FORT WASHINGTON, Pa., May 15 /PRNewswire/ -- Pennsylvania Real Estate
Investment Trust (NYSE: PEI) announced today the results of its operations for
the first quarter ended March 31, 1998.  The Company is reporting a different
comparable quarter ending period as a result of the previously announced
change in its fiscal year from August 31 to December 31.  Therefore, for
comparative purposes, the 1998 quarter includes the three-month period ended
March 31, 1998 ("first quarter 1998") and the 1997 quarter includes the three-
month period ended February 28, 1997 ("first quarter 1997").

    First Quarter Highlights
    -- Increased FFO to $0.56 per share on 13.9 million shares/OP units
       outstanding in 1998 from $0.54 per share on 8.7 million shares
       outstanding in 1997
    -- Increased FFO 65% to $7.7 million in 1998 from $4.7 million in 1997
    -- Increased combined net operating income 31.2% over 1997
    -- Reduced debt to market cap ratio from 51% on February 28, 1997 to 40%
       on March 31, 1998
    -- Acquired remaining 50% interest in Christiana Center Phase I in Newark,
       Delaware
    -- Announced plans to develop a power retail center in Harrisburg,
       Pennsylvania
    -- Reduced spread on line of credit by 30 basis points
    -- Paid off secured term loan of $33.6 million utilizing credit facility's
       lower interest rate

    First Quarter Results
    Funds from operations (FFO) for the three months ended March 31, 1998
totaled $7,744,000, a 65% increase over the prior comparable three-month
period ended February 28, 1997 FFO of $4,701,000, primarily as a result of the
Company's September 30 acquisition of The Rubin Organization and interests in
four shopping centers.  On a per share basis, first quarter FFO was $0.56 per
share and operating partnership (OP) unit on 13,938,000 weighted average
shares outstanding (including OP units), compared to $0.54 per share on
8,678,000 weighted average shares outstanding for the three months ended
February 28, 1997.  The per share results reflect the fully diluted effect of
the Company's equity offering of 4.6 million shares completed on December 17,
1997.  As calculated by NAREIT, FFO is defined as net income excluding
extraordinary and unusual 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, including PREIT-RUBIN, increased 31.2 % to $12,526,000 for the
three months ended March 31, 1998, from $9,544,000 for the three months ended
February 28, 1997.  The increase is mainly due to the Company's acquisition of
The Rubin Organization and interests in four shopping centers.
    Net income for the three months ended March 31, 1998 totaled $4,593,000,
or $0.35 per basic share on total weighted average shares outstanding of
13,292,000 compared to $2,981,000, or $0.34 per share on total weighted
average shares outstanding of 8,678,000 for the three-month period ended
February 28, 1997.  On a fully diluted basis, net income for the three months
ended March 31, 1998 was $0.34 per share on total weighted average shares
outstanding of 13,334,000.  Net income for the 1997 period included gains on
the sales of three joint venture shopping centers in Lancaster, Beaver Falls
and Waynesburg, Pennsylvania of $1,461,000, or $0.17 per share.

    Comments from Management
    Ronald Rubin, Chief Executive Officer of PREIT, remarked, "During the
first quarter of the year, we saw positive performance from both our existing
properties and the more recent acquisitions made in the latter half of last
year.  We strongly believe that there is substantial FFO growth potential for
PREIT -- internally through repositioning, remerchandising or renovating
assets, and externally through accretive acquisitions and new property
developments.
    Mr. Rubin continued, "The pipeline is strong, and we are seeing a good
number of properties that match our acquisition criteria from both outside
sources and through our in-house property management subsidiary PREIT-RUBIN.
We feel we are well positioned, with our recent equity offering and our line
of credit at a more favorable interest rate to make acquisitions according to
our plan and to fund development and leasing activities."
    Edward Glickman, PREIT's CFO, added, "We were able to increase FFO per
share while, at the same time, substantially reducing debt as a percentage of
total capitalization as the result of our December follow-on offering.  PREIT
reduced its debt to market capitalization ratio from 51% on February 28, 1997
to 40% on March 31, 1998."

    Same Store NOI Growth -- Apartment & Shopping Center Portfolios
    Same store net operating income growth for the Company's portfolio of
apartment properties increased 7.9% over the first quarter of 1997, primarily
driven by expense reduction.  While revenues were up 2.8%, overall vacancy
rates for the apartment portfolio were up 1.9% for the first quarter of 1998
over the first quarter of 1997, reflecting increased competition for tenants.
Same store net operating income growth for the first quarter of 1998 for the
Company's shopping center portfolio showed a modest increase of 0.7%.

