The 328,000-sf property is part of the 1.1-million-sf Gallery atMarket East, the largest retail complex in Downtown Philadelphia.PREIT acquired the 193,000-sf Gallery at Market East I fromColumbia, MD-based Rouse Co. last April as part of a six-propertyretail portfolio. At that time, PREIT also sold its multifamilyportfolio and transformed into an all-retail REIT.

The purchase from PSERS bring's PREIT's ownership in Gallery atMarket East to 521,000 sf. The Market East II section is anchoredby Burlington Coat Factory. Among the 51 other in-line tenants areOld Navy, Foot Locker, Bath & Body Works, Limited Express, andLerner. Anchors for the full complex are Strawbridge's and BigK-mart.

As of Dec. 31, 2003, in-line sales volume at the II section ofthe retail complex was $393 per sf, and in-line occupancy was78.3%. The acquisition was funded from PREIT's line of credit. TheREIT underwrote the acquisition to generate an unleveraged returnof approximately 9.5% on cost, based on anticipated income for2004, according to a PREIT statement. The property is subject totwo ground leases with remaining terms of 79 and 44 years.