PHILADELPHIA, March 30, 2016 /PRNewswire/ -- PREIT (NYSE: PEI) today announced it has completed the sale of four additional non-core malls, a milestone achievement that signifies the near-completion of the Company's non-core mall disposition effort with one remaining mall being marketed for sale. In November 2012, the Company communicated its plan to reshape its portfolio by disposing of non-core properties, including its lower-productivity malls, in order to reduce debt, dramatically improve portfolio quality and drive operating results. Since that time, the Company has successfully executed this plan, resulting in the sale of 13 lower-productivity malls as well as several power centers and land parcels, and has generated approximately $600 million in gross proceeds.
Highlights of the improved portfolio fundamentals include:
- Average sales per square foot of the 13 malls sold were $267 compared to February 29, 2016 sales of $458 per square foot, excluding the properties subsequently sold;
- Average Gross Rents for the 13 malls sold were $28.82 per square foot, nearly 50% lower than PREIT's portfolio average of $54.56 per square foot excluding non-core malls;
- Average non-anchor occupancy for the 13 malls sold at the time of sale was 82.1% which compares to a portfolio average of 92.9% at the end of 2015, excluding non-core malls;
- The 13 malls that were sold were a drag on the Company's performance, having generated a decrease in year-over-year Net Operating Income (NOI) of 10%, on average in the year before their respective dispositions.
Today, PREIT announces four, just completed, additional mall disposition transactions, including:
- Lycoming Mall being sold for $26.35 million. Lycoming Mall in Pennsdale, Pa., is anchored by JC Penney, Sears, Bon-Ton and Macy's.
- A three mall package being sold for $66 million, inclusive of $17 million in seller financing. PREIT may also be entitled to $3.5 million of additional consideration for these malls if certain conditions are met in future years. The properties in this transaction are:
- Gadsden Mall in Gadsden, Ala., which is anchored by Belk, JC Penney and Sears.
- New River Valley Mall in Christiansburg, Va., which is anchored by Belk, Dick's Sporting Goods, JC Penney and Kohl's.
- Wiregrass Commons Mall in Dothan, Ala., which is anchored by Belk, Burlington Coat Factory, Dillard's and JC Penney.
The $600 million in gross proceeds has allowed the Company to reduce its overall indebtedness and fund value-creating redevelopment and remerchandising initiatives. Since 2011, PREIT has reduced its total debt by over $300 million and its Bank Leverage from 66.9% to approximately 50% as of December 31, 2015, with an outlined capital plan to drive this below 47% by 2018. The Company has also added one new Premier mall to its portfolio, Springfield Town Center in Springfield, Va., which has strengthened PREIT's presence in the Washington, D.C., marketplace.
"PREIT has remained steadfastly committed to creating a high-quality portfolio that delivers outstanding results for our shareholders," said Joseph Coradino, CEO of PREIT. "The disposition of these 13 malls redefines PREIT. With sales of $458 per square foot and remerchandising and redevelopment initiatives under way that provide a clear and realizable path to $500 per square foot, we are now a more compelling platform for retailers and investors, allowing us to continue to drive same-store NOI growth and strong shareholder returns."
PREIT (NYSE: PEI) is a publicly traded real estate investment trust specializing in the ownership and management of differentiated shopping malls. Headquartered in Philadelphia, Pa., the company owns and operates over 25 million square feet of retail space in the eastern half of the United States with concentration in the Mid-Atlantic region's top MSAs. Since 2012, the company has driven a transformation guided by an emphasis on balance sheet strength, high-quality merchandising and disciplined capital expenditures. Additional information is available at www.preit.com, on Twitter or LinkedIn.
Forward Looking Statements
This press release contains certain "forward-looking statements" within the meaning of the federal securities laws. 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, achievements or results 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. Important factors that might cause future events, achievements or results to differ materially from those expressed or implied by PREIT's forward-looking statements include those discussed in its Annual Report on Form 10-K for the year ended December 31, 2015 in the section entitled "Item 1A. Risk Factors." PREIT does not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.
SVP, Corporate Communications and Investor Relations
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/preit-announces-sale-of-four-additional-non-core-malls-300243071.html