PENNSYLVANIA REAL ESTATE INVESTMENT TRUST - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - 8-K - PENNSYLVANIA REAL ESTATE INVESTMENT TRUST	a2017q1supplemental8k.htm

Exhibit 99.1

Supplemental Financial and Operating Information

Quarter Ended March 31, 2017

www.preit.com

NYSE: PEI

NYSE: PEIPRA, PEIPRB, PEIPRC

Pennsylvania Real Estate Investment Trust

Supplemental Financial and Operating Information

March 31, 2017



Table of Contents
Introduction
Definitions	1
Company Information	2
Market Capitalization and Capital Resources	3
Operating Results
Statement of Operations - Quarters Ended March 31, 2017 and March 31, 2016	4
Computation of Earnings Per Share	5
Net Operating Income - Quarter Ended March 31, 2017 and March 31, 2016	6
Reconciliation of Net Income (GAAP Measure) to Net Operating Income from Consolidated Properties (Non-GAAP Measure) - Quarters Ended March 31, 2017 and March 31, 2016	7
Reconciliation of Equity in Income of Partnerships to Net Operating Income from Equity Method Investments, at Ownership Share (Non-GAAP Measure) - Quarters Ended March 31, 2017 and March 31, 2016	8
Funds From Operations and Funds Available For Distribution - Quarters Ended March 31, 2017 and March 31, 2016	9
Operating Statistics
Leasing Activity Summary - Quarter Ended March 31, 2017	10
Summarized Sales and Rent Per Square Foot and Occupancy Percentages	11
Mall Occupancy Percentage and Sales Per Square Foot	12
Top Twenty Tenants	13
Lease Expirations	14
Property Information	15
Vacant Anchor Summary	19
Balance Sheet
Condensed Balance Sheet - Proportionate Consolidation Method	20
Investment in Real Estate - Consolidated Properties	22
Investment in Real Estate - Equity Method Investments	23
Property Redevelopment Table	24
Capital Expenditures	25
Debt Analysis	26
Debt Schedule	27
Selected Debt Ratios	28
Forward Looking Statements	29

Pennsylvania Real Estate Investment Trust

Definitions

Funds From Operations (FFO)

The National Association of Real Estate Investment Trusts (“NAREIT”) defines Funds From Operations (“FFO”), which is a non-GAAP measure commonly used by REITs, as net income (computed in accordance with GAAP) excluding gains and losses on sales of operating properties; plus real estate depreciation and amortization; and after adjustments for unconsolidated partnerships and joint ventures to reflect funds from operations on the same basis. We compute FFO in accordance with standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition, or that interpret the current NAREIT definition differently than we do.

FFO is a commonly used measure of operating performance and profitability among REITs. We use FFO and FFO per diluted share and unit of limited partnership interest in our operating partnership (“OP Unit”) in measuring our performance against our peers and as one of the performance measures for determining incentive compensation amounts earned under certain of our performance-based executive compensation programs.

FFO does not include gains and losses on sales of operating real estate assets or impairment write downs of depreciable real estate, which are included in the determination of net income in accordance with GAAP. Accordingly, FFO is not a comprehensive measure of our operating cash flows. In addition, since FFO does not include depreciation on real estate assets, FFO may not be a useful performance measure when comparing our operating performance to that of other non-real estate commercial enterprises. We compensate for these limitations by using FFO in conjunction with other GAAP financial performance measures, such as net income and net cash provided by operating activities, and other non-GAAP financial performance measures, such as NOI. FFO does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net income (determined in accordance with GAAP) as an indication of our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions. We believe that net income is the most directly comparable GAAP measurement to FFO.

We also present Funds From Operations, as adjusted, and Funds From Operations, as adjusted, per diluted share and OP Unit, which are non-GAAP measures, for the three months ended March 31, 2017 and 2016 to show the effect of loss on hedge ineffectiveness and provision for employee separation expense which had a significant effect on our results of operations, but are not, in our opinion, indicative of our operating performance.

We believe that FFO is helpful to management and investors as a measure of operating performance because it excludes various items included in net income that do not relate to or are not indicative of operating performance, such as gains on sales of operating real estate and depreciation and amortization of real estate, among others. We believe that Funds From Operations, as adjusted, is helpful to management and investors as a measure of operating performance because it adjusts FFO to exclude items that management does not believe are indicative of our operating performance, including but not limited to loss on hedge ineffectiveness and provision for employee separation expense.

Net Operating Income (NOI)

NOI (a non-GAAP measure) is derived from real estate revenue (determined in accordance with generally accepted accounting principles, or GAAP, including lease termination revenue) minus property operating expenses (determined in accordance with GAAP), plus our share of revenue and property operating expenses of our partnership investments, and includes real estate revenue and property operating expenses from properties included in discontinued operations, if any. It does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net income (determined in accordance with GAAP) as an indication of our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity. It is not indicative of funds available for our cash needs, including our ability to make cash distributions. We believe that NOI is helpful to management and investors as a measure of operating performance because it is an indicator of the return on property investment and provides a method of comparing property performance over time. We believe that net income is the most directly comparable GAAP measurement to NOI.

NOI excludes other income, general and administrative expense, provision for employee separation expenses, interest expense, depreciation and amortization, gain on sale of interest in non operating real estate, gain on sale of interest in real estate, impairment losses and acquisition costs and other expenses.

Same Store NOI

Same Store NOI is calculated using retail properties owned for the full periods presented and excludes properties acquired or disposed of or under redevelopment during the periods presented.

Funds Available for Distribution (FAD)

FAD is a measure of a real estate company’s cash flows generated by operations and capacity to pay dividends. The Company calculates FAD by starting with FFO as adjusted and subtracting (1) straight-line rent, (2) normalized recurring capital expenditures that are capitalized but necessary to maintain our properties, (3) operational tenant allowances, (4) capitalized leasing costs, and (5) amortization of above- and below-market lease intangibles.

We believe that net income is the most directly comparable GAAP measurement to FAD. We believe FAD provides a meaningful indicator of our ability to fund cash needs and to make cash distributions to equity owners. In addition, we believe that to further understand our liquidity, FAD should be compared with our cash flow from operating activities determined in accordance with GAAP, as presented in our consolidated financial statements. The computation of FAD may not be comparable to FAD reported by other REITs or real estate companies and FAD does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, or as an alternative to net cash flow from operating activities (determined in accordance with GAAP), as a measure of our liquidity.

Pennsylvania Real Estate Investment Trust

Company Information

Background

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 retail shopping malls. We currently own interests in 30 retail properties, of which 26 are operating retail properties and four which are development or redevelopment properties. The 26 operating retail properties have a total of 21.7 million square feet and include 22 shopping malls and four other retail properties.

If you would like to participate in our quarterly conference call or would like additional information about PREIT, please contact:

Heather Crowell, Senior Vice President of Corporate Communications and Investor Relations

200 South Broad Street

Philadelphia, PA 19102

Telephone: (215) 875-0735

Fax: (215) 546-2504

Email: Heather.Crowell@preit.com



Research Coverage

Company	Analyst	Phone Number

Barclays Capital	Ross Smotrich	(212) 526-2306
	Linda Tsai	(212) 526-9937

Boenning & Scattergood, Inc.	Floris Van Dijkum	(212) 209-3916

Citi Investment Research	Michael Bilerman	(212) 816-1383
	Christy McElroy	(212) 816-6981

Green Street Advisors	Daniel J. Busch	(949) 640-8780

JP Morgan	Michael W. Mueller	(212) 622-6689

Mitsubishi UFJ Securities (USA)	Karin A. Ford	(212) 405-7349

SunTrust Robinson Humphrey	Ki Bin Kim	(212) 303-4124

NOTE: Press release announcements are available on the Company's website at www.preit.com.

Pennsylvania Real Estate Investment Trust

Market Capitalization and Capital Resources

(in thousands, except per share amounts)



