Sears exposure reduced by 85% in five years
Aggressive and strategic remerchandising transforms properties into vibrant destinations for shopping, socializing, fun and community
Philadelphia, October 10, 2018 – PREIT (NYSE: PEI) outlined its proactive Sears replacement strategy, resulting in minimal exposure to the troubled department store, down from 27 stores in 2012 to just four active stores today when factoring in locations at lease with replacement tenants, those with non-recourse mortgage loans and one location with a significant portion of the space sub-leased by Sears to others. PREIT’s four stores compares to a Mall REIT peer average of over thirty stores.
Since 2017, PREIT has proactively replaced five Sears locations and has reached agreement to recapture a sixth store. As part of its overall anchor repositioning and remerchandising strategy, PREIT has diversified the tenant roster with unique and experiential concepts to reflect the new mall model and drive traffic and sales while improving the underlying tenant credit within the portfolio.
Just as we were proactive in disposing of lower-productivity malls, we have positioned ourselves well with minimal exposure to Sears in the event of potential material store closing event. As we look to redefine the mall experience, we are finding great success in replacing department stores with a variety of uses and experiences in line with the interests of today’s consumer. Our tireless effort to improve our portfolio continues and has laid the foundation for continued growth in traffic, sales and value for our shareholders.
Before and after photos of selected Sears and Kmart replacements help tell the story:
Exton Square – Exton, PA
Magnolia Mall – Florence, SC
Viewmont Mall – Scranton, PA
Plymouth Meeting Mall
|Five Below||Magnolia Mall|
|Studio Movie Grille||Willow Grove Park|
|Fitness||Edge Fitness||Plymouth Meeting Mall|
|One Life Fitness||Valley Mall|
|Sporting Goods/Recreation||DICK’s Sporting Goods||Viewmont Mall
Capital City Mall
Plymouth Meeting Mall
|Field & Stream||Viewmont Mall|
|Department Store||Belk||Valley Mall|
|Von Maur||Woodland Mall|
|Food and Dining||Primanti Bros||Capital City Mall|
|Fine Wine & Good Spirits||Capital City Mall|
|Whole Foods||Exton Square Mall|
PREIT (NYSE:PEI) is a publicly traded real estate investment trust that owns and manages quality properties in compelling markets. PREIT’s robust portfolio of carefully curated retail and lifestyle offerings mixed with destination dining and entertainment experiences are located primarily in the densely populated 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 that can be identified by the use of words such as “anticipate,” “believe,” “estimate,” “expect,” “project,” “intend,” “may” or similar expressions. 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 changes in the retail and real estate industries, including consolidation and store closings, particularly among anchor tenants; current economic conditions and the corresponding effects on tenant business performance, prospects, solvency and leasing decisions; our inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise; our ability to maintain and increase property occupancy, sales and rental rates; increases in operating costs that cannot be passed on to tenants; the effects of online shopping and other uses of technology on our retail tenants; risks related to our development and redevelopment activities, including delays, cost overruns and our inability to reach projected occupancy or rental rates; acts of violence at malls, including our properties, or at other similar spaces, and the potential effect on traffic and sales; our ability to sell properties that we seek to dispose of or our ability to obtain prices we seek; our substantial debt and the liquidation preference of our preferred shares and our high leverage ratio; our ability to refinance our existing indebtedness when it matures, on favorable terms or at all; our ability to raise capital, including through sales of properties or interests in properties and through the issuance of equity or equity-related securities if market conditions are favorable; and potential dilution from any capital raising transactions or other equity issuances.
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, 2017 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.
SVP, Strategy and Communications