PREIT / 1
CONTACT: AT THE COMPANY
Mario Ventresca
EVP & CFO
(215) 875-0703
INVESTOR RELATIONS
Heather Crowell
heather@gregoryfca.com
PREIT Reports Second Quarter 2023 Results
Core Mall Total Occupancy Grew to 94.2%, Portfolio 95.0% Leased
Core Mall Sales Per Square Foot Were $592 in June
Average Renewal Spreads Were 4.7% for the Quarter Ended June 30, 2023
Philadelphia, August 3, 2023 - PREIT (OTCQB:PRET) today reported results for the three and six months ended June 30, 2023. A description of each non-GAAP financial measure and the related reconciliation to the comparable GAAP financial measure is provided in the tables accompanying this release.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
(per share amounts) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net loss - basic and diluted |
|
$ |
(9.73 |
) |
|
$ |
(3.32 |
) |
|
$ |
(19.48 |
) |
|
$ |
(10.72 |
) |
FFO |
|
$ |
(3.15 |
) |
|
$ |
1.72 |
|
|
$ |
(6.20 |
) |
|
$ |
1.51 |
|
FFO, as adjusted |
|
$ |
(3.15 |
) |
|
$ |
1.71 |
|
|
$ |
(6.20 |
) |
|
$ |
0.83 |
|
“Our quarterly results demonstrate that our portfolio continues to be attractive to tenants and customers with core mall non-anchor occupancy improving 120 basis points and total leasing activity nearly 60% ahead of last year," said Joseph F. Coradino, Chairman and CEO of PREIT. “Improvements in occupancy and renewal spreads are clear indicators of compelling nature of our portfolio to tenants."
PREIT / 2
Leasing and Redevelopment
Primary Factors Affecting Financial Results for the Three Months Ended June 30, 2023 and 2022
All NOI and FFO amounts referenced as primary factors affecting financial results above include our share of unconsolidated properties’ revenues and expenses. Additional information regarding changes in operating results for the three and six months ended June 30, 2023 and 2022 is included on page 15.
PREIT / 3
Liquidity and Financing Activities
As of June 30, 2023, the Company had $102.5 million available under its First Lien Revolving Credit Facility. The Company’s corporate cash balances, when combined with available credit, provide total liquidity of $110.7 million. The Company’s Credit Facilities, with a balance of $1,023.1 million as of June 30, 2023, mature on December 10, 2023. The Company is working to address the upcoming maturity by pursuing all available alternatives, including refinancing, selling assets and engaging in discussions with lenders.
During the quarter, the Company extended the mortgage loan secured by Cherry Hill Mall through December 1, 2023 with an additional five month extension option exercisable subject to satisfaction of certain conditions. The Company also extended the maturity date on the mortgage loan secured by Woodland Mall through October 5, 2023.
Asset Dispositions
During the quarter, the Company closed on the sale of a land parcel to Main Event at Woodland Mall for $4.8 million.
2023 Outlook
The Company is not issuing detailed guidance at this time.
Conference Call Information
Management has scheduled a conference call for 11:00 a.m. Eastern Time on Thursday August 3, 2023, to review the Company’s results and future outlook. To listen to the call, please dial 1(888) 330-2024 (domestic toll free), or 1(646) 960-0187 (international), and request to join the PREIT call, Conference ID 9326912, at least fifteen minutes before the scheduled start time as callers could experience delays. Investors can also access the call in a "listen only" mode via the internet at the Company’s website, preit.com. Please allow extra time prior to the call to visit the site and download the necessary software to listen to the Internet broadcast. Financial and statistical information expected to be discussed on the call will also be available on the Company’s website.
For interested individuals unable to join the conference call, the online archive of the webcast will also be available for one year following the call.
About PREIT
PREIT (OTCQB:PRET) is a publicly traded real estate investment trust that owns and manages innovative properties developed to be thoughtful, community-centric hubs. PREIT's robust portfolio of carefully curated, ever-evolving properties generates success for its tenants and meaningful impact for the communities it serves by keenly focusing on five core areas of established and emerging opportunity: multi-family & hotel, health & tech, retail, essentials & grocery and experiential. Located primarily in densely-populated regions, PREIT is a top operator of high quality, purposeful places that serve as one-stop destinations for customers to shop, dine, play and stay. Additional information is available at www.preit.com or on Twitter, Instagram or LinkedIn.