	Quarter Ended March 31,						Year Ended December 31,
TRADING INFORMATION	2017			2016			2016			2015
Common Shares
High Price per share	$	19.92		$	21.95		$	25.67		$	25.34
Low Price per share	$	13.76		$	16.42		$	16.42		$	18.65
Closing Share Price (at the end of period)	$	15.14		$	21.85		$	18.96		$	21.87
Series A Preferred Shares
High Price per share	$	25.65		$	26.30		$	26.50		$	27.62
Low Price per share	$	25.10		$	25.31		$	24.80		$	24.23
Closing Share Price (at the end of period)	$	25.16		$	26.23		$	25.29		$	25.81
Series B Preferred Shares
High Price per share	$	25.50		$	26.26		$	26.71		$	26.89
Low Price per share	$	24.83		$	24.99		$	22.46		$	25.09
Closing Share Price (at the end of period)	$	25.18		$	25.65		$	25.00		$	25.65
Series C Preferred Shares
High Price per share	$	27.03		n/a			n/a			n/a
Low Price per share	$	24.72		n/a			n/a			n/a
Closing Share Price (at the end of period)	$	26.71		n/a			n/a			n/a
MARKET CAPITALIZATION
EQUITY CAPITALIZATION
Common Shares Outstanding	69,747			69,459			69,553			69,197
OP Units Outstanding	8,313			8,338			8,313			8,338
Total Common Shares and OP Units Outstanding	78,060			77,797			77,866			77,535
Equity Market Capitalization—Common Shares and OP Units	$	1,181,830		$	1,699,870		$	1,476,339		$	1,695,693
Series A Preferred Shares, Nominal Value	115,000			115,000			115,000			115,000
Series B Preferred Shares, Nominal Value	86,250			86,250			86,250			86,250
Series C Preferred Shares, Nominal Value	172,500			n/a			n/a			n/a
Total Equity Market Capitalization	$	1,555,580		$	1,901,120		$	1,677,589		$	1,896,943
DEBT CAPITALIZATION
Secured Debt Balance ⁽¹⁾	$	1,274,330		$	1,454,152		$	1,428,895		$	1,588,654
Unsecured Debt Balance ^{(2) (3)}	535,000			515,000			547,000			465,000
Debt Capitalization	1,809,330			1,969,152			1,975,895			2,053,654
TOTAL MARKET CAPITALIZATION	$	3,364,910		$	3,870,272		$	3,653,484		$	3,950,597
Equity Capitalization/Total Market Capitalization	46.2		%	49.1		%	45.9		%	48.0		%
Debt Capitalization/Total Market Capitalization	53.8		%	50.9		%	54.1		%	52.0		%
Unsecured Debt Balance/Total Debt	29.6		%	26.2		%	27.7		%	22.6		%
DISTRIBUTIONS PER COMMON SHARE
Ordinary Dividends	⁽⁴⁾			$	—		$	—		$	—
Non-Dividend Distributions	⁽⁴⁾			0.21			0.84			0.84
Distributions per common share	$	0.21		$	0.21		$	0.84		$	0.84
Annualized Dividend Yield ⁽⁵⁾	5.5		%	3.8		%	4.4		%	3.8		%
CAPITAL RESOURCES
Cash and Cash Equivalents	$	40,591		$	42,191		$	21,892		$	37,754
Revolving Facility	400,000			400,000			400,000			400,000
Amount Outstanding	(135,000		)	(115,000		)	(147,000		)	(65,000		)
Letter of Credit	(15,786		)	(15,252		)	—			(7,852		)
Available Revolving Facility ⁽⁶⁾	249,214			269,748			253,000			327,148
Term Loans	550,000			400,000			400,000			400,000
Amount Borrowed	(400,000		)	(400,000		)	(400,000		)	(400,000		)
Available Term Loans ⁽⁶⁾	150,000			—			—			—
TOTAL	$	439,805		$	311,939		$	274,892		$	364,902
Shelf Registration	$	1,000,000		$	1,000,000		$	1,000,000		$	1,000,000

⁽¹⁾ Reflects our share of debt from equity method investments.

⁽²⁾The unsecured debt balance includes a Revolving Facility balance of $135,000 as of March 31, 2017, $147,000 as of December 31, 2016, and $115,000 as of March 31, 2016.

⁽³⁾The unsecured debt balance includes a Term Loan balance of $400,000 in each of March 31, 2017, December 31, 2016, March 31, 2016 and December 31, 2015.

⁽⁴⁾Tax status of 2017 dividend payments will be available in January 2018.

⁽⁵⁾Based on closing share price at the end of the period.

⁽⁶⁾The available Credit Facility borrowings are subject to covenants that may restrict amounts that can be borrowed. Following recent property sales, the NOI from the Company’s remaining unencumbered properties is at a level such that the maximum unsecured amount that the Company may currently borrow within the Unencumbered Debt Yield covenant, including under the $400.0 million 2013 Revolving Facility and the $400.0 million aggregate Term Loans, is an aggregate of $242.5 million.

Pennsylvania Real Estate Investment Trust

Statement of Operations - Quarters ended March 31, 2017 and 2016

(in thousands)



	Quarter Ended March 31,
	2017			2016
REVENUE:
Base rent	$	57,435		$	66,993
Expense reimbursements	28,097			31,134
Percentage rent	304			451
Lease termination revenue	481			235
Other real estate revenue	2,107			2,643
Total real estate revenue	88,424			101,456
Other income	840			516
Total revenue	89,264			101,972
EXPENSES:
Operating expenses:
Property operating expenses:
CAM and real estate taxes	(29,952		)	(34,189		)
Utilities	(3,823		)	(4,326		)
Other property operating expenses	(3,205		)	(4,596		)
Total property operating expenses	(36,980		)	(43,111		)
Depreciation and amortization	(31,758		)	(33,735		)
General and administrative expenses	(9,041		)	(8,586		)
Provision for employee separation expense	—			(535		)
Project costs and other expenses	(312		)	(51		)
Total operating expenses	(78,091		)	(86,018		)
Interest expense, net⁽¹⁾	(15,338		)	(19,346		)
Impairment of assets	—			(606		)
Total expenses	(93,429		)	(105,970		)
Loss before equity in income of partnerships and gains on sales interests in real estate	(4,165		)	(3,998		)
Equity in income of partnerships	3,736			3,883
(Loss) gains on sales of interests in real estate, net	(57		)	2,035
Gain on sale of interest in non operating real estate	—			9
Net (loss) income	(486		)	1,929
Less: net loss attributed (income available) to noncontrolling interest	52			(208		)
Net (loss attributable) income available to PREIT	(434		)	1,721
Less: preferred share dividends	(6,205		)	(3,962		)
Net (loss attributable) income available to PREIT common shareholders	$	(6,639	)	$	(2,241	)


⁽¹⁾	Net of capitalized interest expense of $1,431 and $703 for the quarters ended March 31, 2017 and 2016, respectively.

Pennsylvania Real Estate Investment Trust

Computation of Earnings Per Share

(in thousands, except per share amounts)



	Quarter Ended March 31,
	2017			2016
Net (loss) income	$	(486	)	$	1,929
Noncontrolling interest	52			(208		)
Dividends on preferred shares	(6,205		)	(3,962		)
Dividends on unvested restricted shares	(97		)	(84		)
Net (loss) income used to calculate loss per share - basic and diluted	$	(6,736	)	$	(2,325	)

Basic and diluted loss per share:	$	(0.10	)	$	(0.03	)

Weighted average shares outstanding - basic	69,218			68,973
Weighted average effect of common share equivalents ⁽¹⁾	—			—
Total weighted average shares outstanding - diluted	69,218			68,973


⁽¹⁾	The Company had net losses used to calculate earnings per share for all periods presented. Therefore, the effect of common share equivalents of 109 and 298 for the three months ended March 31, 2017 and 2016, respectively, are excluded from the calculation of diluted loss per share because they would be antidilutive.

Pennsylvania Real Estate Investment Trust

Net Operating Income

Quarters Ended March 31, 2017 and 2016

(in thousands)

Net Operating Income Reconciliation



	Quarter Ended March 31,
	Same Store				Non Same Store					Total
	2017		2016		2017			2016		2017		2016
NOI from consolidated properties	$	51,532	$	51,756	$	(88	)	$	6,589	$	51,444	$	58,345
NOI attributable to equity method investments, at ownership share	7,562		7,355		1,289			1,543		8,851		8,898
Total NOI	$	59,094	$	59,111	$	1,201		$	8,132	$	60,295	$	67,243
Less: lease termination revenue	520		181		35			56		555		237
Total NOI - excluding lease termination revenue	$	58,574	$	58,930	$	1,166		$	8,076	$	59,740	$	67,006

Pennsylvania Real Estate Investment Trust

Reconciliation of Net Income (Loss) to Net Operating Income from Consolidated Properties (Non-GAAP Measure)

Quarters Ended March 31, 2017 and 2016

(in thousands)



	2017			2016
Net (loss) income	$	(486	)	$	1,929
Other income	(840		)	(516		)
Depreciation and amortization	31,758			33,735
General and administrative expenses	9,041			8,586
Provision for employee separation expense	—			535
Project costs and other expenses	312			51
Interest expense, net	15,338			19,346
Impairment of assets	—			606
Equity in income of partnerships	(3,736		)	(3,883		)
Loss (gains) on sales of interests in real estate), net	57			(2,035		)
Gains on sales of non operating real estate	—			(9		)
NOI from consolidated properties (Non-GAAP)	$	51,444		$	58,345



	Same Store						Non Same Store						Total
	2017			2016			2017			2016			2017			2016
Real estate revenue
Base rent	$	56,667		$	56,671		$	768		$	10,322		$	57,435		$	66,993
Expense reimbursements	28,030			28,632			67			2,502			28,097			31,134
Percentage rent	306			365			(2		)	86			304			451
Lease termination revenue	446			179			35			56			481			235
Other real estate revenue	1,947			2,131			160			512			2,107			2,643
Total real estate revenue	87,396			87,978			1,028			13,478			88,424			101,456
Property operating expenses
CAM and real estate taxes	(28,970		)	(28,853		)	(982		)	(5,336		)	(29,952		)	(34,189		)
Utilities	(3,822		)	(3,982		)	(1		)	(344		)	(3,823		)	(4,326		)
Other property operating expenses	(3,072		)	(3,387		)	(133		)	(1,209		)	(3,205		)	(4,596		)
Total property operating expenses	(35,864		)	(36,222		)	(1,116		)	(6,889		)	(36,980		)	(43,111		)
NOI from consolidated properties (Non-GAAP)	$	51,532		$	51,756		$	(88	)	$	6,589		$	51,444		$	58,345

