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
|
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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PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
||||||||
|
Three Months Ended
March 31, |
|
||||||
(in thousands of dollars)
|
2018
|
|
2017
|
|
||||
REVENUE:
|
|
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|
|
||||
Real estate revenue:
|
|
|
|
|
||||
Base rent
|
$
|
55,976
|
|
|
$
|
57,435
|
|
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Expense reimbursements
|
27,130
|
|
|
28,097
|
|
|
||
Percentage rent
|
95
|
|
|
304
|
|
|
||
Lease termination revenue
|
31
|
|
|
481
|
|
|
||
Other real estate revenue
|
2,161
|
|
|
2,107
|
|
|
||
Total real estate revenue
|
85,393
|
|
|
88,424
|
|
|
||
Other income
|
889
|
|
|
840
|
|
|
||
Total revenue
|
86,282
|
|
|
89,264
|
|
|
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EXPENSES:
|
|
|
|
|
||||
Operating expenses:
|
|
|
|
|
||||
Property operating expenses:
|
|
|
|
|
||||
CAM and real estate taxes
|
(29,396
|
)
|
|
(29,952
|
)
|
|
||
Utilities
|
(3,909
|
)
|
|
(3,823
|
)
|
|
||
Other property operating expenses
|
(3,400
|
)
|
|
(3,205
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)
|
|
||
Total property operating expenses
|
(36,705
|
)
|
|
(36,980
|
)
|
|
||
Depreciation and amortization
|
(34,030
|
)
|
|
(31,758
|
)
|
|
||
General and administrative expenses
|
(10,132
|
)
|
|
(9,041
|
)
|
|
||
Project costs and other expenses
|
(112
|
)
|
|
(312
|
)
|
|
||
Total operating expenses
|
(80,979
|
)
|
|
(78,091
|
)
|
|
||
Interest expense, net
|
(14,901
|
)
|
|
(15,338
|
)
|
|
||
Total expenses
|
(95,880
|
)
|
|
(93,429
|
)
|
|
||
Loss before equity in income of partnerships, gain on sale of real estate by equity method investee, adjustment to gains on sales of interests in non operating real estate and losses on sales of interests in real estate, net
|
(9,598
|
)
|
|
(4,165
|
)
|
|
||
Equity in income of partnerships
|
3,138
|
|
|
3,736
|
|
|
||
Gain on sale of real estate by equity method investee
|
2,773
|
|
|
—
|
|
|
||
Adjustment to gains on sales of interests in non operating real estate
|
(25
|
)
|
|
—
|
|
|
||
Losses on sales of interests in real estate, net
|
—
|
|
|
(57
|
)
|
|
||
Net loss
|
(3,712
|
)
|
|
(486
|
)
|
|
||
Less: net loss attributable to noncontrolling interest
|
394
|
|
|
52
|
|
|
||
Net loss attributable to PREIT
|
(3,318
|
)
|
|
(434
|
)
|
|
||
Less: preferred share dividends
|
(6,844
|
)
|
|
(6,205
|
)
|
|
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Net loss attributable to PREIT common shareholders
|
$
|
(10,162
|
)
|
|
$
|
(6,639
|
)
|
|
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
||||||||
(in thousands of dollars, except per share amounts)
|
Three Months Ended
March 31, |
|
||||||
2018
|
|
2017
|
|
|||||
Net loss
|
$
|
(3,712
|
)
|
|
$
|
(486
|
)
|
|
Noncontrolling interest
|
394
|
|
|
52
|
|
|
||
Preferred share dividends
|
(6,844
|
)
|
|
(6,205
|
)
|
|
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Dividends on unvested restricted shares
|
(138
|
)
|
|
(97
|
)
|
|
||
Net loss used to calculate loss per share—basic and diluted
|
$
|
(10,300
|
)
|
|
$
|
(6,736
|
)
|
|
|
|
|
|
|
||||
Basic and diluted loss per share:
|
$
|
(0.15
|
)
|
|
$
|
(0.10
|
)
|
|
|
|
|
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|
||||
(in thousands of shares)
|
|
|
|
|
||||
Weighted average shares outstanding—basic
|
69,601
|
|
|
69,218
|
|
|
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Effect of common share equivalents
(1)
|
—
|
|
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—
|
|
|
||
Weighted average shares outstanding—diluted
|
69,601
|
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|
69,218
|
|
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(1)
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The Company had net losses used to calculate earnings per share for all periods presented. Therefore, the effects of common share equivalents of
209
and
109
for the three months ended March 31, 2018 and 2017, respectively, are excluded from the calculation of diluted loss per share for these periods because they would be antidilutive.
