PHILADELPHIA, May 9 /PRNewswire/ -- Pennsylvania Real Estate Investment
Trust (NYSE: PEI) announced today the results of its operations for the first
quarter ended March 31, 2000.
2000 First Quarter Highlights
- FFO increased 1.6% to $0.64 per share on 14.9 million shares/OP units
outstanding from $0.63 per share on 14.6 million shares/OP units during
the first quarter of 1999.
- FFO for the first quarter of 2000 increased 4.0% to $9.5 million from
$9.2 million in the 1999 first quarter.
- Increased combined net operating income 9.1% to $20.0 million from
$18.3 million in the 1999 first quarter.
- Same store multifamily net operating income increased 5.5% from the
1999 first quarter.
- Same store retail net operating income increased 4.0% from the 1999
first quarter.
First Quarter Results
Funds from operations (FFO) for the three months ended March 31, 2000
totaled $9,524,000, a 4.0% increase over FFO of $9,155,000 for the comparable
three-month period in 1999. The growth was driven by acquisitions and
development projects completed in 1999 and improved operating results in the
Company's portfolio. First quarter FFO was $0.64 per share on 14,880,708
weighted average share equivalents outstanding (including Operating
Partnership [OP] units), compared to $0.63 per share on 14,582,099 weighted
average share equivalents for the three months ended March 31, 1999. As
calculated by NAREIT, FFO is defined as net income, excluding extraordinary
items, gain (or loss) on the sale of property, plus depreciation and
amortization.
Net operating income before depreciation from wholly-owned properties and
the Company's proportionate share of partnerships and joint venture properties
increased 9.1% to $19,980,000 for the three months ended March 31, 2000, from
$18,316,000 for the three months ended March 31, 1999. The increase is mainly
due to acquisitions and development projects completed in 1999 and improved
operating results in the Company's portfolio.
Net income for the three months ended March 31, 2000 was $6,389,000, or
$0.48 per basic share, on total weighted average shares outstanding of
13,339,873 compared to $5,870,000, or $0.44 per basic share, on 13,308,584
total weighted average shares outstanding for the three months ended March 31,
1999. Net income for the first quarter of 2000 includes a gain on the sale of
the Company's interest in Park Plaza shopping center in Pinellas Park, Fla.,
totaling $2.3 million or $0.17 per share. Net income for the first quarter of
1999 includes gains on the sale of the Company's interest in 135 Commerce
Drive, Fort Washington, Pa., and a land parcel at Crest Plaza in Allentown,
Pa., totaling $1.3 million or $0.10 per share.
Same Store NOI Growth -- Multifamily and Shopping Center Portfolios
Same store net operating income for the Company's portfolio of multifamily
properties increased 5.5% over the first quarter of 2000, primarily driven by
a 5.1% increase in revenues. Same store net operating income for the first
quarter of 2000 for the Company's shopping center portfolio increased by 4.0%
over the comparable quarter in 1999 primarily driven by a 3.2% increase in
revenues.
Comments from Management
Commenting on the quarter, Ronald Rubin, Chief Executive Officer of PREIT,
said, "We are pleased with the overall performance of our core portfolio
during the first quarter of 2000 reflecting the effectiveness of our business
plan. In the quarters ahead, PREIT will continue to concentrate on our
strengths in retail power centers, malls and multifamily while maintaining the
growth of our development pipeline which currently includes 5 power centers,
one entertainment center and one enclosed mall. We are optimistic that 2000
will be another year of solid achievement and are very positive about the
impact of our long-term growth strategies on the financial prospects for the
Company."
Portfolio Highlights
Acquisitions
- Willow Grove Park (Willow Grove, Pa.) - In February, a partnership of
PREIT and Pennsylvania State Employee Retirement System (PaSERS)
purchased Willow Grove Park, a 981,000 square foot regional shopping
center for $140 million. In conjunction with the acquisition, it was
announced that a 225,000 square foot Macy's department store would be
added to the complex in the Fall of 2001.
- Emerald Point (Virginia Beach, Va.) -- In January, PREIT completed the
purchase for $11 million, including assumption of debt, of its partner's
35% interest in 862 apartment units at the Emerald Point multifamily
community. The property is now 100% owned and operated by PREIT.
Development Pipeline
- Paxton Towne Centre (Harrisburg, Pa.) - Construction of the 695,000
square foot power center is on schedule and as of March 31, 2000, 61%
complete and 75% leased. Initial occupancy is expected in the third
quarter of 2000.
- Metroplex Shopping Center (Plymouth Meeting, Pa.) - Construction of the
780,000 square foot power center is on schedule and as of March 31,
2000, 53% complete and 90% leased. Initial occupancy is expected in the
fourth quarter of 2000.
- Pavilion at Market East (Philadelphia, Pa.) - Plans for the site
continue to undergo reconfiguration and redesign, and the recommencement
of construction is dependent upon the completion of leasing and
financing arrangements.
