Company Provides Revised FFO Guidance for 2001

    PHILADELPHIA, July 3 /PRNewswire/ -- Pennsylvania Real Estate Investment
Trust (NYSE: PEI) (PREIT) announced today that it has recently entered into
agreements to take over the management and leasing operations at two retail
properties and one apartment complex with projected annual management and
leasing fees of approximately $0.2 million for the remainder of 2001, and
approximately $0.7 million in 2002. Starting on July 15, 2001, PREIT will
manage, under a three-year agreement, the 837,000 square-foot Harrisburg East
Mall, located in Harrisburg, Pennsylvania and owned by The Prudential
Insurance Company of America. Starting on January 1, 2002, PREIT will also
manage, under a five-year agreement, the 250,000 square foot Home Depot Plaza,
located in Clifton Heights, Pennsylvania.  The Home Depot Plaza is owned by a
partnership between Mainard, Inc. and another entity.  Two trustees of PREIT
are also the principals of Mainard, Inc.  In addition, beginning on January 1,
2002, PREIT will manage and lease pursuant to a five-year agreement, a 233-
unit apartment complex located in West Chester, Pennsylvania, which is owned
by a partnership between PREIT and another entity.
    In addition, the Company announced the completion of a transaction with
the Target Corporation for the sale of eight acres of land at its Florence
Commons Shopping Center in Florence, South Carolina, which yielded net
proceeds of $2.5 million.  The Company is working with Target to support the
opening of a Target store in the second half of 2002, anchoring the
redevelopment and expansion of this center.
    PREIT believes the retail leasing environment, which had been slowing, may
be stabilizing.  The Company thus remains committed to expediting its
construction and leasing activities at retail properties currently under
development or redevelopment.  However, PREIT continues to be affected
negatively by tenant bankruptcies and leasing delays at several properties
currently under development, as previously discussed in PREIT's public
announcements of its results for the first quarter of 2001 and the full year
2000.
    In particular, PREIT is being impacted by the recent bankruptcies of
retail tenants under multi-year lease agreements, including tenants expected
to occupy space yet to be constructed, such as Bradlees, Inc. (scheduled to
begin occupancy on February 1, 2001 at Northeast Tower Center in Philadelphia,
Pennsylvania) and Lechter's, Inc. (scheduled to begin occupancy on July 1,
2001 at Creekview Shopping Center in Warrington, Pennsylvania), and existing
tenants such as Homeplace, Inc. (ceased paying rent on July 1, 2001 at The
Court at Oxford Valley in Langhorne, Pennsylvania). In addition, confronting
the recent challenges of the retail leasing environment, PREIT entered into an
agreement with JC Penney Company, Inc. to induce them to keep their store open
at Prince Georges Plaza in Hyattsville, Maryland beyond the scheduled
expiration of their lease in July 2001.
    The amount of rent and expense reimbursements that PREIT would have
received under the four lease agreements as well as the cost of the inducement
that PREIT has agreed to pay totals approximately $2.2 million in 2001.
Although PREIT is actively seeking to re-lease three of these properties as
well as pursuing its bankruptcy claims, PREIT has not yet secured replacement
tenants at any of these properties. For the yet to be constructed spaces,
until replacement tenants are secured, PREIT will capitalize certain costs,
including interest, and will not incur certain expenses and required capital
expenditures in connection with their completion.   Because of likely
additional development requirements at Creekview Shopping Center and Northeast
Tower Center, PREIT currently does not anticipate that, upon re-leasing the
available space, replacement tenants will begin occupancy before the beginning
of 2002.
    The net impact of these events is that while PREIT continues to expect
that its development and redevelopment projects will produce stabilized
returns on investment that are consistent with the levels it previously
outlined in its March 31, 2001 Quarterly Supplemental Disclosure, the Company
now expects that the dates at which stabilizations will be achieved are later
than originally expected.  As a result of these events, PREIT is revising
downward its previous guidance for anticipated Funds from Operations (FFO) on
a per share basis for the full year 2001 to $2.80-2.85 from $2.85-2.90.  The
revised estimate for FFO per share does not include any potential recoveries
that PREIT may have pursuant to its outstanding bankruptcy claims against
Bradlees, Lechters or Homeplace.
    Pennsylvania Real Estate Investment Trust, founded in 1960 and one of the
first equity REITs in the United States, has a primary investment focus on
shopping centers (approximately 10.6 million square feet) and apartment
communities (approximately 7,242 units) located primarily in the eastern
United States.  PREIT's portfolio currently consists of 45 properties in
10 states.  In addition, there are 6 retail properties under development,
which PREIT expects will add approximately 1.6 million square feet to its
portfolio.  PREIT is headquartered in Philadelphia, Pennsylvania.

    This press release contains certain "forward-looking statements" within
the meaning of Section 21E of the Securities and Exchange Act of 1934, as
amended and the Private Securities Litigation Reform Act of 1995.  Forward-
looking statements relate to expectations, beliefs, projections, future plans
and strategies, anticipated events or trends and similar expressions
concerning matters that are not historical facts.  These forward-looking
statements reflect PREIT management's current views about future events and
are subject to risks, uncertainties, assumptions and changes in circumstances
that may cause PREIT's actual results to differ significantly from those
expressed in any forward-looking statement. Certain factors that could cause
actual results to differ materially from expected results include changes in
global economic, business, competitive market and regulatory factors, many of
which are outside PREIT's control.  For more information regarding risk
factors relevant to PREIT that could cause such a difference, please see
PREIT's filings with the Securities and Exchange Commission, including its
most recent annual report on Form 10-K.  PREIT does not intend and disclaims
any duty or obligation to update or revise any industry information or
forward-looking statements set forth in this press release to reflect new
information, future events or otherwise.

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.

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