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Three Months Ended
March 31, |
|
||||||
(in thousands of dollars)
|
2018
|
|
2017
|
|
||||
Comprehensive income:
|
|
|
|
|
||||
Net loss
|
$
|
(3,712
|
)
|
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$
|
(486
|
)
|
|
Unrealized gain on derivatives
|
4,828
|
|
|
1,710
|
|
|
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Amortization of losses on settled swaps, net of gains
|
275
|
|
|
125
|
|
|
||
Total comprehensive income
|
1,391
|
|
|
1,349
|
|
|
||
Less: comprehensive income attributable to noncontrolling interest
|
(147
|
)
|
|
(145
|
)
|
|
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Comprehensive income attributable to PREIT
|
$
|
1,244
|
|
|
$
|
1,204
|
|
|
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|
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PREIT Shareholders
|
|
|
||||||||||||||||||||||||||||||
|
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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
B
|
|
Series
C
|
|
Series D
|
|
|
|
|
|
Non-
controlling
interest
|
||||||||||||||||||||||
Balance December 31, 2017
|
$
|
760,991
|
|
|
$
|
35
|
|
|
$
|
69
|
|
|
$
|
50
|
|
|
$
|
69,983
|
|
|
$
|
1,663,966
|
|
|
$
|
7,226
|
|
|
$
|
(1,117,290
|
)
|
|
$
|
136,952
|
|
Net loss
|
(3,712
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,318
|
)
|
|
(394
|
)
|
|||||||||
Other comprehensive income
|
5,103
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
4,562
|
|
|
—
|
|
|
541
|
|
||||||||||
Shares issued under employee compensation plans, net of shares retired
|
(195
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
370
|
|
|
(565
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Amortization of deferred compensation
|
1,924
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,924
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Distributions paid to common shareholders ($0.21 per share)
|
(14,766
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,766
|
)
|
|
—
|
|
|||||||||
Distributions paid to Series B preferred shareholders ($0.4609 per share)
|
(1,590
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,590
|
)
|
|
—
|
|
|||||||||
Distributions paid to Series C preferred shareholders ($0.4500 per share)
|
(3,105
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,105
|
)
|
|
—
|
|
|||||||||
Distributions paid to Series D preferred shareholders ($0.4297 per share)
|
(2,149
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,149
|
)
|
|
—
|
|
|||||||||
Noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Distributions paid to Operating Partnership unit holders ($0.21 per unit)
|
(1,737
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,737
|
)
|
|||||||||
Balance March 31, 2018
|
$
|
740,764
|
|
|
$
|
35
|
|
|
$
|
69
|
|
|
$
|
50
|
|
|
$
|
70,353
|
|
|
$
|
1,665,325
|
|
|
$
|
11,788
|
|
|
$
|
(1,142,218
|
)
|
|
$
|
135,362
|
|
|
Three Months Ended
March 31, |
||||||
(in thousands of dollars)
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(3,712
|
)
|
|
$
|
(486
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
31,209
|
|
|
29,632
|
|
||
Amortization
|
3,458
|
|
|
2,883
|
|
||
Straight-line rent adjustments
|
(823
|
)
|
|
(738
|
)
|
||
Provision for doubtful accounts
|
1,075
|
|
|
573
|
|
||
Amortization of deferred compensation
|
1,924
|
|
|
1,497
|
|
||
Adjustment to gains on sales of interests in non operating real estate
|
25
|
|
|
—
|
|
||
Losses on sales of interests in real estate, net
|
—
|
|
|
57
|
|
||
Equity in income of partnerships
|
(3,138
|
)
|
|
(3,736
|
)
|
||
Gain on sale of real estate by equity method investee
|
(2,773
|
)
|
|
—
|
|
||
Cash distributions from partnerships
|
2,742
|
|
|
3,771
|
|
||
Change in assets and liabilities:
|
|
|
|
||||
Net change in other assets
|
1,061
|
|
|
8,411
|
|
||
Net change in other liabilities
|
(21
|
)
|
|
(2,457
|
)
|
||
Net cash provided by operating activities
|
31,027
|
|
|
39,407
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Distribution of refinancing proceeds from equity method investee
|
123,000
|
|
|
—
|
|
||
Cash proceeds from sales of real estate
|
—
|
|
|
41,736
|
|
||
Cash distributions from partnerships of proceeds from real estate sold
|
19,727
|
|
|
—
|
|
||
Investments in partnerships
|
(13,896
|
)
|
|
(18,152
|
)
|
||
Investments in real estate improvements
|
(13,568
|
)
|
|
(12,504
|
)
|
||
Additions to construction in progress
|
(3,119
|
)
|
|
(16,178
|
)
|
||
Capitalized leasing costs
|
(2,172
|
)
|
|
(1,667
|
)
|
||
Additions to leasehold improvements and corporate fixed assets
|
(4
|
)
|
|
(390
|
)
|
||
Net cash provided by (used in) investing activities
|
109,968
|
|
|
(7,155
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Net proceeds from issuance of preferred shares
|
—
|
|
|
166,345
|
|
||
Borrowing from (repayment of) mortgage loans
|
10,185
|
|
|
(150,000
|
)
|
||
Net repayments of revolving facility
|
(53,000
|
)
|
|
(12,000
|
)
|
||
Dividends paid to common shareholders
|
(14,766
|
)
|
|
(14,643
|
)
|
||
Dividends paid to preferred shareholders
|
(6,844
|
)
|
|
(5,618
|
)
|
||
Distributions paid to Operating Partnership unit holders and noncontrolling interest
|
(1,737
|
)
|
|
(1,746
|
)
|
||
Principal installments on mortgage loans
|
(3,832
|
)
|
|
(3,693
|
)
|
||
Payment of deferred financing costs
|
(436
|
)
|
|
(11
|
)
|
||
Value of shares of beneficial interest issued
|
484
|
|
|
344
|
|
||
Value of shares retired under equity incentive plans, net of shares issued
|
(679
|
)
|
|
(1,291
|
)
|
||
Net cash used in financing activities
|
(70,625
|
)
|
|
(22,313
|
)
|
||
Net change in cash, cash equivalents, and restricted cash
|
70,370
|
|
|
9,939
|
|
||
