PHILADELPHIA, Nov. 9 /PRNewswire/ -- Pennsylvania Real Estate Investment
Trust (NYSE: PEI) announced today the results of its operations for the third
quarter and nine months ended September 30, 2000.
2000 Third Quarter Highlights
-- 2000 third quarter FFO per share increased to $0.67 per share on
14.9 million shares of beneficial interest/ Operating Partnership
units (collectively shares) outstanding from $0.66 per share on
14.7 million shares during the third quarter of 1999.
-- Increased combined net operating income by 6.9% to $20.2 million from
$18.9 million in the 1999 third quarter.
-- Same store retail net operating income increased 7.9% from the
1999 third quarter.
-- Same store multifamily net operating income increased 2.7% from
the 1999 third quarter.
Third Quarter Results
For the quarter ended September 30, 2000 the Company's funds from
operations (FFO) totaled $9,977,000, a 3.0% increase over FFO of $9,683,000
for the comparable three-month period in 1999. FFO for the third quarter 2000
was $0.67 per share on 14,922,706 weighted average shares outstanding versus
FFO of $0.66 per share on 14,657,596 weighted average shares for the three
months ended September 30, 1999. As calculated by NAREIT, FFO is defined as
net income, excluding extraordinary items, gain (or loss) on the sale of
property, plus real estate related 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 6.9% to $20,160,000 from $18,851,000 for the three months ended
September 30, 1999. This increase is due to improved performance in the
Company's portfolio and the partial completion and opening of two power
centers, Paxton Town Centre and Metroplex Shopping Center, during the third
quarter.
Net income for the three months ended September 30, 2000 increased to
$6,162,000, or $0.46 per share, on total weighted average shares outstanding
of 13,387,471 compared to $5,064,000 or $0.38 per share, on 13,321,934 total
weighted average shares outstanding for the three months ended September 30,
1999. Net income for the third quarter ended September 30, 2000 includes a
gain on the sale of Valley View, a strip shopping center in Wilmington, DE.
Nine Months Results
FFO for the nine months ended September 30, 2000 totaled $34,381,000, a
20.8% increase over FFO of $28,459,000 for the prior comparable nine-month
period ended September 30, 1999. FFO for the nine-month period totaled $2.31
per share on 14,907,903 weighted average shares outstanding, compared to $1.95
per share on 14,625,386 weighted average shares for the nine months ended
September 30, 1999.
Net operating income before depreciation from wholly-owned properties and
the Company's proportionate share of partnerships and joint venture properties
increased 17.7% to $65,944,000 for the nine months ended September 30, 2000,
from $56,020,000 for the nine months ended September 30, 1999.
On a diluted basis, net income for the nine months ended September 30,
2000 was $2.07 per share on 13,370,767 total weighted average shares
outstanding compared to $1.19 per share on 13,315,203 total weighted average
shares outstanding for the nine months ended September 30, 1999.
Year to date 2000 net income includes $10.2 million from gains on sales of
the Company's interests in Valley View in Wilmington, DE, the CVS Building in
Alexandria, VA and Park Plaza shopping center in Pinellas Park, FL. It also
includes lease termination payments of $5.6 million. Net income for the 1999
nine-month period included aggregate gains of $1.5 million on the sale of 135
Commerce Drive in Fort Washington, PA, a land parcel at Crest Plaza in
Allentown, PA and land located in Rancocas, NJ.
Same Store NOI Growth -- Shopping Center and Multifamily Portfolios
Same store net operating income for the third quarter of 2000 for the
Company's shopping center portfolio increased 7.9% over the comparable quarter
in 1999 primarily driven by a 6.9% revenue increase in the portfolio,
including substantial increases in new leases and additional rental rates at
North Dartmouth Mall, which reopened in November 2000 after extensive
renovations. Same store net operating income for the Company's portfolio of
multifamily properties increased 2.7% over the third quarter of 1999,
primarily driven by a 3.5% increase in rents and reduced rental concessions.
