PHILADELPHIA, Nov. 4, 2021 /PRNewswire/ -- PREIT (NYSE: PEI) today reported results for the three and nine months ended September 30, 2021.  A description of each non-GAAP financial measure and the related reconciliation to the comparable GAAP financial measure is provided in the tables accompanying this release.

PREIT has a primary focus on the ownership and management of differentiated retail shopping malls crafted to fit the dynamic communities they serve. The Company operates properties in 12 states in the eastern U.S. with concentration in the Mid-Atlantic and Greater Philadelphia region. The Company is headquartered in Philadelphia, Pennsylvania. More information about PREIT can be found at www.preit.com or on Twitter or LinkedIn. (PRNewsFoto/PREIT) (PRNewsFoto/)



Three Months Ended September 30,



Nine Months Ended September 30,


(per share amounts)


2021



2020



2021





2020


Net loss - basic and diluted


$

(0.56)



$

(0.46)



$

(1.60)





$

(1.10)


FFO


$

(0.07)



$

0.12



$

(0.12)





$

0.20


FFO, as adjusted


$

(0.08)



$

0.03



$

(0.21)





$

0.12


"As we head into what is forecast to be a record-setting holiday season, our portfolio is generating tremendous momentum with impressive same store NOI growth, robust tenant sales and a strong leasing pipeline as a result of our unrelenting focus to create ever-evolving properties that generate success for our tenants," said Joseph F. Coradino, Chairman and CEO of PREIT.  "As our industry continues along a steep recovery slope, we expect to continue to deliver solid results and create value for our stakeholders."

  • Same Store NOI, excluding lease termination revenue, increased 36.0% for the three months ended September 30, 2021 compared to the three months ended September 30, 2020.
    • For the quarter, results were driven by an increase in real estate revenue of $7.8 million primarily due to favorable percentage rent and a decrease in recognized credit losses for challenged tenants as compared to the three months ended September 30, 2020, partially offset by reduced rents from bankruptcies.
  • Collections continued to be strong with cash collections of 119% of billings for the third quarter of 2021.  We collected 92% of billed third quarter 2021 rents and momentum continued in October with 93% of billed rents collected.
  • Our accounts receivable balance is down to $36.1 million as of September 30, 2021 compared to $54.5 million as of December 31, 2020.
  • As a result of improved collections, net cash generated from operating activities totaled $38.2 million for the nine months ended September 30, 2021 compared to cash used in operating activities of $8.8 million  in the nine months ended September 30, 2020.   
  • Robust leasing activity is driving increased occupancy with Mall Total Occupancy increasing by 100 basis points, sequentially, to 88.8%. Mall Non-anchor Occupancy increased 230 basis points, sequentially, to 86.6%.
  • Total Core Mall leased space, at 91.7%, exceeds occupied space by 210 basis points, and total non-anchor leased space, at 90.2%, exceeds occupied space by 190 basis points when including executed new leases slated for future occupancy, demonstrating the rapid pace of leasing activity.
  • For the rolling 12 month period ended September 30, 2021, core mall sales for comparable tenants grew by 6.1% on average compared to the rolling 12 month period ended September 30, 2019. Sales grew at over 80% of properties, with comparable tenants, meaning tenants that reported sales in both periods, reporting sales growth of 17% in September 2021 when compared to September of 2019.
  • Average renewal spreads for the nine months ended September 30, 2021 declined by 1.1%. Sequentially, average renewal spreads for tenants less than 10,000 square feet improved from -13.5% for the quarter ended June 30, 2021 to -2.3% for the quarter ended September 30, 2021.