Cash, cash equivalents, and restricted cash, beginning of period
|
33,953
|
|
|
29,865
|
|
||
Cash, cash equivalents, and restricted cash, end of period
|
$
|
104,323
|
|
|
$
|
39,804
|
|
(in thousands of dollars)
|
As of March 31,
2018 |
|
As of December 31,
2017 |
||||
Buildings, improvements and construction in progress
|
$
|
2,811,636
|
|
|
$
|
2,808,622
|
|
Land, including land held for development
|
500,704
|
|
|
491,080
|
|
||
Total investments in real estate
|
3,312,340
|
|
|
3,299,702
|
|
||
Accumulated depreciation
|
(1,141,914
|
)
|
|
(1,111,007
|
)
|
||
Net investments in real estate
|
$
|
2,170,426
|
|
|
$
|
2,188,695
|
|
|
Three Months Ended
March 31, |
|
||||||
(in thousands of dollars)
|
2018
|
|
2017
|
|
||||
Development/Redevelopment Activities:
|
|
|
|
|
||||
Interest
|
$
|
1,625
|
|
|
$
|
1,431
|
|
|
Compensation, including commissions
|
438
|
|
|
348
|
|
|
||
Real estate taxes
|
164
|
|
|
93
|
|
|
||
|
|
|
|
|
||||
Leasing Activities:
|
|
|
|
|
||||
Compensation, including commissions
|
2,172
|
|
|
1,667
|
|
|
(in thousands of dollars)
|
March 31, 2018
|
|
December 31, 2017
|
||||
ASSETS:
|
|
|
|
||||
Investments in real estate, at cost:
|
|
|
|
||||
Operating properties
|
$
|
563,525
|
|
|
$
|
612,689
|
|
Construction in progress
|
334,579
|
|
|
293,102
|
|
||
Total investments in real estate
|
898,104
|
|
|
905,791
|
|
||
Accumulated depreciation
|
(200,286
|
)
|
|
(202,424
|
)
|
||
Net investments in real estate
|
697,818
|
|
|
703,367
|
|
||
Cash and cash equivalents
|
26,391
|
|
|
26,158
|
|
||
Deferred costs and other assets, net
|
31,466
|
|
|
34,345
|
|
||
Total assets
|
755,675
|
|
|
763,870
|
|
||
LIABILITIES AND PARTNERS’ INVESTMENT:
|
|
|
|
||||
Mortgage loans payable, net
|
512,772
|
|
|
513,139
|
|
||
Term Loan, net
|
247,517
|
|
|
—
|
|
||
Other liabilities
|
36,359
|
|
|
37,971
|
|
||
Total liabilities
|
796,648
|
|
|
551,110
|
|
||
Net investment
|
(40,973
|
)
|
|
212,760
|
|
||
Partners’ share
|
(20,396
|
)
|
|
106,886
|
|
||
PREIT’s share
|
(20,577
|
)
|
|
105,874
|
|
||
Excess investment
(1)
|
13,870
|
|
|
13,081
|
|
||
Net investments and advances
|
$
|
(6,707
|
)
|
|
$
|
118,955
|
|
|
|
|
|
||||
|
|
|
|
||||
Investment in partnerships, at equity
|
$
|
90,188
|
|
|
$
|
216,823
|
|
Distributions in excess of partnership investments
|
(96,895
|
)
|
|
(97,868
|
)
|
||
Net investments and advances
|
$
|
(6,707
|
)
|
|
$
|
118,955
|
|
(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
March 31, |
|
||||||
(in thousands of dollars)
|
2018
|
|
2017
|
|
||||
Real estate revenue
|
$
|
26,088
|
|
|
$
|
28,168
|
|
|
Operating expenses:
|
|
|
|
|
||||
Property operating and other expenses
|
(8,330
|
)
|
|
(8,704
|
)
|
|
||
Interest expense
|
(5,734
|
)
|
|
(5,372
|
)
|
|
||
Depreciation and amortization
|
(5,071
|
)
|
|
(5,855
|
)
|
|
||
Total expenses
|
(19,135
|
)
|
|
(19,931
|
)
|
|
||
Net income
|
6,953
|
|
|
8,237
|
|
|
||
Partners’ share
|
(3,824
|
)
|
|
(4,491
|
)
|
|
||
PREIT’s share
|
3,129
|
|
|
3,746
|
|
|
||
Amortization of and adjustments to excess investment, net
|
9
|
|
|
(10
|
)
|
|
||
Equity in income of partnerships
|
$
|
3,138
|
|
|
$
|
3,736
|
|
|
|
|
As of
|
|
||||||
(in thousands of dollars)
|
|
March 31, 2018
|
|
December 31, 2017
|
|
||||
Summarized balance sheet information
|
|
|
|
|
|
||||
Total assets
|
|
$
|
47,762
|
|
|
$
|
43,850
|
|
|
Mortgage loan payable, net
|
|
197,941
|
|
|
199,451
|
|
|
|
|
Three Months Ended
March 31, |
|
||||||
(in thousands of dollars)
|
|
2018
|
|
2017
|
|
||||
Summarized statement of operations information
|
|
|
|
|
|
||||
Revenue
|
|
$
|
9,132
|
|
|
$
|
8,809
|
|
|
Property operating expenses
|
|
(2,405
|
)
|
|
(1,903
|
)
|
|
||
Interest expense
|
|
(2,045
|
)
|
|
(1,869
|
)
|
|
||
Net income
|
|
4,026
|
|
|
4,203
|
|
|
||
PREIT’s share of equity in income of partnership
|
|
2,013
|
|
|
2,102
|
|
|
|
Three Months Ended
March 31, |
||||||||
(in thousands of dollars)
|
2018
|
|
2017
|
||||||
2013 Revolving Facility
|
|
|
|
|
|||||
|
Interest expense
|
|
$
|
365
|
|
|
$
|
764
|
|
|
Deferred financing amortization
|
|
200
|
|
|
199
|
|
||
|
|
|
|
|
|
||||
Term Loans
|
|
|
|
|
|||||
|
Interest expense
|
|
4,286
|
|
|
2,835
|
|
||
|
Deferred financing amortization
|
|
191
|
|
|
187
|
|
|
|
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%
|
|
1.45%
|
|
3
|
Equal to or greater than 0.500 to 1.00 but less than 0.550 to 1.00
(1)
|
1.30%
|
|
1.60%
|
|
4
|
Equal to or greater than 0.550 to 1.00
|
1.55%
|
|
1.90%
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
(in millions of dollars)
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Mortgage loans
(1)
|
$
|
1,062.1
|
|
|
$
|
1,023.0
|
|
|
$
|
1,056.1
|
|
|
$
|
1,029.7
|
|
(in thousands of dollars)
|
|
March 31,
2018
|
|
December 31,
2017
|
||||
Cash and cash equivalents
|
|
$
|
89,213
|
|
|
$
|
15,348
|
|
Restricted cash included in other assets
|
|
15,110
|
|
|
18,605
|
|
||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows
|
|
$
|
104,323
|
|
|
$
|
33,953
|
|
Maturity Date
|
Aggregate Notional Value at March 31, 2018
(in millions of dollars)
|
|
Aggregate Fair Value at
March 31, 2018 (1)
(in millions of dollars)
|
|
Aggregate Fair Value at
December 31, 2017 (1) (in millions of dollars) |
|
Weighted Average Interest
Rate |
|||||||
Interest Rate Swaps
|
|
|
|
|
|
|
|
|||||||
2018
(2)
|
N/A
|
|
|
N/A
|
|
|
$
|
—
|
|
|
|
|||
2019
|
$
|
250.0
|
|
|
$
|
1.2
|
|
|
0.8
|
|
|
1.44
|
%
|
|
2020
|
100.0
|
|
|
2.5
|
|
|
1.9
|
|
|
1.23
|
%
|
|||
2021
|
398.6
|
|
|
10.9
|
|
|
7.0
|
|
|
1.57
|
%
|
|||
Total
|
$
|
748.6
|
|
|
$
|
14.6
|
|
|
$
|
9.7
|
|
|
1.48
|
%
|
(1)
|
As of
March 31, 2018
and
December 31, 2017
, 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).
