8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported)  March 3, 2005

Pennsylvania Real Estate Investment Trust

(Exact Name of Registrant as Specified in its Charter)

Pennsylvania	1-6300	23-6216339
(State or Other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(IRS Employer Identification No.)
The Bellevue, 200 S. Broad Street, Philadelphia, Pennsylvania		19102
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code:           (215) 875-0700

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02          Results of Operations and Financial Condition.

On March 3, 2005, Pennsylvania Real Estate Investment Trust issued a press release reporting its financial results for the fourth quarter and twelve months ended December 31, 2004.  A copy of the press release is attached as an exhibit to this report.

The information furnished under this “Item 2.02. Results of Operations and Financial Condition” shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01          Financial Statements and Exhibits.

(c)   Exhibits

99.1 Press Release dated March 3, 2005.

- 2 -

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
Date:  March 4, 2005	By:	/s/ JONATHAN B. WELLER
		Jonathan B. Weller
		Vice Chairman

- 3 -

Exhibit Index

99.1          Press release dated March 3, 2005

- 4 -

EX-99

		Pennsylvania Real Estate Investment Trust
		200 South Broad Street
		Philadelphia, PA 19102
		www.preit.com
		Phone:  215-875-0700
		Fax:     215-546-7311
		Toll Free: 866-875-0700

CONTACT: AT THE COMPANY	AT KCSA PUBLIC RELATIONS WORLDWIDE
Robert McCadden	Jeffrey Goldberger	Lewis Goldberg
EVP and CFO	(Investor Relations)	(Media Relations)
(215) 875-0700	(212) 896-1249	(212) 896-1216

FOR IMMEDIATE RELEASE

March 3, 2005

PREIT Reports 2004 Fourth Quarter and Year End Results

• Fourth Quarter Net Income per Diluted Share Increased 26%

• Fourth Quarter FFO Increased 72%

• Fourth Quarter FFO per Share Increased 35%

Philadelphia, PA, March 3, 2005 -- Pennsylvania Real Estate Investment Trust (“PREIT” or the “Company”) (NYSE: PEI) today announced its results for the fourth quarter and year ended December 31, 2004.  Net income available to common shareholders for the fourth quarter of 2004 was $0.43 per diluted share.  Funds From Operations (“FFO”) per common share and Operating Partnership unit (“share”) for the fourth quarter of 2004 was $1.12, and for calendar year 2004 was $3.70 per share, which was above the Company’s guidance of $3.60 to $3.65 per share that was provided in November 2004.

2004 Fourth Quarter and Calendar Year Financial Highlights

• Income from continuing operations for the fourth quarter of 2004 increased by 87.8% to $19.1 million, and for calendar year 2004 increased by 66.1% to $48.5 million.

• Net income available to common shareholders for the fourth quarter of 2004 increased by 58.1% to $15.8 million, and increased 26.5% to $0.43 per diluted share.

• Net income available to common shareholders for calendar year 2004 was $40.2 million, or $1.10 per diluted share.  Net income in calendar year 2003 included net income from discontinued operations of $166.8 million, or $8.03 per diluted share, relating to the disposition of the Company’s 15 wholly-owned multifamily properties.

• FFO for the fourth quarter of 2004 increased by 72.3% to $45.1 million, and increased 34.9% to $1.12 per share.

• FFO for calendar year 2004 increased by 119.5% to $147.2 million, and increased 25.0% to $3.70 per share.

• Net Operating Income (“NOI”) from continuing operations for the fourth quarter of 2004 increased by 35.7% to $76.4 million, and for calendar year 2004 increased by 100.9% to $271.0 million.

• Same store NOI for the Company’s retail portfolio for the fourth quarter of 2004 increased by 0.4% compared to the fourth quarter of 2003, and for calendar year 2004 increased by 3.7% compared to calendar year 2003.

PREIT Announces 2004 Fourth Quarter and Year End Results

March 3, 2005

Page 2

See the financial tables on pages 11 and 12 for a reconciliation of the terms FFO and NOI as used in this press release to net income, the most directly comparable GAAP measure.

Ronald Rubin, Chairman and Chief Executive Officer of PREIT, stated, “In 2004, PREIT successfully completed the integration of the properties we acquired in our merger with Crown American Realty Trust and from The Rouse Company.  We are pleased that our first full year produced such strong results.  This gives us strong footing for further portfolio growth in 2005 and beyond.”

The results for the year ended December 31, 2004 reflected higher than expected increases in specialty leasing revenues and percentage rents.  Also contributing to the favorable results were lease termination fees, third-party leasing commissions and other fees earned during the last quarter of the year that were not anticipated in our full year forecast. Additionally, operating results benefited from the sooner than anticipated closing on the purchase of Orlando Fashion Square in Orlando, Florida.

