PREIT - Pennsylvania Real Estate Investment Trust
05/05/2022 | Press release | Distributed by Public on 05/05/2022 15:21
NYSE: PEI NYSE: PEIPRB, PEIPRC, PEIPRD - Form 8-K
NYSE: PEI
NYSE: PEIPRB, PEIPRC, PEIPRD
Pennsylvania Real Estate Investment Trust
Supplemental Financial and Operating Information
March 31, 2022
|
Table of Contents |
|
|
Introduction |
|
|
1 |
|
|
Earnings Release |
2 |
|
Changes in Funds from Operations for the Three Months Ended March 31, 2022 |
6 |
|
7 |
|
|
Operating Results |
|
|
Statements of Operations - Three Months Ended March 31, 2022 and 2021 |
8 |
|
9 |
|
|
10 |
|
|
11 |
|
|
12 |
|
|
13 |
|
|
14 |
|
|
Assets and Liabilities - Equity Method Investments, at Ownership Share (Non-GAAP Measure) |
15 |
|
Operating Statistics |
|
|
Leasing Activity Summary - Three Months Ended March 31, 2022 |
16 |
|
Summarized Sales and Rent Per Square Foot and Occupancy Percentages |
17 |
|
18 |
|
|
19 |
|
|
20 |
|
|
Property Information |
21 |
|
Balance Sheet |
|
|
24 |
|
|
Investment in Real Estate - Equity Method Investments at Ownership Share |
25 |
|
26 |
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27 |
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|
29 |
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30 |
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31 |
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32 |
Pennsylvania Real Estate Investment Trust
Company Information
Background
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. PREIT is focused on enhancing the quality of its portfolio through redevelopment, anchor repositioning, diversifying its tenant mix and densifying properties by adding a mix of uses. The portfolio consists of 25 retail properties, 24 of which are operating properties and one is a development property. The 24 operating retail properties have a total of 19.6 million square feet and include 20 shopping malls and four other retail properties.
If you would like to learn more about PREIT or participate in our quarterly earnings conference call, please visit preit.com or contact:
Heather Crowell
EVP, Strategy and Communications
One Commerce Square
2005 Market Street, Suite 1000
Philadelphia, PA 19103
Telephone: (215) 875-0735
Fax: (215) 546-2504
Email: [email protected]
Press release announcements are available on the Company's website at www.preit.com.
1
CONTACT: AT THE COMPANY
Mario Ventresca
EVP & CFO
(215) 875-0703
Heather Crowell
EVP, Strategy and Communications
(215) 454-1241
PREIT Reports First Quarter 2022 Results
Core Mall Sales Per Square Foot Reach $613 in March, up from $603 at Year End
Strong Leasing Activity Resulted in Core Mall Leased Space at 94.0%
Asset Sales in Process Increased to $275 Million
Philadelphia, May 5, 2022 - PREIT (NYSE: PEI) today reported results for the three months ended March 31, 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 March 31, |
||||||
|
(per share amounts) |
2022 |
2021 |
||||
|
Net loss - basic and diluted |
$ |
(0.49 |
) |
$ |
(0.64 |
) |
|
FFO |
$ |
(0.01 |
) |
$ |
(0.14 |
) |
|
FFO, as adjusted |
$ |
(0.06 |
) |
$ |
(0.15 |
) |
"Our portfolio of assets continues to draw interest from investors and tenants interested in assets and parcels. We continue to focus on executing on the near-term plan to exercise our credit facility extension and our longer-term plan to improve our balance sheet through land and asset sales, " said Joseph F. Coradino, Chairman and CEO of PREIT. "The team's attention is on executing on our plan to improve our portfolio valuation through strong leasing and operating results and our capital position through asset sales. This quarter's performance demonstrates the proficiency of our team, driving strong net operating income results and an increase in transactions in process to $275 million based on growing interest."
•
Same Store NOI, excluding lease termination revenue, increased 16.0% for the three months ended March 31, 2022 compared to the three months ended March 31, 2021.
2
o
For the quarter, results were primarily impacted by a strong leasing and sales environment resulting in increased rent, percentage rent, percent sales and common area revenue of $3.5 million, and a decrease in credit losses for challenged tenants of $2.1 million compared to the three months ended March, 31, 2021.
•
Robust leasing activity is driving increased occupancy with Core Mall Total Occupancy increasing by 500 basis points to 92.7% compared to the first quarter 2021. Core Mall Non-anchor Occupancy increased 290 basis points, sequentially, to 88.8%.
•
Total Core Mall leased space, at 94.0%, exceeds occupied space by 130 basis points, and core mall non-anchor leased space, at 90.7%, 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 March 31, 2022, core mall comparable sales grew by 18.6% to $613 per square foot.
•
Average renewal spreads for the three months ended March 31, 2022 improved to 3.7%. Sequentially, average renewal spreads for tenants less than 10,000 square feet improved from (11.0%) for the quarter ended December 31, 2021 to 3.8% for the quarter ended March 31, 2022.
•
The Company made notable advances in its capital-raising efforts and is now underway with $275 million in transactions and anticipates closing approximately $109 million in sales prior to June 30, 2022.
Leasing and Redevelopment
•
408,000 square feet of leases are signed for future openings, which is expected to contribute annualized gross rent of $6.8 million.
•
Leasing momentum continues to build with transactions executed for 203,000 square feet of occupancy thus far in 2022.
•
Construction is expected to begin this year 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.
•
HomeGoods at Cumberland Mall opened in March 2022 occupying 23,000 square feet.
•
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.
•
New-to-portfolio tenants have been executed at Cherry Hill Mall for occupancy in 2022: Marc Cain and Warby Parker are now open and Eddie V's Prime Seafood is expected to open later this year.
Primary Factors Affecting Financial Results for the Three Months Ended March 31, 2022 and 2021
•
Net loss attributable to PREIT common shareholders was $39.3 million (which takes into consideration the accrual of preferred dividends that accumulated during the quarter but have not been paid), or $0.49 per basic and diluted share for the three months ended March 31, 2022, compared to net loss attributable to PREIT common shareholders of $49.6 million, or $0.64 per basic and diluted share for the three months ended March 31, 2021.
•
Funds from Operations showed significant improvement over the quarter ended March 31, 2021 driven by increases in real estate revenue, a gain on sale of the preferred share interest resulting from the sale of our interest in land in New Garden, PA, reduced general and administrative and restructuring costs offset by a gain on hedge ineffectiveness that impacted the quarter ended March 31, 2021.
3
•
Same Store NOI, including lease terminations, increased by $6.8 million, or 18.0%. The increase is primarily due to higher rent, percent sales, percentage rent and lease termination revenue, and decrease in credit losses as compared to the prior year.
•
FFO for the three months ended March 31, 2022 was $(0.01) per diluted share and OP Unit compared to $(0.14) per diluted share and OP Unit for the three months ended March 31, 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 months ended March 31, 2022 and 2021 is included on page 6.
Liquidity and Financing Activities
As of March 31, 2022, the Company had $76.2 million available under its First Lien Revolving Credit Facility. The Company's corporate cash balances, when combined with available credit, provide total liquidity of $110.5 million.
In March 2022, the mortgage loan secured by Gloucester Premium Outlets was extended for one year.
Asset Dispositions
Multifamily Land Parcels: The Company has executed agreements of sale for land parcels for anticipated multi-family development in the aggregate amount of $72.0 million. The agreements are with multiple buyers across four properties for over 1,800units as part of the Company's previously announced multi-family land sale plan. Of particular note, the transaction for the multi-family land sale at Exton Square Mall is factored into the asset sale price noted below. Closing on these 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. The Company has an executed LOI for the sale of a parcel for hotel development at Springfield Town Center for $2.7 million. Closing on these transactions is subject to customary due diligence provisions and securing entitlements.
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 in the second quarter for $2.8 million. In March, the Company executed a purchase and sale agreement for the sale of Exton Square Mall for $27.5 million. 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.
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 Thursday May 5, 2022, to review the Company's results and future outlook. To listen to the call, please dial1(844) 200-6205 (domestic toll free), or 1(646) 904-5544 (international), and request to join the PREIT call, Conference ID 949541,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.
4
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, Instagramor LinkedIn.
Rounding
Certain summarized information in the tables included may not total due to rounding.
5
Pennsylvania Real Estate Investment Trust
Changes in Funds from Operations
For the Three Months Ended March 31, 2022 as compared to the Three Months Ended March 31, 2021
(all per share amounts on a diluted basis unless otherwise noted; rounded to the nearest half penny; amounts may not total due to rounding)
|
(in thousands, except per share amounts) |
Three Months Ended |
Per Diluted |
||||
|
Funds from Operations, as adjusted March 31, 2021 |
$ |
(12,316 |
) |
$ |
(0.15 |
) |
|
Changes - Q1 2021 to Q1 2022 |
||||||
|
Contribution from anchor replacements and new box tenants |
247 |
- |
||||
|
Impact from bankruptcies |
30 |
- |
||||
|
Other leasing activity, including base rent and net CAM and real estate tax recoveries |
1,737 |
0.02 |
||||
|
Lease termination revenue |
(27 |
) |
- |
|||
|
Credit losses |
1,173 |
0.02 |
||||
|
Other |
255 |
- |
||||
|
Same Store NOI from unconsolidated properties |
3,382 |
0.04 |
||||
|
Same Store NOI |
6,797 |
0.08 |
||||
|
Non Same Store NOI |
93 |
- |
||||
|
General and administrative expenses |
348 |
0.01 |
||||
|
Capitalization of leasing costs |
28 |
- |
||||
|
Other |
1,477 |
0.02 |
||||
|
Interest expense, net |
(1,184 |
) |
(0.02 |
) |
||
|
Funds from Operations, as adjusted March 31, 2022 |
(4,757 |
) |
(0.06 |
) |
||
|
Provision for employee separation expense |
(84 |
) |
- |
|||
|
Gain on sale of preferred equity interest |
3,688 |
0.05 |
||||
|
Funds from Operations, March 31, 2022 |
$ |
(1,153 |
) |
$ |
(0.01 |
) |
6
Pennsylvania Real Estate Investment Trust
Market Capitalization and Capital Resources
(in thousands)
|
March 31, 2022 |
December 31, |
|||
|
MARKET CAPITALIZATION |
||||
|
EQUITY CAPITALIZATION |
||||
|
Common Shares Outstanding |
80,617 |
80,200 |
||
|
OP Units Outstanding |
1,031 |
1,031 |
||
|
Total Common Shares and OP Units Outstanding |
81,648 |
81,231 |
||
|
Equity Market Capitalization-Common Shares and OP Units |
$ |
51,438 |
$ |
82,855 |
|
Series B Preferred Shares, Nominal Value |
86,250 |
86,250 |
||
|
Series C Preferred Shares, Nominal Value |
172,500 |
172,500 |
||
|
Series D Preferred Shares, Nominal Value |
125,000 |
125,000 |
||
|
Total Equity Market Capitalization |
$ |
435,188 |
$ |
466,605 |
|
DEBT CAPITALIZATION |
||||
|
Secured Debt Balance (1) |
$ |
2,258,223 |
$ |
2,253,673 |
|
TOTAL MARKET CAPITALIZATION |
$ |
2,693,411 |
$ |
2,720,278 |
|
Equity Capitalization/Total Market Capitalization |
16.2 |
% |
17.2 |
% |
|
Debt Capitalization/Total Market Capitalization |
83.8 |
% |
82.8 |
% |
|
CAPITAL RESOURCES |
||||
|
Cash and Cash Equivalents |
$ |
45,554 |
$ |
36,196 |
|
Revolving Facility |
130,000 |
130,000 |
||
|
Amount Outstanding |
(53,817 |
) |
(54,549 |
) |
|
Available Revolving Facility (2) |
$ |
76,184 |
$ |
75,451 |
|
Term Loans |
1,133,101 |
1,120,751 |
||
|
Amount Borrowed |
(1,133,101 |
) |
(1,120,751 |
) |
|
Available Term Loans |
$ |
- |
$ |
- |
|
TOTAL |
$ |
121,738 |
$ |
111,647 |
(1) Includes all consolidated mortgages, term loans, and revolving credit facility, as well as our share of mortgage debt from unconsolidated equity method investments, which includes $97.3 million of secured debt from our share of the FDP Term Loan as of March 31, 2022 and December 31, 2021 and $59.3 million and $57.8 million from our share of the FDP Partnership Loan as of March 31, 2022 and December 31, 2021, respectively. As of December 10, 2020, all debt is now secured.