Pennsylvania Real Estate Investment Trust

Reconciliation of Equity in Income of Partnerships to Net Operating Income from Equity Method Investments, at Ownership Share (Non-GAAP Measure)

Quarters Ended March 31, 2017 and 2016

(in thousands)



	2017		2016
Equity in income of partnerships	$	3,736	$	3,883
Depreciation and amortization	2,549		2,581
Interest expense and other expenses, net	2,566		2,434
NOI from equity method investments at ownership share (Non-GAAP)	$	8,851	$	8,898



	Same Store						Non Same Store						Total
	2017			2016			2017			2016			2017			2016
Real estate revenue
Base rent	$	6,899		$	6,889		$	1,600		$	2,001		$	8,499		$	8,890
Expense reimbursements	3,234			3,450			602			601			3,836			4,051
Percentage rent	37			56			—			15			37			71
Lease termination revenue	74			2			—			—			74			2
Other real estate revenue	229			235			161			142			390			377
Total real estate revenue	10,473			10,632			2,363			2,759			12,836			13,391
Property operating expenses
CAM and real estate taxes	(2,284		)	(2,429		)	(874		)	(933		)	(3,158		)	(3,362		)
Utilities	(214		)	(181		)	(143		)	(149		)	(357		)	(330		)
Other property operating expenses	(413		)	(667		)	(57		)	(134		)	(470		)	(801		)
Total property operating expenses	(2,911		)	(3,277		)	(1,074		)	(1,216		)	(3,985		)	(4,493		)
NOI from equity method investments at ownership share (Non-GAAP)	$	7,562		$	7,355		$	1,289		$	1,543		$	8,851		$	8,898

Pennsylvania Real Estate Investment Trust

Reconciliation of Net Income to Funds From Operations and Funds Available for Distribution

(in thousands, except per share amounts)



	Three Months Ended March 31,
(in thousands, except per share amounts)	2017			2016
Net (loss) income	$	(486	)	$	1,929
Depreciation and amortization on real estate
Consolidated properties	31,433			33,366
PREIT's share of equity method investments	2,566			2,434
Loss (Gains on sales of interests in real estate), net	57			(2,035		)
Impairment of assets	—			606
Dividends on preferred shares	(6,205		)	(3,962		)
Funds from operations attributable to common shareholders and OP Unit holders	$	27,365		$	32,338
Provision for employee separation expense	—			535
Loss on hedge ineffectiveness	—			142
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders	$	27,365		$	33,015
Funds available for distribution
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders	$	27,365		$	33,015
Adjustments:
Straight line rent	$	(793	)	$	(716	)
Recurring capital expenditures	(3,145		)	(602		)
Tenant allowances	(5,148		)	(5,692		)
Capitalized leasing costs	(1,667		)	(1,737		)
Amortization of above- and below-market lease intangibles	(103		)	(411		)
Funds available for distribution to common shareholders and OP Unit holders	$	16,509		23,857
Funds from operations attributable to common shareholders and OP Unit holders per diluted share and OP Unit	$	0.35		$	0.42
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders per diluted share and OP Unit	$	0.35		$	0.43
Funds available for distribution to common shareholders and OP Unit holders per diluted share and OP Unit	$	0.21		$	0.31
PAYOUT RATIOS ⁽¹⁾
Payout ratio of funds from operations attributable to common shareholders and OP Unit holders	46.0		%	45.1		%
Payout ratio of funds from operations attributable to common shareholders and OP Unit holders, as adjusted	45.7		%	43.8		%
Payout ratio of funds available for distribution attributable to common shareholders and OP Unit holders	81.9		%	68.8		%
Weighted average number of shares outstanding	69,218			68,973
Weighted average effect of full conversion of OP Units	8,313			8,338
Effect of common share equivalents	109			298
Total weighted average shares outstanding, including OP Units	77,640			77,609


⁽¹⁾	Twelve months ended March 31, 2017 and March 31, 2016, respectively.

Pennsylvania Real Estate Investment Trust

Leasing Activity Summary - Quarter Ended March 31, 2017



								Initial Gross Rent Spread ⁽¹⁾				Avg Rent Spread ⁽²⁾	Annualized Tenant Improvements psf ⁽³⁾
	Number	GLA	Term	Initial Rent psf		Prev Rent psf		$			%	%	Annualized Tenant Improvements psf ⁽³⁾
Non Anchor
New Leases
Under 10k sf	62	86,591	6.3	$	56.27	N/A		N/A			N/A	N/A	$	7.93
Over 10k sf	5	105,869	11.0	16.95		N/A		N/A			N/A	N/A	9.07
Total New Leases	67	192,460	6.7	$	34.64	N/A		N/A			N/A	N/A	$	8.56
Renewal Leases
Under 10k sf	83	169,768	3.7	52.46		51.27		1.19			2.3%	6.0%	$	—
Over 10k sf	3	57,730	2.7	18.69		18.39		0.30			1.6%	2.0%	—
Total Fixed Rent	86	227,498	3.7	$	43.89	$	42.93	$	0.96		2.2%	5.6%	$	—
Percentage in Lieu	2	10,109	1.0	5.96		5.96		N/A			N/A	N/A	—
Total Renewal Leases	88	237,607	3.6	$	42.28	$	41.36	$	0.92		2.2%	5.6%	$	—
Total Non Anchor ⁽⁴⁾	155	430,067	4.9	$	38.86
Anchor
New Leases	3	206,878	12.0	$	9.36	N/A		N/A			N/A	N/A	$	5.25
Renewal Leases	1	212,000	5.0	$	1.37	$	1.41	$	(0.04	)	(2.8)%	N/A
Total ⁽⁴⁾	4	418,878	10.3	$	5.32

⁽¹⁾

Initial renewal spread is computed by comparing the initial rent psf in the new lease to the final rent psf amount in the expiring lease. For purposes of this computation, the rent amount includes minimum rent, CAM charges, estimated real estate tax reimbursements and marketing charges, but excludes percentage rent. In certain cases, a lower rent amount may be payable for a period of time until specified conditions in the lease are satisfied.


⁽²⁾	Average renewal spread is computed by comparing the average rent psf over the new lease term to the final rent psf amount in the expiring lease. For purposes of this computation, the rent amount includes minimum rent and fixed CAM charges, but excludes pro rata CAM charges, estimated real estate tax reimbursements, marketing charges and percentage rent.


⁽³⁾	These leasing costs are presented as annualized costs per square foot and are spread uniformly over the initial lease term.


⁽⁴⁾	Includes eleven leases and 248,915 square feet of GLA with respect to our unconsolidated partnerships.

Pennsylvania Real Estate Investment Trust

Summarized Sales and Rent Per Square Foot and Occupancy Percentages



	March 31, 2017																March 31, 2016
	% Rolling 12 Mo. NOI		Avg. Comp Sales		Avg. Gross Rent⁽¹⁾⁽²⁾		Occ. Cost		Actual Occupancy				Leased Occupancy				% Rolling 12 Mo. NOI		Avg. Comp Sales		Avg. Gross Rent⁽¹⁾⁽²⁾		Occ. Cost		Occupancy
									Total		Non-Anchor		Total		Non-Anchor										Total		Non-Anchor
									Total		Non-Anchor		Total		Non-Anchor										Total		Non-Anchor
Malls	89.1	%	$	465	$	58.10	13.1	%	92.9	%	90.5	%	94.8	%	92.1	%	81.9	%	$	469	$	57.21	13.1	%	93.8	%	90.6	%
Other Retail Properties	5.3	%	N/A		$	26.78	—	%	93.1	%	92.5	%	93.7	%	93.2	%	3.8	%	N/A		$	26.50	N/A		95.4	%	95.0	%
Total Retail Properties	94.4	%	N/A		$	50.69	N/A		92.9	%	90.8	%	94.7	%	92.3	%	85.7	%	N/A		$	50.33	N/A		93.9	%	91.3	%
Sold Properties⁽³⁾	2.9	%	N/A		N/A		N/A		N/A		N/A		N/A		N/A		11.3	%	$	329	$	31.27	N/A		94.5	%	88.6	%
Other Properties ⁽⁴⁾	2.7	%	N/A		N/A		N/A		N/A		N/A		N/A		N/A		3.0	%	N/A		N/A		N/A		N/A		N/A
Total Portfolio	100.0	%	$	465	$	50.69			92.9	%	90.8	%	94.7	%	92.3	%	100.0	%	$	460	$	49.12			94.0	%	91.0	%


⁽¹⁾	Average gross rent for malls includes all non-anchor space owned by the Company and leased to tenants that occupy individual spaces of less than 10,000 square feet. Average gross rent for other retail properties includes all non-anchor space owned by the Company regardless of size.


⁽²⁾	Average gross rent for mall tenants greater than 10,000 sf was $21.86 per square foot as of March 31, 2017 and $20.72 per square foot as of March 31, 2016.


⁽³⁾	Sold properties include Beaver Valley Mall, Crossroads Mall, Gadsden Mall, Lycoming Mall, New River Valley Mall, Palmer Park Mall, Washington Crown Center, Wiregrass Commons Mall, and two street level retail properties. Average comp sales and average gross rent information as of March 31, 2016 includes Beaver Valley Mall, Crossroads Mall and Washington Crown Center.


