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
|
o
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Smaller reporting company
|
o
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Emerging growth company
|
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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Item 6.
|
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||
|
|
|
|
|
|
(in thousands, except per share amounts)
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
(unaudited)
|
|
|
||||
ASSETS:
|
|
|
|
||||
INVESTMENTS IN REAL ESTATE, at cost:
|
|
|
|
||||
Operating properties
|
$
|
3,184,656
|
|
|
$
|
3,180,212
|
|
Construction in progress
|
121,204
|
|
|
113,609
|
|
||
Land held for development
|
5,881
|
|
|
5,881
|
|
||
Total investments in real estate
|
3,311,741
|
|
|
3,299,702
|
|
||
Accumulated depreciation
|
(1,169,709
|
)
|
|
(1,111,007
|
)
|
||
Net investments in real estate
|
2,142,032
|
|
|
2,188,695
|
|
||
INVESTMENTS IN PARTNERSHIPS, at equity:
|
120,915
|
|
|
216,823
|
|
||
OTHER ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
19,294
|
|
|
15,348
|
|
||
Tenant and other receivables (net of allowance for doubtful accounts of $7,246 and $7,248 at September 30, 2018 and December 31, 2017, respectively)
|
33,801
|
|
|
38,166
|
|
||
Intangible assets (net of accumulated amortization of $14,791 and $13,117 at September 30, 2018 and December 31, 2017, respectively)
|
17,360
|
|
|
17,693
|
|
||
Deferred costs and other assets, net
|
131,043
|
|
|
112,046
|
|
||
Assets held for sale
|
15,874
|
|
|
—
|
|
||
Total assets
|
$
|
2,480,319
|
|
|
$
|
2,588,771
|
|
LIABILITIES:
|
|
|
|
||||
Mortgage loans payable, net
|
$
|
1,052,138
|
|
|
$
|
1,056,084
|
|
Term Loans, net
|
547,108
|
|
|
547,758
|
|
||
Revolving Facilities
|
37,000
|
|
|
53,000
|
|
||
Tenants’ deposits and deferred rent
|
10,155
|
|
|
11,446
|
|
||
Distributions in excess of partnership investments
|
92,682
|
|
|
97,868
|
|
||
Fair value of derivative liabilities
|
—
|
|
|
20
|
|
||
Accrued expenses and other liabilities
|
71,862
|
|
|
61,604
|
|
||
Total liabilities
|
1,810,945
|
|
|
1,827,780
|
|
||
COMMITMENTS AND CONTINGENCIES (Note 6):
|
|
|
|
||||
EQUITY:
|
|
|
|
||||
Series B Preferred Shares, $.01 par value per share; 25,000 preferred shares authorized; 3,450 Series B Preferred Shares issued and outstanding at each of September 30, 2018 and December 31, 2017; liquidation preference of $86,250
|
35
|
|
|
35
|
|
||
Series C Preferred Shares, $.01 par value per share; 25,000 preferred shares authorized; 6,900 Series C Preferred Shares issued and outstanding at each of September 30, 2018 and December 31, 2017; liquidation preference of $172,500
|
69
|
|
|
69
|
|
||
Series D Preferred Shares, $.01 par value per share; 25,000 preferred shares authorized; 5,000 Series D Preferred Shares issued and outstanding at each of September 30, 2018 and December 31, 2017; liquidation preference of $125,000
|
50
|
|
|
50
|
|
||
Shares of beneficial interest, $1.00 par value per share; 200,000 shares authorized; 70,473 and 69,983 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively
|
70,473
|
|
|
69,983
|
|
||
Capital contributed in excess of par
|
1,669,239
|
|
|
1,663,966
|
|
||
Accumulated other comprehensive income
|
16,505
|
|
|
7,226
|
|
||
Distributions in excess of net income
|
(1,205,896
|
)
|
|
(1,109,469
|
)
|
||
Total equity—Pennsylvania Real Estate Investment Trust
|
550,475
|
|
|
631,860
|
|
||
Noncontrolling interest
|
118,899
|
|
|
129,131
|
|
||
Total equity
|
669,374
|
|
|
760,991
|
|
||
Total liabilities and equity
|
$
|
2,480,319
|
|
|
$
|
2,588,771
|
|
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands of dollars)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
REVENUE:
|
|
|
|
|
|
|
|
||||||||
Real estate revenue:
|
|
|
|
|
|
|
|
||||||||
Base rent
|
$
|
56,372
|
|
|
$
|
56,874
|
|
|
$
|
167,714
|
|
|
$
|
171,078
|
|
Expense reimbursements
|
26,833
|
|
|
26,900
|
|
|
80,194
|
|
|
81,981
|
|
||||
Percentage rent
|
646
|
|
|
593
|
|
|
902
|
|
|
1,223
|
|
||||
Lease termination revenue
|
45
|
|
|
7
|
|
|
7,166
|
|
|
2,279
|
|
||||
Other real estate revenue
|
2,493
|
|
|
2,345
|
|
|
6,928
|
|
|
6,992
|
|
||||
Total real estate revenue
|
86,389
|
|
|
86,719
|
|
|
262,904
|
|
|
263,553
|
|
||||
Other income
|
1,714
|
|
|
2,492
|
|
|
3,454
|
|
|
4,172
|
|
||||
Total revenue
|
88,103
|
|
|
89,211
|
|
|
266,358
|
|
|
267,725
|
|
||||
EXPENSES:
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Property operating expenses:
|
|
|
|
|
|
|
|
||||||||
CAM and real estate taxes
|
(27,826
|
)
|
|
(25,772
|
)
|
|
(84,569
|
)
|
|
(83,985
|
)
|
||||
Utilities
|
(4,430
|
)
|
|
(4,444
|
)
|
|
(12,143
|
)
|
|
(12,407
|
)
|
||||
Other property operating expenses
|
(2,444
|
)
|
|
(3,087
|
)
|
|
(8,752
|
)
|
|
(9,117
|
)
|
||||
Total property operating expenses
|
(34,700
|
)
|
|
(33,303
|
)
|
|
(105,464
|
)
|
|
(105,509
|
)
|
||||
Depreciation and amortization
|
(33,119
|
)
|
|
(29,966
|
)
|
|
(100,505
|
)
|
|
(94,652
|
)
|
||||
General and administrative expenses
|
(8,441
|
)
|
|
(8,288
|
)
|
|
(27,969
|
)
|
|
(26,561
|
)
|
||||
Provision for employee separation expenses
|
(561
|
)
|
|
—
|
|
|
(956
|
)
|
|
(1,053
|
)
|
||||
Project costs and other expenses
|
(214
|
)
|
|
(150
|
)
|
|
(465
|
)
|
|
(547
|
)
|
||||
Total operating expenses
|
(77,035
|
)
|
|
(71,707
|
)
|
|
(235,359
|
)
|
|
(228,322
|
)
|
||||
Interest expense, net
|
(15,181
|
)
|
|
(14,342
|
)
|
|
(46,064
|
)
|
|
(44,098
|
)
|
||||
Impairment of assets
|
—
|
|
|
(1,825
|
)
|
|
(34,286
|
)
|
|
(55,742
|
)
|
||||
Total expenses
|
(92,216
|
)
|
|
(87,874
|
)
|
|
(315,709
|
)
|
|
(328,162
|
)
|
||||
(Loss) income before equity in income of partnerships, gain on sale of real estate by equity method investee, gains (adjustment to gains) on sales of interests in non operating real estate and gains (losses) on sales of interests in real estate, net
|
(4,113
|
)
|
|
1,337
|
|
|
(49,351
|
)
|
|
(60,437
|
)
|
||||
Equity in income of partnerships
|
2,477
|
|
|
4,254
|
|
|
8,186
|
|
|
12,144
|
|
||||
