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SOURCE Pennsylvania Real Estate Investment Trust
PHILADELPHIA, Dec. 16, 2013 /PRNewswire/ -- Pennsylvania Real Estate Investment Trust (NYSE: PEI) has completed the financing of Wyoming Valley Mall in Wilkes-Barre, PA and used a portion of the proceeds to repay the mortgage loan balance on Beaver Valley Mall in Monaca, PA without penalty.
The amount of the new 10-year non-recourse loan on Wyoming Valley Mall is $78.0 million, which replaced a $65.0 million loan, that was repaid in September 2013, and resulted in proceeds of approximately $13.0 million. The interest rate on the new mortgage loan is 5.17%, representing a decrease of 68 basis points from the previous rate. The Company used a portion of the proceeds to pay off the $42.2 million mortgage loan balance on Beaver Valley Mall, which is now unencumbered. This loan carried an interest rate of 9.36% and was set to mature in April 2032. The balance of the proceeds was used to pay down amounts outstanding under the Company's 2013 Revolving Facility and for general corporate purposes.
"PREIT has made significant improvements in strengthening its balance sheet in 2013 with these transactions being examples of our commitment," said Joseph Coradino, Chief Executive Officer of PREIT. "We are pleased with the favorable terms we received on Wyoming Valley Mall's financing and to have paid off the mortgage loan on Beaver Valley which carried a disproportionately high interest rate."
Wyoming Valley Mall is a 910,000 square foot mall in Wilkes-Barre, PA anchored by Sears, JCPenney, Bon-Ton and Macy's with sales per square foot of $396 as of September 30, 2013. Beaver Valley Mall is a 1,154,000 square foot mall in Monaca, PA anchored by Sears, Boscov's, JCPenney and Macy's with sales per square foot of $272 as of September 30, 2013.
In 2013, the Company completed $291.1 million of property-level financings yielding approximately $31.7 million in proceeds at an average interest rate of 4.26%, a 127 basis point reduction versus the previous mortgages.
About Pennsylvania Real Estate Investment Trust
PREIT is a real estate investment trust specializing in the ownership and management of differentiated retail shopping malls designed to fit the dynamic communities they serve. Founded in 1960 as Pennsylvania Real Estate Investment Trust, the Company now operates properties in 12 states in the eastern half of the United States with concentration in the Mid-Atlantic region and Greater Philadelphia. The Company's current portfolio is comprised of 35 shopping malls, five community and power centers, and three development sites totaling 43 properties and 30.3 million square feet of space. PREIT is headquartered in Philadelphia, Pennsylvania, and is publicly traded on the NYSE under the symbol PEI. Information about the Company can be found at www.preit.com or on Twitter or LinkedIn.
Forward Looking Statements
This press release contains certain "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements relate to expectations, beliefs, projections, future plans, strategies, anticipated events, trends and other matters that are not historical facts. These forward-looking statements reflect our current views about future events, achievements or results and are subject to risks, uncertainties and changes in circumstances that might cause future events, achievements or results to differ materially from those expressed or implied by the forward-looking statements. In particular, our business might be materially and adversely affected by uncertainties affecting real estate businesses generally as well as the following, among other factors: our substantial debt and stated value of preferred shares and our high leverage ratio; constraining leverage, interest and tangible net worth covenants under our 2013 Revolving Facility; potential losses on impairment of certain long-lived assets, such as real estate, or of intangible assets, such as goodwill; potential losses on impairment of assets that we might be required to record in connection with any dispositions of assets; recent changes to our corporate management team and any resulting modifications to our business strategies; our ability to refinance our existing indebtedness when it matures, on favorable terms or at all; our ability to raise capital, including through the issuance of equity or equity-related securities if market conditions are favorable, through joint ventures or other partnerships, through sales of properties or interests in properties, or through other actions; our short- and long-term liquidity position; current economic conditions and their effect on employment and consumer confidence and spending and the corresponding effects on tenant business performance, prospects, solvency and leasing decisions and on our cash flows, and the value and potential impairment of our properties; general economic, financial and political conditions, including credit and capital market conditions, changes in interest rates or unemployment; changes in the retail industry, including consolidation and store closings, particularly among anchor tenants; the effects of online shopping and other uses of technology on our retail tenants; our ability to maintain and increase property occupancy, sales and rental rates, in light of the relatively high number of leases that have expired or are expiring in the next two years; increases in operating costs that cannot be passed on to tenants; risks relating to development and redevelopment activities; concentration of our properties in the Mid-Atlantic region; changes in local market conditions, such as the supply of or demand for retail space, or other competitive factors; potential dilution from any capital raising transactions; possible environmental liabilities; our ability to obtain insurance at a reasonable cost; and existence of complex regulations, including those relating to our status as a REIT, and the adverse consequences if we were to fail to qualify as a REIT. The risks included here are non-exhaustive, and there are additional factors that might cause future events, achievements or results to differ materially from those expressed or implied by our forward-looking statements include those discussed in the section of our Annual Report on Form 10-K and in our Quarterly Report on Form 10-Q for the three months ended March 31, 2013 in the section entitled "Item 1A. Risk Factors." We do not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.
EVP & CFO
VP, Corporate Communications and Investor Relations
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