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NEW YORK CITY-The full brunt of recession didn’t appear in the results from three REITS announced late this week, but one of them acknowledges that “the near term general economic environment continues to be challenging.”

Funds from operations (FFO) increased at two Northeastern-based REITS in the third quarter and a third would have also reported positive results except for charges related to termination of a proposed acquisition.

Pennsylvania Real Estate Investment Trust (NYSE: PEI) reported FFO of $10.73 million, an increase of 7.6% compared to 3Q 2000. Combined net operating income increased 10.9% to $22.35 million and same store operating income from the shopping center portfolio increased 4%. Same store multifamily net operating income increased 5.4% while mall sales increased 7.1% to $391 per sf and shopping center occupancy increased 180 basis points to 91.5%.

The company ended 3Q 2001 with $824 million of investment in real estate, a net increase of $20 million over year 2000. The portfolio is now 34% multifamily, 60% retail, 6% retail development and less than 1% industrial. A dividend of 51 cents per share will be paid on Dec. 17, the 99th consecutive distribution since 1962. The trust’s portfolio of 45 properties in 10 states is located primarily in the eastern US. There are 6 retail properties under development expected to add 1.8 million sf to the portfolio.

FFO rose 9% to$1.5 million for the third quarter at One Liberty Properties (Amex: OLP), based in Great Neck, NY. Rental income increased 12% quarter over quarter and by 25% nine months over nine months because of property acquisitions, offset in part by property dispositions. The REIT invests primarily in improved commercial real estate under long term net lease.

New York City-based Aegis Realty (Amex: AER) reported a 13.2% decline in Q3 FFO for 2001, dropping to $2.18 million compared to $2.5 million in 2000. The company attributed the increase primarily to $440,000 in costs associated with the termination of a proposed acquisition of P.O’B. Montgomery & Co. and 19 community shopping centers. The adjusted growth rate for FFO compared to 3Q 2000 is 4.2%.

On Oct. 4 Aegis Realty announced it had hired Robertson Stephens Inc. as an investment advisor under the directive of the board of directors to pursue the potential sale of the company or its assets.

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