Joining of Two Leading Commercial Real Estate Companies Creates Fully
         Integrated Property Acquisition and Development Organization

    FORT WASHINGTON, Pa., July 31 /PRNewswire/ -- Pennsylvania Real Estate
Investment Trust (Amex: PEI), one of the first equity REITs in the U.S., and
The Rubin Organization ("TRO"), one of the country's leading full-service real
estate companies, jointly announced today that they have entered into a
definitive agreement whereby Pennsylvania Real Estate Investment Trust
("PREIT") will acquire TRO, interests in four existing shopping centers and
two shopping centers nearing completion totaling approximately 2.9 million
square feet, and interests in four potential shopping center development
projects, in a transaction valued at an estimated $260 million. (See the table
following this release for detailed information.)
    As part of the transaction, PREIT will begin conducting its operations
through an umbrella partnership REIT ("UPREIT"). PREIT will contribute its
real estate interests to a newly formed operating partnership ("OP"), of which
PREIT will be the sole general partner. The newly formed operating partnership
will acquire 95% of the equity of TRO in exchange for the issuance of 200,000
OP units and a provision to issue up to 800,000 additional OP units over the
next five years, depending on PREIT's achieving certain specified levels of
funds from operations (FFO) on a per share basis over that period.
    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 apartment
communities and shopping centers. PREIT's principal real estate assets
currently include 19 apartment communities with 7,236 units and 14 shopping
centers totaling 4.3 million square feet. Located primarily in the mid-
Atlantic region from Pennsylvania to Virginia and in selected areas of
Florida, 14 of these properties are wholly owned by the Trust. Another 19 are
owned in partnership or joint venture by the Trust or a wholly owned
subsidiary, with varying equity interests. PREIT also owns interests in six
industrial properties and three parcels of undeveloped land. Throughout its
37-year history, PREIT has never omitted or decreased a shareholder dividend.
    Founded in 1946, The Rubin Organization is a fully integrated real estate
company headquartered in the Philadelphia metropolitan area and one of the
largest managers of shopping centers in the eastern United States. TRO was
formed in 1992 from the merger of two existing companies -- Richard I. Rubin &
Co., Inc. and Strouse, Greenberg & Co., Inc. The joining of these two real
estate firms resulted in the establishment of a full-service management and
development company with a substantial portfolio of shopping centers and
office properties in the Delaware Valley region and several markets in the
Southeastern United States. Currently, TRO manages and leases 56 shopping
centers in 20 states totaling approximately 22.5 million gross leasable square
feet. The company employs approximately 125 people in its Philadelphia and
Chicago offices in addition to an estimated 685 employees on site at shopping
center and office building locations.
    "We are very excited about the growth opportunities and management
capabilities arising from the joining of PREIT and The Rubin Organization,"
remarked Sylvan M. Cohen, PREIT's Chairman and Chief Executive Officer since
the Trust's inception, and a former chairman of both NAREIT and the
International Council of Shopping Centers (ICSC). Mr. Cohen continued, "TRO is
an exceptionally well run company with strong name recognition and 51 years in
the real estate business. TRO's expertise in the development, leasing and
managing of shopping centers is the perfect complement to PREIT's existing in-
house apartment management capabilities. What we've done is leverage the
complementary strategic strengths and skills of two highly respected and
successful companies to create an organization with a full range of real
estate acquisition, financing, development, leasing and management
capabilities."
    Mr. Cohen went on to say, "This acquisition provides PREIT with a powerful
new platform for internal and external growth. The newly acquired properties
have an attractive cap rate of 10.25% on projected net operating income before
factoring in the positive impact of straight-lining rents.  We expect the
acquisition of the completed properties and the management company to be
immediately accretive to PREIT's FFO per share and to contribute significantly
to FFO per share growth in 1998 and in future years. Furthermore, the
acquisition enables PREIT to develop projects in key locations by capitalizing
on long-term existing TRO relationships with anchor tenants and shopping
center industry professionals. And, we now have the in-house retail expertise
to more aggressively pursue shopping malls and strip center investments with
value-added redevelopment opportunities that will, in turn, yield higher
returns for shareholders. Finally, existing shopping centers in the PREIT
portfolio can now benefit from the utilization of TRO's management, leasing
and redevelopment expertise."
    Ronald Rubin, founder and Chief Executive Officer of TRO, commented,
"We're very pleased to be part of the joining of two organizations with
successful and distinguished histories. Sylvan Cohen and I have personally
known each other for many years and have served together on behalf of several
professional and non-profit organizations." Mr. Rubin continued, "I believe
that the strategic fit of both companies' core competencies and the creation
of an integrated management team will result in a stronger overall
organization well positioned for future growth. The truly competitive -- and
the most successful -- players in the REIT marketplace will be those companies
that can offer both acquisition acumen and in-house management resources."

