Thank you for sharing!

Your article was successfully shared with the contacts you provided.

PHILADELPHIA-Pennsylvania Real Estate Investment Trust reported declines in net income and funds from operations during Q3 as the locally based shopping center REIT continues accelerated redevelopment of its portfolio. Net income fell to $1.1 million, down from $14.5 million for the same quarter a year ago.

A chief culprit was a third-quarter 2005 gain of $11.8 million from sales or real estate, versus just $1.6 million from sales in the most recent quarter. Funds from operations also slid to $32.5 million, down from $36.3 million in Q3 2005. However, net operating income from properties rose to $72.5 million, a 5.5%-increase compared with NOI of $68.7 million in third-quarter 2005.

“Our results were in line with expectations,” says Ron Rubin, chairman and CEO, during a conference call. “We are making solid progress on our current redevelopment projects.” He cited Nordstrom’s commitment to Cherry Hill Mall, a 110,000-sf lifestyle expansion at Lehigh Valley Mall, and the ongoing transformation of Echelon Mall, which was “the most distressed asset in our portfolio,” into a mixed-use town center.

The portfolio’s occupancy fell to 89.9% as of Sept. 30, down from 91.8% a year ago, primarily because of the acquisition of three vacant Strawbridge’s. Tenants have already committed to two of them, says Joseph Coradino, president of PREIT Services.

As a sign of the benefits of redevelopment activity, average sales per sf in the portfolio reached $351, compared with an average of $338 per sf in the third quarter 2005. “The number of our malls with sales of greater than $400 per sf has increased from seven at the end of September 2005 to nine,” he adds.

In regards to lower performing assets, Rubin says the company is looking at its options. “At present, it appears to us that lower performing assets are not selling at attractive rates. We’re looking at the possibility of redeveloping even those. We’re seeing if there’s opportunity.”

Shares of PEI stock closed at $41.01 a share on the NYSE on Nov. 2 following the conference call. The 52-week high of $44.53 a share was reached on October 19 this year, and the 52-week low of $35.24 a share occurred on Nov. 15, 2005.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?



Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt
Live Chat

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.