10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2023

or

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 001-6300

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST

(Exact name of Registrant as specified in its charter)

Pennsylvania	23-6216339
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
One Commerce Square 2005 Market Street, Suite 1000 Philadelphia, PA	19103
(Address of principal executive offices)	(Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act: None*

Title of each class	Trading Symbol(s)	Name of Exchange on which registered
Shares of Beneficial Interest, par value $1.00 per share	PRET	*
Series B Preferred Shares, par value $0.01 per share	PRETL	*
Series C Preferred Shares, par value $0.01 per share	PRETM	*
Series D Preferred Shares, par value $0.01 per share	PRETN	*

*Pennsylvania Real Estate Investment Trust's securities began trading exclusively on the over-the-counter market on December 16, 2022 under the symbols PRET, PRETL, PRETM, and PRETN.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. On May 5, 2023, 5,340,735 shares of beneficial interest, par value $1.00 per share, of the Registrant were outstanding.

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST

CONTENTS

			Page
	PART I—FINANCIAL INFORMATION
Item 1.		Financial Statements (Unaudited):	1
		Consolidated Balance Sheets—March 31, 2023 and December 31, 2022	1
		Consolidated Statements of Operations—Three Months Ended March 31, 2023 and 2022	2
		Consolidated Statements of Comprehensive Loss—Three Months Ended March 31, 2023 and 2022	3
		Consolidated Statements of Equity—Three Months Ended March 31, 2023 and 2022	4
		Consolidated Statements of Cash Flows —Three Months Ended March 31, 2023 and (as restated) 2022	5
		Notes to Unaudited Consolidated Financial Statements	6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.		Controls and Procedures	42
		PART II—OTHER INFORMATION
Item 1.		Legal Proceedings	43
Item 1A.		Risk Factors	43
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.		Defaults Upon Senior Securities	43
Item 5.		Other Information	43
Item 6.		Exhibits	44
Signatures			46

Except as the context otherwise requires, references in this Quarterly Report on Form 10-Q to “we,” “our,” “us,” the “Company” and “PREIT” refer to Pennsylvania Real Estate Investment Trust and its subsidiaries, including our operating partnership, PREIT Associates, L.P. References in this Quarterly Report on Form 10-Q to “PREIT Associates” or the “Operating Partnership” refer to PREIT Associates, L.P.

Explanatory Note

This Quarterly Report on Form 10-Q contains a restatement of the unaudited Consolidated Statement of Cash Flows for the three months ended March 31, 2022. For a more detailed discussion of the restatement, refer to Note 1 to the unaudited consolidated financial statements.

Item 1. FINANCIAL STATEMENTS

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,			December 31,
(in thousands, except per share amounts)	2023			2022
ASSETS:
INVESTMENTS IN REAL ESTATE, at cost:
Operating properties	$	2,884,367		$	2,894,944
Construction in progress		43,109			42,659
Land held for development		2,058			2,058
Total investments in real estate		2,929,534			2,939,661
Accumulated depreciation		(1,377,167	)		(1,370,065	)
Net investments in real estate		1,552,367			1,569,596
INVESTMENTS IN PARTNERSHIPS, at equity:		7,621			7,845
OTHER ASSETS:
Cash and cash equivalents		20,240			22,937
Tenant and other receivables		33,972			40,459
Intangible assets (net of accumulated amortization of $23,303 and $23,029 at March 31, 2023 and December 31, 2022, respectively)		8,349			8,623
Deferred costs and other assets, net		86,754			91,902
Assets held for sale		35,036			61,767
Total assets	$	1,744,339		$	1,803,129
LIABILITIES:
Mortgage loans payable, net		740,167		$	749,396
Term Loans, net		971,506			976,903
Revolving Facilities		22,481			22,481
Tenants’ deposits and deferred rent		14,099			13,264
Distributions in excess of partnership investments		96,092			93,136
Accrued expenses and other liabilities		69,930			69,846
Liabilities on assets held for sale		1,975			2,539
Total liabilities		1,916,250			1,927,565
COMMITMENTS AND CONTINGENCIES (Note 8)
EQUITY:
Series B Preferred Shares, $.01 par value per share; 3,450 shares issued and outstanding; liquidation preference of $103,741 and $102,151 at March 31, 2023 and December 31, 2022, respectively		35			35
Series C Preferred Shares, $.01 par value per share; 6,900 shares issued and outstanding; liquidation preference of $206,655 and $203,550 at March 31, 2023 and December 31, 2022, respectively		69			69
Series D Preferred Shares, $.01 par value per share; 5,000 shares issued and outstanding; liquidation preference of $148,634 and $146,485 at March 31, 2023 and December 31, 2022, respectively		50			50
Shares of beneficial interest, $1.00 par value per share; 13,333 shares authorized; 5,341 and 5,356 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively		5,341			5,356
Capital contributed in excess of par		1,858,851			1,858,675
Accumulated other comprehensive income		1,415			3,282
Distributions in excess of net income		(2,025,779	)		(1,980,693	)
Total equity (deficit) – Pennsylvania Real Estate Investment Trust		(160,018	)		(113,226	)
Noncontrolling interest		(11,893	)		(11,210	)
Total equity (deficit)		(171,911	)		(124,436	)
Total liabilities and equity	$	1,744,339		$	1,803,129

See accompanying notes to the unaudited consolidated financial statements.

1

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended March 31,
(in thousands, except per share amounts)	2023			2022
REVENUE:
Real estate revenue:
Lease revenue	$	61,515		$	64,283
Expense reimbursements		4,653			4,144
Other real estate revenue		1,006			767
Total real estate revenue		67,174			69,194
Other income		91			241
Total revenue		67,265			69,435
EXPENSES:
Operating expenses:
Property operating expenses:
CAM and real estate taxes		(26,159	)		(27,872	)
Utilities		(3,395	)		(3,561	)
Other property operating expenses		(2,215	)		(2,140	)
Total property operating expenses		(31,769	)		(33,573	)
Depreciation and amortization		(26,369	)		(29,110	)
General and administrative expenses		(11,125	)		(11,483	)
Other expenses		(3	)		(144	)
Total operating expenses		(69,266	)		(74,310	)
Interest expense, net		(41,048	)		(31,391	)
Total expenses		(110,314	)		(105,701	)
Equity in loss of partnerships		(2,696	)		(395	)
Gain on sale of preferred equity interest		—			3,688
Net loss		(45,745	)		(32,973	)
Less: net loss attributable to noncontrolling interest		659			504
Net loss attributable to PREIT		(45,086	)		(32,469	)
Less: preferred share dividends		(6,844	)		(6,844	)
Net loss attributable to PREIT common shareholders	$	(51,930	)	$	(39,313	)
Basic and diluted loss per share:	$	(9.75	)	$	(7.41	)
Weighted average shares outstanding—basic		5,324			5,305
Effect of common share equivalents(1)		—			—
Weighted average shares outstanding—diluted		5,324			5,305

(1) The Company had net losses used to calculate earnings per share for the three months ended March 31, 2023 and 2022. 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.

See accompanying notes to the unaudited consolidated financial statements.

2

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	Three Months Ended March 31,
(in thousands of dollars)	2023			2022
Comprehensive loss:
Net loss	$	(45,745	)	$	(32,973	)
Unrealized (loss) gain on derivatives		(1,885	)		5,807
Amortization of settled swaps		(6	)		—
Total comprehensive loss		(47,636	)		(27,166	)
Less: comprehensive loss attributable to noncontrolling interest		683			431
Comprehensive loss attributable to PREIT	$	(46,953	)	$	(26,735	)

See accompanying notes to the unaudited consolidated financial statements.

3

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST

CONSOLIDATED STATEMENTS OF EQUITY

Three Months Ended March 31, 2023 and 2022

(Unaudited)

				PREIT Shareholders
				Preferred Shares $.01 par						Shares of Beneficial			Capital Contributed			Accumulated Other			Distributions			Non-
(in thousands of dollars, except per share amounts)	Total Equity			Series B		Series C		Series D		Interest, $1.00 Par			in Excess of Par			Comprehensive Loss			in Excess of Net Income			controlling interest
Balance January 1, 2023	$	(124,436	)	$	35	$	69	$	50	$	5,356		$	1,858,675		$	3,282		$	(1,980,693	)	$	(11,210	)
Net loss		(45,745	)		—		—		—		—			—			—			(45,086	)		(659	)
Other comprehensive loss		(1,891	)		—		—		—		—			—			(1,867	)		—			(24	)
Shares issued under employee compensation plan, net of shares retired		(52	)		—		—		—		(15	)		(37	)		—			—			—
Amortization of deferred compensation		213			—		—		—		—			213			—			—			—
Balance March 31, 2023	$	(171,911	)	$	35	$	69	$	50	$	5,341		$	1,858,851		$	1,415		$	(2,025,779	)	$	(11,893	)

				PREIT Shareholders
				Preferred Shares $.01 par						Shares of Beneficial		Capital Contributed		Accumulated Other			Distributions			Non-
(in thousands of dollars, except per share amounts)	Total Equity			Series B		Series C		Series D		Interest, $1.00 Par		in Excess of Par		Comprehensive Loss			in Excess of Net Income			controlling interest
Balance January 1, 2022	$	7,047		$	35	$	69	$	50	$	5,347	$	1,851,866	$	(8,830	)	$	(1,832,375	)	$	(9,115	)
Net loss		(32,973	)		—		—		—		—		—		—			(32,469	)		(504	)
Other comprehensive income		5,807			—		—		—		—		—		5,734			—			73
Shares issued under employee compensation    plans, net of shares retired		4,449			—		—		—		28		4,421		—			—			—
Amortization of deferred compensation		814			—		—		—		—		814		—			—			—
Balance March 31, 2022	$	(14,856	)	$	35	$	69	$	50	$	5,375	$	1,857,101	$	(3,096	)	$	(1,864,844	)	$	(9,546	)

See accompanying notes to the unaudited consolidated financial statements.

4

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
(in thousands of dollars)	2023			2022
				(as restated)
Cash flows from operating activities:
Net loss	$	(45,745	)	$	(32,973	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		24,900			27,436
Amortization		4,448			2,098
Straight-line rent adjustments		(50	)		290
Deferred compensation		213			(165	)
Gain on sale of preferred equity interest		—			(3,688	)
Paid-in-kind interest		20,491			12,547
Gain on hedge ineffectiveness		(8	)		(8	)
Equity in loss of partnerships		2,696			395
Cash distributions from partnerships		485			1,570
Change in assets and liabilities:
Net change in other assets		11,605			7,161
Net change in other liabilities		(498	)		(189	)
Net cash provided by operating activities		18,537			14,474
Cash flows from investing activities:
Cash proceeds from sales of real estate		26,312			—
Investments in real estate improvements		(6,297	)		(2,746	)
Additions to construction in progress		(1,131	)		(1,385	)
Investments in partnerships		—			(415	)
Capitalized leasing costs		(265	)		(29	)
Proceeds from sale of preferred equity interest		—			2,438
Additions to leasehold improvements and corporate fixed assets		(14	)		—
Net cash provided by (used in) investing activities		18,605			(2,137	)
Cash flows from financing activities:
Net repayments to term loans		(26,312	)		(2,437	)
Repayments of finance lease liabilities		(174	)		—
Principal installments on mortgage loans		(9,557	)		(6,048	)
Payment of deferred financing costs		(2,500	)		(235	)
Repurchase of shares retired under equity incentive plans, net of shares issued		(52	)		(593	)
Net cash used in financing activities		(38,595	)		(9,313	)
Net change in cash, cash equivalents, and restricted cash		(1,453	)		3,024
Cash, cash equivalents, and restricted cash, beginning of period		34,689			58,077
Cash, cash equivalents, and restricted cash, end of period	$	33,236		$	61,101
Supplemental non-cash disclosures:
Transfer of equity compensation from liability to equity	$	-		$	6,020

See accompanying notes to the unaudited consolidated financial statements.

5

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

1. BASIS OF PRESENTATION

Nature of Operations

Pennsylvania Real Estate Investment Trust (“PREIT” or the “Company”) prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe that the included disclosures are adequate to make the information presented not misleading. Our unaudited consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included in PREIT’s Annual Report on Form 10-K for the year ended December 31, 2022. In our opinion, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our consolidated financial statements are included. The results of operations for the interim periods presented are not necessarily indicative of the results for the full year.

PREIT, a Pennsylvania business trust founded in 1960 and one of the first equity real estate investment trusts (“REITs”) in the United States, has a primary investment focus on retail shopping malls located in the eastern half of the United States, primarily in the Mid-Atlantic region. As of March 31, 2023, our portfolio consists of a total of 23 properties operating in eight states, including 19 shopping malls, three other retail properties and one development property. The property in our portfolio that is classified as under development does not currently have any activity occurring.

We hold our interest in our portfolio of properties through our operating partnership, PREIT Associates, L.P. (“PREIT Associates” or the “Operating Partnership”). We are the sole general partner of the Operating Partnership and, as of March 31, 2023, we held a 98.7% controlling interest in the Operating Partnership and consolidated it for reporting purposes. The presentation of consolidated financial statements does not itself imply that the assets of any consolidated entity (including any special-purpose entity formed for a particular project) are available to pay the liabilities of any other consolidated entity, or that the liabilities of any consolidated entity (including any special-purpose entity formed for a particular project) are obligations of any other consolidated entity.

Pursuant to the terms of the partnership agreement of the Operating Partnership, each of the limited partners has the right to redeem such partner’s units of limited partnership interest in the Operating Partnership (“OP Units”) for cash or, at our election, we may acquire such OP Units in exchange for our common shares on a fifteen-for-one basis (as a result of our recent reverse share split (described below)), in some cases beginning one year following the respective issue date of the OP Units and in other cases immediately. The current terms of our credit agreements prohibit the Company from acquiring whole share OP Units for cash and, as such, any whole share OP Units presented for redemption will be redeemed for shares. Partial share OP Unit redemptions will be redeemed for cash.

We provide management, leasing and real estate development services through two of our subsidiaries: PREIT Services, LLC (“PREIT Services”), which generally develops and manages properties that we consolidate for financial reporting purposes, and PREIT-RUBIN, Inc. (“PRI”), which generally develops and manages properties that we do not consolidate for financial reporting purposes, including properties owned by partnerships in which we own an interest, and properties that are owned by third parties in which we do not have an interest. PREIT Services and PRI are consolidated. PRI is a taxable REIT subsidiary, as defined by federal tax laws, which means that it is able to offer an expanded menu of services to tenants without jeopardizing our continuing qualification as a REIT under federal tax law.

We evaluate operating results and allocate resources on a property-by-property basis, and do not distinguish or evaluate our consolidated operations on a geographic basis. Due to the nature of our operating properties, which involve retail shopping, dining, entertainment and certain non-traditional tenant operations, we have concluded that our individual properties have similar economic characteristics and meet all other aggregation criteria. Accordingly, we have aggregated our individual properties into one reportable segment. In addition, no single tenant accounts for 10% or more of consolidated revenue, and none of our properties are located outside the United States.

Current Economic and Industry Conditions

Conditions in the economy have caused fluctuations and variations in business and consumer confidence, retail sales, and consumer spending on retail goods, destination dining and entertainment. In particular, current conditions in the economy have caused fluctuations in unemployment rates, and together with supply chain challenges, the current inflationary environment, overall economic uncertainty and the potential for recession, have impacted consumer confidence and spending. The economic factors have had corresponding effects on tenant business performance, prospects, solvency and leasing decisions. Further, traditional mall tenants, including department store anchors and smaller format retail tenants face significant challenges resulting from changing consumer expectations, the convenience of e-commerce shopping, the expansion of outlet centers, and declining mall traffic, among other factors. In recent years, there has been an increased level of tenant bankruptcies and store closings by tenants who have been significantly impacted by these factors. We anticipate that our future business, financial condition, liquidity and results of operations, will continue to be materially impacted by these conditions, and more recently by inflationary pressures and substantial increases in interest rates.

6

Going Concern Considerations

Under the accounting guidance related to the presentation of financial statements, when preparing financial statements for each annual and interim reporting period, management has the responsibility to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. As a result of the considerations articulated below, we believe there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued.

In applying the accounting guidance, management considered our current financial condition and liquidity sources, including current funds available, forecasted future cash flows and our conditional and unconditional obligations due over the next twelve months after the date that our financial statements were issued. Management specifically considered the two secured credit agreements (collectively, as amended, the “Credit Agreements”), further defined in Note 4, with a maturity date in December 2023 as an event or condition that raised substantial doubt about our ability to continue as a going concern. As of March 31, 2023, we had borrowed $305.7 million under the First Lien Term Loan Facility, $667.6 million under the Second Lien Term Loan Facility and $22.5 million under the First Lien Revolving Facility. Our obligations under the Credit Agreements are guaranteed by certain of our subsidiaries. The Credit Agreements include several events of default as described in Note 4. Upon the occurrence of an event of default (except with respect to bankruptcy), the lenders may declare all of the obligations in connection with the applicable Credit Agreement (including an amount equal to the outstanding letters of credit under the First Lien Credit Agreement) immediately due and payable and may terminate the lenders’ commitments thereunder. When the borrowings under the Credit Agreements come due and payable due to a default or at maturity in December 2023, the Company would not be able to satisfy its obligations. Management plans to work with the lender groups under the credit facilities and also explore other options to satisfy this obligation, however, any such relief involves performance by third parties and cannot be considered probable of occurring.

Therefore, due to the inherent risks, unknown results and significant uncertainties associated with this matter and the direct correlation to our ability to satisfy our financial obligations that may arise over the applicable twelve month period, we are unable to conclude that it is probable that we will be able to meet our obligations arising within twelve months of the date of issuance of these financial statements under the parameters set forth in this accounting guidance.

Fair Value

Fair value accounting applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements.

Fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, these accounting requirements establish a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access.

Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs might include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals.

Level 3 inputs are unobservable inputs for the asset or liability and are typically based on an entity’s own assumptions, as there is little, if any, related market activity.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. We utilize the fair value hierarchy in our accounting for derivatives (Level 2), fixed rate and variable rate debt (Level 2), and in our reviews for impairment of real estate assets (Level 3) and goodwill (Level 3).

Impairment of Assets

Real estate investments and related intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the property might not be recoverable, which is referred to as a “triggering event.” If there is a triggering event in relation to a property to be held and used, we will estimate the aggregate future cash flows, net of estimated capital expenditures, to be

7

generated by the property, undiscounted and without interest charges. In addition, this estimate may consider a probability weighted cash flow estimation approach when alternative courses of action to recover the carrying amount of a long-lived asset are under consideration or when a range of possible values is estimated.

During the three months ended March 31, 2023, there were no new indicators of impairment at any of our properties. No impairment review or assessment of the undiscounted future cash flows was required.

Our review of long-lived assets for impairment utilizes qualitative and quantitative factors in order to estimate fair value. The significant qualitative factors that we use include age and condition of the property, market conditions in the property’s trade area, competition with other shopping centers within the property’s trade area and the creditworthiness and performance of the property’s tenants. The significant quantitative factors that we use include historical and forecasted financial and operating information relating to the property, such as net operating income, estimated holding periods, occupancy statistics, vacancy projections and tenants’ sales levels.

The determination of undiscounted cash flows requires significant estimates by our management, including the expected course of action at the balance sheet date that would lead to such cash flows. Subsequent changes in estimated undiscounted cash flows arising from changes in the anticipated action to be taken with respect to the property could affect the determination of whether an impairment exists, and the effects of such changes could materially affect our net income. If the estimated undiscounted cash flows are less than the carrying value of the property, the carrying value is written down to its fair value. Our intent is to hold and operate our properties long-term, which reduces the likelihood that our carrying value is not recoverable. A shortened holding period would increase the likelihood that the carrying value is not recoverable. We will obtain a third party appraisal of the property as deemed necessary.

Assessment of our ability to recover certain lease-related costs must be made when we have a reason to believe that a tenant might not be able to perform under the terms of the lease as originally expected. This requires us to make estimates as to the recoverability of such costs.

An other-than-temporary impairment of an investment in an unconsolidated joint venture is recognized when the carrying value of the investment is not considered recoverable based on evaluation of the severity and duration of the decline in value. To the extent impairment has occurred, the excess carrying value of the asset over its estimated fair value is recorded as a reduction to income.

Assets Classified as Held for Sale

The determination to classify an asset as held for sale requires significant estimates by us about the property and the expected market for the property, which are based on factors including recent sales of comparable properties, recent expressions of interest in the property, financial metrics of the property and the physical condition of the property. We must also determine if it will be possible under those market conditions to sell the property for an acceptable price within one year. When assets are identified by our management as held for sale, we discontinue depreciating the assets and estimate the sales price, net of selling costs, of such assets. We generally consider operating properties to be held for sale when they meet criteria such as whether the sale transaction has been approved by the appropriate level of management and there are no known material contingencies relating to the sale such that the sale is probable and is expected to qualify for recognition as a completed sale within one year. If the expected net sales price of the asset that has been identified as held for sale is less than the net book value of the asset, the asset is written down to fair value less the cost to sell. Assets and liabilities related to assets classified as held for sale are presented separately in the consolidated balance sheets. If we determine that a property no longer meets the held-for-sale criteria, we reclassify the property’s assets and liabilities to their original locations on the consolidated balance sheet and record depreciation and amortization expense for the period that the property was in held-for-sale status.

As of March 31, 2023, we determined that two of our hotel land parcels, one multifamily land parcel, and one retail property met the criteria to be classified as held for sale. As of December 31, 2022, two of our hotel land parcels, one multifamily land parcel, and two retail properties met the criteria to be classified as held for sale.

Reverse Share Split

On June 16, 2022, the Company effected a one-for-fifteen reverse share split of its common shares. Upon the effectiveness of the reverse share split, every 15 issued and outstanding common shares were combined into one issued and outstanding common share, with no change in par value per share, and the authorized number of common shares was proportionally reduced. Shareholders entitled to fractional shares as a result of the reverse share split were entitled to receive a cash payment in lieu of receiving fractional shares. All common share and per share data in the consolidated financial statements and notes to the consolidated financial statements have been retrospectively revised to reflect the reverse share split. Common shares underlying outstanding options, time based and restricted share units, performance based share units and restricted shares were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased. Additionally, the conversion rate of OP Units into common shares was automatically proportionally adjusted from one-for-one to fifteen-for-one. The reverse share split resulted in bringing the Company into compliance with the minimum bid price requirement for maintaining its listing on the New York Stock Exchange (the “NYSE”), and on July 1, 2022, the Company received notice from the NYSE that it had regained compliance with the minimum bid price requirement. The Company's common shares continued to trade under the symbol “PEI” and began trading on a split-adjusted basis on June 16, 2022.

8

On December 15, 2022, the Company received written notice from the NYSE that the Company failed to maintain an average market global capitalization over a consecutive 30 trading-day period of at least $15 million which resulted in NYSE delisting its securities. The securities were transferred to "OTC Pink Market" and later to OTCQB, both operated by OTC Markets Group Inc. As of March 31, 2023, the Company's shares were traded on OTCQB under the symbols PRET (Common Shares), PRETL (Preferred Series B), PRETM (Preferred Series C), and PRETN (Preferred Series D).

New Accounting Developments

The Company considers all new accounting standards for their applicability to the consolidated financial statements. We determined that there were no new accounting standards, issued or effective during the quarter ended March 31, 2023, that have had or are expected to have a material impact on our consolidated financial statements.

Restatement of Previously Reported Financial Statements

The consolidated statement of cash flows for the three months ended March 31, 2022 has been restated due to a misclassification. The value of beneficial shares issued as settlement of certain compensation liabilities was previously reported as cash provided by financing activities, with offsetting reductions to operating cash flows. The cash flow presentation has been restated to properly reflect this transaction as supplemental non-cash financing activity. This restatement only impacts the consolidated statement of cash flows for the three months ended March 31, 2022 and resulted in no change in cash, cash equivalents and restricted cash as of March 31, 2022.

The following table provides a summary of the restatement on the Company's consolidated statement of cash flows for the three months ended March 31, 2022.

	For the three months ended March 31, 2022
(in thousands of dollars)	As Previously Reported			Restatement Adjustment			As Restated
Cash flows from operating activities:
Adjustments to reconcile net loss to net cash provided by operating activities:
Net change in other liabilities	$	(6,209	)	$	6,020		$	(189	)
Net cash provided by operating activities		8,454			6,020			14,474
Cash flows from financing activities:
Repurchase of shares retired under equity incentive plans, net of shares issued		5,427			(6,020	)		(593	)
Net cash used in financing activities		(3,293	)		(6,020	)		(9,313	)
Supplemental non-cash disclosures:
Transfer of equity compensation from liability to equity	$	—		$	6,020		$	6,020

There was no impact to the consolidated balance sheet, statement of operations and statement of equity, and notes related to this matter as of and for the three months ended March 31, 2022.

2. REAL ESTATE ACTIVITIES

Investments in real estate as of March 31, 2023 and December 31, 2022 were comprised of the following:

	March 31,			December 31,
(in thousands of dollars)	2023			2022
Buildings, improvements and construction in progress	$	2,539,604		$	2,549,731
Land, including land held for development		389,930			389,930
Total investments in real estate		2,929,534			2,939,661
Accumulated depreciation		(1,377,167	)		(1,370,065	)
Net investments in real estate	$	1,552,367		$	1,569,596

Dispositions

In February 2023, we sold a retail space at Plymouth Meeting Mall in Plymouth Meeting, Pennsylvania for $27.0 million. We used net proceeds of $26.3 million from the sale to pay down our First Lien Term Loan Facility.

In February 2022, we completed the redemption of preferred equity issued as part of a previous sale of our New Garden land parcel. In connection with this settlement, we received approximately $2.5 million, which funds were used to pay down our First Lien Revolving Facility and First Lien Term Loan Facility. In connection with this transaction, we recorded a gain on sale of preferred equity of $3.7 million in the three months ended March 31, 2022.

9

Assets Classified as Held for Sale

As of March 31, 2023 and December 31, 2022, we had assets and liabilities that have been classified as held for sale and summarized in the following table:

	March 31,			December 31,
(in thousands of dollars)	2023			2022
Assets held for sale:
Operating properties	$	32,204		$	58,562
Tenant and other receivables, net of allowance		321			226
Other assets		2,511			2,979
Total assets held for sale	$	35,036		$	61,767
Liabilities held for sale:
Accrued expenses and other liabilities	$	(1,975	)	$	(2,539	)
Total liabilities held for sale	$	(1,975	)	$	(2,539	)

3. INVESTMENTS IN PARTNERSHIPS

The following table presents summarized financial information of the equity method investments in our unconsolidated partnerships as of March 31, 2023 and December 31, 2022:

_____________________

	March 31,			December 31,
(in thousands of dollars)	2023			2022
ASSETS:
Investments in real estate, at cost:
Operating properties	$	741,998		$	741,007
Construction in progress		5,378			5,346
Total investments in real estate		747,376			746,353
Accumulated depreciation		(242,380	)		(237,791	)
Net investments in real estate		504,996			508,562
Cash and cash equivalents		39,603			28,186
Deferred costs and other assets, net		142,940			142,929
Total assets		687,539			679,677
LIABILITIES AND PARTNERS’ INVESTMENT:
Mortgage loans payable, net		397,998			400,141
FDP Term Loan, net		78,320			104,427
Partnership Loans		246,905			214,008
Other liabilities		165,562			155,873
Total liabilities		888,785			874,449
Net investment		(201,246	)		(194,772	)
Partners’ share		(105,788	)		(102,495	)
PREIT’s share		(95,458	)		(92,277	)
Excess investment (1)		6,987			6,986
Net investments and advances	$	(88,471	)	$	(85,291	)
Investment in partnerships, at equity	$	7,621		$	7,845
Distributions in excess of partnership investments		(96,092	)		(93,136	)
Net investments and advances	$	(88,471	)	$	(85,291	)

(1) Excess investment represents the unamortized difference between our investment and our share of the equity in the underlying net investment in the unconsolidated partnerships. The excess investment is amortized over the life of the properties, and the amortization is included in “Equity in (loss) income of partnerships.”

We record distributions from our equity investments using the nature of the distribution approach.

10

The following table summarizes our share of equity in loss of partnerships for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
(in thousands of dollars)	2023			2022
Real estate revenue	$	27,167		$	29,889
Expenses:
Property operating and other expenses		(10,157	)		(11,874	)
Interest expense (1)		(16,698	)		(11,754	)
Depreciation and amortization		(5,691	)		(6,655	)
Total expenses		(32,546	)		(30,283	)
Net loss		(5,379	)		(394	)
Less: Partners’ share		2,683			(1	)
PREIT’s share		(2,696	)		(395	)
Equity in loss of partnerships	$	(2,696	)	$	(395	)

(1) Net of capitalized interest expense of $24 and $0 for the three months ended March 31, 2023 and 2022, respectively.

Fashion District Philadelphia

FDP Loan Agreement

PM Gallery LP, a Delaware limited partnership and joint venture entity owned indirectly by us and The Macerich Company (“Macerich”), previously entered into a $250.0 million term loan in January 2018 (as amended in July 2019 to increase the total maximum potential borrowings to $350.0 million) to fund the redevelopment of Fashion District Philadelphia and to repay capital contributions to the venture previously made by the partners. On December 10, 2020, PM Gallery LP, together with certain other subsidiaries owned indirectly by us and Macerich (including the fee and leasehold owners of the properties that are part of the Fashion District Philadelphia project), entered into an Amended and Restated Term Loan Agreement (the “FDP Loan Agreement”). In connection with the execution of the FDP Loan Agreement, a $100.0 million principal payment was made (and funded indirectly by Macerich, the “Partnership Loan”) to pay down the existing loan, reducing the outstanding principal under the FDP Loan Agreement from $301.0 million to $201.0 million. In addition, subsequent payments were made on the FDP Loan Agreement as indicated below. The joint venture must repay the Partnership Loan plus 15% accrued interest to Macerich, in its capacity as the lender, prior to the resumption of 50/50 cash distributions to the Company and its joint venture partner.

The FDP Loan Agreement provides for (i) a maturity date of January 22, 2024, (having been extended by one year upon satisfaction of the required conditions to extension), (ii) an interest rate at the borrowers’ option with respect to each advance of either (A) the Base Rate (defined as the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50%, and (c) the LIBOR Market Index Rate plus 1.00%) plus 2.50% or (B) LIBOR for the applicable period plus 3.50%, (iii) a full recourse guarantee of 50% of the borrowers’ obligations by PREIT Associates, L.P., on a several basis, (iv) a full recourse guarantee of certain of the borrowers’ obligations by The Macerich Partnership, L.P., up to a maximum of $50.0 million, on a several basis, (v) a pledge of the equity interests of certain indirect subsidiaries of PREIT and Macerich, as well as of PREIT-RUBIN, Inc. and one of its subsidiaries, that have a direct or indirect ownership interest in the borrowers, (vi) a non-recourse carve-out guaranty and a hazardous materials indemnity by each of PREIT Associates, L.P. and The Macerich Partnership, L.P., and (vii) mortgages of the borrowers’ fee and leasehold interests in the properties that are part of the Fashion District Philadelphia project and certain other properties. In January 2023, the FDP Loan Agreement was amended to replace the interest rate benchmark from LIBOR to SOFR. The Base Rate is defined as the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus one half (0.50%) and (c) Adjusted Term SOFR for a one-month tenor plus one percent (1.00%). The FDP Loan Agreement contains certain covenants typical for loans of its type.

In January 2023, the joint venture paid down an additional $26.1 million of the FDP Loan Agreement balance to reach a debt yield ratio of 12% and exercised its option to extend the FDP Loan Agreement maturity date to January 22, 2024. If the joint venture fails to meet the debt yield covenant as of any quarter end measurement date and does not pay down the FDP Loan Agreement balance to achieve compliance, the balance could become due and payable at that time. The Company guarantees 50% of the joint venture’s obligations under the FDP Loan Agreement. Management projects that the Company would be able to satisfy its obligations if the FDP term loan would become due and payable by its maturity date. The FDP Loan Agreement had a balance of $78.3 million as of March 31, 2023 (our share of which is $39.2 million). The joint venture has an outstanding balance on its Partnership Loans of $246.9 million (our share of which is $123.5 million) as of March 31, 2023 and the majority of the proceeds from the Partnership Loan were used to pay down the FDP Term Loan and the remainder was used to fund ongoing capital expenditures at the property.

Joint Venture

In connection with the execution of the FDP Loan Agreement, the governing structure of PM Gallery LP was modified such that, effective as of January 1, 2021, Macerich is responsible for the entity’s operations and, subject to limited exceptions, controls major decisions. The

11

Company considered the changes to the governing structure of PM Gallery LP and determined the investment qualifies as a variable interest entity and will continue to be accounted for under the equity method of accounting. Our maximum exposure to losses is limited to the extent of our investment, which is a 50% ownership, and the guarantee under the FDP Loan Agreement as noted above.

4. FINANCING ACTIVITY

Credit Agreements

On December 10, 2020 we entered into the “Credit Agreements": (a) an Amended and Restated First Lien Credit Agreement (the “First Lien Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo Bank”) and the other financial institutions signatory thereto and their assignees, for secured loan facilities consisting of: (i) a secured first lien revolving credit facility allowing for borrowings up to $130.0 million, including a sub-facility for letters of credit to be issued thereunder in an aggregate stated amount of up to $10.0 million (collectively, the “First Lien Revolving Facility”), and (ii) a $384.5 million secured first lien term loan facility (the “First Lien Term Loan Facility”), and (b) a Second Lien Credit Agreement (the “Second Lien Credit Agreement”), as amended February 8, 2021 with Wells Fargo Bank and the other financial institutions signatory thereto and their assignees for a $535.2 million secured second lien term loan facility (the “Second Lien Term Loan Facility”). The Credit Agreements were to mature in December 2022, and the maturity date was extended to December 2023. The First Lien Term Loan Facility and the Second Lien Term Loan Facility are collectively referred to as the “Term Loans.”

As of March 31, 2023, we had borrowed $305.7 million under the First Lien Term Loan Facility, $667.6 million under the Second Lien Term Loan Facility and $22.5 million under the First Lien Revolving Facility. The carrying value of the Term Loans on our consolidated balance sheet as of March 31, 2023 is net of $1.8 million of unamortized debt issuance costs. The maximum amount that was available to us under the First Lien Revolving Facility as of March 31, 2023 was $107.5 million. In February 2023, we used net proceeds from the sale of retail space at Plymouth Meeting Mall to pay down our First Lien Term Loan Facility by $26.3 million. In April 2023, we borrowed $5.0 million under the First Lien Revolving Facility.

Wilmington Savings Fund Society, FSB is Administrative Agent under the First Lien Credit Agreement, the Second Lien Credit Agreement and, in each case, the related loan documents. There is currently no letter of credit issuer under the First Lien Revolving Facility, accordingly, the Company cannot currently access the letters of credit sub-facility.

Interest expense and deferred financing fee amortization related to the Credit Agreements for the three months ended March 31, 2023 and 2022 were as follows:

	Three Months Ended March 31,
(in thousands of dollars)	2023		2022
Revolving Facilities:
Interest expense (1)	$	461	$	541
Deferred financing amortization		57		299
Term Loans:
Interest expense (2)	$	27,549	$	20,448
Deferred financing amortization		424		1,784

(1)All of the expense applied to the First Lien Revolving Facility.

(2)All of the expense applied to the Term Loans, of which $20.5 million and $12.5 million, for the three months ended March 31, 2023 and March 31, 2022, respectively, was for the Second Lien Term Loan Facility and was not paid in cash, but capitalized to the principal balance of the loan.

Our obligations under the Credit Agreements are guaranteed by certain of our subsidiaries. Our obligations under the Credit Agreements and the guaranties are secured by mortgages and deeds of trust on a portfolio of 10 of our subsidiaries’ properties, including nine malls and one additional parcel. The obligations are further secured by a lien on substantially all of our personal property pursuant to collateral agreements and a pledge of substantially all of the equity interests held by us and the guarantors, pursuant to pledge agreements, in each case subject to limited exceptions.