Gain on sale of real estate by equity method investee
|
—
|
|
|
6,718
|
|
|
2,773
|
|
|
6,718
|
|
||||
(Adjustment to gains) gains on sales of interests in non operating real estate
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
486
|
|
||||
Losses (gains) on sales of interests in real estate, net
|
—
|
|
|
(9
|
)
|
|
748
|
|
|
(374
|
)
|
||||
Net (loss) income
|
(1,636
|
)
|
|
12,300
|
|
|
(37,669
|
)
|
|
(41,463
|
)
|
||||
Less: net loss (income) attributable to noncontrolling interest
|
891
|
|
|
(507
|
)
|
|
6,122
|
|
|
6,627
|
|
||||
Net (loss) income attributable to PREIT
|
(745
|
)
|
|
11,793
|
|
|
(31,547
|
)
|
|
(34,836
|
)
|
||||
Less: preferred share dividends
|
(6,843
|
)
|
|
(7,525
|
)
|
|
(20,531
|
)
|
|
(20,797
|
)
|
||||
Net (loss) income attributable to PREIT common shareholders
|
$
|
(7,588
|
)
|
|
$
|
4,268
|
|
|
$
|
(52,078
|
)
|
|
$
|
(55,633
|
)
|
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, |
||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
Net (loss) income
|
$
|
(1,636
|
)
|
|
$
|
12,300
|
|
|
$
|
(37,669
|
)
|
|
$
|
(41,463
|
)
|
Noncontrolling interest
|
891
|
|
|
(507
|
)
|
|
6,122
|
|
|
6,627
|
|
||||
Preferred share dividends
|
(6,843
|
)
|
|
(7,525
|
)
|
|
(20,531
|
)
|
|
(20,797
|
)
|
||||
Dividends on unvested restricted shares
|
(136
|
)
|
|
(87
|
)
|
|
(412
|
)
|
|
(272
|
)
|
||||
Net (loss) income used to calculate loss per share—basic and diluted
|
$
|
(7,724
|
)
|
|
$
|
4,181
|
|
|
$
|
(52,490
|
)
|
|
$
|
(55,905
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted (loss) earnings per share:
|
$
|
(0.11
|
)
|
|
$
|
0.06
|
|
|
$
|
(0.75
|
)
|
|
$
|
(0.81
|
)
|
|
|
|
|
|
|
|
|
||||||||
(in thousands of shares)
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding—basic
|
69,803
|
|
|
69,424
|
|
|
69,718
|
|
|
69,319
|
|
||||
Effect of common share equivalents
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted average shares outstanding—diluted
|
69,803
|
|
|
69,424
|
|
|
69,718
|
|
|
69,319
|
|
(1)
|
The Company had net losses used to calculate earnings per share for the three months ended September 30, 2018 and the nine months ended September 30, 2018 and 2017. Therefore, the effects of common share equivalents of
38
for the three months ended
September 30,
2018 and
272
and
51
for the
nine
months ended
September 30,
2018 and 2017, respectively, are excluded from the calculation of diluted loss per share for these periods because they would be antidilutive. There were
no
common share equivalents for the three months ended
September 30,
2017.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands of dollars)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Net (loss) income
|
$
|
(1,636
|
)
|
|
$
|
12,300
|
|
|
$
|
(37,669
|
)
|
|
$
|
(41,463
|
)
|
Unrealized gain (loss) on derivatives
|
1,905
|
|
|
266
|
|
|
9,662
|
|
|
1,544
|
|
||||
Amortization of settled swaps
|
180
|
|
|
259
|
|
|
719
|
|
|
597
|
|
||||
Total comprehensive income (loss)
|
449
|
|
|
12,825
|
|
|
(27,288
|
)
|
|
(39,322
|
)
|
||||
Less: comprehensive loss (income) attributable to noncontrolling interest
|
669
|
|
|
(563
|
)
|
|
5,020
|
|
|
6,398
|
|
||||
Comprehensive income (loss) attributable to PREIT
|
$
|
1,118
|
|
|
$
|
12,262
|
|
|
$
|
(22,268
|
)
|
|
$
|
(32,924
|
)
|
|
|
|
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
B
|
|
Series
C
|
|
Series D
|
|
|
|
|
|
Non-
controlling
interest
|
||||||||||||||||||||||
Balance December 31, 2017
|
$
|
760,991
|
|
|
$
|
35
|
|
|
$
|
69
|
|
|
$
|
50
|
|
|
$
|
69,983
|
|
|
$
|
1,663,966
|
|
|
$
|
7,226
|
|
|
$
|
(1,109,469
|
)
|
|
$
|
129,131
|
|
Net loss
|
(37,669
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31,547
|
)
|
|
(6,122
|
)
|
|||||||||
Other comprehensive income
|
10,381
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,279
|
|
|
—
|
|
|
1,102
|
|
|||||||||
Shares issued under employee compensation plans, net of shares retired
|
371
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
490
|
|
|
(119
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Amortization of deferred compensation
|
5,392
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,392
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Distributions paid to common shareholders ($0.63 per share)
|
(44,349
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(44,349
|
)
|
|
—
|
|
|||||||||
Distributions paid to Series B preferred shareholders ($1.3827 per share)
|
(4,772
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,772
|
)
|
|
—
|
|
|||||||||
Distributions paid to Series C preferred shareholders ($1.35 per share)
|
(9,315
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,315
|
)
|
|
—
|
|
|||||||||
Distributions paid to Series D preferred shareholders ($1.2891 per share)
|
(6,444
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,444
|
)
|
|
—
|
|
|||||||||
Noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Distributions paid to Operating Partnership unit holders ($0.63 per unit)
|
(5,212
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,212
|
)
|
|||||||||
Balance September 30, 2018
|
$
|
669,374
|
|
|
$
|
35
|
|
|
$
|
69
|
|
|
$
|
50
|
|
|
$
|
70,473
|
|
|
$
|
1,669,239
|
|
|
$
|
16,505
|
|
|
$
|
(1,205,896
|
)
|
|
$
|
118,899
|
|
|
Nine Months Ended
September 30, |
||||||
(in thousands of dollars)
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(37,669
|
)
|
|
$
|
(41,463
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
92,063
|
|
|
87,963
|
|
||
Amortization
|
10,776
|
|
|
8,695
|
|
||
Straight-line rent adjustments
|
(1,753
|
)
|
|
(1,908
|
)
|
||
Provision for doubtful accounts
|
2,054
|
|
|
1,281
|
|
||
Non-cash lease termination revenue
|
(4,200
|
)
|
|
—
|
|
||
Amortization of deferred compensation
|
5,392
|
|
|
4,518
|
|
||
Gains on sales of interests in real estate, net
|
(723
|
)
|
|
(112
|
)
|
||
Equity in income of partnerships
|
(8,186
|
)
|
|
(12,144
|
)
|
||
Gain on sale of real estate by equity method investee
|
(2,773
|
)
|
|
(6,718
|
)
|
||
Cash distributions from partnerships
|
6,029
|
|
|
10,974
|
|
||
Amortization of historic tax credits