Fourth quarter 2004 results reflect the acquisition of 26 wholly-owned shopping malls and the remaining 50% interest in Palmer Park Mall in Easton, Pennsylvania, as a result of the Company’s merger with Crown on November 20, 2003.  The fourth quarter 2004 results also reflect the purchase in 2004 of the remaining 27% interest in Cherry Hill Mall in Cherry Hill, New Jersey, the purchase of Orlando Fashion Square in Orlando, Florida, the purchase of The Gallery at Market East II in Philadelphia, Pennsylvania, and the disposition of five non-core malls acquired in the November 2003 merger with Crown and Rio Grande Mall in 2004.

The results for the calendar year ended December 31, 2004 also reflect the acquisition of 26 wholly-owned shopping malls and the 50% interest in Palmer Park Mall in Easton, Pennsylvania that the Company did not already own as a result of the Company’s merger with Crown on November 20, 2003; the 2003 acquisition of six shopping malls from The Rouse Company; the purchase in 2003 of the remaining 70% interest in Willow Grove Park in Willow Grove, Pennsylvania; as well as the disposition in 2003 of the Company’s 15 wholly-owned multifamily properties and the four multifamily properties held in partnerships.

On September 28, 2004, PREIT announced that it had completed the sale of five non-core malls acquired in the November 2003 merger with Crown. These five malls are classified as discontinued operations on the consolidated statement of income. A sixth mall, Schuylkill Mall in Frackville, Pennsylvania, also acquired in the merger with Crown, continues to be held for sale by the Company and is classified as such on the balance sheet.  Also, on August 31, 2004, the Company sold its 60% non-controlling ownership interest in Rio Grande Mall, in Rio Grande, New Jersey, which is classified as continuing operations on the income statement.

The share amounts that were used to calculate net income per diluted share were affected by the increase in weighted average shares outstanding, primarily as a result of 11.7 million common shares issued in connection with the merger with Crown in November 2003. FFO per share was also affected by the 1.7 million Operating Partnership units issued in connection with the merger with Crown in November 2003, and 0.6 million Operating Partnership units issued in connection with the acquisition of the remaining ownership interest in Cherry Hill Mall in June 2004.

PREIT Announces 2004 Fourth Quarter and Year End Results

March 3, 2005

Page 3

Fourth Quarter Results

Net income available to common shareholders for the fourth quarter ended December 31, 2004 was $15.8 million, or $0.43 per diluted share, based on 36.2 million weighted average common shares outstanding (diluted), compared with $10.0 million, or $0.34 per diluted share, based on 29.3 million weighted average common shares outstanding (diluted) for the fourth quarter of 2003.  Net income for the fourth quarter of 2003 included a $4.5 million gain on sale of the Company’s interest in Countrywood Apartments in Tampa, Florida. The gain recognition had been deferred as the buyer’s initial investment did not meet the criteria for gain recognition until the purchase money mortgage was paid in full in December 2003.

For the fourth quarter of 2004, the Company’s FFO increased by 72.3% to $45.1 million  from $26.2 million for the fourth quarter of 2003.

FFO per share increased by 34.9% to $1.12 in the fourth quarter of 2004, up from $0.83 in the fourth quarter of 2003.  Weighted average shares outstanding increased to 40.2 million for the fourth quarter of 2004, up from 31.7 million for the fourth quarter of 2003.

NOI from continuing operations from wholly-owned properties and the Company’s proportionate share of partnership properties increased by 35.7% to $76.4 million for the fourth quarter of 2004, from $56.3 million for the fourth quarter of 2003.

Year End Results

Net income available to common shareholders for the twelve months ended December 31, 2004, was $40.2 million, or $1.10 per diluted share, based on 35.9 million weighted average common shares outstanding (diluted), compared with $194.5 million, or $9.36 per diluted share, based on 20.8 million weighted average common shares outstanding (diluted) for the twelve months ended December 31, 2003.  Net income for the twelve months ended December 2004 included a gain of $1.5 million from the sale of PREIT’s 60% non-controlling interest in Rio Grande Mall in Rio Grande, New Jersey. There was no gain or loss from the sale of the five non-core malls in September 2004.  Net income for the twelve months ended December 31, 2003 included gains on sales of $194.3 million, consisting of $178.1 million from the sale of 15 wholly-owned multifamily properties, $15.1 million from the sale of the Company’s partnership interest in four multifamily properties and $1.1 million from the sale of land at Crest Plaza Shopping Center, Allentown, Pennsylvania, to Target.

