PREIT Completes Sale of Nittany and North Hanover Malls

PHILADELPHIA, PA—Pennsylvania Real Estate Investment Trust has sold the Nittany and North Hanover Malls for $32.3 million. PREIT says completion of the transaction is “a major milestone” in the company's commitment to enhancing the quality of its portfolio.

"Today's announcement demonstrates our continued success in opportunistically divesting assets to transform our portfolio and create value for shareholders," says Joseph F. Coradino, CEO of PREIT. "We have generated significant proceeds through our selective disposition program, while at the same time upgrading our core, high-quality properties. We are driving value by shaping a portfolio that derives nearly all of its NOI from high-quality malls, while maintaining solid operational performance and a strong balance sheet." 

PREIT started disposing of underperforming assets in 2012 as part of its portfolio quality improvement strategy. The two sales, announced this week, bring to 11 the assets sold to date. PREIT also has another property under agreement of sale, and is negotiating agreements of sale for two parcels. PREIT says it has sold successfully six non-core malls that generated sales per square foot well under $250 for approximately $113.9 million. 

Nittany Mall is a 534,000 square foot mall located in State College, PA, with sales of $243 per square foot and non-anchor occupancy of 70.0% as of June 30, 2014. North Hanover Mall is a 452,000 square foot mall located in Hanover, PA, with sales of $275 per square foot and non-anchor occupancy of 72.8% as of June 30, 2014.

Sales and occupancy at these two properties lagged PREIT's portfolio, which had averaged sales of $378 per square foot and non-anchor occupancy of 89.5% as of June 30, 2014.