In December 2022, we exercised our option and satisfied the conditions to extend the maturity date of our Credit Agreements, such that it is now December 10, 2023 (the “Maturity Date”). The loans under the Credit Agreements are repayable in full on the Maturity Date, subject to mandatory prepayment provisions in the event of certain events including asset sales, incurrence of indebtedness, issuances of equity and receipt of casualty insurance proceeds. The terms of our Credit Agreements place restrictions on, among other things, and subject to certain exceptions, our ability to make certain restricted payments (including payments of dividends), make certain types of investments and acquisitions, issue redeemable securities, incur additional indebtedness, incur liens on our assets, enter into agreements with a negative pledge, make certain intercompany transfers, merge, consolidate, or sell our assets or the equity interests in our subsidiaries, amend our organizational documents or material contracts, enter into certain transactions with affiliates, or enter into derivatives contracts. Additionally, if we receive net cash proceeds from certain capital events (including equity issuances), we are required to prepay loans under our Credit Agreements. In addition, the Credit Agreements contain cross-default provisions that trigger an event of default if we fail to make certain payments or otherwise fail to comply with our obligations with respect to certain of our other indebtedness.

12

First Lien Credit Agreement

Amounts borrowed under the First Lien Credit Agreement may be either Base Rate Loans or LIBOR Loans. Base Rate Loans bear interest at the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) the LIBOR Market Index Rate plus 1.0%, provided that the Base Rate will not be less than 1.50% per annum, in each case plus (w) for revolving loans, 2.50% per annum, and (x) for term loans, 4.74% per annum. LIBOR Loans bear interest at LIBOR plus (y) for revolving loans, 3.50% per annum, and (z) for term loans, 5.74% per annum, in each case, provided that LIBOR will not be less than 0.50% per annum. Interest is due to be paid in cash on the last day of each applicable interest period (with rolling 30-day interest periods) and on the Maturity Date. We are required to pay certain fees to the administrative agent for the account of the lenders in connection with the First Lien Credit Agreement, including an unused fee for the account of the revolving lenders, which will accrue (i) 0.35% per annum on the daily amount of the unused revolving commitments when that amount is greater than or equal to 50% of the aggregate amount of revolving commitments, and (ii) 0.25% when that amount is less than 50% of the aggregate amount of revolving commitments. Accrued and unpaid unused fees will be payable quarterly in arrears during the term of the First Lien Credit Agreement and on the revolving termination date (or any earlier date of termination of the revolving commitments or reduction of the revolving commitments to zero).

Letters of credit and the proceeds of revolving loans may be used (i) to refinance indebtedness under the Bridge Credit Agreement (which agreement was canceled and refinanced upon our entry into the Credit Agreements), (ii) for working capital and general corporate purposes (subject to certain exceptions set forth in the First Lien Credit Agreement, including limitations on investments in non-borrowing base properties), and (iii) to fund professional fee payments and other fees and expenses subject to the provisions of the Plan and related confirmation order and for other uses permitted by the provisions of the First Lien Credit Agreement, Plan and confirmation order, in each case consistent with an approved annual business plan. We may terminate or reduce the amount of the revolving commitments at any time and from time to time without penalty or premium, subject to the terms of the First Lien Credit Agreement.

The First Lien Credit Agreement contains, among other restrictions, certain additional affirmative and negative covenants and other terms, many of which substantially align with those in the Second Lien Credit Agreement and are summarized below under “Similar Terms of the Credit Agreements.”

Second Lien Credit Agreement

Amounts borrowed under the Second Lien Credit Agreement may be either Base Rate Loans or LIBOR Loans. Base Rate Loans bear interest at the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) the LIBOR Market Index Rate plus 1.0%, provided that the Base Rate will not be less than 1.50% per annum, in each case plus 7.00% per annum. LIBOR Loans bear interest at LIBOR plus 8.00% per annum, provided that LIBOR will not be less than 0.50% per annum. Interest is due to be paid in kind on the last day of each applicable interest period (with rolling 30-day interest periods) by adding the accrued and unpaid amount thereof to the principal balance of the loans under the Second Lien Credit Agreement and then accruing interest on the increased principal amount (provided that after the discharge of our obligations under the First Lien Credit Agreement and any other senior debt obligations, interest will be paid in cash). We are required to pay certain fees to the administrative agent for the account of the lenders in connection with the Second Lien Credit Agreement.

The Second Lien Credit Agreement contains, among other restrictions, certain additional affirmative and negative covenants and other terms, many of which substantially align with those in the First Lien Credit Agreement and are summarized below under “Similar Terms of the Credit Agreements.”

Similar Terms of the Credit Agreements

Each of the Credit Agreements contains certain affirmative and negative covenants and other provisions, as described in detail below, which substantially align with those contained in the other Credit Agreements.

Covenants

Each of the Credit Agreements contains, among other restrictions, certain affirmative and negative covenants, including, without limitation, requirements that we:

•maintain liquidity of at least $25.0 million, to be comprised of unrestricted cash held in certain deposit accounts subject to control agreements, up to $5.0 million held in a certain other deposit account excluded from the collateral, the unused revolving loan commitments under the First Lien Credit Agreement (to the extent available to be drawn), and amounts on deposit in a designated collateral proceeds account and amounts on deposit in a cash collateral account;

•maintain a minimum senior debt yield of 11.35% from and after June 30, 2021;

•maintain a minimum corporate debt yield of (a) 6.50% from June 30, 2021 through and including September 30, 2021 and (b) 7.25% from and after October 1, 2021;

•provide to the administrative agent, among other things, PREIT and its subsidiaries’ quarterly and annual financial statements, annual budget, reports on projected sources and uses of cash, and an updated annual business plan, as well as quarterly and annual operating

13

statements, rent rolls, and certain other collections and tenant reports and information as the administrative agent may reasonably request with respect to each Borrowing Base Property;

•maintain PREIT’s status as a REIT;

•use commercially reasonable efforts to obtain subordination, non-disturbance and attornment agreements from each tenant under certain Major leases as well as ground lease estoppel certificates from each ground lessor of a borrowing base property;

•comply with the requirements of the various security documents and, at the administrative agent’s request, promptly notify the administrative agent of any acquisition of any owned real property that is not subject to a mortgage and grant liens on such real property to secure our obligations under the applicable Credit Agreement;

•not amend any existing sale agreements with respect to borrowing base properties to result in a reduction of cash consideration by 20% or more; and

•not retain more than $6.5 million of cash in property-level accounts held by our subsidiaries that are owners of real property (subject to certain exceptions).

Each of the Credit Agreements also limits our ability, subject to certain exceptions, to make certain restricted payments (including payments of dividends and voluntary prepayments of certain indebtedness which includes, with respect to the First Lien Credit Agreement, voluntary prepayments under the Second Lien Credit Agreement), make certain types of investments and acquisitions, issue redeemable securities, incur additional indebtedness, incur liens on our assets, enter into agreements with a negative pledge, make certain intercompany transfers, merge, consolidate or sell all or substantially all of our assets or the equity interests in our subsidiaries, amend our organizational documents or material contracts, enter into transactions with affiliates, or enter into derivatives contracts. We are also prohibited from selling certain properties unless certain conditions are satisfied with respect to the terms of the sale agreement for such property or, in the case of Borrowing Base Properties, payment of certain release prices.

The First Lien Credit Agreement and, after our Senior Debt Obligations are discharged, the Second Lien Credit Agreement, each prohibit us from (i) entering into major leases, (ii) assigning leases, (iii) discounting any rent under leases where the leased premises is at least 7,500 square feet at a borrowing base property and the discounted amount is more than $750,000 and more than 25% of the aggregate contractual base rent payable over the initial term (not including any extension options), (iv) collecting rent in advance, (v) terminating or modifying the terms of any major lease or releasing or discharging tenants from any obligations thereunder, (vi) consenting to a tenant’s assignment or subletting of a major lease, or (vii) subordinating any lease to any other deed of trust, mortgage, deed to secure debt or encumbrance, other than the mortgages already encumbering the applicable borrowing base property and the mortgages entered into in connection with the other Credit Agreement. Under the First Lien Credit Agreement, and under the Second Lien Credit Agreement after the First Lien Termination Date, any amounts equal to or greater than $2.5 million but less than $3.5 million received by or on behalf of a guarantor in consideration of any termination or modification of a lease (or the release or discharge of a tenant) are subject to restrictions on use, and such amounts that are equal to or greater than $3.5 million must be applied to reduce our outstanding obligations under the applicable Credit Agreement.

As of March 31, 2023, we were in compliance with all financial covenants under the Credit Agreements.

Consolidated Mortgage Loans

The estimated fair values of our consolidated mortgage loans based on year-end interest rates and market conditions at March 31, 2023 and December 31, 2022 were as follows:

	March 31, 2023				December 31, 2022
(in millions of dollars)	Carrying Value		Fair Value		Carrying Value		Fair Value
Mortgage loans(1)	$	741.9	$	735.4	$	751.5	$	733.7

(1) The carrying value of mortgage loans excludes unamortized debt issuance costs of $1.7 million and $2.1 million as of March 31, 2023 and December 31, 2022, respectively.

The following table outlines the timing of principal payments and balloon payments pursuant to the terms of our consolidated mortgage loans of our consolidated properties as of March 31, 2023:

(in thousands of dollars)	Principal Amortization		Balloon Payments		Total
April 1 through December 31, 2023 (1)	$	6,438	$	394,315	$	400,753
2024		6,405		118,994		125,399
2025		4,406		211,346		215,752
2026		—		—		—
2027 and thereafter		—		—		—
Total principal payments	$	17,249	$	724,655		741,904
Less: Unamortized debt issuance costs						1,737
Carrying value of mortgage notes payable					$	740,167

(1) Includes Cherry Hill Mall mortgage for which, subsequent to March 31, 2023, the maturity was extended through December 1, 2023.

14

The consolidated mortgage loans contain various customary default provisions. As of March 31, 2023, we were not in default on any of the consolidated mortgage loans, except for the Dartmouth Mall mortgage (as described below).

Mortgage Loan Activity

Dartmouth Mall Mortgage Forbearance Agreement

On April 1, 2023, certain of our consolidated subsidiaries entered into a forbearance agreement as it relates to the mortgage loan secured by the property at Dartmouth Mall in North Dartmouth, Massachusetts. The loan matured on March 31, 2023 and is in default, however, pursuant to the forbearance agreement, the borrowers are required to make scheduled monthly debt service payments until June 1, 2023 at which time repayment of the loan in full is required. The forbearance agreement also imposes certain additional informational reporting requirements during the applicable forbearance period. We continue to pursue all our options relating to this debt. As of March 31, 2023, the mortgage loan has an outstanding balance of $53.3 million.

Cherry Hill Mall Mortgage Agreement

On May 1, 2023, certain of our consolidated subsidiaries entered into an amendment and extension to our mortgage loan secured by the property at Cherry Hill Mall in Cherry Hill, New Jersey. This agreement extends the maturity date to December 1, 2023 with a $5.0 million principal paydown at time of execution, and requires the borrower to continue making scheduled monthly debt service payments. The agreement also includes an option to extend the maturity to May 1, 2024 with an additional $5.0 million principal payment. As of March 31, 2023, the mortgage loan has an outstanding balance of $237.2 million.

5. CASH FLOW INFORMATION

We consider all highly liquid short-term investments with a maturity of three months or less at purchase or acquisition to be cash equivalents.

At March 31, 2023 and 2022, cash and cash equivalents and restricted cash totaled $33.2 million and $61.1 million, respectively, and

included tenant security deposits of $2.1 million and $1.7 million, respectively.

Cash paid for interest was $16.4 million and $16.5 million for the three months ended March 31, 2023 and 2022, respectively, net of amounts capitalized of $0.1 million and $24 thousand, respectively.

In our statements of cash flows, we report cash flows on our revolving facilities on a net basis. Aggregate repayments on our First Lien Revolving Facility and First Lien Term Loan Facility were zero and $26.3 million, respectively, for the three months ended March 31, 2023. Aggregate repayments on our First Lien Revolving Facility and First Lien Term Loan Facility were $0.7 million and $1.7 million, respectively, for the three months ended March 31, 2022.

Accrued construction costs increased by $0.9 million and decreased by $3.8 million for the three months ended March 31, 2023 and 2022, respectively, representing non-cash changes in investment in real estate and construction in progress.

The following table provides a summary of cash, cash equivalents, and restricted cash reported within the statement of cash flows.

	March 31,		December 31,		March 31,		December 31,
(in thousands of dollars)	2023		2022		2022		2021
Cash and cash equivalents	$	20,240	$	22,937	$	45,554	$	43,852
Restricted cash included in other assets		12,996		11,752		15,547		14,225
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	33,236	$	34,689	$	61,101	$	58,077

Our restricted cash consists of cash held in escrow by banks for real estate taxes and tenant deposits.

6. DERIVATIVES

In the normal course of business, we are exposed to financial market risks, including interest rate risk on our interest bearing liabilities. We attempt to limit these risks by following established risk management policies, procedures and strategies, including the use of financial instruments such as derivatives. We do not use financial instruments for trading or speculative purposes.

Cash Flow Hedges of Interest Rate Risk

For derivatives that have been designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in “Accumulated other comprehensive (loss) income” and subsequently reclassified into “Interest expense, net” in the same periods during which the hedged transaction affects earnings.

As of March 31, 2023, we had nine total derivatives with a notional amount of $400.0 million, which were designated as cash flow hedges.

We recognize all derivatives at fair value as either assets or liabilities in the accompanying consolidated balance sheets. Our derivative assets are recorded in “Deferred costs and other assets” and our derivative liabilities are recorded in “Fair value of derivative instruments.”

15

Over the next twelve months, we estimate that $2.0 million will be reclassified as a decrease to interest expense in connection with our designated derivatives. The recognition of these amounts could be accelerated in the event that we repay amounts outstanding on the debt instruments and do not replace them with new borrowings.

Interest Rate Swaps

As of March 31, 2023, we had interest rate swap agreements designated in qualifying hedging relationships outstanding with a weighted average base interest rate of 2.92% on a notional amount of $400.0 million, maturing in either May 2023 or May 2024. We originally entered into these interest rate swap agreements in order to hedge the interest payments associated with our issuances of variable interest rate long term debt. The interest rate swap agreements are net settled monthly.

The following table summarizes the terms and estimated fair values of our interest rate swap derivative instruments as of March 31, 2023 and December 31, 2022 based on the year they mature. The notional values provide an indication of the extent of our involvement in these instruments, but do not represent exposure to credit, interest rate or market risks.

Maturity Date	Aggregate Notional Value at March 31, 2023 (in millions of dollars)		Aggregate Fair Value at March 31, 2023 (1)  (in millions of dollars)		Aggregate Fair Value at December 31, 2022 (1)  (in millions of dollars)		Weighted Average Interest Rate
Derivatives in Cash Flow Hedging Relationships
Interest Rate Swaps
2023	$	300.0	$	1.0	$	2.4		2.70	%
2024		100.0		1.0		1.5		3.59	%
Total	$	400.0	$	2.0	$	3.9		2.92	%

(1)As of March 31, 2023 and December 31, 2022, derivative valuations in their entirety were classified in Level 2 of the fair value hierarchy and we did not have any significant recurring fair value measurements related to derivative instruments using significant unobservable inputs (Level 3).

The tables below present the effect of derivative financial instruments on accumulated other comprehensive income (loss) and on our consolidated statements of operations for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
	Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivative Instruments					Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Interest Expense
(in millions of dollars)	2023			2022		2023		2022
Derivatives in Cash Flow Hedging Relationships
Interest rate products	$	(1.9	)	$	3.9	$	1.6	$	1.9

	Three Months Ended March 31,
(in millions of dollars)	2023			2022
Total interest expense presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded	$	(41.0	)	$	(31.4	)
Amount of gain (loss) reclassified from accumulated other comprehensive income into interest expense	$	1.6		$	1.9

Credit-Risk-Related Contingent Features

We have agreements with some of our derivative counterparties that contain a provision pursuant to which, if our entity that originated such derivative instruments defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then we could also be declared to be in default on our derivative obligations. As of March 31, 2023, we were not in default on any of our derivative obligations.

We have an agreement with a derivative counterparty that incorporates the loan covenant provisions of our loan agreement with a lender affiliated with the derivative counterparty. Failure to comply with the loan covenant provisions would result in our being in default on any derivative instrument obligations covered by the agreement.

As of March 31, 2023, the Company did not have any derivatives in a net liability position.

16

7. LEASES

As Lessee

We have entered into ground leases for portions of the land at Springfield Town Center and Plymouth Meeting Mall. We have also entered into an office lease for our headquarters location, as well as vehicle, solar panel and equipment leases as a lessee. The initial terms of these agreements generally range from three to 40 years, with certain agreements containing extension options for up to an additional 60 years. Upon lease execution, the Company measures a liability for the present value of future lease payments over the noncancellable period of the lease and any renewal option period we are reasonably certain of exercising. Certain agreements require that we pay a portion of reimbursable expenses such as CAM, utilities, insurance and real estate taxes. These payments are not included in the calculation of the lease liability and are presented as variable lease costs.

Our leases do not provide a readily determinable implicit interest rate; therefore, we estimate our incremental borrowing rate to calculate the present value of remaining lease payments. In determining our incremental borrowing rate, we considered the lease term, market interest rates and estimates regarding our implied credit rating using market data with adjustments to determine an appropriate incremental borrowing rate.

The following table presents additional information pertaining to the Company’s leases:

	Three Months Ended March 31,
	2023								2022
(in thousands of dollars)	Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total		Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total
Finance lease cost:
Amortization of right-of-use assets	$	205	$	—	$	—	$	205	$	202	$	—	$	—	$	202
Interest on lease liabilities		42		—		—		42		78		—		—		78
Operating lease costs		—		586		45		631		—		585		68		653
Variable lease costs		—		47		206		253		—		46		206		252
Total lease costs	$	247	$	633	$	251	$	1,131	$	280	$	631	$	274	$	1,185

Other information related to leases as of and for the three months ended March 31, 2023 and 2022 are as follows:

(in thousands of dollars)	2023			2022
Cash paid for the amounts included in the measurement of lease liabilities
Operating cash flows used for finance leases	$	54		$	63
Operating cash flows used for operating leases	$	640		$	653
Financing cash flows used for finance leases	$	196		$	185
Weighted average remaining lease term-finance leases (months)		60			72
Weighted average remaining lease term-operating leases (months)		214			292
Weighted average discount rate-finance leases		4.36	%		4.34	%
Weighted average discount rate-operating leases		6.46	%		6.44	%

Future payments against lease liabilities as of March 31, 2023 are as follows:

(in thousands of dollars)	Finance leases			Operating leases			Total
April 1 to December 31, 2023	$	738		$	1,937		$	2,675
2024		950			2,471			3,421
2025		929			2,428			3,357
2026		926			2,429			3,355
2027		859			2,450			3,309
Thereafter		288			46,208			46,496
Total undiscounted lease payments		4,690			57,923			62,613
Less imputed interest		(489	)		(29,322	)		(29,811	)
Total lease liabilities	$	4,201		$	28,601		$	32,802

Lease liabilities are included with accrued expenses and other liabilities in the consolidated balance sheets.

17

As Lessor

As of March 31, 2023, the fixed contractual lease payments, including minimum rents and fixed CAM amounts, to be received over the next five years pursuant to the terms of noncancellable operating leases with initial terms greater than one year are included in the table below. The amounts presented assume that no leases are renewed and no renewal options are exercised. Additionally, the table does not include variable lease payments that may be received under certain leases for percentage rents or the reimbursement of operating costs, such as common area expenses, utilities, insurance and real estate taxes. These variable lease payments are recognized in the period when the applicable expenditures are incurred or, in the case of percentage rents, when the sales data is made available. Except for utility reimbursements, the fixed and variable lease payments are included with lease revenue in the consolidated statements of operations. Utility reimbursements are included within expense reimbursements as a separate line item in the consolidated statement of operations as their pattern of transfer is not aligned with the other payments.

(in thousands of dollars)
April 1 to December 31, 2023	$	183,398
2024		218,494
2025		180,224
2026		145,850
2027		117,112
Thereafter		297,358
	$	1,142,436

The disaggregation of fixed lease revenue and variable lease revenue for the three months ended March 31, 2023 and 2022 is as follows:

	Three Months Ended March 31,
(in thousands of dollars)	2023		2022
Fixed lease revenue	$	51,025	$	51,330
Variable lease revenue		10,490		12,953
Total lease revenue	$	61,515	$	64,283

8. COMMITMENTS AND CONTINGENCIES

Contractual Obligations

As of March 31, 2023, we had contractual and other commitments related to our capital improvement projects and development projects of $3.9 million, including $0.4 million of commitments related to the redevelopment of Fashion District Philadelphia, in the form of tenant allowances and contracts with general service providers and other professional service providers. For purposes of this disclosure, the contractual obligations and other commitments related to Fashion District Philadelphia are included at 100% of the obligation and not at our 50% ownership share.

Preferred Dividend Arrearages

We have aggregate authorized preferred shares of 25.0 million, where each series of authorized preferred shares is equal to the number of preferred shares outstanding of that series. Dividends on the Series B, Series C and Series D preferred shares are cumulative and therefore will continue to accrue at an annual rate of $0.46 per share, $0.45 per share and $0.43 per share, respectively. As of March 31, 2023, the cumulative amount of unpaid dividends on our issued and outstanding preferred shares totaled $75.3 million. This consisted of unpaid dividends per share on the Series B, Series C and Series D preferred shares of $5.07 per share, $4.95 per share and $4.73 per share, respectively. On August 2, 2022, our preferred shareholders elected two independent trustees to our Board of Trustees in accordance with the provisions of the designating amendments of the Company's Amended and Restated Trust Agreement.

18

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following analysis of our consolidated financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and the notes thereto included elsewhere in this report. The disclosures in this report are complementary to those made in our Annual Report on Form 10-K for the year ended December 31, 2022.

OVERVIEW

PREIT, a Pennsylvania business trust founded in 1960 and one of the first equity real estate investment trusts (“REITs”) in the United States, has a primary investment focus on retail shopping malls located in the eastern half of the United States, primarily in the Mid-Atlantic region.

We currently own interests in 23 properties as of March 31, 2023, of which 22 are operating properties and one is a development property. The 22 operating properties include 19 shopping malls and three other retail properties, have a total of 18.3 million square feet and are located in eight states. We and partnerships in which we hold an interest, own 14.0 million square feet at these properties (excluding space owned by anchors or third parties).

As of March 31, 2023, there are 16 operating retail properties in our portfolio that we consolidate for financial reporting purposes. These consolidated properties have a total of 13.7 million square feet, of which we own 10.8 million square feet. The six operating retail properties that are owned by unconsolidated partnerships with third parties have a total of 4.6 million square feet of which 3.3 million square feet are owned by such partnerships. When we refer to “Same Store” properties, we are referring to properties that have been owned for the full periods presented and exclude properties acquired, disposed of, under redevelopment or designated as a non-core property during the periods presented. “Core Malls” excludes Exton Square Mall and Valley View Mall as well as power centers, and Cumberland Mall and our interest in Gloucester Premium Outlets, which were both sold in 2022.

We have one property in our portfolio that is classified as under development; however, we do not currently have any activity occurring at this property.

We are a fully integrated, self-managed and self-administered REIT that has elected to be treated as a REIT for federal income tax purposes. In general, we are required each year to distribute to our shareholders at least 90% of our net taxable income and to meet certain other requirements in order to maintain the favorable tax treatment associated with qualifying as a REIT.

Our primary business is owning, operating and redeveloping shopping malls, which we do primarily through our operating partnership, PREIT Associates, L.P. (“PREIT Associates” or the “Operating Partnership”). We believe our distinctive real estate is at the forefront of enabling communities to flourish through the built environment by providing opportunities to create vibrant multi-use destinations. In general, our malls include carefully curated retail and lifestyle offerings, including national and regional department stores, large format retailers and other anchors, mixed with destination dining and entertainment experiences. In recent years, we have increased the portion of our mall properties that are leased to non-traditional mall tenants, including life sciences, healthcare, supermarkets and self-storage facilities.

We provide management, leasing and real estate development services through PREIT Services, LLC (“PREIT Services”), which generally develops and manages properties that we consolidate for financial reporting purposes, and PREIT-RUBIN, Inc. (“PRI”), which generally develops and manages properties that we do not consolidate for financial reporting purposes, including properties owned by partnerships in which we own an interest, and properties that are owned by third parties in which we do not have an interest. PRI is a taxable REIT subsidiary, as defined by federal tax laws, which means that it is able to offer additional services to tenants without jeopardizing our continuing qualification as a REIT under federal tax law.

Our revenue consists primarily of fixed rental income, additional rent in the form of expense reimbursements, and percentage rent (rent that is based on a percentage of our tenants’ sales or a percentage of sales in excess of thresholds that are specified in the leases) derived from our income producing properties. We also receive income from our real estate partnership investments and from the management and leasing services PRI provides.

Our net loss for the three months ended March 31, 2023, was $45.7 million compared to net loss of $33.0 million for the three months ended March 31, 2022. The $12.7 million increase in net loss was primarily due to: (a) an increase in interest expense of $9.7 million; (b) a decrease in real estate revenue of $2.1 million; (c) an increase in loss of partnerships of $2.3 million; and (d) a decrease in gain on sale of preferred equity interest of $3.7 million; partially offset by, (e) a decrease in operating expenses of $5.0 million.

We evaluate operating results and allocate resources on a property-by-property basis, and do not distinguish or evaluate our consolidated operations on a geographic basis. Due to the nature of our operating properties, which involve retail shopping, dining and entertainment, we have concluded that our individual properties have similar economic characteristics and meet all other aggregation criteria. Accordingly, we have aggregated our individual properties into one reportable segment. In addition, no single tenant accounts for 10% or more of our consolidated revenue, and none of our properties are located outside the United States.

We hold our interest in our portfolio of properties through the Operating Partnership. We are the sole general partner of the Operating Partnership and, as of March 31, 2023, held a 98.7% controlling interest in the Operating Partnership, and consolidated it for reporting

19

purposes. We hold our investments in six of the 22 operating retail properties and the one development property in our portfolio through unconsolidated partnerships with third parties in which we own a 40% to 50% interest.

Dispositions

See Note 2 to our consolidated financial statements for a description of our dispositions for the three months ended March 31, 2023 and 2022.

Current Economic and Industry Conditions

Conditions in the economy have caused fluctuations and variations in business and consumer confidence, retail sales, and consumer spending on retail goods, destination dining and entertainment. In particular, current conditions in the economy have caused fluctuations in unemployment rates, and together with supply chain challenges, the current inflationary environment, overall economic uncertainty and the potential for recession, have impacted consumer confidence and spending. The economic factors have had corresponding effects on tenant business performance, prospects, solvency and leasing decisions. Further, traditional mall tenants, including department store anchors and smaller format retail tenants face significant challenges resulting from changing consumer expectations, the convenience of e-commerce shopping, the expansion of outlet centers, and declining mall traffic, among other factors. In recent years, there has been an increased level of tenant bankruptcies and store closings by tenants who have been significantly impacted by these factors. We anticipate that our future business, financial condition, liquidity and results of operations, will continue to be materially impacted by these conditions, and more recently by inflationary pressures and substantial increases in interest rates.

The table below sets forth information related to our tenants in bankruptcy for our consolidated and unconsolidated properties (excluding tenants in bankruptcy at sold properties):

	Pre-bankruptcy								Units Closed
Year	Number of Tenants (1)		Number of locations impacted		GLA(2)		PREIT’s Share of Annualized Gross Rent(3) (in thousands)		Number of locations closed		GLA(2)		PREIT’s Share of Annualized Gross Rent(3) (in thousands)
2023 (through March 31, 2023)
Consolidated properties		3		3		24,413	$	1,391		1		3,913	$	527
Unconsolidated properties		1		2		22,071		278		—		—		—
Total		3		5		46,484	$	1,669		1		3,913	$	527
2022 (Full Year)
Consolidated properties		2		4		169,790	$	4,151		1		5,100	$	202
Unconsolidated properties		—		—		—		—		—		—		—
Total		2		4		169,790	$	4,151		1		5,100	$	202

(1) Total represents unique tenants and includes both tenant-owned and landlord-owned stores. As a result, amounts may not total.

(2) Gross leasable area (“GLA”) in square feet.

(3) 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, 2023.

Anchor Replacements

In recent years, through property dispositions, proactive store recaptures, lease terminations and other activities, we have made efforts to reduce our risks associated with certain department store concentrations.

Construction was completed in the first quarter of 2020 at a former Sears space at Dartmouth Mall in North Dartmouth, Massachusetts. We expect to continue to move forward with several outparcels at Dartmouth Mall resulting from the Sears recapture and to work with large format prospects for the additional space adjacent to already occupied spaces.

Sears closed its stores at Moorestown Mall in Moorestown, New Jersey and Jacksonville Mall in Jacksonville, North Carolina in April 2020. Sears continues to be financially obligated pursuant to the lease at the Jacksonville Mall location. In July 2021, the former Sears site at Moorestown Mall was sold to Cooper University Health Care. Sears at Francis Scott Key Mall closed in 2023 and Sears remains financially obligated for this space and has plans to repurpose the building.

In May 2020, J.C. Penney filed for bankruptcy and announced the closure of its stores at The Mall at Prince George's in Hyattsville, Maryland, and Magnolia Mall in Florence, South Carolina. The Magnolia Mall location has been leased to Tilt Studio, an entertainment concept that opened in October 2021. The former J.C. Penney location at Willow Grow Park has been leased to Tilted 10, which partially opened in March 2023 and is expected to fully open in 2023.

20

In response to anchor store closings and other trends in the retail space, we have been changing the mix of tenants at our properties. In general, our malls include national and regional department stores, large format retailers and other anchors, mixed with destination dining and entertainment experiences, however, in recent years, we have been reducing the percentage of traditional mall tenants and increasing the share of space dedicated to non-traditional mall tenants. Approximately 27.3% of our mall space is committed to non-traditional tenants offering services such as dining and entertainment, health and wellness, off-price retail and fast fashion. See “— Capital Improvements, Redevelopment and Development Projects.”

To fund the capital necessary to replace anchors and to maintain a reasonable level of leverage, we expect to use a variety of means available to us, subject to and in accordance with the terms of our Credit Agreements. These steps might include (i) making additional borrowings under our Credit Agreements (assuming availability and continued compliance with the financial covenants thereunder), (ii) obtaining construction loans on specific projects, (iii) selling properties or interests in properties with values in excess of their mortgage loans (if applicable) and applying the excess proceeds to fund capital expenditures or for debt reduction, or (iv) obtaining capital from joint ventures or other partnerships or arrangements involving our contribution of assets with institutional investors, private equity investors or other REITs.

Capital Improvements, Redevelopment and Development Projects

We might engage in various types of capital improvement projects at our operating properties. Such projects vary in cost and complexity and can include building out new or existing space for individual tenants, upgrading common areas or exterior areas such as parking lots, or redeveloping the entire property, among other projects. Project costs are accumulated in “Construction in progress” on our consolidated balance sheet until the asset is placed into service and amounted to $43.1 million as of March 31, 2023.

As of March 31, 2023, we had contractual and other commitments related to our capital improvement projects and development projects at our consolidated and unconsolidated properties of $3.9 million, including $0.4 million of commitments related to the redevelopment of Fashion District Philadelphia, in the form of contracts with general service providers and other professional service providers.

In 2014, we entered into a 50/50 joint venture with The Macerich Company ("Macerich") to redevelop Fashion District Philadelphia.

In January 2018, the Company and Macerich entered into a $250.0 million term loan (as amended in July 2019 to increase the total maximum potential borrowings to $350.0 million) to fund the ongoing redevelopment of Fashion District Philadelphia and to repay capital contributions to the venture previously made by the partners. A total of $51.0 million was drawn during the third quarter of 2019 and we received aggregate distributions of $25.0 million as our share of the draws. On December 10, 2020, PM Gallery LP, together with certain other subsidiaries owned indirectly by us and Macerich (including the fee and leasehold owners of the properties that are part of the Fashion District Philadelphia project), entered into an Amended and Restated Term Loan Agreement (the “FDP Loan Agreement”). In connection with the execution of the FDP Loan Agreement, a $100.0 million principal payment was made (and funded indirectly by Macerich, the “Partnership Loan”) to pay down the existing loan, reducing the outstanding principal under the FDP Loan Agreement from $301.0 million to $201.0 million. The joint venture must repay the Partnership Loan plus 15% accrued interest to Macerich, in its capacity as the lender, prior to the resumption of 50/50 cash distributions to us and Macerich. In connection with the execution of the FDP Loan Agreement, the governing structure of PM Gallery LP was modified such that, effective as of January 1, 2021, Macerich is responsible for the entity’s operations and, subject to limited exceptions, controls major decisions. The Company considered the changes to the governing structure of PM Gallery LP and determined the investment qualifies as a variable interest entity and would continue to be accounted for under the equity method of accounting.

The FDP Loan Agreement provides for (i) a maturity date of January 22, 2024, (after exercising the one-year extension upon the borrowers’ satisfaction of certain conditions), (ii) an interest rate at the borrowers’ option with respect to each advance of either (A) the Base Rate (defined as the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50%, and (c) the LIBOR Market Index Rate plus 1.00%) plus 2.50% or (B) LIBOR for the applicable period plus 3.50%, (iii) a full recourse guarantee of 50% of the borrowers’ obligations by PREIT Associates, L.P., on a several basis, (iv) a full recourse guarantee of certain of the borrowers’ obligations by The Macerich Partnership, L.P., up to a maximum of $50.0 million, on a several basis, (v) a pledge of the equity interests of certain indirect subsidiaries of PREIT and Macerich, as well as of PREIT-RUBIN, Inc. and one of its subsidiaries, that have a direct or indirect ownership interest in the borrowers, (vi) a non-recourse carve-out guaranty and a hazardous materials indemnity by each of PREIT Associates, L.P. and The Macerich Partnership, L.P., and (vii) mortgages of the borrowers’ fee and leasehold interests in the properties that are part of the Fashion District Philadelphia project and certain other properties. In January 2023, the FDP Loan Agreement was amended to replace the interest rate benchmark from LIBOR to SOFR. The Base Rate is defined as the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus one half (0.50%) and (c) Adjusted Term SOFR for a one-month tenor plus one percent (1.00%). The FDP Loan Agreement contains certain covenants typical for loans of its type. In 2022, the joint venture made multiple paydowns on the FDP Loan Agreement balance by $90.2 million in order to comply with the financial covenants. In January 2023, the joint venture paid down an additional $26.1 million of the FDP Loan Agreement balance as part of the option that it exercised to extend the FDP Loan Agreement maturity date to January 22, 2024. If the joint venture fails to meet the debt yield covenant as of any quarter end measurement date and does not pay down the term loan to achieve compliance, the term loan could become due and payable at that time.

We also own an interest in a development property, but we do not expect to make any significant investment at this property in the short term.

21

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Critical Accounting Policies are those that require the application of management’s most difficult, subjective, or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that might change in subsequent periods. In preparing the unaudited consolidated financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. In preparing the unaudited consolidated financial statements, management has utilized available information, including our past history, industry standards and the current economic environment, among other factors, in forming its estimates and judgments, giving due consideration to materiality. Management has also considered events and changes in property, market and economic conditions, estimated future cash flows from property operations and the risk of loss on specific accounts or amounts in determining its estimates and judgments. Actual results may differ from these estimates. In addition, other companies may utilize different estimates, which may affect comparability of our results of operations to those of companies in a similar business. The estimates and assumptions made by management in applying critical accounting policies have not changed materially during 2023 and 2022, except as otherwise noted, and none of these estimates or assumptions have proven to be materially incorrect or resulted in our recording any significant adjustments relating to prior periods. We will continue to monitor the key factors underlying our estimates and judgments, but no change is currently expected.

For additional information regarding our Critical Accounting Policies, see “Critical Accounting Policies and Estimates” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022.

22

Asset Impairment

Real estate investments and related intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the property might not be recoverable, which is referred to as a triggering event. A property to be held and used is considered impaired only if management’s estimate of the aggregate future cash flows, less estimated capital expenditures, to be generated by the property, undiscounted and without interest charges, are less than the carrying value of the property. This estimate takes into consideration factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors.

If there is a triggering event in relation to a property to be held and used, we will estimate the aggregate future cash flows, less estimated capital expenditures, to be generated by the property, undiscounted and without interest charges. In addition, this estimate may consider a probability weighted cash flow estimation approach when alternative courses of action to recover the carrying amount of a long-lived asset are under consideration or when a range of possible values is estimated.