FFO for the twelve months ended December 31, 2004, totaled $147.2 million, an increase of 119.5% over $67.1 million for the comparable twelve-month period in 2003.

FFO per share for the twelve-month period ended December 31, 2004, increased by 25.0% to $3.70 based on 39.8 million weighted average shares outstanding, compared to $2.96 per share based on 22.7 million weighted average shares outstanding for the twelve months ended December 31, 2003.

NOI from continuing operations from wholly-owned properties and the Company’s proportionate share of partnership properties totaled $271.0 million for the twelve months ended December 31, 2004, an increase of 100.9% over $134.9 million for the twelve months ended December 31, 2003.

PREIT Announces 2004 Fourth Quarter and Year End Results

March 3, 2005

Page 4

Retail Performance & Occupancy Levels

In the fourth quarter of 2004, same store NOI for the Company’s retail portfolio increased by 0.4%, or $0.1 million, compared to the fourth quarter of 2003.

Same store results represent property operating results for retail properties that the Company owned for the full periods presented and continues to own.  Same store results exclude the results of properties that have undergone or were undergoing redevelopment during the applicable periods, as well as properties acquired or disposed of during the periods presented.

Occupancy in the Company’s same store retail portfolio was 89.7% as of December 31, 2004, compared to 89.9% as of December 31, 2003.  The Company’s same store mall properties reported sales of $354 per square foot in the trailing twelve months ended December 31, 2004, as compared to $347 per square foot in the comparable period ended December 31, 2003.

The Company’s enclosed malls were 90.7% occupied as of December 31, 2004, compared to 90.8% as of December 31, 2003.  Sales per square foot in the trailing twelve months ended December 31, 2004, increased 2.9% to $324 per square foot from $315 per square foot for the trailing twelve months ended December 31, 2003.

The Company’s power centers were 96.8% occupied as of December 31, 2004 and 97.9% as of December 31, 2003.

Leasing Update

During the fourth quarter of 2004, the Company executed 129 retail leases encompassing 694,380 square feet at an average rent per square foot of $14.24.  New leases for space previously leased to other tenants accounted for 25 transactions totaling 50,887 square feet at an average rent of $29.41, or $1.43 higher than the average rent per square foot at the time of expiration.  Seventy-two in-line leases for 233,994 square feet were renewed for an average base rent of $20.67, an increase of $1.87 per square foot over rent at expiration.  Additionally, five anchors renewed leases for 357,219 square feet on their stated terms, with an average base rent of $5.66 per square foot.  The Company also executed transactions for 27 formerly vacant spaces totaling 52,280 square feet with an average rent of $29.36 per square foot.

Portfolio Composition

The Company ended the fourth quarter of 2004 with investments in real estate (excluding assets held for sale) of $2,667 million, an increase of $126 million from $2,541 million at the end of the third quarter of 2004. The increase is primarily a result of the acquisition of Orlando Fashion Square in Orlando, Florida.

Capital Resources

Robert McCadden, PREIT’s Executive Vice President and CFO, commented, “The previously announced modification to our credit facility represents an important first step in achieving a capital structure that will facilitate our redevelopment and acquisition plans.”

PREIT Announces 2004 Fourth Quarter and Year End Results

March 3, 2005

Page 5

2005 Forecast

The Company estimates that for calendar year 2005 net income available to common shareholders will be between $1.19 and $1.31 per diluted share and that FFO will be between $3.72 and $3.84 per share.  The Company estimates that for the first quarter of 2005 net income available to common shareholders will be between $0.17 and $0.21 per share and that FFO per share will be between $0.83 and $0.87.

Estimated Per Share	First Quarter 2005	Calendar Year 2005
Net income available to common shareholders	$0.17 - $0.21	$1.19 - $1.31
Gain on sales, net of minority interest	$0.00	($0.12)
Depreciation and amortization (includes Company’s proportional share of partnerships), net of minority interest, and other	$0.66	$2.65
FFO per share	$0.83 - $0.87	$3.72 - $3.84

Edward Glickman, PREIT’s President and COO, commented, “Looking forward to 2005, we intend to move from integration to execution as we focus on improving the market position of our assets.  To achieve this, we will seek to reposition a number of our assets by adding new merchants and renovating the existing physical plant.  Regardless of their repositioning status, all assets will be the focus of intensified management programs intended to create a fundamental change in our shopper’s experience of our properties.”

Dividend Declaration

On February 17, 2005, PREIT announced that its Board of Trustees had declared a quarterly cash dividend of $0.54 per common share. The dividend will be paid on March 15, 2005, to common shareholders of record on March 1, 2005.  The March 15, 2005, dividend payment will be PREIT’s 112^th consecutive distribution since its initial dividend paid in August 1962. Throughout its history, the Company has never omitted or reduced a shareholder dividend.

