PREIT Makes Further Improvements to Its Balance Sheet
PHILADELPHIA--(BUSINESS WIRE)-- Pennsylvania Real Estate Investment Trust (NYS: PEI) has completed the refinancing of Dartmouth Mall in Dartmouth, MA and paid off the mortgage loan balance on Moorestown Mall in Moorestown, NJ.
The amount of the new 10-year loan on Dartmouth Mall is $67.0 million, which replaces a $58.0 million loan and results in proceeds of approximately $9.0 million. The interest rate on the new mortgage loan is 3.97%, representing a decrease of 98 basis points from the previous rate. The Company also paid off the $53.2 million mortgage loan balance on Moorestown Mall, which is now unencumbered as redevelopment of the property continues. This loan was set to mature in June 2013.
"Our recent capital markets activities highlight our ability to improve PREIT's balance sheet as we drive our cost of capital lower, unencumber assets and extend our maturity dates," said Joseph Coradino, Chief Executive Officer of PREIT. "We are pleased to have completed transactions for all of our 2013 maturities that do not otherwise have extension options at favorable terms, before the conclusion of the first quarter."
Dartmouth Mall is a 671,000 square foot mall in Dartmouth, MA anchored by Sears, jcpenney, and Macy's with sales per square foot of $425 as of December 31, 2012. Moorestown Mall is a 1,000,000 square foot mall in Moorestown, NJ anchored by Sears, Boscov's, Lord & Taylor and Macy's with sales per square foot of $357 as of December 31, 2012. Moorestown Mall is currently in the midst of a redevelopment that will bring an expanded and upgraded movie theater, new restaurants and a redefined retail component. The restaurants will include Marc Vetri's Osteria, Firebirds Wood Fired Grill and up to three additional full service establishments.
Year to date, the Company has completed $213.1 million of property-level financings yielding approximately $18.7 million in proceeds at an average interest rate of 3.93%, a 150 basis point reduction on those mortgages.
About Pennsylvania Real Estate Investment Trust
Pennsylvania Real Estate Investment Trust, founded in 1960 and one of the first equity REITs in the U.S., has a primary investment focus on retail shopping malls. Currently, the Company's portfolio of 46 properties comprises 36 shopping malls, seven community and power centers, and three development properties. The Company's properties are located in 13 states in the eastern half of the United States, primarily in the Mid-Atlantic region. The operating retail properties have approximately 31.0 million total square feet of space. PREIT, headquartered in Philadelphia, Pennsylvania, is publicly traded on the NYSE under the symbol PEI. The Company's website can be found at www.preit.com.
Forward Looking Statements
This press release contains certain "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 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 and stated value of preferred shares and our high leverage ratio; constraining leverage, interest and tangible net worth covenants under our 2010 Credit Facility; potential losses on impairment of certain long-lived assets, such as real estate, or of intangible assets, such as goodwill; potential losses on impairment of assets that we might be required to record in connection with any dispositions of assets; recent 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 short- and long-term liquidity position; current economic conditions and their effect on employment 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; general economic, financial and political conditions, including credit and capital 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 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; risks relating to development and redevelopment activities; 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; potential dilution from any capital raising transactions; possible environmental liabilities; our ability to obtain insurance at a reasonable cost; and existence of complex regulations, including those relating to our status as a REIT, and the adverse consequences if we were to fail to qualify as a REIT. 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 the section of our Annual Report on Form 10-K 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.
Pennsylvania Real Estate Investment Trust
Robert McCadden, 215-875-0735
EVP & CFO
Heather Crowell, 215-875-0735
VP, Corporate Communications and Investor Relations
KEYWORDS: United States North America Massachusetts New Jersey Pennsylvania
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