|
(810
|
)
|
|
(1,768
|
)
|
||
Impairment of assets
|
34,286
|
|
|
55,742
|
|
||
Change in assets and liabilities:
|
|
|
|
||||
Net change in other assets
|
(1,904
|
)
|
|
(5,641
|
)
|
||
Net change in other liabilities
|
1,632
|
|
|
(4,556
|
)
|
||
Net cash provided by operating activities
|
94,214
|
|
|
94,863
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Investments in consolidated real estate acquisitions
|
(11,400
|
)
|
|
—
|
|
||
Distribution of financing proceeds from equity method investee
|
123,000
|
|
|
—
|
|
||
Cash proceeds from sales of real estate
|
1,636
|
|
|
77,778
|
|
||
Cash distributions from partnerships of proceeds from real estate sold
|
19,727
|
|
|
30,265
|
|
||
Investments in partnerships
|
(47,074
|
)
|
|
(56,778
|
)
|
||
Investments in real estate improvements
|
(23,918
|
)
|
|
(36,850
|
)
|
||
Additions to construction in progress
|
(51,349
|
)
|
|
(93,178
|
)
|
||
Capitalized leasing costs
|
(10,423
|
)
|
|
(4,633
|
)
|
||
Additions to leasehold improvements and corporate fixed assets
|
(67
|
)
|
|
(511
|
)
|
||
Net cash provided by (used in) investing activities
|
132
|
|
|
(83,907
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Net proceeds from issuance of preferred shares
|
—
|
|
|
282,005
|
|
||
Borrowing from (repayment of) mortgage loans
|
10,185
|
|
|
(150,000
|
)
|
||
Net (repayments) borrowings under revolving facility
|
(16,000
|
)
|
|
3,000
|
|
||
Dividends paid to common shareholders
|
(44,349
|
)
|
|
(43,959
|
)
|
||
Dividends paid to preferred shareholders
|
(20,531
|
)
|
|
(19,752
|
)
|
||
Distributions paid to Operating Partnership unit holders and noncontrolling interest
|
(5,212
|
)
|
|
(5,232
|
)
|
||
Principal installments on mortgage loans
|
(14,217
|
)
|
|
(12,581
|
)
|
||
Payment of deferred financing costs
|
(6,522
|
)
|
|
(71
|
)
|
||
Value of shares of beneficial interest issued
|
1,118
|
|
|
1,790
|
|
||
Value of shares retired under equity incentive plans, net of shares issued
|
(747
|
)
|
|
(1,328
|
)
|
||
Net cash (used in) provided by financing activities
|
(96,275
|
)
|
|
53,872
|
|
||
Net change in cash, cash equivalents, and restricted cash
|
(1,929
|
)
|
|
64,828
|
|
||
Cash, cash equivalents, and restricted cash, beginning of period
|
33,953
|
|
|
29,865
|
|
||
Cash, cash equivalents, and restricted cash, end of period
|
$
|
32,024
|
|
|
$
|
94,693
|
|
(in thousands of dollars)
|
As of September 30,
2018 |
|
As of December 31,
2017 |
||||
Buildings, improvements and construction in progress
|
$
|
2,839,040
|
|
|
$
|
2,808,622
|
|
Land, including land held for development
|
472,701
|
|
|
491,080
|
|
||
Total investments in real estate
|
3,311,741
|
|
|
3,299,702
|
|
||
Accumulated depreciation
|
(1,169,709
|
)
|
|
(1,111,007
|
)
|
||
Net investments in real estate
|
$
|
2,142,032
|
|
|
$
|
2,188,695
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands of dollars)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Development/Redevelopment Activities:
|
|
|
|
|
|
|
|
||||||||
Interest
|
$
|
1,821
|
|
|
$
|
2,209
|
|
|
$
|
4,728
|
|
|
$
|
5,358
|
|
Compensation, including commissions
|
352
|
|
|
362
|
|
|
1,067
|
|
|
1,058
|
|
||||
Real estate taxes
|
430
|
|
|
496
|
|
|
810
|
|
|
651
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Leasing Activities:
|
|
|
|
|
|
|
|
||||||||
Compensation, including commissions
|
1,482
|
|
|
1,536
|
|
|
5,423
|
|
|
4,633
|
|
(in thousands of dollars)
|
September 30, 2018
|
|
December 31, 2017
|
||||
ASSETS:
|
|
|
|
||||
Investments in real estate, at cost:
|
|
|
|
||||
Operating properties
|
$
|
569,508
|
|
|
$
|
612,689
|
|
Construction in progress
|
396,214
|
|
|
293,102
|
|
||
Total investments in real estate
|
965,722
|
|
|
905,791
|
|
||
Accumulated depreciation
|
(208,555
|
)
|
|
(202,424
|
)
|
||
Net investments in real estate
|
757,167
|
|
|
703,367
|
|
||
Cash and cash equivalents
|
26,129
|
|
|
26,158
|
|
||
Deferred costs and other assets, net
|
33,310
|
|
|
34,345
|
|
||
Total assets
|
816,606
|
|
|
763,870
|
|
||
LIABILITIES AND PARTNERS’ INVESTMENT:
|
|
|
|
||||
Mortgage loans payable, net
|
509,039
|
|
|
513,139
|
|
||
FDP Term Loan, net
|
247,772
|
|
|
—
|
|
||
Other liabilities
|
32,859
|
|
|
37,971
|
|
||
Total liabilities
|
789,670
|
|
|
551,110
|
|
||
Net investment
|
26,936
|
|
|
212,760
|
|
||
Partners’ share
|
13,039
|
|
|
106,886
|
|
||
PREIT’s share
|
13,897
|
|
|
105,874
|
|
||
Excess investment
(1)
|
14,336
|
|
|
13,081
|
|
||
Net investments and advances
|
$
|
28,233
|
|
|
$
|
118,955
|
|
|
|
|
|
||||
|
|
|
|
||||
Investment in partnerships, at equity
|
$
|
120,915
|
|
|
$
|
216,823
|
|
Distributions in excess of partnership investments
|
(92,682
|
)
|
|
(97,868
|
)
|
||
Net investments and advances
|
$
|
28,233
|
|
|
$
|
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
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands of dollars)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Real estate revenue
|
$
|
23,848
|
|
|
$
|
29,395
|
|
|
$
|
73,826
|
|
|
$
|
87,089
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Property operating and other expenses
|
(7,659
|
)
|
|
(7,885
|
)
|
|
(23,512
|
)
|
|
(25,098
|
)
|
||||
Interest expense
|
(5,872
|
)
|
|
(5,460
|
)
|
|
(17,440
|
)
|
|
(16,266
|
)
|
||||
Depreciation and amortization
|
(4,763
|
)
|
|
(6,496
|
)
|
|
(14,715
|
)
|
|
(19,151
|
)
|
||||
Total expenses
|
(18,294
|
)
|
|
(19,841
|
)
|
|
(55,667
|
)
|
|
(60,515
|
)
|
||||
Net income
|
5,554
|
|
|
9,554
|
|
|
18,159
|
|
|
26,574
|
|
||||
Partners’ share
|
(3,057
|
)
|
|
(5,321
|
)
|
|
(9,971
|
)
|
|
(14,567
|
)
|
||||
PREIT’s share
|
2,497
|
|
|
4,233
|
|
|
8,188
|
|
|
12,007
|
|
||||
Amortization of and adjustments to excess investment, net
|
(20
|
)
|
|
21
|
|
|
(2
|
)
|
|
137
|
|
||||
Equity in income of partnerships
|
$
|
2,477
|
|
|
$
|
4,254
|
|
|
$
|
8,186
|
|
|
$
|
12,144
|
|
|
|
As of
|
|
||||||
(in thousands of dollars)
|
|
September 30, 2018
|
|
December 31, 2017
|
|
||||
Summarized balance sheet information
|
|
|
|
|
|
||||
Total assets
|
|
$
|
52,175
|
|
|
$
|
43,850
|
