PHILADELPHIA, Feb. 25, 2020 /PRNewswire/ -- PREIT (NYSE:
PEI) today reported results for the three months and the year ended
December 31, 2019. A
description of each non-GAAP financial measure and the related
reconciliation to the comparable GAAP financial measure is located
in the tables accompanying this release.
|
|
Three Months
Ended
December
31,
|
|
|
Year
Ended
December
31,
|
|
(per share
amounts)
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Net income (loss) -
basic and diluted
|
|
$
|
(0.29)
|
|
|
$
|
(1.23)
|
|
|
$
|
(0.52)
|
|
|
$
|
(1.98)
|
|
FFO
|
|
$
|
0.28
|
|
|
$
|
0.42
|
|
|
$
|
1.33
|
|
|
$
|
1.43
|
|
FFO, as
adjusted
|
|
$
|
0.34
|
|
|
$
|
0.52
|
|
|
$
|
1.05
|
|
|
$
|
1.54
|
|
FFO from assets sold
in 2019
|
|
$
|
-
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.04)
|
|
FFO, as adjusted
for assets sold
|
|
$
|
0.34
|
|
|
$
|
0.51
|
|
|
$
|
1.03
|
|
|
$
|
1.50
|
|
Joseph F. Coradino, Chairman and
Chief Executive Officer of PREIT, said, "As we look into 2020, we
are beginning to believe that industry headwinds are moderating and
the strategic initiatives underway at PREIT will drive growth and
value creation. We have taken proactive steps to manage
industry-wide disruption, such that today 47% of our non-anchor
space is leased to non-mall retail tenants. We have achieved strong
momentum in the first five months of operation at Fashion District
Philadelphia, and look forward to the continued success of that
project."
Coradino added, "Our growing sales and traffic, along with
modest same store NOI growth projected amid continued retail market
uncertainty, demonstrate that our strategy is working. Further, we
believe the capital transactions we are embarking upon demonstrate
that the quality of our portfolio provides us with opportunities to
efficiently access the capital markets."
- Same Store NOI, excluding lease termination revenue, decreased
3.0% for the three months ended December 31,
2019 compared to December 31,
2018.
-
- The quarter was impacted by an incremental decrease in revenue
of $2.3 million as a result of
bankruptcies, related store closings and associated write-offs.
This was partially offset by incremental revenues from anchor
replacements and other leasing activity of $1.1 million in the quarter.
- Same Store NOI, excluding lease termination revenue, decreased
2.5% for the year ended December 31,
2019 compared to December 31,
2018. Excluding the impact of revenue lost from
bankruptcy-related store closings, Same Store NOI, excluding lease
termination was positive.
-
- For the full year ended December 31,
2019, the Company was impacted by $6.9 million of lower revenue compared to the
prior year as a result of bankruptcies, related store closings and
associated write-offs, which was partially offset by $3.5 million in incremental rent from anchor
replacements and other leasing activity.
- NOI-weighted sales at our Core Malls increased to $547 per square foot. Core Mall sales per square
foot reached $539, a 5.7% increase over the prior year. Average
comparable sales per square foot at our top 6 properties rose 5.0%
over the prior year to $646 with two
properties generating sales over $700
per square foot.
- Core Mall total occupancy was 95.5%, an increase of 110 basis
points compared to September 30,
2019. Core Mall non-anchor occupancy declined by only 70
basis points from last year despite the impact from bankruptcies
and chain liquidations that resulted in 71 store closures in
274,000 square feet during the year ended December 31, 2019.
- Non-anchor Leased space exceeds occupied space by 170 basis
points when factoring in executed new leases slated for future
occupancy, excluding Fashion District Philadelphia.
- Average renewal spreads for the full year were strong in our
wholly-owned portfolio at 6.7% for spaces less than 10,000 square
feet and 5.5% for large format spaces. Average renewal spreads for
the entire portfolio were 2.5% for the year.
- As part of the Company's plan to improve our balance sheet,
since last quarter, the Company has executed agreements of sale for
expected gross proceeds of $312.6
million. These include an agreement for the sale - leaseback
of five properties for $153.6
million, the sale of land parcels for multifamily
development in the amount of $125.3
million, $29.9 million related
to operating outparcel sales, and $3.75
million related to the sale of land for hotel development.
Upon closing of these transactions, the Company expects to net
nearly $200 million in additional
liquidity. These transactions, together with potential
modifications to our credit facility covenants, create the runway
needed in order to complete execution of our business plan.
- The Company anticipates not meeting certain financial covenants
during 2020. The Company is in
active discussions with its lenders to modify the terms of
its debt covenants to ensure compliance through September 30, 2020 and anticipates further
discussions with lenders to modify the terms of the debt agreements
on a long term basis.
Leasing and Redevelopment
- Excluding Fashion District Philadelphia, 425,000 square feet of
leases are signed for 2020 openings, which is expected to
contribute annual gross rent of $13.1
million.
- On September 19, 2019, the
Company's 50/50 joint venture with Macerich opened Fashion District
Philadelphia, a four-level retail hub in Center City spanning nearly 900,000 square
feet across three city blocks in the heart of downtown Philadelphia. The project, which represents an
impressive collection of retail, entertainment and co-working uses,
is 87% committed. Noteworthy post-opening additions include: AMC
Theaters, Round One, Wonderspaces, Armani Exchange Outlet and
Sephora. Upcoming additions include: Primark, Industrious,
Kate Spade, DSW Shoes and more.
- At Plymouth Meeting Mall, Michael's will join recently opened
Burlington, DICK's Sporting Goods,
Miller's Ale House and Edge Fitness in the location of the former
Macy's at the end of February
2020.
- On October 12, 2019, the
expansion wing at Woodland Mall opened anchored by a brand new,
top-quality Von Maur Department Store. New tenants in the wing
include: Urban Outfitters, Tricho Salon & Spa, Williams-Sonoma,
Black Rock Bar & Grill, Paddle North and The Cheesecake
Factory. In Spring 2020, the expansion area will welcome White
House | Black Market and Sephora.
- At Willow Grove Park, Yard House
opened in December 2019 and
construction continues on the 51,000 square foot Studio Movie
Grill, which is projected to open in the first half of 2020.
- At Valley Mall, DICK's Sporting Goods is underway with
fixturing and stocking with an anticipated opening in March 2020.
- At Dartmouth Mall, the 43,000 square foot Burlington is expected to open in March 2020. The redevelopment plan also includes
approximately 35,000 square feet of new outparcels to capitalize on
the property's location.