The determination of undiscounted cash flows requires significant estimates by management, including the expected course of action at the balance sheet date that would lead to such cash flows. Subsequent changes in estimated undiscounted cash flows arising from changes in the anticipated action to be taken with respect to the property could impact the determination of whether an impairment exists and whether the effects could materially affect our net income. To the extent estimated undiscounted cash flows are less than the carrying value of the property, the loss will be measured as the excess of the carrying amount of the property over the estimated fair value of the property. Our intent is to hold and operate our properties long-term, which reduces the likelihood that our carrying value is not recoverable. A shortened holding period would increase the likelihood that the carrying value is not recoverable.

Assessment of our ability to recover certain lease related costs must be made when we have a reason to believe that the tenant might not be able to perform under the terms of the lease as originally expected. This requires us to make estimates as to the recoverability of such costs.

An other-than-temporary impairment of an investment in an unconsolidated joint venture is recognized when the carrying value of the investment is not considered recoverable based on evaluation of the severity and duration of the decline in value. To the extent impairment has occurred, the excess carrying value of the asset over its estimated fair value is recorded as reduction to income.

During the three months ended March 31, 2023 and 2022, there were no impairment losses.

Revenue and Receivables

We derive over 98% of our revenue from tenant rent and other tenant-related activities. Tenant rent includes base rent, percentage rent, expense reimbursements (such as reimbursements of costs of common area maintenance (“CAM”), real estate taxes and utilities), and the amortization of above-market and below-market lease intangibles.

We record base rent on a straight-line basis, which means that the monthly base rent revenue according to the terms of our leases with our tenants is adjusted so that an average monthly rent is recorded for each tenant over the term of its lease, provided that it is probable that we will collect substantially all of the lease revenue that is due under the terms of the lease both at inception and on an ongoing basis. When collectability of lease revenue is not probable, leases are prospectively accounted for on a cash basis and any difference between the revenue that has been accrued and the cash collected from the tenant over the life of the lease is recognized as a current period adjustment to lease revenue. We review the collectability of our tenant receivables related to tenant rent including base rent, straight-line rent, expense reimbursements and other revenue or income by specifically analyzing billed and unbilled revenues, including straight-line rent receivable, and considering historical collection issues, tenant creditworthiness and current economic and industry trends. Our revenue recognition and receivables collectability analysis places particular emphasis on past-due accounts and considers the nature and age of the receivables, the payment history and financial condition of the payor, the basis for any disputes or negotiations with the payor, and other information that could affect collectability.

When tenants vacate prior to the end of their lease, we accelerate amortization of any related unamortized straight-line rent balances, and unamortized above-market and below-market intangible balances are amortized as a decrease or increase to real estate revenue, respectively.

Percentage rent represents rental revenue that the tenant pays based on a percentage of its sales, either as a percentage of its total sales or as a percentage of sales over a certain threshold. In the latter case, we do not record percentage rent until the sales threshold has been reached.

Revenue for rent received from tenants prior to their due dates is deferred until the period to which the rent applies.

In addition to base rent, certain lease agreements contain provisions that require tenants to reimburse a fixed or pro rata share of certain CAM costs, real estate taxes and utilities. Tenants generally make monthly expense reimbursement payments based on a budgeted amount determined at the beginning of the year.

Certain lease agreements contain co-tenancy clauses that can change the amount of rent or the type of rent that tenants are required to pay, or, in some cases, can allow the tenant to terminate their lease, in the event that certain events take place, such as a decline in property occupancy levels below certain defined levels or the vacating of an anchor store. Co-tenancy clauses do not generally have any retroactive effect when they are triggered. The effect of co-tenancy clauses is applied on a prospective basis to recognize the new rent that is in effect.

23

Payments made to tenants as inducements to enter into a lease are treated as deferred costs that are amortized as a reduction of rental revenue over the term of the related lease.

Lease termination fee revenue is recognized in the period when a termination agreement is signed, collectability is assured, and the tenant has vacated the space. In the event that a tenant is in bankruptcy when the termination agreement is signed, termination fee income is deferred and recognized when it is received.

Utility reimbursement revenue is presented separate from rental revenue based on actual usage as the pattern of transfer is not aligned with the use of the property.

Other real estate revenue includes income generated from seasonal events at our properties, partnership promotional initiatives, miscellaneous services to tenants and solar revenue.

We also generate revenue by providing management services to third parties, including property management, brokerage, leasing and development. Management fees generally are a percentage of managed property revenue or cash receipts. Leasing fees are earned upon the consummation of new leases. Development fees are earned over the time period of the development activity and are recognized on the percentage of completion method. These activities are collectively included in “Other income” in the consolidated statements of operations.

Property management revenue from management and development activities is generated through contracts with third party owners of real estate properties or with certain of our joint ventures, and is recorded in other income in the consolidated statements of operations. In the case of management fees, our performance obligations are fulfilled over time as the management services are performed and the associated revenues are recognized on a monthly basis when the customer is billed. In the case of development fees, our performance obligations are fulfilled over time as we perform certain stipulated development activities as set forth in the respective development agreements and the associated revenues are recognized on a monthly basis when the customer is billed.

New Accounting Developments

See Note 1 to our unaudited consolidated financial statements for descriptions of new accounting developments.

RESULTS OF OPERATIONS

Overview

Net loss for the three months ended March 31, 2023, was $45.7 million compared to net loss of $33.0 million for the three months ended March 31, 2022. The $12.7 million increase in net loss was primarily due to: (a) an increase in interest expense of $9.7 million; (b) a decrease in real estate revenue of $2.1 million; (c) an increase in loss of partnerships of $2.3 million; and (d) a decrease in gain on sale of preferred equity interest of $3.7 million; partially offset by, (e) a decrease in operating expenses of $5.0 million.

Occupancy

The table below sets forth certain occupancy statistics for our properties as of March 31, 2023 and 2022:

	Occupancy(1) at March 31,
	Consolidated Properties						Unconsolidated Properties						Combined(2)
	2023			2022			2023			2022			2023			2022
Retail portfolio weighted average (3):
Total excluding anchors		90.7	%		88.3	%		86.9	%		86.7	%		89.7	%		87.8	%
Total including anchors		92.3	%		90.8	%		89.7	%		89.5	%		91.7	%		90.5	%
Core Malls weighted average: (4)
Total excluding anchors		92.9	%		91.0	%		78.1	%		78.8	%		90.1	%		88.6	%
Total including anchors		95.4	%		94.2	%		84.0	%		84.5	%		93.5	%		92.6	%

(1) Occupancy for all periods presented includes all tenants irrespective of the term of their agreement.

(2) Combined occupancy is calculated by using occupied GLA for consolidated and unconsolidated properties and dividing by total GLA for consolidated and unconsolidated properties.

(3) Retail portfolio includes all retail properties including Fashion District Philadelphia.

(4) Core Malls excludes Exton Square Mall, Valley View Mall, Cumberland Mall, Gloucester Premium Outlets and power centers.

24

Leasing Activity

The table below sets forth summary leasing activity information with respect to our consolidated and unconsolidated properties for the three months ended March 31, 2023:

	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")		28		55,598		6.0	$	56.99	N/A		N/A			N/A			N/A			$	7.90
Over 10k sf		1		29,909		10.0		26.00	N/A		N/A			N/A			N/A				6.22
Total New Leases		29		85,507		7.4	$	46.15	N/A		N/A			N/A			N/A			$	7.11
Renewal Leases
Under 10k sf		48		127,884		3.0	$	57.01	$	56.47	$	0.54			1.0	%		4.1	%	$	0.32
Over 10k sf		7		111,278		4.8		34.27		31.97		2.30			7.2	%		8.6	%		-
Total Fixed Rent		55		239,162		3.9	$	46.43	$	45.07	$	1.36			3.0	%		5.6	%	$	0.14
Total Percentage in Lieu		28		89,592		2.7		31.31		31.80		(0.49	)		(1.5	%)	N/A				0.42
Total Renewal Leases		83		328,754		3.5	$	42.31	$	41.45	$	0.85			2.1	%	N/A			$	0.19
Total Non Anchor (4)		112		414,261		4.3	$	43.10
Anchor
New Leases		-		-		-	$	-	$	-	$	-		N/A			N/A			$	-
Renewal Leases		1		117,793		1.0		2.05		2.05		-			0.0	%	N/A				-
Total		1		117,793		1.0	$	2.05

(1) Initial gross rent renewal spread is computed by comparing the initial rent per square foot in the new lease to the final rent per square foot 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 per square foot over the new lease term to the final rent per square foot 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) These leasing costs are presented as annualized amounts per square foot and are spread uniformly over the initial lease term.

(4) Includes 17 leases and 64,640 square feet of GLA with respect to our unconsolidated partnerships. We own a 40% 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” for further details on our ownership interests in our unconsolidated properties.

25

The following table sets forth our results of operations for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,						% Change 2022 to 2023
(in thousands of dollars)	2023			2022
Real estate revenue	$	67,174		$	69,194			(2.9	)	%
Property operating expenses		(31,769	)		(33,573	)		(5.4	)	%
Other income		91			241			(62.2	)	%
Depreciation and amortization		(26,369	)		(29,110	)		(9.4	)	%
General and administrative expenses		(11,125	)		(11,483	)		(3.1	)	%
Other (expenses) income		(3	)		(144	)		(97.9	)	%
Interest expense, net		(41,048	)		(31,391	)		30.8		%
Equity in loss of partnerships		(2,696	)		(395	)		582.5		%
Gain on sale of preferred equity interest		—			3,688			(100.0	)	%
Net loss	$	(45,745	)	$	(32,973	)		38.7		%

The amounts in the preceding table reflect our consolidated properties and our unconsolidated properties. Our unconsolidated properties are presented under the equity method of accounting in the line item “Equity in (loss) income of partnerships.”

Real Estate Revenue

We include all rental income earned pursuant to tenant leases under the “Lease revenue” line item in the consolidated statements of operations. Utility reimbursements are presented separately in “Expense reimbursements” as the pattern of transfer is not aligned with the use of the property. We review the collectability of both billed and unbilled lease revenues each reporting period, taking into consideration the tenant’s payment history, credit profile and other factors, including the tenant’s operating performance. For any tenant receivable balance deemed to be uncollectible, we record an offset for credit losses directly to Lease revenue in the consolidated statements of operations.

The following table reports the breakdown of real estate revenues based on the terms of the lease contracts for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
(in thousands of dollars)	2023			2022
Contractual lease payments:
Base rent	$	46,674		$	48,500
CAM reimbursement income		8,183			8,475
Real estate tax income		6,187			7,167
Percentage rent		381			112
Lease termination revenue		188			9
		61,613			64,263
Credit recoveries (losses)		(98	)		20
Lease revenue		61,515			64,283
Expense reimbursements		4,653			4,144
Other real estate revenue		1,006			767
Total real estate revenue	$	67,174		$	69,194

Real Estate Revenue

Real estate revenue decreased by $2.0 million, or 3%, in the three months ended March 31, 2023 compared to the three months ended March 31, 2022, primarily due to:

•a decrease of $2.6 million at Cumberland Mall which was sold on October 31, 2022;

•a decrease of $0.7 million in same store real estate tax reimbursements due to a decrease in real estate tax expense (see “-Property Operating Expenses”) and rental concessions made to some tenants under which the terms of their leases were modified such that they no longer pay expense reimbursements;

•a decrease of $0.1 million in same store common area expense reimbursements due to rental concessions made to some tenants under which the terms of their leases were modified such that they no longer pay expense reimbursements;

•an increase of $0.1 million in same store credit losses due to credit losses in the three months ended March 31, 2022 for struggling tenants across our portfolio; and

•a decrease of $0.1 million at non-same store property Exton Square Mall due to lower occupancy; partially offset by

26

•an increase of $0.7 million in same store utility reimbursements due to a combination of higher tenant electric usage and rates and higher occupancy at some properties;

•an increase of $0.4 million in same store other real estate revenue due to solar incentive revenues and promotional revenues related to activities in the common areas and parking lots;

•an increase of $0.2 million in same store base rent due to increases of $1.1 million from net new store openings and lease modifications over the previous twelve months, partially offset by a decrease of $0.9 million from comparable tenants paying a percentage of sales in lieu of minimum rent; and

•an increase of $0.1 million in same store percentage rent.

Property Operating Expenses

Property operating expenses decreased by $1.8 million, or 5%, in the three months ended March 31, 2023 compared to the three months ended March 31, 2022, primarily due to:

•a decrease of $1.4 million at Cumberland Mall which was sold on October 31, 2022;

•a decrease of $0.5 million in same store real estate tax expense due to a combination of decreases in the real estate tax assessment value and the real estate tax rate at two properties; and

•a decrease of $0.1 million at non-same store property, Exton Square Mall; partially offset by

•an increase of $0.1 million in same store common area maintenance expense, including a $0.3 million increase in security expense, a $0.3 million increase in repairs and maintenance, a $0.2 million increase in cleaning expense, a $0.1 million increase in utility expense and a $0.1 million increase in insurance expense, partially offset by a $0.9 million decrease in snow removal expense due to higher snowfall amounts during 2022 across the Mid-Atlantic States; and

•an increase of $0.1 million in same store other property operating expenses due to an increase in property legal expense.

Depreciation and Amortization

Depreciation and amortization expense decreased by $2.7 million, or 9%, in the three months ended March 31, 2023 compared to the three months ended March 31, 2022, primarily due to:

•a decrease of $0.8 million at Cumberland Mall which was sold on October 31, 2022;

•a decrease of $0.8 million at Plymouth Meeting Mall due to a lower asset base resulting from impairment charges during 2022;

•a decrease of $0.7 million resulting from a lower asset base resulting from parcel sales at four properties in 2022 and accelerated amortization of capital improvements associated with store closings during 2022; and

•a decrease of $0.4 million at non-same store property, Exton Square Mall.

General and Administrative Expenses

General and administrative expenses decreased by $0.4 million, or 3.1%, in the three months ended March 31, 2023 compared to the three months ended March 31, 2022 primarily due to lower incentive compensation expenses in 2023 partially offset by higher professional fees in 2023.

Interest Expense

Interest expense increased by $9.7 million, or 30.8%, in the three months ended March 31, 2023 compared to the three months ended three months ended March 31, 2022. This increase was primarily due to higher weighted average interest rates. Our weighted average effective borrowing rate was 8.72% for the three months ended March 31, 2023 compared to 5.90% for the three months ended March 31, 2022. Our weighted average debt balance was $1,747.7 million for the March 31, 2023, compared to $1,873.4 million for the three months ended March 31, 2022.

Impairment of Assets

For the three months ended March 31, 2023 and 2022, there were no impairment losses.

Equity in Loss of Partnerships

Equity in loss of partnerships was a loss of $2.7 million in the three months ended March 31, 2023 compared to a loss of $0.4 million for the three months ended March 31, 2022, reflecting an increase of $2.3 million, or 583%. The increase in loss was primarily due to higher interest expense offset by lower operating and depreciation and amortization expense.

27

Gain on Sale of Preferred Equity Interest

During the three months ended March 31, 2023 there was no gain on sale of preferred equity interest. During the three months ended March 31, 2022, there was a $3.7 million gain on sale of preferred equity interest in a property that we received in exchange for the sale of a property we previously owned.

NON-GAAP SUPPLEMENTAL FINANCIAL MEASURES

Overview

The preceding discussion analyzes our financial condition and results of operations in accordance with generally accepted accounting principles, or GAAP, for the periods presented. We also use Net Operating Income (“NOI”) and Funds from Operations (“FFO”) which are non-GAAP financial measures, to supplement our analysis and discussion of our operating performance:

•We believe that 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. When we use and present NOI, we also do so on a same store (“Same Store NOI”) and non-same store (“Non Same Store NOI”) basis to differentiate between properties that we have owned for the full periods presented and properties acquired, sold or under redevelopment during those periods. Furthermore, our use and presentation of NOI combines NOI from our consolidated properties and NOI attributable to our share of unconsolidated properties in order to arrive at total NOI. We believe that this is also helpful information because it reflects the pro rata contribution from our unconsolidated properties that are owned through investments accounted for under GAAP as equity in income of partnerships. See “Unconsolidated Properties and Proportionate Financial Information” below.

•We believe that FFO is also helpful to management and investors as a measure of operating performance because it excludes various items included in net loss that do not relate to or are not indicative of operating performance, such as gains on sales of operating real estate and depreciation and amortization of real estate, among others. In addition to FFO and FFO per diluted share and OP Unit, when applicable, we also present FFO, as adjusted and FFO per diluted share and OP Unit, as adjusted, which we believe is helpful to management and investors because they adjust FFO to exclude items that management does not believe are indicative of operating performance, such as gain on debt extinguishment and insurance recoveries.

•We use both NOI and FFO, or related terms like Same Store NOI and, when applicable, Funds From Operations, as adjusted, for determining incentive compensation amounts under certain of our performance-based executive compensation programs.

NOI and FFO are commonly used non-GAAP financial measures of operating performance in the real estate industry, and we use them as supplemental non-GAAP measures to compare our performance between different periods and to compare our performance to that of our industry peers. Our computation of NOI, FFO and other non-GAAP financial measures, such as Same Store NOI, Non Same Store NOI, NOI attributable to our share of unconsolidated properties, and FFO, as adjusted, may not be comparable to other similarly titled measures used by our industry peers. None of these measures are measures of performance in accordance with GAAP, and they have limitations as analytical tools. They should not be considered as alternative measures of our net loss, operating performance, cash flow or liquidity. They are not indicative of funds available for our cash needs, including our ability to make cash distributions. Please see below for a discussion of these non-GAAP measures and their respective reconciliation to the most directly comparable GAAP measure.

Unconsolidated Properties and Proportionate Financial Information

The non-GAAP financial measures presented below incorporate financial information attributable to our share of unconsolidated properties. This proportionate financial information is non-GAAP financial information, but we believe that it is helpful information because it reflects the pro rata contribution from our unconsolidated properties that are owned through investments accounted for under GAAP using the equity method of accounting. Under such method, earnings from these unconsolidated partnerships are recorded in our statements of operations prepared in accordance with GAAP under the caption entitled “Equity in (loss) income of partnerships.”

To derive the proportionate financial information reflected in the tables below as “unconsolidated,” we multiplied the percentage of our economic interest in each partnership on a property-by-property basis by each line item. Under the partnership agreements relating to our current unconsolidated partnerships with third parties, we own a 40% to 50% economic interest in such partnerships, and there are generally no provisions in such partnership agreements relating to special non-pro rata allocations of income or loss, and there are no preferred or priority returns of capital or other similar provisions. While this method approximates our indirect economic interest in our pro rata share of the revenue and expenses of our unconsolidated partnerships, we do not have a direct legal claim to the assets, liabilities, revenues or expenses of the unconsolidated partnerships beyond our rights as an equity owner in the event of any liquidation of such entity. Our percentage ownership is not necessarily indicative of the legal and economic implications of our ownership interest. Accordingly, NOI and FFO results based on our share of the results of unconsolidated partnerships do not represent cash generated from our investments in these partnerships.

28

We have determined that we hold a noncontrolling interest in each of our unconsolidated partnerships, and account for such partnerships using the equity method of accounting, because:

•Except for one property that we co-manage with our partner, all of the other entities are managed on a day-to-day basis by one of our other partners as the managing general partner in each of the respective partnerships. In the case of the co-managed property, all decisions in the ordinary course of business are made jointly.

•The managing general partner is responsible for establishing the operating and capital decisions of the partnership, including budgets, in the ordinary course of business.

•All major decisions of each partnership, such as the sale, refinancing, expansion or rehabilitation of the property, require the approval of all partners.

•Voting rights and the sharing of profits and losses are generally in proportion to the ownership percentages of each partner.

We hold legal title to a property owned by one of our unconsolidated partnerships through a tenancy in common arrangement. For this property, such legal title is held by us and another entity, and each has an undivided interest in title to the property. With respect to this property, under the applicable agreements between us and the entity with ownership interests, we and such other entity have joint control because decisions regarding matters such as the sale, refinancing, expansion or rehabilitation of the property require the approval of both us and the other entity owning an interest in the property. Hence, we account for this property like our other unconsolidated partnerships using the equity method of accounting. The balance sheet items arising from this property appear under the caption “Investments in partnerships, at equity.”

For further information regarding our unconsolidated partnerships, see note 3 to our unaudited consolidated financial statements.

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, other expenses (which includes provision for employee separation expense and project costs), interest expense, net, equity in loss/income of partnerships, gain/loss on sales of real estate, and gain/loss on sale of preferred equity interest.

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

The table below reconciles net loss to NOI of our consolidated properties for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
(in thousands of dollars)	2023			2022
Net loss	$	(45,745	)	$	(32,973	)
Other income		(91	)		(241	)
Depreciation and amortization		26,369			29,110
General and administrative expenses		11,125			11,483
Other expenses		3			144
Interest expense, net		41,048			31,391
Equity in loss of partnerships		2,696			395
Gain on sale of preferred equity interest		—			(3,688	)
NOI from consolidated properties	$	35,405		$	35,621

29

The table below reconciles equity in (loss) income of partnerships to NOI of our share of unconsolidated properties for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
(in thousands of dollars)	2023			2022
Equity in loss of partnerships	$	(2,696	)	$	(395	)
Depreciation and amortization		2,845			3,022
Interest and other expenses		8,381			5,802
Loss on project cost by equity method investee		288			—
NOI from equity method investments at ownership share	$	8,818		$	8,429

The table below presents total NOI and total NOI excluding lease termination revenue for the three months ended March 31, 2023 and 2022:

	Same Store				Non Same Store					Total (non-GAAP)
(in thousands of dollars)	2023		2022		2023			2022		2023		2022
NOI from consolidated properties	$	35,840	$	34,831	$	(435	)	$	790	$	35,405	$	35,621
NOI from equity method investments at ownership share		8,746		7,827		72			601		8,818		8,428
Total NOI		44,586		42,658		(363	)		1,391		44,223		44,049
Less: lease termination revenue		338		793		—			8		338		801
Total NOI excluding lease termination revenue	$	44,248	$	41,865	$	(363	)	$	1,383	$	43,885	$	43,248

Total NOI increased by $0.2 million in the three months ended March 31, 2023 compared to the three months ended March 31, 2022 due to (a) a $1.9 million increase in Same Store NOI and (b) a decrease of $1.7 million in Non Same Store NOI. The increase in Same Store NOI and decrease in Non Same Store NOI is primarily due the reasons described in “— Real Estate Revenue” and “— Property Operating Expenses.”

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 have used it 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, 2023 and 2022, to show the effect of such items as provision for employee separation expense, insurance recoveries or losses, net, and gain on sale of preferred equity interest which had an effect on our results of operations, but are not, in our opinion, indicative of our ongoing operating performance.

We believe that FFO is helpful to management and investors as a measure of operating performance because it excludes various items included in net loss that do not relate to or are not indicative of operating performance, such as gains on sales of operating real estate and depreciation and amortization of real estate, among others. We believe that Funds From Operations, as adjusted, is helpful to management and investors as a

30

measure of operating performance because it adjusts FFO to exclude items that management does not believe are indicative of our operating performance, such as provision for employee separation expense, gain on hedge ineffectiveness and reorganization expenses.

The following table presents a reconciliation of net loss determined in accordance with GAAP to FFO attributable to common shareholders and OP Unit holders, FFO attributable to common shareholders and OP Unit holders per diluted share and OP Unit, FFO attributable to common shareholders and OP Unit holders, as adjusted and FFO attributable to common shareholders and OP Unit holders, as adjusted per diluted share and OP Unit, for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
(in thousands, except per share amounts)	2023			2022
Net loss	$	(45,745	)	$	(32,973	)
Depreciation and amortization on real estate:
Consolidated properties		26,175			28,798
PREIT’s share of equity method investments		2,845			3,022
Loss on project costs by equity method investee		288			—
Funds from operations attributable to common shareholders and OP Unit holders		(16,437	)		(1,153	)
Provision for employee separation expense		5			84
Gain on sale of preferred equity interest		—			(3,688	)
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders	$	(16,432	)	$	(4,757	)
Funds from operations attributable to common shareholders and OP Unit holders per diluted share and OP Unit (1)	$	(3.05	)	$	(0.21	)
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders per diluted share and OP Unit (1)	$	(3.05	)	$	(0.89	)
Weighted average number of shares outstanding		5,324			5,305
Weighted average effect of full conversion of OP Units		68			69
Effect of common share equivalents		—			—
Total weighted average shares outstanding, including OP Units		5,392			5,374

(1) Does not include the impact of $6.8 million, undeclared and unpaid preferred share dividends for the three months ended March 31, 2023 and 2022, respectively. The Company cannot declare and pay cash dividends on common shares while there exists a preferred dividend arrearage.

FFO attributable to common shareholders and OP Unit holders was a loss of $16.4 million for the three months ended March 31, 2023, a decrease of $15.2 million, or 1,325.6%, compared to a loss of $1.2 million for the three months ended March 31, 2022.

This change was primarily due to:

•a $12.2 million increase in interest expense which was due to higher debt and weighted average interest rates; and

•a $3.7 million decrease in gain on sale of preferred equity interest.

FFO attributable to common shareholders and OP Unit holders per diluted share and OP Unit was $(3.05) and $(0.21) for the three months ended March 31, 2023 and 2022, respectively.

FFO, as adjusted, attributable to common shareholders and OP Unit holders per diluted share and OP Unit was $(3.05) and $(0.89) for the three months ended March 31, 2023 and 2022, respectively.

LIQUIDITY AND CAPITAL RESOURCES

This “Liquidity and Capital Resources” section contains certain “forward-looking statements” that relate to expectations and projections that are not historical facts. These forward-looking statements reflect our current views about our future liquidity and capital resources, and are subject to risks and uncertainties that might cause our actual liquidity and capital resources to differ materially from the forward-looking statements. Additional factors that might affect our liquidity and capital resources include those discussed herein and in the section entitled “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC. We do not intend to update or revise any forward-looking statements about our liquidity and capital resources to reflect new information, future events or otherwise.

Capital Resources

We currently expect to meet certain of our liquidity requirements, including operating expenses, recurring capital expenditures, tenant improvements and leasing commissions, generally through our available working capital and our First Lien Revolving Facility, which matures in 2023 and otherwise subject to the terms and conditions of our First Lien Credit Agreement. See “Credit Agreements—Similar terms of the Credit Agreements” below for covenant information. As discussed below, our loans under our Credit Agreements mature and come due in December 2023, the FDP Term Loan (our 50% share of which we have guaranteed) matures and comes due in January 2024, and mortgages

31

secured by three of our properties are due in 2023, and we do not have, nor do we expect to have sufficient cash flow to repay this indebtedness at maturity. We are working to address the upcoming maturity of our credit facilities by pursuing all available alternatives, including refinancing, selling assets and engaging in discussions with lenders, but no assurance can be provided that we will be able to refinance or repay the indebtedness at maturity.

We expect to spend approximately $3.9 million related to our capital improvements and development projects in 2023. We believe that our net cash provided by operations will be sufficient to allow us to make any distributions necessary to enable us to continue to qualify as a REIT under the Internal Revenue Code of 1986, as amended. Our Credit Agreements limit our ability to declare and pay dividends on our common and preferred shares, subject to certain exceptions. We have deferred payments on our preferred shares and suspended payments on our common shares since the third quarter of 2020. Other than as may be required to maintain our status as a REIT, we do not anticipate that we will pay any cash dividends to holders of our common or preferred shares for the foreseeable future.

As a result of the existing cumulative unpaid dividends on our preferred shares and our bankruptcy filing, we are no longer able to register the offer and sale of securities on Form S-3. This creates additional limitations on our ability to raise capital in the capital markets, potentially increasing our costs of raising capital in the future. Our ability to raise capital in the capital markets may also be impacted by market fluctuations more generally, and general economic conditions.

As of March 31, 2023, our capital raised includes cash proceeds of $26.3 million from our share of assets sold by us and our unconsolidated subsidiaries, and through our operations, we generated $18.5 million.

We have availability under our revolving facility of $107.5 million as of March 31, 2023. We have been focused on improving operational efficiency and driving stable and increasing cash flows from operations while advancing our portfolio, including by undertaking, with the assistance of outside advisors, a thorough review of our business and capital structure and evaluating a wide range of opportunities to further strengthen our balance sheet and financial flexibility. We are actively seeking to raise additional capital, including through asset dispositions identified through our portfolio property reviews. Disposing of these properties can enable us to redeploy or recycle our capital to other uses. In many cases, we are marketing land parcels for development for a variety of different nontraditional, non-retail uses, including hotel, multifamily residential and healthcare uses, which we believe can also help position our portfolio within differentiated mixed-use environments. We have executed agreements of sale for various land parcels across multiple properties. The proceeds from our anticipated property sales pursuant to these sale agreements will primarily be used to repay amounts outstanding under our Credit Agreements. We are also in various stages of negotiations for the sale of land parcels for multifamily residential development, and the sale of land parcels for hotel development. Each of these transactions is subject to numerous closing conditions, including the completion of due diligence and securing of entitlements, which in most cases requires zoning variances and similar approvals. The closing of these transactions and the timing of completion cannot be estimated with certainty, in particular not all transactions are expected to close in 2023, and certain of them are expected to extend into 2024 or later.

The following are some of the factors that could affect our cash flows and require the funding of future cash distributions, recurring capital expenditures, tenant improvements or leasing commissions with sources other than operating cash flows:

•adverse changes or prolonged downturns in general, local or retail industry economic, financial, credit or capital market or competitive conditions, inflationary pressures including increased interest rates or otherwise, leading to a reduction in real estate revenue or cash flows or an increase in expenses;

•continued deterioration in our tenants’ business operations and financial stability, which were exacerbated by the extended impacts of the COVID-19 pandemic and may be further impacted by overall economic conditions, weak consumer confidence and the possibility of recession, including anchor or non-anchor tenant bankruptcies, leasing delays or terminations, or lower sales, causing deferrals or declines in rent, percentage rent and cash flows;

•inability to achieve targets for, or decreases in, property occupancy and rental rates, resulting in lower or delayed real estate revenue and operating income;

•costs associated with negotiating and implementing asset dispositions, particularly if delays are experienced or agreements are terminated and new transactions must be pursued;

•increases in operating costs, including increases that cannot be passed on to tenants, resulting in reduced operating income and cash flows; and

•increases in interest rates, resulting in higher borrowing costs.

In addition, we monitored the COVID-19 pandemic and changes to behavior intended to reduce its spread, and its impact on our tenants, their supply chains and customers and the retail industry. The pandemic and the actions taken to address it and the related overall worsening of economic conditions had an adverse effect on our business, operations, liquidity, financial condition and results of operations in 2020 and 2021. While we continue to record rental revenue, our collection levels that unfavorably impacted our liquidity position have begun to see improvements. The extent and duration of such effects are uncertain, continuously changing and difficult to predict.

32

LIBOR Alternative

In July 2017, the Financial Conduct Authority (“FCA”), which is the authority that regulates LIBOR, announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. The Alternative Reference Rates Committee (“ARRC”) has identified the Secured Overnight Financing Rate (“SOFR”) as the rate that represents best practice as the alternative to USD-LIBOR for use in derivatives and other financial contracts that are currently indexed to USD-LIBOR. The FCA no longer publishes one-week and two-month U.S. dollar LIBOR rates and plans to cease publishing all other LIBOR tenors (overnight, one-month, three-month, six-month and 12-month) on June 30, 2023. It is not presently known whether SOFR or any other alternative reference rates will attain broad market acceptance as replacements of LIBOR. There remains uncertainty as to how the financial services industry will address the discontinuance of LIBOR in financial instruments that are indexed to LIBOR. Further, various financial instruments indexed to LIBOR could experience different outcomes based on their contractual terms, ability to amend those terms, market or product type, legal or regulatory jurisdiction, and other factors. Alternative reference rates that replace LIBOR may not yield the same or similar economic results over the lives of the financial instruments, which could adversely affect the value of and return on these instruments.

We have material contracts that are indexed to LIBOR and are monitoring and evaluating the related risks, which include interest on loans or amounts received and paid on derivative instruments. These risks arise in connection with transitioning contracts to a new alternative rate, including any resulting value transfer that may occur. The value of loans, securities, and derivative instruments tied to LIBOR could also be affected if LIBOR is limited or discontinued. For some instruments, the method of transitioning to an alternative rate may be challenging, as they may require negotiation with the respective counterparty. We have transitioned two of our subsidiaries' mortgage agreements to SOFR during 2022. Our Credit Agreements, which represent a significant portion of our debt, include fallback language governing the transition.

If a contract is not transitioned to an alternative rate and LIBOR is discontinued, the impact on our contracts is likely to vary by contract. When LIBOR is phased out and changes implemented, interest rates on our current or future indebtedness may be adversely affected.

While we expect LIBOR to be available in substantially its current form through the middle of 2023, it is possible that LIBOR will become unavailable prior to that point. This could occur, for example, if a requisite number of banks decline to make submissions to the LIBOR administrator. In that case, the risks associated with the transition to an alternative reference rate would be accelerated and magnified.

Credit Agreements

We have entered into two secured credit agreements (collectively, as amended, the “Credit Agreements”): (a) the First Lien Credit Agreement, which, as described in more detail below, includes (i) the $130.0 million First Lien Revolving Facility, and (ii) the $384.5 million First Lien Term Loan Facility, and (b) the Second Lien Credit Agreement, which, as described in more detail below, includes the $535.2 million Second Lien Term Loan Facility. The First Lien Term Loan Facility and the Second Lien Term Loan Facility are collectively referred to as the “Term Loans.” The Credit Agreements refinanced our previously existing credit agreements in effect prior to the effective date, including our secured term loan under the Credit Agreement dated as of August 11, 2020 (as amended, the “Bridge Credit Agreement”), our Seven-Year Term Loan Agreement entered into on January 8, 2014 (as amended, the “7-Year Term Loan”), and our 2018 Amended and Restated Credit Agreement entered into on May 24, 2018 (as amended, the “2018 Credit Agreement”). Capitalized terms used in this section and not otherwise defined in this quarterly report on Form 10-Q have the meanings ascribed to such terms in the applicable Credit Agreement.

As of March 31, 2023, we had borrowed $973.3 million under the Term Loans and $22.5 million under the First Lien Revolving Facility. The carrying value of the Term Loans on our consolidated balance sheet as of March 31, 2023 is net of $1.8 million of unamortized debt issuance costs. The maximum amount that was available to be borrowed by us under the First Lien Revolving Facility as of March 31, 2023 was $107.5 million. In February 2023, we used net proceeds from the sale of a retail parcel at Plymouth Meeting Mall to pay down our First Lien Term Loan Facility by $26.3 million. In April 2023, we borrowed $5.0 million under the First Lien Revolving Facility.

Our obligations under the Credit Agreements are guaranteed by certain of our subsidiaries. Our obligations under the Credit Agreements and the guaranties are secured by mortgages and deeds of trust on a portfolio of 10 of our subsidiaries’ properties, including nine malls and one additional parcel. The obligations are further secured by a lien on substantially all of our personal property pursuant to collateral agreements and a pledge of substantially all of the equity interests held by us and the guarantors, pursuant to pledge agreements, in each case subject to limited exceptions.

In 2022, we exercised our option and satisfied the conditions to extend the maturity date of our Credit Agreements, such that the maturity is now December 10, 2023 (the "Maturity Date"). See Going Concern Considerations section in Note 1 of our consolidated financial statements for further information.

First Lien Credit Agreement

On December 10, 2020, we entered into an Amended and Restated First Lien Credit Agreement (the “First Lien Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo Bank”) and the other financial institutions signatory thereto and their assignees, for secured loan facilities consisting of: (i) a secured first lien revolving credit facility allowing for borrowings up to $130.0 million, including a sub-facility for letters of credit to be issued thereunder in an aggregate stated amount of up to $10.0 million (collectively, the “First Lien Revolving Facility”), and (ii) a $384.5 million secured first lien term loan facility (the “First Lien Term Loan Facility”).