PREIT / 4
Rounding
Certain summarized information in the tables included may not total due to rounding.
Definitions
Funds From Operations (“FFO”)
The National Association of Real Estate Investment Trusts (“NAREIT”) defines Funds From Operations (“FFO”), which is a non-GAAP measure commonly used by REITs, as net income (computed in accordance with GAAP) excluding (i) depreciation and amortization of real estate, (ii) gains and losses on sales of certain real estate assets, (iii) gains and losses from change in control and (iv) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. We compute FFO in accordance with standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition, or that interpret the current NAREIT definition differently than we do. NAREIT’s established guidance provides that excluding impairment write downs of depreciable real estate is consistent with the NAREIT definition.
FFO is a commonly used measure of operating performance and profitability among REITs. We use FFO and FFO per diluted share and unit of limited partnership interest in our operating partnership (“OP Unit”) in measuring our performance against our peers and as one of the performance measures for determining incentive compensation amounts earned under certain of our performance-based executive compensation programs.
FFO does not include gains and losses on sales of operating real estate assets or impairment write downs of depreciable real estate (including development land parcels), which are included in the determination of net loss in accordance with GAAP. Accordingly, FFO is not a comprehensive measure of our operating cash flows. In addition, since FFO does not include depreciation on real estate assets, FFO may not be a useful performance measure when comparing our operating performance to that of other non-real estate commercial enterprises. We compensate for these limitations by using FFO in conjunction with other GAAP financial performance measures, such as net loss and net cash used in operating activities, and other non-GAAP financial performance measures, such as NOI. FFO does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net loss (determined in accordance with GAAP) as an indication of our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions. We believe that net loss is the most directly comparable GAAP measurement to FFO.
When applicable, we also present FFO, as adjusted, and FFO per diluted share and OP Unit, as adjusted, which are non-GAAP measures, for the three and six months ended June 30, 2023 and 2022, respectively, to show the effect of such items as provision for employee separation expense, gain on sale of preferred equity interest, depreciation and amortization on real estate at PREIT’s consolidated properties, PREIT’s share of depreciation and amortization of equity method investments, loss on project costs by equity method investee, gain on sales of interests in real estate and gain on sales of equity method investment, 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, depreciation and amortization of real estate, among others. We believe that Funds From Operations, as adjusted, is helpful to management and investors as a measure of operating performance because it adjusts FFO to exclude items that management does not believe are indicative of our operating performance, such as provision for employee separation expense, and gain on sale of preferred equity interest.
PREIT / 5
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 of partnerships, gain/loss on project costs by equity method investee, gain on sales of interest in real estate, gain on sale of equity method investment, gain on sale of preferred equity interest, and gain on sales of non operating real estate.
Same Store NOI is calculated using retail properties owned for the full periods presented and excludes properties acquired or disposed of, under redevelopment, or designated as non-core during the periods presented. Non Same Store NOI is calculated using the retail properties excluded from the calculation of Same Store NOI.
Unconsolidated Properties and Proportionate Financial Information
The non-GAAP financial measures of FFO and NOI presented in this press release incorporate financial information attributable to our share of unconsolidated properties. This proportionate financial information is non-GAAP financial information, but we believe that it is helpful information because it reflects the pro rata contribution from our unconsolidated properties that are owned through investments accounted for under GAAP using the equity method of accounting. Under such method, earnings from these unconsolidated partnerships are recorded in our statements of operations prepared in accordance with GAAP under the caption entitled “Equity in (loss) income of partnerships.”
To derive the proportionate financial information from our unconsolidated properties,” we multiplied the percentage of our economic interest in each partnership on a property-by-property basis by each line item. Under the partnership agreements relating to our current unconsolidated partnerships with third parties, we own a 40% to 50% economic interest in such partnerships, and there are generally no provisions in such partnership agreements relating to special non-pro rata allocations of income or loss, and there are no preferred or priority returns of capital or other similar provisions. While this method approximates our indirect economic interest in our pro rata share of the revenue and expenses of our unconsolidated partnerships, we do not have a direct legal claim to the assets, liabilities, revenues or expenses of the unconsolidated partnerships beyond our rights as an equity owner in the event of any liquidation of such entity. Our percentage ownership is not necessarily indicative of the legal and economic implications of our ownership interest. Accordingly, NOI and FFO results based on our share of the results of unconsolidated partnerships do not represent cash generated from our investments in these partnerships.