Primary Factors Affecting Financial Results for the Three
Months Ended December 31, 2019 and
December 31, 2018:
- Net loss attributable to PREIT common shareholders was
$21.7 million, or $0.29 per basic and diluted share for the three
months ended December 31, 2019,
compared to net loss attributable to PREIT common shareholders of
$85.6 million, or $1.23 per basic and diluted share for the three
months ended December 31, 2018.
- Same Store NOI decreased by $2.4
million, or 3.8%. Revenue from new store openings, including
contributions from replacement anchors, mitigated the impact of
revenue lost to bankruptcies and associated store closings. Lease
termination revenue was $0.6 million
less than the prior year's quarter.
- Non Same Store NOI decreased by $2.0
million, primarily driven by the disposition of Wyoming
Valley Mall, anchor closings and associated co-tenancy rents at
Valley View Mall and the sale of the Whole Foods parcel at Exton
Square, slightly offset by contribution from Fashion District
Philadelphia.
- FFO for the three months ended December
31, 2019 was $0.28 per share
and OP Unit compared to $0.42 per
share and OP Unit for the three months ended December 31, 2018. Adjustments to FFO in the 2019
quarter included $0.04 per share of
provision for employee separation expenses and $0.03 of impairment of development land parcels.
Adjustments to FFO in the fourth quarter of 2018 included a loss on
mortgage note impairment, provision for employee separation
expenses, and net insurance recoveries that totaled $0.10 per share.
- General and administrative expenses were impacted by the new
lease accounting standard that now limits the capitalization of
certain leasing costs. We expensed $1.1
million ($0.01 per share) of
costs in the three months ended December 31,
2019 that would have been capitalized under the prior
standard.
All NOI and FFO amounts referenced as primary factors affecting
financial results above include our share of unconsolidated
properties' revenues and expenses. Additional information
regarding changes in operating results for the three months and
year ended December 31, 2019 and 2018
is included on page 18.
Asset Dispositions
During the fourth quarter of 2019 and in early 2020, the Company
has executed agreements of sale for expected gross proceeds of
$312.6 million.
Sale/Leaseback: In February
2020, The Company entered into an agreement of sale for the
sale and leaseback of five properties for $153.6 million. Structured as a 99-year
lease with an option to repurchase, the agreement
provides for release of parcels related to multifamily development
and is subject to ongoing lease payments at 7% ($10.75 million) with annual 1.25%
escalations. Closing on the transaction is subject to
customary closing conditions, including due diligence
provisions.
Multifamily Land Parcels: In 2020, the Company
executed seven agreements of sale for land parcels for anticipated
multifamily development in the amount of $125.3 million. The agreements are with
four different buyers across seven properties for 3,450 units as
part of Phase I of the Company's previously announced multifamily
land sale plan. Closing on the transactions is subject to
customary due diligence provisions and securing entitlements.
Outparcels: The Company has executed an agreement of
sale with Four Corners Property Trust ("FCPT") for 14 outparcels,
generating $29.9 million in total
proceeds. We have closed on the sale of four of the parcels,
totaling $10.5 million. The
remaining 10 are expected to close in 2020 and are subject to
customary due diligence provisions.
Hotel Parcels: The Company has executed two
agreements of sale conveying land parcels for anticipated hotel
development in the amount of $3.8
million. The agreements are with two separate buyers
for approximately 250 rooms. Closing on the transactions is
subject to customary due diligence provisions and securing
entitlements.
2019 and Year-to-Date 2020 Capital Transaction
Summary
The table below summarizes 2019 and 2020 capital
activity that is expected to impact the Company's liquidity
position:
|
|
Closed
|
|
|
Under
Contract
|
|
|
Total
|
|
Gainesville
Development Parcel
|
|
$
|
15,000
|
|
|
$
|
-
|
|
|
$
|
15,000
|
|
New Garden Township
Parcel(1)
|
|
|
8,250
|
|
|
|
-
|
|
|
|
8,250
|
|
Wiregrass mortgage
loan sale
|
|
|
8,000
|
|
|
|
-
|
|
|
|
8,000
|
|
Whole Foods
Parcel(2)
|
|
|
10,500
|
|
|
|
-
|
|
|
|
10,500
|
|
Capital City
transaction - incremental capacity(3)
|
|
|
40,000
|
|
|
|
-
|
|
|
|
40,000
|
|
Gloucester Premium
Outlets Parcel
|
|
|
937
|
|
|
|
-
|
|
|
|
937
|
|
Fashion District
Philadelphia Term Loan expansion (4)
|
|
|
25,500
|
|
|
|
-
|
|
|
|
25,500
|
|
Valley View Mall
Outparcel Sale
|
|
|
1,400
|
|
|
|
-
|
|
|
|
1,400
|
|
Sale of Multiple
Outparcels (5)
|
|
|
4,000
|
|
|
|
8,000
|
|
|
|
12,000
|
|
Sale of Land Parcels
related to Hotel Development
|
|
|
-
|
|
|
|
3,750
|
|
|
|
3,750
|
|
Sale of Land Parcels
for Multifamily Development
|
|
|
-
|
|
|
|
125,337
|
|
|
|
125,337
|
|
Sale Leaseback
transaction (5 malls) (5)
|
|
|
-
|
|
|
|
57,000
|
|
|
|
57,000
|
|
Total
|
|
$
|
113,587
|
|
|
$
|
194,087
|
|
|
$
|
307,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents cash proceeds; does
not include $2.8 million of preferred stock received by the
Company.
|
|
|
(2) Represents the net liquidity to
the Company after adjusting for line capacity. Sale price was
$22.1 million.
|
|
|
(3) Represents the Company's
approximate incremental borrowing capacity by the end of 2019, net
of the Capital City mortgage loan defeasance.
|
|
|
(4) Represents the Company's share of
amounts available under the expanded capacity of the Fashion
District Philadelphia term loan.
|
|
|
(5) Represents the net liquidity to
the Company after adjusting for line capacity.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Retail Operations
The following table sets
forth information regarding sales per square foot in the Company's
mall portfolio, including unconsolidated properties:
A reconciliation of portfolio sales per square foot
(1) for the Core Mall portfolio can be found below:
Comp store sales for
the year ended December 31, 2018
|
$
|
510
|
|
Organic sales
growth
|
|
14
|
|
Impact of non-core
malls
|
|
15
|
|
Comp store sales
for the year ended December 31, 2019
|
$
|
539
|
|
(1) Based on reported sales by all
comparable non-anchor tenants that lease individual spaces of less
than 10,000 square feet and have occupied the space for at least 24
months.
|
|
2020 Outlook
The Company is introducing its
earnings guidance for the year ending December 31, 2020 of GAAP Net loss between
($0.68) and ($0.43) per
diluted share and estimates FFO for the year will be between
$1.04
and $1.28 per diluted share.