⁽⁴⁾	Operating metrics for Fashion Outlets of Philadelphia as of March 31, 2017 and 2016, respectively, are excluded because the property is under redevelopment.

Pennsylvania Real Estate Investment Trust

Mall Occupancy Percentage and Sales Per Square Foot



	March 31, 2017						March 31, 2016						Change
	Avg Comp Sales⁽¹⁾		Total Occ %		Non Anchor Occup. %		Avg Comp Sales ⁽¹⁾		Total Occ %		Non Anchor Occup. %		Avg Comp Sales ⁽¹⁾			Total Occ %			Non Anchor Occup. %
Malls
Willow Grove Park	$	651	97.7	%	95.3	%	$	591	97.2	%	94.4	%	10.2	%		0.5	%		0.9	%
Cherry Hill Mall	647		92.4	%	90.8	%	659		95.0	%	94.0	%	(1.8	)%		(2.6	)%		(3.2	)%
Lehigh Valley Mall	565		95.1	%	91.9	%	565		96.7	%	94.5	%	—	%		(1.6	)%		(2.6	)%
Woodland Mall	532		96.9	%	94.8	%	544		96.3	%	96.3	%	(2.2	)%		0.6	%		(1.5	)%
Springfield Town Center	525		90.9	%	87.8	%	508		85.0	%	79.8	%	3.3	%	—	5.9	%	—	8.0	%
Jacksonville Mall	498		96.9	%	93.9	%	486		96.9	%	93.9	%	2.5	%		—	%		—	%
The Mall at Prince Georges	484		93.6	%	86.5	%	459		96.8	%	93.3	%	5.4	%		(3.2	)%		(6.8	)%
Dartmouth Mall	480		90.6	%	84.6	%	498		95.1	%	92.0	%	(3.6	)%		(4.5	)%		(7.4	)%
Patrick Henry Mall	424		95.0	%	92.7	%	444		89.1	%	84.1	%	(4.5	)%		5.9	%		8.6	%
Springfield Mall	423		92.7	%	92.7	%	411		98.1	%	98.1	%	2.9	%		(5.4	)%		(5.4	)%
Viewmont Mall	420		97.3	%	95.1	%	442		99.3	%	98.2	%	(5.0	)%		(2.0	)%		(3.1	)%
Magnolia Mall	418		83.4	%	95.9	%	409		99.2	%	98.3	%	2.2	%		(15.8	)%		(2.4	)%
Valley Mall	407		98.8	%	97.9	%	431		95.1	%	91.5	%	(5.6	)%		3.7	%		6.4	%
Capital City Mall	405		78.4	%	98.0	%	437		92.5	%	87.3	%	(7.3	)%		(14.1	)%		10.7	%
Valley View Mall	386		92.5	%	89.9	%	391		95.7	%	94.2	%	(1.3	)%		(3.2	)%		(4.3	)%
Wyoming Valley Mall	375		91.8	%	76.5	%	397		94.4	%	84.1	%	(5.5	)%		(2.6	)%		(7.6	)%
Cumberland Mall	374		95.4	%	92.5	%	368		95.2	%	92.7	%	1.6	%		0.2	%		(0.2	)%
Moorestown Mall	370		93.1	%	84.8	%	370		92.3	%	83.1	%	—	%		0.8	%		1.7	%
Francis Scott Key Mall	360		96.1	%	93.8	%	370		91.6	%	86.9	%	(2.7	)%		4.5	%		6.9	%
Plymouth Meeting Mall	329		93.1	%	89.3	%	339		94.4	%	91.2	%	(2.9	)%		(1.3	)%		(1.9	)%
Exton Square Mall	329		83.8	%	80.6	%	340		76.8	%	81.0	%	(3.2	)%		7.0	%		(0.4	)%
Logan Valley Mall	313		96.1	%	90.7	%	337		98.0	%	95.2	%	(7.1	)%		(1.9	)%		(4.5	)%
Total Malls weighted average	$	465	92.9	%	90.5	%	$	469	93.8	%	90.6	%	(0.9	)%		(0.9	)%		(0.1	)%


⁽¹⁾	Based on reported sales by all comparable non-anchor tenants that lease individual spaces of less than 10,000 square feet and have occupied the space for at least 24 months.

Pennsylvania Real Estate Investment Trust

Top Twenty Tenants



Tenant	Brands	Locations at Consolidated Properties	Locations at Unconsolidated Properties	Total Number of Locations ⁽¹⁾	Percentage of Annualized Gross Rent⁽²⁾
L Brands, Inc.	Bath & Body Works, Henri Bendel, Pink, Victoria's Secret	41	6	47	4.0	%
Foot Locker, Inc.	Champs, Foot Locker, Footaction, House of Hoops by Foot Locker, Kids Foot Locker, Lady Foot Locker, Nike Yardline	43	8	51	3.8	%
Signet Jewelers Limited	J.B. Robinson Jewelers, Kay Jewelers, LeRoy's, Marks and Morgan Jewelers, Piercing Pagoda, Plumb Gold, Shaw's Jewelers, Silver & Gold Connection, Totally Pagoda, Zale's Jewelers	64	9	73	3.1	%
Gap, Inc.	Banana Republic, Gap/Gap Kids/Gap Outlet/Baby Gap, Old Navy	20	9	29	2.7	%
American Eagle Outfitters, Inc.	Aerie, American Eagle Outfitters	21	4	25	2.5	%
J.C. Penney Company, Inc. ⁽³⁾	JC Penney	17	1	18	2.3	%
Express, Inc	Express, Express Factory Outlet, Express Men	14	3	17	2.0	%
Genesco, Inc.	Hat Shack, Hat World, Johnston & Murphy, Journey's, Journey's Kidz, Lids, Lids Locker Room, Shi by Journey's, Underground by Journey's	50	8	58	1.9	%
Ascena Retail Group, Inc.	Ann Taylor, Dress Barn, Justice, Lane Bryant, Loft, Maurices	31	6	37	1.9	%
Dick's Sporting Goods, Inc.	Dick's Sporting Goods, Field & Stream	7	2	9	1.8	%
Macy's⁽⁴⁾	Bloomingdale's, Macy's	20	2	22	1.8	%
Forever 21, Inc.	Forever 21	8	1	9	1.5	%
Luxottica Group S.p.A.	Lenscrafters, Pearle Vision, Sunglass Hut/Watch Station	30	6	36	1.5	%
Advent CR Holdings, Inc.	Charlotte Russe	14	2	16	1.4	%
Regal Entertainment Group	Regal Cinemas	4	—	4	1.4	%
H&M Hennes & Mauritz L.P.	H & M	13	—	13	1.1	%
The Children's Place Retail Stores, Inc.	The Children's Place	16	2	18	1.1	%
Darden Concepts, Inc.	Bahama Breeze, Capital Grille, Olive Garden, Seasons 52, Yard House	8	—	8	1.0	%
Abercrombie & Fitch Co.	abercrombie, Abercrombie & Fitch, Hollister Co.	10	2	12	1.1	%
Best Buy Co., Inc.	Best Buy, Best Buy Mobile	17	3	20	1.0	%
Total Top 20 Tenants		448	74	522	38.8	%
Total Leases		1,643	345	1,988	100.0	%


⁽¹⁾	Excludes tenants from Fashion Outlets of Philadelphia.


⁽²⁾	Includes our share of tenant gross rent from partnership properties based on PREIT’s ownership percentage in the respective equity method investments as of March 31, 2017.


⁽³⁾	Includes a store at Willow Grove Park that the tenant announced it will close in 2017.


⁽⁴⁾	Includes tenant owned stores at Moorestown Mall, Valley Mall and Valley View Mall and a store located at Plymouth Meeting Mall owned by a third party. The tenant closed the Valley Mall location in March 2016 and the Moorestown Mall, Valley View Mall and Plymouth Meeting Mall locations in March 2017. PREIT purchased the Valley Mall and Valley View Mall locations in April 2017.