    Interest Rate on Line of Credit Reduced
    As of March 31, 1998, the Company had $55.4 million outstanding under its
$150 million unsecured line of credit compared with $10.3 million at December
31, 1997.  The Company used $33.6 million of its line of credit for the payoff
of a secured term loan, which had an interest rate of 8.62% compared with the
7.09% credit facility interest rate at March 31, 1998.  The balance of the
increase in the credit facility was primarily due to investments in properties
under development, including Christiana Center.  As of March 5, 1998, the
interest rate on the credit facility was reduced from 170 to 140 basis points
over LIBOR.

    Portfolio Highlights
    -- Palmer Park (Easton, Pa.) -- Shortly after the close of the quarter,
         PREIT announced plans to open a 200,000 square foot Boscov's
         department store at Palmer Park, in order to attract additional and
         more upscale clientele to the 470,000 square foot mall.  Boscov's,
         which will become one of the anchor tenants, will begin construction
         during the second quarter of 1998, and is expected to open by the end
         of the year.
    -- Paxton Towne Center (Harrisburg, Pa.) -- PREIT has formed a joint
         venture with the privately held Glimcher Group, Inc. of Pittsburgh,
         Pa., to develop a 650,000 square foot power retail center in
         Harrisburg, Pa.  The property is scheduled to begin construction in
         the fourth quarter of 1998, and completion is anticipated by the end
         of 1999, at which time PREIT will acquire Glimcher's interest.
    -- Christiana Center I (Newark, Del.) -- PREIT also announced the
         acquisition of the remaining 50% interest in Christiana Center Phase
         I, a 295,000 square-foot shopping center under construction.  The
         Center is expected to be 100% leased upon its completion in the
         fourth quarter of 1998.

    Jonathan Weller, President and Chief Operating Officer of PREIT, said, "In
keeping with our strategy of maintaining our dominant market position through
remerchandising, retenanting and enhancing the shopping centers in the
portfolio, we are renovating two shopping centers in prime locations.  Palmer
Park Mall is being renovated and expanded, and Whitehall Mall in Allentown,
Pa. is being converted from an enclosed mall to a power center.  Although the
reduction in revenues from these centers has had a short-term impact, we
expect these newly renovated properties to be open for business, fully rented
and contributing to FFO in the first half of 1999."

    Quarterly Dividend Declared
    The Company declared a quarterly dividend of $0.47 per share payable on
June 15, 1998, to shareholders and OP unitholders of record as of May 31,
1998.  The June 15, 1998 dividend payment will be PREIT's 85th consecutive
distribution since its initial dividend paid in August of 1962.  Throughout
its history, the Company has never omitted or reduced a shareholder dividend.

    PREIT Sells Joint Venture Interest in Charter Pointe Apartments
    In April 1998, PREIT sold its 40% joint venture interest in Charter Pointe
Apartments, located in Altamonte Springs, Fla., and realized an approximate
gain of $1.7 million, or $0.13 per share.  Mr. Weller commented, "We have been
pursuing selective opportunities to exit joint venture arrangements in order
to simplify our financial structure and internalize costs throughout our
leasing and management operations.  These transactions, including the
Christiana Center acquisition, and our sale of the Charter Pointe property,
are consistent with that strategy."
    In a more recent transaction, the Company, along with an existing joint
venture partner, purchased the 64,500 square feet of GLA remaining in
Springfield Park shopping center in Springfield, Pa. for $7.15 million.  PREIT
and its partner already owned an interest in 210,000 square feet of the
275,000 square foot center, which is co-anchored by a Target department store;
the center will now be managed by PREIT-RUBIN, Inc.
    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 (6 million square feet) and apartment communities (6,924 units)
located principally in the eastern United States.  In addition, there are six
shopping centers currently under development.  PREIT's portfolio currently
consists of 45 properties in 10 states.  PREIT is headquartered in Fort
Washington, Pa., a suburb of Philadelphia.

    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 and 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, 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.


                  PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
                           Selected Financial Data

    FUNDS FROM OPERATIONS
                                                 Three Months Ended
                                            Mar. 31, 1998  Feb. 28, 1997

    Income before minority interest         $ 4,870,000    $ 3,064,000
    Less:
     Gains on sales of interests in real estate      --     (1,461,000)
     Minority interest in consolidated
      partnerships                              (53,000)       (83,000)
     Provision for losses on investments             --        500,000
    Add:
     Wholly owned & consolidated
      partnership(A)                          2,088,000      1,489,000
     Unconsolidated partnerships &
      joint ventures                            998,000        799,000
     Excess purchase price over net
      asset required                             29,000             --
     Refinancing prepayment fees                     --        519,000
    Less:
     Depreciation of non-real estate assets     (58,000)       (58,000)
     Amortization of deferred
      financing assets                         (130,000)       (68,000)