Leasing and Redevelopment

  • 637,000 square feet of leases are signed for future openings, which is expected to contribute annual gross rent of $10.0 million.
  • Leasing momentum continues to build with transactions executed for 1.2 million square feet of occupancy thus far in 2021.
  • Tilt Studios replaced JC Penney in 104,000 square feet at Magnolia Mall in Florence, SC. The family-focused destination opened in October 2021.
  • Aldi opened its first store in the portfolio in 21,000 square feet at Dartmouth Mall in Dartmouth, MA in September 2021.
  • A lease has been executed with Turn 7 to occupy the former Lord & Taylor space at Moorestown Mall. Turn 7 will open this Fall selling ever-changing overstocked merchandise from online channels at a discount, in a fast-paced, fun atmosphere. The store is expected to open in November.
  • A transaction has been executed with Cooper University Health Care for an outpatient location in the former Sears space at Moorestown Mall in Moorestown, NJ. The Company also executed a rezoning agreement to allow for the addition of up to 1,065 multifamily units and a hotel at Moorestown Mall.
  • Construction is underway on a new self-storage facility in previously unused below grade space at Mall at Prince George's in Hyattsville, MD with an anticipated opening in Q1 2022.
  • A lease has been executed with Tilted 10 and Tilt Studio, an action-packed bi-level 104,000 square foot indoor family entertainment center to replace the former JC Penney at Willow Grove Park, adding family entertainment to this locally-loved destination shopping experience.
  • Phoenix Theatres is under construction to bring a first-class movie experience to Woodland Mall in 47,000 square feet in Q1 2022.

Primary Factors Affecting Financial Results for the Three Months Ended September 30, 2021 and 2020

  • Net loss attributable to PREIT common shareholders was $44.6 million (which takes into consideration the accrual of preferred dividends that accumulated during the quarter but have not been paid), or $0.56 per basic and diluted share for the three months ended September 30, 2021, compared to net loss attributable to PREIT common shareholders of $35.7 million, or $0.46 per basic and diluted share for the three months ended September 30, 2020.
  • Same Store NOI, including lease terminations, increased by $10.8 million, or 30.4%. The increase is primarily due to tenant store closings and rent abatements and increased credit losses that occurred in the prior year, partially offset by a reduction in expense recoveries resulting from tenant restructuring transactions.
  • Non-Same Store NOI increased by $0.4 million, primarily due to higher credit losses in the prior year.
  • FFO for the three months ended September 30, 2021 was $(0.07) per diluted share and OP Unit compared to $0.12 per diluted share and OP Unit for the three months ended September 30, 2020. Adjustments to FFO in the third quarter of 2021 was primarily related to $(0.01) per share from gain on hedge ineffectiveness.

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 and nine months ended September 30, 2021 and 2020 is included on page 15.

Liquidity and Financing Activities
As of September 30, 2021, the Company had $75.2 million available under its First Lien Revolving Credit Facility. The Company's corporate cash balances, when combined with available credit, provides total liquidity of $96.3 million.

Asset Dispositions
Multifamily Land Parcels: The Company has executed agreements of sale for land parcels for anticipated multi-family development in the amount of $99.1 million. The agreements are with multiple buyers across six properties for over 2,500 units as part of the Company's previously announced multi-family land sale plan.  Closing on the transactions is subject to customary due diligence provisions and securing entitlements. 

Hotel Parcels: The Company has an executed agreement of sale to convey a land parcel for anticipated hotel development in the amount of $2.5 million for approximately 125 rooms. Closing on the transaction is subject to customary due diligence provisions and securing entitlements.

Other Parcels:  In August 2021, the Company closed on the sale of the strip center adjacent to Valley View Mall for $3.5 million.   The Company expects to close on the sale of a remaining parcel at the previously disposed Monroe Power Center for $1.0 million in November and an anchor box at Valley View Mall in early 2022 for $2.8 million.

2021 Outlook
The Company is not issuing detailed guidance at this time.

 

Conference Call Information
Management has scheduled a conference call for 11:00 a.m. Eastern Time on Thursday
November 4, 2021, 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 3651629, at least fifteen minutes before the scheduled start time as callers could experience delays.  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 (REIT) that owns and manages distinctive real estate in high barrier-to-entry markets at  the forefront of enabling communities through the built environment. PREIT's robust portfolio of carefully curated retail and lifestyle offerings mixed with destination dining and entertainment experiences are located primarily in densely-populated, high barrier-to-entry markets with tremendous opportunity to create vibrant multi-use destinations. Additional information is available at preit.com or on Twitter or LinkedIn.