PREIT also announced on February 17, 2005, that its Board of Trustees has declared a regular quarterly dividend of $1.375 per share on its 11.00% senior preferred shares. The dividend will be paid on March 15, 2005, to holders of record on March 1, 2005. 

A copy of the Company’s Distribution Reinvestment and Share Purchase Plan prospectus, enrollment forms and other information is available on the Company’s web site at www.preit.com under Investor Information, or by calling Wells Fargo Bank, N.A. at (800) 468-9716, or the Company at (215) 875-0735.  You should read the prospectus carefully before making any investment decisions.

Other Events

Redevelopment Activities

Capital City Mall, Camp Hill, Pennsylvania

On November 8, 2004, PREIT announced a redevelopment plan for Capital City Mall in Harrisburg, Pennsylvania. The 609,000 square foot center is anchored by Hecht’s, JC Penney, and Sears department stores. The plan calls for creating a new eight-bay food court and two family-themed restaurant locations. The existing food court space will be redeveloped into a lifestyle wing with 30,000 square feet of specialty retail space.

PREIT Announces 2004 Fourth Quarter and Year End Results

March 3, 2005

Page 6

New River Valley Mall, Christiansburg, Virginia

On November 8, 2004, PREIT announced a redevelopment plan for New River Valley Mall in Christiansburg, Virginia. The 428,000 square foot center is anchored by Belk, JCPenney and Sears. Regal Cinemas, currently operating a 31,000 square foot theater in the mall with 11 screens and regular seating, will relocate to a new 53,000 square foot, free-standing location to be built near the mall’s perimeter road. The new theater will be a state-of-the-art stadium seating facility with 14 screens and seating capacity for more than 2,500 patrons.

Patrick Henry Mall, Newport News, Virginia

On August 5, 2004, PREIT announced a redevelopment plan for Patrick Henry Mall in Newport News, Virginia. The 640,000 square foot center is currently anchored by Hecht’s, JC Penney and two Dillard’s department stores. The plan incorporates a closing of the 65,000 square foot Dillard’s Men’s store, and an expansion of the second store by 26,000 square feet, to 142,000 square feet.  The newly-expanded Dillard’s store will feature a distinctive mix of merchandise specifically edited to match the preferences of the Newport News customer. A new 50,000 square foot Dick’s Sporting Goods store will also be added to the center and an additional 22,000 square foot junior anchor and approximately 48,000 square feet of new small shop gross leaseable area will be built in place of the former Dillard’s Men’s store.

Echelon Mall, Voorhees, New Jersey

On July 14, 2004, PREIT announced that Wal-Mart Stores, Inc. will build a 147,550 square foot store at Echelon Mall, a 1.1 million square foot mall, in Voorhees, New Jersey.  The Wal-Mart store marks the beginning of the redevelopment of Echelon Mall and will occupy an outparcel in the area previously occupied by JCPenney.  The Wal-Mart store will join Strawbridge’s and Boscov’s as Echelon Mall’s anchor tenants.

Acquisition of Orlando Fashion Square

On December 2, 2004, PREIT announced that it had completed the acquisition of Orlando Fashion Square in Orlando, Florida, for approximately $123.5 million. The acquisition was funded from the Company’s unsecured credit facility.  The in-line sales volume for the mall for the year ended December 31, 2004 was $297 per square foot, and, at December 31, 2004, in-line occupancy was 79.2%.

Subsequent Events

Acquisition of Cumberland Mall

On February 4, 2005, PREIT announced that it completed the previously-announced acquisition of Cumberland Mall in Vineland, New Jersey, for approximately $59.5 million.  This consideration for this acquisition consisted of $0.9 million of cash, the assumption of $47.7 million in mortgage debt and approximately $11.0 million worth of units of our operating partnership.

Agreement to Sell Laurel Mall

On February 17, 2005, PREIT announced that a partnership in which it holds a 40% interest has entered into a definitive agreement to sell Laurel Mall in Hazleton, Pennsylvania, to Laurel Mall, LLC.  The total sale price for the mall is approximately $33.5 million, including assumed debt of approximately $22.7 million. The sale price represents a return of approximately 10.0% on the 2004 operating income from the mall.