FFO, as adjusted per share is expected to be between $1.04 and
$1.28.
A reconciliation between GAAP net loss and FFO is as
follows:
|
|
2020 Guidance
Range
|
|
(Estimates per
diluted share)
|
|
Low
|
|
|
High
|
|
Net loss attributable
to common shareholders
|
|
$
|
(0.68)
|
|
|
$
|
(0.43)
|
|
Depreciation and
amortization, non-controlling interest and other
|
|
|
1.72
|
|
|
|
1.71
|
|
FFO per
share
|
|
$
|
1.04
|
|
|
$
|
1.28
|
|
Adjustments
|
|
|
-
|
|
|
|
-
|
|
FFO per share, as
adjusted
|
|
$
|
1.04
|
|
|
$
|
1.28
|
|
Guidance Assumptions:
Our guidance incorporates the
following assumptions, among others:
- Same Store NOI, excluding termination revenue is expected to
grow between 0.5% and 1.5% with wholly-owned properties in the
range of (0.2%) to 0.8% and joint venture properties increasing
between 4.7% and 6.0%;
- Lease termination revenues of $1.0 to $2.0
million;
- Share of NOI from Fashion District included in Same Store NOI
in Q4 2020;
- Bankruptcy and store closings reserve of between $2.0 at the midpoint to $3.0 million at the low end of Same Store NOI
guidance;
- Land Sale Gains are expected to be between $14.4 and $28.8
million inclusive of the assumption that we close the hotel
land sales and between two and four of the multifamily land sales
in 2020;
- Weighted average shares and OP units of 81.0 million for FFO
and 77.0 million for Net (loss) income;
- Capital expenditures in the range of $125 to $150
million, including redevelopment expenditures, recurring
capital expenditures and tenant allowances; and
- Our guidance does not incorporate the effects of the recently
executed sale leaseback transaction, which are estimated to be
approximately $0.06 dilutive to FFO
per share on an annual basis.
- Our guidance does not assume any other capital market
transactions.
Our 2020 guidance is based on our current assumptions and
expectations about market conditions, our projections regarding
occupancy, retail sales and rental rates, and planned capital
spending. Our guidance is forward-looking, and is 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.
Conference Call Information
Management has scheduled a conference call for 11:00 a.m. Eastern Time on Wednesday, February
26, 2020, to review the Company's results and future outlook.
To listen to the call, please dial 1-844-885-9139 (domestic toll
free), or 1-647-689-4441 (international), and request to join the
PREIT call, Conference ID 7187207, at least five minutes
before the scheduled start time. Investors can also access
the call in a "listen only" mode via the internet at the Company's
website, preit.com. Please allow extra time prior to
the call to visit the site and download the necessary software to
listen to the Internet broadcast. Financial and statistical
information expected to be discussed on the call will also be
available on the Company's website.
For interested individuals unable to join the conference call,
the online archive of the webcast will also be available for one
year following the call.
About PREIT
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.
Rounding
Certain summarized information in the tables above may not total
due to rounding.
Definitions
Funds From Operations (FFO)
The National Association of Real Estate Investment Trusts
("NAREIT") defines FFO, which is a non-GAAP measure commonly used
by REITs, as net income (computed in accordance with GAAP)
excluding (i) depreciation and amortization related to real estate,
(ii) gains and losses from the sale of certain real estate assets,
(iii) gains and losses from change in control, and (iv) impairment
write-downs of certain real estate assets and investments in
entities when the impairment is directly attributable to decreases
in the value of depreciable real estate held by the entity. We
compute FFO in accordance with standards established by NAREIT,
which may not be comparable to FFO reported by other REITs that do
not define the term in accordance with the current NAREIT
definition, or that interpret the current NAREIT definition
differently than we do.
FFO is a commonly used measure of operating performance and
profitability among REITs. We use FFO and FFO per diluted
share and unit of limited partnership interest in our operating
partnership ("OP Unit") and, when applicable, related measures such
as Funds From Operations, as adjusted, in measuring our performance
against our peers and as one of the performance measures for
determining incentive compensation amounts earned under certain of
our performance-based executive compensation programs.
FFO does not include gains and losses on sales of operating real
estate assets or impairment write downs of depreciable real estate,
which are included in the determination of net income in accordance
with GAAP. Accordingly, FFO is not a comprehensive measure of our
operating cash flows. In addition, since FFO does not include
depreciation on real estate assets, FFO may not be a useful
performance measure when comparing our operating performance to
that of other non-real estate commercial enterprises. We compensate
for these limitations by using FFO in conjunction with other GAAP
financial performance measures, such as net income and net cash
provided by operating activities, and other non-GAAP financial
performance measures, such as NOI. FFO does not represent cash
generated from operating activities in accordance with GAAP and
should not be considered to be an alternative to net income
(determined in accordance with GAAP) as an indication of our
financial performance or to be an alternative to cash flow from
operating activities (determined in accordance with GAAP) as a
measure of our liquidity, nor is it indicative of funds available
for our cash needs, including our ability to make cash
distributions. We believe that net income is the most directly
comparable GAAP measurement to FFO.
When applicable, we also present Funds From Operations, as
adjusted, and Funds From Operations per diluted share and OP Unit,
as adjusted, which are non-GAAP measures, to show the effect of
such items as gain or loss on debt extinguishment (including
accelerated amortization of financing costs), impairment of assets,
provision for employee separation expense, and insurance recoveries
or losses, net, which can have a significant effect on our results
of operations, but are not, in our opinion, indicative of our
operating performance. We also present FFO on a further
adjusted basis to isolate the impact on FFO caused by property
dispositions.
We believe that FFO is helpful to management and investors as a
measure of operating performance because it excludes various items
included in net income that do not relate to or are not indicative
of operating performance, such as gains on sales of operating real
estate and depreciation and amortization of real estate, among
others. We believe that Funds From Operations, as adjusted, is
helpful to management and investors as a measure of operating
performance because it adjusts FFO to exclude items that management
does not believe are indicative of our operating performance, such
as provision for employee separation expense, loss on debt
extinguishment (including accelerated amortization of financing
costs) and insurance losses and recoveries.
Net Operating Income ("NOI")
NOI (a non-GAAP measure) is derived from real estate revenue
(determined in accordance with GAAP, including lease termination
revenue), minus property operating expenses (determined in
accordance with GAAP), plus our pro rata share of revenue and
property operating expenses of our unconsolidated partnership
investments. NOI does not represent cash generated from operating
activities in accordance with GAAP and should not be considered to
be an alternative to net income (determined in accordance with
GAAP) as an indication of our financial performance or to be an
alternative to cash flow from operating activities (determined in
accordance with GAAP) as a measure of our liquidity. It is not
indicative of funds available for our cash needs, including our
ability to make cash distributions. We believe that NOI is
helpful to management and investors as a measure of operating
performance because it is an indicator of the return on property
investment, and provides a method of comparing property performance
over time. We believe that net income is the most directly
comparable GAAP measurement to NOI.