Rounding
Certain summarized information in the tables included may not total due to rounding.

Definitions
Funds From Operations ("FFO")

The National Association of Real Estate Investment Trusts ("NAREIT") defines Funds From Operations ("FFO"), which is a non-GAAP measure commonly used by REITs, as net income (computed in accordance with GAAP) excluding (i) depreciation and amortization of real estate, (ii) gains and losses on sales 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. NAREIT's established guidance provides that excluding impairment write downs of depreciable real estate is consistent with the NAREIT definition.

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") 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 (including development land parcels), which are included in the determination of net loss 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 loss and net cash used in 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 loss (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 loss is the most directly comparable GAAP measurement to FFO.

When applicable, we also present FFO, as adjusted, and FFO per diluted share and OP Unit, as adjusted, which are non-GAAP measures, for the three and nine months ended September 30, 2021 and 2020, 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, insurance recoveries or losses, net, gain on derecognition of property, gain or loss on hedge ineffectiveness and reorganization expenses which had an effect on our results of operations, but are not, in our opinion, indicative of our ongoing operating performance.

We believe that FFO is helpful to management and investors as a measure of operating performance because it excludes various items included in net loss 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, gain on hedge ineffectiveness and reorganization expenses.

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 loss (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 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 loss is the most directly comparable GAAP measure to NOI. NOI excludes other income, depreciation and amortization, general and administrative expenses, insurance recoveries and losses, net, provision for employee separation expenses, project costs and other expenses, interest expense, reorganization expenses, impairment of assets, equity in loss/income of partnerships, gain on extinguishment of debt, gain/loss on sale of real estate and gain/loss on sales of non-operating real estate.

Same Store NOI is calculated using retail properties owned for the full periods presented and excludes properties acquired or disposed of, under redevelopment, or designated as non-core during the periods presented.  Non Same Store NOI is calculated using the retail properties excluded from the calculation of Same Store NOI.

Unconsolidated Properties and Proportionate Financial Information

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 non-GAAP financial information, but we believe that it is helpful information because it reflects the pro rata 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 (loss) 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-pro rata 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 was previously designated a non-core property, as we no longer operate this property. 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," and similar expressions. Forward-looking statements relate to expectations, beliefs, projections, future plans, strategies, anticipated events, trends and other matters, including our expectations regarding the impact of COVID-19 on our business, that are not historical facts. These forward-looking statements reflect our current views about future events, achievements, results, cost reductions, dividend payments and the impact of COVID-19 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:

  • the effectiveness of our financial restructuring and any additional strategies that we may employ to address our liquidity and capital resources in the future;
  • our ability to achieve forecasted revenue and pro forma leverage ratio and generate free cash flow to further reduce indebtedness;
  • the COVID-19 global pandemic and the public health and governmental response, which have and may continue to exacerbate many of the risks listed herein;
  • changes in the retail and real estate industries, including bankruptcies, consolidation and store closings, particularly among anchor tenants;
  • current economic conditions, including current high rates of unemployment and its effects on consumer confidence and spending, supply chain challenges, 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;
  • social unrest and acts of vandalism or violence at malls, including our properties, or at other similar spaces, and the potential effect on traffic and sales;
  • the frequency, severity and potential impact of extreme weather events at or near our properties, including potential property damage, some or all of which may not be covered by insurance, the potential effect on traffic and sales, and the potential increased costs of insurance coverage;
  • 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 our ability to remain in compliance with our financial covenants under our debt facilities;
  • our ability to raise capital, including through sales of properties or interests in properties, subject to the terms of our Credit Agreements; 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, 2020 in the section entitled "Item 1A. Risk Factors" and any subsequent reports we file with the SEC. Any forward-looking statements made by us speak only as of the date on which they are made, and 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     **

 

Pennsylvania Real Estate Investment Trust
Selected Financial Data




Three Months Ended

September 30,



Nine Months Ended

September 30,


(in thousands of dollars)


