PREIT Continues Portfolio Quality Improvement Program with Agreements of Sale
Washington Crown Center and remaining office building at Voorhees Town Center under agreement;
Beaver Valley Mall being marketed for sale
PHILADELPHIA PA, July 13, 2016 – PREIT (NYSE: PEI) announced that it continues to drive the quality of its portfolio to new heights having executed agreements of sale and received non-refundable deposits for the sale of Washington Crown Center in Washington, PA and the office building it retained at Voorhees Town Center. Details including pricing and proceeds will be made available upon closing. The transactions are subject to customary closing conditions and are expected to close before the end of the third quarter of 2016.
The company also continues to press forward with optimizing its property portfolio and has decided to market Beaver Valley Mall for sale. In addition to this, PREIT continues to focus on remerchandising and redevelopment opportunities that maximize the appeal to shoppers. This effort includes introducing sought after and new-to-portfolio tenants, proactively replacing department stores and capitalizing on opportunities to redevelop high quality assets to drive future growth.
We are looking toward our future with optimism as we continue to transform our platform with our fourteenth lower-productivity mall now under contract,” said Joseph F. Coradino, CEO of PREIT. “It has been a top priority for PREIT to improve our portfolio so we can deliver strong operating results and allocate capital into our higher-quality assets that are expected to translate into superior risk-adjusted returns for our shareholders.
Washington Crown Center, located in Washington, PA, is anchored by Bon-Ton, Macy’s, Gander Mountain and Sears. As of March 31, 2016, the property generated sales per square foot of $318 and non-anchor occupancy of 87.9%.
The decision to market Beaver Valley Mall was made following the pivotal announcement from Shell Chemical that it is moving forward with development of a multi-billion dollar petrochemical complex just a mile and a half from the mall, which will bring several thousand jobs to the region. This development presents an opportunity to maximize the value of the property upon sale while preserving capital for other investments.
PREIT, through continued execution of its robust transformation agenda, has generated proceeds in excess of $645 million and has driven over 20% sales growth since June 2012.
PREIT (NYSE:PEI) is a publicly traded real estate investment trust specializing in the ownership and management of differentiated shopping malls. Headquartered in Philadelphia, Pennsylvania, the company owns and operates over 25 million square feet of retail space in the eastern half of the United States with concentration in the Mid-Atlantic region’s top MSAs. Since 2012, the company has driven a transformation guided by an emphasis on balance sheet strength, high-quality merchandising and disciplined capital expenditures. Additional information is available at www.preit.com, 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 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: our substantial debt, stated value of preferred shares and our high leverage ratio; constraining leverage, interest and tangible net worth covenants under our 2013 Revolving Facility, our 2014 Term Loans and our 2015 Term Loan; 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; changes to our corporate management team and any resulting modifications to our business strategies; 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 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; our short- and long-term liquidity position; current economic conditions and their effect on employment, 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; general economic, financial and political conditions, including credit market conditions, changes in interest rates or unemployment; changes in the retail industry, including consolidation and store closings, particularly among anchor tenants; the effects of online shopping and other uses of technology on our retail tenants; our ability to sell properties that we seek to dispose of or our ability to obtain estimated sale prices; 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; acts of violence at malls, including our properties, or at other similar spaces, and the potential effect on traffic and sales; increases in operating costs that cannot be passed on to tenants; risks relating to development and redevelopment activities which could be subject to delays or other risks and might not yield the returns we anticipate; 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; and potential dilution from any capital raising transactions. 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 in our most recent Annual Report on Form 10-K and in any subsequent Quarterly Report on Form 10-Q 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.