Pennsylvania Real Estate Investment Trust

Lease Expirations as of March 31, 2017

(dollars in thousands except psf amounts)



Non-Anchors ⁽¹⁾
		Gross Leasable Area			Annualized Gross Rent
Lease Expiration Year	Number of Leases Expiring	Expiring GLA ⁽²⁾	Percent of Total		Gross Rent in Expiring Year		PREIT’s Share of Gross Rent in Expiring Year ⁽³⁾		Percent of PREIT’s Total		Average Expiring Gross Rent psf
2016 and Prior	127	426,904	5.0	%	$	19,725	$	17,543	5.8	%	$	46.20
2017	199	383,858	4.5	%	22,338		20,545		6.8	%	58.19
2018	262	1,099,863	12.8	%	41,363		37,135		12.3	%	37.61
2019	245	941,235	11.0	%	38,369		34,784		11.5	%	40.76
2020	192	1,059,109	12.3	%	33,468		28,527		9.4	%	31.60
2021	166	835,386	9.7	%	30,031		25,379		8.4	%	35.95
2022	121	455,466	5.3	%	22,317		19,355		6.4	%	49.00
2023	120	646,243	7.5	%	26,382		23,741		7.8	%	40.82
2024	128	512,624	6.0	%	27,607		25,700		8.5	%	53.85
2025	174	778,082	9.1	%	36,539		27,647		9.1	%	46.96
2026	123	595,209	6.9	%	26,438		19,781		6.5	%	44.42
Thereafter	85	849,116	9.9	%	24,369		22,800		7.5	%	28.70
Total/Average	1,942	8,583,095	100.0	%	$	348,946	$	302,937	100.0	%	$	40.66



Anchors ⁽¹⁾
		Gross Leasable Area			Annualized Gross Rent
Lease Expiration Year	Number of Leases Expiring ⁽⁴⁾	Expiring GLA	Percent of Total		Gross Rent in Expiring Year		PREIT’s Share of Gross Rent in Expiring Year ⁽³⁾		Percent of PREIT’s Total		Average Expiring Gross Rent psf
2018	4	466,069	8.0	%	$	2,379	$	2,379	9.1	%	$	5.10
2019	9	1,209,615	20.6	%	$	4,596	$	4,596	17.6	%	$	3.80
2020	8	1,027,661	17.6	%	5,115		5,115		19.6	%	4.98
2021	9	979,841	16.8	%	5,657		4,449		17.1	%	5.77
2022	9	1,321,331	22.5	%	4,857		4,505		17.3	%	3.68
2023	—	—	—	%	—		—		—	%	—
2024	—	—	—	%	—		—		—	%	—
2025	2	390,245	6.7	%	1,281		1,281		4.9	%	3.28
2026	1	58,371	1.0	%	803		803		3.1	%	13.76
2027	1	155,392	2.7	%	445		445		1.7	%	2.86
Thereafter	3	239,815	4.1	%	2,504		2,504		9.6	%	10.44
Total/Average	46	5,848,340	100.0	%	$	27,637	$	26,077	100.0	%	$	4.73


⁽¹⁾	Only includes owned space. Excludes tenants from Fashion Outlets of Philadelphia.


⁽²⁾	Does not include tenants occupying space under license agreements with initial terms of less than one year. The GLA of these tenants is 722,134 square feet.


⁽³⁾	Includes our share of tenant rent from partnership properties based on PREIT’s ownership percentage in the respective equity method investments.


⁽⁴⁾	Accounts for all contiguous anchor space as one lease.

Pennsylvania Real Estate Investment Trust

Property Information as of March 31, 2017



		Landlord Owned Anchors/Large Format Non Anchor			Anchor Stores Not Owned		Non-anchor occupied
Properties	Location	Tenant	Exp Year	Anchor GLA	Tenant	GLA	Large Format	Small Shop	Vacant	Total GLA
Malls
Capital City Mall	Camp Hill, PA	JCPenney	2020	102,825	Macy's	120,000	53,787	183,790	107,379	618,083
			⁽³⁾
		Field and Stream	2031				50,302
Cherry Hill Mall	Cherry Hill, NJ	Nordstrom	2025	138,000	JCPenney	174,285	206,114	417,370	62,884	1,303,253
Cherry Hill Mall	Cherry Hill, NJ				Macy's	304,600
Cumberland Mall	Vineland, NJ	Burlington Coat Factory	2019	80,983	BJ's Wholesale Club	117,889	189,559	149,772	30,984	950,986
		The Home Depot	2019	132,013	Boscov's	155,341
		Dick's Sporting Goods	2028	50,000
		Regal Cinemas	2019				44,445
Dartmouth Mall	Dartmouth, MA	JCPenney	2019	100,020	Macy's	140,000	82,696	144,362	49,695	670,201
		Sears	2021	108,440
		AMC Theaters	2026				44,988
Exton Square Mall ⁽¹⁾	Exton, PA	Boscov's	2019	178,000	Macy's	181,200	58,269	240,101	131,236	991,478
		Sears	2019	144,301
		Round 1	2027	58,371
Francis Scott Key Mall	Frederick, MD	JCPenney	2021	101,293	Macy's	139,333	139,863	180,185	24,333	756,040
		Sears	2018	120,883
		Dick's Sporting Goods	2025				50,150
Jacksonville Mall	Jacksonville, NC	Belk	2021	72,510			112,810	124,768	15,329	495,022
		JCPenney	2020	51,812
		Sears	2021	117,793
Lehigh Valley Mall	Allentown, PA	Boscov's	2022	164,694	JCPenney	207,292	179,478	358,442	47,403	1,169,309
Lehigh Valley Mall	Allentown, PA	Macy's	2022	212,000

Pennsylvania Real Estate Investment Trust

Property Information as of March 31, 2017 (continued)

(continued on next page)



		Landlord Owned Anchors/Large Format Non Anchor			Anchor Stores Not Owned		Non-anchor occupied
Properties	Location	Tenant	Exp Year	Anchor GLA	Tenant	GLA	Large Format	Small Shop	Vacant	Total GLA
Logan Valley Mall	Altoona, PA	JCPenney	2022	146,497			101,388	197,419	30,573	783,637
		Macy's	2020	149,197
		Sears	2019	158,563
Magnolia Mall	Florence, SC	Belk	2021	115,793			54,310	165,027	11,314	618,769
		Best Buy	2018	32,054
		JCPenney	2022	104,107
		Sears	⁽³⁾	91,164
		Dick's Sporting Goods	2018				45,000
Moorestown Mall	Moorestown, NJ	Boscov's	2020	202,765	Lord & Taylor	121,200	32,504	200,609	52,018	1,072,530
		Sears	2022	205,591	Macy's	200,000
		Regal Cinemas	2028				57,843
Patrick Henry Mall	Newport News, VA	Dick's Sporting Goods	2022	50,250	Dillard's	144,157	57,684	215,737	21,545	714,585
Patrick Henry Mall	Newport News, VA	JCPenney	2020	85,212	Macy's	140,000
Plymouth Meeting Mall	Plymouth Meeting, PA	Boscov's	2021	188,429	Macy's	214,635	150,414	210,824	49,169	926,626
		Whole Foods	2029	65,155
		AMC Theaters	2027				48,000
Springfield Mall	Springfield, PA				Macy's	192,000	20,577	186,397	16,327	611,200
Springfield Mall	Springfield, PA				Target	195,899
Springfield Town Center	Springfield, VA	Macy's	2025	252,245	JCPenney	209,144	174,249	318,072	96,262	1,397,037
					Target	180,841
		Dick's Sporting Goods	2025				53,891
		Nordstrom Rack	2025				33,107
		Regal Cinemas	2029				49,788
		Saks OFF 5th	2026				29,438

Pennsylvania Real Estate Investment Trust

Property Information as of March 31, 2017 (continued)

(continued on next page)



		Landlord Owned Anchors/Large Format Non Anchor			Anchor Stores Not Owned		Non-anchor occupied
Properties	Location	Tenant	Exp Year	Anchor GLA	Tenant	GLA	Large Format	Small Shop	Vacant	Total GLA
The Mall at Prince Georges	Hyattsville, MD	JCPenney	2021	148,778			161,532	217,882	59,092	918,125
		Macy's	2018	195,655
		Target	2019	135,186
Valley Mall	Hagerstown, MD	Bon -Ton	2019	123,094	Macy's(2)	120,000	95,023	233,041	8,374	913,446
		JCPenney	2019	157,455	Sears	123,400
		Regal Cinemas	2020				53,059
Valley View Mall	La Crosse, WI	JCPenney	2020	96,357	Herberger's	41,344	53,368	150,717	28,055	628,093
					Macy's	100,000
					Sears	113,252
		Dick's Sporting Goods	2025				45,000
Viewmont Mall	Scranton, PA	JCPenney	2020	193,112	Macy's	139,801	76,053	156,979	12,016	577,961
Willow Grove Park	Willow Grove, PA	JCPenney	2032	124,660	Bloomingdale's	237,537	88,284	269,284	17,688	1,178,369
		Macy's	2022	225,000	Sears	175,584
		Nordstrom Rack	2022	40,332
Woodland Mall	Grand Rapids, MI	Sears	⁽⁴⁾	312,965	JCPenney	254,905	163,473	253,191	23,053	1,164,903
					Macy's	157,316

Wyoming Valley Mall	Wilkes-Barre, PA	Bon-Ton	2027	155,392			76,436	166,899	74,852	910,297
		JCPenney	2022	172,860
		Macy's	2020	146,381
		Sears	2018	117,477
Total Malls				6,125,664		4,600,955	2,932,882	4,740,868	969,581	19,369,950

Pennsylvania Real Estate Investment Trust

Property Information as of March 31, 2017 (continued)



		Landlord Owned Anchors/Large Format Non Anchor			Anchor Stores Not Owned		Non-anchor occupied
Properties	Location	Tenant	Exp Year	Anchor GLA	Tenant	GLA	Large Format	Small Shop	Vacant	Total GLA
Other Retail Properties
Gloucester Premium Outlets	Blackwood, NJ						37,303	288,010	44,600	369,913
Metroplex Shopping Center	Plymouth Meeting, PA	Giant Food Store	2021	67,185	Lowe's	163,215	287,711	56,292	—	778,190
					Target	137,514
		Dick's Sporting Goods	2020				41,593
		Saks OFF 5th	2026				24,680
The Court at Oxford Valley	Fairless Hills, PA	Best Buy	2021	59,620	BJ's Wholesale Club	116,872	282,733	54,141	11,028	704,526
					The Home Depot	130,751
		Dick's Sporting Goods	2021				49,381
Red Rose Commons	Lancaster, PA				The Home Depot	134,558	204,994	6,107	52,191	462,882
Red Rose Commons	Lancaster, PA				Weis Market	65,032
Total Other Retail Properties				126,805		747,942	928,395	404,550	107,819	2,315,511
Portfolio Total				6,252,469		5,348,897	3,861,277	5,145,418	1,077,400	21,685,461

(1)Vacant GLA includes 59,629 square feet from former JCPenney store which closed in the second quarter of 2015.