Core Malls
Core Malls exclude Exton Square Mall, Cumberland Mall and Valley View Mall and power centers.
PREIT / 6
Forward Looking Statements
This press release contains certain forward-looking statements that can be identified by the use of words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “project,” and similar expressions. Forward-looking statements relate to expectations, beliefs, projections, future plans, strategies, anticipated events, trends and other matters, including our expectations about 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:
PREIT / 7
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 the section entitled “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2022 and any subsequent quarterly reports on Form 10-Q and other reports we file with the SEC. Any forward-looking statements made by us speak only as of the date on which they are made, and we do not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.
** Quarterly supplemental financial and operating **
** information will be available on www.preit.com **
PREIT / 8
Pennsylvania Real Estate Investment Trust
Selected Financial Data
|
|
For the Three Months Ended June 30, |
|
|
|
For the Six Months Ended June 30, |
|
||||||||||
(in thousands, except per share amounts) |
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
||||
REVENUE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Real estate revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Lease revenue |
|
$ |
61,508 |
|
|
$ |
67,447 |
|
|
|
$ |
123,023 |
|
|
$ |
131,730 |
|
Expense reimbursements |
|
|
4,314 |
|
|
|
4,215 |
|
|
|
|
8,967 |
|
|
|
8,359 |
|
Other real estate revenue |
|
|
1,561 |
|
|
|
1,396 |
|
|
|
|
2,567 |
|
|
|
2,163 |
|
Total real estate revenue |
|
|
67,383 |
|
|
|
73,058 |
|
|
|
|
134,557 |
|
|
|
142,252 |
|
Other income |
|
|
62 |
|
|
|
69 |
|
|
|
|
153 |
|
|
|
310 |
|
Total revenue |
|
|
67,445 |
|
|
|
73,127 |
|
|
|
|
134,710 |
|
|
|
142,562 |
|
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
CAM and real estate taxes |
|
|
(25,353 |
) |
|
|
(26,075 |
) |
|
|
|
(51,512 |
) |
|
|
(53,947 |
) |
Utilities |
|
|
(3,453 |
) |
|
|
(3,528 |
) |
|
|
|
(6,848 |
) |
|
|
(7,089 |
) |
Other property operating expenses |
|
|
(2,090 |
) |
|
|
(2,199 |
) |
|
|
|
(4,305 |
) |
|
|
(4,339 |
) |
Total property operating expenses |
|
|
(30,896 |
) |
|
|
(31,802 |
) |
|
|
|
(62,665 |
) |
|
|
(65,375 |
) |
Depreciation and amortization |
|
|
(25,970 |
) |
|
|
(28,382 |
) |
|
|
|
(52,339 |
) |
|
|
(57,492 |
) |
General and administrative expenses |
|
|
(10,093 |
) |
|
|
(9,744 |
) |
|
|
|
(21,218 |
) |
|
|
(21,227 |
) |
Other expenses |
|
|
(8 |
) |
|
|
66 |
|
|
|
|
(11 |
) |
|
|
(78 |
) |
Total operating expenses |
|
|
(66,967 |
) |
|
|
(69,862 |
) |
|
|
|
(136,233 |
) |
|
|
(144,172 |
) |
Interest expense, net |
|
|
(43,154 |
) |
|
|
(32,601 |
) |
|
|
|
(84,202 |
) |
|
|
(63,992 |
) |
Total expenses |
|
|
(110,121 |
) |
|
|
(102,463 |
) |
|
|
|
(220,435 |
) |
|
|
(208,164 |
) |
Equity in loss of partnerships |
|
|
(3,986 |
) |
|
|
(1,188 |
) |
|
|
|
(6,682 |
) |
|
|
(1,583 |
) |
