Total Core Mall Leased Space Strong at
95.0%
Core Mall Sales Per Square Foot Reached
$605 in June, up 12.2% compared to
2019
Average Renewal Spreads were 2.3% for the Six
Months Ended June 30th
Core Mall Total Occupancy Increased 480 Basis
Points to 93.8%
PHILADELPHIA, Aug. 9, 2022
/PRNewswire/ -- PREIT (NYSE: PEI) today reported results for the
three and six months ended June 30,
2022. 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.
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
(per share
amounts)
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Net loss - basic and
diluted
|
|
$
|
(3.32)
|
|
|
$
|
(6.04)
|
|
|
$
|
(10.72)
|
|
|
$
|
(15.60)
|
|
FFO
|
|
$
|
1.72
|
|
|
$
|
1.51
|
|
|
$
|
1.51
|
|
|
$
|
(0.59)
|
|
FFO, as
adjusted
|
|
$
|
1.71
|
|
|
$
|
0.48
|
|
|
$
|
0.83
|
|
|
$
|
(1.81)
|
|
"It has been a busy and very productive quarter. In the
face of an evolving economic backdrop, our team continues to
deliver strong results, bringing new tenants to the portfolio and
executing on asset sales." said Joseph F.
Coradino, Chairman and CEO of PREIT. "We continue to
drive the quality of our properties, raise capital through asset
sales and pay down debt, improving the balance sheet and setting
the stage for the anticipated exercise of our credit facility
extension."
- Same Store NOI, excluding lease termination revenue, increased
3.6% for the six months ended June
30,2022 compared to the six months ended June 30, 2021 driven by increased occupancy and
rental revenue.
- Same Store NOI, excluding lease termination revenue, decreased
5.7% for the three months ended June 30,
2022 compared to the three months ended June 30, 2021.
-
- The primary driver of the decrease relative to prior year
quarter was the recognition of bad debt recoveries that positively
impacted the quarter ended June 30,
2021.
- Robust leasing activity is driving increased occupancy with
Core Mall Total Occupancy increasing by 480 basis points to 93.8%
compared to the second quarter 2021. Core Mall Non-anchor Occupancy
eclipsed 90%, improving 450 basis points to 90.5% compared to the
second quarter of 2021.
- Total Core Mall leased space, at 95.0%, exceeds occupied space
by 120 basis points, and core mall non-anchor leased space, at
92.3%, exceeds occupied space by 180 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 June 30, 2022, core mall comparable sales grew to
$605 per square foot.
- Average renewal spreads for the six months ended June 30, 2022 were 2.3%.
- Two new trustees were elected to the Company's Board of
Trustees.
- The Company made notable advances in its capital-raising
efforts. As part of its debt reduction plan, the Company has
applied asset sale proceeds and excess cash from operations to pay
down debt by $82 million during the
six months ended June 30, 2022. The
Company currently has over $65
million in purchase and sales agreements executed, and has
several others in the final stages of negotiation for a total of
over $200 million of potential
incremental asset sales pending.
Leasing and Redevelopment
- 297,000 square feet of leases are signed for future openings,
which is expected to contribute annualized gross rent of
$5.9 million.
- Construction has started on a new self-storage facility in
previously unused below grade space at Mall at Prince George's in Hyattsville, MD.
- A lease has been executed with Tilted 10 and Tilt Studio, an
action-packed bi-level 104,000 square foot indoor family
entertainment center at Willow Grove Park, adding family
entertainment to this locally-loved destination shopping
experience, and is expected to open in the third quarter 2022.
- Phoenix Theatres at Woodland Mall, occupying 47,000 square
feet, opened in April 2022.
- At Moorestown Mall, Cooper University Healthcare has started
construction on its facility that is expected to open in the second
half of 2023. The sale of land for multi-family development was
completed in June 2022. Construction
is expected to begin on this project in August 2022 with initial occupancy anticipated in
fall 2024.
- Landlord work is underway for a new prototype, 32,000 square
foot, LEGO® Discovery Center at Springfield Town Center with
expected opening in third quarter 2023.
- Leases are executed for 10 stores within the portfolio with
expanding retailers Rose & Remington, BoxLunch and Lovisa.
Primary Factors Affecting Financial Results for the Three
Months Ended June 30, 2022 and
2021
- Net loss attributable to PREIT common shareholders was
$17.6 million (which takes into
consideration the accrual of preferred dividends that accumulated
during the quarter but have not been paid), or $3.32 per basic and diluted share for the three
months ended June 30, 2022, compared
to net loss attributable to PREIT common shareholders of
$31.4 million, or $6.04 per basic and diluted share for the three
months ended June 30, 2021.