2021



2020



2021



2020


REVENUE:

















Real estate revenue:

















Lease revenue


$

65,543



$

58,473



$

193,563



$

178,313


Expense reimbursements



4,650




4,040




12,436




11,321


Other real estate revenue



1,400




1,336




4,828




4,803


Total real estate revenue



71,593




63,849




210,827




194,437


Other income



143




340




430




764


Total revenue



71,736




64,189




211,257




195,201


EXPENSES:

















Operating expenses:

















Property operating expenses:

















CAM and real estate taxes



(26,408)




(27,688)




(79,899)




(80,418)


Utilities



(3,749)




(3,530)




(9,573)




(8,971)


Other property operating expenses



(1,972)




(1,827)




(6,580)




(5,699)


Total property operating expenses



(32,129)




(33,045)




(96,052)




(95,088)


Depreciation and amortization



(29,142)




(34,420)




(88,667)




(95,597)


General and administrative expenses



(14,453)




(9,526)




(39,819)




(30,790)


Provision for employee separation expenses



(39)




(60)




(279)




(1,173)


Insurance recoveries, net









670




586


Project costs and other expenses



(27)




(124)




(206)




(287)


Total operating expenses



(75,790)




(77,175)




(224,353)




(222,349)


Interest expense, net



(32,426)




(20,260)




(95,135)




(54,300)


Gain on debt extinguishment, net









4,587





Gain on derecognition of property






7,006







7,006


Impairment of assets



(262)







(1,564)





Reorganization expenses









(267)





Total expenses



(108,478)




(90,429)




(316,732)




(269,643)


Loss before equity in loss of partnerships, (loss) gain on sales of real estate by equity method investee, (loss) gain on sales of real estate, net, and gain (loss) on sales of interests in non operating real estate



(36,742)




(26,240)




(105,475)




(74,442)


Equity in loss of partnerships



(1,429)




(3,259)




(2,429)




(2,798)


(Loss) gain on sales of real estate by equity method investee



(10)







1,337





(Loss) gain on sales of real estate, net



(217)




(94)




(1,191)




11,169


Gain (loss) on sales of interests in non operating real estate






16







(174)


Net loss



(38,398)




(29,577)




(107,758)




(66,245)


Less: net loss attributable to noncontrolling interest



669




734




2,686




1,996


Net loss attributable to PREIT



(37,729)




(28,843)




(105,072)




(64,249)


Less: cumulative preferred share dividends



(6,843)




(6,843)




(20,531)




(20,531)


Net loss attributable to PREIT common shareholders


$

(44,572)



$

(35,686)



$

(125,603)



$

(84,780)


 

 

Pennsylvania Real Estate Investment Trust
Selected Financial Data




Three Months Ended

September 30,



Nine Months Ended

September 30,


(in thousands, except per share amounts)


2021



2020



2021



2020


Net loss


$

(38,398)



$

(29,577)



$

(107,758)



$

(66,245)


Noncontrolling interest



669




734




2,686




1,996


Cumulative preferred share dividends



(6,843)




(6,843)




(20,531)




(20,531)


Dividends on unvested restricted shares












(363)


Net loss used to calculate loss per share—basic and diluted


$

(44,572)



$

(35,686)



$

(125,603)



$

(85,143)


Basic and diluted loss per share:


$

(0.56)



$

(0.46)



$

(1.60)



$

(1.10)



















(in thousands of shares)

















Weighted average shares outstanding—basic



79,184




77,401




78,330




77,149


Effect of common share equivalents(1)













Weighted average shares outstanding—diluted



79,184




77,401




78,330




77,149




(1)

The Company had net losses in all periods presented. 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

September 30,



Nine Months Ended

September 30,


(in thousands of dollars)


2021



2020



2021



2020


Comprehensive loss:

















Net loss


$

(38,398)



$

(29,577)



$

(107,758)



$

(66,245)


Unrealized gain (loss) on derivatives



2,634




4,053




7,903




(15,750)


Amortization of settled swaps



4




3




9




73


Total comprehensive loss



(35,760)