(2)Macy's closed this tenant owned store in March 2016. PREIT purchased this location in April 2017

(3)Leases terminated in Q1 2017.

(4)Sears at Woodland Mall (312,965 square feet) is occupying space under a license agreement with an initial term of less than one year.

Pennsylvania Real Estate Investment Trust

Anchor Replacement Summary



		Former/Existing Anchors				Replacement Tenant(s)
Property		Name	GLA '000's	Date Closed/Closing	Date Decommissioned	Name	GLA '000's	Actual/Targeted Occupancy Date
Completed:
	Cumberland Mall	JC Penney ⁽¹⁾	51	Q3 2015	Q3 2015	Dick's Sporting Goods	50	Q4 2016
	Exton Square Mall	JC Penney⁽¹⁾	118	Q2 2015	n/a	Round 1	58	Q4 2016
In process:
	Exton Square Mall	K-mart ⁽¹⁾	96	Q1 2016	Q2 2016	Whole Foods	58	Q4 2017
	Viewmont Mall	Sears ⁽¹⁾	193	Q3 2016		Dick's Sporting Goods/Field & Stream	90	Q4 2017
	Viewmont Mall	Sears ⁽¹⁾	193	Q3 2016		Home Goods	23	Q4 2017
	Capital City Mall	Sears⁽¹⁾	101	Q1 2017	n/a	Dick's Sporting Goods	62	Q3 2017
	Capital City Mall	Sears⁽¹⁾	101	Q1 2017	n/a	Junior anchor, restaurants and small shop space	55
	Woodland Mall	Sears ⁽¹⁾⁽⁴⁾	313	Q2 2017	n/a	Von Maur,	86	Q4 2019
	Woodland Mall	Sears ⁽¹⁾⁽⁴⁾	313	Q2 2017	n/a	Junior anchor, restaurants and small shop space	203	Q4 2019
	Magnolia Mall	Sears ⁽¹⁾	91	Q1 2017	n/a	Burlington	46	Q4 2017
	Magnolia Mall	Sears ⁽¹⁾	91	Q1 2017	n/a	Junior anchor and small shop space
	Valley View Mall	Macy's ⁽⁵⁾	100	Q1 2017	n/a	Herberger's	100	Q4 2017
Pending:
	Plymouth Meeting Mall	Macy's ⁽³⁾	215	Q1 2017	n/a	To be determined
	Moorestown Mall	Macy's ⁽²⁾	200	Q1 2017	n/a	To be determined
	Valley Mall	Macy's ⁽⁵⁾	120	Q1 2016	n/a	To be determined


⁽¹⁾	PREIT owned


⁽²⁾	Tenant owned


⁽³⁾	Third party owned


⁽⁴⁾	Purchased by PREIT from tenant in the fourth quarter of 2016, under license to Sears until April 30, 2017


⁽⁵⁾	Purchased by PREIT in April 2017

Pennsylvania Real Estate Investment Trust

Condensed Balance Sheet

(in thousands, except per share amounts)



	March 31, 2017			December 31, 2016
ASSETS	(unaudited)
Investments in real estate, at cost
Operating properties	$	3,205,211		$	3,196,529
Construction in progress (CIP)	108,553			97,575
Land held for development	5,910			5,910
Total investments in real estate	3,319,674			3,300,014
Accumulated depreciation	(1,090,174		)	(1,060,845		)
Net investments in real estate	2,229,500			2,239,169
Investments in partnerships, at equity	186,789			168,608
Other assets:
Cash and cash equivalents	18,704			9,803
Rent and other receivables ⁽¹⁾	31,047			39,026
Intangible assets, net	19,172			19,746
Deferred costs and other assets, net	101,839			93,800
Assets held for sale	3,444			46,680
Total assets	$	2,590,495		$	2,616,832
LIABILITIES AND EQUITY
Liabilities:
Mortgage loans, net	$	1,069,539		$	1,222,859
Term Loans, net	397,231			397,043
Revolving Facility	135,000			147,000
Tenants’ deposits and deferred rent	15,146			13,262
Distributions in excess of partnership investments	61,898			61,833
Fair value of derivative instruments	834			1,520
Liabilities related to assets held for sale	—			2,658
Other liabilities	62,206			68,251
Total liabilities	1,741,854			1,914,426
Equity:
Total equity	848,643			702,406
Total liabilities and equity	$	2,590,497		$	2,616,832


⁽¹⁾	Total includes straight line rent of $24.4 million as of March 31, 2017 and $23.7 million as of December 31, 2016.

Pennsylvania Real Estate Investment Trust

Assets and Liabilities - Equity Method Investments, at Ownership Share (Non-GAAP)

(in thousands, except per share amounts)



	As of March 31, 2017			As of December 31, 2016
ASSETS:
Investments in real estate, at cost:
Operating properties	$	301,457		$	307,001
Construction in progress	103,384			82,295
Total investments in real estate	404,841			389,296
Accumulated depreciation	(106,867		)	(105,546		)
Net investments in real estate	297,974			283,750
Cash and cash equivalents	21,887			12,089
Deferred costs and other assets, net	18,394			17,978
Total assets	338,255			313,817
LIABILITIES:
Mortgage loans payable, net	200,048			200,876
Other liabilities	13,316			6,166
Total liabilities	213,364			207,042
Net investment	$	124,891		$	106,775
Reconciliation to comparable GAAP balance sheet item:
Investment in partnerships, at equity	$	186,789		$	168,608
Distributions in excess of partnership investments	(61,898		)	(61,833		)
Net investment	$	124,891		$	106,775

The non-GAAP financial information presented above includes financial information attributable to our share of unconsolidated properties. This proportionate financial information is non-GAAP financial information, but we believe that it is helpful information because it reflects the pro rata contribution from our unconsolidated properties that are owned through investments accounted for under GAAP using the equity method of accounting. Under such method, changes in our investments in these entities are recorded in the balance sheet caption entitled “Investment in partnerships, at equity.” In the case of deficit investment balances, such amounts are recorded in “Distributions in excess of partnership investments.”

To derive the proportionate financial information reflected in the tables above we multiplied the percentage of our economic interest in each partnership on a property-by-property basis by each line item. Under the partnership agreements relating to our current unconsolidated partnerships with third parties, we own a 25% to 50% economic interest in such partnerships, and there are generally no provisions in such partnership agreements relating to special non-pro rata allocations of income or loss, and there are no preferred or priority returns of capital or other similar provisions. While this method approximates our indirect economic interest in our pro rata share of the assets and liabilities of our unconsolidated partnerships, we do not control these partnerships or have a direct legal claim to the assets, liabilities, revenues or expenses of the unconsolidated partnerships beyond our rights as an equity owner in the event of any liquidation of such entity. Our percentage ownership is not necessarily indicative of the legal and economic implications of our ownership interest.

Pennsylvania Real Estate Investment Trust

Investment in Real Estate - Consolidated Properties

(in thousands)



	March 31, 2017								December 31, 2016
	Operating Properties and Land Held for Development		CIP		Accumulated Depreciation		Net Real Estate		Operating Properties and Land Held for Development		CIP		Accumulated Depreciation		Net Real Estate
Malls
Capital City Mall	$	112,270	$	1,656	$	41,154	$	72,772	$	112,256	$	228	$	40,264	$	72,220
Cherry Hill Mall	472,657		2,722		216,036		259,343		471,953		422		209,950		262,425
Cumberland Mall	81,882		—		23,136		58,746		81,805		533		22,351		59,987
Dartmouth Mall	71,246		613		36,585		35,274		70,324		35		35,902		34,457
Exton Square Mall	165,444		21,825		49,967		137,302		165,118		21,360		48,842		137,636
Francis Scott Key Mall	94,438		—		35,941		58,497		93,467		1		35,118		58,350
Jacksonville Mall	86,136		—		33,579		52,557		85,889		—		32,792		53,097
Logan Valley Mall	107,823		—		38,421		69,402		107,813		—		37,613		70,200
Magnolia Mall	90,788		801		42,723		48,866		90,582		973		41,993		49,562
Moorestown Mall	152,214		48		53,588		98,674		152,227		18		51,616		100,629
Patrick Henry Mall	152,068		—		63,194		88,874		151,733		640		62,121		90,252
Plymouth Meeting Mall	177,213		4,463		73,420		108,256		177,112		3,752		71,186		109,678
The Mall at Prince Georges	109,365		2,223		52,304		59,284		108,120		1,549		51,459		58,210
Springfield Town Center	485,916		—		25,396		460,520		485,265		—		21,922		463,343
Valley Mall	110,722		407		40,306		70,823		109,806		40		39,363		70,483
Valley View Mall	79,374		276		25,384		54,266		79,376		—		24,710		54,666
Viewmont Mall	102,530		10,081		37,767		74,844		102,498		6,096		36,930		71,664
Willow Grove Park	242,549		—		91,069		151,480		241,252		—		88,976		152,276
Woodland Mall	196,219		30,163		64,748		161,634		196,014		28,692		63,204		161,502
Wyoming Valley Mall	114,357		46		45,456		68,947		113,919		7		44,533		69,393
Total Malls	3,205,211		75,324		1,090,174		2,190,361		3,196,529		64,346		1,060,845		2,200,030
Other Properties
Springhills	—		19,229		—		19,229		—		19,229		—		19,229
White Clay Point	—		14,000		—		14,000		—		14,000		—		14,000
Land held for development	5,910		—		—		5,910		5,910		—		—		5,910
Total Other Properties	5,910		33,229		—		39,139		5,910		33,229		—		39,139
Total Investment in Real Estate	$	3,211,121	$	108,553	$	1,090,174	$	2,229,500	$	3,202,439	$	97,575	$	1,060,845	$	2,239,169