- Funds from Operations increased in the three months ended
June 30, 2022 compared to the prior
year period due primarily to a gain of $8.8
million from the sale of our Moorestown multifamily land parcel and a
decrease in general and administrative expenses offset by lower
NOI, including lease termination revenue.
- Same Store NOI, including lease terminations, decreased by
$4.4 million, or 8.3% due primarily
to lower lease termination revenue and lower rental income compared
to the same quarter last year as a result of accounting treatment
for abatements that positively impacted the 2021 quarter partially
offset by increases in minimum rent and percentage rent.
- FFO for the three months ended June 30,
2022 was $1.72 per diluted
share and OP Unit compared to $1.51
per diluted share and OP Unit for the three months ended
June 30, 2021.
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 six months ended
June 30, 2022 and 2021 is included on
page 15.
Liquidity and Financing Activities
As of
June 30, 2022, the Company had
$113.9 million available under its
First Lien Revolving Credit Facility. The Company's corporate cash
balances, when combined with available credit, provide total
liquidity of $127.6 million.
Asset Dispositions
Multifamily Land
Parcels: During the quarter, the Company closed on the
sale of land for 375 residential units at Moorestown Mall for
approximately $12 million. The
Company has executed agreements of sale for land parcels for
anticipated multi-family development at three properties. One
parcel is being re-marketed and the parcel at Exton Square Mall is
included in the $28.8 million
purchase price.
Hotel Parcels: The Company has an executed purchase
and sale agreement for the sale of a parcel for hotel development
at Springfield Town Center for $2.7
million.
Other Parcels: In February, we completed the
redemption of preferred equity issued as part of the sale of our
New Garden land parcel. In
connection with this settlement, we received approximately
$2.5 million. The Company expects to
close on the sale of an anchor box at Valley View Mall for
$2.6 million in the second half of
the year. In July, the Company executed an amended purchase
and sale agreement for the sale of Exton Square Mall for
$28.8 million, which is expected to
close in the second half of the year. In April, we executed a
purchase and sale agreement for the sale of the former Sears TBA
location at Moorestown Mall for $3.35
million. In May, we executed a purchase and sales agreement
for the sale of 11 outparcels for $32.5
million. The sale of 3 parcels for over $5 million has been completed at this time.
2022 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 Tuesday August 9, 2022, to review the
Company's results and future outlook. To listen to the call, please
dial 1(888) 330-2024 (domestic toll free), or 1(646) 960-0187
(international), and request to join the PREIT call, Conference ID
9326912, 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 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.
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 six months ended June 30, 2022 and 2021, 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
sale of preferred equity interest, 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 (net), provision for employee separation expense,
project costs and other expenses, interest expense, reorganization
expenses, impairment of assets, equity in loss or income of
partnerships, gain on extinguishment of debt, gain or loss on sales
of real estate and gain or loss on sale of preferred equity
interest.
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 40% 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. Core Malls exclude Exton Square Mall and
power centers.