(25,521)




(99,846)




(81,922)


Less: comprehensive loss attributable to noncontrolling
interest



630




138




2,518




2,401


Comprehensive loss attributable to PREIT


$

(35,130)



$

(25,383)



$

(97,328)



$

(79,521)


 

 

Pennsylvania Real Estate Investment Trust
Selected Financial Data


The following table presents a reconciliation of net loss determined in accordance with GAAP to (i) FFO attributable to common shareholders and OP Unit holders, (ii) FFO, as adjusted, attributable to common shareholders and OP Unit holders, (iii) FFO attributable to common shareholders and OP Unit holders per diluted share and OP Unit, (iv) and FFO, as adjusted, attributable to common shareholders and OP Unit holders per diluted share and OP Unit for the three and nine months ended September 30, 2021 and 2020:




Three Months Ended
September 30,



Nine Months Ended
September 30,


(in thousands, except per share amounts)


2021



2020



2021



2020


Net loss


$

(38,398)



$

(29,577)



$

(107,758)



$

(66,245)


     Depreciation and amortization on real estate:

















Consolidated properties



28,812




34,053




87,653




94,538


PREIT's share of equity method investments



3,095




5,095




9,257




12,396


     Gain on sales of real estate by equity method investee



10







(1,337)






     Loss (gain) on sales of real estate, net



217




94




1,191




(11,169)


 Impairment of assets:

















Consolidated properties



262







1,564





PREIT's share of equity method investments









265





Dividend on preferred shares












(13,687)


Funds from operations attributable to common shareholders and
OP Unit holders



(6,002)




9,665




(9,165)




15,833


Insurance recoveries, net









(670)




(586)


    Provision for employee separation expenses



39




60




279




1,173


Gain on hedge ineffectiveness



(532)







(2,329)





    Gain on debt extinguishment, net









(4,587)





Gain on derecognition of property






(7,006)







(7,006)


    Reorganization expenses






-




267





Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders


$

(6,495)



$

2,719



$

(16,205)



$

9,414



















Funds from operations attributable to common shareholders and OP Unit holders per diluted share and OP Unit


$

(0.07)



$

0.12



$

(0.12)



$

0.20


Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders per diluted share and OP Unit


$

(0.08)



$

0.03



$

(0.21)



$

0.12



















(in thousands of shares)

















Weighted average number of shares outstanding



79,184




77,401




78,330




77,149


Weighted average effect of full conversion of OP Units



1,226




2,023




(1,723)




2,023


Effect of common share equivalents



1,081




357




897




411


Total weighted average shares outstanding, including OP Units



81,490




79,781




77,504




79,583


 

 

Pennsylvania Real Estate Investment Trust
Selected Financial Data


NOI for the three months ended September 30, 2021 and 2020:




Same Store



Change



Non Same Store



Total


(in thousands of dollars)


2021



2020



$



%



2021



2020



2021



2020


NOI from consolidated properties


$

38,966



$

30,662



$

8,304




27.1

%


$

498



$

144



$

39,464



$

30,806


NOI attributable to equity method investments, at ownership share



7,226




4,759




2,467




51.8

%



7




6




7,233




4,766


Total NOI



46,192




35,421




10,771




30.4

%



505




150




46,697




35,572


Less: lease termination revenue



740




2,011




(1,271)




(63.2)

%



138







878




2,011


Total NOI excluding lease termination
revenue


$

45,452



$

33,410



$

12,042




36.0

%


$

367



$

150



$

45,819



$

33,561


 

NOI for the nine months ended September 30, 2021 and 2020:




Same Store



Change



Non Same Store



Total


(in thousands of dollars)


2021



2020



$



%



2021



2020



2021



2020


NOI from consolidated properties


$

114,289



$

98,169



$

16,120




16.4

%


$

485



$

1,179



$

114,774



$

99,348


NOI attributable to equity method investments, at ownership share



23,482




18,273




5,209




28.5

%



(5)




22




23,477




18,296


Total NOI



137,771




116,442




21,329




18.3

%



480




1,201




138,251




117,644


Less: lease termination revenue



3,911




2,236




1,675




74.9

%



138







4,049




2,236


Total NOI excluding lease termination
revenue


$

133,860



$

114,206



$

19,654




17.2

%


$

342



$

1,201



$

134,202



$

115,408


 

 

Pennsylvania Real Estate Investment Trust
Selected Financial Data


The table below reconciles net loss to NOI of our consolidated properties for the three and nine months ended September 30, 2021 and 2020.




