"While the economic environment has changed substantially in thepast year, the fundamentals of our business have not," PREIT CEORonald Rubin said during the earnings call. "Despite thechallenging economy, we're working to advance our redevelopment anddevelopment projects to place stores in service, increase netoperating income and occupancy and to generate positive leasingspreads."

Net loss allocable to common shareholders for the quarter wasreported to be $2.9 million compared with a net income available tocommon shareholders of $500,000 in Q2 2007. Net loss for the firstsix months of 2008 was $5 million versus an income of $6.2 millionin the first six months of 2007.

According to Robert McCadden, PREIT's CFO, several factors havecontributed to the loss, most notably the closing of departmentstores at six PREIT-owned malls to facilitate the addition of newanchors. Former Value City locations in Chambersburg, Lycoming,Cumberland and Uniontown are being replaced with Burlington CoatFactory stores, most of which will open at the end of the month. Inaddition, two Duff stores were closed to make way for an 85,000-sfJCPenney and space was taken at the Wiregrass Mall in Dothan, AL toaccommodate a new, larger Duff's.