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 that are not historical facts. These
forward-looking statements reflect our current views about future
events, achievements, results, cost reductions 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 created periods of significant
economic disruptions and also 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;
- changes in economic conditions, including unemployment rates
and its effects on consumer confidence and spending, supply chain
challenges, the current inflationary environment, 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, which may be exacerbated in the current inflationary
environment;
- 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;
- our ability to sell properties that we seek to dispose of,
which may be delayed by, among other things, the failure to obtain
zoning, occupancy and other governmental approvals and permits or,
to the extent required, approvals of other third parties;
- 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, particularly in light of increasing
interest rates, 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, 2021 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
|
|
|
|
For the Three Months
Ended
June 30,
|
|
|
For the Six Months
Ended
June 30,
|
|
(in thousands of
dollars)
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
REVENUE:
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease
revenue
|
|
$
|
66,652
|
|
|
$
|
68,112
|
|
|
$
|
130,092
|
|
|
$
|
128,020
|
|
Expense
reimbursements
|
|
|
4,215
|
|
|
|
3,887
|
|
|
|
8,359
|
|
|
|
7,786
|
|
Other real estate
revenue
|
|
|
2,191
|
|
|
|
1,957
|
|
|
|
3,801
|
|
|
|
3,428
|
|
Total real estate
revenue
|
|
|
73,058
|
|
|
|
73,956
|
|
|
|
142,252
|
|
|
|
139,234
|
|
Other
income
|
|
|
69
|
|
|
|
162
|
|
|
|
310
|
|
|
|
288
|
|
Total
revenue
|
|
|
73,127
|
|
|
|
74,118
|
|
|
|
142,562
|
|
|
|
139,522
|
|
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
CAM and real estate
taxes
|
|
|
(26,075)
|
|
|
|
(25,661)
|
|
|
|
(53,947)
|
|
|
|
(53,492)
|
|
Utilities
|
|
|
(3,528)
|
|
|
|
(2,860)
|
|
|
|
(7,089)
|
|
|
|
(5,824)
|
|
Other property
operating expenses
|
|
|
(2,199)
|
|
|
|
(2,244)
|
|
|
|
(4,339)
|
|
|
|
(4,608)
|
|
Total property
operating expenses
|
|
|
(31,802)
|
|
|
|
(30,765)
|
|
|
|
(65,375)
|
|
|
|
(63,924)
|
|
Depreciation and
amortization
|
|
|
(28,382)
|
|
|
|
(29,686)
|
|
|
|
(57,492)
|
|
|
|
(59,525)
|
|
General and
administrative expenses
|
|
|
(9,744)
|
|
|
|
(13,535)
|
|
|
|
(21,227)
|
|
|
|
(25,366)
|
|
Provision for employee
separation expenses
|
|
|
85
|
|
|
|
(149)
|
|
|
|
1
|
|
|
|
(240)
|
|
Insurance recoveries,
net
|
|
|
—
|
|
|
|
670
|
|
|
|
—
|
|
|
|
670
|
|
Project costs and other
expenses
|
|
|
(19)
|
|
|
|
(77)
|
|
|
|
(79)
|
|
|
|
(179)
|
|
Total operating
expenses
|
|
|
(69,862)
|
|
|
|
(73,542)
|
|
|
|
(144,172)
|
|
|
|
(148,564)
|
|
Interest expense,
net
|
|
|
(32,601)
|
|
|
|
(31,978)
|
|
|
|
(63,992)
|
|
|
|
(62,709)
|
|
Gain on debt
extinguishment, net
|
|
|
—
|
|
|
|
4,587
|
|
|
|
—
|
|
|
|
4,587
|
|
Impairment of
assets
|
|
|
—
|
|
|
|
(1,302)
|
|
|
|
—
|
|
|
|
(1,302)
|
|
Reorganization
expenses
|
|
|
—
|
|
|
|
(69)
|
|
|
|
—
|
|
|
|
(267)
|
|
Total
expenses
|
|
|
(102,463)
|
|
|
|
(102,304)
|
|
|
|
(208,164)
|
|
|
|
(208,255)
|
|
Equity in (loss) income
of partnerships
|
|
|
(1,188)
|
|
|
|
2,433
|
|
|
|
(1,583)
|
|
|
|
(1,000)
|
|
Gain (loss) on sales of
interests in real estate
|
|
|
1,701
|
|
|
|
(974)
|
|
|
|
1,701
|
|
|
|
(974)
|
|
Gain on sale of equity
method investment
|
|
|
9,053
|
|
|
|
—
|
|
|
|
9,053
|
|
|
|
—
|
|
Gain on sales of real
estate by equity method investee
|
|
|
—
|
|
|
|
1,347
|
|
|
|
—
|
|
|
|
1,347
|
|
Gain on sales of non
operating real estate
|
|
|
8,755