Three Months Ended
September 30,


Nine Months Ended
September 30,


(in thousands of dollars)


2021



2020


2021



2020


Net loss


$

(38,398)



$

(29,577)


$

(107,758)



$

(66,245)


Other income



(143)




(338)



(430)




(765)


Depreciation and amortization



29,142




34,420



88,667




95,597


General and administrative expenses



14,453




9,526



39,819




30,790


Insurance recoveries, net








(670)




(586)


Provision for employee separation expense



39




60



279




1,173


Project costs and other expenses



27




124



205




287


Interest expense, net



32,426




20,260



95,135




54,300


Impairment of assets



262






1,564





Gain on debt extinguishment, net








(4,587)





Gain on derecognition of property






(7,006)






(7,006)


Reorganization expenses








267





Equity in (income) loss of partnerships



1,429




3,259



2,429




2,798


Gain on sales of real estate by equity method investee



10






(1,337)





Loss (gain) on sales of real estate, net



217




94



1,191




(11,169)


Loss on sales of interest in non operating real estate






(16)






174


NOI from consolidated properties



39,464




30,806



114,774




99,348


Less: Non Same Store NOI of consolidated properties



498




144



485




1,179


Same Store NOI from consolidated properties



38,966




30,662



114,289




98,169


Less: Same Store lease termination revenue



691




2,011



3,911




2,236


Same Store NOI excluding lease termination revenue


$

38,275



$

28,651


$

110,378



$

95,933


 

 

Pennsylvania Real Estate Investment Trust
Selected Financial Data


The table below reconciles equity in loss of partnerships to NOI of equity method investments at ownership share for the three and nine months ended September 30, 2021 and 2020:




Three Months Ended
September 30,


Nine Months Ended
September 30,




2021



2020


2021



2020


Equity in loss of partnerships


$

(1,429)



$

(3,259)


$

(2,429)



$

(2,798)


Other income






(12)






(38)


Depreciation and amortization



3,095




5,095



9,257




12,396


Impairment of assets








265





Interest and other expenses



5,568




2,942



16,386




8,733


Net operating income from equity method investments at ownership share



7,234




4,766



23,479




18,294


Less: Non Same Store NOI from equity method investments at ownership share



6




6



(5)




22


Same Store NOI of equity method investments at ownership share



7,228




4,760



23,484




18,272


Less: Same Store lease termination revenue



49






2,562





Same Store NOI from equity method investments excluding lease termination revenue at ownership share


$

7,179



$

5,421


$

20,922



$

18,272


 

 

Pennsylvania Real Estate Investment Trust
Selected Financial Data


 (Unaudited)




September 30, 2021



December 31, 2020


(in thousands, except per share amounts)









ASSETS:









INVESTMENTS IN REAL ESTATE, at cost:









Operating properties


$

3,175,442



$

3,168,536


Construction in progress



44,671




46,285


Land held for development



4,339




5,516


Total investments in real estate



3,224,452




3,220,337


Accumulated depreciation



(1,388,330)




(1,308,427)


Net investments in real estate



1,836,122




1,911,910


INVESTMENTS IN PARTNERSHIPS, at equity:



19,947




27,066


OTHER ASSETS:









Cash and cash equivalents



28,975




43,309


Tenant and other receivables, net



36,102




54,532


Intangible assets (net of accumulated amortization of $20,220 and $19,187 at September 30, 2021 and December 31, 2020, respectively)