    FUNDS FROM OPERATIONS                   $ 7,744,000(B) $ 4,701,000

    FUNDS FROM OPERATIONS PER SHARE & OP UNITS    $0.56          $0.54

    Weighted average number of
     shares outstanding                      13,292,000      8,678,000
    Weighted average effect of full
     conversion of OP units                     646,000             --
    Total weighted average no. of shares
     outstanding incl. OP units              13,938,000      8,678,000


    OPERATING RESULTS
                                                Three Months Ended
                                            Mar. 31, 1998   Feb. 28, 1997

    REVENUES
     Gross revenues from real estate       $ 13,526,000   $ 10,117,000
     Interest and other income                  121,000         69,000
                                             13,647,000     10,186,000
    EXPENSES
     Property operating expenses              5,040,000      4,175,000
     Depreciation and amortization            2,138,000      1,555,000
     General & administrative expenses          738,000        824,000
     Interest expense                         1,978,000      2,248,000
     Provision for losses on investments             --        500,000
                                              9,894,000      9,302,000
        Income before equity in unconsolidated
        entities, gains on sales of interests
        in real estate and minority interest  3,753,000        884,000
    Equity in loss of PREIT-RUBIN, Inc.        (358,000)            --
    Equity in income of partnerships and
     joint ventures                           1,475,000        719,000
    Gains on sales of interests in
     real estate (C)                                 --      1,461,000
        Income before minority interest       4,870,000      3,064,000
    Minority interest                          (277,000)       (83,000)
    NET INCOME                              $ 4,593,000    $ 2,981,000

    PER SHARE DATA
    Net income before gains on sales of interests
     in real estate                               $0.35          $0.17
    Gains on sales of interests in real estate (C)   --           0.17
    BASIC INCOME PER SHARE                        $0.35          $0.34

    DILUTED INCOME PER SHARE                      $0.34          $0.34

    Weighted average number of shares
     outstanding                             13,292,000      8,678,000

    (A) Net of minority interest.
    (B) Includes the non-cash effect of straight-line rents of $225,000
    (C) Gains on sales of three joint venture shopping centers in
        Pennsylvania, Lancaster, Beaver Falls and Waynesburg.

                  PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
                           Selected Financial Data

    EQUITY IN INCOME OF PARTNERSHIPS
    AND JOINT VENTURES

                                               Three Months Ended
                                            Mar. 31, 1998  Feb. 28, 1997

    Gross revenues from real estate         $14,737,000    $12,957,000
    Expenses:
     Property operating expenses              5,403,000      5,376,000
     Mortgage and bank loan interest expense  4,233,000      3,379,000
     Refinancing prepayment fee (D)                  --      1,038,000
     Depreciation and amortization            2,071,000      1,651,000
                                             11,707,000     11,444,000
                                              3,030,000      1,513,000
    Partner's Share                          (1,555,000)      (794,000)
    EQUITY IN INCOME OF PARTNERSHIPS
     AND JOINT VENTURES                      $1,475,000       $719,000

    (D) The Company's share for three months is $519,000

    Note:  One partnership in which the Company is a general partner, and has
control as provided in the partnership agreement, has been consolidated for
financial presentation.  All of these assets and liabilities are included in
the consolidated financial statements at 100%.  The minority partner's
interest is 35%.

             Supplemental Information for Wholly Owned Properties
   and the Company's Proportionate Share of Partnerships and Joint Ventures

    EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION
    AND AMORTIZATION ("EBITDA")

                                                 Three Months Ended
                                           Mar. 31, 1998  Feb. 28, 1997

    Gross revenues                          $13,526,000    $10,117,000
    Operating expenses                       (5,040,000)    (4,175,000)
    Minority interest                          (277,000)       (83,000)
    Net operating income:
     Wholly-owned properties                  8,209,000      5,859,000
     Company's proportionate share of
      partnerships and joint ventures
      net operating income                    4,538,000      3,685,000
     Company's proportionate share of
      PREIT-RUBIN net operating loss           (221,000)            --
     Combined net operating income           12,526,000      9,544,000
     Interest income                            121,000         69,000
     General and administrative expenses       (738,000)      (824,000)
     EBITDA                                 $11,909,000     $8,789,000

    MORTGAGE NOTES AND BANK LOANS PAYABLE
    Wholly-Owned Properties
     Mortgage notes payable                 $65,121,000    $84,213,000
     Bank loans payable                      49,526,000     26,853,000
                                            114,647,000    111,066,000
    Company's proportionate share of
     partnership and joint ventures
      Mortgage notes payable                102,704,000     78,665,000
      Bank loans payable                      4,154,000      5,470,000
    Total mortgage notes and bank
     loans payable                         $221,505,000   $195,201,000

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