PREIT Announces 2004 Fourth Quarter and Year End Results

March 3, 2005

Page 7

PREIT’s share of the sale price is expected to be approximately $13.5 million, including assumed debt of approximately $9.1 million. The net cash proceeds to PREIT are expected to be approximately $3.9 million after closing costs and adjustments.  The transaction is expected to be completed in the second quarter of 2005, but is subject to customary closing conditions, including the satisfactory completion of the buyer’s due diligence and the lender’s approval of the buyer’s assumption of the debt.  Laurel Mall totals approximately 560,000 square feet.

Credit Facility Amendment; Lower Interest Rate and Other Favorable Changes

On February 3, 2005, PREIT announced that it has amended its credit facility dated November 20, 2003, effective as of January 31, 2005.  The interest rate under the credit facility, as amended, ranges from 1.05% to 1.55% per annum over LIBOR, depending on the Company’s leverage.  The previous interest rate on the facility ranged from 1.50% to 2.50% over LIBOR.

Pursuant to the amendment, the new capitalization rate applied to property Adjusted Net Operating Income, as defined in the credit facility agreement dated November 20, 2003, in the calculation of Gross Asset Value is 8.25%. Previously, the capitalization rate ranged from 9% to 11%.

The term of the amended credit facility will now run until November 20, 2007, and the Company will have an option to extend the term for an additional 14 months, under prescribed conditions. Previously, the credit facility was scheduled to expire on November 20, 2006, with a 12 month extension option.

Under the amended terms, the Company will pay a facility fee of between 15 and 20 basis points per year of the total lender commitments under the facility. Previously, the Company had paid a fee of between 15 and 30 basis points per year multiplied by the unused portion of the facility.

The amount available under the facility remains at $500 million, of which $326 million is currently outstanding. PREIT has the option to increase the facility to $650 million under prescribed conditions. Based on the Company’s current leverage ratio, the applicable interest rate is 1.05% over LIBOR. Previously, the interest rate was 1.75% over LIBOR for the same leverage ratio. The applicable interest rate is subject to change depending on the Company’s leverage.

Wells Fargo Bank, N.A. is the sole lead arranger and administrative agent under the facility.

Repayment of Second Mortgage on Cherry Hill Mall

On February 24, 2005, the Company fully repaid its obligations under a $59.0 million second mortgage on Cherry Hill Mall in Cherry Hill, New Jersey.  To repay this second mortgage, which had carried an interest rate of 5.0%, the Company borrowed an additional $55.0 million under its $500 million unsecured revolving credit facility, which is included in the $326 million currently outstanding.

Definitions

The National Association of Real Estate Investment Trusts (“NAREIT”) defines Funds From Operations (“FFO”), which is a non-GAAP measure, as income before gains (losses) on sales of property and extraordinary items (computed in accordance with GAAP); plus real estate depreciation; plus or minus adjustments for unconsolidated partnerships to reflect funds from operations on the same basis. FFO is a commonly used measure of operating performance and profitability in the REIT industry, and we use FFO as a supplemental non-GAAP measure to compare our company’s

PREIT Announces 2004 Fourth Quarter and Year End Results

March 3, 2005

Page 8

performance to that of our industry peers.  In addition, we use FFO as a performance measure for determining bonus amounts earned under certain of our performance-based executive compensation programs. The Company computes 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 the Company.  FFO does not include gains (losses) on sale of real estate assets, which are included in the determination of net income 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 income and net cash provided by operating activities, and other non-GAAP financial performance measures, such as net operating income. FFO 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 the Company’s financial performance, or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company’s liquidity, nor is it indicative of funds available for the Company’s cash needs, including its ability to make cash distributions. 

The Company believes that net income is the most directly comparable GAAP measurement to FFO. The Company believes 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 various non-recurring items that are considered extraordinary under GAAP, gains on sales of real estate and depreciation and amortization of real estate.

Net operating income (“NOI”), which is a non-GAAP measure, is derived from revenues (determined in accordance with GAAP) minus property operating expenses (determined in accordance with GAAP). Net operating income is a non-GAAP measure. It 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 the Company’s financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company’s liquidity; nor is it indicative of funds available for the Company’s cash needs, including its ability to make cash distributions. The Company believes that net income is the most directly comparable GAAP measurement to net operating income.

The Company believes that net operating income 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. Net operating income excludes general and administrative expenses, management company revenues, interest income, interest expense, depreciation and amortization, income from discontinued operations and gains on sales of interests in real estate.

EBITDA is earnings before interest, taxes, depreciation and amortization. On a property level, EBITDA and NOI are equivalent; however, certain corporate revenues and expenses are added and deducted to/from NOI to derive EBITDA on a company wide basis. Specifically, management company revenues and interest income are added to NOI while corporate payroll and other general and administrative expenses are deducted from NOI to calculate EBITDA. The Company believes that net

PREIT Announces 2004 Fourth Quarter and Year End Results

March 3, 2005

Page 9

income is the most directly comparable GAAP measurement to EBITDA. The Company believes that EBITDA helps the Company and its investors evaluate the ongoing operating performance of its properties and facilitate comparisons with other REITs and real estate companies. These measures assist management by providing a baseline to assess property-level results, particularly as the Company acquires or sells assets. The EBITDA measures presented by the Company may not be comparable to other similarly titled measures used by other companies.