Comments from Management
Commenting on the Company's third quarter and nine months results, Ronald
Rubin, Chief Executive Officer of PREIT said, "It was a productive quarter for
the Company from both a financial and operational perspective, as demonstrated
by continued growth in FFO, NOI and net income in addition to continued
progress on the development front. PREIT's new development and redevelopment
efforts continue to strengthen the quality of our portfolio. Further we
continue to benefit from a steady income stream from our multifamily portfolio
- allowing PREIT to deploy this positive cash flow into new development
projects"
Dividend Announcement
The Company's Board of Trustees approved on November 7, 2000 a quarterly
cash dividend of $0.51 per share, an 8.5% increase compared to the $0.47 per
share for the previous 27 consecutive quarters. The dividend will be paid on
December 15, 2000 to shareholders of record on November 30, 2000. The
December15, 2000 dividend payment will be PREIT's 95th consecutive
distribution since its initial dividend paid in August of 1962. Throughout
its history, the Company has never omitted or reduced a shareholder dividend.
Mr. Rubin continued, "We are pleased to announce that the continued strong
performance of our portfolio allows us to increase our quarterly dividend to
an annualized rate of $2.04 per share and an 11.9% dividend yield based upon
Tuesday's closing stock price. This increase was made possible by the
continued growth in our operating results, significant gains resulting from
the successful sale of certain non-core assets and the anticipated impact of
the completion in 2001 of three shopping centers currently under development.
Portfolio Highlights
Jonathan B. Weller, PREIT's President and Chief Operating Officer
commented, "Our significant development activities continue to be an important
part of the PREIT growth strategy and currently consists of eight power
centers, one entertainment center and one enclosed mall. These 10 projects
will add approximately 2.8 million of square foot retail space to our
portfolio. Simultaneously, we continue our active redevelopment program on
identified projects where revenue and NOI can be increased, tenant mix
enhanced and market position solidified. Combined, the selective development
of new projects and the continued redevelopment of our existing portfolio
should accelerate our growth throughout the remainder of 2000 as well as
2001."
Mr. Weller continued, "In addition, two properties that did not meet our
long-term operating strategy, Valley View Shopping Center and Forestville
Shopping Center, were sold during the 2000 third quarter for proceeds of
$12.6 million and a gain of $1.4 million. Looking forward, we plan to
continue to prune our portfolio by selling properties that do not meet PREIT's
long-term ownership criteria."
Development Pipeline
-- Paxton Towne Centre (Harrisburg, PA) -- Construction of the 717,000
square foot power center is on schedule and, as of September 30, 2000,
87% complete and 80% leased. During the third quarter several stores
opened including Target, Men's Wearhouse and Borders Books and Music.
Additional stores are slated to open during the 2000 fourth quarter.
-- Metroplex Shopping Center (Plymouth Meeting, PA) - Construction of the
780,000 square foot power center is on schedule and, as of September
30, 2000, 71% complete and 90% leased. The power center celebrated
its grand opening during the third quarter, with the introduction of
several stores including Lowe's, Target, Dick's Sporting Goods, Old
Navy and Best Buy.
New Development Properties
The Company also announced today two new power center development
projects, New Garden Township (Chester County, PA) and Cox Cro Road (Toms
River, NJ). Construction of the two sites is slated to commence in mid-2001
with the 365,000 square foot New Garden Township project scheduled to commence
during the second quarter and the 238,000 square foot Cox Cro Road project
scheduled to commence during the third quarter. Home Depot will anchor both
sites.
Capital Resources
Edward Glickman, Chief Financial Officer of PREIT, added, "During the
first nine months of 2000, PREIT has aggressively managed its balance sheet
and continues to closely examine financing options. Our objective is to
provide the Company with additional funds for its development projects and
other high-value added opportunities. Currently, we are actively engaged in
negotiations to expand our line of credit and expect to announce the results
of these negotiations during the 2000 fourth quarter."
As of September 30, 2000, the Company had approximately $94.4 million
outstanding, including letters of credit, under its $150 million line of
credit.
Quarterly Conference Call
The Company will conduct a conference call that will be broadcast
simultaneously over the Internet at 11:00 EST on November 9, 2000 to review
the Company's quarterly results, market trends and future outlook. The
webcast will be available to the public, on a listen-only basis, via the
Internet at http://www.vcall.com or the Company's website at http://www.preit.com . Please
allow extra time prior to the webcast to visit the site and download the
streaming media software required to listen to the Internet broadcast. The
online archive of the webcast will be available for 30 days.
About Pennsylvania Real Estate Investment Trust
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 9.8 million square feet) and apartment communities
(7,242 units) located primarily in the eastern United States. The Company's
portfolio currently consists of 45 properties in 10 states. In addition,
there are 6 retail properties under development, which will add approximately
3.0 million square feet to the portfolio. Pennsylvania Real Estate Investment
Trust is headquartered in Philadelphia, Pennsylvania.