33

Amounts borrowed under the First Lien Credit Agreement may be either Base Rate Loans or LIBOR Loans. Base Rate Loans bear interest at the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) the LIBOR Market Index Rate plus 1.0%, provided that the Base Rate will not be less than 1.50% per annum, in each case plus (w) for revolving loans, 2.50% per annum, and (x) for term loans, 4.74% per annum. LIBOR Loans bear interest at LIBOR plus (y) for revolving loans, 3.50% per annum, and (z) for term loans, 5.74% per annum, in each case, provided that LIBOR will not be less than 0.50% per annum. Interest is due to be paid in cash on the last day of each applicable interest period (with rolling 30-day interest periods) and on the Maturity Date. We must pay certain fees to the administrative agent for the account of the lenders in connection with the First Lien Credit Agreement, including an unused fee for the account of the revolving lenders, which will accrue (i) 0.35% per annum on the daily amount of the unused revolving commitments when that amount is greater than or equal to 50% of the aggregate amount of revolving commitments, and (ii) 0.25% when that amount is less than 50% of the aggregate amount of revolving commitments. Accrued and unpaid unused fees will be payable quarterly in arrears during the term of the First Lien Credit Agreement and on the Revolving Termination Date (or any earlier date of termination of the revolving commitments or reduction of the revolving commitments to zero).

Letters of credit and the proceeds of revolving loans may be used (i) to refinance indebtedness under the Bridge Credit Agreement (which agreement was canceled and refinanced upon our entry into the Credit Agreements), (ii) for working capital and general corporate purposes (subject to certain exceptions set forth in the First Lien Credit Agreement, including limitations on investments in non-Borrowing Base Properties), and (iii) to fund professional fee payments and other fees and expenses subject to the provisions of the Plan and related confirmation order and for other uses permitted by the provisions of the First Lien Credit Agreement, Plan and confirmation order, in each case consistent with an approved annual business plan. The proceeds of term loans were only used to refinance existing indebtedness under the 2018 Credit Agreement and the 7-Year Term Loan. We may terminate or reduce the amount of the revolving commitments at any time and from time to time without penalty or premium, subject to the terms of the First Lien Credit Agreement.

Second Lien Credit Agreement

On December 10, 2020, we also entered into a Second Lien Credit Agreement (the “Second Lien Credit Agreement”) with Wells Fargo Bank and the other financial institutions signatory thereto and their assignees for a $535.2 million secured second lien term loan facility (the “Second Lien Term Loan Facility”).

Amounts borrowed under the Second Lien Credit Agreement may be either Base Rate Loans or LIBOR Loans. Base Rate Loans bear interest at the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) the LIBOR Market Index Rate plus 1.0%, provided that the Base Rate will not be less than 1.50% per annum, in each case plus 7.00% per annum. LIBOR Loans bear interest at LIBOR plus 8.00% per annum, provided that LIBOR will not be less than 0.50% per annum. Interest is due to be paid in kind on the last day of each applicable interest period (with rolling 30-day interest periods) by adding the accrued and unpaid amount thereof to the principal balance of the loans under the Second Lien Credit Agreement and then accruing interest on the increased principal amount (provided that after the discharge of our Senior Debt Obligations, interest will be paid in cash). We must pay certain fees to the administrative agent for the account of the lenders in connection with the Second Lien Credit Agreement.

The proceeds of loans under the Second Lien Credit Agreement were used to refinance existing indebtedness under the 2018 Credit Agreement and the 7-Year Term Loan.

On February 8, 2021, the Company entered into the first amendment to the Second Lien Credit Agreement (“First Amendment”). The First Amendment provided for elimination of approximately $5.3 million of the disputed default interest that was capitalized into the principal balance of the Second Lien Term Loan Facility, reducing the outstanding principal amount of loans outstanding under the Second Lien Credit Agreement, retroactively as of December 10, 2020, to $535.2 million. The First Amendment also eliminated the disputed PIK interest that was capitalized through the date of the amendment.

Wilmington Savings Fund Society, FSB is Administrative Agent under the First Lien Credit Agreement, the Second Lien Credit Agreement and, in each case, the related loan documents. There is currently no letter of credit issuer under the First Lien Revolving Facility, accordingly, we cannot currently access the letters of credit sub-facility.

See our Annual Report on Form 10-K for the year ended December 31, 2022 for additional information on the Credit Agreements.

FDP Loan Agreement

As described in note 3 of our consolidated financial statements and above in Capital Improvements, Redevelopment and Development Projects, PM Gallery LP, a Delaware limited partnership and joint venture entity owned indirectly by us and Macerich, to redevelop Fashion District Philadelphia and entered into the FDP Loan Agreement and the Partnership Loan.

In January 2023, the FDP Loan Agreement was amended to replace the interest rate benchmark from LIBOR to SOFR. The Base Rate is defined as the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus one half (0.50%) and (c) Adjusted Term SOFR for a one-month tenor plus one percent (1.00%). The FDP Loan Agreement contains certain covenants typical for loans of its type. In January 2023, the joint venture paid down an additional $26.1 million of the FDP Loan Agreement balance as part of the option that it exercised to extend the FDP Loan Agreement maturity date to January 22, 2024. As noted above, PREIT Associates L.P. has severally guaranteed its 50% share of the FDP

34

Term Loan (see note 3 to our consolidated financial statements), which had $78.3 million outstanding as of March 31, 2023 (our share of which is $39.2 million). The joint venture has an outstanding balance on its 2020 Partnership Loan of $200.0 million and an outstanding balance on its 2022 Partnership Loan of $46.9 million (of which our total share for both Partnership Loans is $123.5 million) as of March 31, 2023 and the majority of the proceeds from the Partnership Loan were used to pay down the FDP Term Loan since December 2020 and the remainder was used to fund ongoing capital expenditures at the property as well as accrued interest. We monitor the joint venture's cash flow and its ability to meet its debt service requirements and to comply with the financial covenants under the FDP Loan Agreement. If the joint venture were unable to satisfy its obligations under the FDP Term Loan, and we were required to satisfy the payment obligations under the guarantee, we anticipate that we would be able to satisfy such obligation and that these events would have a material impact on our liquidity and available capital resources. There are also circumstances in which a default of the FDP Term Loan could give rise to an event of default under our Credit Agreements.

Preferred Shares

We have 3,450,000 7.375% Series B Cumulative Redeemable Perpetual Preferred Shares (the “Series B Preferred Shares”) outstanding, 6,900,000 7.20% Series C Cumulative Redeemable Perpetual Preferred Shares (the “Series C Preferred Shares”) outstanding and 5,000,000 6.875% Series D Cumulative Redeemable Perpetual Preferred Shares (the “Series D Preferred Shares”) outstanding. Upon 30 days’ notice, we may redeem any or all of the Series B Preferred Shares, Series C Preferred Shares, or Series D Preferred Shares at $25.00 per share plus any accrued and unpaid dividends. The Series B Preferred Shares, the Series C Preferred Shares and the Series D Preferred Shares have no stated maturity, are not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless we redeem or otherwise repurchase them or they are converted.

In 2020, the Company suspended payment of its preferred share dividends. Dividends on the Series B, Series C and Series D preferred shares are cumulative and therefore will continue to accumulate in arrears at an annual rate of $1.8436 per share, $1.80 per share and $1.7188 per share, respectively. As of March 31, 2023, the cumulative amount of unpaid dividends on our issued and outstanding preferred shares totaled $75.3 million. This consisted of unpaid dividends per share on the Series B, Series C and Series D preferred shares of $5.07 per share, $4.95 per share and $4.73 per share, respectively.

Both the First Lien Credit Agreement and the Second Lien Credit Agreement prohibit any redemption of preferred shares so long as such agreements remain in effect.

Mortgage Loan Activity—Consolidated Properties

On April 1, 2023, certain of our consolidated subsidiaries entered into a forbearance agreement as it relates to the mortgage loan secured by the property at Dartmouth Mall in North Dartmouth, Massachusetts. The loan matured on March 31, 2023 and is in default, however, pursuant to the forbearance agreement, the borrowers are required to make scheduled monthly debt service payments until June 1, 2023 at which time repayment of the loan in full is required. The forbearance agreement also imposes certain additional informational reporting requirements during the applicable forbearance period. We continue to pursue all our options relating to this debt. As of March 31, 2023, the mortgage loan has an outstanding balance of $53.3 million.

On May 1, 2023, certain of our consolidated subsidiaries entered into an amendment and extension to our mortgage loan secured by the property at Cherry Hill Mall in Cherry Hill, New Jersey. This agreement extended the maturity date to December 1, 2023 and we were required to make a $5 million principal payment upon execution and the borrower is required to continue to make scheduled monthly debt service payments. The agreement also includes an option to extend the maturity date to May 1, 2024 with an additional $5.0 million payment. As of March 31, 2023, the mortgage loan has an outstanding balance of $237.2 million.

Mortgage Loans

Our mortgage loans, which are secured by seven of our consolidated properties, are due in installments over various terms extending to the year 2025. Six of these mortgage loans bear interest at fixed interest rates that range from 3.88% to 7.19% and had a weighted average interest rate of 4.49% at March 31, 2023. Three of our mortgage loans bear interest at variable rates, a portion of which has been swapped to fixed rates, and have a weighted average interest rate of 8.48% at March 31, 2023. The weighted average interest rate of all consolidated mortgage loans was 5.16% at March 31, 2023. Mortgage loans for properties owned by unconsolidated partnerships are accounted for in “Investments in partnerships, at equity” and “Distributions in excess of partnership investments,” and are not included in the table below.

35

The following table outlines the timing of principal payments and balloon payments pursuant to the terms of our mortgage loans on our consolidated properties as of March 31, 2023:

			Remainder of
(in thousands of dollars)	Total		2023		2024-2025		2026-2027		Thereafter
Consolidated mortgage loans
Principal payments	$	17,249	$	6,438	$	10,811	$	—	$	—
Balloon payments (1) (2)		724,655		394,315		330,340		—		—
Total consolidated mortgage loans		741,904	$	400,753	$	341,151	$	—	$	—
Less: Unamortized debt issuance costs		1,737
Carrying value of mortgage notes payable	$	740,167

(1) Includes Cherry Hill Mall mortgage for which, subsequent to March 31, 2023, the maturity was extended through December 1, 2023.

(2) For secured mortgage loans with balloon payments due in 2023, we expect to refinance on similar terms or extend the maturities, but cannot provide any assurance that we will be able to do so.

Contractual Obligations

The following table presents our consolidated aggregate contractual obligations as of March 31, 2023 for the periods presented:

(in thousands of dollars)	Total		Remainder of 2023		2024-2025		2026-2027		Thereafter
Mortgage loans (1)	$	741,904	$	400,753	$	341,151	$	—	$	—
Term Loans (2)		973,366		973,366		—		—		—
First Lien Revolving Facility		22,481		22,481		—		—		—
Interest on indebtedness (3)		122,391		102,692		19,699		—		—
Operating leases		8,362		749		1,730		1,710		4,173
Ground leases		49,561		1,188		3,169		3,169		42,035
Finance leases		4,690		738		1,879		1,785		288
Development and redevelopment commitments (4)		3,898		3,898		—		—		—
Total	$	1,926,653	$	1,505,865	$	367,628	$	6,664	$	46,496

(1) Includes Cherry Hill Mall mortgage for which, subsequent to March 31, 2023, the maturity was extended through December 1, 2023.

(2) Includes our First Lien Term Loan Facility of $305.7 million and the anticipated maturity date balance of our Second Lien Term Loan Facility of $667.6 million, which includes estimated capitalized PIK interest based on current interest rates.

(3) Includes interest payments expected to be made on consolidated debt, including those in connection with interest rate swap agreements.

(4) The timing of the payments of these amounts is uncertain. We expect that a significant majority of such payments (of which we include 100% of our obligations related to Fashion District Philadelphia) will be made prior to December 31, 2023, but cannot provide any assurance that changed circumstances at these projects will not delay the settlement of these obligations.

Interest Rate Derivative Agreements

As of March 31, 2023, we had interest rate swap agreements designated in qualifying hedging relationships outstanding with a weighted average base interest rate of 2.92% on a notional amount of $400.0 million, maturing in May 2023 or May 2024. We originally entered into these interest rate swap agreements in 2020 to hedge the interest payments associated with our issuances of variable interest rate long term debt. The interest rate swap agreements are net settled monthly.

For derivatives that have been designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in “Accumulated other comprehensive (loss) income” and subsequently reclassified into “Interest expense, net” in the same periods during which the hedged transaction affects earnings.

As of March 31, 2023, we had nine total derivatives which were designated as cash flow hedges.

We recognize all derivatives at fair value as either assets or liabilities in the accompanying consolidated balance sheets. Our derivative assets are recorded in “Deferred costs and other assets” and our derivative liabilities are recorded in “Fair value of derivative instruments.”

Over the next twelve months, we estimate that $2.0 million will be reclassified as a decrease to interest expense in connection with our designated derivatives. The recognition of these amounts could be accelerated in the event that we repay amounts outstanding on the debt instruments and do not replace them with new borrowings.

As of March 31, 2023, the fair value of derivatives in an asset position, which excludes accrued interest but includes any adjustment for nonperformance risk related to these agreements, was $2.0 million. If we had breached any of the default provisions in these agreements, the

36

derivatives may be required to be settled at their termination value, which at March 31, 2023, was in an asset position (including accrued interest) of $2.6 million. We had not breached any of these provisions as of March 31, 2023.

CASH FLOWS

Net cash provided by operating activities totaled $18.5 million for the three months ended March 31, 2023 compared to net cash provided by operating activities of $14.5 million for the three months ended March 31, 2022. This increase in cash provided by operating activities was due to changes in working capital between periods primarily as a result of strong collections of outstanding accounts receivable in the first three months of the current year, which are included in change in other assets in our statement of cash flows.

Cash flows provided by investing activities were $18.6 million for the three months ended March 31, 2023 compared to cash flows used in investing activities of $2.1 million for the three months ended March 31, 2022. Cash flows provided by investing activities for the three months ended March 31, 2023 included $26.3 million in proceeds from sales of real estate, partially offset by $1.1 million of additions to construction in progress and $6.3 million of investments in real estate improvements.

Cash flows used in financing activities were $38.6 million for the three months ended March 31, 2023 compared to cash flows used in financing activities of $9.3 million for the three months ended March 31, 2022. Cash flows used in financing activities for the three months ended March 31, 2023 included repayment of term loans of $26.3 million, $9.6 million of principal payments on mortgage loans, along with $2.5 million of deferred financing costs paid for our Cherry Hill Mall mortgage extension.

ENVIRONMENTAL

We are aware of certain environmental matters at some of our properties. We have, in the past, performed remediation of such environmental matters, and we are not aware of any significant remaining potential liability relating to these environmental matters or of any obligation to satisfy requirements for further remediation. We may be required in the future to perform testing relating to these matters. We have insurance coverage for certain environmental claims up to $10.0 million per occurrence and up to $10.0 million in the aggregate over our two year policy term. See our Annual Report on Form 10-K for the year ended December 31, 2022, in the section entitled “Item 1A. Risk Factors— Risks Related to Our Business and Our Properties—We might incur costs to comply with environmental laws, which could have an adverse effect on our results of operations.”

COMPETITION AND TENANT CREDIT RISK

Competition in the retail real estate market is intense. We compete with other public and private retail real estate companies, including companies that own or manage malls, power centers, strip centers, lifestyle centers, factory outlet centers, theme/festival centers and community centers, as well as other commercial real estate developers and real estate owners, particularly those with properties near our properties, on the basis of several factors, including location and rent charged. We compete with these companies to attract customers to our properties, as well as to attract anchor and non-anchor store and other tenants. Our malls and our other operating properties face competition from similar retail, destination dining and entertainment centers, including more recently developed or renovated centers that are near our retail properties. We also face competition from a variety of different retail formats, including internet retailers, discount or value retailers, home shopping networks, mail order operators, catalogs, and telemarketers. Our tenants face competition from companies at the same and other properties and from other retail formats as well, including internet retailers. They also face competition for employees in the current largely constrained labor market, which could impact their operations and operation costs. This competition could have a material adverse effect on our ability to lease space and on the amount of rent and expense reimbursements that we receive.

The existence or development of competing retail properties and the related increased competition for tenants might, subject to the terms and conditions of the Credit Agreements, require us to make capital improvements to properties that we would have deferred or would not have otherwise planned to make and might also affect the total sales, occupancy and net operating income of such properties. Any such capital improvements, undertaken individually or collectively, would involve costs and expenses that could adversely affect our results of operations.

If we seek to make acquisitions, competitors (such as institutional investors, other REITs and other owner-operators of retail properties) might drive up the price we must pay for properties, parcels, other assets or other companies or might themselves succeed in acquiring those properties, parcels, assets or companies. In addition, our potential acquisition targets might find our competitors to be more attractive suitors if they have greater resources, are willing to pay more, or have a more compatible operating philosophy. We might not succeed in acquiring retail properties or development sites that we seek, or, if we pay a higher price for a property and/or generate lower cash flow from an acquired property than we expect, our investment returns will be reduced, which will adversely affect the value of our securities.

We receive a substantial portion of our operating income as rent under leases with tenants. At any time, any tenant having space in one or more of our properties could experience a downturn in its business that might weaken its financial condition. Such tenants might enter into or renew leases with relatively shorter terms. Such tenants might also defer or fail to make rental payments when due, delay or defer lease commencement, voluntarily vacate the premises or declare bankruptcy, which could result in the termination of the tenant’s lease or preclude the collection of rent in connection with the space for a period of time, and could result in material losses to us and harm to our results of operations. Also, it might take time to terminate leases of underperforming or nonperforming tenants and we might incur costs to remove such tenants. Some of our tenants occupy stores at multiple locations in our portfolio, and so the effect of any bankruptcy or store closings of those

37

tenants might be more significant to us than the bankruptcy or store closings of other tenants. In addition, under many of our leases, our tenants pay rent based, in whole or in part, on a percentage of their sales. Accordingly, declines in these tenants’ sales directly affect our results of operations. Also, if tenants are unable to comply with the terms of their leases, or otherwise seek changes to the terms, including changes to the amount of rent, we might modify lease terms in ways that are less favorable to us. Given current conditions in the economy, certain industries and the capital markets, in some instances retailers that have sought protection from creditors under bankruptcy law have had difficulty in obtaining debtor-in-possession financing, which has decreased the likelihood that such retailers will emerge from bankruptcy protection and has limited their alternatives. All of these factors have been exacerbated by the impact of the ongoing COVID-19 pandemic.

SEASONALITY

There is seasonality in the retail real estate industry. Retail property leases often provide for the payment of all or a portion of rent based on a percentage of a tenant’s sales revenue, or sales revenue over certain levels. Income from such rent is recorded only after the minimum sales levels have been met. The sales levels are often met in the fourth quarter, during the November/December holiday season. Also, many new and temporary leases are entered into later in the year in anticipation of the holiday season and a higher number of tenants vacate their space early in the year. As a result, our occupancy and cash flows are generally higher in the fourth quarter and lower in the first and second quarters. Our concentration in the retail sector increases our exposure to seasonality and has resulted, and is expected to continue to result, in a greater percentage of our cash flows being received in the fourth quarter.

INFLATION

Inflation can have many effects on financial performance. Retail property leases often provide for the payment of rent based on a percentage of sales, which might increase with inflation. Customers might spend less at our retailers, which might decrease our rent based on a percentage of sales, due to inflation. Leases might also provide for tenants to bear all or a portion of operating expenses, which might reduce the impact of such increases on us. However, rent increases might not keep up with inflation, or if we recover a smaller proportion of property operating expenses, we might bear more costs if such expenses increase because of inflation.

FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, together with other statements and information publicly disseminated by us, contain 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;

•our substantial debt, and our ability to satisfy our obligations or extend the maturity of or refinance our outstanding debt at or prior to maturity, particularly in light of increasing interest rates, and our ability to remain in compliance with our financial covenants under our debt facilities;

•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, the potential for recession and the corresponding effects on tenant business performance, prospects, solvency and leasing decisions;

38

•our inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise;

•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 ability to raise capital, including through sales of properties or interests in properties, subject to the terms of our Credit Agreements;

•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; 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, 2022 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.

39

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The analysis below presents the sensitivity of the market value of our financial instruments to selected changes in market interest rates. As of March 31, 2023, our consolidated debt portfolio consisted of $740.2 million of fixed and variable rate mortgage loans (net of debt issuance costs), $22.5 million outstanding under our First Lien Revolving Facility, which bore interest at a rate of 8.17%, $305.7 million borrowed under our First Lien Term Loan Facility, which bore interest at a rate of 8.47%, and $667.6 million borrowed under our Second Lien Term Loan Facility, which bore interest at a rate of 12.81%.

Our mortgage loans, which are secured by seven of our consolidated properties, are due in installments over various terms extending to October 2025. Six of our mortgage loans bear interest at fixed interest rates that range from 3.88% to 7.19%, and had a weighted average interest rate of 4.49% at March 31, 2023. Three of our mortgage loans bear interest at variable rates, a portion of which has been swapped to fixed rates, and had a weighted average interest rate of 8.48% at March 31, 2023. The weighted average interest rate of all consolidated mortgage loans was 5.16% at March 31, 2023. Mortgage loans for properties owned by unconsolidated partnerships are accounted for in “Investments in partnerships, at equity” and “Distributions in excess of partnership investments” on the consolidated balance sheets and are not included in the table below.

Our interest rate risk is monitored using a variety of techniques. The table below presents the principal amounts of the expected annual maturities due in the respective years and the weighted average interest rates for the principal payments in the specified periods:

	Fixed Rate Debt						Variable Rate Debt
(in thousands of dollars) For the Year Ending December 31,	Principal Payments			Weighted Average Interest Rate			Principal Payments			Weighted Average Interest Rate (1)
2023	$	595,103	(2) (3)		7.07	%	$	801,497	(2)		12.34	%
2024	$	106,405			6.83	%	$	18,994			1.41	%
2025	$	215,752			4.02	%	$	—			—
2026	$	—			—		$	—			—
2027 and thereafter	$	—			—		$	—			—

(1) Based on the weighted average interest rates in effect as of March 31, 2023 and does not include the effect of our interest rate swap derivative instruments as described below.

(2) Includes term loan debt of $973.3 million under our First Lien Term Loan Facility and Second Lien Term Loan Facility with a weighted average interest rate of 11.45% as of March 31, 2023.

(3) Includes Cherry Hill Mall mortgage of $237.2 million for which, subsequent to March 31, 2023, the maturity was extended through December 1, 2023.

As of March 31, 2023, we had $820.5 million of variable rate debt. To manage interest rate risk and limit overall interest cost, we may employ interest rate swaps, options, forwards, caps and floors, or a combination thereof, depending on the underlying exposure. Interest rate differentials that arise under swap contracts are recognized in interest expense over the life of the contracts. If interest rates rise, the resulting cost of funds is expected to be lower than that which would have been available if debt with matching characteristics was issued directly. Conversely, if interest rates fall, the resulting costs would be expected to be, and in some cases have been, higher. We may also employ forwards or purchased options to hedge qualifying anticipated transactions. Gains and losses are deferred and recognized in net loss in the same period that the underlying transaction occurs, expires or is otherwise terminated. See Note 6 of the notes to our unaudited consolidated financial statements for further information.

As of March 31, 2023, we had interest rate swap agreements outstanding with a weighted average base interest rate of 2.92% on a notional amount of $400.0 million, maturing on various dates through May 2023 and May 2024.

Changes in market interest rates have different effects on the fixed and variable rate portions of our debt portfolio. A change in market interest rates applicable to the fixed portion of the debt portfolio affects the fair value, but it has no effect on interest incurred or cash flows. A change in market interest rates applicable to the variable portion of the debt portfolio affects the interest incurred and cash flows, but does not affect the fair value. The following sensitivity analysis related to our debt portfolio, which includes the effects of our interest rate swap agreements, assumes an immediate 100 basis point change in interest rates from their actual March 31, 2023 levels, with all other variables held constant.

A 100 basis point increase in market interest rates would have resulted in a decrease in our net financial instrument position of $4.9 million at March 31, 2023. A 100 basis point decrease in market interest rates would have resulted in an increase in our net financial instrument position of $7.1 million at March 31, 2023. Based on the variable rate debt included in our debt portfolio at March 31, 2023, a 100 basis point increase in interest rates would have resulted in an additional $8.2 million in interest expense annually. A 100 basis point decrease would have reduced interest incurred by $8.2 million annually.

40

Because the information presented above includes only those exposures that existed as of March 31, 2023, it does not consider changes, exposures or positions which have arisen or could arise after that date. The information presented herein has limited predictive value. As a result, the ultimate realized gain or loss or expense with respect to interest rate fluctuations will depend on the exposures that arise during the period, our hedging strategies at the time and interest rates.

41

ITEM 4. CONTROLS AND PROCEDURES.

We are committed to providing accurate and timely disclosure in satisfaction of our SEC reporting obligations. In 2002, we established a Disclosure Committee to formalize our disclosure controls and procedures. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that:

•information that we are required to disclose in our reports under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and

•material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

Management, under the supervision of our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") evaluated our disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, our CEO and CFO concluded that as of March 31, 2023, our disclosure controls and procedures were not effective due to the material weakness in our internal control over financial reporting.

The ineffectiveness of our internal control over financial reporting was due to the material weakness in our internal control over financial reporting which we identified and previously reported in Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2022.

As previously disclosed in our 2022 Form 10-K, we identified a material weakness related to the review of manual journal entries, which continued to exist as of March 31, 2023. Specifically, we identified segregation of duties conflicts in certain authorizations and permissions that impacted the effectiveness of certain other business process-level control activities and the reliability of data used in the operation of those control activities. The precision of review of our consolidated statement of cash flow for the three months ended March 31, 2022 was previously identified as ineffective and the control remains aggregated in the segregation of duties conflicts identified above.

Management’s Remediation Efforts

Management of the Company and the Board of Trustees are committed to maintaining a strong internal control environment and to making further progress in its remediation efforts. During 2021 and 2022, we commenced efforts towards remediation of the previously reported material weakness described above which efforts continued into 2023. Our remediation activities resulted in additional consideration of the risks related to improper segregation of duties and ongoing design enhancements to our internal controls. Our remediation activities are ongoing, however, those activities have also included the implementation of technology solutions to automate visibility and enforcement of the independent review and documentation of journal entries, including enforcement of proper segregation of duties.

Management believes that it has made progress with the remediation efforts that include completion and implementation of design to ensure reliability of information used in the controls will reduce the risk that a material misstatement to the consolidated financial statements would not be prevented or detected on a timely basis. We will monitor and evaluate the remediation steps to ensure our internal control over financial reporting is consistently effective to address control deficiencies or as we determine it necessary to modify the remediation plan described above. We will continue to report regularly to our Audit Committee on the progress of our remediation plan.
 

Changes in Internal Control over Financial Reporting

Other than our actions to remediate the material weakness relating to our internal controls over financial reporting as described above, there were no changes in our internal control over financial reporting during the quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

42

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

In the normal course of business, we have become and might in the future become involved in legal actions relating to our business, including but not limited to commercial disputes, rent collection actions and other matters related to the ownership and operation of our properties and the properties that we manage for third parties. In management’s opinion, the resolution of any such pending legal actions is not expected to have a material adverse effect on our consolidated financial position or results of operations.

ITEM 1A. RISK FACTORS.

In addition to the other information set forth in this report, you should carefully consider the risks that could materially affect our business, financial condition or results of operations which are discussed under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Issuer Purchases of Equity Securities

We did not acquire any shares in the three months ended March 31, 2023.

Limitations upon the Payment of Dividends

The Credit Agreements provide generally that we may only make dividend payments in the minimum amount necessary to maintain our status as a REIT. We must maintain our status as a REIT at all times.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Preferred Dividend Arrearage

Dividends on the Series B, Series C and Series D preferred shares are cumulative and therefore will continue to accrue at an annual rate of $1.8436 per share, $1.80 per share and $1.7188 per share, respectively. As of May 9, 2023, the cumulative amount of unpaid dividends on our issued and outstanding preferred shares totaled $75.3 million. This consisted of unpaid dividends per share on the Series B, Series C and Series D preferred shares of $5.07 per share, $4.95 per share and $4.73 per share, respectively.

ITEM 5. OTHER INFORMATION.

On May 1, 2023, PR Cherry Hill STW LLC and Cherry Hill Center, LLC, both of which are subsidiaries of Pennsylvania Real Estate Investment Trust (the “Trust”) that own Cherry Hill Mall (the “Borrowers”), PREIT Associates, L.P., which is the guarantor under the Notes (as defined below), and New York Life Insurance Company and Teachers Insurance and Annuity Association of America, who are the lenders under the loans that are evidenced by the Notes (the “Lenders”), entered into a Third Loan Extension and Modification Agreement (the “Third Extension and Modification Agreement”) to that certain (i) $150.0 million promissory note with New York Life Insurance Company dated August 15, 2012, and (ii) $150.0 million promissory note with Teachers Insurance and Annuity Association of America dated August 15, 2012 (together, the “Notes”). The Third Extension and Modification Agreement (i) extended the maturity date of the Notes from May 1, 2023 to December 1, 2023, (ii) increased the interest rate of the Notes from 3.90% per annum to 7.50% per annum and (iii) increased the monthly principal and interest payment of each respective Note from $707,503.00 to $800,273.75, commencing June 1, 2023, and continuing until the maturity date of the Notes. To satisfy the conditions precedent of the Third Extension and Modification Agreement and effectuate the extension of the maturity date of the Notes, the Borrowers paid down $5,000,000 of the outstanding principal balance of the Notes and paid certain expenses incurred by the Lenders in connection with the Third Extension and Modification Agreement, among other terms and conditions.

The Third Extension and Modification agreement also includes an option for the Borrowers to further extend the maturity date of each Note to May 1, 2024 if (i) an additional $2,500,000 of the outstanding principal balance of the respective Note is paid down ($5,000,000 in the aggregate with respect to both Notes) and (ii) the maturity date of the Trust’s two secured credit agreements are extended to December 2024 or if the Trust enters into a new credit facility on commercially reasonable terms (as determined by the Lenders) for a minimum term of one year, among other terms and conditions.

The foregoing description of the Third Extension and Modification Agreement is qualified in its entirety by reference to the full text of the Third Extension and Modification Agreement, which is included as Exhibit 10.2 to this report.

43

ITEM 6. EXHIBITS.

3.1	Amended and Restated Trust Agreement dated December 18, 2008, filed as Exhibit 3.1 to PREIT’s Current Report on Form 8-K filed on December 23, 2008, is incorporated herein by reference.
3.2	Amendment, dated June 7, 2012, to Amended and Restated Trust Agreement of Pennsylvania Real Estate Investment Trust dated December 18, 2008, as amended, filed as Exhibit 3.1 to PREIT’s Current Report on Form 8-K filed on June 12, 2012, is incorporated herein by reference.
3.3	Amendment to Amended and Restated Trust Agreement dated December 18, 2008, as amended, dated as of March 30, 2020, filed as Exhibit 3.1 to PREIT’s Current Report on Form 8-K filed on March 31, 2020, is incorporated herein by reference.
3.4	Amendment to Amended and Restated Trust Agreement dated December 18, 2008, as amended, dated as of June 15, 2022, filed as Exhibit 3.1 to PREIT’s Current Report on Form 8-K filed on June 22, 2022, is incorporated herein by reference.
3.5	By-Laws of PREIT (as amended through March 31, 2020), filed as Exhibit 3.2 to PREIT’s Current Report on Form 8-K filed on March 31, 2020, is incorporated herein by reference.
3.6	Designating Amendment to Trust Agreement, designating the rights, preferences, privileges, qualifications, limitations and restrictions of PREIT’s 8.25% Series A Cumulative Redeemable Perpetual Preferred Shares, liquidation preference $25.00 per share, par value $0.01 per share, filed as Exhibit 3.2 to PREIT’s Form 8-A filed on April 20, 2012, is incorporated herein by reference.
3.7	Second Designating Amendment to Trust Agreement, designating the rights, preferences, privileges, qualifications, limitations and restrictions of PREIT’s 7.375% Series B Cumulative Redeemable Perpetual Preferred Shares, liquidation preference $25.00 per share, par value $0.01 per share, filed as Exhibit 3.2 to PREIT’s Form 8-A filed on October 11, 2012, is incorporated herein by reference.
3.8	Third Designating Amendment to Trust Agreement, designating the rights, preferences, privileges, qualifications, limitations and restrictions of PREIT’s 7.20% Series C Cumulative Redeemable Perpetual Preferred Shares, liquidation preference $25.00 per share, par value $0.01 per share, filed as Exhibit 3.4 to PREIT’s Form 8-A filed on January 27, 2017, is incorporated herein by reference.
3.9	Fourth Designating Amendment to Trust Agreement, designating the rights, preferences, privileges, qualifications, limitations and restrictions of PREIT’s 6.875% Series D Cumulative Redeemable Perpetual Preferred Shares, liquidation preference $25.00 per share, par value $0.01 per share, filed as Exhibit 3.5 to PREIT’s Form 8-A filed on September 11, 2017, is incorporated herein by reference.
10.1+*	Form of 2023 Retention Award Letter.
10.2*	Third Loan Extension and Modification Agreement, dated as of May 1, 2023, by and among PR Cherry Hill STW LLC, Cherry Hill Center, LLC, PREIT Associates, L.P., New York Life Insurance Company and Teachers Insurance and Annuity Association of America.
31.1*	Certification pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*	Inline XBRL Taxonomy Extension Schema Document.
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document.

44

101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.INS).

* Filed herewith

** Furnished herewith

+ Management contract or compensatory plan or arrangement.

45

SIGNATURE OF REGISTRANT

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 thereunto duly authorized.

		PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
Date:	May 9, 2023	By:	/s/ Joseph F. Coradino
			Joseph F. Coradino
			Chairman and Chief Executive Officer
Date:	May 9, 2023	By:	/s/ Mario C. Ventresca, Jr.
			Mario C. Ventresca, Jr.
			Executive Vice President and Chief Financial Officer
Date:	May 9, 2023	By:	/s/ Sathana Semonsky
			Sathana Semonsky
			Senior Vice President and Chief Accounting Officer

46

EX-10

Exhibit 10.1

PREIT LETTERHEAD

[Date]

[EMPLOYEE]

[Address Line 1]

[Address Line 2]

Re: Retention Bonus

Dear [EMPLOYEE]:

In exchange for your valuable work and commitments to PREIT Services, LLC (the “Company”), your anticipated future contributions, and to incentivize and motivate you to continue your employment, the Company is offering you a retention bonus. The details are as follows:

1.Retention Bonus. Provided you remain continuously employed by the Company or its affiliates from July 1, 2023 through June 30, 2024 (the “Retention Period”), the Company will pay you a retention bonus in a gross total amount equal to $______________, less all applicable withholdings required by law (the “Retention Bonus”).

2.Timing of Payments of Retention Bonus. The Retention Bonus shall be paid to you in cash in three (3) installments on the following schedule:

•50% of the Retention Bonus on September 1, 2023

•25% of the Retention Bonus on January 1, 2024

•25% of the Retention Bonus on April 1, 2024

3.Pro-Rata Forfeiture of the Retention Bonus. While the Company is going to pay the Retention Bonus to you according to the above schedule, you understand and agree that you will forfeit the Retention Bonus, on a pro-rata basis, if, prior to the end of the Retention Period, you voluntarily resign from your employment with the Company or your employment with the Company is terminated for willful misconduct. In such circumstances, you agree to repay the portion of the Retention Bonus received by you during the Retention Period that exceeds the amount of Retention Bonus earned by you on a pro-rata basis between July 1, 2023 and the date you cease to be employed by the Company, adjusted for withholdings and as determined by the Company in its sole discretion. The Company will advise you of the repayment amount within ten (10) business days of the date you cease to be employed by the Company, which amount shall be paid to the Company within ten (10) days thereafter.

DOCPROPERTY DMNumber 123228395 DOCPROPERTY DMVersionNumber -2

4.Authorization for Recoupment of Overpayment from Amounts Due. In the event you are obligated to repay any portion of the Retention Bonus, you expressly authorize the Company to satisfy some or all of the amounts due by deducting such amounts from and reducing compensation and other amounts that are due to you at the date you cease to be employed by the Company. You also agree to timely execute any additional documentation that the Company deems necessary to effectuate the deduction described above.

This letter shall be construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to conflicts-of-law principles. This letter contains the entire understanding between you and the Company with respect to your eligibility for the Retention Bonus and related terms. However, nothing in this letter is intended to waive your rights under previous awards of LTIP and retention.

The terms described above may not be amended except by written document signed by you and an authorized representative of the Company. The terms and benefits of this letter may not be assigned by you. The Company may assign this letter in its discretion, including but not limited to in connection with a merger or sale of equity or assets.

