PHILADELPHIA, Jan. 12, 2022 /PRNewswire/ -- PREIT (NYSE:
PEI) (the "Company"), a leading real estate investment trust
focused on creating thoughtful, community-centric properties, today
announced meaningful increases in shopper traffic over the
holiday season, building on strong sales during the early shopping
season in October and November. PREIT also provided an update
on its ongoing efforts to improve its financial position,
including a process now underway to consider a wide range of
options to reduce debt and strengthen the Company's capital
structure.
Joseph F. Coradino, Chairman and
CEO of PREIT, said, "We are encouraged by the increased customer
traffic and positive sales trends throughout the holiday season,
which demonstrate continued momentum in the pace of recovery.
Continued consumer confidence, coupled with our strong operational
execution, position PREIT's portfolio for success as we enter the
new year."
Robust Leasing Activity and Shopper Traffic over
Holiday Season
Following years of strategic portfolio pruning and reinvestment
of capital in proactive anchor repositioning, the strength of
PREIT's portfolio is evident in its 2021 leasing and tenant sales
results.
In 2021, the Company executed transactions for 1.2 million
square feet of new space – more than any of the past five years
and nearly three times as much as 2019. This creates a strong
foundation for the future, as PREIT begins 2022 with executed
leases to come online during the year which is expected to generate
$4 million of new revenue
annually.
During 2021, over 1.1 million square feet of space opened
throughout PREIT's portfolio. Notable first-to-portfolio 2021
openings included:
- Aldi at Dartmouth Mall
- Miniso, Peloton and Purple at Cherry Hill Mall
- Power Warehouse at Cumberland Mall
- Turn 7 at Moorestown Mall
- Rose & Remington, Lovisa and Offline by aerie (opening this
week) at Woodland Mall
Strong demand is driving improved results across PREIT's
portfolio. This is illustrated by existing tenant sales which, on a
rolling 12-month basis through November, were up over five percent
in the core portfolio compared to the rolling 12-month period ended
November 30, 2019. Traffic during the
holiday season (November and December) grew by 25% over
2020 at core malls with over 8 million customers visiting
PREIT malls during that time. Anecdotally, retailers operating in
the Company's portfolio experienced strong sales throughout the
season on the heels of a strong fall where sales for comparable
tenants grew by 9.3% and 6.1% in October and November,
respectively. Estimated core mall comparable sales per square foot
reached a record high of $590
for the period ended November 30,
2021.
Capital-Raising Activity
Capital-raising, to reduce debt and the Company's interest
burden, remains a key focus of management. The Company's
capital plan includes raising over $350
million in multiple phases.
During its Q3 2021 earnings call, the Company outlined its
intention to sell over 10 land and operating parcels for over
$120 million in proceeds
between now and the middle of 2022 as part of its initial phase of
capital-raising, including approximately $40
million in multi-family land sales and $80 million in other parcel sales.
As a second phase of capital-raising, the Company has contracts
for additional multi-family land sales for another $60 million and an additional phase of
multi-family land sales estimated at $100
million in value. The Company is also marketing
several other parcels for approximately $70
million. Capital raised will be used to reduce the Company's
outstanding debt.
Mr. Coradino continued, "Raising capital is a key strategic
priority to further strengthen PREIT's financial flexibility for
the benefit of our stakeholders. We have several significant
capital-raising initiatives in advanced stages of
implementation and will continue to opportunistically reduce our
overall debt and interest obligations. This holiday season
highlighted the strength of our portfolio, which we expect will
continue to solidify as new tenants and uses come online in
2022 and we execute on our balance sheet improvement
initiatives."
The status of Phase I initiatives, for $120 million in gross proceeds, can be found
below. Over 67% is executed or in documentation.