Conference Call Information

The Company has scheduled a conference call for 3:00 p.m. Eastern Time today to review its fourth quarter and year end results, recent developments, market trends and future outlook. To listen to the call, please dial (877) 691-0878 (domestic) or (973) 935-8505 (international), at least five minutes before the scheduled start time. Investors can also access the call in a “listen only” mode via the Internet at the Company website at www.preit.com or at www.viavid.net.  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 at www.preit.com under the Investor Relations tab in Supplemental Disclosures.

For interested individuals unable to join the conference call, a replay of the call will be available through March 17, 2005, at (877) 519-4471 (domestic) or (973) 341-3080 (international), (Passcode: 5723142).  The online archive of the webcast will be available for 14 days following the call.  

About Pennsylvania Real Estate Investment Trust

Pennsylvania Real Estate Investment Trust, founded in 1960 and one of the first equity REITs in the U.S., has a primary investment focus on retail shopping malls and power centers (approximately 33.0 million square feet) located in the eastern United States.  PREIT’s portfolio currently consists of 54 properties in 12 states.  PREIT’s portfolio includes 37 shopping malls, 13 strip and power centers and four industrial properties.  PREIT is headquartered in Philadelphia, Pennsylvania.  PREIT’s website can be found at www.preit.com.

This press release contains certain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and other matters that are not historical facts.   These forward-looking statements reflect PREIT’s current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause future events, achievements or results to differ materially from those expressed by the forward-looking statements.  Additionally, there can be no assurance that PREIT’s actual results will not differ significantly from the forecast and estimates set forth above, or that PREIT’s returns on its acquisitions will be consistent with the estimates outlined in the related press releases.  PREIT’s business is subject to uncertainties regarding the revenues, operating expenses, leasing activities, occupancy rates, and other competitive factors relating to PREIT’s portfolio and changes in local market conditions as well as general economic, financial and political conditions, including the possibility of outbreak or escalation of war or terrorist attacks, any of which may cause future events, achievements or results to differ materially from those expressed by the forward-looking statements. PREIT does not intend to and disclaims any duty or obligation to update or revise any forward-looking statements or industry information set forth in this press release to reflect new information, future events or otherwise.  Investors are also directed to consider the risks and uncertainties discussed in documents PREIT has filed with the Securities and

PREIT Announces 2004 Fourth Quarter and Year End Results

March 3, 2005

Page 10

Exchange Commission and, in particular, PREIT’s Annual Report on Form 10-K for the year ended December 31, 2003.

[Financial Tables Follow]

# # #

** A supplemental quarterly financial package **

will be available on the Company’s web site at www.preit.com.

PREIT Announces 2004 Fourth Quarter and Year End Results

March 3, 2005

Page 11

Pennsylvania Real Estate Investment Trust

Selected Financial Data

FUNDS FROM OPERATIONS	Three Months Ended						Twelve Months Ended
(In thousands, except per share amounts)	Dec 31, 2004			Dec 31, 2003			Dec 31, 2004			Dec 31, 2003
Net income	$	19,164		$	11,501		$	53,788		$	196,040
Minority interest in Operating Partnership		2,334			1,198			5,695			3,298
Minority interest in Operating Partnership-discontinued operations		23			580			622			18,849
Dividends on preferred shares		(3,403	)		(1,533	)		(13,613	)		(1,533	)
Gains (adjustment to gains) on sales of interests in real estate		45			(4,457	)		(1,484	)		(16,199	)
Gains (adjustment to gains) on dispositions of discontinued operations		—			(194	)		550			(178,121	)
Depreciation and amortization:
Wholly owned & consolidated partnerships, net		24,419	(a)		17,853	(a)		95,863	(a)		37,357	(a)
Unconsolidated partnerships		2,559	(a)		1,244	(a)		5,781	(a)		5,071	(a)
Discontinued operations					—						2,308
FUNDS FROM OPERATIONS	$	45,141	(b)	$	26,192	(b)	$	147,202	(b)	$	67,070	(b)
FUNDS FROM OPERATIONS PER SHARE AND OP UNITS	$	1.12		$	0.83		$	3.70		$	2.96
Weighted average number of shares outstanding		35,819			28,787			35,609			20,390
Weighted average effect of full conversion of OP units		4,426			2,957			4,183			2,303
Total weighted average shares outstanding, including OP units		40,245			31,744			39,792			22,693
Weighted average number of preferred shares		2,475			2,475			2,475			2,475

a)	Excludes depreciation of non-real estate assets, amortization of deferred financing costs and discontinued operations.
b)	Includes the non-cash effect of straight-line rents of $1,375 and $1,055 for the 4th quarter 2004 and 2003, respectively, and $5,212 and $2,806 for the twelve months ended December 31, 2004 and 2003, respectively.