2

DOCPROPERTY DMNumber 123228395 DOCPROPERTY DMVersionNumber -2

If you have any questions relating to this letter, please feel free to contact me. If you are in agreement with the terms of this letter, please execute and return this letter to the Company’s Human Resource Department.

Sincerely,

PREIT SERVICES, LLC

By: Joseph Coradino

Title: Chief Executive Officer

I hereby acknowledge and agree to the terms of this letter.

I expressly acknowledge that I have read and understand its terms, including without limitation the authorization for the Company to recoup any overpayments of Retention Bonus issued to me from amounts otherwise due to me from the Company in the event my employment with the Company ceases prior to the end of the Retention Period.

Date: ___________________________ By: ____________________________

Name: __________________________

[EMPLOYEE]

3

DOCPROPERTY DMNumber 123228395 DOCPROPERTY DMVersionNumber -2

EX-10

Exhibit 10.2

THIRD LOAN EXTENSION AND MODIFICATION AGREEMENT

THIS THIRD LOAN EXTENSION AND MODIFICATION AGREEMENT (this “Agreement”), dated as of May 1, 2023, is made by and among PR CHERRY HILL STW LLC, a Delaware limited liability company (“PR Cherry Hill”), and CHERRY HILL CENTER, LLC, a Maryland limited liability company (“Cherry Hill Center”; PR Cherry Hill and Cherry Hill Center are referred to herein individually and collectively, as the context may require, as “Borrower”), PREIT ASSOCIATES, L.P., a Delaware limited partnership (“Guarantor”), NEW YORK LIFE INSURANCE COMPANY, a New York mutual insurance company (“Co-Lender A-1”), and TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, a New York corporation (“Co-Lender A-2”; Co-Lender A-1 and Co-Lender A-2, together with their successors and assigns, are referred to herein individually as “Co-Lender” and collectively as “Lender”).

RECITALS:

WHEREAS, on August 15, 2012, Lender made a loan (the “Loan”) to Borrower in the original principal amount of Three Hundred Million Dollars ($300,000,000.00);

WHEREAS, the Loan is evidenced by that certain Promissory Note A-1 dated August 15, 2012, made by Borrower and payable to Co-Lender A-1, in the original principal amount of One Hundred Fifty Million Dollars ($150,000,000.00) (“Note A-1”) and that certain Promissory Note A-2 dated August 15, 2012, made by Borrower and payable to Co-Lender A-2, in the original principal amount of One Hundred Fifty Million Dollars ($150,000,000.00) (“Note A-2”; Note A-1 and Note A-2 are referred to herein individually as a “Note” and collectively as the “Notes”);

WHEREAS, Borrower’s obligations under the Notes are secured by, among other things, that certain Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing made on August 9, 2012 and effective as of August 15, 2012, from Borrower to Lender, recorded on August 24, 2012 in Book 09648, at Page 0640 in the Public Records of Camden County, New Jersey, as amended by that certain Modification and Extension of Mortgage dated as of August 31, 2022 and recorded on October 5, 2022 in Book 12202, at Page 789 in the Public Records of Camden County, New Jersey (as so amended, the “Security Instrument”), covering certain real property and improvements thereon, more particularly described therein (the “Property”). Capitalized terms used but not otherwise defined in this Agreement shall have the meanings given to them in the Notes or the Security Instrument, as applicable;

WHEREAS, in connection with the Loan, (i) Guarantor executed and delivered to Lender that certain Guaranty dated as of August 15, 2012 (the “Guaranty”); and (ii) Borrower and Guarantor executed and delivered to Lender that certain Environmental Indemnity Agreement dated as of August 15, 2012 (the “Environmental Indemnity”);

WHEREAS, the stated Maturity Date of the Notes was previously extended to November 1, 2022 pursuant to that certain Loan Extension and Modification Agreement dated as of August 31, 2022 by and among Borrower, Guarantor and Lender (the “First Modification”), as further extended to May 1, 2023 pursuant to that certain Second Loan Extension and Modification

Agreement dated as of October 31, 2022 by and among Borrower, Guarantor and Lender (the “Second Modification”);

WHEREAS, Borrower has requested that Lender further extend the Maturity Date of the Notes; and

WHEREAS, Lender has agreed to further extend the Maturity Date of the Notes to December 1, 2023 and to provide Borrower with an additional extension option to May 1, 2024, in each case, subject to the terms and conditions of this Agreement.

NOW, THEREFORE, as an inducement to Lender to extend the Maturity Date of the Notes, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

TERMS:

1.Amendments to Notes. Subject to the satisfaction of the Conditions Precedent (as hereinafter defined), each Note is hereby amended as follows:

(a)The Maturity Date is hereby amended to be December 1, 2023.

(b)The Interest Rate is hereby amended to be seven and fifty-hundredths percent (7.50%) per annum.

(c)The Payments due under each Note (other than the Payment due on the date of this Agreement) are hereby revised as follows:

Commencing on the first (1st) day of June, 2023 and on the first (1st) day of each and every month thereafter until and including the Maturity Date, Borrower shall pay to Lender a monthly payment of principal and interest payment in the amount of Eight Hundred Thousand Two Hundred Seventy-Three and 75/100 Dollars ($800,273.75) with respect to each Note, and One Million Six Hundred Thousand Five Hundred Forty Seven and 50/00 Dollars ($1,600, 547.50) in the aggregate as to the Notes.

(d)The following paragraphs are hereby added at the end of each Note:

“Maker shall have one (1) option to extend the Maturity Date (the “Extension Option”), on the same terms as set forth in this Note, for an additional period of five (5) months to end on May 1, 2024 (the “Extension Term”), provided that all of the following conditions are satisfied for the Extension Term: (i) Maker requests the extension in writing not less than fifteen (15) days prior to the Maturity Date, (ii) upon the closing of the Extension Option, no Event of Default has occurred and is continuing under any of the Loan Instruments, (iii) concurrently with the closing of the Extension Option, Maker pays to each Holder an amount equal to Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000.00) (i.e. Five Million and 00/100 Dollars ($5,000,000.00) in the aggregate with respect to both

Notes) which amount will be applied by the Holders as a principal repayment thereby reducing the outstanding balance of the Loan by such paid amount (the “Principal Reduction”), (iv) the maturity date of the Credit Agreements (as defined in the Second Modification) shall have been extended to December 2024 on commercially reasonable terms or PREIT shall have entered into a new credit facility for a minimum term of one (1) year on commercially reasonable terms, in each case as determined by Lender in the exercise of commercially reasonable and good faith judgment, and (v) concurrently with the closing of the Extension Option, Maker delivers satisfactory evidence to Holder, in Holder’s commercially reasonable discretion, of Maker’s continuation of the process to explore options to refinance the Loan or other corporate restructuring or equity sale transactions that would facilitate a repayment of the Loan. The closing of the Extension Option shall occur at least one (1) business day before the Maturity Date. If the closing of the Extension Option does not occur by such date, the Loan will mature on the Maturity Date and Maker shall have no further option to extend. Time is of the essence with respect to each of the time periods set forth in this paragraph.”

2.Conditions Precedent. As a condition precedent to the effectiveness of this Agreement, Borrower shall have satisfied each of the following conditions (collectively, the “Conditions Precedent”) on the date hereof:

(a)Principal Reduction. Borrower pays to each Holder an amount equal to Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000.00) (i.e. Five Million and 00/100 Dollars ($5,000,000.00) in the aggregate with respect to both Notes) which amount will be applied by the Holders as a principal repayment thereby reducing the outstanding balance of the Loan by such paid amount.

(b)Fees and Expenses. Borrower pays all actual out-of-pocket costs and expenses incurred by Lender (including reasonable legal fees and expenses) in connection with this Agreement as and to the extent an itemized request for payment of the same has been provided to Borrower at least one (1) business day prior to May 1, 2023 (if such request is provided at a later date, Borrower shall pay the same within 5 business days after request).

3.Monthly Leasing Update. Borrower shall provide to Lender, no later than the twentieth (20th) day of each calendar month during the term of the Loan, an updated leasing plan for the Property including (i) a schedule of any new leases or renewals of existing leases, (ii) a schedule of current leases, including upcoming predicted or known changes such as rent reviews by type and timing, options for a further term, and expiration dates, (iii) the status of any negotiations with existing and prospective tenants, (iv) proposals for new leases pending a decision by the landlord or tenant, (v) a vacancy report of spaces that are soon to be or are already vacant, (vi) marketing strategy and inspection feedback for vacant spaces, (vii) a schedule of prospects currently looking at the Property and status, (viii) target rentals and target lease terms for the Property, and (ix) a summary of any other leasing decisions made by the Borrower in the last month. All information delivered by Borrower pursuant to this Section 3 shall be deemed to be “Confidential Information” pursuant to Section 26 of this Agreement.

4.Budget. In furtherance of the provisions of Section 5 of the Second Modification, Borrower shall submit to Lender for Lender’s review and approval a proposed operating budget for the 2024 calendar year, including all planned capital expenditures, projected income and projected operating expenses and leasing costs (including tenant improvement costs, tenant allowances and/or leasing commissions) for the Property no later than December 1, 2023.

5.Cash Management. Section 3.1(b) of the Cash Management Agreement (as defined in the First Modification) is deleted in its entirety and replaced with the following:

(b) On each Payment Date (or other applicable due date) provided no Event of Default has occurred, other than an Event of Default as to which Lender in its sole discretion has accepted a cure, Lender shall allocate and/or direct the disbursement of all funds received in the DACA Account during the related Collection Period in excess of the Minimum Balance, in the following amounts and order of priority:

(i)first, as estimated by Lender, an amount (when paid monthly) necessary to accumulate sufficient funds to pay all real estate taxes and insurance premiums for the Property when due, to be held by Lender pursuant to Section 1.04 of the Security Instrument;

(ii)second, to Lender, an amount sufficient to pay debt service and other amounts due under the Loan (including, but not limited to, principal, interest, default interest, and late payment charges);

(iii)third, to Borrower, an amount sufficient to pay or reimburse Borrower for expenses payable for such month and set forth in the Budget, or as otherwise required by transactions approved by Lender from time to time, in Lender’s sole discretion;

(iv)fourth, to the TI/LC Reserve Account in the amount of Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) per month; provided however, if there are insufficient funds to make such payments, any shortfall shall accrue and be payable to the extent of sufficient funds on the next following Payment Date(s); and

(v)fifth, all remaining funds to the Capital Expenditure Reserve Account.

6.Reserve Accounts.

(a)On the date hereof, Lender shall establish (i) a TI/LC Reserve Account (the “TI/LC Reserve Account”) for the purpose of holding any lease termination payments, including without limitation the lease termination payments deposited with Lender pursuant to Section 6 of the Second Modification, and the funds to be deposited pursuant to Section 3(b)(iv) of the Cash Management Agreement, and (ii) a Capital Expenditure Reserve Account (the “Capital Expenditure Reserve Account”) for the purpose of holding the funds to be deposited pursuant to Section 3(b)(v) of the Cash Management Agreement. Each of the TI/LC Reserve Account and the Capital Expenditure Reserve Account is referred to herein individually as a “Reserve Account” and collectively as the “Reserve Accounts.” Each Reserve Account shall be an account established by Lender and shall not constitute a trust fund. Borrower hereby assigns and grants Lender a

security interest in the Reserve Accounts (and all funds therein) as security for the payment and performance of the Obligations. The Reserve Accounts shall constitute additional security for the Loan. Lender shall have a perfected first security interest in the Reserve Accounts to secure payment of the Obligations. At Lender’s option, funds deposited into a Reserve Account may be commingled with other money held by Lender or any servicer on behalf of Lender. The Reserve Accounts are subject to the sole dominion, control and discretion of Lender, its authorized agents or designees, subject to the terms hereof. Borrower shall not have the right to make any withdrawal from any Reserve Account.

(b)Notwithstanding anything to the contrary contained herein or in any other Loan Instrument, if an Event of Default then exists, (i) any amounts deposited into or remaining in any Reserve Account shall be for the account of Lender and may be withdrawn by Lender and applied to the Indebtedness in any manner as Lender may elect in Lender’s sole discretion; and (ii) Borrower shall have no further right in respect of the Reserve Accounts. Borrower shall pay for all expenses of opening and maintaining all of the Reserve Accounts.

(c)Lender shall disburse to Borrower (i) amounts from the TI/LC Reserve Account to pay or reimburse Borrower for tenant improvement costs and leasing commissions incurred in connection with any lease reasonably approved by Lender, and (ii) amounts from the Capital Expenditure Reserve Account to pay or reimburse Borrower for capital improvement expenditures as set forth in the approved Budget or otherwise approved by Lender (collectively, “Permitted Expenditures”); provided, however, that Lender shall not be required to make disbursements from either Reserve Account (i) at any time during the continuance of any Default; (ii) more frequently than once each calendar month; (iii) (except the final disbursement) in an amount less than $100,000; and (iv) unless and until the following conditions have been satisfied:

(i)At least ten (10) business days prior to the date on which Borrower desires Lender to disburse any amounts from a Reserve Account, Borrower shall have given Lender a written request for such disbursement (a “Disbursement Request”), specifying the amount of the requested disbursement and accompanied by a written statement by Borrower describing the Permitted Expenditures to be reimbursed from such disbursement.

(ii)Borrower shall have delivered to Lender evidence reasonably satisfactory to Lender (A) demonstrating that the amount of the requested disbursement is a payment to, or a reimbursement of Borrower for previously incurred or paid and unreimbursed costs of Borrower with respect to Permitted Expenditures, which evidence may include without limitation, certificates of occupancy or the equivalent, if required by Legal Requirements, invoices, receipts confirming payment and interim conditional (as to payment only) or final lien waivers, as the case may be, from all suppliers, contractors and subcontractors; (B) that all previous disbursements from the Reserve Accounts have been properly applied to reimburse Borrower for Borrower’s payment of Permitted Expenditures; and (C) verifying that any tenant improvement or capital improvement that is the subject of any such Disbursement Request has been completed to the satisfaction of Lender (which may include a satisfactory inspection by a representative of Lender).

(iii)Within ten (10) business days after receiving the Disbursement Request, Lender shall either (A) make the requested disbursement or (B) notify Borrower in writing of

Lender’s objection to the requested disbursement, specifying in such notice the reasons for such objection. Lender shall not be required to disburse funds in excess of the amount of the funds remaining in either Reserve Account.

(iv)If the amount of funds in the Capital Expenditure Reserve Account at the time Borrower elects to exercise the Extension Option exceeds the remaining capital expenditures set forth in the approved Budget through the extended Maturity Date, such excess funds will be applied by Lender to the Principal Reduction (thereby reducing the amount that Borrower otherwise pays from separate funds). If at any time thereafter the amount of funds in the Capital Expenditure Reserve Account exceeds the remaining capital expenditures set forth in the approved Budget through the extended Maturity Date, Lender may, in its sole discretion, apply such excess funds to reduce the outstanding principal balance of the Loan.

With respect to any approvals for leases requested by Borrower, Borrower will send an initial notice requesting consent. If Lender has not approved or denied approval within ten (10) business days thereafter, Borrower may send a second notice, which shall conspicuously state that if Lender fails to respond to such second notice within five (5) business days after the date thereof, then Lender’s approval will be deemed granted. If Lender fails to so respond within five (5) business days after such second notice and provided no Event of Default then exists, then Lender’s approval will be deemed granted.

(d)Lender and its agents, contractors, employees and other representatives (including, but not limited to, Lender’s consultants) are hereby irrevocably authorized upon not less than two (2) business days prior notice to Borrower to enter into and upon the Property for the purposes of inspecting all or any part of any tenant improvement or capital improvement work undertaken or completed. Neither any inspection of all or any part of such work by or on behalf of Lender, nor any approval or disapproval by or on behalf of Lender of all or any part of such work or any plans, specifications or other construction related documents or other guideline relating thereto shall be deemed or construed to be a representation, warranty or agreement by Lender concerning the fitness or adequacy of all or any part of such work for any purpose other than compliance with the requirements of this Agreement for the benefit of Lender. Lender shall not be responsible or accountable to Borrower or any other person for any unfitness or inadequacy of all or any part of such work for any other purpose (including, but not limited to, any failure of all or any part of such work to comply with any governmental requirements or with applicable safety standards).

(e)Any funds remaining in any Reserve Account upon the maturity of the Loan or refinance of the Loan shall be available to Lender for debt retirement to the extent the Loan has not otherwise been repaid in full. If at such time as the principal balance of the Notes and all accrued interest thereon and all other monetary Obligations have been paid in full, there remains any undisbursed funds in any Reserve Account, Lender shall direct that such remaining funds be disbursed to Borrower within five (5) business days thereafter.

(f)Borrower shall not be entitled to any earnings or interest on funds deposited into the Reserve Accounts. Interest, if any, earned by such deposits will be and remain the property of Lender.

7.Release of Claims. Each of Borrower and Guarantor for themselves and for their past, present and future agents, attorneys, representatives, officers, directors, partners, shareholders, successors and assigns (collectively, the “Releasors”) does hereby release, remise, and forever discharge Lender, and Lender’s divisions, subsidiaries, parents, affiliates and other related entities (whether or not such entities are wholly-owned) and each of Lender’s past, present and future directors, trustees, fiduciaries, administrators, officers, agents, employees, servants, shareholders and attorneys (as well as its predecessors, successors and assigns) (collectively, the “Releasees”) of and from all manner of actions, causes of action, suits, debts, reckonings, bonds, bills, specialties, covenants, controversies, agreements, promises, variances, trespasses, liabilities, obligations, damages, judgments, executions, claims and demands, whatsoever, in law or in equity, known or unknown at this time (collectively, “Claims”), which the Releasors, or any of them, now have as of the date of this Agreement or may claim to have, against one or more of the Releasees for or by reason of: (i) any matter, claim, damage or cause of action whatsoever (including, without in any way limiting the generality of the foregoing, all direct and indirect claims either for direct, consequential, or punitive damages of any kind) arising or accruing prior to the date hereof, whether known or unknown, suspected or unsuspected, foreseen or unforeseen at the present time arising out of or relating to the Loan Instruments, the Property or the Loan; (ii) any pre-existing acts, claims or events occurring at any time or times up to the date hereof which may result in future claims of any kind, (including, without in any way limiting the generality of the foregoing, all direct and indirect claims either for direct, consequential, or punitive damages of any kind) arising out of or relating to Loan Instruments, the Property or the Loan; (iii) any matter arising out of or relating to the Loan Instruments, the enforcement of the Loan Instruments, the Property or the Loan arising prior to the date of this Agreement (the matters referred to in the immediately preceding clauses (i), (ii) and (iii) shall collectively be referred to herein as the “Released Claims”). Each of the Releasors hereby agrees not to bring, or assist in bringing, any claim, action, cause of action, or proceeding regarding or in any way related to any of the Released Claims, and each of the Releasors further agrees that the foregoing release is, will constitute, and may be pleaded as, a bar to any such claim, action, cause of action or proceeding.

8.Representations and Warranties. Each of Borrower and Guarantor hereby reaffirms all of their respective representations and warranties set forth in the Loan Instruments (other than with respect to representations and warranties which were made as to a specific date or time, and without the need for disclosure of facts, circumstances or condition which, through the passage of time, or the undertaking of activities in accordance with the Loan Instruments, render any such representation or warranty untrue and are not, in and of themselves, a default under the Loan Instruments), and further represents and warrants that (a) Borrower is the sole legal and beneficial owner of the Property; (b) each of Borrower and Guarantor has the full power and authority (i) to execute and deliver this Agreement and (ii) to perform its obligations hereunder; (c) Borrower’s and Guarantor’s execution, delivery, and performance of this Agreement has been duly and validly authorized by all necessary action on the part of Borrower and Guarantor; (d) this Agreement has been duly and validly executed and delivered by Borrower and Guarantor and constitutes the legal, valid, and binding obligations of Borrower and Guarantor, enforceable in accordance with their respective terms; (e) no authorization, consent, approval, license, exemption, or other action by, and no registration, qualification, designation, declaration or filing with, any Person not a party hereto is or will be necessary in connection with the execution and delivery by Borrower and Guarantor of this Agreement or, to the extent necessary, have been obtained prior to the date

hereof; (f) the execution and delivery of this Agreement does not contravene, result in a breach of, or constitute a default under, any mortgage, loan agreement, indenture or other contract or agreement to which Borrower or Guarantor is a party or by which Borrower or Guarantor or any of Borrower’s or Guarantor’s properties may be bound; (g) there exists no default under the Notes or any of the other Loan Instruments; (h) there are no offsets, claims, counterclaims, cross-claims or defenses with respect to the Obligations; and (i) the Loan Instruments and this Agreement are fully enforceable by their terms. Each of Borrower and Guarantor further represent and warrant that there is no suit, judicial or administrative action, claim, investigation, inquiry, proceeding or written demand pending (or, to Borrower’s and Guarantor’s knowledge, threatened) that is not covered by Borrower’s insurance policies (i) against Borrower or Guarantor that would reasonably be expected to result in any material adverse change in the business, operations, properties or assets or in the condition, financial or otherwise, of Borrower or Guarantor, or in the ability of Borrower to pay or otherwise perform the Obligations, or (ii) which would adversely affect the Property or Borrower’s title to the Property, or (iii) which would adversely affect the validity, enforceability or priority of any of the Loan Instruments. It shall be an Event of Default under the Loan Instruments if any representation or warranty made by Borrower or Guarantor herein proves to be untrue or inaccurate in any material respect.

9.Renewal and Lien Continuation. Subject to the provisions of this Agreement, Borrower hereby renews the Obligations and promises to pay and perform all Obligations; and Guarantor hereby renews and reaffirms its obligations under the Loan Instruments and promises to pay and perform all of its obligations under the Loan Instruments. Nothing in this Agreement shall in any manner diminish, impair, waive or extinguish any of the Loan Instruments (including, without limitation, the Notes), any Obligations or any of the liens, assignments, grants or security interests given to secure all or any part of the Obligations (collectively, the “Liens”). The Liens are hereby ratified and confirmed as valid, subsisting and continuing to secure the Obligations.

10.Default. A default under this Agreement shall constitute an Event of Default under the Notes and other Loan Instruments. Upon the occurrence of any Event of Default, Lender may, at its option and without notice to Borrower, exercise any and all rights and remedies available to Lender pursuant to the Loan Instruments (including, without limitation, the ability of Lender to collect interest at the Increased Rate (as defined in the Notes) from the date of this Agreement), at law or in equity, in such manner as Lender in its sole and exclusive discretion determines. Borrower and Guarantor unconditionally and irrevocably waive further notice and any and all grace or cure periods that may be required prior to the exercise by the Lender of any rights or remedies it may have, whether under this Agreement, the other Loan Instruments, at law or in equity. Borrower hereby consents to the ex parte appointment of a receiver through any court having jurisdiction over the Property or the Borrower following the occurrence and during the continuance of an Event of Default and waives any and all defenses, counterclaims and notices in connection with such appointment of a receiver. Such consent and waiver is in addition to all rights of Lender hereunder, under the other Loan Instruments, at law and in equity.

11.No Waiver by Lender; Reservation of Rights. Nothing in this Agreement shall extend to or affect in any way any of the Obligations, any of the rights of Lender or any remedies of Lender arising under the Loan Instruments, at law or in equity, and Lender shall not be deemed to have waived any or all of such rights or remedies with respect to any default or event or condition

which, with notice or the lapse of time, or both, would become a default under the Loan Instruments and which upon Borrower’s execution and delivery of this Agreement might otherwise exist or which might hereafter occur. Without limiting the foregoing, nothing in this Agreement shall be deemed to apply to or limit any right or remedy of Lender, at any time following the occurrence and during the continuance of an Event of Default, including, without limitation, (A) the right to exercise self-help remedies, or (B) the right to foreclose judicially or non-judicially against any real or personal property collateral, or to exercise judicial or non-judicially power of sale rights, or (C) to obtain from a court provisional or ancillary remedies such as (but not limited to) injunctive relief, prejudgment attachment, or the appointment of a receiver. All such rights and remedies, as set forth in the Loan Instruments, are reserved.

12.Ratification and Reaffirmation of Loan Instruments. All of the terms, covenants, and conditions contained in the Loan Instruments (including, without limitation, Sections 3, 4 and 5 of the First Modification and Sections 3, 5 and 6 of the Second Modification) shall be and remain in full force and effect, except as specifically modified in this Agreement, and are hereby ratified, reaffirmed and republished in their entirety by the parties hereto. To the extent of any conflict between the other Loan Instruments and this Agreement, this Agreement shall control. It is expressly understood that the execution and delivery of this Agreement do not and shall not (a) give rise to any defense, set-off, right of recoupment, claim or counterclaim with respect to any of Borrower's or Guarantor's obligations under the Loan Instruments or the enforcement thereof, (b) operate as a waiver of any of Lender's rights, powers or privileges under the Loan Instruments, or (c) prejudice, limit or affect in any way any present or future rights, remedies, powers or benefits available to Borrower under the Loan Instruments or any other documents executed by Borrower or Guarantor for the benefit of Lender in connection with the Loan. In addition, the parties hereto expressly disclaim any intent to effect a novation or an extinguishment or discharge of any of the obligations pursuant to the Loan Instruments or by any other document executed in connection therewith by reason of this Agreement.

13.Authorization and Consent. Each party hereto hereby represents and warrants that such party (a) is authorized to enter into this Agreement and (b) has obtained all necessary consents, if any, needed to enter into this Agreement.

14.Acknowledgment of Legal Counsel. Borrower and Guarantor each represents and warrants that each is represented by legal counsel of their respective choice, is fully aware of the terms contained in this Agreement and has voluntarily and without coercion or duress of any kind, entered into this Agreement and the documents executed in connection with this Agreement.

15.Entire Agreement; Binding Affect. This Agreement constitutes the entire and final agreement among the parties and there are no agreements, understandings, warranties or representations among the parties with respect to the Loan except as set forth in this Agreement and the other Loan Instruments. This Agreement will inure to the benefit and bind the respective heirs, administrators, executors, representatives, successors and permitted assigns of the parties hereto. Nothing in this Agreement or in the other Loan Instruments, expressed or implied, is intended to confer upon any party other than the parties hereto and thereto any rights, remedies, obligations or liabilities under or by reason of this Agreement or the other Loan Instruments.

16.Interpretation. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

17.Governing Law. This Agreement is executed and delivered in the State of New Jersey (the “State”) and it is the desire and intention of the parties that it be in all respects interpreted according to the laws of the State. Borrower specifically and irrevocably consents to the jurisdiction and venue of the federal and state courts of the State with respect to all matters concerning this Agreement or the other Loan Instruments or the enforcement of any of the foregoing. Borrower agrees that the execution and performance of this Agreement shall have a State situs and accordingly, consents to personal jurisdiction in the State.

18.WAIVER OF JURY TRIAL. BORROWER AND GUARANTOR EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE OR HEREAFTER HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE LOAN INSTRUMENTS OR THE UNDERLYING TRANSACTIONS. BORROWER AND GUARANTOR EACH CERTIFIES THAT NEITHER LENDER NOR ANY OF ITS REPRESENTATIVES, AGENTS OR COUNSEL HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LENDER WOULD NOT IN THE EVENT OF ANY SUCH SUIT, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO TRIAL BY JURY.

19.Waiver of Automatic Stay. Lender shall be and is entitled to, and Borrower hereby consents to, relief from the stay imposed by Section 362 of the Bankruptcy Code, as amended, in any applicable proceeding with respect to Borrower. Borrower represents, warrants and agrees that (i) Borrower is a sophisticated commercial party experienced in transactions similar to the transaction contemplated herein and is represented by counsel of its own choosing, which counsel is experienced in transactions similar to the transaction contemplated herein, as determined by Borrower in its sole discretion, (ii) it has been advised of, and discussed with its counsel, alternatives to entering into this Agreement, including without limitation, a petition for relief under any Chapter of the Bankruptcy Code, Title 11, U.S.C.A., and it has determined that the transactions described herein are more favorable to it than such alternatives, (iii) it has been given good and valuable consideration for the waiver described in this Section 19, (iv) it has not entered into this Agreement with intention, expectation or belief that its performance in accordance with the terms this Agreement will adversely affect Borrower’s secured or unsecured creditors other than Lender, if any, and (v) it is entering into this Agreement with a reasonable, good faith expectation that it will be able to otherwise perform and satisfy its obligations in respect of this Agreement, the Loan and the Loan Instruments together with its obligations to its secured and unsecured creditors other than Lender, if any, as and when such obligations become due.

20.References. This Agreement is a Loan Instrument and from and after the date hereof: (a) references in any of the Loan Instruments to any of the other Loan Instruments will be deemed to be references to such other Loan Instruments as modified by this Agreement; and (b)

all references to the term “Loan Instruments” in each of the Loan Instruments shall hereinafter refer to the Loan Instruments as defined in the Security Instrument, this Agreement, and all documents executed in connection with this Agreement.

21.Counterpart Execution. This Agreement may be executed by one or more of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.

22.Electronic Execution of Documents. The words “execute,” “execution,” “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby (including without limitation any consents hereunder) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by Lender, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act and the Uniform Electronic Transactions Act, N.J.S.A. 12A:12-1 et seq.; provided that notwithstanding anything contained herein to the contrary Lender is under no obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by Lender pursuant to procedures approved by it.

23.Successors and Assigns. This Agreement shall inure to the benefit of and are binding upon Borrower and Lender, and their respective successors and permitted assigns.

24.Guarantor. Nothing herein is intended, nor shall it, increase, modify or supplement the obligations of the Guarantor under the Loan Instruments to which it is a party.

25.Exculpation/Nonrecourse. Section 5.18 of the Security Instrument, and the corresponding provision in the Notes (pages 5 to 7), are incorporated herein by this reference and are deemed made to apply with equal force and effect hereto.

26.Confidentiality. All Confidential Information shall be kept confidential by Lender, may not be disclosed to any third parties other than Lender’s Representatives (as hereinafter defined) or as required by applicable law or pursuant to legal process in the enforcement of rights and remedies under the Loan, and shall be used solely for the purpose of administering the Loan. Confidential Information shall not include any information which (i) is or becomes generally available to the public other than as a result of a disclosure by the Lender or its Representatives, (ii) was available to the Lender or its Representatives on a non-confidential basis prior to its disclosure by the Borrower or the Borrower’s Representatives, (iii) becomes available to the Lender or its Representatives on a non-confidential basis from a source (other than the Borrower or the Borrower’s Representatives) that is not known by Lender to be bound by a confidentiality agreement with the Borrower, or the Borrower’s Representatives or is not otherwise prohibited from transmitting the information to the Lender or (iv) is independently developed by Lender or its Representatives without the use of the Confidential Information. Nothing contained herein shall in any way restrict or impair the Lender’s right to disclose any of the Confidential Information if required by applicable laws and regulations, or at the request of any regulatory authority or self-regulatory organization having proper jurisdiction and authority over Lender. As used in herein,

the term “Representative” means, as to any person or entity, such person’s or entity’s affiliates and its and their directors, officers, employees, members, advisors (financial or otherwise), attorneys, accountants, auditors, consultants, lending sources and agents.

[NO FURTHER TEXT ON THIS PAGE]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the day and year first above written.

BORROWER:

PR CHERRY HILL STW LLC, a Delaware limited liability company

By: PREIT Associates, L.P.,

a Delaware limited partnership,

its sole member

By: Pennsylvania Real Estate Investment

Trust, its sole general partner

By:	/s/ Andrew Ioannou
Name:	Andrew M. Ioannou
Title:	Executive Vice President Finance and Acquisitions

CHERRY HILL CENTER, LLC,a Maryland limited liability company

By: Cherry Hill Center Manager, LLC,

a Delaware limited liability company,

its managing member

By: PREIT Associates, L.P.,

a Delaware limited partnership,

its sole member

By: Pennsylvania Real Estate Investment

Trust, its sole general partner

By:	/s/ Andrew Ioannou
Name:	Andrew M. Ioannou
Title:	Executive Vice President Finance and Acquisitions

GUARANTOR:

PREIT ASSOCIATES, L.P., a Delaware limited partnership

By: Pennsylvania Real Estate Investment Trust,

its sole general partner

By:	/s/ Andrew Ioannou
Name:	Andrew M. Ioannou
Title:	Executive Vice President Finance and Acquisitions

LENDER:

NEW YORK LIFE INSURANCE COMPANY,

a New York mutual insurance company

By:	/s/ Roger Braxton
Name:	Roger Braxton
Title:	Corporate Vice President and Secretary

TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA,

a New York corporation

By: Nuveen Alternatives Advisors LLC,

a Delaware limited liability company,

its investment manager

By:	/s/ Talia Feuerstein
Name:	Talia Feuerstein
Title:	Authorized Signer

EX-31

Exhibit 31.1

CERTIFICATION

I, Joseph F. Coradino, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Pennsylvania Real Estate Investment Trust;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of trustees (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2023

	/s/ Joseph F. Coradino
Name:	Joseph F. Coradino
Title:	Chairman and Chief Executive Officer

EX-31

Exhibit 31.2

CERTIFICATION

I, Mario C. Ventresca, Jr., certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Pennsylvania Real Estate Investment Trust;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of trustees (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2023

	/s/ Mario C. Ventresca, Jr.
Name:	Mario C. Ventresca, Jr.
Title:	Executive Vice President and Chief Financial Officer

EX-32

Exhibit 32.1

Certification of Chief Executive Officer

Pursuant to Section 906 of Sarbanes-Oxley Act of 2002

I, Joseph F. Coradino, the Chief Executive Officer of Pennsylvania Real Estate Investment Trust (the “Company”), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) the Form 10-Q of the Company for the quarter ended March 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 9, 2023

	/s/ Joseph F. Coradino
Name:	Joseph F. Coradino
Title:	Chairman and Chief Executive Officer

EX-32

Exhibit 32.2

Certification of Chief Financial Officer

Pursuant to Section 906 of Sarbanes-Oxley Act of 2002

I, Mario C. Ventresca, Jr., the Executive Vice President and Chief Financial Officer of Pennsylvania Real Estate Investment Trust (the “Company”), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) the Form 10-Q of the Company for the quarter ended March 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 9, 2023

	/s/ Mario C. Ventresca, Jr.
Name:	Mario C. Ventresca, Jr.
Title:	Executive Vice President and Chief Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2023	May 05, 2023
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Registrant Name	PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
Entity Central Index Key	0000077281
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Small Business	true
Entity File Number	001-6300
Entity Tax Identification Number	23-6216339
Entity Address, Address Line One	One Commerce Square
Entity Address, Address Line Two	2005 Market Street, Suite 1000
Entity Address, City or Town	Philadelphia
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19103
City Area Code	215
Local Phone Number	875-0700
Entity Common Stock, Shares Outstanding		5,340,735
Entity Incorporation, State or Country Code	PA
Entity Interactive Data Current	Yes
Document Quarterly Report	true
Document Transition Report	false
Fair Value Measured at Net Asset Value Per Share
Document Information [Line Items]
Title of 12(b) Security	Shares of Beneficial Interest, par value $1.00 per share
Trading Symbol	PRET
Series B Preferred Stock
Document Information [Line Items]
Title of 12(b) Security	Series B Preferred Shares, par value $0.01 per share
Trading Symbol	PRETL
Series C Preferred Stock
Document Information [Line Items]
Title of 12(b) Security	Series C Preferred Shares, par value $0.01 per share
Trading Symbol	PRETM
Series D Preferred Stock
Document Information [Line Items]
Title of 12(b) Security	Series D Preferred Shares, par value $0.01 per share
Trading Symbol	PRETN

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
INVESTMENTS IN REAL ESTATE, at cost:
Operating properties	$ 2,884,367	$ 2,894,944
Construction in progress	43,109	42,659
Land held for development	2,058	2,058
Total investments in real estate	2,929,534	2,939,661
Accumulated depreciation	(1,377,167)	(1,370,065)
Net investments in real estate	1,552,367	1,569,596
INVESTMENTS IN PARTNERSHIPS, at equity:	7,621	7,845
OTHER ASSETS:
Cash and cash equivalents	20,240	22,937
Tenant and other receivables	33,972	40,459
Intangible assets (net of accumulated amortization of $23,303 and $23,029 at March 31, 2023 and December 31, 2022, respectively)	8,349	8,623
Deferred costs and other assets, net	86,754	91,902
Assets held for sale	35,036	61,767
Total assets	1,744,339	1,803,129
LIABILITIES:
Mortgage loans payable, net	740,167	749,396
Term Loans, net	971,506	976,903
Revolving Facilities	22,481	22,481
Tenants’ deposits and deferred rent	14,099	13,264
Distributions in excess of partnership investments	96,092	93,136
Accrued expenses and other liabilities	69,930	69,846
Liabilities on assets held for sale	1,975	2,539
Total liabilities	1,916,250	1,927,565
COMMITMENTS AND CONTINGENCIES (Note 8)
EQUITY:
Shares of beneficial interest, $1.00 par value per share; 13,333 shares authorized; 5,341 and 5,356 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	5,341	5,356
Capital contributed in excess of par	1,858,851	1,858,675
Accumulated other comprehensive income	1,415	3,282
Distributions in excess of net income	(2,025,779)	(1,980,693)
Total equity (deficit) - Pennsylvania Real Estate Investment Trust	(160,018)	(113,226)
Noncontrolling interest	(11,893)	(11,210)
Total equity (deficit)	(171,911)	(124,436)
Total liabilities and equity	1,744,339	1,803,129
Series B Preferred Stock
EQUITY:
Preferred Shares	35	35
Series C Preferred Stock
EQUITY:
Preferred Shares	69	69
Series D Preferred Stock
EQUITY:
Preferred Shares	$ 50	$ 50

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Intangible assets, accumulated amortization	$ 23,303,000	$ 23,029,000
Common stock, par value (in dollars per share)	$ 1.00	$ 1.00
Common stock, shares authorized (in shares)	13,333,000	13,333,000
Common stock, shares issued (in shares)	5,341,000	5,356,000
Common stock, shares outstanding (in shares)	5,341,000	5,356,000
Series B Preferred Stock
Preferred shares, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares issued (in shares)	3,450,000	3,450,000
Preferred shares, outstanding (in shares)	3,450,000	3,450,000
Liquidation preference	$ 103,741,000	$ 102,151,000
Series C Preferred Stock
Preferred shares, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares issued (in shares)	6,900,000	6,900,000
Preferred shares, outstanding (in shares)	6,900,000	6,900,000
Liquidation preference	$ 206,655,000	$ 203,550,000
Series D Preferred Stock
Preferred shares, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares issued (in shares)	5,000,000	5,000,000
Preferred shares, outstanding (in shares)	5,000,000	5,000,000
Liquidation preference	$ 148,634,000	$ 146,485,000

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2023	Mar. 31, 2022
Real estate revenue:
Lease revenue		$ 61,515	$ 64,283
Expense reimbursements		4,653	4,144
Other real estate revenue		1,006	767
Total real estate revenue		67,174	69,194
Other income		91	241
Total revenue		67,265	69,435
Property operating expenses:
CAM and real estate taxes		(26,159)	(27,872)
Utilities		(3,395)	(3,561)
Other property operating expenses		(2,215)	(2,140)
Total property operating expenses		(31,769)	(33,573)
Depreciation and amortization		(26,369)	(29,110)
General and administrative expenses		(11,125)	(11,483)
Other expenses		(3)	(144)
Total operating expenses		(69,266)	(74,310)
Interest expense, net		(41,048)	(31,391)
Total expenses		(110,314)	(105,701)
Equity in loss of partnerships		(2,696)	(395)
Gain on sale of preferred equity interest		0	3,688
Net loss		(45,745)	(32,973)
Less: net loss attributable to noncontrolling interest		659	504
Net loss attributable to PREIT		(45,086)	(32,469)
Less: preferred share dividends		(6,844)	(6,844)
Net loss attributable to PREIT common shareholders		$ (51,930)	$ (39,313)
Basic loss per share:		$ (9.75)	$ (7.41)
Diluted loss per share:		$ (9.75)	$ (7.41)
Weighted average shares outstanding-basic (in shares)		5,324	5,305
Effect of common share equivalents (in shares)	[1]	0	0
Weighted average shares outstanding-diluted (in shares)		5,324	5,305

[1] The Company had net losses used to calculate earnings per share for the three months ended March 31, 2023 and 2022. 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.