Gain on sales of interests in real estate |
|
|
— |
|
|
|
1,701 |
|
|
|
|
— |
|
|
|
1,701 |
|
Gain on sale of equity method investment |
|
|
— |
|
|
|
9,053 |
|
|
|
|
— |
|
|
|
9,053 |
|
Gain on sales of interests in non operating real estate |
|
|
1,057 |
|
|
|
8,755 |
|
|
|
|
1,057 |
|
|
|
8,755 |
|
Gain on sale of preferred equity interest |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
3,688 |
|
Net loss |
|
|
(45,605 |
) |
|
|
(11,015 |
) |
|
|
|
(91,350 |
) |
|
|
(43,988 |
) |
Less: net loss attributable to noncontrolling interest |
|
|
654 |
|
|
|
225 |
|
|
|
|
1,313 |
|
|
|
729 |
|
Net loss attributable to PREIT |
|
|
(44,951 |
) |
|
|
(10,790 |
) |
|
|
|
(90,037 |
) |
|
|
(43,259 |
) |
Less: preferred share dividends |
|
|
(6,844 |
) |
|
|
(6,844 |
) |
|
|
|
(13,688 |
) |
|
|
(13,688 |
) |
Net loss attributable to PREIT common shareholders |
|
$ |
(51,795 |
) |
|
$ |
(17,634 |
) |
|
|
$ |
(103,725 |
) |
|
$ |
(56,947 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted loss per share: |
|
$ |
(9.73 |
) |
|
$ |
(3.32 |
) |
|
|
$ |
(19.48 |
) |
|
$ |
(10.72 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding—basic |
|
|
5,325 |
|
|
|
5,317 |
|
|
|
|
5,324 |
|
|
|
5,311 |
|
Effect of common share equivalents(1) |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Weighted average shares outstanding—diluted |
|
|
5,325 |
|
|
|
5,317 |
|
|
|
|
5,324 |
|
|
|
5,311 |
|
(1) The Company had net losses in all periods presented. Therefore, the effects of common share equivalents are excluded from the calculation of diluted loss per share for these periods because they would be antidilutive.
PREIT / 9
Pennsylvania Real Estate Investment Trust
Selected Financial Data
|
|
For the Three Months Ended June 30, |
|
|
For the Six Months Ended June 30, |
|
||||||||||
(in thousands of dollars) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
$ |
(45,605 |
) |
|
$ |
(11,015 |
) |
|
$ |
(91,350 |
) |
|
$ |
(43,988 |
) |
Unrealized (loss) gain on derivatives |
|
|
(512 |
) |
|
|
3,612 |
|
|
|
(2,397 |
) |
|
|
9,419 |
|
Amortization of settled swaps |
|
|
2 |
|
|
|
5 |
|
|
|
(4 |
) |
|
|
5 |
|
Total comprehensive loss |
|
|
(46,115 |
) |
|
|
(7,398 |
) |
|
|
(93,751 |
) |
|
|
(34,564 |
) |
Less: comprehensive loss attributable to noncontrolling interest |
|
|
660 |
|
|
|
179 |
|
|
|
1,343 |
|
|
|
610 |
|
Comprehensive loss attributable to PREIT |
|
$ |
(45,455 |
) |
|
$ |
(7,219 |
) |
|
$ |
(92,408 |
) |
|
$ |
(33,954 |
) |
PREIT / 10
Pennsylvania Real Estate Investment Trust
Selected Financial Data
The following table presents a reconciliation of net loss determined in accordance with GAAP to (i) FFO attributable to common shareholders and OP Unit holders, (ii) FFO, as adjusted, attributable to common shareholders and OP Unit holders, (iii) FFO attributable to common shareholders and OP Unit holders per diluted share and OP Unit, (iv) and FFO, as adjusted, attributable to common shareholders and OP Unit holders per diluted share and OP Unit for the three and six months ended June 30, 2023 and 2022:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