NOI excludes other income, general and administrative expenses,
provision for employee separation expenses, interest expense,
depreciation and amortization, impairment of assets,
gains/adjustments to gains on sale of interest in non operating
real estate, gain/adjustments to gain on sale of interest in real
estate by equity method investee, gains/losses on sales of
interests in real estate, net, project costs, gain or loss on debt
extinguishment, insurance losses or recoveries, net and other
expenses.
Same Store NOI is calculated using retail properties owned for
the full periods presented and excludes properties acquired,
disposed, under redevelopment or designated as non-core during the
periods presented. In 2018, Wyoming Valley Mall was
designated as non-core. In 2019, Exton Square and Valley View
Malls were designated as non-core and are excluded from Same Store
NOI. Non Same Store NOI is calculated using the retail
properties excluded from the calculation of Same Store NOI.
Financial Information of our Unconsolidated Properties
The non-GAAP financial measures of FFO and NOI presented in this
press release incorporate financial information attributable to our
share of unconsolidated properties. This proportionate financial
information is also non-GAAP financial information, but we believe
that it is helpful information because it reflects the
proportionate contribution from our unconsolidated properties that
are owned through investments accounted for under GAAP using the
equity method of accounting. Under such method, earnings from
these unconsolidated partnerships are recorded in our statements of
operations prepared in accordance with GAAP under the caption
entitled "Equity in income of partnerships."
To derive the proportionate financial information from our
unconsolidated properties, we multiplied the percentage of our
economic interest in each partnership on a property-by-property
basis by each line item. Under the partnership agreements
relating to our current unconsolidated partnerships with third
parties, we own a 25% to 50% economic interest in such
partnerships, and there are generally no provisions in such
partnership agreements relating to special non-proportionate
allocations of income or loss, and there are no preferred or
priority returns of capital or other similar provisions.
While this method approximates our indirect economic interest in
our pro rata share of the revenue and expenses of our
unconsolidated partnerships, we do not have a direct legal claim to
the assets, liabilities, revenues or expenses of the unconsolidated
partnerships beyond our rights as an equity owner in the event of
any liquidation of such entity. Our percentage ownership is
not necessarily indicative of the legal and economic implications
of our ownership interest. Accordingly, NOI and FFO results
based on our share of the results of unconsolidated partnerships do
not represent cash generated from our investments in these
partnerships.
Core Properties
Core Properties include all operating retail properties except
for Exton Square Mall, Valley View Mall and Fashion District
Philadelphia. Core Malls excludes these properties, power
centers and Gloucester Premium Outlets.
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," "intend," "may," "project" 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 the following:
- 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;
- potential losses on impairment of certain long-lived assets,
such as real estate, including losses that we might be required to
record in connection with any disposition of assets;
- 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 and our ability to remain in
compliance with our financial covenants under our credit
facilities;
- 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, 2018 in the section entitled "Item
1A. Risk Factors", our Quarterly Report on Form 10-Q for the
quarterly period ended September 30,
2019 in the section entitled "Item 1A. Risk Factors" and any
subsequent reports we may file with the SEC. We do not intend to
update or revise any forward-looking statements to reflect new
information, future events or otherwise.
** Quarterly
supplemental financial and operating
**
** information will be
available on www.preit.com **
|
|
Three Months
Ended
December
31,
|
|
|
Year
Ended
December
31,
|
|
(in thousands of
dollars)
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
REVENUE:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease
revenue
|
|
$
|
78,643
|
|
|
$
|
85,162
|
|
|
$
|
302,311
|
|
|
$
|
324,829
|
|
Expense
reimbursements
|
|
|
4,637
|
|
|
|
5,014
|
|
|
|
19,979
|
|
|
|
21,322
|
|
Other real estate
revenue
|
|
|
5,049
|
|
|
|
5,149
|
|
|
|
12,668
|
|
|
|
12,078
|
|
Total real estate
revenue
|
|
|
88,329
|
|
|
|
95,325
|
|
|
|
334,958
|
|
|
|
358,229
|
|
Other
income
|
|
|
393
|
|
|
|
717
|
|
|
|
1,834
|
|
|
|
4,171
|
|
Total
revenue
|
|
|
88,722
|
|
|
|
96,042
|
|
|
|
336,792
|
|
|
|
362,400
|
|
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAM and real estate
taxes
|
|
|
(27,369)
|
|
|
|
(28,666)
|
|
|
|
(113,260)
|
|
|
|
(113,235)
|
|
Utilities
|
|
|
(3,383)
|
|
|
|
(3,847)
|
|
|
|
(14,733)
|
|
|
|
(15,990)
|
|
Other property
operating expenses
|
|
|
(2,750)
|
|
|
|
(3,257)
|
|
|
|
(8,565)
|
|
|
|
(12,007)
|
|
Total property