|
|
|
|
—
|
|
|
|
8,755
|
|
|
|
—
|
|
Gain on sale of
preferred equity interest
|
|
|
—
|
|
|
|
—
|
|
|
|
3,688
|
|
|
|
—
|
|
Net
loss
|
|
|
(11,015)
|
|
|
|
(25,380)
|
|
|
|
(43,988)
|
|
|
|
(69,360)
|
|
Less: net loss
attributable to noncontrolling interest
|
|
|
225
|
|
|
|
783
|
|
|
|
729
|
|
|
|
2,017
|
|
Net loss
attributable to PREIT
|
|
|
(10,790)
|
|
|
|
(24,597)
|
|
|
|
(43,259)
|
|
|
|
(67,343)
|
|
Less: preferred share
dividends
|
|
|
(6,844)
|
|
|
|
(6,844)
|
|
|
|
(13,688)
|
|
|
|
(13,688)
|
|
Net loss
attributable to PREIT common shareholders
|
|
$
|
(17,634)
|
|
|
$
|
(31,441)
|
|
|
$
|
(56,947)
|
|
|
$
|
(81,031)
|
|
Pennsylvania Real
Estate Investment Trust
|
Selected Financial
Data
|
|
|
|
For the Three Months
Ended
June 30,
|
|
|
For the Six Months
Ended
June 30,
|
|
(in thousands,
except per share amounts)
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Net loss
|
|
$
|
(11,015)
|
|
|
$
|
(25,380)
|
|
|
$
|
(43,988)
|
|
|
$
|
(69,360)
|
|
Noncontrolling
interest
|
|
|
225
|
|
|
|
783
|
|
|
|
729
|
|
|
|
2,017
|
|
Preferred share
dividends
|
|
|
(6,844)
|
|
|
|
(6,844)
|
|
|
|
(13,688)
|
|
|
|
(13,688)
|
|
Net loss used to
calculate loss per share—basic and diluted
|
|
$
|
(17,634)
|
|
|
$
|
(31,441)
|
|
|
$
|
(56,947)
|
|
|
$
|
(81,031)
|
|
Basic and diluted loss
per share:
|
|
$
|
(3.32)
|
|
|
$
|
(6.04)
|
|
|
$
|
(10.72)
|
|
|
$
|
(15.60)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of
shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding—basic
|
|
|
5,317
|
|
|
|
5,210
|
|
|
|
5,311
|
|
|
|
5,193
|
|
Effect of common share
equivalents(1)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Weighted average shares
outstanding—diluted
|
|
|
5,317
|
|
|
|
5,210
|
|
|
|
5,311
|
|
|
|
5,193
|
|
|
|
(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.
|
|
|
For the Three Months
Ended
June 30,
|
|
|
For the Six Months
Ended
June 30,
|
|
(in thousands of
dollars)
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Comprehensive
loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(11,015)
|
|
|
$
|
(25,380)
|
|
|
$
|
(43,988)
|
|
|
$
|
(69,360)
|
|
Unrealized gain (loss)
on derivatives
|
|
|
3,612
|
|
|
|
2,668
|
|
|
|
9,419
|
|
|
|
5,269
|
|
Amortization of
settled swaps
|
|
|
5
|
|
|
|
2
|
|
|
|
5
|
|
|
|
5
|
|
Total comprehensive
loss
|
|
|
(7,398)
|
|
|
|
(22,710)
|
|
|
|
(34,564)
|
|
|
|
(64,086)
|
|
Less: comprehensive
loss attributable to noncontrolling interest
|
|
|
179
|
|
|
|
718
|
|
|
|
610
|
|
|
|
1,888
|
|
Comprehensive loss
attributable to PREIT
|
|
$
|
(7,219)
|
|
|
$
|
(21,992)
|
|
|
$
|
(33,954)
|
|
|
$
|
(62,198)
|
|
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 six months ended June
30, 2022 and 2021:
|
|
Three Months
Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
(in thousands,
except per share amounts)
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Net
loss
|
|
$
|
(11,015)
|
|
|
$
|
(25,380)
|
|
|
$
|
(43,988)
|
|
|
$
|
(69,360)
|
|
Depreciation and
amortization on real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
properties
|
|
|
28,078
|
|
|
|
29,349
|
|
|
|
56,876
|
|
|
|
58,840
|
|
PREIT's share of
equity method investments
|
|
|
2,973
|
|
|
|
2,974
|
|
|
|
5,995
|
|
|
|
6,162
|
|
(Gain) loss on sales
of interests in real estate
|
|
|
(1,701)
|
|
|
|
974
|
|
|
|
(1,701)
|
|
|
|
974
|
|
Gain on sale of equity
method investment
|
|
|
(9,053)
|
|
|
|
-
|
|
|
|
(9,053)
|
|
|
|
-
|
|
Gain on sales of real
estate by equity method investee
|
|
|
-
|
|
|
|
(1,347)
|
|
|
|
-
|
|
|
|
(1,347)
|
|
Impairment
of assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
properties
|
|
|
-
|
|
|
|
1,302
|
|
|
|
-
|
|
|
|
1,302
|
|
PREIT's share of
equity method investments
|
|
|
-
|
|
|
|
265
|
|
|
|
-
|
|
|
|
265
|
|
Funds from operations
