PHILADELPHIA-Pennsylvania Real Estate Investment is currently60% leveraged and one of the ways management could lessen thatnumber is by selling noncore assets, including some of itsportfolio of 13 open-air and power centers. "In today's market,smaller assets tend to be a little more liquid and a little moreattractive to investors," said CFO Robert McFadden, speaking at theannual REIT Week convention in Chicago.

Another way to reduce the leverage, he said, is for managment toconsider non-retail tenants in middle markets where spaces whereanchor space was vacated by store closings. For example, one ofPREIT's 38 malls, in Pennsylvania, leased space to a telemarketingfirm. McFaddeen contended that some of these nontraditional tenantsactually pay higher rents than big-format retailers.

The company would also like to partner with instutionalinvestors that might be looking for "growth opportunities in thefuture," he said.