(2) The available First Lien Revolving Facility borrowings are subject to covenants that may restrict amounts that can be borrowed.
7
Pennsylvania Real Estate Investment Trust
Statements of Operations - Three Months Ended March 31, 2022 and 2021
(unaudited)
|
Three Months Ended |
||||||
|
(in thousands of dollars) |
2022 |
2021 |
||||
|
REVENUE: |
||||||
|
Real estate revenue: |
||||||
|
Lease revenue |
$ |
63,440 |
$ |
59,908 |
||
|
Expense reimbursements |
4,144 |
3,899 |
||||
|
Other real estate revenue |
1,610 |
1,471 |
||||
|
Total real estate revenue |
69,194 |
65,278 |
||||
|
Other income |
241 |
125 |
||||
|
Total revenue |
69,435 |
65,403 |
||||
|
EXPENSES: |
||||||
|
Operating expenses: |
||||||
|
Property operating expenses: |
||||||
|
CAM and real estate taxes |
(27,872 |
) |
(27,831 |
) |
||
|
Utilities |
(3,561 |
) |
(2,964 |
) |
||
|
Other property operating expenses |
(2,140 |
) |
(2,364 |
) |
||
|
Total property operating expenses |
(33,573 |
) |
(33,159 |
) |
||
|
Depreciation and amortization |
(29,110 |
) |
(29,839 |
) |
||
|
General and administrative expenses |
(11,483 |
) |
(11,831 |
) |
||
|
Provision for employee separation expenses |
(84 |
) |
(92 |
) |
||
|
Project costs and other expenses |
(60 |
) |
(101 |
) |
||
|
Total operating expenses |
(74,310 |
) |
(75,022 |
) |
||
|
Interest expense, net (1) |
(31,391 |
) |
(30,731 |
) |
||
|
Reorganization expenses |
- |
(197 |
) |
|||
|
Total expenses |
(105,701 |
) |
(105,950 |
) |
||
|
Loss before equity in loss of partnerships and gain on sale of preferred equity interest |
(36,266 |
) |
(40,547 |
) |
||
|
Equity in loss of partnerships (2) |
(395 |
) |
(3,433 |
) |
||
|
Gain on sale of preferred equity interest |
3,688 |
- |
||||
|
Net loss |
(32,973 |
) |
(43,980 |
) |
||
|
Less: net loss attributable to noncontrolling interest |
504 |
1,234 |
||||
|
Net loss attributable to PREIT |
(32,469 |
) |
(42,746 |
) |
||
|
Less: preferred share dividends |
(6,844 |
) |
(6,844 |
) |
||
|
Net loss attributable to PREIT common shareholders |
$ |
(39,313 |
) |
$ |
(49,590 |
) |
(1) Net of capitalized interest expense of $24 and $130 for the three months ended March 31, 2022 and 2021, respectively.
(2) Equity in loss of partnerships is net of capitalized interest expense of $0 and $103 for the three months ended March 31, 2022 and 2021, respectively.
8
Pennsylvania Real Estate Investment Trust
Computation of Earnings Per Share - Three Months Ended March 31, 2022 and 2021
(unaudited)
|
Three Months Ended |
||||||
|
(in thousands, except per share amounts) |
2022 |
2021 |
||||
|
Net loss |
$ |
(32,973 |
) |
$ |
(43,980 |
) |
|
Noncontrolling interest |
504 |
1,234 |
||||
|
Preferred share dividends |
(6,844 |
) |
(6,844 |
) |
||
|
Net loss used to calculate loss per share-basic and diluted |
$ |
(39,313 |
) |
$ |
(49,590 |
) |
|
Basic and diluted loss per share: |
$ |
(0.49 |
) |
$ |
(0.64 |
) |
|
(in thousands of shares) |
||||||
|
Weighted average shares outstanding-basic |
79,577 |
77,647 |
||||
|
Effect of common share equivalents(1) |
- |
- |
||||
|
Weighted average shares outstanding-diluted |
79,577 |
77,647 |
(1)The Company had net losses used to calculate earnings per share for the three months ended March 31, 2022 and 2021. 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.
9
Pennsylvania Real Estate Investment Trust
Reconciliation of Net Operating Income and Earnings Before Interest, Income Taxes, Depreciation, and Amortization for Real Estate (Non-GAAP Measures) - Three Months Ended March 31, 2022 and 2021
(in thousands)
Net Operating Income ("NOI") Reconciliation for the Three Months Ended March 31, 2022(1)
|
Same Store |
Change |
Non Same Store |
Total |
|||||||||||||||
|
(in thousands of dollars) |
2022 |
2021 |
$ |
% |
2022 |
2021 |
2022 |
2021 |
||||||||||
|
NOI from consolidated properties |
$ |
36,122 |
$ |
32,707 |
$ |
3,415 |
10.4 |
% |
$ |
(500 |
) |
$ |
(588 |
) |
$ |
35,622 |
$ |
32,119 |
|
NOI attributable to equity method investments, at ownership share |
8,442 |
5,060 |
3,382 |
66.8 |
% |
(13 |
) |
(18 |
) |
8,429 |
5,042 |
|||||||
|
Total NOI |
44,564 |
37,767 |
6,797 |
18.0 |
% |
(513 |
) |
(606 |
) |
44,051 |
37,161 |
|||||||
|
Less: lease termination revenue |
802 |
36 |
766 |
2,127.8 |
% |
- |
- |
802 |
36 |
|||||||||
|
Total NOI excluding lease termination revenue |
$ |
43,762 |
$ |
37,731 |
$ |
6,031 |
16.0 |
% |
$ |
(513 |
) |
$ |
(606 |
) |
$ |
43,249 |
$ |
37,125 |
(1) NOI is a non-GAAP measure. See definition of NOI on page 32.
Earnings Before Interest, Income Taxes, Depreciation, and Amortization for Real Estate ("EBITDAre") Reconciliation(1)
|
Three Months Ended March 31, |
||||||
|
2022 |
2021 |
|||||
|
Net loss |
$ |
(32,973 |
) |
$ |
(43,980 |
) |
|
Depreciation and amortization: |
||||||
|
Consolidated |
29,110 |
29,839 |
||||
|
Unconsolidated properties at ownership share |
3,022 |
3,187 |
||||
|
Interest expense: |
||||||
|
Consolidated |
31,391 |
30,731 |
||||
|
Unconsolidated properties at ownership share |
5,770 |
5,246 |
||||
|
EBITDAre |
$ |
36,320 |
$ |
25,023 |
(1) EBITDAre is a non-GAAP measure. See definition on page 33.
10
Pennsylvania Real Estate Investment Trust
Reconciliation of Net Loss (GAAP Measure) to Net Operating Income from Consolidated Properties (Non-GAAP Measure)
Three Months Ended March 31, 2022 and 2021
(in thousands)
|
Three Months Ended March 31, |
||||||
|
2022 |
2021 |
|||||
|
Net loss |
$ |
(32,973 |
) |
$ |
(43,980 |
) |
|
Other income |
(241 |
) |
(125 |
) |
||
|
Depreciation and amortization |
29,110 |
29,839 |
||||
|
General and administrative expenses |
11,483 |
11,831 |
||||
|
Provision for employee separation expenses |
84 |
92 |
||||
|
Project costs and other expenses |
60 |
101 |
||||
|
Interest expense, net |
31,391 |
30,731 |
||||
|
Equity in loss of partnerships |
395 |
3,433 |
||||
|
Reorganization expenses |
- |
197 |
||||
|
Gain on sale of preferred equity interest |
(3,688 |
) |
- |
|||
|
NOI from consolidated properties(1) |
$ |
35,621 |
$ |
32,119 |
(1) NOI is a non-GAAP measure. See definition of NOI on page 32.
|
Same Store |
Non Same Store |
Total |
||||||||||||
|
2022 |
2021 |
2022 |
2021 |
2022 |
2021 |
|||||||||
|
Real estate revenue |
||||||||||||||
|
Base rent |
$ |
46,757 |
$ |
44,795 |
$ |
899 |
$ |
1,123 |
$ |
47,655 |
$ |
45,918 |
||
|
CAM reimbursement income |
8,378 |
8,191 |
98 |
168 |
8,477 |
8,359 |
||||||||
|
Real estate tax income |
7,169 |
6,911 |
(2 |
) |
33 |
7,167 |
6,944 |
|||||||
|
Percentage rent |
112 |
(12 |
) |
- |
- |
112 |
(12 |
) |
||||||
|
Lease termination revenue |
9 |
36 |
- |
- |
9 |
36 |
||||||||
|
62,425 |
59,921 |
995 |
1,324 |
63,420 |
61,245 |
|||||||||
|
Less: credit losses |
(25 |
) |
(1,198 |
) |
45 |
(139 |
) |
20 |
(1,337 |
) |
||||
|
Lease revenue |
62,400 |
58,723 |
1,040 |
1,185 |
63,440 |
59,908 |
||||||||
|
Expense reimbursements |
4,042 |
3,786 |
103 |
113 |
4,144 |
3,899 |
||||||||
|
Other real estate revenue |
1,505 |
1,412 |
104 |
59 |
1,610 |
1,471 |
||||||||
|
Total real estate revenue |
67,947 |
63,921 |
1,247 |
1,357 |
69,194 |
65,278 |
||||||||
|
Property operating expenses |
||||||||||||||
|
CAM and real estate taxes |
(26,432 |
) |
(26,214 |
) |
(1,440 |
) |
(1,616 |
) |
(27,873 |
) |
(27,831 |
) |
||
|
Utilities |
(3,406 |
) |
(2,851 |
) |
(155 |
) |
(113 |
) |
(3,561 |
) |
(2,964 |
) |
||
|
Other property operating expenses |
(1,987 |
) |
(2,149 |
) |
(152 |
) |
(216 |
) |
(2,139 |
) |
(2,364 |
) |
||
|
Total property operating expenses |
(31,825 |
) |
(31,214 |
) |
(1,747 |
) |
(1,945 |
) |
(33,573 |
) |
(33,159 |
) |
||
|
NOI from consolidated properties(1) |
$ |
36,122 |
$ |
32,707 |
$ |
(500 |
) |
$ |
(588 |
) |
$ |
35,621 |
$ |
32,119 |
|
Less: Lease termination revenue |
9 |
36 |
- |
- |
9 |
36 |
||||||||
|
NOI from consolidated properties excluding lease termination revenue(1) |
$ |
36,113 |
$ |
32,671 |
$ |
(500 |
) |
$ |
(588 |
) |
$ |
35,612 |
$ |
32,083 |
|
% change in Same Store NOI from consolidated properties excluding lease termination revenue |
10.5% |
(1) NOI is a non-GAAP measure. See definition of NOI on page 32.