|
(2)
|
Three swaps matured in the first quarter of 2018. As of December 31, 2017, these swaps had a notional value that totaled
$110.6 million
, had a weighted average interest rate of
1.11%
and a de minimus fair value.
|
|
For the three months ended March 31,
|
||||||||||||||
|
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivative Instruments
|
|
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Interest Expense
|
||||||||||||
(in millions of dollars)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
|
|
|
|
|
|
||||||||
Interest rate products
|
$
|
5.2
|
|
|
$
|
1.0
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.8
|
|
|
|
For the three months ended March 31,
|
||||||
(in millions of dollars)
|
|
2018
|
|
2017
|
||||
Total interest expense presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded
|
|
$
|
(14.9
|
)
|
|
$
|
(15.3
|
)
|
|
|
|
|
|
||||
Amount of gain (loss) reclassified from accumulated other comprehensive income into interest expense
|
|
$
|
(0.1
|
)
|
|
$
|
0.8
|
|
|
|
Pre-bankruptcy
|
|
Units Closed
|
|||||||||||||||||||
Year
|
|
Number of Tenants
(1)
|
|
Number of locations impacted
|
|
GLA
(2)
|
|
PREIT’s Share of Annualized Gross Rent
(3)
(in thousands)
|
|
Number of locations closed
|
|
GLA
(2)
|
|
PREIT’s Share of Annualized Gross Rent
(3)
(in thousands)
|
|||||||||
2018 (Three Months)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Consolidated properties
|
|
3
|
|
|
27
|
|
|
287,138
|
|
|
$
|
4,029
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Unconsolidated properties
|
|
2
|
|
|
4
|
|
|
4,352
|
|
|
248
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
|
3
|
|
|
31
|
|
|
291,490
|
|
|
$
|
4,277
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2017 (Full Year)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Consolidated properties
|
|
16
|
|
|
75
|
|
|
341,701
|
|
|
$
|
10,837
|
|
|
23
|
|
|
102,336
|
|
|
$
|
3,655
|
|
Unconsolidated properties
|
|
9
|
|
|
16
|
|
|
191,538
|
|
|
2,103
|
|
|
7
|
|
|
82,713
|
|
|
974
|
|
||
Total
|
|
18
|
|
|
91
|
|
|
533,239
|
|
|
$
|
12,940
|
|
|
30
|
|
|
185,049
|
|
|
$
|
4,629
|
|
|
|
Former Anchors
|
|
|
Replacement Tenant(s)
|
||||
Property
|
Name
|
GLA '000's
|
Date Store Closed
|
|
Date De-commissioned
|
Name
|
GLA
'000's
|
Actual/Targeted Occupancy Date
|
|
Completed:
|
|
|
|
|
|
|
|
|
|
|
Exton Square Mall
|
K-mart
|
96
|
Q1 16
|
|
Q2 16
|
Whole Foods
|
55
|
Q1 18
|
In process:
|
|
|
|
|
|
|
|
|
|
|
Magnolia Mall
|
Sears
|
91
|
|
|
|
Burlington
|
46
|
Q3 17
|
|
Q1 17
|
|
Q2 17
|
HomeGoods
|
22
|
Q2 18
|
|||
|
|
|
|
Five Below
|
8
|
Q2 18
|
|||
|
Valley Mall
|
Macy's
|
120
|
Q1 16
|
|
n/a
|
One Life Fitness
|
70
|
Q4 18
|
|
|
Tilt Studio
|
48
|
Q4 18
|
|||||
|
BonTon
|
123
|
Q1 18
|
|
n/a
|
Belk
|
123
|
Q4 18
|
|
|
Moorestown Mall
|
Macy's
|
200
|
Q1 17
|
|
n/a
|
Sierra Trading Post
|
19
|
Q1 19
|
|
|
HomeSense
|
28
|
Q3 18
|
|||||
|
|
Grocer and other tenant
|
32
|
Q4 18
|
|||||
|
Woodland Mall
|
Sears
|
313
|
Q2 17
|
|
Q2 17
|
Von Maur
|
86
|
Q4 19
|
|
Restaurants and small shop space
|
TBD
|
Q4 19
|
||||||
|
Willow Grove Park
|
JC Penney
|
125
|
Q3 17
|
|
n/a
|
Movie theater and entertainment
|
49
|
Q3 19
|
|
|
Restaurant and entertainment space
|
TBD
|
Q3 19
|
|||||
Pending:
|
|
|
|
|
|
|
|
|
|
|
Plymouth Meeting Mall
|
Macy's
(1)
|
215
|
Q1 17
|
|
n/a
|
Various large format tenants
|
153
|
Q4 19
|
(1)
|
Property is third-party owned and is subject to a ground lease dated June 23, 2017.
