PREIT Board of Trustees Issues Response to Letter from “Concerned Shareholders”

PREIT (OTCQB: PRET) today issued a statement and letter in response to the July 6, 2023 letter from David Steinberg, Scott Bishins and Michael Mayer.

Statement from PREIT:

PREIT welcomes and values the opinions of all shareholders and is open to any input that may help advance the goals of the Company and its various stakeholders.  As noted during the Company’s Q1 2023 Earnings Call, work continues to address the upcoming maturity by pursuing all available alternatives, including refinancing, selling assets and engaging in discussions with lenders. In 2022, the Company sold assets generating over $113 million in gross proceeds and has applied these proceeds and excess cash from operations to pay down debt by over $157 million.  Earlier this year, we executed on the sale of Whole Foods at Plymouth Meeting Mall, which was completed in January.  Coupled with excess cash, this enabled us to pay down debt by $29 million through the end of March. We continue to pursue entitlements and approvals for the multifamily properties with the expectation to continue to move these to sale. 

The entire letter can be found below:
July 7, 2023

DLS Capital
Mr. Scott Bishins
Mr. Michael Meyer
Mr. David Steinberg

 

Re:     July 6, 2023 Letter to the Board of Trustees

Gentlemen:

This will serve as our response to your July 6, 2023 letter to the Board of Trustees.  In compliance with the Company’s Trust Agreement and Bylaws, the Common Stockholder Trustees were duly elected by a plurality vote of the Common Stockholders at the recently-concluded annual meeting.  Furthermore, the actions taken by the Board with respect to rejecting the tendered resignations pursuant to the Company’s guidelines fully comport with the Company’s governance documents, and the Board properly exercised its business judgement under the circumstances.  The actions you propose would destabilize and cause harm to the Company and would clearly not be in the best interests of the shareholders and other stakeholders.

Moreover, your frivolous assertions that the Board has not sufficiently pursued all strategic options available to it are without factual basis or legal foundation.  Indeed, the notion that anyone is “standing idly by” is utterly false and offensive.  As you well know and was disclosed to the public, PJT Partners, a premier global advisory-focused investment bank, with particular expertise in both real estate and restructuring, was retained in January 2022 to engage in a strategic and financial process to explore all opportunities to maximize shareholder value. Each of the assertions you make is false — PJT has in fact been robustly marketing the Company’s properties, vigorously pursuing strategic alternatives, seeking additional capital infusion for the Company, and otherwise exploring any available options.  As you are also aware, the Company was able to successfully extend its debt maturity for one year in December 2022, which afforded it additional time to pursue strategic options.  Nonetheless, this has been a very difficult time for mall owners due to constricted financial markets with rising interest rates impacting cap rates.  Indeed, your group has been in contact with PJT and the Company, but you have failed to produce any offer or sensible alternative to be pursued.

While your letter engages in name-calling and blame-casting as if there were some magic solution that everyone is ignoring, the reality is that, in order to manage the Company’s impending debt maturities and the difficult state of the real estate and financing markets, management, the Board and PJT have been vigorously exploring all strategic alternatives, which has been broadly disclosed by the Company.  Notwithstanding your highly inappropriate and baseless personal attacks, the Board will continue to fulfill its fiduciary duties and exercise prudent business judgment to maximize value for shareholders and all stakeholders.  All rights are reserved.

Sincerely,

Joseph F. Coradino, Chairman and CEO & Michael J. DeMarco, Lead Independent Trustee

 

CC: PREIT Board of Trustees

George J. Alburger, Jr.
JoAnne A. Epps
Kenneth B. Hart
Mark E. Pasquerilla
Charles P. Pizzi
John J. Roberts
Christopher Swann