11
Pennsylvania Real Estate Investment Trust
Reconciliation of Equity in (Loss) Income of Partnerships (GAAP Measure) to Net Operating Income from Equity Method Investments, at Ownership Share (Non-GAAP Measure)
Three Months Ended March 31, 2022 and 2021
(in thousands)
|
Three Months Ended March 31, |
||||||
|
(in thousands of dollars) |
2022 |
2021 |
||||
|
Equity in loss of partnerships |
$ |
(395 |
) |
$ |
(3,433 |
) |
|
Depreciation and amortization |
3,022 |
3,187 |
||||
|
Interest expense and other expenses, net |
5,802 |
5,288 |
||||
|
NOI from equity method investments at ownership share(1) |
$ |
8,429 |
$ |
5,042 |
(1) NOI is a non-GAAP measure. See definition of NOI on page 32.
|
Same Store |
Non Same Store |
Total |
||||||||||||
|
2022 |
2021 |
2022 |
2021 |
2022 |
2021 |
|||||||||
|
Real estate revenue |
||||||||||||||
|
Base rent |
$ |
8,272 |
$ |
8,080 |
$ |
8 |
$ |
- |
$ |
8,281 |
$ |
8,080 |
||
|
CAM reimbursement income |
2,047 |
1,565 |
- |
- |
2,047 |
1,565 |
||||||||
|
Real estate tax income |
1,052 |
954 |
- |
- |
1,052 |
954 |
||||||||
|
Percentage rent |
264 |
65 |
93 |
92 |
357 |
157 |
||||||||
|
Lease termination revenue |
793 |
- |
- |
- |
793 |
- |
||||||||
|
12,428 |
10,664 |
101 |
92 |
12,530 |
10,756 |
|||||||||
|
Less: credit losses |
37 |
(887 |
) |
- |
- |
37 |
(887 |
) |
||||||
|
Lease revenue |
12,465 |
9,777 |
101 |
92 |
12,567 |
9,869 |
||||||||
|
Expense reimbursements |
665 |
482 |
- |
- |
665 |
482 |
||||||||
|
Other real estate revenue |
702 |
191 |
- |
8 |
701 |
199 |
||||||||
|
Total real estate revenue |
13,832 |
10,450 |
101 |
100 |
13,933 |
10,550 |
||||||||
|
Property operating expenses |
||||||||||||||
|
CAM and real estate taxes |
(4,123 |
) |
(4,189 |
) |
(109 |
) |
(108 |
) |
(4,232 |
) |
(4,297 |
) |
||
|
Utilities |
(561 |
) |
(374 |
) |
- |
- |
(561 |
) |
(374 |
) |
||||
|
Other property operating expenses |
(706 |
) |
(827 |
) |
(5 |
) |
(10 |
) |
(711 |
) |
(837 |
) |
||
|
Total property operating expenses |
(5,390 |
) |
(5,390 |
) |
(114 |
) |
(118 |
) |
(5,504 |
) |
(5,508 |
) |
||
|
NOI from equity method investments at ownership share(1) |
$ |
8,442 |
$ |
5,060 |
$ |
(13 |
) |
$ |
(18 |
) |
$ |
8,429 |
$ |
5,042 |
|
Less: Lease termination revenue |
793 |
- |
- |
- |
793 |
- |
||||||||
|
NOI from equity method investments at ownership share excluding lease termination revenue(1) |
$ |
7,649 |
$ |
5,060 |
$ |
(13 |
) |
$ |
(18 |
) |
$ |
7,636 |
$ |
5,042 |
|
% change in Same Store NOI from equity method investments at ownership share excluding lease termination revenue |
51.2% |
(1) NOI is a non-GAAP measure. See definition of NOI on page 32.
12
Pennsylvania Real Estate Investment Trust
Reconciliation of Net Loss (GAAP Measure) to Funds From Operations and Funds Available for Distribution (Non-GAAP Measures)
Three Months Ended March 31, 2022 and 2021
(in thousands, except per share amounts)
|
Three Months Ended March 31, |
||||||
|
2022 |
2021 |
|||||
|
FUNDS FROM OPERATIONS (1) |
||||||
|
Net loss |
$ |
(32,973 |
) |
$ |
(43,980 |
) |
|
Depreciation and amortization on real estate: |
||||||
|
Consolidated properties |
28,798 |
29,491 |
||||
|
PREIT's share of equity method investments |
3,022 |
3,187 |
||||
|
Funds from operations attributable to common shareholders and OP Unit holders(1) |
(1,153 |
) |
(11,302 |
) |
||
|
Provision for employee separation expenses |
84 |
92 |
||||
|
Gain on hedge ineffectiveness |
- |
(1,303 |
) |
|||
|
Gain on sale of preferred equity interest |
(3,688 |
) |
- |
|||
|
Reorganization expenses |
- |
197 |
||||
|
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders |
$ |
(4,757 |
) |
$ |
(12,316 |
) |
|
FUNDS AVAILABLE FOR DISTRIBUTION(1) |
||||||
|
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders(1) |
$ |
(4,757 |
) |
$ |
(12,316 |
) |
|
Adjustments: |
||||||
|
Straight line rent |
310 |
(166 |
) |
|||
|
Recurring capital expenditures |
(813 |
) |
(222 |
) |
||
|
Tenant allowances |
(988 |
) |
(1,463 |
) |
||
|
Amortization of non-cash deferred compensation |
(165 |
) |
1,322 |
|||
|
Capitalized leasing costs |
(29 |
) |
(1 |
) |
||
|
Amortization of above- and below-market lease intangibles |
(4 |
) |
(15 |
) |
||
|
Funds available for distribution to common shareholders and OP Unit holders(1) |
$ |
(6,446 |
) |
$ |
(12,860 |
) |
|
Funds from operations attributable to common shareholders and OP Unit holders per diluted share and OP Unit(1) |
$ |
(0.01 |
) |
$ |
(0.14 |
) |
|
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders per diluted share and OP Unit |
$ |
(0.06 |
) |
$ |
(0.15 |
) |
|
Funds available for distribution to common shareholders and OP Unit holders per diluted share and OP Unit(1) |
$ |
(0.08 |
) |
$ |
(0.16 |
) |
|
Weighted average number of shares outstanding |
79,577 |
77,647 |
|
Weighted average effect of full conversion of OP Units |
1,031 |
1,976 |
|
Effect of common share equivalents |
- |
691 |
|
Total weighted average shares outstanding, including OP Units |
80,608 |
80,314 |
(1) Non-GAAP measures. See definitions on page 32.
13
Pennsylvania Real Estate Investment Trust
Condensed Consolidated Balance Sheets
(Unaudited)
|
(in thousands, except per share amounts) |
March 31, 2022 |
December 31, 2021 |
||
|
ASSETS: |
||||
|
INVESTMENTS IN REAL ESTATE, at cost: |
||||
|
Operating properties |
$ |
3,113,736 |
$ |
3,156,194 |
|
Construction in progress |
45,146 |
45,828 |
||
|
Land held for development |
4,339 |
4,339 |
||
|
Total investments in real estate |
3,163,221 |
3,206,361 |
||
|
Accumulated depreciation |
(1,417,522 |
) |
(1,405,260 |
) |
|
Net investments in real estate |
1,745,699 |
1,801,101 |
||
|
INVESTMENTS IN PARTNERSHIPS, at equity: |
12,749 |
16,525 |
||
|
OTHER ASSETS: |
||||
|
Cash and cash equivalents |
45,554 |
43,852 |
||
|
Tenant and other receivables |
36,036 |
42,501 |
||
|
Intangible assets (net of accumulated amortization of $21,900 and $21,598 at March 31, 2022 and December 31, 2021, respectively) |
9,752 |
10,054 |
||
|
Deferred costs and other assets, net |
123,957 |
128,923 |
||
|
Assets held for sale |
42,416 |
8,780 |
||
|
Total assets |
$ |
2,016,163 |
$ |
2,051,736 |
|
LIABILITIES: |
||||
|
Mortgage loans payable, net |
$ |
844,987 |
$ |
851,283 |
|
Term Loans, net |
971,761 |
959,137 |
||
|
Revolving Facilities |
53,818 |
54,549 |
||
|
Tenants' deposits and deferred rent |
11,177 |
10,180 |
||
|
Distributions in excess of partnership investments |
69,344 |
71,570 |
||
|
Fair value of derivative instruments |
2,613 |
8,427 |
||
|
Accrued expenses and other liabilities |
77,319 |
89,543 |
||
|
Total liabilities |
2,031,019 |
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 $97,381 and $95,791 at March 31, 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 $194,235 and $191,130 at March 31, 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 $140,040 and $137,891 at March 31, 2022 and December 31, 2021, respectively |
50 |
50 |
||
|
Shares of beneficial interest, $1.00 par value per share; 200,000 shares authorized; 80,617 and 80,200 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively |
80,617 |
80,200 |
||
|
Capital contributed in excess of par |
1,781,859 |
1,777,013 |
||
|
Accumulated other comprehensive loss |
(3,096 |
) |
(8,830 |
) |
|
Distributions in excess of net income |
(1,864,844 |
) |
(1,832,375 |
) |
|
Total equity - Pennsylvania Real Estate Investment Trust |
(5,310 |
) |
16,162 |
|
|
Noncontrolling interest |
(9,546 |
) |
(9,115 |
) |
|
Total equity (deficit) |
(14,856 |
) |
7,047 |
|
|
Total liabilities and equity |
$ |
2,016,163 |
$ |
2,051,736 |
14
Pennsylvania Real Estate Investment Trust
Assets and Liabilities - Equity Method Investments, at Ownership Share (Non-GAAP Measure)
(in thousands)
|
(in thousands of dollars) |
March 31, 2022 |
December 31, |
|||
|
ASSETS: |
|||||
|
Investments in real estate, at cost: |
|||||
|
Operating properties |
$ |
405,427 |
$ |
403,799 |
|
|
Construction in progress |
4,059 |
5,430 |
|||
|
Total investments in real estate |
409,487 |
409,229 |
|||
|
Accumulated depreciation |
(123,571 |
) |
(120,996 |
) |
|
|
Net investments in real estate |
285,916 |
288,233 |
|||
|
Cash and cash equivalents |
28,183 |
25,191 |
|||
|
Deferred costs and other assets, net |
76,181 |
75,944 |
|||
|
Total assets |
390,280 |
389,368 |
|||
|
LIABILITIES AND PARTNERS' INVESTMENT: |
|||||
|
Mortgage loans payable, net |
223,769 |
224,744 |
|||
|
FDP Term Loan, net |
97,301 |
97,301 |
|||
|
Partnership Loan |
59,280 |
57,771 |
|||
|
Other liabilities |
66,525 |
64,597 |
|||
|
Total liabilities |
446,875 |
444,413 |
|||
|
Net investment |
$ |
(56,595 |
) |
(55,045 |
) |
|
Reconciliation to comparable GAAP balance sheet item: |
The non-GAAP financial information presented above includes 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, our investments in these entities are recorded in the balance sheet caption entitled "Investment in partnerships, at equity." In the case of deficit investment balances, such amounts are recorded in "Distributions in excess of partnership investments."