operating expenses
|
|
|
(33,502)
|
|
|
|
(35,770)
|
|
|
|
(136,558)
|
|
|
|
(141,232)
|
|
Depreciation and
amortization
|
|
|
(39,699)
|
|
|
|
(32,611)
|
|
|
|
(137,784)
|
|
|
|
(133,116)
|
|
General and
administrative expenses
|
|
|
(12,591)
|
|
|
|
(10,373)
|
|
|
|
(46,010)
|
|
|
|
(38,342)
|
|
Provision for
employee separation expenses
|
|
|
(2,611)
|
|
|
|
(183)
|
|
|
|
(3,689)
|
|
|
|
(1,139)
|
|
Insurance recoveries,
net
|
|
|
(132)
|
|
|
|
714
|
|
|
|
4,362
|
|
|
|
689
|
|
Project costs and
other expenses
|
|
|
(17)
|
|
|
|
(252)
|
|
|
|
(284)
|
|
|
|
(693)
|
|
Total operating
expenses
|
|
|
(88,552)
|
|
|
|
(78,475)
|
|
|
|
(319,963)
|
|
|
|
(313,833)
|
|
Interest expense,
net
|
|
|
(17,001)
|
|
|
|
(15,291)
|
|
|
|
(63,987)
|
|
|
|
(61,355)
|
|
Gain on debt
extinguishment, net
|
|
|
27
|
|
|
|
-
|
|
|
|
24,859
|
|
|
|
-
|
|
Impairment of
assets
|
|
|
(3,553)
|
|
|
|
(103,201)
|
|
|
|
(3,553)
|
|
|
|
(137,487)
|
|
Impairment of
development land parcel
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,464)
|
|
|
|
-
|
|
Total
expenses
|
|
|
(109,079)
|
|
|
|
(196,967)
|
|
|
|
(364,108)
|
|
|
|
(512,675)
|
|
Loss before equity in
income of partnerships, gain on sales of
real estate by equity method investee, gain on sales of real
estate, net, and adjustment to gain on sales of interests in
non operating real estate
|
|
|
(20,357)
|
|
|
|
(100,925)
|
|
|
|
(27,316)
|
|
|
|
(150,275)
|
|
Equity in income of
partnerships
|
|
|
2,153
|
|
|
|
3,189
|
|
|
|
8,289
|
|
|
|
11,375
|
|
Gain on sales of real
estate by equity method investee
|
|
|
—
|
|
|
|
—
|
|
|
|
553
|
|
|
|
2,772
|
|
Gain on sales of real
estate, net
|
|
|
72
|
|
|
|
975
|
|
|
|
2,744
|
|
|
|
1,722
|
|
Gain on sales of
interests in non operating real estate
|
|
|
2,718
|
|
|
|
8,126
|
|
|
|
2,718
|
|
|
|
8,126
|
|
Adjustment to gain on
sales of interests in non operating real
estate
|
|
|
—
|
|
|
|
(199)
|
|
|
|
12
|
|
|
|
(223)
|
|
Net
loss
|
|
|
(15,414)
|
|
|
|
(88,834)
|
|
|
|
(13,000)
|
|
|
|
(126,503)
|
|
Less: net loss
attributable to noncontrolling interest
|
|
|
565
|
|
|
|
10,052
|
|
|
|
2,128
|
|
|
|
16,174
|
|
Net loss
attributable to PREIT
|
|
|
(14,849)
|
|
|
|
(78,782)
|
|
|
|
(10,872)
|
|
|
|
(110,329)
|
|
Less: preferred share
dividends
|
|
|
(6,844)
|
|
|
|
(6,844)
|
|
|
|
(27,375)
|
|
|
|
(27,375)
|
|
Net loss
attributable to PREIT common shareholders
|
|
$
|
(21,693)
|
|
|
$
|
(85,626)
|
|
|
$
|
(38,247)
|
|
|
$
|
(137,704)
|
|
|
|
Three Months
Ended
December
31,
|
|
|
Year
Ended
December
31,
|
|
(in thousands,
except per share amounts)
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Net loss
|
|
$
|
(15,414)
|
|
|
$
|
(88,834)
|
|
|
$
|
(13,000)
|
|
|
$
|
(126,503)
|
|
Noncontrolling
interest
|
|
|
565
|
|
|
|
10,052
|
|
|
|
2,128
|
|
|
|
16,174
|
|
Preferred share
dividends
|
|
|
(6,844)
|
|
|
|
(6,844)
|
|
|
|
(27,375)
|
|
|
|
(27,375)
|
|
Dividends on unvested
restricted shares
|
|
|
(219)
|
|
|
|
(130)
|
|
|
|
(883)
|
|
|
|
(542)
|
|
Net loss used to
calculate loss per share—basic and diluted
|
|
$
|
(21,912)
|
|
|
$
|
(85,756)
|
|
|
$
|
(39,130)
|
|
|
$
|
(138,246)
|
|
Basic and diluted
loss per share:
|
|
$
|
(0.29)
|
|
|
$
|
(1.23)
|
|
|
$
|
(0.52)
|
|
|
$
|
(1.98)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of
shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding—basic
|
|
|
76,557
|
|
|
|
69,840
|
|
|
|
75,221
|
|
|
|
69,749
|
|
Effect of common
share equivalents(1)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Weighted average
shares outstanding—diluted
|
|
|
76,557
|
|
|
|
69,840
|
|
|
|
75,221
|
|
|
|
69,749
|
|
|
|
|
|
(1)
|
The Company had net
losses for the three months and the year ended December 31, 2019
and 2018, respectively, therefore, the effects of common share
equivalents are excluded from the calculation of diluted loss per
share for these periods because they would be
antidilutive.
|
|
|
Three Months
Ended
December
31,
|
|
|
Year
Ended
December
31,
|
|
(in thousands of
dollars)
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Comprehensive income
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(15,414)
|
|
|
$
|
(88,834)
|
|
|
$
|
(13,000)
|
|
|
$
|
(126,503)
|
|
Unrealized (loss) gain
on derivatives
|
|
|
2,903
|
|
|
|
(12,417)
|
|
|
|
(18,937)
|
|
|
|
(2,755)
|
|
Amortization of
settled swaps
|
|
|
3
|
|
|
|
2
|
|
|
|
85
|
|
|
|
721
|
|
Total comprehensive
loss
|
|
|
(12,508)
|
|
|
|
(101,249)
|
|
|
|
(31,852)
|
|
|
|
(128,537)
|
|
Less: comprehensive
loss attributable to noncontrolling
interest
|
|
|
491
|
|
|
|
11,370
|
|
|
|
3,016
|
|
|
|
16,390
|
|
Comprehensive loss
attributable to PREIT
|
|
$
|
(12,017)
|
|
|
$
|
(89,879)
|
|
|
$
|
(28,836)
|
|
|
$
|
(112,147)
|
|
The following table
presents a reconciliation of net income (loss) determined in
accordance with GAAP to (i) Funds from operations attributable to
common shareholders and OP Unit holders, (ii) Funds from
operations, as adjusted, attributable to common shareholders and OP
Unit holders, (iii) Funds from operations, as adjusted for assets
sold, (iv) Funds from operations attributable to common
shareholders and OP Unit holders per diluted share and OP Unit, (v)
Funds from operations, as adjusted, attributable to common
shareholders and OP Unit holders per diluted share and OP Unit, and
(vi) Funds from operations, as adjusted for assets sold per diluted
