PHILADELPHIA-Net operating income for Pennsylvania Real Estate Investment Trust dipped 1.2% in third quarter to $68.1 million, versus $68.9 million in the same quarter a year ago. Occupancy in the locally based retail REIT's portfolio was 91.6% at the end of September 2005, down slightly from 91.7% in September 2004, and in-line occupancy for its enclosed malls dipped to 85.9% in the most recent quarter, down from 86.9% at the same time a year ago.
The third-quarter results reflect redevelopment activities that are taking place at 10 of its 37 malls. "As redevelopment initiatives gain traction, we anticipate earnings growth at the properties coming out of construction in late 2005 and early 2006," said Edward Glickman, president and COO, during a conference call. "At the same time, we expect continued dislocation over the near term at our properties that are currently in the earlier stages of redevelopment. Overall," he added, "while we expect NOI to increase in 2006, our rate of growth will continue to reflect the ongoing repositioning efforts at many of our assets."
Meanwhile, PREIT's board authorized the repurchase of up to $100 million of the company's common shares through year-end 2007. As much as $50 million of the funding for the repurchase can come from the company's revolving credit facility. During the call, Ronald Rubin, chairman and CEO, said he expected accelerated growth from redevelopment and from ground-up development would raise the value of the stock.
As the closing bell on the NYSE approached on Mon., Oct. 31, the day the financials were disclosed, shares of PEI traded at $38.55 a share, down almost 2.9% since the opening. The 52-week high of $50.20 a share was reached on Aug. 3 this year, and the 52-week low of $37.09 a share occurred little more than two months later on Oct. 13.
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