attributable to
common shareholders and OP Unit holders
|
|
|
9,282
|
|
|
|
8,137
|
|
|
|
8,129
|
|
|
|
(3,164)
|
|
Insurance recoveries,
net
|
|
|
-
|
|
|
|
(670)
|
|
|
|
-
|
|
|
|
(670)
|
|
Provision for employee
separation expenses
|
|
|
(85)
|
|
|
|
149
|
|
|
|
(1)
|
|
|
|
240
|
|
Gain on hedge
ineffectiveness
|
|
|
-
|
|
|
|
(494)
|
|
|
|
-
|
|
|
|
(1,797)
|
|
Gain on
debt extinguishment, net
|
|
|
-
|
|
|
|
(4,587)
|
|
|
|
-
|
|
|
|
(4,587)
|
|
Gain on sale of
preferred equity interest
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,688)
|
|
|
|
-
|
|
Reorganization
expenses
|
|
|
-
|
|
|
|
69
|
|
|
|
-
|
|
|
|
267
|
|
Funds from
operations, as adjusted, attributable to
common shareholders and OP Unit holders
|
|
$
|
9,197
|
|
|
$
|
2,604
|
|
|
$
|
4,440
|
|
|
$
|
(9,711)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations
attributable to common
shareholders and OP Unit holders per diluted share and OP
Unit
|
|
$
|
1.72
|
|
|
$
|
1.51
|
|
|
$
|
1.51
|
|
|
$
|
(0.59)
|
|
Funds from operations,
as adjusted, attributable to
common shareholders and OP Unit holders per diluted
share and OP Unit
|
|
$
|
1.71
|
|
|
$
|
0.48
|
|
|
$
|
0.83
|
|
|
$
|
(1.81)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of
shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares outstanding
|
|
|
5,317
|
|
|
|
5,210
|
|
|
|
5,311
|
|
|
|
5,193
|
|
Weighted average effect
of full conversion of OP Units
|
|
|
69
|
|
|
|
132
|
|
|
|
69
|
|
|
|
132
|
|
Effect of common share
equivalents
|
|
|
-
|
|
|
|
61
|
|
|
|
-
|
|
|
|
53
|
|
Total weighted
average shares outstanding, including OP
Units
|
|
|
5,386
|
|
|
|
5,403
|
|
|
|
5,380
|
|
|
|
5,378
|
|
Pennsylvania Real Estate Investment Trust
Selected Financial Data
NOI for the three and six months ended June 30, 2022 and 2021:
|
Same
Store
|
|
Change
|
|
Non Same
Store
|
|
Total
|
|
(in thousands of
dollars)
|
2022
|
|
2021
|
|
$
|
|
%
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
NOI from consolidated
properties
|
$
|
41,469
|
|
$
|
42,617
|
|
$
|
(1,148)
|
|
|
(2.7)
|
%
|
$
|
(213)
|
|
$
|
574
|
|
$
|
41,256
|
|
$
|
43,191
|
|
NOI attributable to
equity method
investments, at ownership share
|
|
7,275
|
|
|
10,544
|
|
|
(3,269)
|
|
|
(31.0)
|
%
|
|
560
|
|
|
658
|
|
|
7,835
|
|
|
11,202
|
|
Total
NOI
|
|
48,744
|
|
|
53,161
|
|
|
(4,417)
|
|
|
(8.3)
|
%
|
|
347
|
|
|
1,232
|
|
|
49,091
|
|
|
54,393
|
|
Less: lease termination
revenue
|
|
1,551
|
|
|
3,135
|
|
|
(1,584)
|
|
|
(50.5)
|
%
|
|
41
|
|
|
-
|
|
|
1,592
|
|
|
3,135
|
|
Total NOI excluding
lease
termination revenue
|
$
|
47,193
|
|
$
|
50,026
|
|
$
|
(2,833)
|
|
|
(5.7)
|
%
|
$
|
306
|
|
$
|
1,232
|
|
$
|
47,499
|
|
$
|
51,258
|
|
|
|
|
Same
Store
|
|
Change
|
|
Non Same
Store
|
|
Total
|
|
(in thousands of
dollars)
|
2022
|
|
2021
|
|
$
|
|
%
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
NOI from consolidated
properties
|
$
|
77,591
|
|
$
|
75,323
|
|
$
|
2,268
|
|
|
3.0
|
%
|
$
|
(713)
|
|
$
|
(13)
|
|
$
|
76,878
|
|
$
|
75,310
|
|
NOI attributable to
equity method
investments, at ownership share
|
|
15,102
|
|
|
15,020
|
|
|
82
|
|
|
0.5
|
%
|
|
1,162
|
|
|
1,225
|
|
|
16,264
|
|
|
16,245
|
|
Total
NOI
|
|
92,693
|
|
|
90,343
|
|
|
2,350
|
|
|
2.6
|
%
|
|
449
|
|
|
1,212
|
|
|
93,142
|
|
|
91,555
|
|
Less: lease termination
revenue
|
|
2,345
|
|
|
3,170
|
|
|
(825)
|
|
|
-26.0
|
%
|
|
49
|
|
|
-
|
|
|
2,394
|
|
|
3,170
|
|
Total NOI excluding
lease
termination revenue
|
$
|
90,348
|
|
$
|
87,173
|
|
$
|
3,175
|
|
|
3.6
|
%
|
$
|
400
|
|
$
|
1,212
|
|
$
|
90,748
|
|
$
|
88,385
|
|
Pennsylvania Real Estate Investment Trust
Selected Financial Data
The table below reconciles net loss to NOI of our consolidated
properties for the three and six months ended June 30, 2022 and 2021.