Pennsylvania Real Estate Investment Trust

Investment in Real Estate - Equity Method Investments at Ownership Share

(in thousands)



	March 31, 2017								December 31, 2016
	Operating Properties and Land Held for Development		CIP		Accumulated Depreciation		Net Real Estate		Operating Properties and Land Held for Development		CIP		Accumulated Depreciation		Net Real Estate
Unconsolidated Malls
Fashion Outlets of Philadelphia⁽¹⁾	$	78,257	$	102,172	$	16,712	$	163,717	$	83,780	$	81,113	$	16,798	$	148,095
Lehigh Valley Mall	47,734		295		26,649		21,380		47,786		265		26,296		21,755
Springfield Mall	57,595		66		19,856		37,805		57,462		66		19,474		38,054
Total Unconsolidated Malls	183,586		102,533		63,217		222,902		189,028		81,444		62,568		207,904
Unconsolidated Other Retail Properties
Gloucester Premium Outlets	27,691		29		1,807		25,913		27,793		29		1,514		26,308
Metroplex Shopping Center	42,918		26		24,342		18,602		42,918		26		24,200		18,744
The Court at Oxford Valley	28,970		9		11,727		17,252		28,970		9		11,571		17,408
Red Rose Commons	11,996		3		3,504		8,495		11,996		3		3,451		8,548
Total Unconsolidated Other Retail Properties	111,575		67		41,380		70,262		111,677		67		40,736		71,008
Unconsolidated Property Under Development
Pavilion at Market East	6,296		784		2,270		4,810		6,296		784		2,242		4,838
Total Unconsolidated Properties Under Development	6,296		784		2,270		4,810		6,296		784		2,242		4,838
TOTAL INVESTMENT IN REAL ESTATE	$	301,457	$	103,384	$	106,867	$	297,974	$	307,001	$	82,295	$	105,546	$	283,750

⁽¹⁾CIP includes $41.0 million of existing building shell that was reclassified from operating properties.

Pennsylvania Real Estate Investment Trust

Property Redevelopment Table as of March 31, 2017



NAME OF PROJECT LOCATION	PREIT's PROJECTED SHARE OF COST ⁽¹⁾	TOTAL PROJECT COST ⁽¹⁾	PREIT'S INVESTMENT TO DATE	TARGETED RETURN ON INCREMENTAL INVESTMENT	CONSTRUCTION START DATE	EXPECTED CON- STRUCTION COMPLETION	STABILIZATION YEAR
	(in millions)	(in millions)	(in millions)

Fashion Outlets of Philadelphia ⁽²⁾ Philadelphia, PA	$152.5-$182.5	$305-$365	$67.5	8-9%	2016	2018	2020
-Complete overhaul of the former Gallery at Market East, spanning three city blocks in downtown Philadelphia. Project will offer a fusion of luxury and moderate outlet shops, flagship retail, destination dining and entertainment experiences.

Woodland Mall Grand Rapids, MI	$106-$114	$106-$114	$28.9	7-8%	2017	2019	2020
-Upgrade of existing tenant mix inclusive of 90,000 square foot Von Maur, along with an array of high-quality retail in enclosed small shop space and 30,000 square feet of quality polished casual restaurants, will join the roster, replacing a Sears store, in 2019.

The Mall at Prince Georges Hyattsville, MD	$30-$31	$30-31	$5.4	8-9%	2016	2018	2019
-Property remerchandising, including H&M, with plans to add fast casual restaurants and other retail on the exterior of the mall. Minor interior cosmetic renovation and exterior re-facing planned.

Plymouth Meeting Mall Plymouth Meeting, PA	$7	$7	$5.3	8-9%	2016	2017	2018
-Addition of 33,000 sf Legoland Discovery Center, one of nine in the United States.

Anchor replacements:

Capital City Mall Camp Hill, PA	$28-$30	$28-30	$6.6	7-9%	2017	2017	2019
-58,000 square foot Dick’s Sporting Goods will replace Sears along with 2-3 additional, exterior-access medium boxes.

Exton Square Mall - Phase I Exton, PA	$29	$29	$28.9	9-10%	2016	2017	2018
-55,000 sf Whole Foods to open on site of K-Mart in 2017; -Addition of first to market entertainment complex, Round 1, in the former JCPenney anchor store location.

Magnolia Mall Florence, SC	$15-$19	$15-$19	$1.5	7-9%	2017	2017	2019
-60,000 square foot, first-to-market Burlington will replace Sears along with 2 additional, exterior-access medium boxes.

Viewmont Mall Scranton, PA	$21-$22	$21-$22	$10.1	8-9%	2016	2017	2018
-Dick's Sporting Goods/Field & Stream concept and HomeGoods to replace Sears anchor store location.

Valley View Mall La Crosse, WI	$8-$9	$8-$9	$0.3	10%	2017	2017	2019
-Herberger's lease executed to relocate and expand info former Macy's space.

⁽¹⁾ PREIT's projected share of costs is net of any expected tenant reimbursements, parcel sales, tax credits or other incentives.

⁽²⁾ Total Project Costs are net of $25.0 million of approved public financing grants that will be a reduction of costs.

Pennsylvania Real Estate Investment Trust

Capital Expenditures

(in thousands)



	Quarter Ended March 31, 2017
	Consolidated		PREIT's Share of Equity Method Investments			Total
Redevelopment projects with incremental GLA and/or anchor replacement ⁽¹⁾	$	17,360	$	15,673		$	33,033
New development projects	—		2			2
Tenant allowances	5,127		21			5,148
Recurring capital expenditures:
CAM expenditures	2,944		13			2,957
Non-CAM expenditures	110		(104		)	6
Total recurring capital expenditures	3,054		(91		)	2,963
Total	$	25,541	$	15,605		$	41,146


⁽¹⁾	Net of any tenant reimbursements, parcel sales, tax credits or other incentives.

Pennsylvania Real Estate Investment Trust

Debt Analysis as of March 31, 2017

(in thousands)



	Outstanding Debt
	Fixed Rate⁽¹⁾			% of Total Indebtedness		Variable Rate			% of Total Indebtedness		Total			% of Total Indebtedness
Consolidated mortgage loans payable ⁽²⁾	$	1,067,847		59.0	%	$	5,844		0.3	%	$	1,073,691		59.3	%
Unconsolidated mortgage loans payable ⁽³⁾	176,342			9.7	%	24,297			1.3	%	200,639			11.0	%
Term Loans ⁽⁴⁾	350,000			19.3	%	50,000			2.9	%	400,000			22.2	%
2013 Revolving Facility	—			—	%	135,000			7.5	%	135,000			7.5	%
TOTAL OUTSTANDING DEBT	$	1,594,189		88.0	%	$	215,141		12.0	%	$	1,809,330		100.0	%
AVERAGE STATED INTEREST RATE	3.96		%			2.20		%			3.75		%


⁽¹⁾	Includes variable rate debt swapped to fixed rate debt.


⁽²⁾	Excludes deferred financing costs of $4,152.


⁽³⁾	Reflects our share of debt of equity method investees. Excludes our share of deferred financing costs of $591.


⁽⁴⁾	Excludes deferred financing costs of $2,769.



		Average Debt Balance
		Mortgage Debt			2013 Revolving Facility			Term Loans		TOTAL
Beginning Balance	12/31/2016	$	1,428,895		$	147,000		$	400,000	$	1,975,895
Mortgage loan amortization, including our share of debt equity method investees		(4,565		)	—			—		(4,565		)
The Mall at Prince Georges mortgage repayment		(150,000		)	—			—		(150,000		)
2013 Revolving Facility, net		—			(12,000		)	—		(12,000		)
Ending Balance	3/31/2017	$	1,274,330		$	135,000		$	400,000	$	1,809,330
Weighted Average Balance		$	1,377,731		$	79,044		$	400,000	$	1,856,776



	Debt Maturities⁽¹⁾
Year	Scheduled Amortization		Def Fin Cost Amort Mortgages			Mortgage Balance at Maturity		2013 Revolving Facility		Term Loans		Def Fin Cost Amort Term Loans			Total Debt
2017	16,803		(919		)	3,283		—		—		(561		)	18,606
2018	22,243		(927		)	89,450		135,000		—		(749		)	245,017
2019	23,176		(869		)	—		—		150,000		(574		)	171,733
2020	23,003		(818		)	85,680		—		150,000		(484		)	257,381
2021	21,287		(473		)	216,760		—		100,000		(401		)	337,173
Thereafter	37,460		(737		)	735,185		—		—		—			771,908
	$	143,972	$	(4,743	)	$	1,130,358	$	135,000	$	400,000	$	(2,769	)	$	1,801,818


⁽¹⁾	The weighted average period to mortgage loan maturity is 5.48 years, excluding extension options. Includes 100% of mortgage loan debt from consolidated properties and our share of mortgage loan debt of equity method investees.



