Well-positioned boxes in market-dominant locations generating significant tenant interest
PHILADELPHIA, PA January 5, 2017 – PREIT (NYSE: PEI) today commented on the three Macy’s store closings in its ongoing portfolio (Moorestown, Plymouth Meeting and Valley View Malls):
Demand for the Macy’s spaces is robust with new opportunities situated in desirable locations in quality, high barrier-to-entry markets,” said PREIT CEO Joseph F. Coradino. “We are in the process of finalizing transactions to control the real estate in two of the three locations and are negotiating terms on the third. At Valley View Mall, we are in advanced discussions with a traditional department store and for Moorestown and Plymouth Meeting Malls, we are negotiating LOIs for replacement stores and anticipate making detailed announcements in the near future.
Moorestown Mall has undergone a dramatic transformation over the past few years generating strong results, including an increase in traffic of over 10% during the 2016 holiday shopping season. The mall has recently welcomed new H&M and Rue 21 stores, regionally renowned Catelli Duo restaurant and new prototype Victoria’s Secret and Bath & Body Works stores.
Plymouth Meeting Mall is an exceptional real estate location in the Philadelphia market with over 90 million cars passing by annually. It has become a dining, entertainment and lifestyle destination and this presents a great opportunity to replace an underperforming department store with more exciting destination tenants. The mall’s trade area is expected to expand with the addition of the country’s 9th LEGOLAND Discovery Center offering a first-of-its-kind experience this Spring.
Valley View Mall in LaCrosse Wisconsin is a market-dominant property that draws from a 50 mile trade area, boasts a strong lineup of national tenants, has historically strong occupancy levels and sales of approximately $400 per square foot as of September 30, 2016.
Beaver Valley Mall is under agreement of sale and is expected to close before the end of January.
“We are particularly pleased that the announced Macy’s closings at competitive malls in Massachusetts, Virginia and Greater Philadelphia will serve to further strengthen our premier assets with existing Macy’s stores located in these markets including: Cherry Hill Mall, Willow Grove Park, Springfield Town Center and Dartmouth Mall,” Coradino continued. “To summarize, replacing these Macy’s stores is an opportunity to dramatically improve sales, traffic, NOI and earnings.”
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