PENNSYLVANIA REAL ESTATE NVESTMENT RUST NYSE: PEI · This presentation contains certain “forward-looking statements”within the meaning of the U.S. Private Securities Litigation

PENNSYLVANIA REAL ESTATE INVESTMENT TRUSTNYSE: PEI

New York, NY - June 2009

2

History

• Founded in 1960 – One of the first equity REITs in the U.S.

• Merged with The Rubin Organization in 1997– Focus on development and management of

institutional quality assets across office, retail, multifamily, industrial and hospitality sectors.

– Specialist in assisting financial institutions with REO turnaround

– Acquired asset base and management company

3

History (continued)

• Changed strategic focus from diversified property base to retail in 2003– Acquired 6 malls from The Rouse Company

– Sold 19 multifamily properties

– Merged with Crown American Realty Trust

• $1 billion redevelopment program to be completed in 2010

4

Property Portfolio

• 56 properties– 38 malls– 14 centers– 4 under development

• 35 million square feet

Philadelphia Metro Area map on next page

Information presented in this and subsequent slides includes our proportionate share of partnership properties.

5

Philadelphia Metro Area

• 17 properties– 9 malls– 6 centers– 2 under development

• 11 million square feet– 32% of portfolio

6

Strategic Objectives

Balance SheetStabilization

EquityRecapitalization

Asset Completionand Stabilization

7

Redevelopment Assets

2007 CompletionsBeaver Valley MallFrancis Scott Key MallLehigh Valley MallMagnolia MallNew River Valley Mall

UnderwayCherry Hill MallGallery at Market EastPlymouth Meeting MallVoorhees Town CenterWiregrass Commons Mall

2006 CompletionsCapital City MallCumberland MallLycoming MallPatrick Henry MallMall at Prince GeorgesValley View MallViewmont MallWyoming Valley Mall

2008 CompletionsGadsden MallJacksonville MallMoorestown Mall

8

Capital Investments

$0

$100

$200

$300

$400

2006 2007 2008 1Q09 2Q-4Q'09E

(in m

illio

ns)

Acquisition Redevelopment Development

PREIT is nearing completion of its five-year, $1 billion redevelopment

and development program

PREIT is nearing completion of its five-year, $1 billion redevelopment

and development program

Projected costs are net of any expected tenant reimbursements, parcel sales, tax credits or other incentives.

9

Plymouth Meeting MallNovember 2007

Plaza ShopsUnder Construction

Under Construction

Under Construction

Under Construction

Under ConstructionUnder

ConstructionUnder Construction

Under Construction

10

Plymouth Meeting MallApril 2009

Under Construction

The Plaza Shops

11

Plymouth Meeting MallMay 2008 – The Plaza Shops Under Construction

12

Plymouth Meeting MallMay 2009 – The Plaza Shops

13

Plymouth Meeting MallMay 2009 – Whole Foods Market Under Construction

14

Plymouth Meeting MallTODAY – Restaurants

15

Plymouth Meeting MallTODAY

16

Voorhees Town CenterNovember 2007

The Learning ExperienceDay Care Center

The Star Group HQ

AbitareResidencesTown Center Boulevard

17

Voorhees Town CenterApril 2009

The Learning ExperienceDay Care Center

The Star Group HQ

Town Center BoulevardAbitare

ResidencesIntoxx Fitness

18

Voorhees Town CenterMay 2009 – Boulevard Under Construction

19

Voorhees Town CenterMay 2009 – Boulevard Under Construction

20

Voorhees Town CenterMay 2009 – Rizzieri Masters Salon & Aveda School for Wellness & Beauty

21

Voorhees Town CenterMay 2009 – Macy’s Grand Entrance

22

Voorhees Town CenterTODAY – The Star Group

23

Cherry Hill MallMarch 2008

Parking DeckUnder

Construction

Under Construction

Bistro RowUnder Construction

Food Court

24

Cherry Hill MallTODAY

Parking Deck

Food Court

25

Cherry Hill Mall2008 – Food Court Relocated

26

Cherry Hill MallMarch 2009 – Nordstrom Grand Opening

27

Cherry Hill MallMarch 2009 – Seasons 52 Opened

28

Cherry Hill MallMarch 2009 – Grand Center Court Unveiled

29

Funds to Completion

Redevelopment Projects($ in millions) Invest to Date Remaining Costs

(estimated)

