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PHILADELPHIA-All of the pending transactions that marked locally based Pennsylvania Real Estate Investment Trust’s conversion to a retail-only REIT were completed in third quarter. Primarily as a result of the acquisition of six malls from Rouse Co., funds from operations rose 17.9% to approximately $14.5 million from just under $12.3 million in the same quarter a year ago.

Same store net operating income from PREIT’s retail portfolio this third quarter dropped from 96.6% in third quarter 2002 to 95%. The closing of an Ames store at Dartmouth Mall in Massachusetts was the primary cause of the decline. PREIT has a non-binding letter of intent to sell a pad including that site to May Co. for a 140,000-sf Filene’s Department Store.

PREIT’s power centers were 97.7% occupied in the most recent quarter, and occupancy at its enclosed malls was 86.3%. Sales in the company’s same store mall properties averaged $377 per sf, versus $382 per sf in the comparable quarter a year ago.

During the third-quarter PREIT executed 43 retail leases encompassing 356,657 sf at an average rent of $10.37 per sf. New leases for previously leased space accounted for five transactions totaling 16,243 sf at an average rent of $32.85 per sf, which is $6.13 per sf higher than the average prior rent in those spaces. Renewed leases for 21 tenants, occupying an aggregate 159,503 sf, averaged $12.65 per sf, an increase of just 89 cents per sf over the rent at expiration.

PREIT also executed transactions for 17 formerly vacant spaces totaling 180,911 sf with an average rent of $6.35 per sf. They include a ground lease for a 136,010-sf store with Target at Prince Georges Plaza, Hyattsville, MD with a base rent of $2.21 per sf, and 16 leases for 44,901 sf at $18.90 per sf.

Meanwhile, PREIT shareholders will meet on Nov. 11 to vote on the company’s proposed merger with Crown American Realty Trust, which is expected to reach completion by the end of this year.

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