PREIT Provides COVID-19 Business Update
PHILADELPHIA, March 25, 2020 /PRNewswire/ — PREIT (NYSE: PEI) today reported on various aspects of its business during the COVID-19 pandemic sweeping across the Unites States. PREIT employees are working productively from remote locations and continue to make progress toward key initiatives.
Key tenant openings:
Two anchor replacements opened quietly without grand opening activity – DICK’s Sporting Goods at Valley Mall and Burlington at Dartmouth Mall, both replacing Sears stores. PREIT looks forward to celebrating these new additions within their communities once advisable by health officials. They join Michaels stores that recently opened at both Plymouth Meeting and Moorestown Malls in February, marking the completion of former Macy’s box redevelopments at these two centers and a meaningful amount of new space added to the rent roll in 2020.
PREIT has continued to conduct its core business remotely. Since March 1, the Company has executed leased for over $4 million in annual gross rent:
- 14 new leases for annual gross rent of $1.4 million including new-to-portfolio transactions with Tempur-Pedic and Veda as well as expanding international retailer, Ardene who will open at Willow Grove Park, and
- 20 renewals securing annual gross rent of $2.9 million
Update on mall and store operations:
- PREIT has continued to follow recommendations and orders of government and health officials.
- At this time, PREIT has now closed all of its enclosed mall properties across the nine states in which it operates. Many restaurants and essential exterior-facing tenants remain open. PREIT has continued to support these tenants through social media and email blasts to our consumers and is hosting a variety of community support initiatives including blood drives, mobile food pantries and supporting restaurants that are offering discounted and free meals to the medical community.
Balance sheet activity:
- Since the beginning of the year, the Company has completed the sale of 3 additional outparcels for gross proceeds of approximately $8 million.
- The Company expects to finalize its credit facility amendment by the end of March.
«While this is certainly an unprecedented time, we are pleased with how the PREIT team is responding to best position the portfolio for the future,» said Joseph F. Coradino, Chairman and CEO of PREIT. «We believe that a combination of lease provisions, insurance and federal, state and local stimulus will allow us to effectively execute on our 2020 business plan. We wish all of our employees, shoppers and tenants continued good health.»
PREIT (NYSE: PEI) is a publicly traded real estate investment trust that owns and manages innovative properties at the forefront of shaping consumer experiences through the built environment. PREIT’s robust portfolio of carefully curated retail and lifestyle offerings mixed with destination dining and entertainment experiences are located primarily in densely-populated, high barrier-to-entry markets with tremendous opportunity to create vibrant multi-use destinations. Additional information is available at www.preit.com or on Twitter or LinkedIn.
Forward Looking Statements
This press release contains certain forward-looking statements that can be identified by the use of words such as «anticipate,» «believe,» «estimate,» «expect,» «project,» «intend,» «may» or similar expressions. 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 changes in the retail and real estate industries, including consolidation and store closings, particularly among anchor tenants; current economic conditions, including the impact of the COVID-19 pandemic and the steps taken by governmental authorities and other third parties to reduce its spread, and the corresponding effects on tenant business performance, prospects, solvency and leasing decisions; our inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise; our ability to maintain and increase property occupancy, sales and rental rates; increases in operating costs that cannot be passed on to tenants; the effects of online shopping and other uses of technology on our retail tenants; risks related to our development and redevelopment activities, including delays, cost overruns and our inability to reach projected occupancy or rental rates; acts of violence at malls, including our properties, or at other similar spaces, and the potential effect on traffic and sales; our ability to sell properties that we seek to dispose of or our ability to obtain prices we seek; our substantial debt and the liquidation preference of our preferred shares and our high leverage ratio; our ability to refinance our existing indebtedness when it matures, on favorable terms or at all; our ability to raise capital, including through sales of properties or interests in properties and through the issuance of equity or equity-related securities if market conditions are favorable; and potential dilution from any capital raising transactions or other equity issuances.
Due to the unprecedented and rapidly changing social and economic impacts associated with the COVID-19 pandemic on the U.S. and global economies generally, and in particular on the U.S. retail environment, we are unable to predict or estimate the ultimate impact on our business or business prospects. The ultimate significance of COVID-19 on our business will depend on, among other things: the extent and duration of the pandemic, the severity of the disease and the number of people infected with the virus; the effects on the economy of the pandemic and of the measures taken by governmental authorities and other third parties restricting day to day life and the length of time that such measures remain in place; our ability to obtain waivers to continue certain operations, including construction, and governmental programs implemented to assist consumers and business owners.
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 herein and in our Annual Report on Form 10-K for the year ended December 31, 2019 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, Strategy and Communications
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