    Terms of the Agreement
    The Operating Partnership will acquire the interests in four shopping
centers currently owned by affiliates of TRO for approximately $75 million in
OP units, the assumption of debt and cash. Specifically, the Partnership has
agreed to acquire interests in two existing shopping centers -- The Court at
Oxford Valley located in Langhorne, Pennsylvania and Springfield Park in
Springfield, Pennsylvania -- and, upon their completion, two shopping centers
currently under construction (Hillview Shopping Center in Cherry Hill, New
Jersey and Northeast Tower Center in Philadelphia).
    The two other existing shopping centers (Magnolia Mall in Florence, South
Carolina and North Dartmouth Mall in Dartmouth, Massachusetts) currently
managed by TRO are under contract for acquisition by TRO from entities
affiliated with the principals of Equity Properties and Development Limited
Partnership ("EPDLP"). The owners of the EPDLP properties, including investor
Samuel Zell and Northwestern Mutual Life Insurance Company, will have the
right to receive up to 1.1 million OP units or up to $25.9 million in cash or
a combination of cash and OP units for the equity interest in the two
properties. PREIT has agreed to acquire Magnolia Mall even if the total
transaction is not completed.

    The OP units issued for the acquisition of the four shopping centers
currently owned by affiliates of TRO will be valued at $23.40 per unit (the
average closing price of PREIT shares of common stock for twenty trading days
preceding the execution of definitive documentation). Any OP units which are
issued for the two shopping centers which are owned by entities affiliated
with the principals of EPDLP will be valued at $23.47 per unit (the average
closing price of PREIT's common stock for the twenty trading days preceding
the issuance of this press release).
    The Operating Partnership will acquire TRO's rights to four potential
shopping center sites (located in Delaware and Pennsylvania) in exchange for
an obligation to issue, upon the completion of the four properties, OP units
equal to 50% of the development profit created for the four properties. PREIT
will also reimburse TRO for certain pre-development expenses related to the
properties.

    Commented Mr. Cohen, "The projects under development are particularly
important to PREIT's growth potential. Through this acquisition, we will
acquire several properties in the development and pre-development phase that
will provide opportunities for future growth and earnings and add value to the
overall portfolio."