|
|
Mortgage loan payable, net
|
|
196,329
|
|
|
199,451
|
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands of dollars)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Summarized statement of operations information
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
$
|
8,871
|
|
|
$
|
8,355
|
|
|
$
|
26,474
|
|
|
$
|
25,811
|
|
Property operating expenses
|
|
(2,249
|
)
|
|
(2,169
|
)
|
|
(6,778
|
)
|
|
(6,653
|
)
|
||||
Interest expense
|
|
(2,062
|
)
|
|
(1,851
|
)
|
|
(6,158
|
)
|
|
(5,582
|
)
|
||||
Net income
|
|
3,853
|
|
|
3,449
|
|
|
11,495
|
|
|
10,710
|
|
||||
PREIT’s share of equity in income of partnership
|
|
1,927
|
|
|
1,724
|
|
|
5,748
|
|
|
5,355
|
|
|
|
Applicable Margin
|
|
|
|
||||
Level
|
Ratio of Total Liabilities
to Gross Asset Value |
Revolving Loans that are LIBOR Loans
|
|
Revolving Loans that are Base Rate Loans
|
|
Term Loans that are LIBOR Loans
|
|
Term Loans that are Base Rate Loans
|
|
1
|
Less than 0.450 to 1.00
|
1.20%
|
|
0.20%
|
|
1.35%
|
|
0.35%
|
|
2
|
Equal to or greater than 0.450 to 1.00 but less than 0.500 to 1.00
|
1.25%
|
|
0.25%
|
|
1.45%
|
|
0.45%
|
|
3
|
Equal to or greater than 0.500 to 1.00 but less than 0.550 to 1.00
(1)
|
1.30%
|
|
0.30%
|
|
1.60%
|
|
0.60%
|
|
4
|
Equal to or greater than 0.550 to 1.00
|
1.55%
|
|
0.55%
|
|
1.90%
|
|
0.90%
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||||
(in thousands of dollars)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||
Revolving Facilities
(1)
|
|
|
|
|
|
|
|
|
|||||||||
|
Interest expense
|
|
$
|
392
|
|
|
$
|
601
|
|
|
$
|
1,006
|
|
|
$
|
2,011
|
|
|
Deferred financing amortization
|
|
274
|
|
|
199
|
|
|
778
|
|
|
597
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Term Loans
(2)
|
|
|
|
|
|
|
|
|
|||||||||
|
Interest expense
|
|
4,525
|
|
|
4,205
|
|
|
13,310
|
|
|
10,752
|
|
||||
|
Deferred financing amortization
|
|
188
|
|
|
191
|
|
|
569
|
|
|
568
|
|
||||
|
Accelerated financing costs
|
|
—
|
|
|
—
|
|
|
363
|
|
|
—
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||
(in millions of dollars)
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Mortgage loans
(1)
|
$
|
1,052.1
|
|
|
$
|
1,004.0
|
|
|
$
|
1,056.1
|
|
|
$
|
1,029.7
|
|
(in thousands of dollars)
|
|
September 30,
2018
|
|
September 30,
2017
|
||||
Cash and cash equivalents
|
|
$
|
19,294
|
|
|
$
|
76,942
|
|
Restricted cash included in other assets
|
|
12,730
|
|
|
17,751
|
|
||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows
|
|
$
|
32,024
|
|
|
$
|
94,693
|
|
Maturity Date
|
Aggregate Notional Value at September 30, 2018
(in millions of dollars) |
|
Aggregate Fair Value at
September 30, 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
|
|
|
$
|
—
|
|
|
N/A
|
|
||
2019
|
$
|
250.0
|
|
|
$
|
0.6
|
|
|
0.8
|
|
|
1.44
|
%
|
|
2020
|
100.0
|
|
|
2.6
|
|
|
1.9
|
|
|
1.23
|
%
|
|||
2021
|
397.7
|
|
|
13.5
|
|
|
7.0
|
|
|
1.57
|
%
|
|||
2022
|
—
|
|
|
—
|
|
|
N/A
|
|
|
—
|
%
|
|||
2023
|
50.0
|
|
|
0.6
|
|
|
N/A
|
|
|
2.62
|
%
|
|||
Forward Starting Swaps
|
|
|
|
|
|
|
|
|||||||
2023
|
250.0
|
|
|
2.1
|
|
|
N/A
|
|
|
2.71
|
%
|
|||
Total
|
$
|
1,047.7
|
|
|
$
|
19.4
|
|
|
$
|
9.7
|
|
|
1.83
|
%
|
(1)
|
As of
September 30, 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 nine months 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.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||||
|
|
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
|
|
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
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate products
|
|
$
|
3.0
|
|
|
$
|
0.1
|
|
|
$
|
(1.0
|
)
|
|
$
|
0.4
|
|
|
$
|
11.2
|
|
|
$
|
0.2
|
|
|
$
|
(0.8
|
)
|
|
$
|
1.9
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
||||||||||||
(in millions of dollars)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Total interest expense presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded
|
|
$
|
(15.2
|
)
|
|
$
|
(14.3
|
)
|
|
$
|
(46.1
|
)
|
|
$
|
(44.1
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Amount of gain (loss) reclassified from accumulated other comprehensive income into interest expense
|
|
$
|
(1.0
|
)
|
|
$
|
0.4
|
|
|
$
|
(0.8
|
)
|
|
$
|
1.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Former Anchors
|
|
|
Replacement Tenant(s)
|
||||
Property
|
Name
|
GLA '000's
|
Date Store Closed
|
|
Decommission Date
|
Name
|
GLA
'000's
|
Actual/Targeted Occupancy Date
|
|
Completed:
|
|
|
|
|
|
|
|
|
|
|
Exton Square Mall
|
Kmart
|
96
|
Q1 16
|
|
Q2 16
|
Whole Foods
|
55
|
Q1 18
|
|
Magnolia Mall
|
Sears
|
91
|
Q1 17
|
|
Q2 17
|
Burlington
|
46
|
Q3 17
|
|
|
HomeGoods
|
22
|
Q2 18
|
|||||
|
|
Five Below
|
8
|
Q2 18
|
|||||
|
Moorestown Mall
|
Macy’s
|
200
|
Q1 17
|
|
Q2 17
|
HomeSense
|
28
|
Q3 18
|
|
|
Five Below
|
9
|
Q4 18
|
|||||
|
Valley Mall
|
Macy’s
|
120
|
Q1 16
|
|
Q4 17
|
Tilt Studio
|
48
|
Q3 18
|
In process:
|
|
|
|
|
|
|
|
|
|
|
Valley Mall
|
Macy's
|
see above
|
One Life Fitness
|
70
|
Q3 18
|
|||
|
Bon-Ton
|
123
|
Q1 18
|
|
Q1 18
|
Belk
|
123
|
Q4 18
|
|
|
Moorestown Mall
|
Macy's
|
see above
|
Sierra Trading Post
|
19
|
Q1 19
|
|||
|
Arts & Crafts retailer
|
26
|
Q2 19
|
||||||
|
Other uses
|
50
|
Q4 19
|
||||||
|
Woodland Mall
|
Sears
|
313
|
Q2 17
|
|
Q2 17
|
Von Maur
|
86
|
Q4 19
|
|
REI
|
20
|
Q4 19
|
||||||
|
Restaurants and small shop space
|
30
|
Q4 19
|
||||||
|
Plymouth Meeting Mall
|
Macy's
(1)
|
215
|
Q1 17
|
|
Q2 17
|
Burlington
|
41
|
Q4 19
|
|
|
Dick's Sporting Goods
|
58
|
Q4 19
|
|||||
|
|
Edge Fitness
|
38
|
Q4 19
|
|||||
|
|
Miller's Ale House
|
7
|
Q2 19
|
|||||
|
|
Michael’s
|
26
|
Q4 19
|
|||||
|
Willow Grove Park
|
JC Penney
|
125
|
Q3 17
|
|
Q1 18
|
Studio Movie Grill
|
49
|
Q4 19
|
|
|
Restaurant and entertainment space
|
44
|
Q4 19
|
|||||
Other
|
|
|
|
|
|
|
|
|
|
|
Valley View Mall
|
Herberger's
|
100
|
Q3 18
|
|
n/a
|
TBD
|
100
|
TBD
|
|
Wyoming Valley Mall
|
Sears
|
117
|
Q3 18
|
|
n/a
|
TBD
|
117
|
TBD
|
|
Bon-Ton
|
155
|
Q3 18
|
|
n/a
|
TBD
|
155
|
TBD
|
(1)
|
Building and improvements are now owned by us. Property is subject to a ground lease dated June 23, 2017.