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
(in thousands of
dollars)
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Net loss
|
|
$
|
(11,015)
|
|
|
$
|
(25,380)
|
|
|
$
|
(43,988)
|
|
|
$
|
(69,360)
|
|
Other income
|
|
|
(69)
|
|
|
|
(162)
|
|
|
|
(310)
|
|
|
|
(288)
|
|
Depreciation and
amortization
|
|
|
28,382
|
|
|
|
29,686
|
|
|
|
57,492
|
|
|
|
59,525
|
|
General and
administrative expenses
|
|
|
9,744
|
|
|
|
13,535
|
|
|
|
21,227
|
|
|
|
25,366
|
|
Insurance recoveries,
net
|
|
|
-
|
|
|
|
(670)
|
|
|
|
-
|
|
|
|
(670)
|
|
Provision for employee
separation expense
|
|
|
(85)
|
|
|
|
149
|
|
|
|
(1)
|
|
|
|
240
|
|
Project costs and other
expenses
|
|
|
19
|
|
|
|
77
|
|
|
|
79
|
|
|
|
179
|
|
Interest expense,
net
|
|
|
32,601
|
|
|
|
31,978
|
|
|
|
63,992
|
|
|
|
62,709
|
|
Impairment of
assets
|
|
|
-
|
|
|
|
1,302
|
|
|
|
-
|
|
|
|
1,302
|
|
Gain on debt
extinguishment, net
|
|
|
-
|
|
|
|
(4,587)
|
|
|
|
-
|
|
|
|
(4,587)
|
|
Reorganization
expenses
|
|
|
-
|
|
|
|
69
|
|
|
|
-
|
|
|
|
267
|
|
Equity in loss (income)
of partnerships
|
|
|
1,188
|
|
|
|
(2,433)
|
|
|
|
1,583
|
|
|
|
1,000
|
|
(Gain) loss on sales of
interests in real estate
|
|
|
(1,701)
|
|
|
|
974
|
|
|
|
(1,701)
|
|
|
|
974
|
|
Gain on sale of equity
method investment
|
|
|
(9,053)
|
|
|
|
-
|
|
|
|
(9,053)
|
|
|
|
-
|
|
Gain on sales of real
estate by equity method investee
|
|
|
-
|
|
|
|
(1,347)
|
|
|
|
-
|
|
|
|
(1,347)
|
|
Gain on sale of
preferred equity interest
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,688)
|
|
|
|
-
|
|
Gain on sales of non
operating real estate
|
|
|
(8,755)
|
|
|
|
-
|
|
|
|
(8,755)
|
|
|
|
-
|
|
NOI from
consolidated properties
|
|
|
41,256
|
|
|
|
43,191
|
|
|
|
76,877
|
|
|
|
75,310
|
|
Less: Non Same Store
NOI of consolidated properties
|
|
|
(213)
|
|
|
|
575
|
|
|
|
(713)
|
|
|
|
(13)
|
|
Same Store NOI from
consolidated properties
|
|
|
41,469
|
|
|
|
42,617
|
|
|
|
77,590
|
|
|
|
75,323
|
|
Less: Same Store lease
termination revenue
|
|
|
1,491
|
|
|
|
623
|
|
|
|
1,499
|
|
|
|
658
|
|
Same Store NOI
excluding lease termination revenue
|
|
$
|
39,978
|
|
|
$
|
41,994
|
|
|
$
|
76,091
|
|
|
$
|
72,153
|
|
Pennsylvania Real Estate Investment Trust
Selected Financial Data
The table below reconciles equity in (loss) income of
partnerships to NOI of equity method investments at ownership share
for the three and six months ended June 30,
2022 and 2021:
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Equity in loss of
partnerships
|
|
$
|
(1,188)
|
|
|
$
|
2,433
|
|
|
$
|
(1,583)
|
|
|
$
|
(1,000)
|
|
Depreciation and
amortization
|
|
|
2,973
|
|
|
|
2,974
|
|
|
|
5,995
|
|
|
|
6,162
|
|
Impairment of
assets
|
|
|
-
|
|
|
|
265
|
|
|
|
-
|
|
|
|
265
|
|
Interest and other
expenses
|
|
|
6,050
|
|
|
|
5,531
|
|
|
|
11,852
|
|
|
|
10,818
|
|
Net operating income
from equity method
investments at ownership share
|
|
|
