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

Company Information

1

Earnings Release

2

Changes in Funds from Operations for the Three Months Ended March 31, 2022

6

Market Capitalization and Capital Resources

7

Operating Results

Statements of Operations - Three Months Ended March 31, 2022 and 2021

8

Computation of Earnings Per Share

9

Reconciliation of Net Operating Income and EBITDAre (Non-GAAP Measures) - Three Months Ended March 31, 2022 and 2021

10

Reconciliation of Net Loss (GAAP Measure) to Net Operating Income from Consolidated Properties (Non-GAAP Measure) - Three Months Ended March 31, 2022 and 2021

11

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

12

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

13

Condensed Consolidated Balance Sheets

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

Mall Occupancy Percentage and Sales Per Square Foot

18

Top Twenty Tenants

19

Lease Expirations

20

Property Information

21

Balance Sheet

Investment in Real Estate - Consolidated Properties

24

Investment in Real Estate - Equity Method Investments at Ownership Share

25

Capital Expenditures - Three Months Ended March 31, 2022

26

Debt Analysis

27

Debt Schedule

29

Selected Debt Ratios

30

Forward Looking Statements

31

Definitions

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

[email protected]

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
March 31

Per Diluted
Share and OP
Unit

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,
2021

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
March 31,

(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
March 31,

(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,
2021

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
per square
foot ("psf")

Previous
Rent psf

Initial Gross Rent
Renewal Spread(1)

Average Rent
Renewal
Spread(2)

Annualized
Tenant
Improvements
psf(3)

$

%

%

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

%
Rolling
12 Mo.
NOI

Average
Comp
Sales (1)

Average
Gross
Rent(2)(3)

Occupancy
Cost

Total

Non-
Anchor

Total

Non-
Anchor

Average
Comp
Sales (1)

Average
Gross
Rent(2)(3)

Occupancy
Cost(4)

Total

Non-
Anchor

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
NOI

Avg Comp
Sales (2)

Total
Occupancy
%

Non-
Anchor
Occupancy
%

Avg Comp
Sales (1)

Total
Occupancy
%

Non-Anchor
Occupancy
%

Avg Comp
Sales (1)

Total
Occupancy
%

Non-
Anchor
Occupancy
%

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
Consolidated
Properties

Locations at
Unconsolidated
Properties

Total Number
of Locations (1)

Percentage of
Annualized
Gross Rent (2)

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
Expiration Year

Number of
Leases Expiring

Expiring GLA (1)

Percent of Total

Gross Rent in
Expiring Year

PREIT's Share of
Gross Rent in
Expiring Year (2)

Percent of
PREIT's Total

Average Expiring
Gross Rent psf

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
Expiration Year

Number of
Leases Expiring

Expiring GLA (1)

Percent of Total

Gross Rent in
Expiring Year

PREIT's Share of
Gross Rent in
Expiring Year (2)

Percent of
PREIT's Total

Average Expiring
Gross Rent psf

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/
Large Format Non Anchor

Anchor Stores Not Owned

Non-anchor
occupied GLA

Properties

Location

Tenant

Expiration
Year

GLA

Tenant

GLA

Large
Format

Small
Shop

Vacant

Total
GLA

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/
Large Format Non Anchor

Anchor Stores Not Owned

Non-anchor
occupied GLA

Properties

Location

Tenant

Expiration
Year

GLA

Tenant

GLA

Large
Format

Small
Shop

Vacant

Total
GLA

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/
Large Format Non Anchor

Anchor Stores Not Owned

Non-anchor
occupied GLA

Properties

Location

Tenant

Expiration
Year

GLA

Tenant

GLA

Large
Format

Small
Shop

Vacant

Total
GLA

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
Properties and
Land Held for
Development

Construction in
Progress

Accumulated
Depreciation

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
Properties and
Land Held for
Development

Construction in
Progress

Accumulated
Depreciation

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
of Equity
Method
Investments

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
Indebtedness

Variable Rate

% of Total
Indebtedness

Total

% of Total
Indebtedness

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
Amortization

Deferred
Financing Cost
Amortization -
Mortgages

Mortgage
Balance
at Initial
Maturity Date

2020 Revolving
Facility

Term Loans

Deferred
Financing Cost
Amortization -
Term Loans

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
Debt Service

Balance at
Maturity

Initial
Maturity Date

Fully Extended
Maturity Date

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