|
|
Occupancy
(1)
at September 30,
|
||||||||||||||||
|
Consolidated
Properties
|
|
Unconsolidated
Properties
(2)
|
|
Combined
(2)(3)
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||
Retail portfolio weighted average:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total excluding anchors
|
91.5
|
%
|
|
91.7
|
%
|
|
89.0
|
%
|
|
92.1
|
%
|
|
90.9
|
%
|
|
91.8
|
%
|
Total including anchors
|
92.0
|
%
|
|
93.9
|
%
|
|
91.0
|
%
|
|
93.5
|
%
|
|
91.8
|
%
|
|
93.8
|
%
|
Malls weighted average:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total excluding anchors
|
91.4
|
%
|
|
92.3
|
%
|
|
89.0
|
%
|
|
89.5
|
%
|
|
91.2
|
%
|
|
92.0
|
%
|
Total including anchors
|
91.9
|
%
|
|
94.2
|
%
|
|
92.4
|
%
|
|
92.9
|
%
|
|
92.0
|
%
|
|
94.1
|
%
|
Other retail properties
|
100.0
|
%
|
|
36.7
|
%
|
|
89.9
|
%
|
|
94.0
|
%
|
|
90.4
|
%
|
|
91.3
|
%
|
(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 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 square feet ("sf")
|
|
Consolidated
|
|
31
|
|
|
117,254
|
|
|
7.8
|
|
|
$
|
41.58
|
|
|
|
|
|
|
|
|
|
|
$
|
10.62
|
|
||||||
|
|
Unconsolidated
(4)
|
|
3
|
|
|
7,085
|
|
|
9.2
|
|
|
42.29
|
|
|
|
|
|
|
|
|
|
|
6.40
|
|
||||||||
Total Under 10k sf
|
|
34
|
|
|
124,339
|
|
|
7.9
|
|
|
41.62
|
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
10.34
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Over 10k sf
|
|
Consolidated
|
|
6
|
|
|
231,047
|
|
|
10.8
|
|
|
16.05
|
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
3.69
|
|
||||||||
Total New Leases
|
|
40
|
|
|
355,386
|
|
|
9.8
|
|
|
$
|
25.00
|
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
$
|
5.56
|
|
||||||||
Renewal Leases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Under 10k sf
|
|
Consolidated
|
|
21
|
|
|
46,293
|
|
|
4.1
|
|
|
$
|
56.60
|
|
|
$
|
54.37
|
|
|
$
|
2.23
|
|
|
4.1
|
%
|
|
11.5
|
%
|
|
$
|
0.39
|
|
|
|
Unconsolidated
(4)
|
|
7
|
|
|
18,760
|
|
|
2.9
|
|
|
47.66
|
|
|
54.38
|
|
|
(6.72
|
)
|
|
(12.4
|
)%
|
|
(8.1
|
)%
|
|
—
|
|
||||
Total Under 10k sf
|
|
28
|
|
|
65,053
|
|
|
3.8
|
|
|
$
|
54.02
|
|
|
$
|
54.37
|
|
|
$
|
(0.35
|
)
|
|
(0.6
|
)%
|
|
5.4
|
%
|
|
$
|
0.30
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Over 10k sf
|
|
Consolidated
|
|
6
|
|
|
171,785
|
|
|
4.3
|
|
|
$
|
20.01
|
|
|
$
|
18.84
|
|
|
$
|
1.17
|
|
|
6.2
|
%
|
|
8.7
|
%
|
|
$
|
—
|
|
Total Fixed Rent
|
|
34
|
|
|
236,838
|
|
|
4.2
|
|
|
$
|
29.35
|
|
|
$
|
28.60
|
|
|
$
|
0.75
|
|
|
2.6
|
%
|
|
6.9
|
%
|
|
$
|
0.08
|
|
||
Percentage in Lieu
|
|
Consolidated
|
|
12
|
|
|
32,131
|
|
|
1.6
|
|
|
$
|
52.55
|
|
|
$
|
55.40
|
|
|
$
|
(2.85
|
)
|
|
(5.1
|
)%
|
|
n/a
|
|
—
|
|
||
Total Renewal Leases
|
|
46
|
|
|
268,969
|
|
|
3.9
|
|
|
$
|
32.12
|
|
|
$
|
31.80
|
|
|
$
|
0.32
|
|
|
1.0
|
%
|
|
6.9
|
%
|
|
$
|
0.07
|
|
||
Total Non Anchor
|
|
86
|
|
|
624,355
|
|
|
7.2
|
|
|
$
|
28.07
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Anchor
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
New Leases
|
|
|
|
1
|
|
|
41,883
|
|
|
10.0
|
|
|
$
|
16.38
|
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
$
|
9.17
|
|
||||||
Renewal Leases
|
|
Consolidated
|
|
3
|
|
|
410,033
|
|
|
5.0
|
|
|
$
|
2.91
|
|
|
$
|
2.85
|
|
|
0.06
|
|
|
2.1
|
%
|
|
n/a
|
|
$
|
—
|
|
||
Total
|
|
|
|
4
|
|
|
451,916
|
|
|
6.3
|
|
|
$
|
4.16
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
|
|
|
GLA in square feet (“sf”)
|
|
Term (years)
|
|
Initial Rent per square foot ("psf")
|
|
|
|
Initial Gross Rent Renewal Spread
(1)
|
|
Average Rent Renewal Spread
(2)
|
|
Annualized Tenant Improvements psf
(3)
|
||||||||||||||||
|
|
|
|
Number
|
|
|
|
|
Previous Rent psf
|
|
$
|
|
%
|
|
%
|
|
||||||||||||||||||
Non Anchor
|
|
|
||||||||||||||||||||||||||||||||
New Leases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Under 10k square feet ("sf")
|
|
Consolidated
|
|
78
|
|
|
269,588
|
|
|
7.2
|
|
|
$
|
45.28
|
|
|
|
|
|
|
|
|
|
|
$
|
10.33
|
|
|||||||
|
|
Unconsolidated
(4)
|
|
11
|
|
|
36,514
|
|
|
7.7
|
|
|
40.16
|
|
|
|
|
|
|
|
|
|
|
17.60
|
|
|||||||||
Total Under 10k sf
|
—
|
|
89
|
|
|
306,102
|
|
|
7.3
|
|
|
44.67
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
11.25
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Over 10k sf
|
|
Consolidated
|
|
14
|
|
|
333,102
|
|
|
10.6
|
|
|
22.51
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
4.76
|
|
|||||
Total New Leases
|
|
103
|
|
|
639,204
|
|
|
9.0
|
|
|
$
|
33.12
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
$
|
7.27
|
|
|||||
Renewal Leases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Under 10k sf
|
|
Consolidated
|
|
74
|
|
|
162,335
|
|
|
3.3
|
|
|
$
|
52.13
|
|
|
$
|
51.20
|
|
|
$
|
0.93
|
|
|
1.8
|
%
|
|
7.8
|
%
|
|
$
|
0.14
|
|
|
|
|
Unconsolidated
(4)
|
|
31
|
|
|
79,487
|
|
|
3.4
|
|
|
62.91
|
|
|
66.18
|
|
|
(3.27
|
)
|
|
(4.9
|
)%
|
|
(0.1
|
)%
|
|
0.46
|
|
|||||
Total Under 10k sf
|
|
105
|
|
|
241,822
|
|
|
3.3
|
|
|
$
|
55.67
|
|
|
$
|
56.12
|
|
|
$
|
(0.45
|
)
|
|
(0.8
|
)%
|
|
4.7
|
%
|
|
$
|
0.25
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Over 10k sf
|
|
Consolidated
|
|
10
|
|
|
281,432
|
|
|
5.5
|
|
|
$
|