The matters discussed in this report, as well as news releases issued from
time to time by PREIT include use of forward-looking terminology such as
"may," "will," "should," "expect," "anticipate," "estimate," "plan," or
"continue" or the negative thereof or other variations thereon, or comparable
terminology which constitute "forward-looking statements." Such
forward-looking statements (including without limitation, information
concerning PREIT's continuing dividend levels, planned acquisition,
development and divestiture activities, short- and long-term liquidity
position, ability to raise capital through public and private offerings of
debt and/or equity securities, availability of adequate funds at reasonable
cost, revenues and operating expenses for some or all of the properties,
leasing activities, occupancy rates, changes in local market conditions or
other competitive factors) involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements
of PREIT's results to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. PREIT disclaims any obligation to update any such factors or to
publicly announce the result of any revisions to any of the forward-looking
statements contained herein to reflect future events or developments.
** 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 Nine Months Ended
Sept 30, Sept 30, Sept 30, Sept 30,
2000 1999 2000 1999
Income before
minority interest
in operating
partnership $6,871,000 $5,571,000 $30,815,000 $17,409,000
Less: Gains on
sales of interests
in real estate (1,388,000) (162,000) (10,298,000) (1,508,000)
Add: Depreciation
and amortization:
Wholly owned &
consolidated
partnership, net 3,676,000 3,326,000 11,103,000 9,748,000
Unconsolidated
partnerships &
joint ventures 977,000 1,127,000 3,234,000 3,323,000
Excess purchase
price over net
asset acquired 73,000 54,000 219,000 161,000
Refinancing
prepayment fee
of partnership/
joint ventures - 55,000
Less: Depreciation
of non-real
estate assets (65,000) (60,000) (195,000) (180,000)
Amortization of
deferred financing
assets (167,000) (173,000) (497,000) (549,000)
FUNDS FROM
OPERATIONS $9,977,000(A) $9,683,000(A) $34,381,000(A) $28,459,000(A)
FUNDS FROM
OPERATIONS PER
SHARE AND OP UNITS $0.67 $0.66 $2.31 $1.95
Weighted average
number of shares
outstanding 13,387,471 13,321,934 13,370,767 13,315,203
Weighted average
effect of full
conversion of
OP units 1,535,235 1,335,662 1,537,136 1,310,183
Total weighted
average shares of
outstanding including
OP units 14,922,706 14,657,596 14,907,903 14,625,386
(A) Includes the non-cash effect of straight-line rents of $555,000 and
$189,000 for the 3rd quarter 2000 and 1999 and $1,034,000 and
$807,000 for year to date 2000 and 1999, respectively.
OPERATING RESULTS
Three Months Ended Nine Months Ended
Sept 30, Sept 30, Sept 30, Sept 30,
2000 1999 2000 1999
REVENUES
Gross revenues
from real
estate $23,203,000 $21,949,000 $74,546,000 $65,184,000
Interest and
other income 454,000 293,000 1,010,000 857,000
23,657,000 22,242,000 75,556,000 66,041,000
EXPENSES
Property operating
expenses 8,048,000 7,925,000 23,652,000 23,289,000
Depreciation and
amortization 3,676,000 3,384,000 11,103,000 9,909,000
General &
administrative
expenses 939,000 771,000 3,380,000 2,617,000
Interest expense 5,730,000 5,676,000 17,216,000 16,143,000
18,393,000 17,756,000 55,351,000 51,958,000
Income before equity
in unconsolidated
entities, gains on
sales of interests
in real estate and
minority interest
in operating
partnership 5,264,000 4,486,000 20,205,000 14,083,000
Equity in loss of
PREIT-RUBIN, Inc. (1,634,000) (618,000) (5,021,000) (2,566,000)
Equity in income of
partnerships and
joint ventures 1,853,000 1,541,000 5,333,000 4,384,000
Gains on sales of
interests in
real estate 1,388,000(A) 162,000(B) 10,298,000(C) 1,508,000(D)
Income before
minority interest
in operating
partnership 6,871,000 5,571,000 30,815,000 17,409,000
Minority interest
in operating
partnership (709,000) (507,000) (3,180,000) (1,557,000)
NET INCOME $ 6,162,000 $ 5,064,000 $ 27,635,000 $ 15,852,000
PER SHARE DATA
Net income before
gains on sales of
interests in
real estate $0.36 $0.37 $1.30 $1.08
Gains on sales of
interests in
real estate 0.10(A) 0.01(B) 0.77(C) 0.11(D)
BASIC INCOME PER SHARE $0.46 $0.38 $2.07 $1.19
DILUTED INCOME
PER SHARE $0.46 $0.38 $2.07 $1.19
Weighted average
number of shares
outstanding 13,387,471 13,321,934 13,370,767 13,315,203
(A) 3rd qtr 2000 includes gain on sale of Valley View, Wilmington, DE
(B) 3rd qtr 1999 includes gain on sale of land in Rancocas, NJ.
