Proactive store recaptures provides opportunity to enhance value and drive traffic at key properties
PHILADELPHIA, PA January 4, 2017 – PREIT (NYSE: PEI) released comments today on its proactive effort to replace Sears and the anticipated closures of three stores in its portfolio in 2017 (Capital City, Magnolia and Woodland Malls):
These store recaptures are an opportunity to continue to enhance the shopper experience, drive traffic and create value by executing on repositioning plans at these three market-dominant assets,” said PREIT CEO Joseph F. Coradino. “The Company has an executed lease with a fashion department store to replace Sears at Woodland Mall, providing a remarkable opportunity to enhance this premier property, and is finalizing lease documents with replacement tenants at Capital City and Magnolia Malls. The transactions are part of PREIT’s plan to continue upgrading its properties following our aggressive portfolio disposition and repositioning program which has created a quality platform that is more compelling to retailers.
Since 2012, PREIT has made a concerted effort to reduce its exposure to select department stores, understanding that department store rationalization is a net positive for our industry. Through dispositions and store recaptures, PREIT has reduced the number of Sears and KMart stores in its portfolio from 27 to 11 following this announcement.
At Viewmont Mall, in Scranton, PA, construction is underway for DICK’S Sporting Goods, Field & Stream and HomeGoods to replace the former Sears store in 2017 and at Exton Square in Chester County, PA, construction continues on Whole Foods which will replace a former K Mart.
PREIT (NYSE:PEI) is a publicly traded real estate investment trust that owns and manages quality properties in compelling markets. PREIT’s 25 million square feet of carefully curated retail and lifestyle offerings mixed with destination dining and entertainment experiences are located primarily in the eastern U.S. with concentrations in the mid-Atlantic’s top MSAs. Since 2012, the company has driven a transformation guided by an emphasis on portfolio quality and balance sheet strength driven by disciplined capital expenditures. Additional information is available at www.preit.com or on Twitter or LinkedIn.
Forward Looking Statements
This press release, together with other statements and information publicly disseminated by us, contain certain “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans, strategies, anticipated events, trends and other matters that are not historical facts. These forward-looking statements reflect our current views about future events, achievements or results and are subject to risks, uncertainties and changes in circumstances that might cause future events, achievements or results to differ materially from those expressed or implied by the forward-looking statements. In particular, our business might be materially and adversely affected by uncertainties affecting real estate businesses generally as well as the following, among other factors:
Changes in the retail industry, including consolidation and store closings, particularly among anchor tenants; our ability to maintain and increase property occupancy, sales and rental rates, in light of the relatively high number of leases that have expired or are expiring in the next two years; increases in operating costs that cannot be passed on to tenants; current economic conditions and the state of employment growth and consumer confidence and spending, and the corresponding effects on tenant business performance, prospects, solvency and leasing decisions and on our cash flows, and the value and potential impairment of our properties; our ability to sell properties that we seek to dispose of or our ability to obtain estimated sale prices; potential losses on impairment of certain long-lived assets, such as real estate, or of intangible assets, such as goodwill, including such losses that we might be required to record in connection with any dispositions of assets; risks relating to development and redevelopment activities; our ability to identify and execute on suitable acquisition opportunities and to integrate acquired properties into our portfolio; our partnerships and joint ventures with third parties to acquire or develop properties; concentration of our properties in the Mid-Atlantic region; changes in local market conditions, such as the supply of or demand for retail space, or other competitive factors; changes to our corporate management team and any resulting modifications to our business strategies; the effects of online shopping and other uses of technology on our retail tenants; acts of violence at malls, including our properties, or at other similar spaces, and the potential effect on traffic and sales; our substantial debt and stated value of preferred shares and our high leverage ratio; constraining leverage, unencumbered debt yield, interest and tangible net worth covenants under our Credit Agreements; our ability to refinance our existing indebtedness when it matures, on favorable terms or at all; our ability to raise capital, including through the issuance of equity or equity-related securities if market conditions are favorable, through joint ventures or other partnerships, through sales of properties or interests in properties, or through other actions; our short and long-term liquidity position; potential dilution from any capital raising transactions or other equity issuances; and general economic, financial and political conditions, including credit and capital market conditions, changes in interest rates or unemployment.
Additional factors that might cause future events, achievements or results to differ materially from those expressed or implied by our forward-looking statements include those discussed herein and in our Annual Report on Form 10-K for the year ended December 31, 2015 in the section entitled “Item 1A. Risk Factors.” We do not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.
CONTACT: AT THE COMPANY
SVP, Corporate Communications and Investor Relations