21.49
|
|
|
$
|
20.34
|
|
|
$
|
1.15
|
|
|
5.7
|
%
|
|
15.8
|
%
|
|
$
|
1.29
|
|
|
|
|
Unconsolidated
(4)
|
|
1
|
|
|
11,306
|
|
|
1.0
|
|
|
14.15
|
|
|
25.72
|
|
|
(11.57
|
)
|
|
(45.0
|
)%
|
|
(45.0
|
)%
|
|
—
|
|
|||||
Total Over 10k sf
|
|
11
|
|
|
292,738
|
|
|
5.3
|
|
|
$
|
21.21
|
|
|
$
|
20.55
|
|
|
$
|
0.66
|
|
|
3.2
|
%
|
|
12.3
|
%
|
|
$
|
1.28
|
|
|||
Total Fixed Rent
|
|
116
|
|
|
534,560
|
|
|
4.4
|
|
|
$
|
36.80
|
|
|
$
|
36.64
|
|
|
$
|
0.16
|
|
|
0.4
|
%
|
|
7.0
|
%
|
|
$
|
0.93
|
|
|||
Percentage in Lieu
|
|
Consolidated
|
|
42
|
|
|
115,198
|
|
|
1.5
|
|
|
$
|
38.04
|
|
|
$
|
46.40
|
|
|
$
|
(8.36
|
)
|
|
(18.0
|
)%
|
|
n/a
|
|
|
$
|
—
|
|
|
Total Renewal Leases
(5)
|
|
158
|
|
|
649,758
|
|
|
3.9
|
|
|
$
|
37.02
|
|
|
$
|
38.37
|
|
|
$
|
(1.35
|
)
|
|
(3.5
|
)%
|
|
7.0
|
%
|
|
$
|
0.87
|
|
|||
Total Non Anchor
|
|
261
|
|
|
1,288,962
|
|
|
6.4
|
|
|
$
|
35.09
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Anchor
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
New Leases
|
|
|
|
1
|
|
|
41,883
|
|
|
10.0
|
|
|
$
|
16.38
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
$
|
9.17
|
|
|||
Renewal Leases
|
|
Consolidated
|
|
4
|
|
|
512,858
|
|
|
5.6
|
|
|
$
|
3.28
|
|
|
$
|
3.36
|
|
|
$
|
(0.08
|
)
|
|
(2.4
|
)%
|
|
n/a
|
|
|
$
|
—
|
|
|
Total
|
|
|
|
5
|
|
|
554,741
|
|
|
6.5
|
|
|
$
|
4.27
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Initial gross rent renewal spread is computed by comparing the initial rent psf in the new lease to the final rent psf amount in the expiring lease. For purposes of this computation, the rent amount includes minimum rent, 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 psf over the new lease term to the final rent psf 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.
|
(5)
|
Includes 7 leases and 11,102 square feet of GLA with respect to tenants whose leases were restructured and extended following a bankruptcy filing. Excluding those leases, the initial gross rent spread was 0.4% for leases under 10,000 square feet and (2.6%) for all non anchor leases. Excluding these leases, the average rent spreads were 6.1% for leases under 10,000 square feet and 8.1% for all non anchor leases.
|
|
|
Three Months Ended
September 30, |
|
% Change
2017 to 2018 |
|
Nine Months Ended
September 30, |
|
% Change
2017 to 2018 |
|
||||||||||||||
(in thousands of dollars)
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
||||||||||||
Real estate revenue
|
|
$
|
86,389
|
|
|
$
|
86,719
|
|
|
—
|
%
|
|
$
|
262,904
|
|
|
$
|
263,553
|
|
|
—
|
%
|
|
Property operating expenses
|
|
(34,700
|
)
|
|
(33,303
|
)
|
|
4
|
%
|
|
(105,464
|
)
|
|
(105,509
|
)
|
|
—
|
%
|
|
||||
Other income
|
|
1,714
|
|
|
2,492
|
|
|
(31
|
)%
|
|
3,454
|
|
|
4,172
|
|
|
(17
|
)%
|
|
||||
Depreciation and amortization
|
|
(33,119
|
)
|
|
(29,966
|
)
|
|
11
|
%
|
|
(100,505
|
)
|
|
(94,652
|
)
|
|
6
|
%
|
|
||||
General and administrative expenses
|
|
(8,441
|
)
|
|
(8,288
|
)
|
|
2
|
%
|
|
(27,969
|
)
|
|
(26,561
|
)
|
|
5
|
%
|
|
||||
Provision for employee separation expense
|
|
(561
|
)
|
|
—
|
|
|
—
|
%
|
|
(956
|
)
|
|
(1,053
|
)
|
|
(9
|
)%
|
|
||||
Project costs and other expenses
|
|
(214
|
)
|
|
(150
|
)
|
|
43
|
%
|
|
(465
|
)
|
|
(547
|
)
|
|
(15
|
)%
|
|
||||
Interest expense, net
|
|
(15,181
|
)
|
|
(14,342
|
)
|
|
6
|
%
|
|
(46,064
|
)
|
|
(44,098
|
)
|
|
4
|
%
|
|
||||
Impairment of assets
|
|
—
|
|
|
(1,825
|
)
|
|
(100
|
)%
|
|
(34,286
|
)
|
|
(55,742
|
)
|
|
(38
|
)%
|
|
||||
Equity in income of partnerships
|
|
2,477
|
|
|
4,254
|
|
|
(42
|
)%
|
|
8,186
|
|
|
12,144
|
|
|
(33
|
)%
|
|
||||
Gain on sale of real estate by equity method investee
|
|
—
|
|
|
6,718
|
|
|
(100
|
)%
|
|
2,773
|
|
|
6,718
|
|
|
(59
|
)%
|
|
||||
Gains (adjustment to gains) on sales of interests in non operating real estate
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
(25
|
)
|
|
486
|
|
|
(105
|
)%
|
|
||||
(Losses) gains on sales of interests in real estate, net
|
|
—
|
|
|
(9
|
)
|
|
(100
|
)%
|
|
748
|
|
|
(374
|
)
|
|
(300
|
)%
|
|
||||
Net (loss) income
|
|
$
|
(1,636
|
)
|
|
$
|
12,300
|
|
|
(113
|
)%
|
|
$
|
(37,669
|
)
|
|
$
|
(41,463
|
)
|
|
(9
|
)%
|
|
•
|
a decrease of $1.8 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 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; and
|
•
|
a decrease of $0.3 million in same store utility reimbursements due to a decrease in electric consumption, partially offset by slightly higher electric billing rates as set by the Public Utility Commission; partially offset by
|
•
|
an increase of $1.3 million in same store real estate tax reimbursements. The three months ended September 30, 2017 were
|
•
|
an increase of $0.7 million in same store base rent due to $1.2 million from net new store openings over the previous twelve months, partially offset by a $0.3 million decrease related to tenant bankruptcies in 2017 and 2018, as well as a $0.2 million decrease related to co-tenancy concessions due to anchor closings; and
|
•
|
an increase of $0.3 million in same store other property revenue due to an increase corporate sponsorship revenue.