|
|
Occupancy
(1)
at March 31,
|
||||||||||||||||
|
Consolidated
Properties
|
|
Unconsolidated
Properties
(2)
|
|
Combined
(2)(3)
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||
Retail portfolio weighted average:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total excluding anchors
|
90.5
|
%
|
|
90.3
|
%
|
|
92.7
|
%
|
|
92.4
|
%
|
|
91.0
|
%
|
|
90.8
|
%
|
Total including anchors
|
92.9
|
%
|
|
92.5
|
%
|
|
94.0
|
%
|
|
93.8
|
%
|
|
93.1
|
%
|
|
92.9
|
%
|
Malls weighted average:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total excluding anchors
|
91.0
|
%
|
|
90.5
|
%
|
|
92.5
|
%
|
|
92.1
|
%
|
|
91.1
|
%
|
|
90.8
|
%
|
Total including anchors
|
93.2
|
%
|
|
92.6
|
%
|
|
94.9
|
%
|
|
94.6
|
%
|
|
93.3
|
%
|
|
92.9
|
%
|
Other retail properties
|
41.9
|
%
|
|
74.9
|
%
|
|
93.4
|
%
|
|
93.1
|
%
|
|
91.0
|
%
|
|
92.3
|
%
|
(1)
|
Occupancy for both periods presented includes all tenants irrespective of the term of their agreements. Fashion District Philadelphia is excluded for 2017 and 2018 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Tenant Improvements psf
(3)
|
|||||||||||||||
|
|
|
|
Number
|
|
GLA
in square feet (“sf”)
|
|
Term (years)
|
|
Initial Rent per square foot (“psf”)
|
|
Previous Rent psf
|
|
Initial Gross Rent Renewal Spread
(1)
|
|
Average Rent Renewal Spread
(2)
|
|
||||||||||||||||
|
|
|
|
|
|
|
$
|
|
%
|
|
%
|
|
|||||||||||||||||||||
Non Anchor
|
|||||||||||||||||||||||||||||||||
New Leases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Under 10k sf
|
|
Consolidated
|
|
18
|
|
|
51,205
|
|
|
7.5
|
|
|
$
|
40.59
|
|
|
|
|
|
|
|
|
|
|
$
|
8.33
|
|
||||||
|
|
Unconsolidated
|
|
8
|
|
|
29,429
|
|
|
7.4
|
|
|
39.65
|
|
|
|
|
|
|
|
|
|
|
20.94
|
|
||||||||
Total Under 10k sf
|
|
26
|
|
|
80,634
|
|
|
7.4
|
|
|
40.24
|
|
|
|
|
|
|
|
|
|
|
$
|
12.89
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Over 10k sf
|
|
Consolidated
|
|
2
|
|
|
22,457
|
|
|
10.0
|
|
|
38.52
|
|
|
|
|
|
|
|
|
|
|
$
|
8.77
|
|
|||||||
Total New Leases
|
|
28
|
|
|
103,091
|
|
|
8.0
|
|
|
$
|
39.87
|
|
|
|
|
|
|
|
|
|
|
$
|
11.76
|
|
||||||||
Renewal Leases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Under 10k sf
|
|
Consolidated
|
|
25
|
|
|
54,457
|
|
|
3.2
|
|
|
$
|
47.01
|
|
|
$
|
46.36
|
|
|
$
|
0.65
|
|
|
1.4
|
%
|
|
4.4
|
%
|
|
$
|
—
|
|
|
|
Unconsolidated
|
|
21
|
|
|
45,009
|
|
|
3.3
|
|
|
77.14
|
|
|
79.23
|
|
|
(2.09
|
)
|
|
(2.6
|
)%
|
|
2.0
|
%
|
|
0.90
|
|
||||
Total Under 10k sf
|
|
46
|
|
|
99,466
|
|
|
3.2
|
|
|
$
|
60.64
|
|
|
$
|
61.24
|
|
|
$
|
(0.60
|
)
|
|
(1.0
|
)%
|
|
3.0
|
%
|
|
$
|
0.40
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Over 10k sf
|
|
Consolidated
|
|
4
|
|
|
109,647
|
|
|
7.3
|
|
|
$
|
23.82
|
|
|
$
|
22.68
|
|
|
$
|
1.14
|
|
|
5.0
|
%
|
|
23.6
|
%
|
|
$
|
4.97
|
|
|
|
Unconsolidated
|
|
1
|
|
|
11,306
|
|
|
1.0
|
|
|
14.15
|
|
|
25.72
|
|
|
(11.57
|
)
|
|
(45.0
|
)%
|
|
(45.0
|
)%
|
|
—
|
|
||||
Total Over 10k sf
|
|
5
|
|
|
120,953
|
|
|
6.7
|
|
|
$
|
22.91
|
|
|
$
|
22.96
|
|
|
$
|
(0.05
|
)
|
|
(0.2
|
)%
|
|
15.7
|
%
|
|
$
|
4.90
|
|
||
Total Fixed Rent
|
|
51
|
|
|
220,419
|
|
|
5.1
|
|
|
$
|
39.94
|
|
|
$
|
40.23
|
|
|
$
|
(0.29
|
)
|
|
(0.7
|
)%
|
|
7.1
|
%
|
|
$
|
3.65
|
|
||
Percentage in Lieu
|
|
Consolidated
|
|
14
|
|
|
52,198
|
|
|
1.4
|
|
|
$
|
28.41
|
|
|
$
|
36.53
|
|
|
$
|
(8.12
|
)
|
|
(22.2
|
)%
|
|
N/A
|
|
—
|
|
||
Total Renewal Leases
(4)
|
|
65
|
|
|
272,617
|
|
|
4.4
|
|
|
$
|
37.73
|
|
|
$
|
39.52
|
|
|
$
|
(1.79
|
)
|
|
(4.5
|
)%
|
|
7.1
|
%
|
|
$
|
3.43
|
|
||
Total Non Anchor
|
|
93
|
|
|
375,708
|
|
|
5.5
|
|
|
$
|
38.32
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Anchor
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
New Leases
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
$
|
—
|
|
||||||
Renewal Leases
|
|
Consolidated
|
|
1
|
|
|
102,825
|
|
|
8.0
|
|
|
$
|
4.73
|
|
|
$
|
5.38
|
|
|
(0.65
|
)
|
|
(12.1
|
)%
|
|
|
|
$
|
—
|
|
||
Total
|
|
|
|
1
|
|
|
102,825
|
|
|
8.0
|
|
|
$
|
4.73
|
|
|
|
|
|
|
|
|
|
|
|
(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 rent 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)
|
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.
