
12/31/19
|
273.7
|
-
|
-
|
-
|
Percentile
|
Percent of Base Units
Deliverable in Shares
|
|
Below 25th
|
0
|
%
|
25
th
|
50
|
%
|
40th
|
80
|
%
|
50th
|
100
|
%
|
65th
|
130
|
%
|
75
th
or above
|
150
|
%
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Pennsylvania Real Estate Investment Trust;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of trustees (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
/s/ Joseph F. Coradino
|
|
|
|
Name:
|
|
Joseph F. Coradino
|
|
|
|
Title:
|
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Pennsylvania Real Estate Investment Trust;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of trustees (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Robert F. McCadden
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Name:
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Robert F. McCadden
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Title:
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Executive Vice President and
Chief Financial Officer
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/s/ Joseph F. Coradino
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Name:
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Joseph F. Coradino
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Title:
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Chairman and Chief Executive Officer
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/s/ Robert F. McCadden
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Name:
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Robert F. McCadden
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Title:
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Executive Vice President and
Chief Financial Officer
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