OPERATING RESULTS	Three Months Ended						Twelve Months Ended
(In thousands, except per share amounts)	Dec 31, 2004			Dec 31, 2003			Dec 31, 2004			Dec 31, 2003
REVENUE:
Real estate revenues:
Base rent	$	70,104		$	49,293		$	255,750		$	112,117
Percentage rent		4,697			3,333			9,827			4,281
Expense reimbursements		27,719			21,581			114,127			47,970
Lease termination revenue		1,253			699			3,931			985
Other real estate revenues		5,819			3,452			11,885			5,164
Total real estate revenues		109,592			78,358			395,520			170,517
Management Company revenue		4,073			3,661			9,703			10,971
Interest and other income		161			335			1,026			887
Total revenues		113,826			82,354			406,249			182,375
EXPENSES:
Property operating expenses:
Property payroll and benefits		(6,566	)		(4,138	)		(26,105	)		(9,369	)
Real estate and other taxes		(8,853	)		(6,650	)		(35,299	)		(15,587	)
Utilities		(6,331	)		(4,931	)		(27,369	)		(10,043	)
Other operating expenses		(16,745	)		(11,344	)		(55,478	)		(24,317	)
Total property operating expenses		(38,495	)		(27,063	)		(144,251	)		(59,316	)
Depreciation and amortization		(24,835	)		(18,096	)		(97,311	)		(38,142	)
General and administrative expenses:
Corporate payroll and benefits		(7,466	)		(10,261	)		(30,057	)		(23,169	)
Other general and administrative expenses		(3,725	)		(7,598	)		(14,613	)		(16,509	)
Total general and administrative expenses		(11,191	)		(17,859	)		(44,670	)		(39,678	)
Interest expense		(18,456	)		(13,692	)		(72,314	)		(35,318	)
Total expenses		(92,977	)		(76,710	)		(358,546	)		(172,454	)
Income before equity in income of partnerships, gains on sales of interests in real estate, minority interest and discontinued operations		20,849			5,644			47,703			9,921
Equity in income of partnerships		697			1,609			5,606			7,231
Gains (adjustment to gains) on sales of interests in real estate		(45	)		4,457			1,484			16,199
Income before minority interest and discontinued operations		21,501			11,710			54,793			33,351
Minority interest in properties		(66	)		(339	)		(611	)		(858	)
Minority interest in Operating Partnership		(2,334	)		(1,198	)		(5,695	)		(3,298	)
Income from continuing operations		19,101			10,173			48,487			29,195
Discontinued operations:
Income from discontinued operations		85			1,722			6,491			7,581
Gains (adjustment to gains) on disposition of discontinued operations		—			194			(550	)		178,121
Minority interest in properties		1			(8	)		(18	)		(8	)
Minority interest in Operating Partnership		(23	)		(580	)		(622	)		(18,849	)
Total discontinued operations		63			1,328			5,301			166,845
Net income	$	19,164		$	11,501		$	53,788		$	196,040
Dividends on preferred shares		(3,403	)		(1,533	)		(13,613	)		(1,533	)
Net income available to common shareholders	$	15,761		$	9,968		$	40,175		$	194,507
BASIC EARNINGS PER SHARE
From continuing operations	$	0.43		$	0.30		$	0.96		$	1.36
From discontinued operations		—			0.05			0.15			8.18
TOTAL BASIC EARNINGS PER SHARE	$	0.43		$	0.35		$	1.11		$	9.54
DILUTED EARNINGS PER SHARE
From continuing operations	$	0.43		$	0.29		$	0.95		$	1.33
From discontinued operations		—			0.05			0.15			8.03
TOTAL DILUTED EARNINGS PER SHARE	$	0.43		$	0.34		$	1.10		$	9.36
Weighted average number of shares outstanding (diluted)		36,196			29,262			35,928			20,784