|
|
|
Three Months Ended
March 31, |
|
% Change
2017 to 2018 |
|
|||||||
(in thousands of dollars)
|
|
2018
|
|
2017
|
|
|
||||||
Real estate revenue
|
|
$
|
85,393
|
|
|
$
|
88,424
|
|
|
(3
|
)%
|
|
Property operating expenses
|
|
(36,705
|
)
|
|
(36,980
|
)
|
|
(1
|
)%
|
|
||
Other income
|
|
889
|
|
|
840
|
|
|
6
|
%
|
|
||
Depreciation and amortization
|
|
(34,030
|
)
|
|
(31,758
|
)
|
|
7
|
%
|
|
||
General and administrative expenses
|
|
(10,132
|
)
|
|
(9,041
|
)
|
|
12
|
%
|
|
||
Project costs and other expenses
|
|
(112
|
)
|
|
(312
|
)
|
|
(64
|
)%
|
|
||
Interest expense, net
|
|
(14,901
|
)
|
|
(15,338
|
)
|
|
(3
|
)%
|
|
||
Equity in income of partnerships
|
|
3,138
|
|
|
3,736
|
|
|
(16
|
)%
|
|
||
Gain on sale of real estate by equity method investee
|
|
2,773
|
|
|
—
|
|
|
—
|
%
|
|
||
Adjustment to gains on sales of interest in non operating real estate
|
|
(25
|
)
|
|
—
|
|
|
—
|
%
|
|
||
Losses on sales of interests in real estate, net
|
|
—
|
|
|
(57
|
)
|
|
—
|
%
|
|
||
Net loss
|
|
$
|
(3,712
|
)
|
|
$
|
(486
|
)
|
|
664
|
%
|
|
•
|
a decrease of $3.5 million in real estate revenue related to properties sold in 2017;
|
•
|
a decrease of $0.5 million in same store common area expense reimbursements, due to 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; and
|
•
|
a decrease of $0.4 million in same store lease termination revenue, including $0.4 million received from one tenant during the three months ending March 31, 2017; partially offset by
|
•
|
an increase of $1.0 million in same store base rent due to $1.6 million from net new store openings over the previous twelve months, partially offset by a $0.2 million decrease related to tenant bankruptcies in 2017 and 2018, as well as a $0.5 million decrease related to co-tenancy concessions that resulted from anchor closings; and
|
•
|
an increase of $0.4 million in same store real estate tax reimbursements, due to an increase in real estate tax expense (see “—Property Operating Expenses”), partially offset by 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 $2.0 million in property operating expenses related to properties sold in 2017; partially offset by
|
•
|
an increase of $1.0 million in same store real estate tax expense due to a combination of increases in real estate tax assessment values and real estate tax rates; and
|
•
|
an increase of $0.5 million in same store bad debt expense, primarily due to bad debt expense recorded in connection with 2018 tenant bankruptcies.
|
•
|
an increase of $3.1 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; partially offset by
|
•
|
a decrease of $0.8 million related to properties sold in 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, when applicable, we also present FFO, as adjusted and FFO per diluted share and OP Unit, as adjusted, which we believe is helpful to management and investors because they adjust FFO to exclude items that management does not believe are indicative of operating performance, such as provision for employee separation expense and loss on hedge ineffectiveness.
|
•
|
We use both NOI and FFO, or related terms like Same Store NOI and, when applicable, Funds From Operations, as adjusted, for determining incentive compensation amounts under certain of our performance-based executive compensation programs.
|
•
|
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
March 31, |
|
||||||
(in thousands of dollars)
|
2018
|
|
2017
|
|
||||
Net loss
|
$
|
(3,712
|
)
|
|
$
|
(486
|
)
|
|
Other income
|
(889
|
)
|
|
(840
|
)
|
|
||
Depreciation and amortization
|
34,030
|
|
|
31,758
|
|
|
||
General and administrative expenses
|
10,132
|
|
|
9,041
|
|
|
||
Project costs and other expenses
|
112
|
|
|
312
|
|
|
||
Interest expense, net
|
14,901
|
|
|
15,338
|
|
|
||
Equity in income of partnerships
|
(3,138
|
)
|
|
(3,736
|
)
|
|
||
Gain on sale of real estate by equity method investee
|
(2,773
|
)
|
|
—
|
|
|
||
Adjustment to gains on sales of interest in non operating real estate
|
25
|
|
|
—
|
|
|
||
Losses on sales of interests in real estate, net
|
—
|
|
|
57
|
|
|
||
NOI from consolidated properties
|
$
|
48,688
|
|
|
$
|
51,444
|
|
|
|
Three Months Ended
March 31, |
|
||||||
(in thousands of dollars)
|
2018
|
|
2017
|
|
||||
Equity in income of partnerships
|
$
|
3,138
|
|
|
$
|
3,736
|
|
|
Other income
|
(12
|
)
|
|
—
|
|
|
||
Depreciation and amortization
|
2,241
|
|
|
2,566
|
|
|
||
Interest and other expenses
|
2,671
|
|
|
2,549
|
|
|
||
NOI from equity method investments at ownership share
|
$
|
8,038
|
|
|
$
|
8,851
|
|
|
|
|
Same Store
|
|
Non Same Store
|
|
Total (non GAAP)
|
||||||||||||||||||
(in thousands of dollars)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
NOI from consolidated properties
|
|
$
|
48,700
|
|
|
$
|
49,855
|
|
|
$
|
(12
|
)
|
|
$
|
1,589
|
|
|
$
|
48,688
|
|
|
$
|
51,444
|
|
NOI from equity method investments at ownership share
|
|
7,575
|
|
|
7,562
|
|
|
463
|
|
|
1,289
|
|
|
8,038
|
|
|
8,851
|
|
||||||
Total NOI
|
|
56,275
|
|
|
57,417
|
|
|
451
|
|
|
2,878
|
|
|
56,726
|
|
|
60,295
|
|
||||||
Less: lease termination revenue
|
|
261
|
|
|
520
|
|
|
22
|
|
|
35
|
|
|
283
|
|
|
555
|
|
||||||
Total NOI excluding lease termination revenue
|
|
$
|
56,014
|
|
|
$
|
56,897
|
|
|
$
|
429
|
|
|
$
|
2,843
|
|
|
$
|
56,443
|
|
|
$
|
59,740
|
|
|
Three Months Ended
March 31, |
|
||||||
(in thousands, except per share amounts)
|
2018
|
|
2017
|
|
||||