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Comprehensive loss:
Net loss	$ (45,745)	$ (32,973)
Unrealized (loss) gain on derivatives	(1,885)	5,807
Amortization of settled swaps	(6)	0
Total comprehensive loss	(47,636)	(27,166)
Less: comprehensive loss attributable to noncontrolling interest	683	431
Comprehensive loss attributable to PREIT	$ (46,953)	$ (26,735)

XML

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Shares of Beneficial Interest, $1.00 Par	Capital Contributed in Excess of Par	Accumulated Other Comprehensive Loss	Distributions in Excess of Net Income	Non- controlling interest	Series B Preferred Stock Preferred Shares $.01 par	Series C Preferred Stock Preferred Shares $.01 par	Series D Preferred Stock Preferred Shares $.01 par
Beginning balance at Dec. 31, 2021	$ 7,047	$ 5,347	$ 1,851,866	$ (8,830)	$ (1,832,375)	$ (9,115)	$ 35	$ 69	$ 50
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(32,973)				(32,469)	(504)
Other comprehensive (loss) income	5,807			5,734		73
Shares issued under employee compensation plans, net of shares retired	4,449	28	4,421
Amortization of deferred compensation	814		814
Ending balance at Mar. 31, 2022	(14,856)	5,375	1,857,101	(3,096)	(1,864,844)	(9,546)	35	69	50
Beginning balance at Dec. 31, 2022	(124,436)	5,356	1,858,675	3,282	(1,980,693)	(11,210)	35	69	50
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(45,745)				(45,086)	(659)
Other comprehensive (loss) income	(1,891)			(1,867)		(24)
Shares issued under employee compensation plans, net of shares retired	(52)	(15)	(37)
Amortization of deferred compensation	213		213
Ending balance at Mar. 31, 2023	$ (171,911)	$ 5,341	$ 1,858,851	$ 1,415	$ (2,025,779)	$ (11,893)	$ 35	$ 69	$ 50

XML

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022
Common stock, par value (in dollars per share)	$ 1.00	$ 1.00	$ 1.00
Series B Preferred Stock
Preferred shares, par value (in dollars per share)	0.01	0.01	0.01
Series C Preferred Stock
Preferred shares, par value (in dollars per share)	0.01	0.01	0.01
Series D Preferred Stock
Preferred shares, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net loss	$ (45,745)	$ (32,973)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	24,900	27,436
Amortization	4,448	2,098
Straight-line rent adjustments	(50)	290
Deferred compensation	213	(165)
Gain on sale of preferred equity interest	0	(3,688)
Paid-in-kind interest	20,491	12,547
Gain on hedge ineffectiveness	(8)	(8)
Equity in loss of partnerships	2,696	395
Cash distributions from partnerships	485	1,570
Change in assets and liabilities:
Net change in other assets	11,605	7,161
Net change in other liabilities	(498)	(189)
Net cash provided by operating activities	18,537	14,474
Cash flows from investing activities:
Cash proceeds from sales of real estate	26,312	0
Investments in real estate improvements	(6,297)	(2,746)
Additions to construction in progress	(1,131)	(1,385)
Investments in partnerships	0	(415)
Capitalized leasing costs	(265)	(29)
Proceeds from sale of preferred equity interest	0	2,438
Additions to leasehold improvements and corporate fixed assets	(14)	0
Net cash provided by (used in) investing activities	18,605	(2,137)
Cash flows from financing activities:
Net repayments to term loans	(26,312)	(2,437)
Repayments of finance lease liabilities	(174)	0
Principal installments on mortgage loans	(9,557)	(6,048)
Payment of deferred financing costs	(2,500)	(235)
Repurchase of shares retired under equity incentive plans, net of shares issued	(52)	(593)
Net cash used in financing activities	(38,595)	(9,313)
Net change in cash, cash equivalents, and restricted cash	(1,453)	3,024
Cash, cash equivalents, and restricted cash, beginning of period	34,689	58,077
Cash, cash equivalents, and restricted cash, end of period	$ 33,236	61,101
Supplemental non-cash disclosures:
Transfer of equity compensation from liability to equity		$ 6,020

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation

1. BASIS OF PRESENTATION

Nature of Operations

Pennsylvania Real Estate Investment Trust (“PREIT” or the “Company”) prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe that the included disclosures are adequate to make the information presented not misleading. Our unaudited consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included in PREIT’s Annual Report on Form 10-K for the year ended December 31, 2022. In our opinion, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our consolidated financial statements are included. The results of operations for the interim periods presented are not necessarily indicative of the results for the full year.

PREIT, a Pennsylvania business trust founded in 1960 and one of the first equity real estate investment trusts (“REITs”) in the United States, has a primary investment focus on retail shopping malls located in the eastern half of the United States, primarily in the Mid-Atlantic region. As of March 31, 2023, our portfolio consists of a total of 23 properties operating in eight states, including 19 shopping malls, three other retail properties and one development property. The property in our portfolio that is classified as under development does not currently have any activity occurring.

We hold our interest in our portfolio of properties through our operating partnership, PREIT Associates, L.P. (“PREIT Associates” or the “Operating Partnership”). We are the sole general partner of the Operating Partnership and, as of March 31, 2023, we held a 98.7% controlling interest in the Operating Partnership and consolidated it for reporting purposes. The presentation of consolidated financial statements does not itself imply that the assets of any consolidated entity (including any special-purpose entity formed for a particular project) are available to pay the liabilities of any other consolidated entity, or that the liabilities of any consolidated entity (including any special-purpose entity formed for a particular project) are obligations of any other consolidated entity.

Pursuant to the terms of the partnership agreement of the Operating Partnership, each of the limited partners has the right to redeem such partner’s units of limited partnership interest in the Operating Partnership (“OP Units”) for cash or, at our election, we may acquire such OP Units in exchange for our common shares on a fifteen-for-one basis (as a result of our recent reverse share split (described below)), in some cases beginning one year following the respective issue date of the OP Units and in other cases immediately. The current terms of our credit agreements prohibit the Company from acquiring whole share OP Units for cash and, as such, any whole share OP Units presented for redemption will be redeemed for shares. Partial share OP Unit redemptions will be redeemed for cash.

We provide management, leasing and real estate development services through two of our subsidiaries: PREIT Services, LLC (“PREIT Services”), which generally develops and manages properties that we consolidate for financial reporting purposes, and PREIT-RUBIN, Inc. (“PRI”), which generally develops and manages properties that we do not consolidate for financial reporting purposes, including properties owned by partnerships in which we own an interest, and properties that are owned by third parties in which we do not have an interest. PREIT Services and PRI are consolidated. PRI is a taxable REIT subsidiary, as defined by federal tax laws, which means that it is able to offer an expanded menu of services to tenants without jeopardizing our continuing qualification as a REIT under federal tax law.

We evaluate operating results and allocate resources on a property-by-property basis, and do not distinguish or evaluate our consolidated operations on a geographic basis. Due to the nature of our operating properties, which involve retail shopping, dining, entertainment and certain non-traditional tenant operations, we have concluded that our individual properties have similar economic characteristics and meet all other aggregation criteria. Accordingly, we have aggregated our individual properties into one reportable segment. In addition, no single tenant accounts for 10% or more of consolidated revenue, and none of our properties are located outside the United States.

Current Economic and Industry Conditions

Conditions in the economy have caused fluctuations and variations in business and consumer confidence, retail sales, and consumer spending on retail goods, destination dining and entertainment. In particular, current conditions in the economy have caused fluctuations in unemployment rates, and together with supply chain challenges, the current inflationary environment, overall economic uncertainty and the potential for recession, have impacted consumer confidence and spending. The economic factors have had corresponding effects on tenant business performance, prospects, solvency and leasing decisions. Further, traditional mall tenants, including department store anchors and smaller format retail tenants face significant challenges resulting from changing consumer expectations, the convenience of e-commerce shopping, the expansion of outlet centers, and declining mall traffic, among other factors. In recent years, there has been an increased level of tenant bankruptcies and store closings by tenants who have been significantly impacted by these factors. We anticipate that our future business, financial condition, liquidity and results of operations, will continue to be materially impacted by these conditions, and more recently by inflationary pressures and substantial increases in interest rates.

Going Concern Considerations

Under the accounting guidance related to the presentation of financial statements, when preparing financial statements for each annual and interim reporting period, management has the responsibility to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. As a result of the considerations articulated below, we believe there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued.

In applying the accounting guidance, management considered our current financial condition and liquidity sources, including current funds available, forecasted future cash flows and our conditional and unconditional obligations due over the next twelve months after the date that our financial statements were issued. Management specifically considered the two secured credit agreements (collectively, as amended, the “Credit Agreements”), further defined in Note 4, with a maturity date in December 2023 as an event or condition that raised substantial doubt about our ability to continue as a going concern. As of March 31, 2023, we had borrowed $305.7 million under the First Lien Term Loan Facility, $667.6 million under the Second Lien Term Loan Facility and $22.5 million under the First Lien Revolving Facility. Our obligations under the Credit Agreements are guaranteed by certain of our subsidiaries. The Credit Agreements include several events of default as described in Note 4. Upon the occurrence of an event of default (except with respect to bankruptcy), the lenders may declare all of the obligations in connection with the applicable Credit Agreement (including an amount equal to the outstanding letters of credit under the First Lien Credit Agreement) immediately due and payable and may terminate the lenders’ commitments thereunder. When the borrowings under the Credit Agreements come due and payable due to a default or at maturity in December 2023, the Company would not be able to satisfy its obligations. Management plans to work with the lender groups under the credit facilities and also explore other options to satisfy this obligation, however, any such relief involves performance by third parties and cannot be considered probable of occurring.

Therefore, due to the inherent risks, unknown results and significant uncertainties associated with this matter and the direct correlation to our ability to satisfy our financial obligations that may arise over the applicable twelve month period, we are unable to conclude that it is probable that we will be able to meet our obligations arising within twelve months of the date of issuance of these financial statements under the parameters set forth in this accounting guidance.

Fair Value

Fair value accounting applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements.

Fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, these accounting requirements establish a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access.

Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs might include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals.

Level 3 inputs are unobservable inputs for the asset or liability and are typically based on an entity’s own assumptions, as there is little, if any, related market activity.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. We utilize the fair value hierarchy in our accounting for derivatives (Level 2), fixed rate and variable rate debt (Level 2), and in our reviews for impairment of real estate assets (Level 3) and goodwill (Level 3).

Impairment of Assets

Real estate investments and related intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the property might not be recoverable, which is referred to as a “triggering event.” If there is a triggering event in relation to a property to be held and used, we will estimate the aggregate future cash flows, net of estimated capital expenditures, to be

generated by the property, undiscounted and without interest charges. In addition, this estimate may consider a probability weighted cash flow estimation approach when alternative courses of action to recover the carrying amount of a long-lived asset are under consideration or when a range of possible values is estimated.

During the three months ended March 31, 2023, there were no new indicators of impairment at any of our properties. No impairment review or assessment of the undiscounted future cash flows was required.

Our review of long-lived assets for impairment utilizes qualitative and quantitative factors in order to estimate fair value. The significant qualitative factors that we use include age and condition of the property, market conditions in the property’s trade area, competition with other shopping centers within the property’s trade area and the creditworthiness and performance of the property’s tenants. The significant quantitative factors that we use include historical and forecasted financial and operating information relating to the property, such as net operating income, estimated holding periods, occupancy statistics, vacancy projections and tenants’ sales levels.

The determination of undiscounted cash flows requires significant estimates by our management, including the expected course of action at the balance sheet date that would lead to such cash flows. Subsequent changes in estimated undiscounted cash flows arising from changes in the anticipated action to be taken with respect to the property could affect the determination of whether an impairment exists, and the effects of such changes could materially affect our net income. If the estimated undiscounted cash flows are less than the carrying value of the property, the carrying value is written down to its fair value. Our intent is to hold and operate our properties long-term, which reduces the likelihood that our carrying value is not recoverable. A shortened holding period would increase the likelihood that the carrying value is not recoverable. We will obtain a third party appraisal of the property as deemed necessary.

Assessment of our ability to recover certain lease-related costs must be made when we have a reason to believe that a tenant might not be able to perform under the terms of the lease as originally expected. This requires us to make estimates as to the recoverability of such costs.

An other-than-temporary impairment of an investment in an unconsolidated joint venture is recognized when the carrying value of the investment is not considered recoverable based on evaluation of the severity and duration of the decline in value. To the extent impairment has occurred, the excess carrying value of the asset over its estimated fair value is recorded as a reduction to income.

Assets Classified as Held for Sale

The determination to classify an asset as held for sale requires significant estimates by us about the property and the expected market for the property, which are based on factors including recent sales of comparable properties, recent expressions of interest in the property, financial metrics of the property and the physical condition of the property. We must also determine if it will be possible under those market conditions to sell the property for an acceptable price within one year. When assets are identified by our management as held for sale, we discontinue depreciating the assets and estimate the sales price, net of selling costs, of such assets. We generally consider operating properties to be held for sale when they meet criteria such as whether the sale transaction has been approved by the appropriate level of management and there are no known material contingencies relating to the sale such that the sale is probable and is expected to qualify for recognition as a completed sale within one year. If the expected net sales price of the asset that has been identified as held for sale is less than the net book value of the asset, the asset is written down to fair value less the cost to sell. Assets and liabilities related to assets classified as held for sale are presented separately in the consolidated balance sheets. If we determine that a property no longer meets the held-for-sale criteria, we reclassify the property’s assets and liabilities to their original locations on the consolidated balance sheet and record depreciation and amortization expense for the period that the property was in held-for-sale status.

As of March 31, 2023, we determined that two of our hotel land parcels, one multifamily land parcel, and one retail property met the criteria to be classified as held for sale. As of December 31, 2022, two of our hotel land parcels, one multifamily land parcel, and two retail properties met the criteria to be classified as held for sale.

Reverse Share Split

On June 16, 2022, the Company effected a one-for-fifteen reverse share split of its common shares. Upon the effectiveness of the reverse share split, every 15 issued and outstanding common shares were combined into one issued and outstanding common share, with no change in par value per share, and the authorized number of common shares was proportionally reduced. Shareholders entitled to fractional shares as a result of the reverse share split were entitled to receive a cash payment in lieu of receiving fractional shares. All common share and per share data in the consolidated financial statements and notes to the consolidated financial statements have been retrospectively revised to reflect the reverse share split. Common shares underlying outstanding options, time based and restricted share units, performance based share units and restricted shares were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased. Additionally, the conversion rate of OP Units into common shares was automatically proportionally adjusted from one-for-one to fifteen-for-one. The reverse share split resulted in bringing the Company into compliance with the minimum bid price requirement for maintaining its listing on the New York Stock Exchange (the “NYSE”), and on July 1, 2022, the Company received notice from the NYSE that it had regained compliance with the minimum bid price requirement. The Company's common shares continued to trade under the symbol “PEI” and began trading on a split-adjusted basis on June 16, 2022.

On December 15, 2022, the Company received written notice from the NYSE that the Company failed to maintain an average market global capitalization over a consecutive 30 trading-day period of at least $15 million which resulted in NYSE delisting its securities. The securities were transferred to "OTC Pink Market" and later to OTCQB, both operated by OTC Markets Group Inc. As of March 31, 2023, the Company's shares were traded on OTCQB under the symbols PRET (Common Shares), PRETL (Preferred Series B), PRETM (Preferred Series C), and PRETN (Preferred Series D).

New Accounting Developments

The Company considers all new accounting standards for their applicability to the consolidated financial statements. We determined that there were no new accounting standards, issued or effective during the quarter ended March 31, 2023, that have had or are expected to have a material impact on our consolidated financial statements.

Restatement of Previously Reported Financial Statements

The consolidated statement of cash flows for the three months ended March 31, 2022 has been restated due to a misclassification. The value of beneficial shares issued as settlement of certain compensation liabilities was previously reported as cash provided by financing activities, with offsetting reductions to operating cash flows. The cash flow presentation has been restated to properly reflect this transaction as supplemental non-cash financing activity. This restatement only impacts the consolidated statement of cash flows for the three months ended March 31, 2022 and resulted in no change in cash, cash equivalents and restricted cash as of March 31, 2022.

The following table provides a summary of the restatement on the Company's consolidated statement of cash flows for the three months ended March 31, 2022.

	For the three months ended March 31, 2022
(in thousands of dollars)	As Previously Reported			Restatement Adjustment			As Restated
Cash flows from operating activities:
Adjustments to reconcile net loss to net cash provided by operating activities:
Net change in other liabilities	$	(6,209	)	$	6,020		$	(189	)
Net cash provided by operating activities		8,454			6,020			14,474
Cash flows from financing activities:
Repurchase of shares retired under equity incentive plans, net of shares issued		5,427			(6,020	)		(593	)
Net cash used in financing activities		(3,293	)		(6,020	)		(9,313	)
Supplemental non-cash disclosures:
Transfer of equity compensation from liability to equity	$	—		$	6,020		$	6,020

There was no impact to the consolidated balance sheet, statement of operations and statement of equity, and notes related to this matter as of and for the three months ended March 31, 2022.

XML

Real Estate Activities

3 Months Ended

Mar. 31, 2023

Real Estate [Abstract]

Real Estate Activities

2. REAL ESTATE ACTIVITIES

Investments in real estate as of March 31, 2023 and December 31, 2022 were comprised of the following:

	March 31,			December 31,
(in thousands of dollars)	2023			2022
Buildings, improvements and construction in progress	$	2,539,604		$	2,549,731
Land, including land held for development		389,930			389,930
Total investments in real estate		2,929,534			2,939,661
Accumulated depreciation		(1,377,167	)		(1,370,065	)
Net investments in real estate	$	1,552,367		$	1,569,596

Dispositions

In February 2023, we sold a retail space at Plymouth Meeting Mall in Plymouth Meeting, Pennsylvania for $27.0 million. We used net proceeds of $26.3 million from the sale to pay down our First Lien Term Loan Facility.

In February 2022, we completed the redemption of preferred equity issued as part of a previous sale of our New Garden land parcel. In connection with this settlement, we received approximately $2.5 million, which funds were used to pay down our First Lien Revolving Facility and First Lien Term Loan Facility. In connection with this transaction, we recorded a gain on sale of preferred equity of $3.7 million in the three months ended March 31, 2022.

Assets Classified as Held for Sale

As of March 31, 2023 and December 31, 2022, we had assets and liabilities that have been classified as held for sale and summarized in the following table:

	March 31,			December 31,
(in thousands of dollars)	2023			2022
Assets held for sale:
Operating properties	$	32,204		$	58,562
Tenant and other receivables, net of allowance		321			226
Other assets		2,511			2,979
Total assets held for sale	$	35,036		$	61,767
Liabilities held for sale:
Accrued expenses and other liabilities	$	(1,975	)	$	(2,539	)
Total liabilities held for sale	$	(1,975	)	$	(2,539	)

XML

Investments in Partnerships

3 Months Ended

Mar. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

Investments in Partnerships

3. INVESTMENTS IN PARTNERSHIPS

The following table presents summarized financial information of the equity method investments in our unconsolidated partnerships as of March 31, 2023 and December 31, 2022:

_____________________

	March 31,			December 31,
(in thousands of dollars)	2023			2022
ASSETS:
Investments in real estate, at cost:
Operating properties	$	741,998		$	741,007
Construction in progress		5,378			5,346
Total investments in real estate		747,376			746,353
Accumulated depreciation		(242,380	)		(237,791	)
Net investments in real estate		504,996			508,562
Cash and cash equivalents		39,603			28,186
Deferred costs and other assets, net		142,940			142,929
Total assets		687,539			679,677
LIABILITIES AND PARTNERS’ INVESTMENT:
Mortgage loans payable, net		397,998			400,141
FDP Term Loan, net		78,320			104,427
Partnership Loans		246,905			214,008
Other liabilities		165,562			155,873
Total liabilities		888,785			874,449
Net investment		(201,246	)		(194,772	)
Partners’ share		(105,788	)		(102,495	)
PREIT’s share		(95,458	)		(92,277	)
Excess investment (1)		6,987			6,986
Net investments and advances	$	(88,471	)	$	(85,291	)
Investment in partnerships, at equity	$	7,621		$	7,845
Distributions in excess of partnership investments		(96,092	)		(93,136	)
Net investments and advances	$	(88,471	)	$	(85,291	)

(1) Excess investment represents the unamortized difference between our investment and our share of the equity in the underlying net investment in the unconsolidated partnerships. The excess investment is amortized over the life of the properties, and the amortization is included in “Equity in (loss) income of partnerships.”

We record distributions from our equity investments using the nature of the distribution approach.

The following table summarizes our share of equity in loss of partnerships for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
(in thousands of dollars)	2023			2022
Real estate revenue	$	27,167		$	29,889
Expenses:
Property operating and other expenses		(10,157	)		(11,874	)
Interest expense (1)		(16,698	)		(11,754	)
Depreciation and amortization		(5,691	)		(6,655	)
Total expenses		(32,546	)		(30,283	)
Net loss		(5,379	)		(394	)
Less: Partners’ share		2,683			(1	)
PREIT’s share		(2,696	)		(395	)
Equity in loss of partnerships	$	(2,696	)	$	(395	)

(1) Net of capitalized interest expense of $24 and $0 for the three months ended March 31, 2023 and 2022, respectively.

Fashion District Philadelphia

FDP Loan Agreement

PM Gallery LP, a Delaware limited partnership and joint venture entity owned indirectly by us and The Macerich Company (“Macerich”), previously entered into a $250.0 million term loan in January 2018 (as amended in July 2019 to increase the total maximum potential borrowings to $350.0 million) to fund the redevelopment of Fashion District Philadelphia and to repay capital contributions to the venture previously made by the partners. On December 10, 2020, PM Gallery LP, together with certain other subsidiaries owned indirectly by us and Macerich (including the fee and leasehold owners of the properties that are part of the Fashion District Philadelphia project), entered into an Amended and Restated Term Loan Agreement (the “FDP Loan Agreement”). In connection with the execution of the FDP Loan Agreement, a $100.0 million principal payment was made (and funded indirectly by Macerich, the “Partnership Loan”) to pay down the existing loan, reducing the outstanding principal under the FDP Loan Agreement from $301.0 million to $201.0 million. In addition, subsequent payments were made on the FDP Loan Agreement as indicated below. The joint venture must repay the Partnership Loan plus 15% accrued interest to Macerich, in its capacity as the lender, prior to the resumption of 50/50 cash distributions to the Company and its joint venture partner.

The FDP Loan Agreement provides for (i) a maturity date of January 22, 2024, (having been extended by one year upon satisfaction of the required conditions to extension), (ii) an interest rate at the borrowers’ option with respect to each advance of either (A) the Base Rate (defined as the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50%, and (c) the LIBOR Market Index Rate plus 1.00%) plus 2.50% or (B) LIBOR for the applicable period plus 3.50%, (iii) a full recourse guarantee of 50% of the borrowers’ obligations by PREIT Associates, L.P., on a several basis, (iv) a full recourse guarantee of certain of the borrowers’ obligations by The Macerich Partnership, L.P., up to a maximum of $50.0 million, on a several basis, (v) a pledge of the equity interests of certain indirect subsidiaries of PREIT and Macerich, as well as of PREIT-RUBIN, Inc. and one of its subsidiaries, that have a direct or indirect ownership interest in the borrowers, (vi) a non-recourse carve-out guaranty and a hazardous materials indemnity by each of PREIT Associates, L.P. and The Macerich Partnership, L.P., and (vii) mortgages of the borrowers’ fee and leasehold interests in the properties that are part of the Fashion District Philadelphia project and certain other properties. In January 2023, the FDP Loan Agreement was amended to replace the interest rate benchmark from LIBOR to SOFR. The Base Rate is defined as the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus one half (0.50%) and (c) Adjusted Term SOFR for a one-month tenor plus one percent (1.00%). The FDP Loan Agreement contains certain covenants typical for loans of its type.

In January 2023, the joint venture paid down an additional $26.1 million of the FDP Loan Agreement balance to reach a debt yield ratio of 12% and exercised its option to extend the FDP Loan Agreement maturity date to January 22, 2024. If the joint venture fails to meet the debt yield covenant as of any quarter end measurement date and does not pay down the FDP Loan Agreement balance to achieve compliance, the balance could become due and payable at that time. The Company guarantees 50% of the joint venture’s obligations under the FDP Loan Agreement. Management projects that the Company would be able to satisfy its obligations if the FDP term loan would become due and payable by its maturity date. The FDP Loan Agreement had a balance of $78.3 million as of March 31, 2023 (our share of which is $39.2 million). The joint venture has an outstanding balance on its Partnership Loans of $246.9 million (our share of which is $123.5 million) as of March 31, 2023 and the majority of the proceeds from the Partnership Loan were used to pay down the FDP Term Loan and the remainder was used to fund ongoing capital expenditures at the property.

Joint Venture

In connection with the execution of the FDP Loan Agreement, the governing structure of PM Gallery LP was modified such that, effective as of January 1, 2021, Macerich is responsible for the entity’s operations and, subject to limited exceptions, controls major decisions. The

Company considered the changes to the governing structure of PM Gallery LP and determined the investment qualifies as a variable interest entity and will continue to be accounted for under the equity method of accounting. Our maximum exposure to losses is limited to the extent of our investment, which is a 50% ownership, and the guarantee under the FDP Loan Agreement as noted above.

XML

Financing Activity

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Financing Activity

4. FINANCING ACTIVITY

Credit Agreements

On December 10, 2020 we entered into the “Credit Agreements": (a) an Amended and Restated First Lien Credit Agreement (the “First Lien Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo Bank”) and the other financial institutions signatory thereto and their assignees, for secured loan facilities consisting of: (i) a secured first lien revolving credit facility allowing for borrowings up to $130.0 million, including a sub-facility for letters of credit to be issued thereunder in an aggregate stated amount of up to $10.0 million (collectively, the “First Lien Revolving Facility”), and (ii) a $384.5 million secured first lien term loan facility (the “First Lien Term Loan Facility”), and (b) a Second Lien Credit Agreement (the “Second Lien Credit Agreement”), as amended February 8, 2021 with Wells Fargo Bank and the other financial institutions signatory thereto and their assignees for a $535.2 million secured second lien term loan facility (the “Second Lien Term Loan Facility”). The Credit Agreements were to mature in December 2022, and the maturity date was extended to December 2023. The First Lien Term Loan Facility and the Second Lien Term Loan Facility are collectively referred to as the “Term Loans.”

As of March 31, 2023, we had borrowed $305.7 million under the First Lien Term Loan Facility, $667.6 million under the Second Lien Term Loan Facility and $22.5 million under the First Lien Revolving Facility. The carrying value of the Term Loans on our consolidated balance sheet as of March 31, 2023 is net of $1.8 million of unamortized debt issuance costs. The maximum amount that was available to us under the First Lien Revolving Facility as of March 31, 2023 was $107.5 million. In February 2023, we used net proceeds from the sale of retail space at Plymouth Meeting Mall to pay down our First Lien Term Loan Facility by $26.3 million. In April 2023, we borrowed $5.0 million under the First Lien Revolving Facility.

Wilmington Savings Fund Society, FSB is Administrative Agent under the First Lien Credit Agreement, the Second Lien Credit Agreement and, in each case, the related loan documents. There is currently no letter of credit issuer under the First Lien Revolving Facility, accordingly, the Company cannot currently access the letters of credit sub-facility.

Interest expense and deferred financing fee amortization related to the Credit Agreements for the three months ended March 31, 2023 and 2022 were as follows:

	Three Months Ended March 31,
(in thousands of dollars)	2023		2022
Revolving Facilities:
Interest expense (1)	$	461	$	541
Deferred financing amortization		57		299
Term Loans:
Interest expense (2)	$	27,549	$	20,448
Deferred financing amortization		424		1,784

(1)All of the expense applied to the First Lien Revolving Facility.

(2)All of the expense applied to the Term Loans, of which $20.5 million and $12.5 million, for the three months ended March 31, 2023 and March 31, 2022, respectively, was for the Second Lien Term Loan Facility and was not paid in cash, but capitalized to the principal balance of the loan.

Our obligations under the Credit Agreements are guaranteed by certain of our subsidiaries. Our obligations under the Credit Agreements and the guaranties are secured by mortgages and deeds of trust on a portfolio of 10 of our subsidiaries’ properties, including nine malls and one additional parcel. The obligations are further secured by a lien on substantially all of our personal property pursuant to collateral agreements and a pledge of substantially all of the equity interests held by us and the guarantors, pursuant to pledge agreements, in each case subject to limited exceptions.

In December 2022, we exercised our option and satisfied the conditions to extend the maturity date of our Credit Agreements, such that it is now December 10, 2023 (the “Maturity Date”). The loans under the Credit Agreements are repayable in full on the Maturity Date, subject to mandatory prepayment provisions in the event of certain events including asset sales, incurrence of indebtedness, issuances of equity and receipt of casualty insurance proceeds. The terms of our Credit Agreements place restrictions on, among other things, and subject to certain exceptions, our ability to make certain restricted payments (including payments of dividends), make certain types of investments and acquisitions, issue redeemable securities, incur additional indebtedness, incur liens on our assets, enter into agreements with a negative pledge, make certain intercompany transfers, merge, consolidate, or sell our assets or the equity interests in our subsidiaries, amend our organizational documents or material contracts, enter into certain transactions with affiliates, or enter into derivatives contracts. Additionally, if we receive net cash proceeds from certain capital events (including equity issuances), we are required to prepay loans under our Credit Agreements. In addition, the Credit Agreements contain cross-default provisions that trigger an event of default if we fail to make certain payments or otherwise fail to comply with our obligations with respect to certain of our other indebtedness.

First Lien Credit Agreement

Amounts borrowed under the First Lien Credit Agreement may be either Base Rate Loans or LIBOR Loans. Base Rate Loans bear interest at the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) the LIBOR Market Index Rate plus 1.0%, provided that the Base Rate will not be less than 1.50% per annum, in each case plus (w) for revolving loans, 2.50% per annum, and (x) for term loans, 4.74% per annum. LIBOR Loans bear interest at LIBOR plus (y) for revolving loans, 3.50% per annum, and (z) for term loans, 5.74% per annum, in each case, provided that LIBOR will not be less than 0.50% per annum. Interest is due to be paid in cash on the last day of each applicable interest period (with rolling 30-day interest periods) and on the Maturity Date. We are required to pay certain fees to the administrative agent for the account of the lenders in connection with the First Lien Credit Agreement, including an unused fee for the account of the revolving lenders, which will accrue (i) 0.35% per annum on the daily amount of the unused revolving commitments when that amount is greater than or equal to 50% of the aggregate amount of revolving commitments, and (ii) 0.25% when that amount is less than 50% of the aggregate amount of revolving commitments. Accrued and unpaid unused fees will be payable quarterly in arrears during the term of the First Lien Credit Agreement and on the revolving termination date (or any earlier date of termination of the revolving commitments or reduction of the revolving commitments to zero).

Letters of credit and the proceeds of revolving loans may be used (i) to refinance indebtedness under the Bridge Credit Agreement (which agreement was canceled and refinanced upon our entry into the Credit Agreements), (ii) for working capital and general corporate purposes (subject to certain exceptions set forth in the First Lien Credit Agreement, including limitations on investments in non-borrowing base properties), and (iii) to fund professional fee payments and other fees and expenses subject to the provisions of the Plan and related confirmation order and for other uses permitted by the provisions of the First Lien Credit Agreement, Plan and confirmation order, in each case consistent with an approved annual business plan. We may terminate or reduce the amount of the revolving commitments at any time and from time to time without penalty or premium, subject to the terms of the First Lien Credit Agreement.

The First Lien Credit Agreement contains, among other restrictions, certain additional affirmative and negative covenants and other terms, many of which substantially align with those in the Second Lien Credit Agreement and are summarized below under “Similar Terms of the Credit Agreements.”

Second Lien Credit Agreement

Amounts borrowed under the Second Lien Credit Agreement may be either Base Rate Loans or LIBOR Loans. Base Rate Loans bear interest at the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) the LIBOR Market Index Rate plus 1.0%, provided that the Base Rate will not be less than 1.50% per annum, in each case plus 7.00% per annum. LIBOR Loans bear interest at LIBOR plus 8.00% per annum, provided that LIBOR will not be less than 0.50% per annum. Interest is due to be paid in kind on the last day of each applicable interest period (with rolling 30-day interest periods) by adding the accrued and unpaid amount thereof to the principal balance of the loans under the Second Lien Credit Agreement and then accruing interest on the increased principal amount (provided that after the discharge of our obligations under the First Lien Credit Agreement and any other senior debt obligations, interest will be paid in cash). We are required to pay certain fees to the administrative agent for the account of the lenders in connection with the Second Lien Credit Agreement.