share and OP Unit for the three months and the year ended December
31, 2019 and 2018, respectively:
|
|
|
Three Months
Ended
December
31,
|
|
|
Year
Ended
December
31,
|
|
(in thousands,
except per share amounts)
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Net
loss
|
|
$
|
(15,414)
|
|
|
$
|
(88,834)
|
|
|
$
|
(13,000)
|
|
|
$
|
(126,503)
|
|
Depreciation and
amortization on real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
properties
|
|
|
39,296
|
|
|
|
32,265
|
|
|
|
136,422
|
|
|
|
131,694
|
|
PREIT's share of
equity method investments
|
|
|
3,421
|
|
|
|
2,095
|
|
|
|
9,874
|
|
|
|
8,612
|
|
Gain on sales of real
estate by equity method investee
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,772)
|
|
Gain on sales of
interests in real estate, net
|
|
|
(72)
|
|
|
|
(776)
|
|
|
|
(2,756)
|
|
|
|
(1,525)
|
|
Impairment of
assets
|
|
|
1,455
|
|
|
|
95,079
|
|
|
|
1,455
|
|
|
|
129,365
|
|
Preferred share
dividends
|
|
|
(6,844)
|
|
|
|
(6,844)
|
|
|
|
(27,375)
|
|
|
|
(27,375)
|
|
Funds from
operations attributable to common
shareholders and OP Unit holders
|
|
$
|
21,842
|
|
|
$
|
32,985
|
|
|
$
|
104,620
|
|
|
$
|
111,496
|
|
Gain on debt
extinguishment, net
|
|
|
(27)
|
|
|
|
-
|
|
|
|
(24,859)
|
|
|
|
-
|
|
Impairment of mortgage
note receivable
|
|
|
-
|
|
|
|
8,122
|
|
|
|
-
|
|
|
|
8,122
|
|
Accelerated
amortization of financing costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
363
|
|
Impairment of
development land parcel
|
|
|
2,098
|
|
|
|
-
|
|
|
|
3,562
|
|
|
|
-
|
|
Provision for employee
separation expenses
|
|
|
2,611
|
|
|
|
183
|
|
|
|
3,689
|
|
|
|
1,139
|
|
Insurance recoveries,
net
|
|
|
132
|
|
|
|
(714)
|
|
|
|
(4,362)
|
|
|
|
(689)
|
|
Funds from
operations, as adjusted, attributable to
common shareholders and OP Unit holders
|
|
$
|
26,656
|
|
|
$
|
40,576
|
|
|
$
|
82,650
|
|
|
$
|
120,431
|
|
Less: Funds from
operations from assets sold in 2019 and
2018
|
|
|
-
|
|
|
|
(666)
|
|
|
|
(666)
|
|
|
|
(311)
|
|
Funds from
operations, as adjusted for assets sold
|
|
$
|
26,656
|
|
|
$
|
39,910
|
|
|
$
|
81,984
|
|
|
$
|
120,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from
operations attributable to common
shareholders and OP Unit holders per diluted share and
OP Unit
|
|
$
|
0.28
|
|
|
$
|
0.42
|
|
|
$
|
1.33
|
|
|
$
|
1.43
|
|
Funds from
operations, as adjusted, attributable to
common shareholders and OP Unit holders per diluted
share and OP Unit
|
|
$
|
0.34
|
|
|
$
|
0.52
|
|
|
$
|
1.05
|
|
|
$
|
1.54
|
|
Funds from
operations, as adjusted for assets sold per
diluted share and OP Unit
|
|
$
|
0.34
|
|
|
$
|
0.51
|
|
|
$
|
1.04
|
|
|
$
|
1.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of
shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding
|
|
|
76,557
|
|
|
|
69,840
|
|
|
|
75,221
|
|
|
|
69,749
|
|
Weighted average
effect of full conversion of OP Units
|
|
|
2,023
|
|
|
|
8,273
|
|
|
|
3,221
|
|
|
|
8,273
|
|
Effect of common
share equivalents
|
|
|
485
|
|
|
|
23
|
|
|
|
453
|
|
|
|
203
|
|
Total weighted
average shares outstanding, including OP
Units
|
|
|
79,065
|
|
|
|
78,136
|
|
|
|
78,895
|
|
|
|
78,225
|
|
NOI for the three
months ended December 31, 2019 and 2018:
|
|
|
|
|
Same
Store
|
|
|
Change
|
|
|
|
Non Same
Store
|
|
|
|
Total
|
|
|
|
|
2019
|
|
|
2018
|
|
|
$
|
|
%
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
NOI from consolidated
properties
|
|
$
|
52,664
|
|
|
$
|
54,597
|
|
|
$
|
(1,933)
|
|
|
-3.5%
|
|
|
$
|
2,162
|
|
|
$
|
4,958
|
|
|
$
|
54,826
|
|
|
$
|
59,555
|
|
NOI attributable to
equity method
investments, at ownership share
|
|
|
7,451
|
|
|
|
7,880
|
|
|
|
(429)
|
|
|
-5.4%
|
|
|
|
923
|
|
|
|
95
|
|
|
|
8,374
|
|
|
|
7,975
|
|
Total
NOI
|
|
|
60,115
|
|
|
|
62,477
|
|
|
|
(2,362)
|
|
|
-3.8%
|
|
|
|
3,085
|
|
|
|
5,053
|
|
|
|
63,200
|
|
|
|
67,530
|
|
Less: lease
termination revenue
|
|
|
1,018
|
|
|
|
1,575
|
|
|
|
(557)
|
|
|
-35.4%
|
|
|
|
1
|
|
|
|
-
|
|
|
|
1,019
|
|
|
|
1,575
|
|
Total NOI excluding
lease termination
revenue
|
|
$
|
59,097
|
|
|
$
|
60,902
|
|
|
$
|
(1,805)
|
|
|
-3.0%
|
|
|
$
|
3,084
|
|
|
$
|
5,053
|
|
|
$
|
62,181
|
|
|
$
|
65,955
|
|
NOI for the year
ended December 31, 2019 and 2018:
|
|
|
|
|
Same
Store
|
|
|
Change
|
|
|
Non Same
Store
|
|
|
Total
|
|
|
|
2019
|
|
|
2018
|
|
|
$
|
|
|
%
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
NOI from consolidated
properties
|
|
$
|
185,874
|
|
|
$
|
196,836
|
|
|
$
|
(10,962)
|
|
|
|
-5.6%
|
|
|
$
|
12,526
|
|
|
$
|
20,163
|
|
|
$
|
198,400
|
|
|
$
|
216,999
|
|
NOI attributable to
equity method
investments, at ownership share
|
|
|
28,597
|
|
|
|
30,161
|
|
|
|
(1,564)
|
|
|
|
-5.2%
|
|
|
|
732
|
|
|
|
572
|
|
|
|
29,329
|
|
|
|
30,733
|
|
Total
NOI
|
|
|
214,471
|
|
|
|
226,997
|
|
|
|
(12,526)
|
|
|
|
-5.5%
|
|
|
|
13,258
|
|
|
|
20,735
|
|
|
|
227,729
|
|
|
|
247,732
|
|
Less: lease
termination revenue
|
|
|
1,531
|
|
|
|
8,641
|
|
|
|
(7,110)
|
|
|
|
-82.3%
|
|
|
|
18
|
|
|
|
577
|
|
|
|
1,549
|
|
|
|
9,218
|
|
Total NOI excluding
lease termination
revenue
|
|
$
|
212,940
|
|
|
$
|
218,356
|
|
|
$
|
(5,416)
|
|
|
|
-2.5%
|
|
|
$
|
13,240
|
|
|
$
|
20,158
|
|
|
$
|
226,180
|
|
|
$
|
238,514
|
|
The table below
reconciles net loss to NOI of our consolidated properties for the
three months and the year ended December 31, 2019 and
2018.