- Creekview (Warrington, Pa.) - Construction of the 419,000 square foot
shopping center is on schedule and as of March 31, 2000, 52% complete
and 84% leased. Target and Lowe's have opened at Creekview and the
Company recently signed a lease with Genuardis Supermarkets, Inc.
Occupancy of additional tenants is expected in the third quarter of 2001
with completion in the fourth quarter of 2001.
Dispositions
- Park Plaza Shopping Center (Pinellas Park, Fla.) -- Consistent with the
Company's disposition strategy of selling non-core properties, PREIT
completed the sale of its 50% interest in Park Plaza Shopping Center to
its joint venture partner. The Company realized total proceeds of
approximately $3.0 million and a gain on the sale totaling $2.3 million
or $0.17 per share.
Second Quarter 2000 Activity
- CVS Building (Alexandria, Va.) - As previously announced, in April,
PREIT sold a 294,000 square foot industrial property for total proceeds
of approximately $12.0 million. In connection with the sale, the
Company terminated the lease with the building's sole tenant, CVS Drug
Co., which otherwise would have expired on April 30, 2002. The sale of
the property will result in a gain of approximately $6.6 million
($0.45 per share and OP Unit) in the second quarter of 2000. The lease
termination payment of approximately $4 million will be recorded as
income in the second quarter of 2000 in accordance with Generally
Accepted Accounting Principles (GAAP).
- Northeast Tower Center (Philadelphia, Pa.) -- PREIT also announced today
the termination of a ground lease by General Cinema at Northeast Tower
Center, a 479,498 square foot power center. The lease termination
payment of one year's rent totals $650,000 and will be recorded as
income in the second quarter of 2000 in accordance with GAAP.
The Company also announced today that is has entered into a 20-year
lease agreement with Bradlees Stores for a 114,270 square foot store at
Northeast Tower Center. Under the lease agreement, which commences on
February 1, 2001 or earlier if the store is open, the tenant will pay
initial annual rent of $1.1 million. Bradlees anticipates the opening
of its store in November of 2000.
- Mandarin Corners (Jacksonville, Fla.) - The Company also announced today
an agreement in principle to terminate a lease with Uptons. Uptons,
which has vacated the Mandarin Corners strip center, will make a lease
termination payment of approximately $1.0 million. The agreement is
expected to be finalized during the second quarter. The lease was
scheduled to expire on October 31, 2007 and annual rent was $375,550.
Capital Resources
As of March 31, 2000, the Company had approximately $103.0 million
outstanding, including letters of credit, under its line of credit.
Edward Glickman, Chief Financial Officer of PREIT, added, "Our objective
in 2000 is to provide the Company with additional capital to fund its
development projects and other value-added opportunities. We continue to be
prudent in choosing our opportunities and expect to fund our development
pipeline with a combination of retained cash, non-core asset dispositions,
debt financing and potential strategic partnerships. Towards this end, we
have maintained our strategy of opportunistically selling non-core properties
at favorable prices and reinvesting the proceeds in assets with higher cash
flows and better appreciation prospects. Of note, we continue to work with
Eastdil Realty to sell several non-core supermarket and drugstore strip
centers."
Pennsylvania Real Estate Investment Trust, founded in 1960 and one of the
first equity REITs in the U.S., has a primary investment focus on shopping
centers (approximately 9.5 million square feet) and apartment communities
(7,242 units) located primarily in the eastern United States. The Company's
portfolio currently consists of 46 properties in 10 states. In addition,
there are 7 retail properties under development, which will add approximately
3.4 million square feet to the portfolio. Pennsylvania Real Estate Investment
Trust is headquartered in Philadelphia, Pa.
With the exception of the historical information contained in the release,
the matters described herein contain forward-looking statements that are made
pursuant to the Safe Harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such statements involve various risks which may cause
actual results to differ materially. These risks include, but are not limited
to, the ability of the Company to grow internally or by acquisition and to
integrate acquired businesses, the availability of adequate funds at
reasonable cost, changing industry and competitive conditions, and other risks
outside the control of the company referred to in the Company's registration
statement and periodic reports filed with the Securities and Exchange
Commission.
A supplemental quarterly financial package is available on the Company's
web site at http://www.preit.com.
To receive additional information on Pennsylvania Real Estate Investment
Trust via fax at no charge, please dial 1-800-PRO-INFO and enter the ticker
symbol PEI.