PREIT Announces 2004 Fourth Quarter and Year End Results

March 3, 2005

Page 12

Pennsylvania Real Estate Investment Trust

Selected Financial Data

EQUITY IN INCOME OF PARTNERSHIPS	Three Months Ended						Twelve Months Ended
(In thousands)	Dec 31, 2004			Dec 31, 2003			Dec 31, 2004			Dec 31, 2003
Gross revenues from real estate	$	15,387		$	15,704		$	57,986		$	82,018
Expenses:
Property operating expenses		(4,565	)		(5,385	)		(17,947	)		(28,008	)
Mortgage interest expense		(4,239	)		(4,512	)		(16,923	)		(25,633	)
Depreciation and amortization		(4,628	)		(2,496	)		(11,001	)		(13,676	)
Total expenses		(13,432	)		(12,393	)		(45,871	)		(67,317	)
Net revenues from real estate		1,955			3,311			12,115			14,701
Less: Partners’ share		(991	)		(1,653	)		(6,131	)		(7,359	)
Company’s share		964			1,658			5,984			7,342
Amortization of excess investment		(267	)		(49	)		(378	)		(111	)
EQUITY IN INCOME OF PARTNERSHIPS	$	697		$	1,609		$	5,606		$	7,231

Supplemental Information for Wholly Owned Properties
and the Company’s Proportionate Share of Partnerships

EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (“EBITDA”)	Three Months Ended						Twelve Months Ended
(In thousands)	Dec 31, 2004			Dec 31, 2003			Dec 31, 2004			Dec 31, 2003
Gross revenues from real estate	$	109,592		$	78,358		$	395,520		$	170,517
Property operating expenses		(38,495	)		(27,063	)		(144,251	)		(59,316	)
Net operating income: wholly-owned properties		71,097			51,295			251,269			111,201
Company’s proportionate share of partnership net operating income
Property level net operating income		5,340			5,044			19,704			23,683
Combined net operating income		76,437	(1)		56,339	(1)		270,973	(1)		134,884	(1)
Interest and other income		161			335			1,026			887
Management company revenue		4,073			3,661			9,703			10,971
Total general & administrative expenses		(11,191	)		(17,859	)		(44,670	)		(39,678	)
EBITDA	$	69,480	(2)	$	42,476	(2)	$	237,032	(2)	$	107,064	(2)

1)	NOI including the impact of disposed real estate assets was $76,838 and $58,510 for the 3 months ended 12/31/04 and 12/31/03, respectively. NOI including the impact of disposed real estate assets was $280,385 and $150,429 for the 12 months ended 12/31/04 and 12/31/03, respectively.
2)	EBITDA including the impact of disposed real estate assets was $69,883 and $44,647 for the 3 months ended 12/31/04 and 12/31/03, respectively. EBITDA including the impact of disposed real estate assets was $246,445 and $122,613 for the 12 months ended 12/31/04 and 12/31/03, respectively.

RECONCILIATION OF NET INCOME TO PROPERTY LEVEL EBITDA AND TO PROPERTY LEVEL NET OPERATING INCOME	Three Months Ended						Twelve Months Ended
(In thousands)	Dec 31, 2004			Dec 31, 2003			Dec 31, 2004			Dec 31, 2003
Net income	$	19,164		$	11,501		$	53,788		$	196,040
Minority interest in Operating Partnership		2,334			1,198			5,695			3,298
Minority interest in properties		66			339			611			858
Equity in income from partnerships		(697	)		(1,609	)		(5,606	)		(7,231	)
Company’s proportionate share of partnership net operating income		5,340			5,044			19,704			23,683
Gains on sales of interests in real estate		45			(4,457	)		(1,484	)		(16,199	)
Income from discontinued operations		(63	)		(1,328	)		(5,301	)		(166,845	)
Depreciation and amortization		24,835			18,096			97,311			38,142
Interest expense		18,456			13,692			72,314			35,318
Property level EBITDA		69,480			42,476			237,032			107,064
Interest and other income		(161	)		(335	)		(1,026	)		(887	)
Management company revenue		(4,073	)		(3,661	)		(9,703	)		(10,971	)
Total general & administrative expenses		11,191			17,859			44,670			39,678
PROPERTY LEVEL NET OPERATING INCOME	$	76,437		$	56,339		$	270,973		$	134,884

MORTGAGE NOTES AND BANK LOANS PAYABLE
(In thousands)	December 31, 2004		December 31, 2003
Wholly-owned properties, excluding mortgage debt on assets held for sale
Mortgage notes payable	$	1,145,079	$	1,150,054
Debt premium on mortgage notes payable		56,135		71,127
Bank loans payable		271,000		170,000
		1,472,214		1,391,181
Company’s proportionate share of partnerships
Mortgage notes payable		107,513		109,582
Total mortgage notes and bank loans payable	$	1,579,727	$	1,500,763