|
|
|
|
|
Three Months
Ended
December
31,
|
|
|
Year
Ended
December
31,
|
|
(in thousands of
dollars)
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Net
loss
|
|
$
|
(15,414)
|
|
|
$
|
(88,834)
|
|
|
$
|
(13,000)
|
|
|
$
|
(126,503)
|
|
Other
income
|
|
|
(393)
|
|
|
|
(717)
|
|
|
|
(1,834)
|
|
|
|
(4,171)
|
|
Depreciation and
amortization
|
|
|
39,699
|
|
|
|
32,611
|
|
|
|
137,784
|
|
|
|
133,116
|
|
General and
administrative expenses
|
|
|
12,591
|
|
|
|
10,373
|
|
|
|
46,010
|
|
|
|
38,342
|
|
Insurance recoveries,
net
|
|
|
132
|
|
|
|
(714)
|
|
|
|
(4,362)
|
|
|
|
(689)
|
|
Provision for
employee separation expense
|
|
|
2,611
|
|
|
|
183
|
|
|
|
3,689
|
|
|
|
1,139
|
|
Project costs and
other expenses
|
|
|
17
|
|
|
|
252
|
|
|
|
284
|
|
|
|
693
|
|
Interest expense,
net
|
|
|
17,001
|
|
|
|
15,291
|
|
|
|
63,987
|
|
|
|
61,355
|
|
Impairment of
assets
|
|
|
3,553
|
|
|
|
103,201
|
|
|
|
3,553
|
|
|
|
137,487
|
|
Impairment of
development land parcel
|
|
|
-
|
|
|
|
-
|
|
|
|
1,464
|
|
|
|
-
|
|
Gain on debt
extinguishment, net
|
|
|
(27)
|
|
|
|
-
|
|
|
|
(24,859)
|
|
|
|
-
|
|
Equity in income of
partnerships
|
|
|
(2,153)
|
|
|
|
(3,189)
|
|
|
|
(8,289)
|
|
|
|
(11,375)
|
|
Gain on sales of real
estate by equity method
investee
|
|
|
-
|
|
|
|
-
|
|
|
|
(553)
|
|
|
|
(2,772)
|
|
Gain on sales of
interests in real estate, net
|
|
|
(72)
|
|
|
|
(776)
|
|
|
|
(2,756)
|
|
|
|
(1,525)
|
|
Gain on sales of
interest in non operating real
estate
|
|
|
(2,718)
|
|
|
|
(8,126)
|
|
|
|
(2,718)
|
|
|
|
(8,100)
|
|
NOI from
consolidated properties
|
|
$
|
54,827
|
|
|
$
|
59,555
|
|
|
$
|
198,400
|
|
|
$
|
216,997
|
|
Less: Non Same Store
NOI of consolidated
properties
|
|
|
2,162
|
|
|
|
4,958
|
|
|
|
12,526
|
|
|
|
20,162
|
|
Same Store NOI
from consolidated properties
|
|
$
|
52,665
|
|
|
$
|
54,597
|
|
|
$
|
185,874
|
|
|
$
|
196,835
|
|
Less: Same Store
lease termination revenue
|
|
|
963
|
|
|
|
1,563
|
|
|
|
1,426
|
|
|
|
8,152
|
|
Same Store NOI
excluding lease termination
revenue
|
|
$
|
51,702
|
|
|
$
|
53,034
|
|
|
$
|
184,448
|
|
|
$
|
188,683
|
|
The table below
reconciles equity in income of partnerships to NOI of equity method
investments at ownership share for the three months
and the year ended December 31, 2019 and 2018:
|
|
|
|
|
Three Months
Ended
December
31,
|
|
|
Year
Ended
December
31,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Equity in income of
partnerships
|
|
$
|
2,153
|
|
|
$
|
3,189
|
|
|
$
|
8,289
|
|
|
$
|
11,375
|
|
Other
income
|
|
|
(29)
|
|
|
|
(46)
|
|
|
|
(77)
|
|
|
|
(82)
|
|
Depreciation and
amortization
|
|
|
3,421
|
|
|
|
2,095
|
|
|
|
9,874
|
|
|
|
8,612
|
|
Interest and other
expenses
|
|
|
2,829
|
|
|
|
2,737
|
|
|
|
11,244
|
|
|
|
10,828
|
|
Net operating
income from equity method
investments at ownership share
|
|
$
|
8,374
|
|
|
$
|
7,975
|
|
|
$
|
29,330
|
|
|
$
|
30,733
|
|
Less: Non Same Store
NOI from equity method
investments at ownership share
|
|
|
923
|
|
|
|
95
|
|
|
|
732
|
|
|
|
573
|
|
Same Store NOI of
equity method investments
at ownership share
|
|
$
|
7,451
|
|
|
$
|
7,880
|
|
|
$
|
28,598
|
|
|
$
|
30,160
|
|
Less: Same Store
lease termination revenue
|
|
|
55
|
|
|
|
12
|
|
|
|
105
|
|
|
|
489
|
|
Same Store NOI
from equity method
investments excluding lease termination
revenue at ownership share
|
|
$
|
7,396
|
|
|
$
|
7,868
|
|
|
$
|
28,493
|
|
|
$
|
29,671
|
|
|
|
December
31,
|
|
|
|
2019
|
|
|
2018
|
|
(in thousands of
dollars)
|
|
|
|
|
|
|
|
|
ASSETS:
|
|
|
|
|
|
|
|
|
INVESTMENTS IN REAL
ESTATE, at cost:
|
|
|
|
|
|
|
|
|
Operating
properties
|
|
$
|
3,100,530
|
|
|
$
|
3,063,531
|
|
Construction in
progress
|
|
|
106,028
|
|
|
|
115,182
|
|
Land held for
development
|
|
|
5,881
|
|
|
|
5,881
|
|
Total investments in
real estate
|
|
|
3,212,439
|
|
|
|
3,184,594
|
|
Accumulated
depreciation
|
|
|
(1,205,868)
|
|
|
|
(1,118,582)
|
|
Net investments in
real estate
|
|
|
2,006,571
|
|
|
|
2,066,012
|
|
INVESTMENTS IN
PARTNERSHIPS, at equity:
|
|
|
159,993
|
|
|
|
131,124
|
|
OTHER
ASSETS:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
12,211
|
|
|
|
18,084
|
|