Cherry Hill Mall, Cherry Hill, NJ $ 196.8

The Gallery at Market East, Philadelphia, PA 78.3 3.3

83.7

56.1

Developments($ in millions) Invest to Date Remaining Costs

(estimated)

Pitney Road Plaza, Lancaster, PA 9.2 $11.1

Springhills, Gainesville, FL 32.1 TBD

White Clay Point, Landenberg, PA 42.9 TBD

Pavilion at Market East, Philadelphia, PA $ 0.7 TBD

$ 21.2

Plymouth Meeting Mall, Plymouth Meeting, PA 12.9

Voorhees Town Center, Voorhees, NJ 26.9

As of March 31, 2009.

30

Tenants in Expansion Space

Cherry Hill Mall 28,711sf– California Pizza Kitchen– Capital Grille– Swarovski Crystal– Teavana– Urban Outfitters

Plymouth Meeting Mall 87,176 sf– Ann Taylor Loft– Chico’s– Coldwater Creek– Jos A Bank– Whole Foods

Other Properties 359,285 sf– Barnes & Noble Woodland Mall– Burlington Coat Factory Wiregrass Commons– Commonwealth of Pennsylvania Gallery at Market East– Rizzieri Institute Voorhees Town Center

TOTAL NEW TENANT GLA 475,172sf

Scheduled to open from April 1, 2009 through December 31, 2009. Does not represent a complete list of new tenants.

31

Comp Store Sales

$343

$361$356

$340

2006 2007 2008 1Q'09

4.5% decrease

4.5% decrease

32

Retail Occupancy

80.0%

85.0%

90.0%

95.0%

100.0%

2006 2007 2008 1Q'09Total Non-Anchor

33

Mall Occupancy

80.0%

85.0%

90.0%

95.0%

100.0%


34

Strip & Power Center Occupancy

80.0%

85.0%

90.0%

95.0%

100.0%


35

Tenant Bankruptcies

0

250

500

750

1,000

2008 YTD 2009

(GLA

in th

ousa

nds)

Vacant Negotiating Assumed Executed Not Yet Determined

627 sf

66 sf

B. Moss, Bally’s, BC Sports, Circuit City, Disney, Dream

Machine, Friedman/Whitehall Jewelers, Goody’s, KB Toys,

Linens N’ Things, Stamor, Steve & Barry’s, Tweeter, Wilson’s Leather

B. Moss, Bally’s, BC Sports, Circuit City, Disney, Dream

Machine, Friedman/Whitehall Jewelers, Goody’s, KB Toys,

Linens N’ Things, Stamor, Steve & Barry’s, Tweeter, Wilson’s Leather

Bachrach, Garfield’s, Ritz Camera, S&K Menswear, Zounds

Bachrach, Garfield’s, Ritz Camera, S&K Menswear, Zounds

Total GLA = 26,729 sfTotal GLA = 26,729 sf

36

Financial Performance $ in millions

$495 $496 $507

$306 $303 $307

$148 $161 $147

$96$95$93

2006 2007 2008Revenues NOI FFO FAD

* *

* Includes gain on exchangeable notes and asset impairment charges in 2008; preferred stock redemption in 2007

37

Financial Performance$ in millions

$123 $122

$76 $72

$34 $29$24$27

1Q 2008 1Q 2009

Revenues NOI FFO FAD

38

Distributions

$3.62$3.90

$3.57

$2.28 $2.31 $2.34$2.28 $2.28$2.28

99%

97%

100%

2006 2007 2008FFO FAD Dividends FAD Payout Ratio

39

Distributions

$0.83

$0.71$0.65

$0.59

$0.29

$0.57

88.0%

97.6%

1Q 2008 1Q 2009FFO FAD Dividends FAD Payout Ratio

2Q 2009 cash dividend of $0.15 per share is payable June 15, 2009.

40

Real Estate Investments (’07-’08)

$3,573

$257$55 $17 $33 $19 $3,916

$3,250

$3,500

$3,750

$4,000

$4,250

2007

Redev

elopm

ent

Develo

pment

Acquisi

tion

CapEx

Impair

ments

2008

(in m

illio

ns)

41

2009 Financing Strategy

SOURCES• Retained Cash from Operations

• Corporate Credit– Credit Facility– $51 million available

• Unencumbered Properties– 27% of NOI– 17 Malls– 5 Centers

USES• Redevelopments

– Cherry Hill Mall– The Gallery at Market East– Plymouth Meeting Mall– Voorhees Town Center

• 2009 Mortgage Maturities– Paid $16 million Palmer Park

Mall mortgage in January– $47 million* remaining

• Developments


* Maturity date assumes all renewal options are exercised.