(in thousands, except per share amounts) |
|
2023 |
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
||||
Net loss |
|
$ |
(45,605 |
) |
|
$ |
(11,015 |
) |
|
$ |
(91,350 |
) |
|
$ |
(43,988 |
) |
Depreciation and amortization on real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consolidated properties |
|
|
25,801 |
|
|
|
28,078 |
|
|
|
51,975 |
|
|
|
56,876 |
|
PREIT’s share of equity method investments |
|
|
2,789 |
|
|
|
2,973 |
|
|
|
5,634 |
|
|
|
5,995 |
|
(Gain) loss on sales of interest in real estate |
|
|
- |
|
|
|
(1,701 |
) |
|
|
- |
|
|
|
(1,701 |
) |
Loss (gain) on sale of equity method investment |
|
|
- |
|
|
|
(9,053 |
) |
|
|
- |
|
|
|
(9,053 |
) |
Loss on project costs by equity method investee |
|
|
35 |
|
|
|
- |
|
|
|
323 |
|
|
|
- |
|
Funds from operations attributable to common shareholders and OP Unit holders |
|
|
(16,980 |
) |
|
|
9,282 |
|
|
|
(33,418 |
) |
|
|
8,129 |
|
Provision for employee separation expenses |
|
|
(2 |
) |
|
|
(85 |
) |
|
|
3 |
|
|
|
(1 |
) |
Gain on sale of preferred equity interest |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(3,688 |
) |
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders |
|
$ |
(16,982 |
) |
|
$ |
9,197 |
|
|
$ |
(33,415 |
) |
|
$ |
4,440 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Funds from operations attributable to common shareholders and OP Unit holders per diluted share and OP Unit |
|
$ |
(3.15 |
) |
|
$ |
1.72 |
|
|
$ |
(6.20 |
) |
|
$ |
1.51 |
|
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders per diluted share and OP Unit |
|
$ |
(3.15 |
) |
|
$ |
1.71 |
|
|
$ |
(6.20 |
) |
|
$ |
0.83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(in thousands of shares) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of shares outstanding |
|
|
5,325 |
|
|
|
5,317 |
|
|
|
5,324 |
|
|
|
5,311 |
|
Weighted average effect of full conversion of OP Units |
|
|
68 |
|
|
|
69 |
|
|
|
68 |
|
|
|
69 |
|
Total weighted average shares outstanding, including OP Units |
|
|
5,393 |
|
|
|
5,386 |
|
|
|
5,392 |
|
|
|
5,380 |
|
PREIT / 11
Pennsylvania Real Estate Investment Trust
Selected Financial Data
NOI for the three and six months ended June 30, 2023 and 2022:
|
Same Store |
|
Change |
|
Non Same Store |
|
Total |
|
||||||||||||||||
(in thousands of dollars) |
2023 |
|
2022 |
|
$ |
|
% |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
||||||||
NOI from consolidated properties |
$ |
36,903 |
|
$ |
40,005 |
|
$ |
(3,102 |
) |
|
(7.8 |
%) |
$ |
(416 |
) |
$ |
1,251 |
|
$ |
36,487 |
|
$ |
41,256 |
|
NOI attributable to equity method investments, at ownership share |
|
7,505 |
|
|
7,275 |
|
|
230 |
|
|
3.2 |
% |
|
31 |
|
|
560 |
|
|
7,536 |
|
|
7,835 |
|
Total NOI |
|
44,408 |
|
|
47,280 |
|
|
(2,872 |
) |
|
(6.1 |
%) |
|
(385 |
) |
|
1,811 |
|
|
44,023 |
|
|
49,091 |
|
Less: lease termination revenue |
|
228 |
|
|
1,551 |
|
|
(1,323 |
) |
|
(85.3 |
%) |
|
- |
|
|
41 |
|
|
228 |
|
|
1,592 |
|
Total NOI excluding lease termination revenue |
$ |
44,180 |
|
$ |
45,729 |
|
$ |
(1,549 |
) |
|
(3.4 |
%) |
$ |
(385 |
) |
$ |
1,770 |
|
$ |
