PHILADELPHIA-The minor slides that impacted Pennsylvania Real Estate Investment Trust's third-quarter financials were reversed in the final quarter of 2005 when two of the 10 properties under redevelopment reached completion. Overall occupancy also rose from 91.6% at the end of September to 92.2% by Dec. 31, 2005.
The increases occurred despite the closing of four overlapping Strawbridge units by Federated, which the locally based REIT has released and/or redeveloped. Plans for the Strawbridge unit in the Gallery at Market East here are yet to be determined. During a conference call, Ron Rubin, chairman and CEO, said, "generally, Federated replaces with a Macy's. That's a possibility, but I can't speak for Federated." In respect to Pavilion at 18th and Market streets, which is now a parking lot, Rubin said that in joint-venture with locally based Goldenberg Group, "we're looking at opportunities," and, under questioning from analysts, conceded that they included "uses other than retail," such as residential development.
Net income for the fourth quarter was $16 million, up 1.3% over the same quarter a year ago. FFO rose 1.5% to $46 million, and net operating income increased 1.3% to $78.6 million. Sales per sf in the 39-property portfolio averaged $329 at the end of 2005, up from $324 per sf for the portfolio at year-end 2004. Overall occupancy, including anchors, was 92.2% at year-end, up from the previous quarter and at the same level as year-end 2004.
"Redevelopment is highly disruptive and causes immediate dislocation," said Ed Glickman, CFO, during the call. "However, in the long run it is necessary as retail concepts change." He also said the company would continue to position and reposition assets, "which may include mixed-use."
The $49.8-million redevlopment and added power center at New River Valley Mall in Christiansburg, VA is expected to reach completion at the end of this quarter. Redevelopment of four more properties, at an aggregate investment of $25.8 million, is expected to be finished in third quarter. That leaves Cherry Hill (NJ) Mall, Plymouth Meeting Mall and Echelon Mall in Voorhees, NJ on track for redevelopment completion in 2007. The latter will be renamed Voorhees Town Center, where plans call for the addition of approximately 200,000 sf of lifestyle retail and condominium and rental multifamily units to be developed by a residential developer.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.