|
•
|
a decrease of $8.4 million in real estate revenue related to properties sold in 2017; and
|
•
|
a decrease of $1.3 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; partially offset by
|
•
|
an increase of $4.9 million in same store lease termination revenue, including $7.1 million from the termination of leases with three tenants during the nine months ended September 30, 2018, partially offset by $2.1 million received from three tenants during the nine months ended September 30, 2017;
|
•
|
an increase of $2.2 million in same store base rent due to $3.8 million from net new store openings over the previous twelve months, partially offset by a $0.9 million decrease related to tenant bankruptcies in 2017 and 2018, as well as a $0.7 million decrease related to co-tenancy concessions due to anchor closings;
|
•
|
an increase of $1.8 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. Also, the nine months ended September 30, 2017 were impacted by a successful real estate tax appeal at one of our properties resulting in lower real estate tax expense and a corresponding decrease in real estate tax reimbursements; and
|
•
|
an increase of $0.4 million in same store other property revenue due to an increase in corporate sponsorship revenue.
|
•
|
an increase of $3.4 million in same store real estate tax expense. The three month period ended September 30, 2017 was favorably impacted by a successful real estate tax appeal at one of our properties resulting in lower real estate tax expense; partially offset by
|
•
|
a decrease of $1.0 million in property operating expenses related to properties sold in 2017;
|
•
|
a decrease of $0.7 million in same store common area maintenance expense, including a decrease of $0.6 million in housekeeping, maintenance and loss prevention expense due to negotiated rate reductions with the service providers; and
|
•
|
a decrease of $0.4 million in same store other property expenses, including a $0.2 million decrease in bad debt expense and a $0.2 million decrease in personnel costs.
|
•
|
a decrease of $4.0 million in property operating expenses related to properties sold in 2017; and
|
•
|
a decrease of $1.7 million in same store common area maintenance expense, including a $1.3 million decrease in housekeeping, maintenance and loss prevention expense due to negotiated rate reductions with the service providers and a $1.0 million decrease in personnel costs, partially offset by a $0.4 million increase in snow removal expense due to higher snow fall amounts across the Mid-Atlantic States, where many of our properties are located; partially offset by
|
•
|
an increase of $5.3 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, as well as a successful real estate tax appeal at one of our properties resulting in lower real estate tax expense during the nine months ended September 30, 2017; and
|
•
|
an increase of $0.4 million in same store other property expenses, including a $0.7 million increase in bad debt expense due to increased reserves for bankruptcy and other troubled tenants.
|
•
|
an increase of $3.2 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.
|
•
|
an increase of $7.4 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 $1.5 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, under redevelopment or designated as non-core 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
|
•
|
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
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands of dollars)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net (loss) income
|
$
|
(1,636
|
)
|
|
$
|
12,300
|
|
|
$
|
(37,669
|
)
|
|
$
|
(41,463
|
)
|
Other income
|
(1,714
|
)
|
|
(2,492
|
)
|
|
(3,454
|
)
|
|
(4,172
|
)
|
||||
Depreciation and amortization
|
33,119
|
|
|
29,966
|
|
|
100,505
|
|
|
94,652
|
|
||||
General and administrative expenses
|
8,441
|
|
|
8,288
|
|
|
27,969
|
|
|
26,561
|
|
||||
Employee separation expenses
|
561
|
|
|
—
|
|
|
956
|
|
|
1,053
|
|
||||
Project costs and other expenses
|
214
|
|
|
150
|
|
|
465
|
|
|
547
|
|
||||
Interest expense, net
|
15,181
|
|
|
14,342
|
|
|
46,064
|
|
|
44,098
|
|
||||
Impairment of assets
|
—
|
|
|
1,825
|
|
|
34,286
|
|
|
55,742
|
|
||||
Equity in income of partnerships
|
(2,477
|
)
|
|
(4,254
|
)
|
|
(8,186
|
)
|
|
(12,144
|
)
|
||||
Gain on sale of real estate by equity method investee
|
—
|
|
|
(6,718
|
)
|
|
(2,773
|
)
|
|
(6,718
|
)
|
||||
(Adjustment to gains) gains on sales of interest in non operating real estate
|
—
|
|
|
—
|
|
|
25
|
|
|
(486
|
)
|
||||
Losses (gains) on sales of interests in real estate, net
|
—
|
|
|
9
|
|
|
(748
|
)
|
|
374
|
|
||||
NOI from consolidated properties
|
$
|
51,689
|
|
|
$
|
53,416
|
|
|
$
|
157,440
|
|
|
$
|
158,044
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands of dollars)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Equity in income of partnerships
|
$
|
2,477
|
|
|
$
|
4,254
|
|
|
$
|
8,186
|
|
|
$
|
12,144
|
|
Other income
|
(12
|
)
|
|
(20
|
)
|
|
(35
|
)
|
|
(20
|
)
|
||||
Depreciation and amortization
|
2,132
|
|
|
2,902
|
|
|
6,518
|
|
|
8,493
|
|
||||
Interest and other expenses
|
2,713
|
|
|
2,566
|
|
|
8,090
|
|
|
7,683
|
|
||||
NOI from equity method investments at ownership share
|
$
|
7,310
|
|
|
$
|
9,702
|
|
|
$
|
22,759
|
|
|
$
|
28,300
|
|
|
|
Same Store
|
|
Non Same Store
|
|
Total (non GAAP)
|
||||||||||||||||||
(in thousands of dollars)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
NOI from consolidated properties
|
|
$
|
49,925
|
|
|
$
|
50,858
|
|
|
$
|
1,764
|
|
|
$
|
2,558
|
|
|
$
|
51,689
|
|
|
$
|
53,416
|
|
NOI from equity method investments at ownership share
|
|
7,351
|
|
|
7,604
|
|
|
(41
|
)
|
|
2,098
|
|
|
7,310
|
|
|
9,702
|
|
||||||
Total NOI
|
|
57,276
|
|
|
58,462
|
|
|
1,723
|
|
|
4,656
|
|
|
58,999
|
|
|
63,118
|
|
||||||
Less: lease termination revenue
|
|
252
|
|
|
282
|
|
|
14
|
|
|
—
|
|
|
266
|
|
|
282
|
|
||||||
Total NOI excluding lease termination revenue
|
|
$
|
57,024
|
|
|
$
|
58,180
|
|
|
$
|
1,709
|
|
|
$
|
4,656
|
|
|
$
|
58,733
|
|
|
$
|
62,836
|
|
|
|
Same Store
|
|
Non Same Store
|
|
Total (non GAAP)
|
||||||||||||||||||