The Second Lien Credit Agreement contains, among other restrictions, certain additional affirmative and negative covenants and other terms, many of which substantially align with those in the First Lien Credit Agreement and are summarized below under “Similar Terms of the Credit Agreements.”

Similar Terms of the Credit Agreements

Each of the Credit Agreements contains certain affirmative and negative covenants and other provisions, as described in detail below, which substantially align with those contained in the other Credit Agreements.

Covenants

Each of the Credit Agreements contains, among other restrictions, certain affirmative and negative covenants, including, without limitation, requirements that we:

•maintain liquidity of at least $25.0 million, to be comprised of unrestricted cash held in certain deposit accounts subject to control agreements, up to $5.0 million held in a certain other deposit account excluded from the collateral, the unused revolving loan commitments under the First Lien Credit Agreement (to the extent available to be drawn), and amounts on deposit in a designated collateral proceeds account and amounts on deposit in a cash collateral account;

•maintain a minimum senior debt yield of 11.35% from and after June 30, 2021;

•maintain a minimum corporate debt yield of (a) 6.50% from June 30, 2021 through and including September 30, 2021 and (b) 7.25% from and after October 1, 2021;

•provide to the administrative agent, among other things, PREIT and its subsidiaries’ quarterly and annual financial statements, annual budget, reports on projected sources and uses of cash, and an updated annual business plan, as well as quarterly and annual operating

statements, rent rolls, and certain other collections and tenant reports and information as the administrative agent may reasonably request with respect to each Borrowing Base Property;

•maintain PREIT’s status as a REIT;

•use commercially reasonable efforts to obtain subordination, non-disturbance and attornment agreements from each tenant under certain Major leases as well as ground lease estoppel certificates from each ground lessor of a borrowing base property;

•comply with the requirements of the various security documents and, at the administrative agent’s request, promptly notify the administrative agent of any acquisition of any owned real property that is not subject to a mortgage and grant liens on such real property to secure our obligations under the applicable Credit Agreement;

•not amend any existing sale agreements with respect to borrowing base properties to result in a reduction of cash consideration by 20% or more; and

•not retain more than $6.5 million of cash in property-level accounts held by our subsidiaries that are owners of real property (subject to certain exceptions).

Each of the Credit Agreements also limits our ability, subject to certain exceptions, to make certain restricted payments (including payments of dividends and voluntary prepayments of certain indebtedness which includes, with respect to the First Lien Credit Agreement, voluntary prepayments under the Second Lien Credit Agreement), make certain types of investments and acquisitions, issue redeemable securities, incur additional indebtedness, incur liens on our assets, enter into agreements with a negative pledge, make certain intercompany transfers, merge, consolidate or sell all or substantially all of our assets or the equity interests in our subsidiaries, amend our organizational documents or material contracts, enter into transactions with affiliates, or enter into derivatives contracts. We are also prohibited from selling certain properties unless certain conditions are satisfied with respect to the terms of the sale agreement for such property or, in the case of Borrowing Base Properties, payment of certain release prices.

The First Lien Credit Agreement and, after our Senior Debt Obligations are discharged, the Second Lien Credit Agreement, each prohibit us from (i) entering into major leases, (ii) assigning leases, (iii) discounting any rent under leases where the leased premises is at least 7,500 square feet at a borrowing base property and the discounted amount is more than $750,000 and more than 25% of the aggregate contractual base rent payable over the initial term (not including any extension options), (iv) collecting rent in advance, (v) terminating or modifying the terms of any major lease or releasing or discharging tenants from any obligations thereunder, (vi) consenting to a tenant’s assignment or subletting of a major lease, or (vii) subordinating any lease to any other deed of trust, mortgage, deed to secure debt or encumbrance, other than the mortgages already encumbering the applicable borrowing base property and the mortgages entered into in connection with the other Credit Agreement. Under the First Lien Credit Agreement, and under the Second Lien Credit Agreement after the First Lien Termination Date, any amounts equal to or greater than $2.5 million but less than $3.5 million received by or on behalf of a guarantor in consideration of any termination or modification of a lease (or the release or discharge of a tenant) are subject to restrictions on use, and such amounts that are equal to or greater than $3.5 million must be applied to reduce our outstanding obligations under the applicable Credit Agreement.

As of March 31, 2023, we were in compliance with all financial covenants under the Credit Agreements.

Consolidated Mortgage Loans

The estimated fair values of our consolidated mortgage loans based on year-end interest rates and market conditions at March 31, 2023 and December 31, 2022 were as follows:

	March 31, 2023				December 31, 2022
(in millions of dollars)	Carrying Value		Fair Value		Carrying Value		Fair Value
Mortgage loans(1)	$	741.9	$	735.4	$	751.5	$	733.7

(1) The carrying value of mortgage loans excludes unamortized debt issuance costs of $1.7 million and $2.1 million as of March 31, 2023 and December 31, 2022, respectively.

The following table outlines the timing of principal payments and balloon payments pursuant to the terms of our consolidated mortgage loans of our consolidated properties as of March 31, 2023:

(in thousands of dollars)	Principal Amortization		Balloon Payments		Total
April 1 through December 31, 2023 (1)	$	6,438	$	394,315	$	400,753
2024		6,405		118,994		125,399
2025		4,406		211,346		215,752
2026		—		—		—
2027 and thereafter		—		—		—
Total principal payments	$	17,249	$	724,655		741,904
Less: Unamortized debt issuance costs						1,737
Carrying value of mortgage notes payable					$	740,167

(1) Includes Cherry Hill Mall mortgage for which, subsequent to March 31, 2023, the maturity was extended through December 1, 2023.

The consolidated mortgage loans contain various customary default provisions. As of March 31, 2023, we were not in default on any of the consolidated mortgage loans, except for the Dartmouth Mall mortgage (as described below).

Mortgage Loan Activity

Dartmouth Mall Mortgage Forbearance Agreement

On April 1, 2023, certain of our consolidated subsidiaries entered into a forbearance agreement as it relates to the mortgage loan secured by the property at Dartmouth Mall in North Dartmouth, Massachusetts. The loan matured on March 31, 2023 and is in default, however, pursuant to the forbearance agreement, the borrowers are required to make scheduled monthly debt service payments until June 1, 2023 at which time repayment of the loan in full is required. The forbearance agreement also imposes certain additional informational reporting requirements during the applicable forbearance period. We continue to pursue all our options relating to this debt. As of March 31, 2023, the mortgage loan has an outstanding balance of $53.3 million.

Cherry Hill Mall Mortgage Agreement

On May 1, 2023, certain of our consolidated subsidiaries entered into an amendment and extension to our mortgage loan secured by the property at Cherry Hill Mall in Cherry Hill, New Jersey. This agreement extends the maturity date to December 1, 2023 with a $5.0 million principal paydown at time of execution, and requires the borrower to continue making scheduled monthly debt service payments. The agreement also includes an option to extend the maturity to May 1, 2024 with an additional $5.0 million principal payment. As of March 31, 2023, the mortgage loan has an outstanding balance of $237.2 million.

XML

Cash Flow Information

3 Months Ended

Mar. 31, 2023

Supplemental Cash Flow Elements [Abstract]

Cash Flow Information

5. CASH FLOW INFORMATION

We consider all highly liquid short-term investments with a maturity of three months or less at purchase or acquisition to be cash equivalents.

At March 31, 2023 and 2022, cash and cash equivalents and restricted cash totaled $33.2 million and $61.1 million, respectively, and

included tenant security deposits of $2.1 million and $1.7 million, respectively.

Cash paid for interest was $16.4 million and $16.5 million for the three months ended March 31, 2023 and 2022, respectively, net of amounts capitalized of $0.1 million and $24 thousand, respectively.

In our statements of cash flows, we report cash flows on our revolving facilities on a net basis. Aggregate repayments on our First Lien Revolving Facility and First Lien Term Loan Facility were zero and $26.3 million, respectively, for the three months ended March 31, 2023. Aggregate repayments on our First Lien Revolving Facility and First Lien Term Loan Facility were $0.7 million and $1.7 million, respectively, for the three months ended March 31, 2022.

Accrued construction costs increased by $0.9 million and decreased by $3.8 million for the three months ended March 31, 2023 and 2022, respectively, representing non-cash changes in investment in real estate and construction in progress.

The following table provides a summary of cash, cash equivalents, and restricted cash reported within the statement of cash flows.

	March 31,		December 31,		March 31,		December 31,
(in thousands of dollars)	2023		2022		2022		2021
Cash and cash equivalents	$	20,240	$	22,937	$	45,554	$	43,852
Restricted cash included in other assets		12,996		11,752		15,547		14,225
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	33,236	$	34,689	$	61,101	$	58,077

Our restricted cash consists of cash held in escrow by banks for real estate taxes and tenant deposits.

XML

Derivatives

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

6. DERIVATIVES

In the normal course of business, we are exposed to financial market risks, including interest rate risk on our interest bearing liabilities. We attempt to limit these risks by following established risk management policies, procedures and strategies, including the use of financial instruments such as derivatives. We do not use financial instruments for trading or speculative purposes.

Cash Flow Hedges of Interest Rate Risk

For derivatives that have been designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in “Accumulated other comprehensive (loss) income” and subsequently reclassified into “Interest expense, net” in the same periods during which the hedged transaction affects earnings.

As of March 31, 2023, we had nine total derivatives with a notional amount of $400.0 million, which were designated as cash flow hedges.

We recognize all derivatives at fair value as either assets or liabilities in the accompanying consolidated balance sheets. Our derivative assets are recorded in “Deferred costs and other assets” and our derivative liabilities are recorded in “Fair value of derivative instruments.”

Over the next twelve months, we estimate that $2.0 million will be reclassified as a decrease to interest expense in connection with our designated derivatives. The recognition of these amounts could be accelerated in the event that we repay amounts outstanding on the debt instruments and do not replace them with new borrowings.

Interest Rate Swaps

As of March 31, 2023, we had interest rate swap agreements designated in qualifying hedging relationships outstanding with a weighted average base interest rate of 2.92% on a notional amount of $400.0 million, maturing in either May 2023 or May 2024. We originally entered into these interest rate swap agreements in order to hedge the interest payments associated with our issuances of variable interest rate long term debt. The interest rate swap agreements are net settled monthly.

The following table summarizes the terms and estimated fair values of our interest rate swap derivative instruments as of March 31, 2023 and December 31, 2022 based on the year they mature. The notional values provide an indication of the extent of our involvement in these instruments, but do not represent exposure to credit, interest rate or market risks.

Maturity Date	Aggregate Notional Value at March 31, 2023 (in millions of dollars)		Aggregate Fair Value at March 31, 2023 (1)  (in millions of dollars)		Aggregate Fair Value at December 31, 2022 (1)  (in millions of dollars)		Weighted Average Interest Rate
Derivatives in Cash Flow Hedging Relationships
Interest Rate Swaps
2023	$	300.0	$	1.0	$	2.4		2.70	%
2024		100.0		1.0		1.5		3.59	%
Total	$	400.0	$	2.0	$	3.9		2.92	%

(1)As of March 31, 2023 and December 31, 2022, derivative valuations in their entirety were classified in Level 2 of the fair value hierarchy and we did not have any significant recurring fair value measurements related to derivative instruments using significant unobservable inputs (Level 3).

The tables below present the effect of derivative financial instruments on accumulated other comprehensive income (loss) and on our consolidated statements of operations for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
	Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivative Instruments					Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Interest Expense
(in millions of dollars)	2023			2022		2023		2022
Derivatives in Cash Flow Hedging Relationships
Interest rate products	$	(1.9	)	$	3.9	$	1.6	$	1.9

	Three Months Ended March 31,
(in millions of dollars)	2023			2022
Total interest expense presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded	$	(41.0	)	$	(31.4	)
Amount of gain (loss) reclassified from accumulated other comprehensive income into interest expense	$	1.6		$	1.9

Credit-Risk-Related Contingent Features

We have agreements with some of our derivative counterparties that contain a provision pursuant to which, if our entity that originated such derivative instruments defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then we could also be declared to be in default on our derivative obligations. As of March 31, 2023, we were not in default on any of our derivative obligations.

We have an agreement with a derivative counterparty that incorporates the loan covenant provisions of our loan agreement with a lender affiliated with the derivative counterparty. Failure to comply with the loan covenant provisions would result in our being in default on any derivative instrument obligations covered by the agreement.

As of March 31, 2023, the Company did not have any derivatives in a net liability position.

XML

Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

7. LEASES

As Lessee

We have entered into ground leases for portions of the land at Springfield Town Center and Plymouth Meeting Mall. We have also entered into an office lease for our headquarters location, as well as vehicle, solar panel and equipment leases as a lessee. The initial terms of these agreements generally range from three to 40 years, with certain agreements containing extension options for up to an additional 60 years. Upon lease execution, the Company measures a liability for the present value of future lease payments over the noncancellable period of the lease and any renewal option period we are reasonably certain of exercising. Certain agreements require that we pay a portion of reimbursable expenses such as CAM, utilities, insurance and real estate taxes. These payments are not included in the calculation of the lease liability and are presented as variable lease costs.

Our leases do not provide a readily determinable implicit interest rate; therefore, we estimate our incremental borrowing rate to calculate the present value of remaining lease payments. In determining our incremental borrowing rate, we considered the lease term, market interest rates and estimates regarding our implied credit rating using market data with adjustments to determine an appropriate incremental borrowing rate.

The following table presents additional information pertaining to the Company’s leases:

	Three Months Ended March 31,
	2023								2022
(in thousands of dollars)	Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total		Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total
Finance lease cost:
Amortization of right-of-use assets	$	205	$	—	$	—	$	205	$	202	$	—	$	—	$	202
Interest on lease liabilities		42		—		—		42		78		—		—		78
Operating lease costs		—		586		45		631		—		585		68		653
Variable lease costs		—		47		206		253		—		46		206		252
Total lease costs	$	247	$	633	$	251	$	1,131	$	280	$	631	$	274	$	1,185

Other information related to leases as of and for the three months ended March 31, 2023 and 2022 are as follows:

(in thousands of dollars)	2023			2022
Cash paid for the amounts included in the measurement of lease liabilities
Operating cash flows used for finance leases	$	54		$	63
Operating cash flows used for operating leases	$	640		$	653
Financing cash flows used for finance leases	$	196		$	185
Weighted average remaining lease term-finance leases (months)		60			72
Weighted average remaining lease term-operating leases (months)		214			292
Weighted average discount rate-finance leases		4.36	%		4.34	%
Weighted average discount rate-operating leases		6.46	%		6.44	%

Future payments against lease liabilities as of March 31, 2023 are as follows:

(in thousands of dollars)	Finance leases			Operating leases			Total
April 1 to December 31, 2023	$	738		$	1,937		$	2,675
2024		950			2,471			3,421
2025		929			2,428			3,357
2026		926			2,429			3,355
2027		859			2,450			3,309
Thereafter		288			46,208			46,496
Total undiscounted lease payments		4,690			57,923			62,613
Less imputed interest		(489	)		(29,322	)		(29,811	)
Total lease liabilities	$	4,201		$	28,601		$	32,802

Lease liabilities are included with accrued expenses and other liabilities in the consolidated balance sheets.

As Lessor

As of March 31, 2023, the fixed contractual lease payments, including minimum rents and fixed CAM amounts, to be received over the next five years pursuant to the terms of noncancellable operating leases with initial terms greater than one year are included in the table below. The amounts presented assume that no leases are renewed and no renewal options are exercised. Additionally, the table does not include variable lease payments that may be received under certain leases for percentage rents or the reimbursement of operating costs, such as common area expenses, utilities, insurance and real estate taxes. These variable lease payments are recognized in the period when the applicable expenditures are incurred or, in the case of percentage rents, when the sales data is made available. Except for utility reimbursements, the fixed and variable lease payments are included with lease revenue in the consolidated statements of operations. Utility reimbursements are included within expense reimbursements as a separate line item in the consolidated statement of operations as their pattern of transfer is not aligned with the other payments.

(in thousands of dollars)
April 1 to December 31, 2023	$	183,398
2024		218,494
2025		180,224
2026		145,850
2027		117,112
Thereafter		297,358
	$	1,142,436

The disaggregation of fixed lease revenue and variable lease revenue for the three months ended March 31, 2023 and 2022 is as follows:

	Three Months Ended March 31,
(in thousands of dollars)	2023		2022
Fixed lease revenue	$	51,025	$	51,330
Variable lease revenue		10,490		12,953
Total lease revenue	$	61,515	$	64,283

XML

Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

8. COMMITMENTS AND CONTINGENCIES

Contractual Obligations

As of March 31, 2023, we had contractual and other commitments related to our capital improvement projects and development projects of $3.9 million, including $0.4 million of commitments related to the redevelopment of Fashion District Philadelphia, in the form of tenant allowances and contracts with general service providers and other professional service providers. For purposes of this disclosure, the contractual obligations and other commitments related to Fashion District Philadelphia are included at 100% of the obligation and not at our 50% ownership share.

Preferred Dividend Arrearages

We have aggregate authorized preferred shares of 25.0 million, where each series of authorized preferred shares is equal to the number of preferred shares outstanding of that series. Dividends on the Series B, Series C and Series D preferred shares are cumulative and therefore will continue to accrue at an annual rate of $0.46 per share, $0.45 per share and $0.43 per share, respectively. As of March 31, 2023, the cumulative amount of unpaid dividends on our issued and outstanding preferred shares totaled $75.3 million. This consisted of unpaid dividends per share on the Series B, Series C and Series D preferred shares of $5.07 per share, $4.95 per share and $4.73 per share, respectively. On August 2, 2022, our preferred shareholders elected two independent trustees to our Board of Trustees in accordance with the provisions of the designating amendments of the Company's Amended and Restated Trust Agreement.

XML

Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Nature of Operations

Nature of Operations

Pennsylvania Real Estate Investment Trust (“PREIT” or the “Company”) prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe that the included disclosures are adequate to make the information presented not misleading. Our unaudited consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included in PREIT’s Annual Report on Form 10-K for the year ended December 31, 2022. In our opinion, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our consolidated financial statements are included. The results of operations for the interim periods presented are not necessarily indicative of the results for the full year.

PREIT, a Pennsylvania business trust founded in 1960 and one of the first equity real estate investment trusts (“REITs”) in the United States, has a primary investment focus on retail shopping malls located in the eastern half of the United States, primarily in the Mid-Atlantic region. As of March 31, 2023, our portfolio consists of a total of 23 properties operating in eight states, including 19 shopping malls, three other retail properties and one development property. The property in our portfolio that is classified as under development does not currently have any activity occurring.

We hold our interest in our portfolio of properties through our operating partnership, PREIT Associates, L.P. (“PREIT Associates” or the “Operating Partnership”). We are the sole general partner of the Operating Partnership and, as of March 31, 2023, we held a 98.7% controlling interest in the Operating Partnership and consolidated it for reporting purposes. The presentation of consolidated financial statements does not itself imply that the assets of any consolidated entity (including any special-purpose entity formed for a particular project) are available to pay the liabilities of any other consolidated entity, or that the liabilities of any consolidated entity (including any special-purpose entity formed for a particular project) are obligations of any other consolidated entity.

Pursuant to the terms of the partnership agreement of the Operating Partnership, each of the limited partners has the right to redeem such partner’s units of limited partnership interest in the Operating Partnership (“OP Units”) for cash or, at our election, we may acquire such OP Units in exchange for our common shares on a fifteen-for-one basis (as a result of our recent reverse share split (described below)), in some cases beginning one year following the respective issue date of the OP Units and in other cases immediately. The current terms of our credit agreements prohibit the Company from acquiring whole share OP Units for cash and, as such, any whole share OP Units presented for redemption will be redeemed for shares. Partial share OP Unit redemptions will be redeemed for cash.

We provide management, leasing and real estate development services through two of our subsidiaries: PREIT Services, LLC (“PREIT Services”), which generally develops and manages properties that we consolidate for financial reporting purposes, and PREIT-RUBIN, Inc. (“PRI”), which generally develops and manages properties that we do not consolidate for financial reporting purposes, including properties owned by partnerships in which we own an interest, and properties that are owned by third parties in which we do not have an interest. PREIT Services and PRI are consolidated. PRI is a taxable REIT subsidiary, as defined by federal tax laws, which means that it is able to offer an expanded menu of services to tenants without jeopardizing our continuing qualification as a REIT under federal tax law.

We evaluate operating results and allocate resources on a property-by-property basis, and do not distinguish or evaluate our consolidated operations on a geographic basis. Due to the nature of our operating properties, which involve retail shopping, dining, entertainment and certain non-traditional tenant operations, we have concluded that our individual properties have similar economic characteristics and meet all other aggregation criteria. Accordingly, we have aggregated our individual properties into one reportable segment. In addition, no single tenant accounts for 10% or more of consolidated revenue, and none of our properties are located outside the United States.

Current Economic and Industry Conditions

Current Economic and Industry Conditions

Conditions in the economy have caused fluctuations and variations in business and consumer confidence, retail sales, and consumer spending on retail goods, destination dining and entertainment. In particular, current conditions in the economy have caused fluctuations in unemployment rates, and together with supply chain challenges, the current inflationary environment, overall economic uncertainty and the potential for recession, have impacted consumer confidence and spending. The economic factors have had corresponding effects on tenant business performance, prospects, solvency and leasing decisions. Further, traditional mall tenants, including department store anchors and smaller format retail tenants face significant challenges resulting from changing consumer expectations, the convenience of e-commerce shopping, the expansion of outlet centers, and declining mall traffic, among other factors. In recent years, there has been an increased level of tenant bankruptcies and store closings by tenants who have been significantly impacted by these factors. We anticipate that our future business, financial condition, liquidity and results of operations, will continue to be materially impacted by these conditions, and more recently by inflationary pressures and substantial increases in interest rates.

Going Concern Considerations

Going Concern Considerations

Under the accounting guidance related to the presentation of financial statements, when preparing financial statements for each annual and interim reporting period, management has the responsibility to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. As a result of the considerations articulated below, we believe there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued.

In applying the accounting guidance, management considered our current financial condition and liquidity sources, including current funds available, forecasted future cash flows and our conditional and unconditional obligations due over the next twelve months after the date that our financial statements were issued. Management specifically considered the two secured credit agreements (collectively, as amended, the “Credit Agreements”), further defined in Note 4, with a maturity date in December 2023 as an event or condition that raised substantial doubt about our ability to continue as a going concern. As of March 31, 2023, we had borrowed $305.7 million under the First Lien Term Loan Facility, $667.6 million under the Second Lien Term Loan Facility and $22.5 million under the First Lien Revolving Facility. Our obligations under the Credit Agreements are guaranteed by certain of our subsidiaries. The Credit Agreements include several events of default as described in Note 4. Upon the occurrence of an event of default (except with respect to bankruptcy), the lenders may declare all of the obligations in connection with the applicable Credit Agreement (including an amount equal to the outstanding letters of credit under the First Lien Credit Agreement) immediately due and payable and may terminate the lenders’ commitments thereunder. When the borrowings under the Credit Agreements come due and payable due to a default or at maturity in December 2023, the Company would not be able to satisfy its obligations. Management plans to work with the lender groups under the credit facilities and also explore other options to satisfy this obligation, however, any such relief involves performance by third parties and cannot be considered probable of occurring.

Therefore, due to the inherent risks, unknown results and significant uncertainties associated with this matter and the direct correlation to our ability to satisfy our financial obligations that may arise over the applicable twelve month period, we are unable to conclude that it is probable that we will be able to meet our obligations arising within twelve months of the date of issuance of these financial statements under the parameters set forth in this accounting guidance.

Fair Value

Fair Value

Fair value accounting applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements.

Fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, these accounting requirements establish a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access.

Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs might include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals.

Level 3 inputs are unobservable inputs for the asset or liability and are typically based on an entity’s own assumptions, as there is little, if any, related market activity.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. We utilize the fair value hierarchy in our accounting for derivatives (Level 2), fixed rate and variable rate debt (Level 2), and in our reviews for impairment of real estate assets (Level 3) and goodwill (Level 3).

Impairment of Assets

Impairment of Assets

Real estate investments and related intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the property might not be recoverable, which is referred to as a “triggering event.” If there is a triggering event in relation to a property to be held and used, we will estimate the aggregate future cash flows, net of estimated capital expenditures, to be

generated by the property, undiscounted and without interest charges. In addition, this estimate may consider a probability weighted cash flow estimation approach when alternative courses of action to recover the carrying amount of a long-lived asset are under consideration or when a range of possible values is estimated.

During the three months ended March 31, 2023, there were no new indicators of impairment at any of our properties. No impairment review or assessment of the undiscounted future cash flows was required.

Our review of long-lived assets for impairment utilizes qualitative and quantitative factors in order to estimate fair value. The significant qualitative factors that we use include age and condition of the property, market conditions in the property’s trade area, competition with other shopping centers within the property’s trade area and the creditworthiness and performance of the property’s tenants. The significant quantitative factors that we use include historical and forecasted financial and operating information relating to the property, such as net operating income, estimated holding periods, occupancy statistics, vacancy projections and tenants’ sales levels.

The determination of undiscounted cash flows requires significant estimates by our management, including the expected course of action at the balance sheet date that would lead to such cash flows. Subsequent changes in estimated undiscounted cash flows arising from changes in the anticipated action to be taken with respect to the property could affect the determination of whether an impairment exists, and the effects of such changes could materially affect our net income. If the estimated undiscounted cash flows are less than the carrying value of the property, the carrying value is written down to its fair value. Our intent is to hold and operate our properties long-term, which reduces the likelihood that our carrying value is not recoverable. A shortened holding period would increase the likelihood that the carrying value is not recoverable. We will obtain a third party appraisal of the property as deemed necessary.

Assessment of our ability to recover certain lease-related costs must be made when we have a reason to believe that a tenant might not be able to perform under the terms of the lease as originally expected. This requires us to make estimates as to the recoverability of such costs.

An other-than-temporary impairment of an investment in an unconsolidated joint venture is recognized when the carrying value of the investment is not considered recoverable based on evaluation of the severity and duration of the decline in value. To the extent impairment has occurred, the excess carrying value of the asset over its estimated fair value is recorded as a reduction to income.

Assets Classified as Held for Sale

Assets Classified as Held for Sale

The determination to classify an asset as held for sale requires significant estimates by us about the property and the expected market for the property, which are based on factors including recent sales of comparable properties, recent expressions of interest in the property, financial metrics of the property and the physical condition of the property. We must also determine if it will be possible under those market conditions to sell the property for an acceptable price within one year. When assets are identified by our management as held for sale, we discontinue depreciating the assets and estimate the sales price, net of selling costs, of such assets. We generally consider operating properties to be held for sale when they meet criteria such as whether the sale transaction has been approved by the appropriate level of management and there are no known material contingencies relating to the sale such that the sale is probable and is expected to qualify for recognition as a completed sale within one year. If the expected net sales price of the asset that has been identified as held for sale is less than the net book value of the asset, the asset is written down to fair value less the cost to sell. Assets and liabilities related to assets classified as held for sale are presented separately in the consolidated balance sheets. If we determine that a property no longer meets the held-for-sale criteria, we reclassify the property’s assets and liabilities to their original locations on the consolidated balance sheet and record depreciation and amortization expense for the period that the property was in held-for-sale status.

As of March 31, 2023, we determined that two of our hotel land parcels, one multifamily land parcel, and one retail property met the criteria to be classified as held for sale. As of December 31, 2022, two of our hotel land parcels, one multifamily land parcel, and two retail properties met the criteria to be classified as held for sale.

Reverse Share Split

Reverse Share Split

On June 16, 2022, the Company effected a one-for-fifteen reverse share split of its common shares. Upon the effectiveness of the reverse share split, every 15 issued and outstanding common shares were combined into one issued and outstanding common share, with no change in par value per share, and the authorized number of common shares was proportionally reduced. Shareholders entitled to fractional shares as a result of the reverse share split were entitled to receive a cash payment in lieu of receiving fractional shares. All common share and per share data in the consolidated financial statements and notes to the consolidated financial statements have been retrospectively revised to reflect the reverse share split. Common shares underlying outstanding options, time based and restricted share units, performance based share units and restricted shares were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased. Additionally, the conversion rate of OP Units into common shares was automatically proportionally adjusted from one-for-one to fifteen-for-one. The reverse share split resulted in bringing the Company into compliance with the minimum bid price requirement for maintaining its listing on the New York Stock Exchange (the “NYSE”), and on July 1, 2022, the Company received notice from the NYSE that it had regained compliance with the minimum bid price requirement. The Company's common shares continued to trade under the symbol “PEI” and began trading on a split-adjusted basis on June 16, 2022.

On December 15, 2022, the Company received written notice from the NYSE that the Company failed to maintain an average market global capitalization over a consecutive 30 trading-day period of at least $15 million which resulted in NYSE delisting its securities. The securities were transferred to "OTC Pink Market" and later to OTCQB, both operated by OTC Markets Group Inc. As of March 31, 2023, the Company's shares were traded on OTCQB under the symbols PRET (Common Shares), PRETL (Preferred Series B), PRETM (Preferred Series C), and PRETN (Preferred Series D).

New Accounting Developments

New Accounting Developments

The Company considers all new accounting standards for their applicability to the consolidated financial statements. We determined that there were no new accounting standards, issued or effective during the quarter ended March 31, 2023, that have had or are expected to have a material impact on our consolidated financial statements.

Restatement of Previously Reported Financial Statements

Restatement of Previously Reported Financial Statements

The consolidated statement of cash flows for the three months ended March 31, 2022 has been restated due to a misclassification. The value of beneficial shares issued as settlement of certain compensation liabilities was previously reported as cash provided by financing activities, with offsetting reductions to operating cash flows. The cash flow presentation has been restated to properly reflect this transaction as supplemental non-cash financing activity. This restatement only impacts the consolidated statement of cash flows for the three months ended March 31, 2022 and resulted in no change in cash, cash equivalents and restricted cash as of March 31, 2022.

The following table provides a summary of the restatement on the Company's consolidated statement of cash flows for the three months ended March 31, 2022.

	For the three months ended March 31, 2022
(in thousands of dollars)	As Previously Reported			Restatement Adjustment			As Restated
Cash flows from operating activities:
Adjustments to reconcile net loss to net cash provided by operating activities:
Net change in other liabilities	$	(6,209	)	$	6,020		$	(189	)
Net cash provided by operating activities		8,454			6,020			14,474
Cash flows from financing activities:
Repurchase of shares retired under equity incentive plans, net of shares issued		5,427			(6,020	)		(593	)
Net cash used in financing activities		(3,293	)		(6,020	)		(9,313	)
Supplemental non-cash disclosures:
Transfer of equity compensation from liability to equity	$	—		$	6,020		$	6,020

There was no impact to the consolidated balance sheet, statement of operations and statement of equity, and notes related to this matter as of and for the three months ended March 31, 2022.

XML

Basis of Presentation (Tables)

3 Months Ended

Mar. 31, 2023

Condensed Financial Information Disclosure [Abstract]

Summary of Restatement of Consolidated Statement of Cash Flows

The consolidated statement of cash flows for the three months ended March 31, 2022 has been restated due to a misclassification. The value of beneficial shares issued as settlement of certain compensation liabilities was previously reported as cash provided by financing activities, with offsetting reductions to operating cash flows. The cash flow presentation has been restated to properly reflect this transaction as supplemental non-cash financing activity. This restatement only impacts the consolidated statement of cash flows for the three months ended March 31, 2022 and resulted in no change in cash, cash equivalents and restricted cash as of March 31, 2022.

The following table provides a summary of the restatement on the Company's consolidated statement of cash flows for the three months ended March 31, 2022.

	For the three months ended March 31, 2022
(in thousands of dollars)	As Previously Reported			Restatement Adjustment			As Restated
Cash flows from operating activities:
Adjustments to reconcile net loss to net cash provided by operating activities:
Net change in other liabilities	$	(6,209	)	$	6,020		$	(189	)
Net cash provided by operating activities		8,454			6,020			14,474
Cash flows from financing activities:
Repurchase of shares retired under equity incentive plans, net of shares issued		5,427			(6,020	)		(593	)
Net cash used in financing activities		(3,293	)		(6,020	)		(9,313	)
Supplemental non-cash disclosures:
Transfer of equity compensation from liability to equity	$	—		$	6,020		$	6,020

XML

Real Estate Activities (Tables)

3 Months Ended

Mar. 31, 2023

Real Estate [Abstract]

Investments in Real Estate

Investments in real estate as of March 31, 2023 and December 31, 2022 were comprised of the following:

	March 31,			December 31,
(in thousands of dollars)	2023			2022
Buildings, improvements and construction in progress	$	2,539,604		$	2,549,731
Land, including land held for development		389,930			389,930
Total investments in real estate		2,929,534			2,939,661
Accumulated depreciation		(1,377,167	)		(1,370,065	)
Net investments in real estate	$	1,552,367		$	1,569,596

Summary of Assets and Liabilities Held for Sale

As of March 31, 2023 and December 31, 2022, we had assets and liabilities that have been classified as held for sale and summarized in the following table:

	March 31,			December 31,
(in thousands of dollars)	2023			2022
Assets held for sale:
Operating properties	$	32,204		$	58,562
Tenant and other receivables, net of allowance		321			226
Other assets		2,511			2,979
Total assets held for sale	$	35,036		$	61,767
Liabilities held for sale:
Accrued expenses and other liabilities	$	(1,975	)	$	(2,539	)
Total liabilities held for sale	$	(1,975	)	$	(2,539	)

XML

Investments in Partnerships (Tables)

3 Months Ended

Mar. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

Summary of Equity Method Investments

The following table presents summarized financial information of the equity method investments in our unconsolidated partnerships as of March 31, 2023 and December 31, 2022:

_____________________

	March 31,			December 31,
(in thousands of dollars)	2023			2022
ASSETS:
Investments in real estate, at cost:
Operating properties	$	741,998		$	741,007
Construction in progress		5,378			5,346
Total investments in real estate		747,376			746,353
Accumulated depreciation		(242,380	)		(237,791	)
Net investments in real estate		504,996			508,562
Cash and cash equivalents		39,603			28,186
Deferred costs and other assets, net		142,940			142,929
Total assets		687,539			679,677
LIABILITIES AND PARTNERS’ INVESTMENT:
Mortgage loans payable, net		397,998			400,141
FDP Term Loan, net		78,320			104,427
Partnership Loans		246,905			214,008
Other liabilities		165,562			155,873
Total liabilities		888,785			874,449
Net investment		(201,246	)		(194,772	)
Partners’ share		(105,788	)		(102,495	)
PREIT’s share		(95,458	)		(92,277	)
Excess investment (1)		6,987			6,986
Net investments and advances	$	(88,471	)	$	(85,291	)
Investment in partnerships, at equity	$	7,621		$	7,845
Distributions in excess of partnership investments		(96,092	)		(93,136	)
Net investments and advances	$	(88,471	)	$	(85,291	)

(1) Excess investment represents the unamortized difference between our investment and our share of the equity in the underlying net investment in the unconsolidated partnerships. The excess investment is amortized over the life of the properties, and the amortization is included in “Equity in (loss) income of partnerships.”

Summary of Share of Equity in Loss of Partnerships

The following table summarizes our share of equity in loss of partnerships for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
(in thousands of dollars)	2023			2022
Real estate revenue	$	27,167		$	29,889
Expenses:
Property operating and other expenses		(10,157	)		(11,874	)
Interest expense (1)		(16,698	)		(11,754	)
Depreciation and amortization		(5,691	)		(6,655	)
Total expenses		(32,546	)		(30,283	)
Net loss		(5,379	)		(394	)
Less: Partners’ share		2,683			(1	)
PREIT’s share		(2,696	)		(395	)
Equity in loss of partnerships	$	(2,696	)	$	(395	)

(1) Net of capitalized interest expense of $24 and $0 for the three months ended March 31, 2023 and 2022, respectively.

XML

Financing Activity (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule Of Credit Facility Interest Expense and Deferred Financing Fee Amortization

Interest expense and deferred financing fee amortization related to the Credit Agreements for the three months ended March 31, 2023 and 2022 were as follows:

	Three Months Ended March 31,
(in thousands of dollars)	2023		2022
Revolving Facilities:
Interest expense (1)	$	461	$	541
Deferred financing amortization		57		299
Term Loans:
Interest expense (2)	$	27,549	$	20,448
Deferred financing amortization		424		1,784

(1)All of the expense applied to the First Lien Revolving Facility.