Pennsylvania Real Estate Investment Trust
Selected Financial Data
FUNDS FROM OPERATIONS
Three Months Ended
March 31, 2000 March 31, 1999
Income before minority interest in
operating partnership $7,129,000 $6,432,000
Less: Gains on sales of interests
in real estate (2,263,000) (1,346,000)
Add:
Wholly owned & consolidated
partnership, net 3,710,000 3,156,000
Unconsolidated partnerships & joint
ventures 1,122,000 1,059,000
Excess purchase price over net asset
acquired 54,000 53,000
Less: Depreciation of non-real estate assets (65,000) (60,000)
Amortization of deferred financing
assets (163,000) (139,000)
FUNDS FROM OPERATIONS $9,524,000(A) $9,155,000(A)
FUNDS FROM OPERATIONS PER SHARE AND OP UNITS $0.64 $0.63
Weighted average number shares outstanding 13,339,873 13,308,584
Weighted average effect of full conversion
of OP units 1,540,835 1,273,515
Total weighted average shares of outstanding
including OP units 14,880,708 14,582,099
A)Includes the non-cash effect of straight-line rents of $296,000 and
$295,000 for the 1st quarter 2000 and 1999, respectively.
OPERATING RESULTS
Three Months Ended
March 31, 2000 March 31, 1999
REVENUES
Gross revenues from real estate $23,222,000 $21,578,000
Interest and other income 230,000 163,000
23,452,000 21,741,000
EXPENSES
Property operating expenses 8,180,000 7,855,000
Depreciation and amortization 3,710,000 3,216,000
General & administrative expenses 1,035,000 853,000
Interest expense 5,844,000 5,105,000
18,769,000 17,029,000
Income before equity in unconsolidated
entities, gains on sales of interests
in real estate and minority interest
in operating partnership 4,683,000 4,712,000
Equity in loss of PREIT-RUBIN, Inc. (1,489,000) (1,092,000)
Equity in income of partnerships and
joint ventures 1,672,000 1,466,000
Gains on sales of interests in real estate 2,263,000(A) 1,346,000(B)
Income before minority interest in
operating partnership 7,129,000 6,432,000
Minority interest in operating partnership (740,000) (562,000)
NET INCOME $6,389,000 $5,870,000
PER SHARE DATA
Net income before gains on sales of interests
in real estate $0.31 $0.34
Gains on sales of interests in real estate 0.17(A) 0.10(B)
BASIC INCOME PER SHARE $0.48 $0.44
DILUTED INCOME PER SHARE $0.48 $0.44
Weighted average number shares outstanding 13,339,873 13,308,584
A)2000 includes a gain on sale of interest in Park Plaza shopping center
in Pinellas Park, Fla.
B)1999 includes gains on sale of interests in 135 Commerce Drive, Fort
Washington, Pa., and land parcel at Crest Plaza, Allentown, Pa.
Pennsylvania Real Estate Investment Trust
Selected Financial Data
EQUITY IN INCOME OF PARTNERSHIPS
AND JOINT VENTURES
Three Months Ended
March 31, 2000 March 31, 1999
Gross revenues from real estate $16,423,000 $14,158,000
Expenses:
Property operating expenses 5,468,000 4,852,000
Mortgage and bank loan interest 5,113,000 4,188,000
Depreciation and amortization 2,531,000 2,154,000
13,112,000 11,194,000
3,311,000 2,964,000
Partner's Share (1,639,000) (1,498,000)
EQUITY IN INCOME OF PARTNERSHIPS
AND JOINT VENTURES $1,672,000 $1,466,000
Supplemental Information for Wholly Owned Properties
and the Company's Proportionate Share of Partnerships and Joint Ventures
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION
AND AMORTIZATIONS ("EBITDA")
Three Months Ended
March 31, 2000 March 31, 1999
Gross Revenues $23,222,000 $21,578,000
Operating expenses (8,180,000) (7,855,000)
Net operating income:
Wholly-owned properties 15,042,000 13,723,000
Company's proportionate share
of partnerships and joint ventures
net operating income 4,938,000 4,593,000
Combined net operating income 19,980,000 18,316,000
Interest income 230,000 163,000
Company's proportionate share of PREIT-RUBIN,
Inc. net operating income (loss) (1,129,000) (800,000)
General and administrative expenses (1,035,000) (853,000)
EBITDA $18,046,000 $16,826,000
MORTGAGE NOTES, BANK AND CONSTRUCTION LOANS
PAYABLE
Wholly-Owned Properties
Mortgage notes payable $265,809,000 $166,274,000
Bank Loans payable 97,700,000 142,973,000
Construction Loan Payable 10,145,000 --
376,654,000 309,247,000
Company's Proportionate Share of
Partnerships and Joint Ventures
Mortgage notes payable 113,195,000 108,861,000
Bank loans payable 14,396,000 2,482,000
Total mortgage notes and bank loans
payable $501,245,000 $420,590,000
SOURCE Pennsylvania Real Estate Investment Trust
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Related links:
http://www.preit.com
CONTACT:
Edward A. Glickman, Executive Vice President
and CFO of Pennsylvania Real Estate Investment Trust,
215-875-0700; or General Info, Joe Calabrese, Analyst Info,
Pamela Belfor, or Media Info, Judith Sylk-Siegel, all of The
Financial Relations Board, 212-661-8030
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