43,795 |
|
$ |
47,499 |
|
|
Same Store |
|
Change |
|
Non Same Store |
|
Total |
|
||||||||||||||||
(in thousands of dollars) |
2023 |
|
2022 |
|
$ |
|
% |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
||||||||
NOI from consolidated properties |
$ |
72,744 |
|
$ |
74,836 |
|
$ |
(2,092 |
) |
|
(2.8 |
%) |
$ |
(852 |
) |
$ |
2,042 |
|
$ |
71,892 |
|
$ |
76,878 |
|
NOI attributable to equity method investments, at ownership share |
|
16,249 |
|
|
15,102 |
|
|
1,147 |
|
|
7.6 |
% |
|
105 |
|
|
1,162 |
|
|
16,354 |
|
|
16,264 |
|
Total NOI |
|
88,993 |
|
|
89,938 |
|
|
(945 |
) |
|
(1.1 |
%) |
|
(747 |
) |
|
3,204 |
|
|
88,246 |
|
|
93,142 |
|
Less: lease termination revenue |
|
566 |
|
|
2,345 |
|
|
(1,779 |
) |
|
(75.9 |
%) |
|
- |
|
|
49 |
|
|
566 |
|
|
2,394 |
|
Total NOI excluding lease termination revenue |
$ |
88,427 |
|
$ |
87,593 |
|
$ |
834 |
|
|
1.0 |
% |
$ |
(747 |
) |
$ |
3,155 |
|
$ |
87,680 |
|
$ |
90,748 |
|
PREIT / 12
Pennsylvania Real Estate Investment Trust
Selected Financial Data
The table below reconciles net loss to NOI of our consolidated properties for the three and six months ended June 30, 2023 and 2022:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
(in thousands of dollars) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net loss |
|
$ |
(45,605 |
) |
|
$ |
(11,015 |
) |
|
|
(91,350 |
) |
|
|
(43,988 |
) |
Other income |
|
|
(62 |
) |
|
|
(69 |
) |
|
|
(153 |
) |
|
|
(310 |
) |
Depreciation and amortization |
|
|
25,970 |
|
|
|
28,382 |
|
|
|
52,339 |
|
|
|
57,492 |
|
General and administrative expenses |
|
|
10,093 |
|
|
|
9,744 |
|
|
|
21,218 |
|
|
|
21,227 |
|
Other (expenses) income |
|
|
8 |
|
|
|
(66 |
) |
|
|
11 |
|
|
|
78 |
|
Interest expense, net |
|
|
43,154 |
|
|
|
32,601 |
|
|
|
84,202 |
|
|
|
63,992 |
|
Equity in loss of partnerships |
|
|
3,986 |
|
|
|
1,188 |
|
|
|
6,682 |
|
|
|
1,583 |
|
Gain on sales of interest in real estate |
|
|
- |
|
|
|
(1,701 |
) |
|
|
- |
|
|
|
(1,701 |
) |
Gain on sale of equity method investment |
|
|
- |
|
|
|
(9,053 |
) |
|
|
- |
|
|
|
(9,053 |
) |
Gain on sale of preferred equity interest |
|
|
— |
|
|
|
|
|
|
- |
|
|
|
(3,688 |
) |
|
Gain on sales of non operating real estate |
|
|
(1,057 |
) |
|
|
(8,755 |
) |
|
|
(1,057 |
) |
|
|
(8,755 |
) |
NOI from consolidated properties |
|
|
36,487 |
|
|
|
41,256 |
|
|
|
71,892 |
|
|
|
76,877 |
|
Less: Non Same Store NOI of consolidated properties |
|
|
(417 |
) |
|
|
1,251 |
|
|
|
(852 |
) |
|
|
2,042 |
|
Same Store NOI from consolidated properties |
|
|
36,904 |
|
|
|
40,005 |
|
|
|
72,744 |
|
|
|
74,835 |
|
Less: Same Store lease termination revenue |
|
|
155 |
|
|
|
1,491 |
|
|
|
343 |
|
|
|
1,499 |
|
Same Store NOI excluding lease termination revenue |
|
$ |
36,749 |
|
|
$ |
38,514 |
|
|
$ |
72,401 |
|
|
$ |
73,336 |
|
PREIT / 13
Pennsylvania Real Estate Investment Trust
Selected Financial Data
The table below reconciles equity in loss of partnerships to NOI of equity method investments at ownership share for the three and six months ended June 30, 2023 and 2022:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Equity in loss of partnerships |