(C) Year to date 2000 includes gains on sales of Valleyview, Wilmington,
DE, of CVS Building, Alexandria, VA and gain on sale of interest in
Park Plaza shopping center in Pinellas Park, Florida.
(D) Year to date 1999 includes gains on sales of interest in 135 Commerce
Drive, Fort Washington, PA, land parcel at Crest Plaza, Allentown, PA
and land located in Rancocas, NJ.
Pennsylvania Real Estate Investment Trust
Selected Financial Data
EQUITY IN INCOME OF PARTNERSHIPS
AND JOINT VENTURES
Three Months Ended Nine Months Ended
Sept 30, Sept 30, Sept 30, Sept 30,
2000 1999 2000 1999
Gross revenues from
real estate $16,381,000 $14,388,000 $55,942,000 $42,909,000
Expenses:
Property operating
expenses 5,468,000 4,603,000 18,604,000 14,285,000
Mortgage and bank
loan interest 5,113,000 4,398,000 18,150,000 12,917,000
Refinancing prepayment
fee (A) - - - 110,000
Depreciation and
amortization 2,531,000 2,291,000 8,592,000 6,756,000
13,112,000 11,292,000 45,346,000 34,068,000
3,269,000 3,096,000 10,596,000 8,841,000
Partner's Share (1,416,000) (1,555,000) (5,263,000) (4,457,000)
EQUITY IN INCOME
OF PARTNERSHIPS
AND JOINT
VENTURES $1,853,000 $1,541,000 $5,333,000 $4,384,000
(A) The Company's share is $55,000.
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 Nine Months Ended
Sept 30, Sept 30, Sept 30, Sept 30,
2000 1999 2000 1999
Gross Revenues $23,203,000 $21,949,000 $74,546,000 $65,184,000
Operating
expenses (8,048,000) (7,925,000) (23,652,000) (23,289,000)
Net operating
income:
Wholly-owned
properties 15,155,000 14,024,000 50,894,000 41,895,000
Company's
proportionate share
of partnerships and
joint ventures
net operating
income 5,005,000 4,827,000 15,050,000 14,125,000
Combined net
operating income 20,160,000 18,851,000 65,944,000 56,020,000
Interest income 454,000 293,000 1,010,000 857,000
Company's
proportionate share
of PREIT-RUBIN, Inc.
net operating
income (loss) (1,165,000) (149,000) (3,732,000) (1,352,000)
General and
administrative
expenses (939,000) (771,000) (3,379,000) (2,617,000)
EBITDA $ 18,510,000 $ 18,224,000 $ 59,843,000 $ 52,908,000
MORTGAGE NOTES, BANK
AND CONSTRUCTION
LOANS PAYABLE
Wholly-Owned Properties Sept 30, Dec. 31,
2000 1999
Mortgage notes payable $263,583,000 $266,830,000
Bank Loans payable 87,700,000 91,000,000
Construction Loan Payable 20,423,000 6,804,000
371,706,000 364,634,000
Company's Proportionate Share of
Partnerships and Joint Ventures
Mortgage notes payable 111,881,000 113,670,000
Bank loans payable
Construction loans payable 22,973,000 11,149,000
Total mortgage notes and
bank loans payable $506,560,000 $489,453,000
SOURCE Pennsylvania Real Estate Trust
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Related links:
http://www.preit.com
CONTACT:
Edward A. Glickman, Executive Vice President
and CFO at Pennsylvania Real Estate Trust, 215-875-0700, or
General Info, Joe Calabrese, 212-661-8030, Analyst Info,
Georganne Palffy, 312-266-7800, or Media Info, Judith
Sylk-Siegel, 212-661-8030, all of The Financial Relations Board
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