42

Covenant Compliance

March 31, 2009Actual Requirement

Consolidated Liabilities / Gross Asset Value (1) 64.24% ≤ 65%EBITDA / Interest Expense 1.95 ≥ 1.7Adjusted EBITDA / Fixed Charges 1.66 ≥ 1.5EBITDA / Total Indebtedness (2) 9.98% ≥ 9.75%Secured Debt / Gross Asset Value 42.80% ≤ 60%Secured Recourse Debt / Gross Asset Value 1.80% ≤ 25%

(1) Credit Facility permits leverage to exceed 65% for two consecutive quarters, as long as it remains below 70%.

(2) Credit Facility permits debt yield to be less than 9.75% for one period of two consecutive fiscal quarters but may not be less than 9.25%.

43

Debt Maturities

$0

$200

$400

$600

2009 2010 2011 2012 2013

(in m

illio

ns)

Secured - WO Secured - JV Credit Facility UnsecuredAssumes all renewal options are exercised.

44

2009 Debt Maturities

Maturity Property Debt2009

$ 15.7 million$ 12.4 million$ 75.0 million$ 8.0 million$ 34.3 million$ 36.2 million

January Palmer Park Mall Paid Off

August Lehigh Valley Mall Extend

December Springfield Mall Extend

August One Cherry Hill (office bldg) ExtendOctober Valley View Mall Refinance

May Red Rose Commons Refinance

Strategy


45

2010 Debt Maturities

Maturity Property Debt2010

$ 1.4 million$500.0 million

March Term Loan $170.0 million ExtendJune Creekview Center $ 19.4 million Extend

$ 75.0 million$ 8.0 million$ 36.2 million

January Springfield Park Pay OffMarch Credit Facility up to Refinance

August Lehigh Valley Mall RefinanceAugust One Cherry Hill (office bldg) ExtendDecember Springfield Mall Refinance

Strategy


46

De-Levering Strategy

• Achieve pro forma returns on capital invested

• Stabilize and grow core NOI

• Reduce G&A expenses

• Limit dividend payout

• Sell non-strategic assets

• Enter into joint ventures

• Opportunistic repurchase of debt

• Issue equity

47

Forward Looking Statements

This presentation contains certain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements relate to expectations, beliefs, projections, future plans, strategies, anticipated events, trends and other matters that are not historical facts. These forward-looking statements reflect PREIT’s current views about future events and are subject to risks, uncertainties and changes in circumstances that might cause future events, achievements or results to differ materially from those expressed or implied by the forward-looking statements. More specifically, PREIT’s business might be affected by uncertainties affecting real estate businesses generally as well as the following, among other factors: general economic, financial and political conditions, including changes in interest rates or the possibility of war or terrorist attacks; changes in local market conditions or other competitive or retail industry factors in the regions where our properties are concentrated; PREIT’s ability to maintain and increase property occupancy and rental rates, and risks relating to development or redevelopment activities, including construction, obtaining entitlements and managing multiple projects simultaneously. In particular, the successful development or redevelopment of any property is subject to a number of risks, including, among others, that PREIT’s development or redevelopment plans might change, its development or redevelopment activities might be delayed and anticipated project costs might increase. Unanticipated expenses or delays would also adversely affect PREIT’s investment returns on a development or redevelopment project. Additionally, there can be no assurance that PREIT’s actual results will not differ significantly from the estimates set forth above, or that PREIT’s returns on its developments, redevelopments or acquisitions will be consistent with the estimates outlined in the related press releases or other disclosures. Investors are also directed to consider the risks and uncertainties discussed in documents PREIT has filed with the Securities and Exchange Commission and, in particular, PREIT's Annual Report on Form 10-K for the year ended December 31, 2008. PREIT does not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST

NYSE: PEI

Documents

PENNSYLVANIA REAL ESTATE NVESTMENT RUST NYSE: PEI · This presentation contains certain “forward-looking statements”within the meaning of the U.S. Private Securities Litigation