Weighted Average Mortgage Interest Rates
Year	Balance ⁽¹⁾		Interest Rate
2017	$	3,316	3.31	%
2018	89,450		3.25	%
2019	—		—	%
2020	92,067		5.90	%
2021	227,158		3.58	%
Thereafter	862,339		4.26	%
Total	$	1,274,330	4.18	%


⁽¹⁾	Includes our share of debt of equity method investees.

Pennsylvania Real Estate Investment Trust

Debt Schedule as of March 31, 2017

(in thousands)



	Debt			Interest Rate		Annual Debt Service		Balance at Maturity		Initial Maturity Date	Fully Extended Maturity Date
Fixed Rate Mortgage Loans
Francis Scott Key Mall ⁽¹⁾	$	62,625		3.71	%	$	2,311	$	62,625	Mar 2018	Mar 2018
Valley View Mall	29,030			5.95	%	2,290		27,161		July 2020	July 2020
Lehigh Valley Mall ⁽²⁾	63,037			5.88	%	4,972		58,519		July 2020	July 2020
Viewmont Mall ⁽¹⁾	57,000			3.48	%	1,984		57,000		Mar 2021	Mar 2021
Woodland Mall ⁽¹⁾	128,460			3.02	%	5,553		121,600		Apr 2021	Apr 2021
Red Rose Commons ⁽²⁾	13,644			5.14	%	978		12,378		July 2021	July 2021
The Court at Oxford Valley ⁽²⁾	28,054			5.56	%	2,058		25,782		July 2021	July 2021
Capital City Mall	60,907			5.30	%	4,379		54,715		Mar 2022	Mar 2022
Cumberland Mall	46,351			4.40	%	3,433		38,157		Aug 2022	Aug 2022
Cherry Hill Mall	286,158			3.90	%	16,980		251,120		Sept 2022	Sept 2022
Dartmouth Mall	62,229			3.97	%	3,825		53,300		Apr 2023	Apr 2023
Metroplex Shopping Center ⁽²⁾	39,835			5.00	%	2,818		33,502		Oct 2023	Oct 2023
Wyoming Valley Mall	75,839			5.17	%	5,124		66,747		Dec 2023	Dec 2023
Patrick Henry Mall	93,614			4.35	%	5,748		77,591		July 2025	July 2025
Springfield Mall ⁽²⁾	31,772			4.45	%	1,964		26,299		Oct 2025	Oct 2025
Willow Grove Park	165,634			3.88	%	9,599		133,754		Oct 2025	Oct 2025
Total Fixed Rate Mortgage Loans	$	1,244,189		4.23	%	$	74,016	$	1,100,250
Variable Rate Mortgage Loans
Pavilion East Associates ⁽²⁾	$	3,316		3.31	%	$	201	$	3,283	Aug 2017	Aug 2017
Francis Scott Key Mall	5,844			3.12	%	183		5,844		Mar 2018	Mar 2018
Gloucester Premium Outlets ⁽²⁾	20,981			1.92	%	458		20,981		June 2018	June 2019
Total Variable Rate Mortgage Loans	$	30,141		2.31	%	$	842	$	30,108
Total Mortgage Loans	$	1,274,330		4.18	%	$	74,858	$	1,130,358
CONSOLIDATED MORTGAGE LOANS	$	1,073,691		4.04	%	$	61,409	$	949,614
CONSOLIDATED DEFERRED FINANCING FEES	(4,152		)	N/A		N/A		N/A
UNCONSOLIDATED MORTGAGE LOANS ⁽²⁾	200,639			4.93	%	13,449		180,744
UNCONSOLIDATED DEFERRED FINANCING FEES ⁽²⁾	(591		)	N/A		N/A		N/A
2014 5 YEAR TERM LOAN ⁽¹⁾	150,000			3.10	%	4,652		150,000		Jan 2019	Jan 2019
2014 7 YEAR TERM LOAN ⁽¹⁾	100,000			2.95	%	2,947		100,000		Dec 2021	Dec 2021
2015 5 YEAR TERM LOAN FIXED ⁽¹⁾	100,000			2.87	%	2,866		100,000		June 2020	June 2020
2015 5 YEAR TERM LOAN VARIABLE	50,000			2.38	%	1,192		50,000		June 2020	June 2020
TERM LOAN DEFERRED FINANCING FEES	(2,769		)	N/A		N/A		N/A
2013 REVOLVING FACILITY	135,000			2.11	%	2,855		135,000		June 2018	June 2020
Total	$	1,801,818		3.75	%	$	89,370	$	1,665,358
AMORTIZATION OF DEFERRED FINANCING FEES	—			0.18	%	—		—
EFFECTIVE INTEREST RATE	$	1,801,818		3.93	%	$	89,370	$	1,665,358


⁽¹⁾	All or a portion of the loan has been effectively swapped to the fixed interest rate presented.


⁽²⁾	Includes our share of debt of equity method investees, based on our ownership percentage.

Pennsylvania Real Estate Investment Trust

Selected Debt Ratios ⁽¹⁾




	March 31, 2017
Consolidated Liabilities to Gross Asset Value	48.15	%
Ratio of Consolidated Liabilities to Gross Asset Value shall not exceed 60%
Secured Indebtedness to Gross Asset Value	32.35	%
Secured indebtedness to Gross Asset Value may not exceed 60%
Adjusted EBITDA to Fixed Charges	2.09
Adjusted EBITDA may not be less than 1.50 to 1.00
Unencumbered Adjusted NOI to Unsecured Interest Expense	5.46
Unencumbered Adjusted NOI to Unsecured Interest Expense may not be less than 1.75 to 1.00
Unencumbered Debt Yield	16.31	%
The ratio of Unencumbered Adjusted NOI to Unsecured Debt may not be less than 11%

⁽¹⁾

The 2013 Revolving Facility agreement dated as of April 17, 2013, as amended, the 2014 Term Loan agreements dated as of June 30, 2016 and January 8, 2014, and the 2015 Term Loan agreement dated June 26, 2015 contain identical affirmative and negative covenants customarily found in such agreements, including requirements that the Company, on a consolidated basis, maintain certain financial ratios. All capitalized terms used on this page have the meanings ascribed to such terms in the 2013 Revolving Facility, 2014 Term Loans, and 2015 Term Loan. In addition to the ratios set forth herein, there are several other ratios set forth in the covenants under the 2013 Revolving Facility, 2014 Term Loans and 2015 Term Loan with which the Company must comply, all of which are described in the Company’s 2016 Annual Report on Form 10-K dated February 28, 2017.

Pennsylvania Real Estate Investment Trust

Forward Looking Statements

This Quarterly Supplemental and Operating Information 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. When used, the words “anticipate,” “believe,” “estimate,” “target,” “goal,” ”expect,” “intend,” “may,” “plan,” “project,” “result,” “should,” “will,” and similar expressions, which do not relate solely to historical matters, are intended to identify forward looking statements. 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:


•	changes in the retail industry, including consolidation and store closings, particularly among anchor 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;


•	current economic conditions and the state of employment growth 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;


•	the effects of online shopping and other uses of technology on our retail tenants;


•	risks related to our development and redevelopment activities;


•	acts of violence at malls, including our properties, or at other similar spaces, and the potential effect on traffic and sales;


•	our ability to identify and execute on suitable acquisition opportunities and to integrate acquired properties into our portfolio;


•	our partnerships and joint ventures with third parties to acquire or develop properties;


•	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;


•	changes to our corporate management team and any resulting modifications to our business strategies;


•	our ability to sell properties that we seek to dispose of or our ability to obtain prices we seek;


•	potential losses on impairment of certain long-lived assets, such as real estate, or of intangible assets, such as goodwill, including such losses that we might be required to record in connection with any dispositions of assets;


•	our substantial debt and the liquidation preference value of our preferred shares and our high leverage ratio;


•	constraining leverage, unencumbered debt yield, interest and tangible net worth covenants under our principal credit agreements;


•	our ability to refinance our existing indebtedness when it matures, on favorable terms or at all;


•	our ability to raise capital, including through joint ventures or other partnerships, through sales of properties or interests in properties, through the issuance of equity or equity-related securities if market conditions are favorable, or through other actions;


•	our short- and long-term liquidity position;


•	potential dilution from any capital raising transactions or other equity issuances; and


•	general economic, financial and political conditions, including credit and capital market conditions, changes in interest rates or unemployment.

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PENNSYLVANIA REAL ESTATE INVESTMENT TRUST Reports