Item 1.01. Entry into a Material Definitive Agreement.
Purchase Agreement
On September 7, 2017,
Pennsylvania Real Estate Investment Trust (the Company) entered into a Purchase Agreement (the Purchase Agreement) by and among the Company, PREIT Associates, L.P., a Delaware limited partnership and the Companys
operating partnership (the Operating Partnership), and Wells Fargo Securities, LLC, as representative of the several underwriters named therein (the Underwriters), pursuant to which the Company agreed to offer and sell
4,800,000 shares of its 6.875% Series D Cumulative Redeemable Perpetual Preferred Shares, par value $0.01 per share (the Series D Preferred Shares). The Series D Preferred Shares were offered to the public at a price of $25.00 per share,
and were offered to the Underwriters at a price of $24.2125 per share. Pursuant to the terms of the Purchase Agreement, the Company granted the Underwriters a 30-day option to purchase up to an additional 720,000 Series D Preferred Shares. The
closing of the offering occurred on September 11, 2017.
The Company estimates that the net proceeds from this offering, after deducting underwriting
discounts and commissions and estimated offering expenses payable by the Company, will be approximately $115.8 million. The Company intends to use the net proceeds from the offering to redeem all of the Companys outstanding 8.25% Series A
Cumulative Redeemable Perpetual Preferred Shares (Series A Preferred Shares) with an aggregate liquidation preference of approximately $115.0 million and to use any remaining proceeds for general corporate purposes.
The Company made certain customary representations, warranties and covenants concerning the Company and the registration statement in the Purchase Agreement
and also agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. The closing of the offering is subject to customary closing conditions pursuant to the terms of the
Purchase Agreement.
Some of the Underwriters and their affiliates have engaged in investment banking and other commercial dealings in the ordinary course
of business with the Company and therefore may have an interest in the successful completion of this offering in addition to the underwriting discounts and commissions they will receive in connection with the offering. In addition, affiliates of
certain of the underwriters in this offering are holders of outstanding Series A Preferred Shares and will receive a portion of the net proceeds of this offering that are used to redeem the outstanding Series A Preferred Shares. Further, Stifel,
Nicolaus & Company, Incorporated, one of the Underwriters, may pay an unaffiliated entity or its affiliate, who is also a lender under the Companys credit facility, a fee in connection with this offering.
A copy of the Purchase Agreement is attached to this Current Report on Form 8-K as Exhibit 1.1 and incorporated herein by reference. The summary set forth
above is qualified in its entirety by reference to Exhibit 1.1.
Fourth Addendum to the First Amended and Restated Agreement of Limited Partnership
On September 11, 2017, the Company, as the sole general partner of the Operating Partnership, executed a Fourth Addendum to the First Amended
and Restated Agreement of Limited Partnership of the Operating Partnership, as amended (the Addendum). The Addendum created, designated and authorized the issuance of 4,800,000 6.875% Series D Preferred Partner Units, with a liquidation
preference of $25.00 per Series D Preferred Partner Unit (the Series D Preferred Units), to the Company. The Series D Preferred Units have economic terms that are substantially similar to the Companys Series D Preferred Shares.
The Series D Preferred Units will rank, with respect to rights to receive distributions and to participate in distributions or payments upon
liquidation, dissolution or winding up of the Operating Partnership, senior to the common limited partner interests of the Operating Partnership, on parity with any other limited partner interests of the Operating Partnership the terms of which
place them on parity with the Series D Preferred Units, including the 8.25% Series A Preferred Partner Units, the 7.375% Series B Preferred Partner Units and the 7.20% Series C Preferred Partner Units, and junior to all partner interests of the
Operating Partnership the terms of which specifically provide that such partner interests rank senior to the Series D Preferred Units.
A copy of the
Addendum is attached to this Current Report on Form 8-K as Exhibit 10.1 and incorporated herein by reference. The summary set forth above is qualified in its entirety by reference to Exhibit 10.1.