Tenant and other
receivables, net
|
|
|
41,556
|
|
|
|
38,914
|
|
Intangible
assets
|
|
|
14,541
|
|
|
|
17,868
|
|
Deferred costs and
other assets, net
|
|
|
103,889
|
|
|
|
110,805
|
|
Assets held for
sale
|
|
|
12,506
|
|
|
|
22,307
|
|
Total
assets
|
|
$
|
2,351,267
|
|
|
$
|
2,405,114
|
|
LIABILITIES:
|
|
|
|
|
|
|
|
|
Mortgage loans
payable, net
|
|
$
|
899,753
|
|
|
$
|
1,047,906
|
|
Term Loans,
net
|
|
|
548,025
|
|
|
|
547,289
|
|
Revolving
Facilities
|
|
|
255,000
|
|
|
|
65,000
|
|
Tenants' deposits
and deferred rent
|
|
|
13,006
|
|
|
|
15,400
|
|
Distributions in
excess of partnership investments
|
|
|
87,916
|
|
|
|
92,057
|
|
Fair value of
derivative liabilities
|
|
|
13,126
|
|
|
|
3,010
|
|
Accrued expenses and
other liabilities
|
|
|
107,016
|
|
|
|
87,901
|
|
Total
liabilities
|
|
|
1,923,842
|
|
|
|
1,858,563
|
|
EQUITY:
|
|
|
|
|
|
|
|
|
Total
equity
|
|
|
427,425
|
|
|
|
546,551
|
|
Total liabilities and
equity
|
|
$
|
2,351,267
|
|
|
$
|
2,405,114
|
|
Changes in Funds from
Operations for the three months and the year ended December 31,
2019 as compared to the three months and the
year ended December 31, 2018 (all per share amounts on a diluted
basis unless otherwise noted; rounded to the nearest half
penny;
amounts may not total due to rounding)
|
|
|
(in
thousands, except per share amounts)
|
|
Three
Months
Ended
December
31,
2019
|
|
|
Per
Diluted
Share and
OP
Unit
|
|
|
Year
Ended
December
31,
2019
|
|
|
Per
Diluted
Share and
OP
Unit
|
|
Funds from
Operations, as adjusted December 31,
2018
|
|
$
|
40,576
|
|
|
$
|
0.52
|
|
|
$
|
120,431
|
|
|
$
|
1.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes - Q4 2018
to Q4 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution from
anchor replacements and new box tenants
|
|
|
888
|
|
|
|
0.010
|
|
|
|
2,918
|
|
|
|
0.035
|
|
Impact from 2019
bankruptcies
|
|
|
(2,214)
|
|
|
|
(0.030)
|
|
|
|
(5,653)
|
|
|
|
(0.070)
|
|
Other leasing
activity, including base rent and net
CAM and real estate tax recoveries
|
|
|
206
|
|
|
|
0.005
|
|
|
|
(1,682)
|
|
|
|
(0.020)
|
|
Lease termination
revenue
|
|
|
(600)
|
|
|
|
(0.010)
|
|
|
|
(6,726)
|
|
|
|
(0.085)
|
|
Credit
losses
|
|
|
(237)
|
|
|
|
(0.005)
|
|
|
|
(378)
|
|
|
|
(0.005)
|
|
Other
|
|
|
24
|
|
|
|
-
|
|
|
|
560
|
|
|
|
0.005
|
|
Same Store NOI from
unconsolidated properties
|
|
|
(429)
|
|
|
|
(0.005)
|
|
|
|
(1,563)
|
|
|
|
(0.020)
|
|
Same Store
NOI
|
|
|
(2,362)
|
|
|
|
(0.030)
|
|
|
|
(12,524)
|
|
|
|
(0.160)
|
|
Non Same Store
NOI
|
|
|
(1,968)
|
|
|
|
(0.025)
|
|
|
|
(7,476)
|
|
|
|
(0.095)
|
|
Dilutive effect of
asset sales
|
|
|
(666)
|
|
|
|
(0.010)
|
|
|
|
(1,087)
|
|
|
|
(0.015)
|
|
General and
administrative expenses
|
|
|
(858)
|
|
|
|
(0.010)
|
|
|
|
(1,552)
|
|
|
|
(0.020)
|
|
Capitalization of
leasing costs
|
|
|
(1,360)
|
|
|
|
(0.015)
|
|
|
|
(6,116)
|
|
|
|
(0.080)
|
|
Gain on sales of
non-operating real estate
|
|
|
(5,408)
|
|
|
|
(0.070)
|
|
|
|
(5,383)
|
|
|
|
(0.070)
|
|
Other
|
|
|
395
|
|
|
|
0.005
|
|
|
|
(1,118)
|
|
|
|
(0.015)
|
|
Interest expense,
net
|
|
|
(1,692)
|
|
|
|
(0.020)
|
|
|
|
(2,525)
|
|
|
|
(0.030)
|
|
Increase in weighted
average shares
|
|
|
-
|
|
|
|
(0.005)
|
|
|
|
-
|
|
|
|
(0.005)
|
|
Funds from
Operations, as adjusted December 31,
2019
|
|
$
|
26,657
|
|
|
$
|
0.34
|
|
|
$
|
82,650
|
|
|
$
|
1.05
|
|
Insurance recoveries,
net
|
|
|
(132)
|
|
|
|
-
|
|
|
|
4,362
|
|
|
|
0.055
|
|
Gain on debt
extinguishment, net
|
|
|
27
|
|
|
|
-
|
|
|
|
24,859
|
|
|
|
0.320
|
|
Impairment of
assets
|
|
|
(2,098)
|
|
|
|
(0.025)
|
|
|
|
(2,098)
|
|
|
|
(0.025)
|
|
Impairment of
development land parcel
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,464)
|
|
|
|
(0.020)
|
|
Provision for
employee separation expense
|
|
|
(2,611)
|
|
|
|
(0.035)
|
|
|
|
(3,689)
|
|
|
|
(0.045)
|
|
Funds from
Operations December 31, 2019
|
|
$
|
21,843
|
|
|
$
|
0.28
|
|
|
$
|
104,620
|
|
|
$
|
1.33
|
|
CONTACT: AT THE COMPANY
Mario Ventresca
EVP & CFO
(215) 875-0703
Heather Crowell
EVP, Strategy and Communications
(215) 454-1241
heather.crowell@preit.com
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SOURCE PREIT