|
$ |
(3,986 |
) |
|
$ |
(1,188 |
) |
|
$ |
(6,682 |
) |
|
$ |
(1,583 |
) |
Depreciation and amortization |
|
|
2,789 |
|
|
|
2,973 |
|
|
|
5,634 |
|
|
|
5,995 |
|
Interest and other expenses |
|
|
8,697 |
|
|
|
6,050 |
|
|
|
17,079 |
|
|
|
11,852 |
|
Loss on project costs by equity method investee |
|
|
35 |
|
|
|
- |
|
|
|
323 |
|
|
|
- |
|
Net operating income from equity method investments at ownership share |
|
|
7,535 |
|
|
|
7,835 |
|
|
|
16,354 |
|
|
|
16,264 |
|
Less: Non Same Store NOI from equity method investments at ownership share |
|
|
32 |
|
|
|
560 |
|
|
|
104 |
|
|
|
1,162 |
|
Same Store NOI of equity method investments at ownership share |
|
|
7,503 |
|
|
|
7,275 |
|
|
|
16,250 |
|
|
|
15,102 |
|
Less: Same Store lease termination revenue |
|
|
74 |
|
|
|
60 |
|
|
|
224 |
|
|
|
854 |
|
Same Store NOI from equity method investments excluding lease termination revenue at ownership share |
|
$ |
7,429 |
|
|
$ |
7,215 |
|
|
$ |
16,026 |
|
|
$ |
14,248 |
|
PREIT / 14
Pennsylvania Real Estate Investment Trust
Selected Financial Data
|
|
June 30, |
|
|
December 31, |
|
||
(in thousands, except per share amounts) |
|
2023 |
|
|
2022 |
|
||
ASSETS: |
|
|
|
|
|
|
||
INVESTMENTS IN REAL ESTATE, at cost: |
|
|
|
|
|
|
||
Operating properties |
|
$ |
2,887,673 |
|
|
$ |
2,894,944 |
|
Construction in progress |
|
|
42,259 |
|
|
|
42,659 |
|
Land held for development |
|
|
2,058 |
|
|
|
2,058 |
|
Total investments in real estate |
|
|
2,931,990 |
|
|
|
2,939,661 |
|
Accumulated depreciation |
|
|
(1,401,515 |
) |
|
|
(1,370,065 |
) |
Net investments in real estate |
|
|
1,530,475 |
|
|
|
1,569,596 |
|
INVESTMENTS IN PARTNERSHIPS, at equity: |
|
|
7,790 |
|
|
|
7,845 |
|
OTHER ASSETS: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
|
22,578 |
|
|
|
22,937 |
|
Tenant and other receivables |
|
|
31,490 |
|
|
|
40,459 |
|
Intangible assets, net |
|
|
8,075 |
|
|
|
8,623 |
|
Deferred costs and other assets, net |
|
|
87,778 |
|
|
|
91,902 |
|
Assets held for sale |
|
|
34,172 |
|
|
|
61,767 |
|
Total assets |
|
$ |
1,722,358 |
|
|
$ |
1,803,129 |
|
LIABILITIES: |
|
|
|
|
|
|
||
Mortgage loans payable, net |
|
$ |
725,947 |
|
|
$ |
749,396 |
|
Term Loans, net |
|
|
994,148 |
|
|
|
976,903 |
|
Revolving Facility |
|
|
27,481 |
|
|
|
22,481 |
|
Tenants’ deposits and deferred rent |
|
|
12,307 |
|
|
|
13,264 |
|
Distributions in excess of partnership investments |
|
|
100,461 |
|
|
|
93,136 |
|
Accrued expenses and other liabilities |
|
|
78,205 |
|
|
|
69,846 |
|
Liabilities on assets held for sale |
|
|
1,774 |
|
|
|
2,539 |
|
Total liabilities |
|
|
1,940,323 |
|
|
|
1,927,565 |
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
||
EQUITY: |
|
|
|
|
|
|
||
Series B Preferred Shares, $.01 par value per share; 3,450 shares issued and outstanding; liquidation preference of $105,331 and $102,151 at June 30, 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 $209,760 and $203,550 at June 30, 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 $150,782 and $146,485 at June 30, 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 June 30, 2023 and December 31, 2022, respectively |