Multi-family Land Sales
Closing on land parcels for multi-family development is an
important way the Company is efficiently raising capital and
further evolving its properties. PREIT is progressing on all
facets of the announced projects and currently expects to close on
three sales with a current contract value of approximately
$40 million before June 30, 2022. Three additional sales are
currently under contract for over $60
million and are expected to close before the end of
2023. A phase II multi-family opportunity is estimated
to potentially raise an additional $100
million for over 2,000 units.
Evaluating Opportunities to Further Reduce Debt and
Strengthen the Company's Capital Structure
"Over the past several years, we have improved operational
efficiency and drove stable and increasing cash flows from
operations while advancing our portfolio. Today, our business is
performing well, as most recently evidenced by a strong holiday
season," said Coradino. "While we are pleased with our progress to
date, and look forward to reducing PREIT's debt to position
ourselves to exercise our credit facility extension option, we are
undertaking a thorough review of our business and capital
structure. Our Board and management team are evaluating a wide
range of opportunities to further strengthen the Company's balance
sheet and financial flexibility."
To assist the Board of Trustees and management team in pursuing
strategic and financial options that will strengthen the Company's
balance sheet, PREIT has engaged PJT Partners, a premier global
advisory-focused investment bank. There can be no assurance that
the process will result in any particular outcome, and the Company
notes that it will take the appropriate time to complete the
review. PREIT does not intend to provide updates concerning this
process until such time as the Company determines that further
disclosure is necessary or appropriate.
About PREIT
PREIT (NYSE:PEI) is a publicly traded real estate investment
trust that owns and manages innovative properties developed to be
thoughtful, community-centric hubs. PREIT's robust portfolio of
carefully curated, ever-evolving properties generates success for
its tenants and meaningful impact for the communities it serves by
keenly focusing on five core areas of established and emerging
opportunity: multi-family & hotel, health & tech, retail,
essentials & grocery and experiential. Located primarily in
densely-populated regions, PREIT is a top operator of high quality,
purposeful places that serve as one-stop destinations for customers
to shop, dine, play and stay. Additional information is available
at www.preit.com or on Twitter, Instagram 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 expectations and assumptions regarding our business, the
economy and other future events and conditions and are based on
currently available financial, economic and competitive data and
our current business plans. Actual results could vary materially
depending on risks, uncertainties and changes in circumstances that
may affect our operations, markets, services, prices and other
factors as discussed in the Risk Factors section of our other
filings with the Securities and Exchange Commission. While we
believe our assumptions are reasonable, we caution you against
relying on any forward-looking statements as it is very difficult
to predict the impact of known factors, and it is impossible for us
to anticipate all factors that could affect our actual results.
Important factors that could cause actual results to differ
materially from those in the forward-looking statements include,
but are not limited to, the effectiveness of strategies we may
employ to address our liquidity and capital resources in the
future, our ability to achieve our forecasted revenue and pro forma
leverage ratio and generate free cash flow to further reduce our
indebtedness; our ability to manage our business through the
impacts of the COVID-19 pandemic, a weakening of global economic
and financial conditions, changes in governmental regulations and
related compliance and litigation costs and the other factors
listed in our SEC filings. Additionally, our business might be
materially and adversely affected by changes in the retail and real
estate industries, including bankruptcies, consolidation and store
closings, particularly among anchor tenants; current economic
conditions, including consumer confidence and spending levels and
supply chain challenges and the impact of the COVID-19 pandemic and
the public health and governmental response as well as 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; social
unrest and acts of vandalism and violence at malls, including our
properties, or at other similar spaces, and the potential effect on
traffic and sales; the frequency, severity and impact of extreme
weather events at or near our properties; 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 and our ability
to remain in compliance with our financial covenants under our debt
facilities; 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 the sections entitled "Item 1A. Risk Factors" in our Annual
Report on Form 10-K for the year ended December 31, 2020. We do not intend to update or
revise any forward-looking statements to reflect new information,
future events or otherwise.
Contact:
Heather
Crowell
EVP, Strategy and Communications
(215) 454-1241
heather.crowell@preit.com
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SOURCE PREIT