To derive the proportionate financial information reflected in the tables above 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 assets and liabilities of our unconsolidated partnerships, we do not control these partnerships or 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.
15
Pennsylvania Real Estate Investment Trust
Leasing Activity Summary - Three Months Ended March 31, 2022
|
Number |
GLA |
Term |
Initial Rent |
Previous |
Initial Gross Rent |
Average Rent |
Annualized |
||||||||||
|
$ |
% |
% |
|||||||||||||||
|
Non Anchor |
|||||||||||||||||
|
New Leases |
|||||||||||||||||
|
Under 10k square feet ("sf") |
Consolidated |
34 |
77,644 |
6.4 |
$ |
40.97 |
N/A |
N/A |
N/A |
N/A |
$ |
7.03 |
|||||
|
Unconsolidated(4) |
- |
- |
- |
- |
N/A |
N/A |
N/A |
N/A |
- |
||||||||
|
Total Under 10k sf |
34 |
77,644 |
6.4 |
$ |
40.97 |
N/A |
N/A |
N/A |
N/A |
$ |
7.03 |
||||||
|
Over 10k sf |
Unconsolidated(4) |
2 |
41,450 |
12.4 |
13.51 |
N/A |
N/A |
N/A |
N/A |
5.94 |
|||||||
|
Total New Leases |
36 |
119,094 |
8.5 |
$ |
31.41 |
N/A |
N/A |
N/A |
N/A |
$ |
6.48 |
||||||
|
Renewal Leases |
|||||||||||||||||
|
Under 10k sf |
Consolidated |
30 |
87,725 |
4.5 |
$ |
49.51 |
$ |
51.21 |
$ |
(1.70 |
) |
(3.3 |
%) |
4.2 |
% |
$ |
1.39 |
|
Unconsolidated(4) |
3 |
12,256 |
2.0 |
$ |
68.04 |
$ |
66.13 |
1.91 |
2.9 |
% |
2.9 |
% |
- |
||||
|
Total Under 10k sf |
33 |
99,981 |
4.2 |
$ |
51.78 |
$ |
53.04 |
$ |
(1.26 |
) |
(2.4 |
%) |
3.8 |
% |
$ |
1.31 |
|
|
Over 10k sf |
Consolidated |
3 |
69,735 |
4.1 |
24.29 |
23.52 |
0.77 |
3.3 |
% |
2.6 |
% |
$ |
3.51 |
||||
|
Unconsolidated(4) |
- |
- |
- |
- |
- |
- |
0.0 |
% |
0.0 |
% |
- |
||||||
|
Total Over 10k sf |
3 |
69,735 |
4.1 |
24.29 |
23.52 |
0.77 |
3.3 |
% |
2.6 |
% |
$ |
3.51 |
|||||
|
Total Fixed Rent |
36 |
169,716 |
4.1 |
$ |
40.49 |
$ |
40.91 |
$ |
(0.42 |
) |
(1.0 |
%) |
3.7 |
% |
$ |
2.20 |
|
|
Percentage in Lieu |
Consolidated |
13 |
48,347 |
2.2 |
$ |
19.68 |
$ |
20.46 |
$ |
(0.78 |
) |
(3.8 |
%) |
N/A |
$ |
1.72 |
|
|
Unconsolidated(4) |
- |
- |
- |
$ |
- |
$ |
- |
- |
0.0 |
% |
N/A |
- |
|||||
|
Total Percentage in Lieu |
13 |
48,347 |
2.2 |
19.68 |
20.46 |
(0.78 |
) |
(3.8 |
%) |
N/A |
1.72 |
||||||
|
Total Renewal Leases (4) |
49 |
218,063 |
3.7 |
` |
$ |
35.87 |
$ |
36.38 |
$ |
(0.50 |
) |
(1.4 |
%) |
$ |
2.14 |
||
|
Total Non Anchor |
85 |
337,157 |
5.4 |
$ |
34.30 |
||||||||||||
(1) Initial gross rent renewal spread is computed by comparing the initial rent psf in the new lease to the final rent psf amount in the expiring lease. For purposes of this computation, the rent amount includes minimum rent, CAM charges, estimated real estate tax reimbursements and marketing charges, but excludes percentage rent. In certain cases, a lower rent amount may be payable for a period of time until specified conditions in the lease are satisfied.
(2) Average rent renewal spread is computed by comparing the average rent psf over the new lease term to the final rent psf amount in the expiring lease. For purposes of this computation, the rent amount includes minimum rent and fixed CAM charges, but excludes pro rata CAM charges, estimated real estate tax reimbursements, marketing charges and percentage rent.
(3) Tenant improvements and certain other leasing costs are presented as annualized amounts per square foot and are spread uniformly over the initial lease term.
(4) We own a 25% to 50% interest in each of our unconsolidated properties and do not control such properties. Our percentage ownership is not necessarily indicative of the legal and economic implications of our ownership interest. See "-Non-GAAP Supplemental Financial Measures" in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 for further details on our ownership interests in our unconsolidated properties. Our unconsolidated properties include 3 leases and 12,256 square feet of GLA with respect to our unconsolidated partnerships.
16
Pennsylvania Real Estate Investment Trust
Summarized Sales and Rent Per Square Foot and Occupancy Percentages
|
March 31, 2022 |
March 31, 2021(1) |
||||||||||||||||||||||||
|
Actual Occupancy |
Leased Occupancy |
Actual Occupancy |
|||||||||||||||||||||||
|
% |
Average |
Average |
Occupancy |
Total |
Non- |
Total |
Non- |
Average |
Average |
Occupancy |
Total |
Non- |
|||||||||||||
|
Malls |
94.28 |
% |
$ |
613 |
$ |
56.68 |
10.7% |
92.7 |
% |
88.8 |
% |
94.0 |
% |
90.7 |
% |
$ |
517 |
$ |
57.16 |
12.7 |
% |
87.7 |
% |
85.9 |
% |
|
Non-Core Malls (4) |
0.64 |
% |
$ |
315 |
$ |
36.07 |
12.2% |
48.3 |
% |
41.8 |
% |
48.3 |
% |
41.8 |
% |
$ |
342 |
$ |
38.10 |
14.8 |
% |
58.3 |
% |
47.7 |
% |
|
Malls Total |
94.92 |
% |
$ |
609 |
$ |
56.38 |
10.8% |
90.0 |
% |
86.8 |
% |
91.3 |
% |
88.7 |
% |
$ |
510 |
$ |
56.74 |
12.7 |
% |
86.0 |
% |
84.2 |
% |
|
Other Retail Properties |
5.40 |
% |
N/A |
$ |
24.47 |
N/A |
92.7 |
% |
92.0 |
% |
93.7 |
% |
93.2 |
% |
N/A |
$ |
24.23 |
N/A |
86.1 |
% |
85.0 |
% |
|||
|
Total Retail Properties |
100.3 |
% |
$ |
609 |
$ |
47.56 |
10.8% |
90.3 |
% |
87.6 |
% |
93.7 |
% |
93.2 |
% |
$ |
510 |
$ |
47.84 |
12.7 |
% |
86.0 |
% |
84.3 |
% |
|
Sold Properties |
0.01 |
% |
N/A |
N/A |
N/A |
N/A |
|||||||||||||||||||
|
Other Properties |
-0.32 |
% |
N/A |
N/A |
N/A |
N/A |
|||||||||||||||||||
|
Total Portfolio |
100.0 |
% |
$ |
609 |
$ |
47.56 |
10.8% |
90.3 |
% |
87.6 |
% |
91.5 |
% |
89.3 |
% |
$ |
510 |
$ |
47.84 |
12.7 |
% |
86.0 |
% |
84.3 |
% |
(1) Rolling 12 month average comp sales are not reported for 2021 due to COVID-19 related mall closures and operational limitations impacting 2020 activity. Comp sales for 2022 are now included and are compared to the same quarter 2019 sales, as set forth in the columns for 2021. Historically, average comp sales have been based on reported sales by all comparable non-anchor tenants that lease individual spaces of less than 10,000 square feet and have occupied the space for at least 24 months.
(2) Average gross rent for malls includes all non-anchor space owned by the Company and leased to tenants that occupy individual spaces of less than 10,000 square feet. Average gross rent for other retail properties includes all non-anchor space owned by the Company regardless of size.
(3) Average gross rent for mall tenants greater than 10,000 sf was $22.05 per square foot as of March 31, 2022 and $21.26 per square foot as of March 31, 2021.
(4) Beginning in the third quarter of 2021, Fashion District Philadelphia is classified as a Core Mall, compared to prior quarters when it was classified as a Non-Core Mall.