|
|
5,341 |
|
|
|
5,356 |
|
Capital contributed in excess of par |
|
|
1,858,912 |
|
|
|
1,858,675 |
|
Accumulated other comprehensive income |
|
|
911 |
|
|
|
3,282 |
|
Distributions in excess of net income |
|
|
(2,070,730 |
) |
|
|
(1,980,693 |
) |
Total equity (deficit) —Pennsylvania Real Estate Investment Trust |
|
|
(205,412 |
) |
|
|
(113,226 |
) |
Noncontrolling interest |
|
|
(12,553 |
) |
|
|
(11,210 |
) |
Total equity (deficit) |
|
|
(217,965 |
) |
|
|
(124,436 |
) |
Total liabilities and equity |
|
$ |
1,722,358 |
|
|
$ |
1,803,129 |
|
PREIT / 15
Pennsylvania Real Estate Investment Trust
Selected Financial Data
The table below reconciles changes in funds from operations for the three and six months ended June 30, 2023 as compared to the three and six months ended June 30, 2022 (all per share amounts on a diluted basis unless otherwise noted; per share amounts rounded to the nearest half penny; amounts may not total due to rounding):
(in thousands, except per share amounts) |
|
Three Months Ended |
|
|
Per Diluted |
|
|
|
Six Months |
|
|
Per Diluted |
|
|||||
Funds from Operations, as adjusted June 30, 2022 |
|
$ |
9,197 |
|
|
$ |
1.71 |
|
|
|
|
$ |
4,440 |
|
|
$ |
0.83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Changes - Q2 2022 to Q2 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Contribution from anchor replacements and new box tenants |
|
|
302 |
|
|
|
0.05 |
|
|
|
|
554 |
|
|
|
0.11 |
|
|
Impact from bankruptcies |
|
|
(249 |
) |
|
|
(0.05 |
) |
|
|
|
(426 |
) |
|
|
(0.08 |
) |
|
Other leasing activity, including base rent and net CAM and real estate tax recoveries |
|
|
(1,328 |
) |
|
|
(0.25 |
) |
|
|
|
(753 |
) |
|
|
(0.14 |
) |
|
Lease termination revenue |
|
|
(1,335 |
) |
|
|
(0.25 |
) |
|
|
|
(1,156 |
) |
|
|
(0.22 |
) |
|
Credit losses |
|
|
(721 |
) |
|
|
(0.14 |
) |
|
|
|
(756 |
) |
|
|
(0.14 |
) |
|
Other |
|
|
228 |
|
|
|
0.05 |
|
|
|
|
445 |
|
|
|
0.09 |
|
|
Same Store NOI(1) from unconsolidated properties |
|
|
228 |
|
|
|
0.04 |
|
|
|
|
1,147 |
|
|
|
0.22 |
|
|
Same Store NOI |
|
|
(2,875 |
) |
|
|
(0.53 |
) |
|
|
|
(945 |
) |
|
|
(0.16 |
) |
|
Non Same Store NOI |
|
|
(2,196 |
) |
|
|
(0.41 |
) |
|
|
|
(3,951 |
) |
|
|
(0.74 |
) |
|
General and administrative expenses |
|
|
(10,093 |
) |
|
|
(1.88 |
) |
|
|
|
(21,218 |
) |
|
|
(3.94 |
) |
|
Capitalization of leasing costs |
|
|
(33 |
) |
|
|
(0.01 |
) |
|
|
|
203 |
|
|
|
0.04 |
|
|
Other |
|
|
2,206 |
|
|
|
0.40 |
|
|
|
|
13,468 |
|
|
|
2.49 |
|
|
Interest expense, net |
|
|
(13,188 |
) |
|
|
(2.44 |
) |
|
|
|
(25,412 |
) |
|
|
(4.72 |
) |
|
Funds from Operations, as adjusted June 30, 2023 |
|
|
(16,982 |
) |
|
|
(3.15 |
) |
|
|
|
(33,415 |
) |
|
|
(6.20 |
) |
|
Provision for employee separation expense |
|
|
2 |
|
|
|
- |
|
|
|
|
(3 |
) |
|
|
- |
|
|
Funds from Operations June 30, 2023 |
|
$ |
(16,980 |
) |
|
$ |
(3.15 |
) |
|
|
$ |
(33,418 |
) |
|
$ |
(6.20 |
) |
|
(1) Funds from Operations and NOI are non-GAAP measures. See definition of Funds from Operation and NOI on page 4-5.