Net loss
|
$
|
(3,712
|
)
|
|
$
|
(486
|
)
|
|
Depreciation and amortization on real estate:
|
|
|
|
|
||||
Consolidated properties
|
33,663
|
|
|
31,433
|
|
|
||
PREIT’s share of equity method investments
|
2,241
|
|
|
2,566
|
|
|
||
Gain on sale of real estate by equity method investee
|
(2,773
|
)
|
|
—
|
|
|
||
Losses on sales of interests in real estate, net
|
—
|
|
|
57
|
|
|
||
Preferred share dividends
|
(6,844
|
)
|
|
(6,205
|
)
|
|
||
Funds from operations attributable to common shareholders and OP Unit holders
|
$
|
22,575
|
|
|
$
|
27,365
|
|
|
Funds from operations attributable to common shareholders and OP Unit holders per diluted share and OP Unit
|
$
|
0.29
|
|
|
$
|
0.35
|
|
|
|
|
|
|
|
||||
Weighted average number of shares outstanding
|
69,601
|
|
|
69,218
|
|
|
||
Weighted average effect of full conversion of OP Units
|
8,274
|
|
|
8,313
|
|
|
||
Effect of common share equivalents
|
209
|
|
|
109
|
|
|
||
Total weighted average shares outstanding, including OP Units
|
78,084
|
|
|
77,640
|
|
|
•
|
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 2018
|
|
2019-2020
|
|
2021-2022
|
|
Thereafter
|
||||||||||
Principal payments
|
$
|
107,750
|
|
|
$
|
14,655
|
|
|
$
|
39,308
|
|
|
$
|
35,082
|
|
|
$
|
18,705
|
|
Balloon payments
|
958,042
|
|
|
—
|
|
|
27,161
|
|
|
599,489
|
|
|
331,392
|
|
|||||
Total
|
$
|
1,065,792
|
|
|
$
|
14,655
|
|
|
$
|
66,469
|
|
|
$
|
634,571
|
|
|
$
|
350,097
|
|
Less: unamortized debt issuance costs
|
3,722
|
|
|
|
|
|
|
|
|
|
|||||||||
Carrying value of mortgage notes payable
|
$
|
1,062,070
|
|
|
|
|
|
|
|
|
|
(in thousands of dollars)
|
Total
|
|
Remainder of 2018
|
|
2019-2020
|
|
2021-2022
|
|
Thereafter
|
||||||||||
Mortgage loan principal payments
|
$
|
1,065,792
|
|
|
$
|
14,655
|
|
|
$
|
66,469
|
|
|
$
|
634,571
|
|
|
$
|
350,097
|
|
Term Loans
|
550,000
|
|
|
—
|
|
|
300,000
|
|
|
250,000
|
|
|
—
|
|
|||||
2013 Revolving Facility
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest on indebtedness
(2) (3)
|
247,989
|
|
|
45,418
|
|
|
107,139
|
|
|
66,856
|
|
|
28,576
|
|
|||||
Operating leases
|
3,830
|
|
|
1,554
|
|
|
2,110
|
|
|
166
|
|
|
—
|
|
|||||
Ground leases
|
42,300
|
|
|
1,021
|
|
|
2,568
|
|
|
3,168
|
|
|
35,543
|
|
|||||
Development and redevelopment commitments
(4)
|
133,527
|
|
|
118,771
|
|
|
14,756
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
2,043,438
|
|
|
$
|
181,419
|
|
|
$
|
493,042
|
|
|
$
|
954,761
|
|
|
$
|
414,216
|
|
•
|
changes in the retail and real estate industries, including consolidation and store closings, particularly among anchor tenants;
|
•
|
current economic conditions and the corresponding effects on tenant business performance, prospects, solvency and leasing decisions;
|
•
|
our inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise;
|
•
|
our ability to maintain and increase property occupancy, sales and rental rates;
|
•
|
increases in operating costs that cannot be passed on to tenants;
|
•
|
the effects of online shopping and other uses of technology on our retail tenants;
|
•
|
risks related to our development and redevelopment activities, including delays, cost overruns and our inability to reach projected occupancy or rental rates;
|
•
|
acts of violence at malls, including our properties, or at other similar spaces, and the potential effect on traffic and sales;
|
•
|
our ability to sell properties that we seek to dispose of or our ability to obtain prices we seek;
|
•
|
our substantial debt and the liquidation preference of our preferred shares and our high leverage ratio;
|
•
|
our ability to refinance our existing indebtedness when it matures, on favorable terms or at all;
|
•
|
our ability to raise capital, including through sales of properties or interests in properties and through the issuance of equity or equity-related securities if market conditions are favorable; and
|
•
|
potential dilution from any capital raising transactions or other equity issuances.
|
|
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)
|
||||||
2018
|
$
|
13,395
|
|
|
4.24
|
%
|
|
$
|
1,260
|
|
|
3.66
|
%
|
2019
|
17,837
|
|
|
4.25
|
%
|
|
151,680
|
|
(2)
|
3.31
|
%
|
||
2020
|
45,272
|
|
|
5.03
|
%
|
|
151,680
|
|
(2)
|
3.27
|
%
|
||
2021
|
18,602
|
|
|
4.20
|
%
|
|
440,902
|
|
(2)
|
3.36
|
%
|
||
2022 and thereafter
|
708,252
|
|
|
4.21
|
%
|
|
66,912
|
|
|
4.26
|
%
|
(1)
|
Based on the weighted average interest rates in effect as of
March 31, 2018
.
|
(2)
|
Includes Term Loan debt balance of $550.0 million with a weighted average interest rate of
3.26%
as of
March 31, 2018
.
|
•
|
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
|
||||||
January 1 - January 31, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
February 1 - February 28, 2018
|
66,128
|
|
|
10.27
|
|
|
—
|
|
|
—
|
|
||
March 1 - March 31, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
66,128
|
|
|
$
|
10.27
|
|
|
—
|
|
|
$
|
—
|
|
|
|
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
|
|
Date:
|
May 4, 2018
|
|
|
|
|
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)
|
|
|
Page
|
|
1.
|
PURPOSES
|
1
|
|
2.
|
DEFINITIONS
|
1
|
|
3.
|
AWARD AGREEMENT
|
4
|
|
4.
|
PERFORMANCE GOAL; DELIVERY OF SHARES
|
4
|
|
5.
|
BENEFICIARY DESIGNATION
|
8
|
|
6.
|
DELIVERY TO GUARDIAN
|
8
|
|
7.
|
SOURCE OF SHARES
|
8
|
|
8.
|
CAPITAL ADJUSTMENTS
|
8
|
|
9.
|
TAX WITHOLDING
|
9
|
|
10.
|
ADMINISTRATION
|
9
|
|
11.
|
AMENDMENT AND TERMINATION
|
9
|
|
12.