7,835
|
|
|
|
11,203
|
|
|
|
16,264
|
|
|
|
16,245
|
|
Less: Non Same Store
NOI from equity method
investments at ownership share
|
|
|
560
|
|
|
|
658
|
|
|
|
1,162
|
|
|
|
1,225
|
|
Same Store NOI of
equity method investments at
ownership share
|
|
|
7,275
|
|
|
|
10,545
|
|
|
|
15,102
|
|
|
|
15,020
|
|
Less: Same Store lease
termination revenue
|
|
|
62
|
|
|
|
2,512
|
|
|
|
854
|
|
|
|
2,512
|
|
Same Store NOI from
equity method investments
excluding lease termination revenue at ownership
share
|
|
$
|
7,213
|
|
|
$
|
8,033
|
|
|
$
|
14,248
|
|
|
$
|
12,508
|
|
Pennsylvania Real
Estate Investment Trust
|
Selected Financial
Data
|
|
(in thousands,
except per share amounts)
|
|
June 30,
2022
|
|
|
December 31,
2021
|
|
ASSETS:
|
|
|
|
|
|
|
INVESTMENTS IN REAL
ESTATE, at cost:
|
|
|
|
|
|
|
Operating
properties
|
|
$
|
3,113,836
|
|
|
$
|
3,156,194
|
|
Construction in
progress
|
|
|
45,472
|
|
|
|
45,828
|
|
Land held for
development
|
|
|
4,339
|
|
|
|
4,339
|
|
Total investments in
real estate
|
|
|
3,163,647
|
|
|
|
3,206,361
|
|
Accumulated
depreciation
|
|
|
(1,443,004)
|
|
|
|
(1,405,260)
|
|
Net investments in
real estate
|
|
|
1,720,643
|
|
|
|
1,801,101
|
|
INVESTMENTS IN
PARTNERSHIPS, at equity:
|
|
|
7,967
|
|
|
|
16,525
|
|
OTHER
ASSETS:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
24,008
|
|
|
|
43,852
|
|
Tenant and other
receivables, net
|
|
|
32,173
|
|
|
|
42,501
|
|
Intangible assets,
net
|
|
|
9,378
|
|
|
|
10,054
|
|
Deferred costs and
other assets, net
|
|
|
93,198
|
|
|
|
128,923
|
|
Assets held for
sale
|
|
|
41,304
|
|
|
|
8,780
|
|
Total
assets
|
|
$
|
1,928,671
|
|
|
$
|
2,051,736
|
|
LIABILITIES:
|
|
|
|
|
|
|
Mortgage loans
payable, net
|
|
$
|
808,644
|
|
|
$
|
851,283
|
|
Term Loans,
net
|
|
|
968,871
|
|
|
|
959,137
|
|
Revolving
Facility
|
|
|
16,078
|
|
|
|
54,549
|
|
Tenants' deposits and
deferred rent
|
|
|
9,322
|
|
|
|
10,180
|
|
Distributions in
excess of partnership investments
|
|
|
72,680
|
|
|
|
71,570
|
|
Fair value of
derivative liabilities
|
|
|
-
|
|
|
|
8,427
|
|
Accrued expenses and
other liabilities
|
|
|
74,941
|
|
|
|
89,543
|
|
Total
liabilities
|
|
|
1,950,536
|
|
|
|
2,044,689
|
|
COMMITMENTS AND
CONTINGENCIES (Note 8)
|
|
|
|
|
|
|
EQUITY:
|
|
|
|
|
|
|
Series B Preferred
Shares, $.01 par value per share; 25,000 shares authorized;
3,450 shares issued and outstanding; liquidation preference of
$98,971 and
$95,791 at June 30, 2022 and December 31, 2021,
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
$197,340 and
$191,130 at June 30, 2022 and December 31, 2021,
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
$142,188 and
$137,891 at June 30, 2022 and December 31, 2021,
respectively
|
|
|
50
|
|
|
|
50
|
|
Shares of beneficial
interest, $1.00 par value per share; 13,333 shares
authorized; 5,369 and 5,347 shares issued and outstanding at June
30, 2022
and December 31, 2021, respectively
|
