PHILADELPHIA, Jan. 17, 2014 /PRNewswire/ -- PREIT (PREIT/NYSE: PEI) today provided commentary on the announced closure of the 118,000 square foot JCPenney store at its Exton Square Mall. PREIT looks forward to incorporating the JCPenney building into its planned redevelopment of the mall which is expected to follow the recapture of an existing Kmart location, ideally located with extensive frontage along heavily traveled Route 100 in Exton, Pennsylvania. The Company has an absolute right to acquire the Ground Lease underlying the Kmart building in 2016.
Exton Square Mall is located in Chester County, whose exceptional demographics include the highest incomes in Pennsylvania. According to demographic data, 37.5% of households in the trade area exceed $100,000, which significantly exceeds the state average. Further demonstrating the strength of the market, average home values in the trade area are 75% higher than the state average.
Earlier this week, the mall celebrated the opening of the 32,000 square foot convenient and innovative health care center operated by Main Line Health, one of the area's leading providers of quality care. Other recent store openings include Francesca's Collection, Teavana, Learning Express, Chico's, and White House|Black Market, all reflective of the County's strong demographics. As of September 30, 2013 the mall was 94.8% occupied and generated comparable sales per square foot of $322. The mall's remaining department stores will be Macy's, Sears and Boscov's. Any co-tenancy impacts resulting from the closure will be negligible.
"This is a tremendous opportunity for PREIT. Having control over the JCPenney and Kmart locations will allow us to reposition Exton Square Mall by capitalizing on the stellar demographic profile of the area, which is the best in our portfolio," said PREIT CEO Joseph Coradino. "PREIT has a strong track record of replacing department stores, having successfully replaced nine in the past nine years. We look forward to sharing the details of our plans for Exton Square Mall in the near future and demonstrating the value creation proposition this presents."
About Pennsylvania Real Estate Investment Trust
PREIT is a real estate investment trust specializing in the ownership and management of differentiated retail shopping malls designed to fit the dynamic communities they serve. Founded in 1960 as Pennsylvania Real Estate Investment Trust, the Company now operates properties in 12 states in the eastern half of the United States with concentration in the Mid-Atlantic region and Greater Philadelphia. The Company's current portfolio is comprised of 35 shopping malls, five community and power centers, and three development sites totaling 43 properties and 30.3 million square feet of space. PREIT is headquartered in Philadelphia, Pennsylvania, and is publicly traded on the NYSE under the symbol PEI. Information about the Company can be found at www.preit.com or on Twitter or LinkedIn.
Forward Looking Statements
This press release 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, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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 our 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. In particular, our business might be materially and adversely affected by uncertainties affecting real estate businesses generally as well as the following, among other factors: our substantial debt and stated value of preferred shares and our high leverage ratio; constraining leverage, interest and tangible net worth covenants under our 2013 Revolving Facility and 2014 Term Loans; potential losses on impairment of certain long-lived assets, such as real estate, or of intangible assets, such as goodwill; potential losses on impairment of assets that we might be required to record in connection with any dispositions of assets; recent changes to our corporate management team and any resulting modifications to our business strategies; our ability to refinance our existing indebtedness when it matures, on favorable terms or at all; our ability to raise capital, including through the issuance of equity or equity-related securities if market conditions are favorable, through joint ventures or other partnerships, through sales of properties or interests in properties, or through other actions; our short- and long-term liquidity position; current economic conditions and their effect on employment and consumer confidence and spending and the corresponding effects on tenant business performance, prospects, solvency and leasing decisions and on our cash flows, and the value and potential impairment of our properties; general economic, financial and political conditions, including credit and capital market conditions, changes in interest rates or unemployment; changes in the retail industry, including consolidation and store closings, particularly among anchor tenants; the effects of online shopping and other uses of technology on our retail tenants; our ability to maintain and increase property occupancy, sales and rental rates, in light of the relatively high number of leases that have expired or are expiring in the next two years; increases in operating costs that cannot be passed on to tenants; risks relating to development and redevelopment activities; concentration of our properties in the Mid-Atlantic region; changes in local market conditions, such as the supply of or demand for retail space, or other competitive factors; potential dilution from any capital raising transactions; possible environmental liabilities; our ability to obtain insurance at a reasonable cost; and existence of complex regulations, including those relating to our status as a REIT, and the adverse consequences if we were to fail to qualify as a REIT. The risks included here are non-exhaustive, and there are additional factors that might cause future events, achievements or results to differ materially from those expressed or implied by our forward-looking statements include those discussed in the section of our Annual Report on Form 10-K and in our Quarterly Report on Form 10-Q for the three months ended March 31, 2013 in the section entitled "Item 1A. Risk Factors." We do not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.
CONTACT: AT THE COMPANY Robert McCadden EVP & CFO (215) 875-0735
Heather Crowell VP, Corporate Communications and Investor Relations (215) 875-0735