Completion of disposition program, totaling 16 underperforming malls, reveals transformed
portfolio with growth opportunities
Philadelphia, PA, January 17, 2017 – PREIT (NYSE: PEI) today announced it has completed the sales of its two remaining non-core malls, Beaver Valley and Crossroads Malls, for a combined purchase price of $49 million. Since January 2013, the Company has methodically executed on the sale of 16 lower productivity malls as well as other non-core properties, generating $720 million in gross proceeds. The foundational principle in undertaking this portfolio re-shaping effort was to create a high quality portfolio that would be attractive to retailers, deliver strong operating results and create opportunities to grow the platform through reinvestment.
Highlighting the significance of this transformation effort and the profound impact on the portfolio:
- Portfolio average sales have improved by 25% from $372 as of December 31, 2012 to $463 as of November 30, 2016;
- NOI generated from Premier malls accounts for approximately 46% of PREIT’s mall NOI compared to 34% in 2012. It is noteworthy that the NOI contribution from Premier malls is expected to continue to increase as Springfield Town Center reaches stabilization and the redevelopment of Fashion Outlets of Philadelphia comes on line.
- The Company has consolidated its operating footprint to core, densely populated markets having exited smaller markets in West Virginia, Alabama, western Pennsylvania and Florida.
- The Company has transformed its anchor store profile by reducing its count of certain department stores as follows:
- Sears – from 27 in 2012 to 10 following the recently announced recapture of 3 stores
- Macy’s – from 24 in 2012 to 15 following the recently announced store closures
Details on the two properties sold follow:
- Beaver Valley Mall in Monaca, Pa., which is anchored by Boscov’s, JCPenney and DICK’S Sporting Goods was sold for $24.2 million.
- Crossroads Mall in Beckley, WV., which is anchored by Belk, DICK’S Sporting Goods, JCPenney and Sears was sold for $24.8 million.
We continue to believe that quality retail properties will be a critical consumer touchpoint in the omni-channel retail environment. Our disposition and remerchandising efforts put us well in front of the changing retail landscape culminating in a portfolio of properties that are extremely well-positioned in densely populated markets that is attractive to retailers,” said Joseph Coradino, CEO of PREIT. “With this phase of our transformation behind us, we are now in a position to capitalize on our value-enhancing redevelopment, remerchandising and anchor replacement programs that we expect will lead us to $500 per square foot in sales, while delivering NOI and NAV growth and creating shareholder value.
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 contains 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 PREIT’s 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. Important factors that might cause future events, achievements or results to differ materially from those expressed or implied by PREIT’s forward-looking statements include those discussed in its Annual Report on Form 10-K for the year ended December 31, 2015 in the section entitled “Item 1A. Risk Factors.” PREIT does not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.
SVP, Corporate Communications and Investor Relations