10,359




11,392


Deferred costs and other assets, net



134,967




127,593


Assets held for sale



3,626




1,384


Total assets


$

2,070,098



$

2,177,186


LIABILITIES:









Mortgage loans payable, net


$

856,986



$

884,503


Term Loans, net



945,456




908,473


Revolving Facility



54,830




54,830


Tenants' deposits and deferred rent



9,075




8,899


Distributions in excess of partnership investments



69,627




76,586


Fair value of derivative liabilities



13,060




23,292


Accrued expenses and other liabilities



91,062




93,663


Total liabilities



2,040,096




2,050,246


COMMITMENTS AND CONTINGENCIES









EQUITY:









Series B Preferred Shares, $.01 par value per share; 25,000 shares authorized; 3,450 shares issued and outstanding; liquidation preference of $94,201 and $89,430 at September 30, 2021 and December 31, 2020, respectively



35




35


Series C Preferred Shares, $.01 par value per share; 25,000 shares authorized; 6,900 shares issued and outstanding; liquidation preference of $188,025 and $178,710 at September 30, 2021 and December 31, 2020, respectively



69




69


Series D Preferred Shares, $.01 par value per share; 25,000 shares authorized; 5,000 shares issued and outstanding; liquidation preference of $135,743 and $129,297 at September 30, 2021 and December 31, 2020, respectively



50




50


Shares of beneficial interest, $1.00 par value per share; 200,000 shares authorized; 80,200 and 79,537 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively



80,200




79,537


Capital contributed in excess of par



1,775,959




1,771,777


Accumulated other comprehensive loss



(12,876)




(20,620)


Distributions in excess of net income



(1,804,710)




(1,699,638)


Total equity—Pennsylvania Real Estate Investment Trust



38,727




131,210


Noncontrolling interest



(8,725)




(4,270)


Total equity



30,002




126,940


Total liabilities and equity


$

2,070,098



$

2,177,186


 

 

Pennsylvania Real Estate Investment Trust
Selected Financial Data


Changes in Funds from Operations for the three and nine months ended September 30, 2021 as compared to the three and nine months ended September 30, 2020 (all per share amounts on a diluted basis unless otherwise noted; per share amounts rounded to the nearest half penny; amounts may not total due to rounding)


 (in thousands, except per share amounts)


Three Months Ended September 30, 2021



Per Diluted

Share and OP

Unit


Nine Months Ended September 30, 2021



Per Diluted

Share and OP

Unit


Funds from Operations, as adjusted September 30, 2020


$

2,719



$

0.03


$

9,413



$

0.12


















Changes - Q3 2020 to Q3 2021
































Contribution from anchor replacements and new box tenants



697




0.01



2,009




0.03


Impact from bankruptcies



316




0.01



938




0.01


Other leasing activity, including base rent and net CAM and real estate tax recoveries



1,109




0.02



352




0.01


Lease termination revenue



(1,320)




(0.02)



(887)




(0.01)


Credit losses



7,503




0.10



14,508




0.18


Other



(1)






(800)




(0.01)


Same Store NOI from unconsolidated properties



2,467




0.03



5,209




0.07


Same Store NOI



10,771




0.14



21,329




0.27


Non Same Store NOI



355




0.01



(721)




(0.01)


Dilutive effect of asset sales












General and administrative expenses



(4,927)




(0.06)



(9,029)




(0.12)


Capitalization of leasing costs



36






(89)





Other



(649)




(0.01)



11,389




0.15


Interest expense, net



(14,801)




(0.19)



(48,497)




(0.61)


Increase in weighted average shares











(0.01)


Funds from Operations, as adjusted September 30, 2021



(6,495)




(0.08)



(16,205)




(0.21)


Provision for employee separation expense



(39)






(279)




(0.01)


Gain on hedge ineffectiveness



532




0.01



2,329




0.03


Gain on debt extinguishment, net








4,587




0.06


Insurance recoveries, net








670




0.01


Reorganization expenses








(267)




(0.01)


Funds from Operations September 30, 2021


$

(6,002)



$

(0.07)


$

(9,165)



$

(0.12)


 

 

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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