(2)All of the expense applied to the Term Loans, of which $20.5 million and $12.5 million, for the three months ended March 31, 2023 and March 31, 2022, respectively, was for the Second Lien Term Loan Facility and was not paid in cash, but capitalized to the principal balance of the loan.

Carrying and Fair Values of Mortgage Loans

The estimated fair values of our consolidated mortgage loans based on year-end interest rates and market conditions at March 31, 2023 and December 31, 2022 were as follows:

	March 31, 2023				December 31, 2022
(in millions of dollars)	Carrying Value		Fair Value		Carrying Value		Fair Value
Mortgage loans(1)	$	741.9	$	735.4	$	751.5	$	733.7

(1) The carrying value of mortgage loans excludes unamortized debt issuance costs of $1.7 million and $2.1 million as of March 31, 2023 and December 31, 2022, respectively.

Timing of Principal Payments and Terms of Mortgage Loans

The following table outlines the timing of principal payments and balloon payments pursuant to the terms of our consolidated mortgage loans of our consolidated properties as of March 31, 2023:

(in thousands of dollars)	Principal Amortization		Balloon Payments		Total
April 1 through December 31, 2023 (1)	$	6,438	$	394,315	$	400,753
2024		6,405		118,994		125,399
2025		4,406		211,346		215,752
2026		—		—		—
2027 and thereafter		—		—		—
Total principal payments	$	17,249	$	724,655		741,904
Less: Unamortized debt issuance costs						1,737
Carrying value of mortgage notes payable					$	740,167

(1) Includes Cherry Hill Mall mortgage for which, subsequent to March 31, 2023, the maturity was extended through December 1, 2023.

XML

Cash Flow Information (Tables)

3 Months Ended

Mar. 31, 2023

Supplemental Cash Flow Elements [Abstract]

Summary of Cash, Cash Equivalents, and Restricted Cash Reported within Statement of Cash Flows

The following table provides a summary of cash, cash equivalents, and restricted cash reported within the statement of cash flows.

	March 31,		December 31,		March 31,		December 31,
(in thousands of dollars)	2023		2022		2022		2021
Cash and cash equivalents	$	20,240	$	22,937	$	45,554	$	43,852
Restricted cash included in other assets		12,996		11,752		15,547		14,225
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	33,236	$	34,689	$	61,101	$	58,077

XML

Derivatives (Tables)

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value of Derivative Instruments

The following table summarizes the terms and estimated fair values of our interest rate swap derivative instruments as of March 31, 2023 and December 31, 2022 based on the year they mature. The notional values provide an indication of the extent of our involvement in these instruments, but do not represent exposure to credit, interest rate or market risks.

Maturity Date	Aggregate Notional Value at March 31, 2023 (in millions of dollars)		Aggregate Fair Value at March 31, 2023 (1)  (in millions of dollars)		Aggregate Fair Value at December 31, 2022 (1)  (in millions of dollars)		Weighted Average Interest Rate
Derivatives in Cash Flow Hedging Relationships
Interest Rate Swaps
2023	$	300.0	$	1.0	$	2.4		2.70	%
2024		100.0		1.0		1.5		3.59	%
Total	$	400.0	$	2.0	$	3.9		2.92	%

As of March 31, 2023 and December 31, 2022, derivative valuations in their entirety were classified in Level 2 of the fair value hierarchy and we did not have any significant recurring fair value measurements related to derivative instruments using significant unobservable inputs (Level 3).

Effect of Our Derivative Financial Instruments on Our Consolidated Statements of Operations

The tables below present the effect of derivative financial instruments on accumulated other comprehensive income (loss) and on our consolidated statements of operations for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
	Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivative Instruments					Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Interest Expense
(in millions of dollars)	2023			2022		2023		2022
Derivatives in Cash Flow Hedging Relationships
Interest rate products	$	(1.9	)	$	3.9	$	1.6	$	1.9

	Three Months Ended March 31,
(in millions of dollars)	2023			2022
Total interest expense presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded	$	(41.0	)	$	(31.4	)
Amount of gain (loss) reclassified from accumulated other comprehensive income into interest expense	$	1.6		$	1.9

XML

Leases (Tables)

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Lease, Cost

The following table presents additional information pertaining to the Company’s leases:

	Three Months Ended March 31,
	2023								2022
(in thousands of dollars)	Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total		Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total
Finance lease cost:
Amortization of right-of-use assets	$	205	$	—	$	—	$	205	$	202	$	—	$	—	$	202
Interest on lease liabilities		42		—		—		42		78		—		—		78
Operating lease costs		—		586		45		631		—		585		68		653
Variable lease costs		—		47		206		253		—		46		206		252
Total lease costs	$	247	$	633	$	251	$	1,131	$	280	$	631	$	274	$	1,185

Supplemental Cash Flows and Terms

Other information related to leases as of and for the three months ended March 31, 2023 and 2022 are as follows:

(in thousands of dollars)	2023			2022
Cash paid for the amounts included in the measurement of lease liabilities
Operating cash flows used for finance leases	$	54		$	63
Operating cash flows used for operating leases	$	640		$	653
Financing cash flows used for finance leases	$	196		$	185
Weighted average remaining lease term-finance leases (months)		60			72
Weighted average remaining lease term-operating leases (months)		214			292
Weighted average discount rate-finance leases		4.36	%		4.34	%
Weighted average discount rate-operating leases		6.46	%		6.44	%

Future Payments Against Lease Liabilities

Future payments against lease liabilities as of March 31, 2023 are as follows:

(in thousands of dollars)	Finance leases			Operating leases			Total
April 1 to December 31, 2023	$	738		$	1,937		$	2,675
2024		950			2,471			3,421
2025		929			2,428			3,357
2026		926			2,429			3,355
2027		859			2,450			3,309
Thereafter		288			46,208			46,496
Total undiscounted lease payments		4,690			57,923			62,613
Less imputed interest		(489	)		(29,322	)		(29,811	)
Total lease liabilities	$	4,201		$	28,601		$	32,802

Lessor, Operating Lease, Payments to be Received, Maturity

As of March 31, 2023, the fixed contractual lease payments, including minimum rents and fixed CAM amounts, to be received over the next five years pursuant to the terms of noncancellable operating leases with initial terms greater than one year are included in the table below. The amounts presented assume that no leases are renewed and no renewal options are exercised. Additionally, the table does not include variable lease payments that may be received under certain leases for percentage rents or the reimbursement of operating costs, such as common area expenses, utilities, insurance and real estate taxes. These variable lease payments are recognized in the period when the applicable expenditures are incurred or, in the case of percentage rents, when the sales data is made available. Except for utility reimbursements, the fixed and variable lease payments are included with lease revenue in the consolidated statements of operations. Utility reimbursements are included within expense reimbursements as a separate line item in the consolidated statement of operations as their pattern of transfer is not aligned with the other payments.

(in thousands of dollars)
April 1 to December 31, 2023	$	183,398
2024		218,494
2025		180,224
2026		145,850
2027		117,112
Thereafter		297,358
	$	1,142,436

Disaggregation of Fixed Lease Revenue and Variable Lease Revenue

The disaggregation of fixed lease revenue and variable lease revenue for the three months ended March 31, 2023 and 2022 is as follows:

	Three Months Ended March 31,
(in thousands of dollars)	2023		2022
Fixed lease revenue	$	51,025	$	51,330
Variable lease revenue		10,490		12,953
Total lease revenue	$	61,515	$	64,283

XML

Basis of Presentation - Nature of Operations (Details)		3 Months Ended
	Jun. 16, 2022	Mar. 31, 2023 Property State Segment Subsidiary	Dec. 31, 2022 Property
Real Estate Properties [Line Items]
Number of real estate properties		23
Number of states in which entity operates | State		8
Common stock, conversion ratio	15	15
Period of conversion		1 year
Number of subsidiaries | Subsidiary		2
Number of reportable segments | Segment		1
PREIT Associates, L.P. - Operating Partnership
Real Estate Properties [Line Items]
Interest in the Operating Partnership		98.70%
Mall
Real Estate Properties [Line Items]
Number of real estate properties		19
Other Retail Properties
Real Estate Properties [Line Items]
Number of real estate properties		3
Development Properties
Real Estate Properties [Line Items]
Number of real estate properties		1
Hotel Land Parcels
Real Estate Properties [Line Items]
Number of properties held for sale		2	2
Multifamily Land Parcel
Real Estate Properties [Line Items]
Number of properties held for sale		1	1
Retail Properties
Real Estate Properties [Line Items]
Number of properties held for sale		1	2

XML

Basis of Presentation - Going Concern Considerations (Details) - USD ($) $ in Thousands	1 Months Ended
	Feb. 28, 2023	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Outstanding line of credit		$ 22,481	$ 22,481
Credit Agreements | First Lien Term Loan
Debt Instrument [Line Items]
Long-term debt		305,700
Repayment of Loan	$ 26,300
Credit Agreements | Second Lien Term Loan
Debt Instrument [Line Items]
Long-term debt		667,600
Credit Agreements | First Lien Revolving Facility
Debt Instrument [Line Items]
Outstanding line of credit		$ 22,500

XML

Basis of Presentation - Reverse Share Split (Details) $ in Millions			3 Months Ended
	Dec. 15, 2022 USD ($)	Jun. 16, 2022	Mar. 31, 2023
Real Estate Properties [Line Items]
Common stock, conversion ratio		15	15
Stockholders' Equity, Reverse Stock Split			On June 16, 2022, the Company effected a one-for-fifteen reverse share split of its common shares. Upon the effectiveness of the reverse share split, every 15 issued and outstanding common shares were combined into one issued and outstanding common share, with no change in par value per share, and the authorized number of common shares was proportionally reduced. Shareholders entitled to fractional shares as a result of the reverse share split were entitled to receive a cash payment in lieu of receiving fractional shares. All common share and per share data in the consolidated financial statements and notes to the consolidated financial statements have been retrospectively revised to reflect the reverse share split. Common shares underlying outstanding options, time based and restricted share units, performance based share units and restricted shares were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased. Additionally, the conversion rate of OP Units into common shares was automatically proportionally adjusted from one-for-one to fifteen-for-one. The reverse share split resulted in bringing the Company into compliance with the minimum bid price requirement for maintaining its listing on the New York Stock Exchange (the “NYSE”), and on July 1, 2022, the Company received notice from the NYSE that it had regained compliance with the minimum bid price requirement. The Company's common shares continued to trade under the symbol “PEI” and began trading on a split-adjusted basis on June 16, 2022.
Trading period	30 days
Average market global capitalization amount	$ 15

XML

Basis of Presentation - Summary of Restatement of Consolidated Statement of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Adjustments to reconcile net loss to net cash provided by operating activities:
Net change in other liabilities	$ (498)	$ (189)
Net cash provided by operating activities	18,537	14,474
Cash flows from financing activities:
Repurchase of shares retired under equity incentive plans, net of shares issued	(52)	(593)
Net cash used in financing activities	$ (38,595)	(9,313)
Supplemental non-cash disclosures:
Transfer of equity compensation from liability to equity		6,020
As Previously Reported
Adjustments to reconcile net loss to net cash provided by operating activities:
Net change in other liabilities		(6,209)
Net cash provided by operating activities		8,454
Cash flows from financing activities:
Repurchase of shares retired under equity incentive plans, net of shares issued		5,427
Net cash used in financing activities		(3,293)
Restatement Adjustment
Adjustments to reconcile net loss to net cash provided by operating activities:
Net change in other liabilities		6,020
Net cash provided by operating activities		6,020
Cash flows from financing activities:
Repurchase of shares retired under equity incentive plans, net of shares issued		(6,020)
Net cash used in financing activities		(6,020)
Supplemental non-cash disclosures:
Transfer of equity compensation from liability to equity		$ 6,020

XML

Real Estate Activities - Investments in Real Estate (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Real Estate [Abstract]
Buildings, improvements and construction in progress	$ 2,539,604	$ 2,549,731
Land, including land held for development	389,930	389,930
Total investments in real estate	2,929,534	2,939,661
Accumulated depreciation	(1,377,167)	(1,370,065)
Net investments in real estate	$ 1,552,367	$ 1,569,596

XML

Real Estate Activities - Disposition (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended
	Feb. 28, 2023	Feb. 28, 2022	Mar. 31, 2023	Mar. 31, 2022
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from redemption of preferred equity		$ 2,500
Cash proceeds from sales of real estate			$ 26,312	$ 0
Gain on sale of preferred equity interest			$ 0	$ 3,688
Plymouth Meeting Mall
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal group, consideration	$ 27,000
Cash proceeds from sales of real estate	$ 26,300

XML

Real Estate Activities - Summary of Assets and Liabilities Held for Sale (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total assets held for sale	$ 35,036	$ 61,767
Liabilities on assets held for sale	1,975	2,539
Assets Classified as Held for Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total assets held for sale	35,036	61,767
Liabilities on assets held for sale	(1,975)	(2,539)
Assets Classified as Held for Sale | Operating Properties
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total assets held for sale	32,204	58,562
Assets Classified as Held for Sale | Tenant and Other Receivables, Net of Allowance
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total assets held for sale	321	226
Assets Classified as Held for Sale | Other Assets
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total assets held for sale	2,511	2,979
Assets Classified as Held for Sale | Accrued Expenses and Other Liabilities
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Liabilities on assets held for sale	$ (1,975)	$ (2,539)

XML

Investments in Partnerships - Summary of Equity Method Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Investments in real estate, at cost:
Operating properties	$ 741,998	$ 741,007
Construction in progress	5,378	5,346
Total investments in real estate	747,376	746,353
Accumulated depreciation	(242,380)	(237,791)
Net investments in real estate	504,996	508,562
Cash and cash equivalents	39,603	28,186
Deferred costs and other assets, net	142,940	142,929
Total assets	687,539	679,677
LIABILITIES AND PARTNERS’ INVESTMENT:
Mortgage loans payable, net	397,998	400,141
FDP Term Loan, net	78,320	104,427
Partnership Loans	246,905	214,008
Other liabilities	165,562	155,873
Total liabilities	888,785	874,449
Net investment	(201,246)	(194,772)
Partners’ share	(105,788)	(102,495)
PREIT’s share	(95,458)	(92,277)
Excess investment	6,987	6,986
Net investments and advances	(88,471)	(85,291)
Investment in partnerships, at equity	7,621	7,845
Distributions in excess of partnership investments	$ (96,092)	$ (93,136)

XML

Investments in Partnerships - Summary of Share of Equity in Loss of Partnerships (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Equity Method Investments and Joint Ventures [Abstract]
Real estate revenue	$ 27,167	$ 29,889
Expenses:
Property operating and other expenses	(10,157)	(11,874)
Interest expense	(16,698)	(11,754)
Depreciation and amortization	(5,691)	(6,655)
Total expenses	(32,546)	(30,283)
Net loss	(5,379)	(394)
Less: Partners’ share	2,683	(1)
PREIT’s share	(2,696)	(395)
Equity in loss of partnerships	$ (2,696)	$ (395)

XML

Investments in Partnerships - Summary of Share of Equity in Loss of Partnerships (Parenthetical) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Equity Method Investments and Joint Ventures [Abstract]
Capitalized interest expense	$ 24	$ 0

XML

Investments in Partnerships - FDP Loan Agreement (Details) - USD ($)		1 Months Ended	3 Months Ended
	Dec. 10, 2020	Jan. 31, 2023	Mar. 31, 2023	Dec. 31, 2022	Jul. 31, 2019	Jan. 31, 2018
Schedule Of Equity Method Investments [Line Items]
Outstanding balance on partnership loans			$ 246,905,000	$ 214,008,000
FDP Loan Agreement
Schedule Of Equity Method Investments [Line Items]
Long-term debt					$ 350,000,000.0	$ 250,000,000.0
Principal payment		$ 26,100
Outstanding principal			78,300,000
Outstanding balance on partnership loans			$ 246,900,000
Debt instrument, maturity date			Jan. 22, 2024
Debt instrument extension term			1 year
Debt, variable interest rate			2.50%
Percentage of full recourse guarantee			50.00%
Full recourse guarantee amount			$ 50,000,000.0
Debt yield covenant ratio		12.00%
Joint ventures obligations		50.00%
FDP Loan Agreement | Pennsylvania Real Estate Investment Trust
Schedule Of Equity Method Investments [Line Items]
Outstanding principal			39,200,000
Outstanding balance on partnership loans			$ 123,500,000
FDP Loan Agreement | Federal Funds Rate
Schedule Of Equity Method Investments [Line Items]
Debt, variable interest rate			0.50%
FDP Loan Agreement | LIBOR Market Index Rate
Schedule Of Equity Method Investments [Line Items]
Debt, variable interest rate			1.00%
FDP Loan Agreement | LIBOR
Schedule Of Equity Method Investments [Line Items]
Debt, variable interest rate			3.50%
FDP Loan Agreement | Federal Fund Rate Plus One Half
Schedule Of Equity Method Investments [Line Items]
Debt, variable interest rate		0.50%
FDP Loan Agreement | Adjusted Term SOFR for One Month Tenor Plus One Percent
Schedule Of Equity Method Investments [Line Items]
Debt, variable interest rate		1.00%
FDP Loan Agreement | Partnership Loan
Schedule Of Equity Method Investments [Line Items]
Principal payment	$ 100,000,000.0
Outstanding principal	$ 301,000,000.0		$ 201,000,000.0
Accrued interest percentage			15.00%
Cash distributions description			50/50 cash distributions to the Company and its joint venture partner.

XML

Financing Activity - Credit Agreements (Details)				1 Months Ended	3 Months Ended
	Oct. 01, 2021	Jun. 30, 2021	Dec. 10, 2020 USD ($)	Feb. 28, 2023 USD ($)	Mar. 31, 2023 USD ($) ft² Property	Sep. 30, 2021	Apr. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Debt Instrument [Line Items]
Outstanding line of credit					$ 22,481,000			$ 22,481,000
Amounts equal to greater than termination or modification of lease					2,500,000
Maximum
Debt Instrument [Line Items]
Amounts received on behalf of guarantor in consideration of termination or modification of lease.					$ 3,500,000
Minimum
Debt Instrument [Line Items]
Leased premises | ft²					7,500
Debt instrument discounted amount					$ 750,000
Percentage of aggregate contractual base rent					25.00%
Outstanding obligations					$ 3,500,000
Unsecured Debt
Debt Instrument [Line Items]
Debt issuance costs, line of credit arrangements					$ 1,800,000
First Lien Credit Agreement Base Rate Loans | Federal Funds Rate
Debt Instrument [Line Items]
Debt, variable interest rate					0.50%
First Lien Credit Agreement Base Rate Loans | LIBOR Market Index Rate
Debt Instrument [Line Items]
Debt, variable interest rate					1.00%
First Lien Credit Agreement Base Rate Loans | Base Rate
Debt Instrument [Line Items]
Debt, variable interest rate					1.50%
Second Lien Credit Agreement Base Rate Loan | Federal Funds Rate
Debt Instrument [Line Items]
Debt, variable interest rate					0.50%
Second Lien Credit Agreement Base Rate Loan | LIBOR Market Index Rate
Debt Instrument [Line Items]
Debt, variable interest rate					1.00%
Second Lien Credit Agreement Base Rate Loan | Base Rate
Debt Instrument [Line Items]
Debt, variable interest rate					1.50%
Debt instrument interest rate					7.00%
Second Lien Credit Agreement LIBOR Loans | Maximum
Debt Instrument [Line Items]
Debt, variable interest rate					0.50%
Second Lien Credit Agreement LIBOR Loans | LIBOR
Debt Instrument [Line Items]
Debt, variable interest rate					8.00%
Credit Agreements
Debt Instrument [Line Items]
Debt instrument maturity period			2022-12		2023-12
Number of properties | Property					10
Number of malls | Property					9
Number of additional parcels | Property					1
Percentage of minimum corporate debt yield	7.25%					6.50%
Debt Instrument, restrictive covenants					In December 2022, we exercised our option and satisfied the conditions to extend the maturity date of our Credit Agreements, such that it is now December 10, 2023 (the “Maturity Date”). The loans under the Credit Agreements are repayable in full on the Maturity Date, subject to mandatory prepayment provisions in the event of certain events including asset sales, incurrence of indebtedness, issuances of equity and receipt of casualty insurance proceeds. The terms of our Credit Agreements place restrictions on, among other things, and subject to certain exceptions, our ability to make certain restricted payments (including payments of dividends), make certain types of investments and acquisitions, issue redeemable securities, incur additional indebtedness, incur liens on our assets, enter into agreements with a negative pledge, make certain intercompany transfers, merge, consolidate, or sell our assets or the equity interests in our subsidiaries, amend our organizational documents or material contracts, enter into certain transactions with affiliates, or enter into derivatives contracts. Additionally, if we receive net cash proceeds from certain capital events (including equity issuances), we are required to prepay loans under our Credit Agreements. In addition, the Credit Agreements contain cross-default provisions that trigger an event of default if we fail to make certain payments or otherwise fail to comply with our obligations with respect to certain of our other indebtedness.
Minimum liquidity comprised of unrestricted cash held in certain deposit accounts subject to control agreements					$ 25,000,000.0
Maximum certain other deposit account not subject to control agreement					5,000,000.0
Percentage of minimum senior debt yield		11.35%
Maximum cash not retain in property level accounts held by subsidiaries					$ 6,500,000
Debt instrument, maturity date					Dec. 10, 2023
Credit Agreements | First Lien Term Loan
Debt Instrument [Line Items]
Outstanding borrowings					$ 305,700,000
Repayment of Loan				$ 26,300,000
Credit Agreements | First Lien Term Loan | Subsequent Event
Debt Instrument [Line Items]
Outstanding borrowings							$ 5,000,000.0
Credit Agreements | Second Lien Term Loan
Debt Instrument [Line Items]
Outstanding borrowings					667,600,000
Credit Agreements | First Lien Revolving Facility
Debt Instrument [Line Items]
Outstanding line of credit					22,500,000
Remaining borrowing capacity					$ 107,500,000
Secured First Lien Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing			$ 130,000,000.0
Letter of Credit
Debt Instrument [Line Items]
Maximum borrowing			10,000,000.0
First Lien Term Loan Facility
Debt Instrument [Line Items]
Maximum borrowing			384,500,000
Second Lien Term Loan Facility
Debt Instrument [Line Items]
Maximum borrowing			$ 535,200,000
Revolving Loans
Debt Instrument [Line Items]
Debt, variable interest rate					2.50%
Revolving Loans | LIBOR
Debt Instrument [Line Items]
Debt, variable interest rate					3.50%
First Lien Credit Agreement
Debt Instrument [Line Items]
Days of interest period					30 days
Percentage of amount greater than equal to 50% of aggregate amount of revolving commitments					0.35%
Percentage of daily amount of unused revolving commitments					50.00%
Percentage of amount less than 50% of aggregate amount of revolving commitments					0.25%
Debt instrument, variable rate description					Amounts borrowed under the First Lien Credit Agreement may be either Base Rate Loans or LIBOR Loans. Base Rate Loans bear interest at the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) the LIBOR Market Index Rate plus 1.0%, provided that the Base Rate will not be less than 1.50% per annum, in each case plus (w) for revolving loans, 2.50% per annum, and (x) for term loans, 4.74% per annum. LIBOR Loans bear interest at LIBOR plus (y) for revolving loans, 3.50% per annum, and (z) for term loans, 5.74% per annum, in each case, provided that LIBOR will not be less than 0.50% per annum. Interest is due to be paid in cash on the last day of each applicable interest period (with rolling 30-day interest periods) and on the Maturity Date. We are required to pay certain fees to the administrative agent
First Lien Credit Agreement | LIBOR | Maximum
Debt Instrument [Line Items]
Debt, variable interest rate					0.50%
First Lien Credit Agreement | Term Loans
Debt Instrument [Line Items]
Debt, variable interest rate					4.74%
First Lien Credit Agreement | Term Loans | LIBOR
Debt Instrument [Line Items]
Debt, variable interest rate					5.74%
Second Lien Credit Agreement
Debt Instrument [Line Items]
Days of interest period					30 days
Debt instrument, variable rate description					Amounts borrowed under the Second Lien Credit Agreement may be either Base Rate Loans or LIBOR Loans. Base Rate Loans bear interest at the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) the LIBOR Market Index Rate plus 1.0%, provided that the Base Rate will not be less than 1.50% per annum, in each case plus 7.00% per annum. LIBOR Loans bear interest at LIBOR plus 8.00% per annum, provided that LIBOR will not be less than 0.50% per annum. Interest is due to be paid in kind on the last day of each applicable interest period (with rolling 30-day interest periods) by adding the accrued and unpaid amount thereof to the principal balance of the loans under the Second Lien Credit Agreement and then accruing interest on the increased principal amount (provided that after the discharge of our obligations under the First Lien Credit Agreement and any other senior debt obligations, interest will be paid in cash). We are required to pay certain fees to the administrative agent for the account of the lenders in connection with the Second Lien Credit Agreement.

XML

Financing Activity - Interest Expense and Deferred Financing Amortization (Details) - Credit Agreements and Restructured Credit Agreements - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
2018 Revolving Facility
Debt Instrument [Line Items]
Interest expense	$ 461	$ 541
Deferred financing amortization	57	299
Term Loans
Debt Instrument [Line Items]
Interest expense	27,549	20,448
Deferred financing amortization	$ 424	$ 1,784

XML

Financing Activity - Interest Expense and Deferred Financing Amortization (Parenthetical) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Second lien Term Loans
Debt Instrument [Line Items]
Interest expense	$ 20.5	$ 12.5

XML

Financing Activity - Carrying and Fair Values of Mortgage Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Mortgage loans, carrying value	$ 740,167	$ 749,396
Carrying Value | Mortgage Loan
Debt Instrument [Line Items]
Mortgage loans, carrying value	741,900	751,500
Fair Value | Mortgage Loan
Debt Instrument [Line Items]
Mortgage loans, fair value	$ 735,400	$ 733,700

XML

Financing Activity - Carrying and Fair Values of Mortgage Loans (Parenthetical) (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Mortgage Loan
Debt Instrument [Line Items]
Debt issuance costs, line of credit arrangements	$ 1.7	$ 2.1

XML

Financing Activity - Timing of Principal Payments and Terms of Mortgage Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Total
Carrying value of mortgage notes payable	$ 740,167	$ 749,396
Mortgage Loan
Total
Less: Unamortized debt issuance costs	1,700	$ 2,100
Mortgage Loan | Consolidated Properties
Principal Amortization
April 1 through December 31, 2023	6,438
2024	6,405
2025	4,406
2027 and thereafter	0
Total principal payments	17,249
Balloon Payments
April 1 through December 31, 2023	394,315
2024	118,994
2025	211,346
2027 and thereafter	0
Total principal payments	724,655
Total
April 1 through December 31, 2023	400,753
2024	125,399
2025	215,752
2027 and thereafter	0
Total principal payments	741,904
Less: Unamortized debt issuance costs	1,737
Carrying value of mortgage notes payable	$ 740,167

XML

Financing Activity - Mortgage Loan Activity (Details) - USD ($)		3 Months Ended
	May 01, 2023	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Mortgage loans, carrying value		$ 740,167,000	$ 749,396,000
Cherry Hill Mall
Debt Instrument [Line Items]
Debt instrument, maturity date		May 01, 2024
Debt instrument extended maturity period description		This agreement extends the maturity date to December 1, 2023 with a $5.0 million principal paydown at time of execution, and requires the borrower to continue making scheduled monthly debt service payments. The agreement also includes an option to extend the maturity to May 1, 2024 with an additional $5.0 million principal payment.
Principal payment		$ 5,000.0
Cherry Hill Mall | Subsequent Event [Member]
Debt Instrument [Line Items]
Debt instrument, maturity date	Dec. 01, 2023
Cherry Hill Mall | Mortgage Loan | Commercial Real Estate
Debt Instrument [Line Items]
Mortgage loans, carrying value		$ 237,200,000
Cherry Hill Mall | Mortgage Loan | Commercial Real Estate | Subsequent Event [Member]
Debt Instrument [Line Items]
Required principal paydown	$ 5,000,000.0
Dartmouth Mall | Mortgage Loan | Commercial Real Estate
Debt Instrument [Line Items]
Debt instrument, maturity date		Mar. 31, 2023
Mortgage loans, carrying value		$ 53,300,000

XML

Cash Flow Information - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Dec. 31, 2021
Other Significant Noncash Transactions [Line Items]
Cash and cash equivalents and restricted cash	$ 33,236	$ 61,101	$ 34,689	$ 58,077
Tenant security deposits	2,100	1,700
Cash paid for interest	16,400	16,500
Net of capitalized interest	100	24
Aggregate repayments on term loan	26,312	2,437
Increase (decrease) in accrued construction costs	900	(3,800)
First Lien Term Loan
Other Significant Noncash Transactions [Line Items]
Aggregate repayments on term loan	26,300	1,700
First Lien Revolving Facility
Other Significant Noncash Transactions [Line Items]
Aggregate repayments on term loan	$ 0	$ 700

XML

Cash Flow Information - Summary of Cash, Cash Equivalents, and Restricted Cash Reported within Statement of Cash Flows (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Cash and Cash Equivalents [Abstract]
Cash and cash equivalents	$ 20,240	$ 22,937	$ 45,554	$ 43,852
Restricted cash included in other assets	12,996	11,752	15,547	14,225
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$ 33,236	$ 34,689	$ 61,101	$ 58,077

XML

Derivatives - Additional Information (Details)	3 Months Ended
	Mar. 31, 2023 USD ($) Derivativeinstrument	Mar. 31, 2022 USD ($)
Derivative Instruments [Line Items]
Derivative, notional amount	$ 400,000,000.0
Estimate decrease to interest expense	$ 2,000,000.0
Weighted average interest rate	2.92%
Amount of gain or (loss) reclassified from accumulated other comprehensive income into interest expense	$ (1,600,000)	$ (1,900,000)
Interest rate derivative liabilities, at fair value	0
Interest Rate Swap
Derivative Instruments [Line Items]
Derivative, notional amount	$ 400,000,000.0
Credit Agreements
Derivative Instruments [Line Items]
Debt instrument, maturity date	Dec. 10, 2023
Credit Agreements | Term Loans
Derivative Instruments [Line Items]
Number of voluntarily de-designated interest rate swaps from cash flow hedges | Derivativeinstrument	9

XML

Derivatives - Fair Value of Derivative Instruments (Details) - USD ($) $ in Millions		Mar. 31, 2023	Dec. 31, 2022
Derivative Instruments, Gain (Loss) [Line Items]
Aggregate Notional Value		$ 400.0
Aggregate Fair Value	[1]	$ 2.0	$ 3.9
Weighted Average Interest Rate		2.92%
Interest Rate Swaps 2023 Maturity
Derivative Instruments, Gain (Loss) [Line Items]
Aggregate Notional Value		$ 300.0
Aggregate Fair Value	[1]	$ 1.0	2.4
Weighted Average Interest Rate		2.70%
Interest Rate Swaps 2024 Maturity
Derivative Instruments, Gain (Loss) [Line Items]
Aggregate Notional Value		$ 100.0
Aggregate Fair Value	[1]	$ 1.0	$ 1.5
Weighted Average Interest Rate		3.59%

[1] As of March 31, 2023 and December 31, 2022, derivative valuations in their entirety were classified in Level 2 of the fair value hierarchy and we did not have any significant recurring fair value measurements related to derivative instruments using significant unobservable inputs (Level 3).

XML

Derivatives - Effect of Our Derivative Financial Instruments on Our Consolidated Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivative Instruments	$ (1,900)	$ 3,900
Amount of Loss Reclassified from Accumulated Other Comprehensive Income into Interest Expense	$ 1,600	$ 1,900
Derivative Instrument, Gain (Loss) Reclassified from AOCI into Income, Effective Portion, Statement of Income or Comprehensive Income [Extensible Enumeration]	Other Operating Income (Expense), Net	Other Operating Income (Expense), Net
Interest Expense	$ (41,048)	$ (31,391)

XML

Leases - As Lessee (Details)	3 Months Ended
	Mar. 31, 2023
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Lessee, operating lease, renewal term	60 years
Lessee, Operating Lease, Existence of Option to Extend	true
Lessor, Operating Lease, Existence of Option to Extend	false
Minimum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Lessee, operating lease, term of contract	3 years
Maximum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Lessee, operating lease, term of contract	40 years

XML

Leases - Lease Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Amortization of right-of-use assets	$ 205	$ 202
Interest on lease liabilities	42	78
Operating lease costs	631	653
Variable lease costs	253	252
Total lease costs	1,131	1,185
Solar Panel Leases
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Amortization of right-of-use assets	205	202
Interest on lease liabilities	42	78
Operating lease costs	0	0
Variable lease costs	0	0
Total lease costs	247	280
Ground Leases
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Amortization of right-of-use assets	0	0
Interest on lease liabilities	0	0
Operating lease costs	586	585
Variable lease costs	47	46
Total lease costs	633	631
Office, equipment, and vehicle leases
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Amortization of right-of-use assets	0	0
Interest on lease liabilities	0	0
Operating lease costs	45	68
Variable lease costs	206	206
Total lease costs	$ 251	$ 274

XML

Leases - Supplemental Cash Flows and Terms (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Leases [Abstract]
Operating cash flows used for finance leases	$ 54	$ 63
Operating cash flows used for operating leases	640	653
Financing cash flows used for finance leases	$ 196	$ 185
Weighted average remaining lease term-finance leases (months)	60 months	72 months
Weighted average remaining lease term-operating leases (months)	214 months	292 months
Weighted average discount rate-finance leases	4.36%	4.34%
Weighted average discount rate-operating leases	6.46%	6.44%

XML

Leases - Future Payments Against Lease Liabilities (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Finance leases
April 1 to December 31, 2023	$ 738
2024	950
2025	929
2026	926
2027	859
Thereafter	288
Total undiscounted lease payments	4,690
Less imputed interest	(489)
Total lease liabilities	$ 4,201
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Accrued Liabilities and Other Liabilities
Operating leases
April 1 to December 31, 2023	$ 1,937
2024	2,471
2025	2,428
2026	2,429
2027	2,450
Thereafter	46,208
Total undiscounted lease payments	57,923
Less imputed interest	(29,322)
Total lease liabilities	$ 28,601
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Accrued Liabilities and Other Liabilities
Total
April 1 to December 31, 2023	$ 2,675
2024	3,421
2025	3,357
2026	3,355
2027	3,309
Thereafter	46,496
Total undiscounted lease payments	62,613
Less imputed interest	(29,811)
Total lease liabilities	$ 32,802

XML

Leases - Lessor Payments to be Received, Maturity (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Leases [Abstract]
April 1 to December 31, 2023	$ 183,398
2024	218,494
2025	180,224
2026	145,850
2027	117,112
Thereafter	297,358
Total payments to be received	$ 1,142,436

XML

Leases - Disaggregation of Fixed Lease Revenue and Variable Lease Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating Lease, Lease Income [Abstract]
Fixed lease revenue	$ 51,025	$ 51,330
Variable lease revenue	10,490	12,953
Total lease revenue	$ 61,515	$ 64,283

XML

Commitments and Contingencies - Contractual Obligations (Details) $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($)
Fashion District Philadelphia
Other Commitments [Line Items]
Contractual obligation and other commitments	$ 0.4
Percentage of contractual obligation	100.00%
Ownership percentage	50.00%
Construction in Progress
Other Commitments [Line Items]
Contractual obligation and other commitments	$ 3.9

XML

Commitments and Contingencies - Preferred Dividend Arrearages (Details) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($) $ / shares shares
Other Commitments [Line Items]
Preferred shares, authorized (in shares) | shares	25.0
Cumulative amount of unpaid dividends on preferred stock | $	$ 75.3
Series B Preferred Stock
Other Commitments [Line Items]
Preferred stock annual dividend rate	$ 0.46
Unpaid dividends per share on preferred stock	5.07
Series C Preferred Stock
Other Commitments [Line Items]
Preferred stock annual dividend rate	0.45
Unpaid dividends per share on preferred stock	4.95
Series D Preferred Stock
Other Commitments [Line Items]
Preferred stock annual dividend rate	0.43
Unpaid dividends per share on preferred stock	$ 4.73