|
HEADINGS
|
9
|
|
13.
|
INCORPORATION OF PLAN BT REFERENCE
|
9
|
|
APPENDIX A
|
A-1
|
|
|
APPENDIX B
|
B-1
|
|
|
APPENDIX C
|
C-1
|
|
|
APPENDIX D
|
D-1
|
|
•
|
if the Trust’s TRS is below the 25th percentile on the FTSE Retail REIT Index, the award multiplier shall be 0%;
|
•
|
if the Trust’s TRS is equal to the 25th percentile on the FTSE Retail REIT Index, the award multiplier shall be 50%;
|
•
|
if the Trust’s TRS is above the 25th percentile but less than the 50th percentile on the FTSE Retail REIT Index, the award multiplier shall be twice such percentile, expressed as a percentage;
|
•
|
if the Trust’s TRS is equal to the 50th percentile on the FTSE Retail REIT Index, the award multiplier shall be 100%;
|
•
|
if the Trust’s TRS is above the 50th percentile and below the 75th percentile on the FTSE Retail REIT Index, the award multiplier shall be determined by linear interpolation between 100% at the 50th percentile (as set forth in the prior bullet), and 200% at the 75th percentile (as set forth in the subsequent bullet); and
|
•
|
if the Trust’s TRS is equal to or above the 75th percentile on the FTSE Retail REIT Index, the award multiplier shall be 200%.
|
•
|
if the TRS over the Measurement Period shall reflect a TRS below 15%, the award multiplier shall be 0%;
|
•
|
if the TRS over the Measurement Period shall reflect a TRS equal to 15%, the award multiplier shall be 50%,
|
•
|
if the TRS over the Measurement Period shall reflect a TRS equal to 25%, the award multiplier shall be 100%;
|
•
|
if the TRS over the Measurement Period shall reflect a TRS equal to 35% or more, the award multiplier shall be 200%; and
|
•
|
if the TRS is between 15% and 25%, or between 25% and 35%, the award multiplier shall be determined by linear interpolation between the applicable endpoints set forth in the prior bullets.
|
Date
|
Aggregate
Base Units
|
Deemed
Dividend
|
20-Day
Average Share Price
|
Additional
RSUs Credited
|
1/1/18
|
250.0
|
—
|
—
|
—
|
3/15/18
|
250.0
|
$52.50
|
$11
|
4.8
|
6/15/18
|
254.8
|
$53.51
|
$11
|
4.9
|
9/15/18
|
259.7
|
$54.54
|
$12
|
4.5
|
12/15/18
|
264.2
|
$55.48
|
$12
|
4.6
|
3/15/19
|
268.8
|
$56.45
|
$13
|
4.3
|
6/15/19
|
273.1
|
$57.35
|
$13
|
4.4
|
9/15/19
|
277.5
|
$58.28
|
$14
|
4.2
|
12/15/19
|
281.7
|
$59.16
|
$14
|
4.2
|
3/15/20
|
285.9
|
$60.04
|
$15
|
4.0
|
6/15/20
|
289.9
|
$60.88
|
$15
|
4.1
|
9/15/20
|
294.0
|
$61.74
|
$16
|
3.9
|
12/15/20
|
297.9
|
$62.56
|
$16
|
3.9
|
12/31/20
|
301.8
|
—
|
—
|
—
|
Percentile
|
Percent of Base Units (subject to the Relative TRS Award Program) Deliverable in Shares
EVPs and SVPs
|
Below 25th
|
0%
|
25th
|
50%
|
40th
|
80%
|
50th
|
100%
|
65th
|
160%
|
75
th
or above
|
200%
|
TRS
|
Percent of Base Units (subject to the Absolute TRS Award Program) Deliverable in Shares
EVPs and SVPs
|
Below 15%
|
0%
|
15%
|
50%
|
20%
|
75%
|
25%
|
100%
|
30%
|
150%
|
35% or above
|
200%
|
1.
|
Acadia Realty Trust
|
2.
|
Agree Realty Corporation
|
3.
|
Brixmor Property Group Inc.
|
4.
|
CBL Properties
|
5.
|
Cedar Realty Trust, Inc.
|
6.
|
DDR Corp.
|
7.
|
Federal Realty Investment Trust
|
8.
|
Four Corners Property Trust, Inc.
|
9.
|
Getty Realty Corp.
|
10.
|
GGP Inc.
|
11.
|
Kimco Realty Corporation
|
12.
|
Kite Realty Group Trust
|
13.
|
Macerich Company
|
14.
|
National Retail Properties, Inc.
|
15.
|
Pennsylvania Real Estate Investment Trust
|
16.
|
Ramco-Gershenson Properties Trust
|
17.
|
Realty Income Corporation
|
18.
|
Regency Centers Corporation
|
19.
|
Retail Opportunity Investments Corp.
|
20.
|
Retail Properties of America, Inc.
|
21.
|
Saul Centers, Inc.
|
22.
|
Seritage Growth Properties
|
23.
|
Simon Property Group, Inc.
|
24.
|
Spirit Realty Capital, Inc.
|
25.
|
STORE Capital Corporation
|
26.
|
Tanger Factory Outlet Centers, Inc.
|
27.
|
Taubman Centers, Inc.
|
28.
|
Urban Edge Properties
|
29.
|
Urstadt Biddle Properties Inc.
|
30.
|
Washington Prime Group Inc.
|
31.
|
Weingarten Realty Investors
|
32.
|
Wheeler Real Estate Investment Trust, Inc.
|
Date Restricted Shares
Become Vested
|
Number of Restricted Shares
|
_______________
|
___________ Restricted Shares
|
_______________
|
an additional ___________ Restricted Shares
|
_______________
|
an additional ___________ Restricted Shares
|
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;
|
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/ Robert F. McCadden
|
|
|
Name:
|
Robert F. McCadden
|
Title:
|
Executive Vice President and
Chief Financial Officer
|
|
/s/ Joseph F. Coradino
|
|
|
Name:
|
Joseph F. Coradino
|
|
|
Title:
|
Chairman and Chief Executive Officer
|
|
/s/ Robert F. McCadden
|
|
|
Name:
|
Robert F. McCadden
|
|
|
Title:
|
Executive Vice President and
Chief Financial Officer
|