17
Pennsylvania Real Estate Investment Trust
Mall Occupancy Percentage and Sales Per Square Foot
|
March 31, 2022 |
March 31, 2021 |
Change |
|||||||||||||||||
|
% of Mall |
Avg Comp |
Total |
Non- |
Avg Comp |
Total |
Non-Anchor |
Avg Comp |
Total |
Non- |
||||||||||
|
Top 6 Malls |
|||||||||||||||||||
|
Cherry Hill Mall |
12.1 |
% |
$ |
938 |
92.4 |
% |
90.9 |
% |
$ |
690 |
91.5 |
% |
89.8 |
% |
35.9% |
0.9 |
% |
1.1 |
% |
|
Willow Grove Park |
5.4 |
% |
767 |
93.7 |
% |
89.1 |
% |
749 |
91.7 |
% |
85.5 |
% |
2.4% |
2.0 |
% |
3.6 |
% |
||
|
Lehigh Valley Mall |
6.5 |
% |
674 |
88.9 |
% |
82.1 |
% |
568 |
86.1 |
% |
77.6 |
% |
18.7% |
2.8 |
% |
4.5 |
% |
||
|
Woodland Mall |
6.7 |
% |
654 |
89.3 |
% |
87.3 |
% |
579 |
85.7 |
% |
83.1 |
% |
13.0% |
3.6 |
% |
4.2 |
% |
||
|
Dartmouth Mall |
4.4 |
% |
607 |
92.6 |
% |
90.2 |
% |
522 |
96.6 |
% |
95.0 |
% |
16.3% |
(4.0 |
%) |
(4.8 |
%) |
||
|
Mall at Prince Georges |
8.0 |
% |
591 |
99.1 |
% |
98.4 |
% |
558 |
82.1 |
% |
96.1 |
% |
5.9% |
17.0 |
% |
2.3 |
% |
||
|
43.1 |
% |
$ |
731 |
92.6 |
% |
89.3 |
% |
$ |
627 |
88.1 |
% |
87.2 |
% |
16.6% |
4.5 |
% |
2.1 |
% |
|
|
Malls 7-12 |
|||||||||||||||||||
|
Springfield Town Center |
10.3 |
% |
575 |
89.3 |
% |
85.6 |
% |
552 |
87.6 |
% |
83.3 |
% |
4.2% |
1.7 |
% |
2.3 |
% |
||
|
Capital City Mall |
5.4 |
% |
551 |
97.2 |
% |
95.8 |
% |
434 |
98.7 |
% |
98.1 |
% |
27.0% |
(1.5 |
%) |
(2.3 |
%) |
||
|
Jacksonville Mall |
4.0 |
% |
545 |
99.6 |
% |
99.3 |
% |
501 |
98.6 |
% |
97.2 |
% |
8.8% |
1.0 |
% |
2.1 |
% |
||
|
Viewmont Mall |
4.1 |
% |
544 |
98.8 |
% |
97.5 |
% |
429 |
95.8 |
% |
91.3 |
% |
26.8% |
3.0 |
% |
6.2 |
% |
||
|
Patrick Henry Mall |
5.1 |
% |
539 |
94.3 |
% |
91.7 |
% |
417 |
92.6 |
% |
89.2 |
% |
29.3% |
1.7 |
% |
2.5 |
% |
||
|
Magnolia Mall |
3.1 |
% |
534 |
98.1 |
% |
96.7 |
% |
464 |
77.8 |
% |
92.0 |
% |
15.1% |
20.3 |
% |
4.7 |
% |
||
|
31.9 |
% |
$ |
552 |
95.4 |
% |
92.6 |
% |
$ |
473 |
90.9 |
% |
90.2 |
% |
16.7% |
4.5 |
% |
2.4 |
% |
|
|
Malls 13-19 |
|||||||||||||||||||
|
Valley Mall |
4.8 |
% |
507 |
97.9 |
% |
95.2 |
% |
410 |
97.7 |
% |
94.9 |
% |
23.7% |
0.2 |
% |
0.3 |
% |
||
|
Springfield Mall |
1.5 |
% |
484 |
89.5 |
% |
89.5 |
% |
404 |
83.9 |
% |
83.9 |
% |
19.8% |
5.6 |
% |
5.6 |
% |
||
|
Francis Scott Key Mall |
3.2 |
% |
455 |
93.2 |
% |
89.4 |
% |
373 |
90.4 |
% |
84.9 |
% |
22.0% |
2.8 |
% |
4.5 |
% |
||
|
Moorestown Mall |
3.3 |
% |
453 |
96.5 |
% |
93.9 |
% |
410 |
93.6 |
% |
85.7 |
% |
10.5% |
2.9 |
% |
8.2 |
% |
||
|
Cumberland Mall |
3.0 |
% |
450 |
95.1 |
% |
92.0 |
% |
387 |
83.9 |
% |
83.9 |
% |
16.3% |
11.2 |
% |
8.1 |
% |
||
|
Plymouth Meeting Mall |
4.0 |
% |
407 |
87.2 |
% |
81.2 |
% |
326 |
82.8 |
% |
74.6 |
% |
24.8% |
4.4 |
% |
6.6 |
% |
||
|
Fashion District Philadelphia |
4.4 |
% |
N/A |
78.1 |
% |
72.2 |
% |
N/A |
67.1 |
% |
72.6 |
% |
N/A |
11.0 |
% |
(0.4 |
%) |
||
|
24.2 |
% |
$ |
463 |
90.8 |
% |
85.7 |
% |
$ |
385 |
85.2 |
% |
81.5 |
% |
20.3% |
5.6 |
% |
4.2 |
% |
|
|
All Core Malls |
99.3 |
% |
$ |
613 |
92.7 |
% |
88.8 |
% |
$ |
517 |
87.7 |
% |
85.9 |
% |
18.6% |
5.0 |
% |
2.9 |
% |
|
Non-Core Malls |
|||||||||||||||||||
|
Exton Square Mall |
0.7 |
% |
315 |
48.3 |
% |
41.8 |
% |
342 |
58.3 |
% |
47.7 |
% |
-7.9% |
(10.0 |
%) |
(5.9 |
%) |
||
|
All Non-Core Malls |
0.7 |
% |
$ |
315 |
48.3 |
% |
41.8 |
% |
$ |
342 |
58.3 |
% |
47.7 |
% |
-7.9% |
(10.0 |
%) |
(5.9 |
%) |
|
All Malls |
100.0 |
% |
$ |
609 |
90.0 |
% |
86.8 |
% |
$ |
510 |
86.0 |
% |
84.2 |
% |
19.4% |
4.0 |
% |
2.5 |
% |
(1) Rolling 12 month average comp sales are not reported for 2021 due to COVID-19 related mall closures and operational limitations impacting 2020 activity. Comp sales for 2022 are now included and are compared to the same quarter 2019 sales, as set forth in the columns for 2021. Historically, average comp sales have been based on reported sales by all comparable non-anchor tenants that lease individual spaces of less than 10,000 square feet and have occupied the space for at least 24 months.
(2) Beginning in the third quarter of 2021, Fashion District Philadelphia is classified as a Core Mall, compared to prior quarters when it was classified as a Non-Core Mall.
18
Pennsylvania Real Estate Investment Trust
Top Twenty Tenants
March 31, 2022
|
Tenant |
Brands |
Locations at |
Locations at |
Total Number |
Percentage of |
|
|
Foot Locker, Inc. |
Champs, Foot Locker, Footaction, House of Hoops by Foot Locker, Kids Foot Locker |
35 |
6 |
41 |
4.4 |
% |
|
Signet Jewelers Limited |
Kay Jewelers, Piercing Pagoda, Piercing Pagoda Plus, Totally Pagoda, Zales Jewelers, Banter by Piercing Pagoda |
48 |
11 |
59 |
3.2 |
% |
|
Dick's Sporting Goods, Inc. |
Dick's Sporting Goods, Field & Stream |
10 |
1 |
11 |
2.8 |
% |
|
Victoria's Secret & Co. |
Victoria's Secret, Pink |
14 |
3 |
17 |
2.8 |
% |
|
American Eagle Outfitters, Inc. |
Aerie, American Eagle Outfitters |
13 |
6 |
19 |
2.6 |
% |
|
Sycamore Partners |
Hot Topic, Talbots, Torrid, AnnTaylor, Loft, Belk |
33 |
8 |
41 |
1.9 |
% |
|
Express, Inc |
Express, Express Factory Outlet, Express Men |
10 |
4 |
14 |
1.8 |
% |
|
Dave & Buster's, Inc. |
Dave & Buster's |
3 |
1 |
4 |
1.8 |
% |
|
Macy's |
Bloomingdale's, Macy's |
12 |
2 |
14 |
1.8 |
% |
|
Gap, Inc. |
Banana Republic, Gap/Gap Kids/Gap Outlet, Old Navy |
10 |
8 |
18 |
1.7 |
% |
|
Cineworld Group |
Regal Cinemas |
4 |
- |
4 |
1.7 |
% |
|
Genesco Inc. |
Johnston & Murphy, Journeys, Journeys Kidz, Underground by Journeys |
22 |
5 |
27 |
1.6 |
% |
|
Hennes & Mauritz L.P. |
H & M |
12 |
1 |
13 |
1.6 |
% |
|
Bath & Body Works, Inc. |
Bath & Body Works |
17 |
3 |
20 |
1.4 |
% |
|
Darden Concepts, Inc. |
Bahama Breeze, Capital Grille, Olive Garden, Seasons 52, Yard House |
8 |
- |
8 |
1.3 |
% |
|
Luxottica Group S.p.A. |
Lenscrafters, Pearle Vision, Sunglass Hut |
21 |
7 |
28 |
1.2 |
% |
|
F21 OpCo LLC |
Forever 21 |
8 |
2 |
10 |
1.1 |
% |
|
The TJX Companies, Inc. |
HomeGoods, HomeSense, Marshalls, Sierra Trading Post, TJ Maxx |
7 |
2 |
9 |
1.1 |
% |
|
AMC Entertainment Holdings, Inc. |
AMC |
3 |
1 |
4 |
1.1 |
% |
|
Shoe Show, Inc. |
Shoe Department, Shoe Dept. Encore |
14 |
2 |
16 |
1.0 |
% |
|
Total Top 20 Tenants |
304 |
73 |
377 |
38.1 |
% |
|
|
Total Leases |
1,332 |
355 |
1,687 |
100.0 |
% |
(1)
Includes our share of tenant gross rent from partnership properties based on PREIT's ownership percentage in the respective equity method investments as of March 31, 2022.
19
Pennsylvania Real Estate Investment Trust
Lease Expirations as of March 31, 2022
(dollars in thousands except per square foot ("psf") amounts)
|
Non-Anchors |
||||||||||||
|
Gross Leasable Area ("GLA") |
Annualized Gross Rent |
|||||||||||
|
Lease |
Number of |
Expiring GLA (1) |
Percent of Total |
Gross Rent in |
PREIT's Share of |
Percent of |
Average Expiring |
|||||
|
2022 and Prior |
295 |
639,434 |
7.8 |
% |
38,678 |
34,223 |
12.1 |
% |
60.49 |
|||
|
2023 |
280 |
1,419,329 |
17.2 |
% |
48,532 |
42,792 |
15.0 |
% |
34.19 |
|||
|
2024 |
246 |
916,190 |
11.2 |
% |
41,683 |
36,327 |
12.8 |
% |
45.50 |
|||
|
2025 |
187 |
955,782 |
11.6 |
% |
43,003 |
35,045 |
12.4 |
% |
44.99 |
|||
|
2026 |
146 |
794,392 |
9.7 |
% |
34,747 |
27,919 |
9.9 |
% |
43.74 |
|||
|
2027 |
106 |
814,572 |
9.9 |
% |
28,757 |
26,341 |
9.3 |
% |
35.30 |
|||
|
2028 |
81 |
593,013 |
7.2 |
% |
22,319 |
20,882 |
7.4 |
% |
37.64 |
|||
|
2029 |
71 |
523,423 |
6.4 |
% |
20,989 |
16,868 |
6.0 |
% |
40.10 |
|||
|
2030 |
65 |
480,968 |
5.9 |
% |
21,160 |
17,750 |
6.3 |
% |
44.00 |
|||
|
2031 |
43 |
418,084 |
5.1 |
% |
12,931 |
10,434 |
3.7 |
% |
30.93 |
|||
|
Thereafter |
45 |
661,015 |
8.0 |
% |
18,755 |
14,428 |
5.1 |
% |
28.37 |
|||
|
Total/Average |
1,565 |
8,216,202 |
100.0 |
% |
$ |
331,554 |
$ |
283,009 |
100.0 |
% |
$ |
40.35 |
|
Anchors |
||||||||||||
|
Gross Leasable Area ("GLA") |
Annualized Gross Rent |
|||||||||||
|
Lease |
Number of |
Expiring GLA (1) |
Percent of Total |
Gross Rent in |
PREIT's Share of |
Percent of |
Average Expiring |
|||||
|
2022 and prior |
2 |
376,694 |
7.9 |
% |
710 |
355 |
1.4 |
% |
1.88 |
|||
|
2023 |
5 |
550,775 |
11.5 |
% |
2,485 |
2,485 |
9.5 |
% |
4.51 |
|||
|
2024 |
4 |
485,531 |
10.2 |
% |
3,265 |
3,265 |
12.4 |
% |
6.73 |
|||
|
2025 |
9 |
1,181,974 |
24.7 |
% |
3,211 |
3,211 |
12.3 |
% |
2.72 |
|||
|
2026 |
6 |
470,638 |
9.8 |
% |
3,910 |
2,646 |
10.1 |
% |
8.31 |
|||
|
2027 |
2 |
275,250 |
5.8 |
% |
1,743 |
1,743 |
6.7 |
% |
6.33 |
|||
|
2028 |
8 |
879,599 |
18.4 |
% |
5,633 |
5,633 |
21.4 |
% |
6.40 |
|||
|
2029 |
1 |
65,155 |
1.4 |
% |
2,210 |
2,210 |
8.4 |
% |
33.92 |
|||
|
2030 |
2 |
85,718 |
1.8 |
% |
1,522 |
1,522 |
5.8 |
% |
17.75 |
|||
|
2031 |
2 |
166,523 |
3.5 |
% |
932 |
932 |
3.6 |
% |
5.60 |
|||
|
Thereafter |
3 |
241,327 |
5.0 |
% |
2,188 |
2,188 |
8.4 |
% |
9.07 |
|||
|
Total/Average |
44 |
4,779,184 |
100.0 |
% |
$ |
27,809 |
$ |
26,190 |
100.0 |
% |
$ |
5.82 |
(1) Does not include tenants occupying space under license agreements with initial terms of less than one year.