    The Fully Integrated Organization
    Following the acquisition, PREIT will increase its portfolio of interests
in shopping centers to 24 totaling 9.1 million square feet and its total
market capitalization (assuming all components of the acquisition are
completed) from $400 million to $660 million. Prior to the acquisition, the
Trust had interests in 14 shopping centers totaling 4.3 million square feet.
    After the close of the acquisition, Pennsylvania Real Estate Investment
Trust will retain its name and continue trading on the American Stock Exchange
under the ticker symbol "PEI." The Trust will continue to maintain its
headquarters in Fort Washington, Pennsylvania. The new management company
formerly known as The Rubin Organization will now be called PREIT-Rubin, Inc.
    Following the acquisition, Ronald Rubin, founder and Chief Executive
Officer of TRO, will become Chief Executive Officer of PREIT. Sylvan M. Cohen,
currently PREIT's Chairman and Chief Executive Officer, will continue to serve
as Chairman of PREIT's Board of Trustees and Chairman of the Property
Committee, which reviews all acquisitions and dispositions. Jonathan B. Weller
will continue to serve as President and Chief Operating Officer of PREIT.
George Rubin will serve as President of PREIT-Rubin, Inc. and Edward A.
Glickman, currently Executive Vice President and CFO of TRO, will serve in
that capacity for PREIT.
    Mr. Rubin continued, "This acquisition adds significantly to the assets of
PREIT's property portfolio, from which the Trust can expect increased cash
flow and earnings growth. In addition, TRO has made significant investment in
management information, market research and financial systems, which will
provide the Trust with increased efficiencies and economies of scale and give
PREIT a clear advantage in this competitive marketplace."
    The Board of Trustees, following completion of the TRO acquisition, will
consist of Messrs. Cohen, Weller, Jack Farber, Leonard I. Korman, William R.
Dimeling, Jeffrey P. Orleans, all of whom currently serve as Trustees, as well
as Ronald Rubin, George Rubin, and Rosemarie B. Greco, President and Chief
Executive Officer of CoreStates Bank, N.A., who will be appointed to serve as
Trustees.
    Immediately following the close of the transaction, PREIT officers will
beneficially own approximately 13% of the shares/units outstanding.
Management's ownership could increase to over 20%, depending upon several
factors, including PREIT's achievement of certain specified levels of FFO over
the next five years.
    Shareholder Vote on TRO Acquisition Expected in September
The definitive acquisition agreement between PREIT and TRO has been approved
by the Board of Trustees of PREIT and the shareholders of TRO. In connection
with the acquisition, PREIT has received a fairness opinion from Lehman
Brothers Inc., which is acting as financial advisor to PREIT in connection
with the acquisition. The acquisition agreement is subject to approval by the
shareholders of PREIT and is also subject to various closing conditions. If
PREIT terminates the agreement under certain circumstances, it will be
obligated to pay TRO certain break-up fees as specified in the agreement.
PREIT has announced that it intends to promptly file proxy materials and
anticipates submitting the TRO acquisition to shareholder vote in September.
    Following the completion of the TRO acquisition, anticipated by September
30, 1997, PREIT will consider changing its fiscal year end from August 31 to
December 31.
    PREIT has also obtained a commitment from CoreStates Bank for a $125
million revolving credit facility in order to fund the cash portion of the TRO
transaction and other financing needs of the Trust. The facility will replace
PREIT's existing $75 million revolving credit facility and term loan with
CoreStates, of which $40 million is currently in use.
    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 Trust 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 Trust's
registration statement and periodic reports filed with the Securities and
Exchange Commission.

                             TABLE OF PROPERTIES

                                    Gross
                                 Ownership       Leasable        Purchase
    Existing Properties          Interest            Area           Price
    The Court at
     Oxford Valley(a),(c)             50%        692, 000     $31,102,000
    Springfield Park(a)               50%         207,000       3,228,728
    Magnolia Mall(b)                 100%         570,000      45,365,000
    N. Dartmouth Mall(b)             100%         620,000      35,000,000
    Total                                       2,089,000    $114,695,728

    Properties Under Construction
    Hillview Shopping Center(a),(d)   50%          341,000    $14,049,496
    Northeast Tower Center(a)         100%         462,000     25,254,426
    Total                                          803,000    $39,303,922


                                                                         OP
    Existing Properties              Debt         Equity              Units
    The Court at
     Oxford Valley(a),(c)     $25,000,000     $6,102,000            239,402
    Springfield Park(a)         3,228,728             --                 --
    Magnolia Mall(b)           25,000,000     19,865,000                TBD
    N. Dartmouth Mall(b)       29,000,000      6,000,000                TBD
    Total                     $82,728,728    $31,967,000                 --

    Properties Under Construction
    Hillview Shopping
     Center(a),(d)          $12,867,917        $1,181,579            16,307
    Northeast Tower
     Center(a)               20,536,202        4,718,224            201,633
    Total                   $33,404,119       $5,899,803            217,940

                                               Projected        Projected
                              Percentage   Gross Leasable    Construction
    Predevelopment Properties   Interest   Retail Sq. Ft. Commencement Date
    Blue Route Metroplex             50%          760,000         3Q 1998
    Christiana Strip - Phase I       50%          279,000         4Q 1997
    Christiana Strip - Phase II      50%          445,000         4Q 1998
    Red Rose Commons                 50%          476,000         4Q 1997
    Total                                       1,960,000


    (a) Currently owned by affiliates of TRO.
    (b) Currently owned by entities affiliated with the principals of EPDLP.
    (c) Number of OP units issued for the Court at Oxford Valley based on
        $5,602,000.
    (d) Number of OP units issued for Hillview Shopping Center based on
        $381,579.

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