(in thousands of dollars)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
NOI from consolidated properties
|
|
$
|
152,330
|
|
|
$
|
148,591
|
|
|
$
|
5,110
|
|
|
$
|
9,453
|
|
|
$
|
157,440
|
|
|
$
|
158,044
|
|
NOI from equity method investments at ownership share
|
|
22,280
|
|
|
22,340
|
|
|
479
|
|
|
5,960
|
|
|
22,759
|
|
|
28,300
|
|
||||||
Total NOI
|
|
174,610
|
|
|
170,931
|
|
|
5,589
|
|
|
15,413
|
|
|
180,199
|
|
|
186,344
|
|
||||||
Less: lease termination revenue
|
|
7,608
|
|
|
2,629
|
|
|
35
|
|
|
71
|
|
|
7,643
|
|
|
2,700
|
|
||||||
Total NOI excluding lease termination revenue
|
|
$
|
167,002
|
|
|
$
|
168,302
|
|
|
$
|
5,554
|
|
|
$
|
15,342
|
|
|
$
|
172,556
|
|
|
$
|
183,644
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands, except per share amounts)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net (loss) income
|
$
|
(1,636
|
)
|
|
$
|
12,300
|
|
|
$
|
(37,669
|
)
|
|
$
|
(41,463
|
)
|
Depreciation and amortization on real estate:
|
|
|
|
|
|
|
|
||||||||
Consolidated properties
|
32,764
|
|
|
29,589
|
|
|
99,428
|
|
|
93,529
|
|
||||
PREIT’s share of equity method investments
|
2,132
|
|
|
2,902
|
|
|
6,518
|
|
|
8,493
|
|
||||
Gain on sale of real estate by equity method investee
|
—
|
|
|
(6,718
|
)
|
|
(2,773
|
)
|
|
(6,718
|
)
|
||||
Losses (gains) losses on sales of interests in real estate, net
|
—
|
|
|
9
|
|
|
(748
|
)
|
|
374
|
|
||||
Impairment of assets
|
—
|
|
|
1,825
|
|
|
34,286
|
|
|
55,742
|
|
||||
Preferred share dividends
|
(6,843
|
)
|
|
(7,525
|
)
|
|
(20,531
|
)
|
|
(20,797
|
)
|
||||
Funds from operations attributable to common shareholders and OP Unit holders
|
26,417
|
|
|
32,382
|
|
|
78,511
|
|
|
89,160
|
|
||||
Accelerated amortization of financing costs
|
—
|
|
|
—
|
|
|
363
|
|
|
—
|
|
||||
Provision for employee separation expense
|
561
|
|
|
—
|
|
|
956
|
|
|
1,053
|
|
||||
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders
|
$
|
26,978
|
|
|
$
|
32,382
|
|
|
$
|
79,830
|
|
|
$
|
90,213
|
|
Funds from operations attributable to common shareholders and OP Unit holders per diluted share and OP Unit
|
$
|
0.34
|
|
|
$
|
0.42
|
|
|
$
|
1.00
|
|
|
$
|
1.15
|
|
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders per diluted share and OP Unit
|
$
|
0.35
|
|
|
$
|
0.42
|
|
|
$
|
1.02
|
|
|
$
|
1.16
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares outstanding
|
69,803
|
|
|
69,424
|
|
|
69,718
|
|
|
69,319
|
|
||||
Weighted average effect of full conversion of OP Units
|
8,273
|
|
|
8,291
|
|
|
8,273
|
|
|
8,303
|
|
||||
Effect of common share equivalents
|
38
|
|
|
—
|
|
|
272
|
|
|
51
|
|
||||
Total weighted average shares outstanding, including OP Units
|
78,114
|
|
|
77,715
|
|
|
78,263
|
|
|
77,673
|
|
•
|
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
|
$
|
97,365
|
|
|
$
|
4,270
|
|
|
$
|
39,308
|
|
|
$
|
35,082
|
|
|
$
|
18,705
|
|
Balloon payments
|
958,042
|
|
|
—
|
|
|
27,161
|
|
|
599,489
|
|
|
331,392
|
|
|||||
Total
|
$
|
1,055,407
|
|
|
$
|
4,270
|
|
|
$
|
66,469
|
|
|
$
|
634,571
|
|
|
$
|
350,097
|
|
Less: unamortized debt issuance costs
|
3,269
|
|
|
|
|
|
|
|
|
|
|||||||||
Carrying value of mortgage notes payable
|
$
|
1,052,138
|
|
|
|
|
|
|
|
|
|
(in thousands of dollars)
|
Total
|
|
Remainder of 2018
|
|
2019-2020
|
|
2021-2022
|
|
Thereafter
|
||||||||||
Mortgage loan principal payments
|
$
|
1,055,407
|
|
|
$
|
4,270
|
|
|
$
|
66,469
|
|
|
$
|
634,571
|
|
|
$
|
350,097
|
|
Term Loans
|
550,000
|
|
|
—
|
|
|
—
|
|
|
250,000
|
|
|
300,000
|
|
|||||
2018 Revolving Facility
|
37,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,000
|
|
|||||
Interest on indebtedness
(1) (2)
|
274,092
|
|
|
31,430
|
|
|
127,551
|
|
|
86,535
|
|
|
28,576
|
|
|||||
Operating leases
|
2,904
|
|
|
513
|
|
|
2,165
|
|
|
226
|
|
|
—
|
|
|||||
Ground leases
|
41,575
|
|
|
296
|
|
|
2,568
|
|
|
3,168
|
|
|
35,543
|
|
|||||
Development and redevelopment commitments
(3)
|
127,970
|
|
|
72,889
|
|
|
55,081
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
2,088,948
|
|
|
$
|
109,398
|
|
|
$
|
253,834
|
|
|
$
|
974,500
|
|
|
$
|
751,216
|
|
•
|
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 ended December 31, |
Principal
Payments
|
|
Weighted
Average
Interest Rate
(1)
|
|
Principal
Payments
|
|
Weighted
Average
Interest Rate
(1)
|
||||||
2018
|
$
|
3,990
|
|
|
4.25
|
%
|
|
$
|
280
|
|
|
4.10
|
%
|
2019
|
17,837
|
|
|
4.25
|
%
|
|
1,680
|
|
(2)
|
4.10
|
%
|
||
2020
|
45,272
|
|
|
5.03
|
%
|
|
1,680
|
|
(2)
|
4.10
|
%
|
||
2021
|
18,602
|
|
|
4.20
|
%
|
|
440,902
|
|
(2)
|
3.80
|
%
|
||
2022 and thereafter
|
708,253
|
|
|
4.21
|
%
|
|
403,911
|
|
|
3.70
|
%
|
(1)
|
Based on the weighted average interest rates in effect as of
September 30, 2018
.
|
(2)
|
Includes Term Loan debt balance of $550.0 million with a weighted average interest rate of
3.70%
as of
September 30, 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
|
||||||
July 1 - July 31, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
August 1 - August 31, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
September 1 - September 30, 2018
|
6,994
|
|
|
9.76
|
|
|
—
|
|
|
—
|
|
||
Total
|
6,994
|
|
|
$
|
9.76
|
|
|
—
|
|
|
$
|
—
|
|
|
|
10.1*
|
|
|
|
31.1*
|
|
|
|
31.2*
|
|
|
|
32.1**
|
|
|
|
32.2**
|
|
|
|
101*
|
The following financial information from the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2018 is formatted in XBRL interactive data files: (i) Consolidated Statements of Operations for the three and nine months ended September 30, 2018 and 2017; (ii) Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2018 and 2017; (iii) Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017; (iv) Consolidated Statement of Equity for the nine months ended September 30, 2018; (v) Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 and 2017; and (vi) Notes to Unaudited Consolidated Financial Statements.
|
|
|
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
|
|
Date:
|
November 1, 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
|
Re:
|
Severance Agreement and General Release
|
UNDERSTOOD AND AGREED,
INTENDING TO BE LEGALLY BOUND:
|
/s/ Jon Bell
|
Jon Bell
|
9/7/2018
|
Date
|
/s/ Theresa A. Bell
|
Witness
|
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
|