(2) Includes our share of tenant rent from partnership properties based on PREIT's ownership percentage in the respective equity method investments.
20
Pennsylvania Real Estate Investment Trust
Property Information as of March 31, 2022
|
Landlord Owned Anchors/ |
Anchor Stores Not Owned |
Non-anchor |
||||||||
|
Properties |
Location |
Tenant |
Expiration |
GLA |
Tenant |
GLA |
Large |
Small |
Vacant |
Total |
|
Core Malls |
||||||||||
|
Capital City Mall |
Camp Hill, PA |
JCPenney |
2025 |
102,825 |
Macy's |
120,000 |
104,806 |
170,299 |
14,337 |
624,246 |
|
Dick's Sporting Goods |
2028 |
61,677 |
||||||||
|
Sportsman's Warehouse |
2031 |
50,302 |
||||||||
|
Cherry Hill Mall |
Cherry Hill, NJ |
Nordstrom |
2025 |
138,000 |
JCPenney |
174,285 |
239,234 |
392,854 |
63,012 |
1,311,985 |
|
Macy's |
304,600 |
|||||||||
|
Cumberland Mall |
Vineland, NJ |
The Home Depot |
2024 |
132,013 |
BJ's Wholesale Club |
117,889 |
132,298 |
146,742 |
33,440 |
952,012 |
|
Dick's Sporting Goods |
2028 |
50,000 |
Boscov's |
155,341 |
||||||
|
Regal Cinemas |
2026 |
44,445 |
||||||||
|
Power Warehouse |
2023 |
116,934 |
||||||||
|
HomeGoods |
2033 |
22,910 |
||||||||
|
Dartmouth Mall |
Dartmouth, MA |
JCPenney |
2025 |
100,020 |
Macy's |
140,000 |
96,482 |
146,656 |
36,469 |
632,513 |
|
Burlington |
2030 |
43,835 |
||||||||
|
AMC Theaters |
2026 |
44,988 |
||||||||
|
Aldi |
2031 |
24,063 |
||||||||
|
Fashion District Philadelphia |
Philadelphia, PA |
Burlington |
2032 |
85,162 |
160,849 |
112,931 |
186,811 |
851,471 |
||
|
AMC |
2034 |
36,535 |
||||||||
|
Round 1 |
2029 |
58,080 |
||||||||
|
City Winery |
2038 |
29,762 |
||||||||
|
H&M |
2030 |
38,694 |
||||||||
|
Shopper's World |
2026 |
95,159 |
||||||||
|
Primark |
2032 |
47,488 |
||||||||
|
Francis Scott Key Mall |
Frederick, MD |
JCPenney |
2025 |
101,293 |
Macy's |
139,333 |
124,272 |
176,772 |
41,528 |
754,231 |
|
Sears |
2023 |
120,883 |
||||||||
|
Dick's Sporting Goods |
2025 |
50,150 |
||||||||
|
Jacksonville Mall |
Jacksonville, NC |
Belk |
2026 |
72,510 |
123,079 |
125,853 |
1,822 |
492,869 |
||
|
JCPenney |
2025 |
51,812 |
||||||||
|
Sears |
2026 |
117,793 |
||||||||
|
Lehigh Valley Mall |
Allentown, PA |
Boscov's |
2022 |
164,694 |
JCPenney |
207,292 |
185,631 |
316,477 |
109,554 |
1,195,648 |
|
Macy's |
2022 |
212,000 |
||||||||
|
Magnolia Mall |
Florence, SC |
Belk |
2028 |
115,793 |
96,175 |
141,609 |
11,349 |
591,776 |
||
|
Best Buy |
2023 |
32,054 |
||||||||
|
Tilt Studio |
2031 |
104,107 |
||||||||
|
Dick's Sporting Goods |
2023 |
45,000 |
||||||||
|
Burlington |
2028 |
45,689 |
||||||||
|
Moorestown Mall |
Moorestown, NJ |
Boscov's |
2028 |
202,765 |
Cooper Hospital (2) |
182,153 |
110,814 |
197,725 |
25,713 |
926,699 |
|
Regal Cinemas |
2030 |
57,843 |
||||||||
|
HomeSense |
2028 |
28,486 |
||||||||
|
Turn 7 Liquidations |
2023 |
121,200 |
||||||||
|
Patrick Henry Mall |
Newport News, VA |
Dick's Sporting Goods |
2027 |
50,250 |
Dillard's |
144,157 |
60,095 |
213,344 |
24,863 |
717,921 |
|
JCPenney |
2025 |
85,212 |
Macy's |
140,000 |
21
|
Landlord Owned Anchors/ |
Anchor Stores Not Owned |
Non-anchor |
||||||||
|
Properties |
Location |
Tenant |
Expiration |
GLA |
Tenant |
GLA |
Large |
Small |
Vacant |
Total |
|
Plymouth Meeting Mall |
Plymouth Meeting, PA |
Boscov's |
2028 |
188,429 |
188,024 |
178,455 |
117,089 |
917,844 |
||
|
Whole Foods |
2029 |
65,155 |
||||||||
|
Burlington |
2030 |
41,883 |
||||||||
|
Dick's Sporting Goods |
2031 |
57,588 |
||||||||
|
AMC Theaters |
2027 |
48,000 |
||||||||
|
LEGOLAND Discovery Center |
2032 |
33,221 |
||||||||
|
Springfield Mall |
Springfield, PA |
Macy's |
192,000 |
20,577 |
178,777 |
23,377 |
610,630 |
|||
|
Target |
195,899 |
|||||||||
|
Springfield Town Center |
Springfield, VA |
Macy's |
2025 |
252,245 |
JCPenney |
209,144 |
178,772 |
310,721 |
105,678 |
1,374,187 |
|
Target |
180,841 |
|||||||||
|
Dick's Sporting Goods |
2025 |
53,891 |
||||||||
|
Nordstrom Rack |
2025 |
33,107 |
||||||||
|
Regal Cinemas |
2031 |
49,788 |
||||||||
|
The Mall at Prince Georges |
Hyattsville, MD |
Macy's |
2023 |
195,655 |
177,988 |
263,632 |
7,299 |
779,760 |
||
|
Target |
2024 |
135,186 |
||||||||
|
Valley Mall |
Hagerstown, MD |
JCPenney |
2025 |
157,455 |
95,023 |
201,076 |
17,771 |
827,735 |
||
|
Belk |
2028 |
123,094 |
||||||||
|
Regal Cinemas |
2033 |
53,059 |
||||||||
|
Dick's Sporting Goods |
2031 |
62,416 |
||||||||
|
Onelife Fitness |
2033 |
70,000 |
||||||||
|
Tilt Studio |
2028 |
47,841 |
||||||||
|
Viewmont Mall |
Scranton, PA |
JCPenney |
2025 |
193,112 |
Macy's |
139,801 |
76,053 |
161,003 |
6,680 |
689,226 |
|
Dick's Sporting Goods/Field & Stream |
2028 |
90,000 |
||||||||
|
HomeGoods |
2027 |
22,577 |
||||||||
|
Willow Grove Park |
Willow Grove, PA |
Macy's |
2027 |
225,000 |
Bloomingdale's |
237,537 |
78,219 |
240,272 |
39,054 |
1,035,998 |
|
Nordstrom Rack |
2024 |
40,332 |
Sears (1) |
175,584 |
||||||
|
Woodland Mall |
Grand Rapids, MI |
Von Maur |
2119 |
86,165 |
JCPenney |
254,905 |
115,714 |
306,909 |
61,243 |
982,252 |
|
Macy's |
157,316 |
|||||||||
|
Total Core Malls |
4,480,445 |
3,568,077 |
3,311,285 |
3,982,107 |
927,089 |
16,269,003 |
22
|
Landlord Owned Anchors/ |
Anchor Stores Not Owned |
Non-anchor |
||||||||
|
Properties |
Location |
Tenant |
Expiration |
GLA |
Tenant |
GLA |
Large |
Small |
Vacant |
Total |
|
Other Malls and Retail Properties |
||||||||||
|
Exton Square Mall |
Exton, PA |
Boscov's |
2024 |
178,000 |
Macy's |
181,200 |
31,652 |
122,465 |
418,457 |
990,145 |
|
Round 1 |
2026 |
58,371 |
||||||||
|
Gloucester Premium Outlets |
Blackwood, NJ |
49,479 |
236,259 |
91,229 |
376,967 |
|||||
|
Metroplex Shopping Center |
Plymouth Meeting, PA |
Giant Food Store |
2026 |
67,185 |
Lowe's |
163,215 |
328,809 |
49,012 |
7,280 |
777,695 |
|
Target |
137,514 |
|||||||||
|
Saks OFF 5th |
2026 |
24,680 |
||||||||
|
The Court at Oxford Valley |
Fairless Hills, PA |
Best Buy |
2026 |
59,620 |
BJ's Wholesale Club |
116,872 |
293,144 |
37,570 |
16,571 |
703,909 |
|
The Home Depot |
130,751 |
|||||||||
|
Dick's Sporting Goods |
2026 |
49,381 |
||||||||
|
Red Rose Commons |
Lancaster, PA |
The Home Depot |
134,558 |
248,086 |
15,207 |
- |
462,883 |
|||
|
Weis Market |
65,032 |
|||||||||
|
Total Other Malls and Retail Properties |
363,176 |
929,142 |
1,025,231 |
460,513 |
533,537 |
3,311,599 |
||||
|
Total Portfolio |
4,843,621 |
4,497,219 |
4,336,516 |
4,442,620 |
1,460,626 |
19,580,602 |
|
(1) Approximately 69,000 square feet of this space has been subleased to Primark. (2)Former Sears was acquired by Cooper Hospital. The site is under development and not currently operating. |
23
Pennsylvania Real Estate Investment Trust
Investment in Real Estate - Consolidated Properties
(in thousands)
|
March 31, 2022 |
||||||||||
|
Operating |
Construction in |
Accumulated |
Net Real Estate |
Debt(1) |
||||||
|
Core Malls |
||||||||||
|
Capital City Mall |
$ |
138,039 |
$ |
- |
$ |
62,832 |
$ |
75,207 |
$ |
- |
|
Cherry Hill Mall |
486,069 |
- |
294,893 |
191,176 |
254,086 |
|||||
|
Cumberland Mall |
85,544 |
126 |
37,679 |
47,991 |
38,736 |
|||||
|
Dartmouth Mall |
92,329 |
110 |
52,255 |
40,184 |
54,945 |
|||||
|
Francis Scott Key Mall |
98,302 |
- |
50,135 |
48,167 |
58,768 |
|||||
|
Jacksonville Mall |
95,047 |
- |
47,346 |
47,701 |
- |
|||||
|
Magnolia Mall |
108,941 |
- |
58,479 |
50,462 |
- |
|||||
|
Moorestown Mall |
186,975 |
- |
91,042 |
95,933 |
- |
|||||
|
Patrick Henry Mall |
157,592 |
- |
82,807 |
74,785 |
84,600 |
|||||
|
Plymouth Meeting Mall |