|
|
5,369
|
|
|
|
5,347
|
|
Capital contributed in
excess of par
|
|
|
1,857,496
|
|
|
|
1,851,866
|
|
Accumulated other
comprehensive loss
|
|
|
475
|
|
|
|
(8,830)
|
|
Distributions in
excess of net income
|
|
|
(1,875,634)
|
|
|
|
(1,832,375)
|
|
Total
equity—Pennsylvania Real Estate Investment Trust
|
|
|
(12,140)
|
|
|
|
16,162
|
|
Noncontrolling
interest
|
|
|
(9,725)
|
|
|
|
(9,115)
|
|
Total equity
(deficit)
|
|
|
(21,865)
|
|
|
|
7,047
|
|
Total liabilities and
equity
|
|
$
|
1,928,671
|
|
|
$
|
2,051,736
|
|
Pennsylvania Real Estate Investment Trust
Selected Financial Data
Changes in Funds from Operations for the three and six months
ended June 30, 2022 as compared to
the three and six months ended June 30,
2021 (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
June 30, 2022
|
|
|
Per Diluted
Share and OP
Unit
|
|
|
Six Months
Ended June
30, 2022
|
|
|
Per Diluted
Share and OP
Unit
|
|
Funds from
Operations, as adjusted June 30, 2021
|
|
$
|
8,137
|
|
|
$
|
0.10
|
|
|
$
|
(3,164)
|
|
|
$
|
(0.04)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes - Q2 2021 to
Q2 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution from
anchor replacements and new
box tenants
|
|
|
528
|
|
|
|
0.10
|
|
|
|
834
|
|
|
|
0.16
|
|
Impact from
bankruptcies
|
|
|
(17)
|
|
|
|
(0.01)
|
|
|
|
13
|
|
|
|
-
|
|
Other leasing activity,
including base rent and net
CAM and real estate tax recoveries
|
|
|
(1,425)
|
|
|
|
(0.27)
|
|
|
|
250
|
|
|
|
0.05
|
|
Lease termination
revenue
|
|
|
867
|
|
|
|
0.16
|
|
|
|
841
|
|
|
|
0.16
|
|
Credit
losses
|
|
|
(1,502)
|
|
|
|
(0.28)
|
|
|
|
(328)
|
|
|
|
(0.06)
|
|
Other
|
|
|
401
|
|
|
|
0.07
|
|
|
|
658
|
|
|
|
0.12
|
|
Same Store NOI from
unconsolidated properties
|
|
|
(3,269)
|
|
|
|
(0.61)
|
|
|
|
82
|
|
|
|
0.02
|
|
Same Store
NOI
|
|
|
(4,417)
|
|
|
|
(0.83)
|
|
|
|
2,350
|
|
|
|
0.45
|
|
Non Same Store
NOI
|
|
|
(884)
|
|
|
|
(0.17)
|
|
|
|
(15,738)
|
|
|
|
(2.92)
|
|
General and
administrative expenses
|
|
|
3,791
|
|
|
|
0.70
|
|
|
|
4,139
|
|
|
|
0.77
|
|
Capitalization of
leasing costs
|
|
|
48
|
|
|
|
0.01
|
|
|
|
76
|
|
|
|
0.02
|
|
Other
|
|
|
3,703
|
|
|
|
0.69
|
|
|
|
19,143
|
|
|
|
3.55
|
|
Interest expense,
net
|
|
|
(1,181)
|
|
|
|
(0.22)
|
|
|
|
(2,366)
|
|
|
|
(0.44)
|
|
Increase in weighted
average shares
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
Funds from
Operations, as adjusted June 30, 2022
|
|
|
9,197
|
|
|
|
1.71
|
|
|
|
4,440
|
|
|
|
0.83
|
|
Provision for employee
separation expense
|
|
|
85
|
|
|
|
0.01
|
|
|
|
1
|
|
|
|
-
|
|
Gain on sale of
preferred equity interest
|
|
|
-
|
|
|
|
-
|
|
|
|
3,688
|
|
|
|
0.68
|
|
Funds from
Operations, June 30, 2022
|
|
$
|
9,282
|
|
|
$
|
1.72
|
|
|
$
|
8,129
|
|
|
$
|
1.51
|
|
CONTACT: AT THE COMPANY
Mario Ventresca
EVP & CFO
(215) 875-0703
Heather Crowell
heather@gregoryfca.com
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SOURCE PREIT