PHILADELPHIA-Pennsylvania Real Estate Investment Trust has amended its Nov. 20, 2003 credit facility to obtain an interest rate that ranges from 0.95% to 1.40% a year over Libor versus the previous range of between 1.05% and 1.55% over Libor. The interest rate changes, based on PREIT's leverage ratio, currently, it is at the low end of the new range, which shaves 0.1% from the rate at the time of the amendment.

The amended facility also extends the term of the previous facility from Nov. 20, 2007 to Jan. 20, 2009 and includes a 14-month extension option. Wells Fargo Bank is the sole lead arranger and administrative agent.

The capitalization rate applied to the gross asset value of the new credit facility is 7.5% versus the previous cap rate of 8.25%. The amount of the facility, $500 million, is unchanged, and $271 million is currently outstanding. Under conditions spelled out in the amended facility, PREIT has the option of increasing it to $650 million.

While reducing the minimum interest coverage and total debt ratios, this agreement allows for an increase in joint-venture investments. The locally based retail REIT is currently discussing JV-development of a parking lot at 18th and Market streets with Goldenberg Group, also based here. According to Ron Rubin, chairman and CEO, at least one other joint venture is on deck as PREIT redevelops and repositions Cherry Hill Mall in New Jersey into Voorhees Town Center. The Voorhees, NJ project calls for the addition of multifamily condos and rental apartments, which will be created in partnership with a residential developer.