236,888 |
5,456 |
120,679 |
121,665 |
- |
|||||
|
The Mall at Prince Georges |
142,058 |
218 |
77,077 |
65,199 |
- |
|||||
|
Springfield Town Center |
492,080 |
99 |
99,059 |
393,120 |
- |
|||||
|
Valley Mall |
148,953 |
1,229 |
60,735 |
89,447 |
- |
|||||
|
Viewmont Mall |
122,384 |
- |
60,220 |
62,164 |
67,185 |
|||||
|
Willow Grove Park |
232,915 |
38,048 |
121,996 |
148,967 |
148,162 |
|||||
|
Woodland Mall |
288,334 |
106 |
100,220 |
188,220 |
112,750 |
|||||
|
Total Core Malls |
3,112,451 |
45,392 |
1,417,454 |
1,740,389 |
819,233 |
|||||
|
Non-Core Malls |
||||||||||
|
Valley View Center (2) |
1,027 |
- |
66 |
961 |
27,212 |
|||||
|
Total Malls |
$ |
3,113,478 |
$ |
45,392 |
$ |
1,417,520 |
$ |
1,741,350 |
$ |
846,446 |
|
Other Properties |
||||||||||
|
Land held for development |
3,163,221 |
- |
- |
3,163,221 |
- |
|||||
|
Total Investment in Real Estate |
$ |
6,276,699 |
$ |
45,392 |
$ |
1,417,520 |
$ |
4,904,571 |
$ |
846,446 |
|
Assets held for sale |
||||||||||
|
Valley View Center |
12 |
- |
- |
12 |
- |
|||||
|
Exton Square Mall |
28,446 |
- |
- |
28,446 |
- |
|||||
|
Mall at Prince George's |
5,091 |
- |
- |
5,091 |
- |
|||||
|
Moorestown |
1,751 |
- |
- |
1,751 |
- |
|||||
|
Springfield Town Center |
5,193 |
- |
- |
5,193 |
- |
|||||
|
Woodland Mall |
1,054 |
- |
- |
1,054 |
- |
|||||
|
Valley View Macy's Box |
974 |
- |
- |
974 |
- |
|||||
|
Total held for sale |
$ |
42,520 |
$ |
- |
$ |
- |
$ |
42,520 |
$ |
- |
(1)
Refer to page 27 for further debt information.
(2)
The Valley View Mall mortgage of $27.2 million was outstanding as of March 31, 2022. In the third quarter of 2020, the Company derecognized the assets of Valley View Mall as a result of the property being assigned to a special servicer, but continued to recognize the mortgage until the foreclosure process is complete. In May 2022, the foreclosure proceedings were completed.
24
Pennsylvania Real Estate Investment Trust
Investment in Real Estate - Equity Method Investments at Ownership Share
(in thousands)
|
March 31, 2022 |
|||||||||||
|
Operating |
Construction in |
Accumulated |
Net Real Estate |
Debt(1) |
|||||||
|
Unconsolidated Malls |
|||||||||||
|
Fashion District Philadelphia |
$ |
165,774 |
$ |
394 |
$ |
(5,932 |
) |
$ |
160,236 |
$ |
156,581 |
|
Lehigh Valley Mall |
57,109 |
63 |
(32,105 |
) |
25,067 |
92,155 |
|||||
|
Springfield Mall |
58,740 |
60 |
(27,464 |
) |
31,336 |
28,805 |
|||||
|
Total Unconsolidated Malls |
$ |
281,623 |
$ |
517 |
$ |
(65,501 |
) |
$ |
216,639 |
$ |
277,541 |
|
Unconsolidated Other Retail Properties |
|||||||||||
|
Gloucester Premium Outlets |
28,173 |
15 |
(7,182 |
) |
21,006 |
21,500 |
|||||
|
Metroplex Shopping Center |
46,248 |
2,773 |
(28,508 |
) |
20,513 |
35,151 |
|||||
|
The Court at Oxford Valley |
28,411 |
- |
(14,005 |
) |
14,406 |
27,500 |
|||||
|
Red Rose Commons |
14,626 |
(28 |
) |
(5,956 |
) |
8,642 |
16,780 |
||||
|
Total Unconsolidated Other Retail Properties |
$ |
117,458 |
$ |
2,760 |
$ |
(55,651 |
) |
$ |
64,567 |
$ |
100,931 |
|
Unconsolidated Property Under Development |
|||||||||||
|
Pavilion at Market East |
6,346 |
784 |
(2,420 |
) |
4,710 |
$ |
2,968 |
||||
|
Total Investment in Real Estate |
$ |
405,427 |
$ |
4,061 |
$ |
(123,572 |
) |
$ |
285,916 |
$ |
381,440 |
(1)
Refer to page 27 for further debt information.
25
Pennsylvania Real Estate Investment Trust
Capital Expenditures
Three Months Ended March 31, 2022
(in thousands)
|
Three Months Ended March 31, 2022 |
||||||
|
Consolidated |
PREIT's Share |
Total |
||||
|
Redevelopment projects with incremental GLA and/or anchor replacement (1) |
$ |
1,102 |
$ |
112 |
$ |
1,214 |
|
Tenant allowances |
976 |
12 |
- |
988 |
||
|
Recurring capital expenditures: |
- |
|||||
|
CAM expenditures |
459 |
145 |
- |
604 |
||
|
Non-CAM expenditures |
209 |
- |
- |
209 |
||
|
Total recurring capital expenditures |
668 |
145 |
813 |
|||
|
Total |
$ |
2,746 |
$ |
269 |
$ |
3,015 |
(1) Net of any tenant reimbursements, parcel sales, tax credits or other incentives.
26
Pennsylvania Real Estate Investment Trust
Debt Analysis as of March 31, 2022
(in thousands)
|
Outstanding Debt |
||||||||||||
|
Fixed Rate (1) |
% of Total |
Variable Rate |
% of Total |
Total |
% of Total |
|||||||
|
Consolidated mortgage loans payable (2) |
$ |
607,741 |
26.9 |
% |
$ |
238,703 |
10.6 |
% |
$ |
846,444 |
37.5 |
% |
|
Unconsolidated mortgage loans payable (3) |
200,391 |
8.9 |
% |
24,468 |
1.1 |
% |
224,859 |
10.0 |
% |
|||
|
Consolidated Term Loans (4) |
300,000 |
13.3 |
% |
676,521 |
30.0 |
% |
976,521 |
43.2 |
% |
|||
|
Unconsolidated Term Loans (5) |
59,280 |
2.6 |
% |
97,301 |
4.3 |
% |
156,581 |
6.9 |
% |
|||
|
2020 Revolving Facility |
- |
0.0 |
% |
53,818 |
2.4 |
% |
53,818 |
2.4 |
% |
|||
|
Total Outstanding Debt |
$ |
1,167,412 |
51.7 |
% |
$ |
1,090,811 |
48.3 |
% |
$ |
2,258,223 |
100.0 |
% |
|
Average Stated Interest Rate |
5.76 |
% |
6.56 |
% |
6.15 |
% |
(1) Includes variable rate debt swapped to fixed rate debt.
(2) Excludes deferred financing costs of $1,458.
(3) Reflects our share of mortgage debt of equity method investees. Excludes our share of deferred financing costs of $796.
(4) Excludes deferred financing costs of $4,758.
(5) Reflects our share of Term Loan debt of equity method investee.
|
Average Debt Balance |
|||||||||
|
Mortgage Debt |
Revolving Facility |
Term Loans |
Total |
||||||
|
Beginning Balance |
12/31/2021 |
$ |
1,078,373 |
$ |
54,549 |
$ |
1,120,751 |
2,253,673 |
|
|
First Lien Paydown |
2/4/2022 |
- |
(732 |
) |
(1,706 |
) |
(2,439 |
) |
|
|
2020 FDP Partnership Loan Accrued Interest |
2/4/2022 |
- |
- |
1,509 |
1,509 |
||||
|
Mortgage loan amortization, including our share of debt of equity method investees |
3/31/2022 |
(7,068 |
) |
- |
- |
(7,068 |
) |
||
|
Second Lien PIK Interest |
3/31/2022 |
12,548 |
12,548 |
||||||
|
Ending Balance |
3/31/2022 |
$ |
1,071,305 |
$ |
53,817 |
$ |
1,133,101 |
$ |
2,258,223 |
|
Weighted Average Balance |
$ |
1,076,143 |
$ |
54,097 |
$ |
1,123,901 |
$ |
2,254,141 |
(continued next page)
27
Pennsylvania Real Estate Investment Trust
Debt Analysis as of March 31, 2022
(in thousands)
|
Debt Maturities(1) |
||||||||||||||||
|
Year |
Scheduled |
Deferred |
Mortgage |
2020 Revolving |
Term Loans |
Deferred |
Total Debt |
|||||||||
|
2022 |
$ |
12,327 |
$ |
(1,013 |
) |
$ |
450,740 |
$ |
53,818 |
$ |
976,519 |
$ |
(4,758 |
) |
$ |
1,487,633 |
|
2023 |
10,596 |
(770 |
) |
89,661 |
- |
97,301 |
- |
196,788 |
||||||||
|
2024 |
10,242 |
(675 |
) |
125,953 |
- |
- |
- |
135,521 |
||||||||
|
2025 |
9,031 |
(574 |
) |
237,644 |
- |
- |
- |
246,101 |
||||||||
|
2026 |
3,197 |
(325 |
) |
- |
- |
- |
- |
2,872 |
||||||||
|
Thereafter |
10,597 |
(675 |
) |
111,315 |
- |
59,280 |
- |
180,517 |
||||||||
|
$ |
55,991 |
$ |
(4,032 |
) |
$ |
1,015,314 |
$ |
53,818 |
$ |
1,133,101 |
$ |
(4,758 |
) |
$ |
2,249,433 |
(1) The weighted average period to total debt maturity is 1.56 years, excluding extension options. Includes 100% of revolver, term loan and mortgage loan debt from consolidated properties and our share of term loan and mortgage loan debt of equity method investees.
|
Weighted Average Mortgage Interest Rates |
||||
|
Year |
Balance (1) |
Interest Rate |
||
|
2022 |
$ |
432,784 |
4.10 |
% |
|
2023 |
114,564 |
3.84 |
% |
|
|
2024 |
125,953 |
3.83 |
% |
|
|
2025 |
261,567 |
4.10 |
% |
|
|
2026 |
- |
0.00 |
% |
|
|
Thereafter |
136,434 |
3.79 |
% |
|
|
Total |
$ |
1,071,303 |
4.00 |
% |
(1) Includes our share of debt of equity method investees.
28
Pennsylvania Real Estate Investment Trust
Debt Schedule as of March 31, 2022
(in thousands)
|
Debt |
Interest Rate |
Annual |
Balance at |
Initial |
Fully Extended |
|||||
|
Fixed Rate Mortgage Loans |
||||||||||
|
Cumberland Mall |
$ |
38,736 |
4.40 |
% |
$ |
3,433 |
$ |
38,157 |
August 2022 |
August 2022 |
|
Cherry Hill Mall |
254,085 |
3.90 |
% |
16,980 |
251,120 |
September 2022 |
September 2022 |
|||
|
Dartmouth Mall |
54,945 |
3.97 |
% |
3,825 |
53,299 |
April 2023 |
April 2023 |
|||
|
Metroplex Shopping Center (2) |
35,151 |
5.00 |
% |
2,818 |
33,502 |
October 2023 |
October 2023 |
|||
|
Patrick Henry Mall |
84,600 |
4.35 |
% |
5,748 |
77,591 |
July 2025 |
July 2025 |
|||
|
Springfield Mall (2) |
28,805 |
4.45 |
% |
1,964 |
26,299 |
October 2025 |
October 2025 |
|||
|
Willow Grove Park |
148,162 |
3.88 |
% |
9,599 |
133,754 |
October 2025 |
October 2025 |
|||
|
Lehigh Valley Mall (2) |
92,155 |
4.06 |
% |
5,768 |
79,789 |
November 2027 |
November 2027 |
|||
|
Red Rose Commons (2) |
16,780 |
3.28 |
% |
978 |
13,183 |
July 2031 |
July 2031 |
|||
|
The Court at Oxford Valley (2) |
27,500 |
3.20 |
% |
2,058 |
18,343 |
July 2031 |
July 2031 |
|||
|
Valley View Mall |
27,212 |
5.95 |
% |
0 |
27,212 |
July 2020 |
July 2020 |
|||
|
Total Fixed Rate Mortgage Loans |
$ |
808,132 |
4.09 |
% |
$ |
53,171 |
$ |
752,249 |
||
|
Variable Rate Mortgage Loans |
||||||||||
|
Francis Scott Key Mall |
$ |
58,768 |
3.83 |
% |
$ |
2,251 |
$ |
58,768 |
June 2024 |
June 2024 |
|
Woodland Mall |
112,750 |
4.00 |
% |
8,710 |
112,750 |
April 2021 |
December 2022 |
|||
|
Gloucester Premium Outlets (2) |
21,500 |
1.59 |
% |
341 |
21,500 |
March 2022 |
March 2023 |
|||
|
Pavilion East Associates (2) |
2,968 |
4.00 |
% |
218 |
2,860 |
May 2023 |
May 2023 |
|||
|
Viewmont Mall |
67,185 |
3.83 |
% |
2,574 |
67,185 |
June 2024 |
June 2024 |
|||
|
Total Variable Rate Mortgage Loans |
$ |
263,171 |
3.72 |
% |
$ |
14,094 |
$ |
263,063 |
||
|
Total Mortgage Loans |
$ |
1,071,303 |
4.00 |
% |
$ |
67,265 |
$ |
1,015,312 |
||
|
Consolidated Mortgage Loans |
$ |
846,445 |
4.04 |
% |
$ |
53,120 |
$ |
819,838 |
||
|
Consolidated Deferred Financing Fees |
(1,458 |
) |
n/a |
n/a |
n/a |
|||||
|
Unconsolidated Mortgage Loans |
224,859 |
3.85 |
% |
14,145 |
195,474 |
|||||
|
Unconsolidated Deferred Financing Fees (3) |
(2,574 |
) |
n/a |
n/a |
n/a |
|||||
|
First Lien Term Loan (1) |
377,703 |
7.98 |
% |
30,160 |
377,703 |
December 2022 |
December 2023 |
|||
|
Second Lien Term Loan |
598,817 |
8.50 |
% |
50,899 |
598,817 |
(4) |
December 2022 |
December 2023 |
||
|
2018 FDP Term Loan |
97,301 |
4.00 |
% |
3,892 |
97,301 |
January 2023 |
January 2024 |
|||
|
Term Loan Deferred Financing Fees |
(4,758 |
) |
n/a |
n/a |
n/a |
|||||
|
First Lien Revolver |
53,818 |
4.00 |
% |
2,153 |
53,818 |
December 2022 |
December 2023 |
|||
|
2020 FDP Partnership Loan |
59,280 |
15.00 |
% |
8,892 |
59,280 |
(4) |
December 2027 |
December 2027 |
||
|
Total |
$ |
2,249,433 |
6.15 |
% |
$ |
163,261 |
$ |
2,202,231 |
||
|
Amortization of Deferred Financing Fees |
0 |
0.75 |
% |
- |
- |
|||||
|
Effective Interest Rate |
$ |
2,249,433 |
6.90 |
% |
$ |
163,261 |
$ |
2,202,231 |
(1) All or a portion of the loan has been effectively swapped to the fixed interest rate presented.
(2) Includes our share of debt of equity method investees, based on our ownership percentage.
(3) The Valley View Mall mortgage of $27.2 million was outstanding as of March 31, 2022. In the third quarter of 2020, the Company derecognized the assets of Valley View Mall as a result of the property being assigned to a special servicer, but continued to recognize the mortgage until the foreclosure process is complete and had no annual debt service on the property. In May 2022, the foreclosure proceedings were completed.
(4) The balances at maturity are subject to increase as additional interest accrues to the principal balances of the loans.
29
Pennsylvania Real Estate Investment Trust
Selected Debt Ratios
|
March 31, 2022 |
|
|
Debt Yield Ratio |
|
|
Maintain a minimum Debt Yield Ratio (Senior) of 11.35% from and after June 30, 2021 |
19.05% |
|
Maintain a minimum Debt Yield Ratio (Corporate) of (a) 6.50% from June 30, 2021 through and including September 30, 2021 and (b) 7.25% from and after October 1, 2021 |
8.86% |
|
Liquidity |
|
|
Maintain minimum liquidity of at least $25.0 million, to be comprised of unrestricted cash held in certain deposit accounts subject to control agreements |
$110.5 million |
(1)
The First Lien Credit Agreement and Second Lien Credit Agreement (collectively, the "Credit Agreements"), contain identical affirmative and negative covenants customarily found in such agreements, including requirements that the Company, on a consolidated basis, maintain certain financial ratios and liquidity. All capitalized terms used on this page have the meanings ascribed to such terms in the Credit Agreements. In addition to the ratios set forth herein, there are several other requirements set forth in the covenants under the Credit Agreements with which the Company must comply. As of March 31, 2022, we were in compliance with terms under the Credit Agreements, however, a material decline in future operating results could affect our ability to comply with the financial covenants, including additional covenants that came into effect starting on June 30, 2021.
30
Pennsylvania Real Estate Investment Trust
Forward Looking Statements
FORWARD LOOKING STATEMENTS
This Quarterly Supplemental and Operating Information for the quarter ended March 31, 2022, 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, 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 created periods of significant economic disruption 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 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. We do not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.
31
Pennsylvania Real Estate Investment Trust
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 months ended March 31, 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, 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 income that do not relate to or are not indicative of operating performance, such as gains on sales of operating real estate and depreciation and amortization of real estate, among others. We believe that Funds From Operations, as adjusted, is helpful to management and investors as a measure of operating performance because it adjusts FFO to exclude items that management does not believe are indicative of our operating performance, such as provision for employee separation expense and accelerated amortization of financing costs.
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, provision for employee separation expenses, project costs and other expenses, interest expense, reorganization expenses, equity in loss/income of partnerships, gain/loss on sale of real estate and gain/loss on sales of non-operating real estate.
32
Same Store NOI
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.
Funds Available for Distribution (FAD)
FAD is a measure of a real estate company's cash flows generated by operations and capacity to pay dividends. The Company calculates FAD by starting with FFO as adjusted and subtracting (1) straight-line rent, (2) normalized recurring capital expenditures that are capitalized but necessary to maintain our properties, (3) operational tenant allowances, (4) capitalized leasing costs, (5) non-cash compensation charges, and (6) amortization of above- and below-market lease intangibles.
We believe that net income is the most directly comparable GAAP measurement to FAD. We believe FAD provides a meaningful indicator of our ability to fund cash needs and to make cash distributions to equity owners. In addition, we believe that to further understand our liquidity, FAD should be compared with our cash flow from operating activities determined in accordance with GAAP, as presented in our consolidated financial statements. The computation of FAD may not be comparable to FAD reported by other REITs or real estate companies and FAD does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, or as an alternative to net cash flow from operating activities (determined in accordance with GAAP), as a measure of our liquidity.
Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre)
NAREIT defines Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate ("EBITDAre"), which is a non-GAAP measure, as net income (computed in accordance with GAAP) plus interest expense, income tax expense, depreciation and amortization; plus or minus losses and gains on the disposition of depreciated property, including losses/ gains on change in control; plus impairment write downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate; plus or minus adjustments to reflect the entity's share of EBITDAre of unconsolidated affiliates. We compute EBITDAre in accordance with the standards established by NAREIT, which may not be comparable to EBITDAre 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.
EBITDAre does not include interest expense, income tax expense, gains or losses on sales of operating real estate or impairment writedowns of depreciable real estate, which are included in the determination of net income in accordance with GAAP. Accordingly, EBITDAre is not a comprehensive measure of our operating cash flows. EBITDAre does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net income (determined in accordance with GAAP) as an indication of our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions. We believe that net income is the most directly comparable GAAP measurement to EBITDAre.
We believe that EBITDAre is helpful to management and investors as a measure of operating performance because it provides an additional performance measure to management and investors to facilitate the evaluation and comparison of the Company to other REITs and to other non-real estate commercial enterprises.
33