PHILADELPHIA, July 14, 2020 /PRNewswire/ -- PREIT (NYSE: PEI), a leading operator of diverse retail and experiential destinations, reported that its entire portfolio is operational and provided an update on other Company initiatives.
"Over the past decade, we have upgraded our portfolio to hold only dramatically higher quality properties in dominant locations, with improved anchors and lifestyle experiences that create a sense of community and loyalty for our customers. Now, as shoppers happily return to our properties, we see the results of this long-range strategy paying off," said Joseph F. Coradino, CEO of PREIT. "The portfolio's locations in the high barrier to entry metro markets of Philadelphia and DC provide abundant opportunities to distinguish ourselves in this continually changing retail environment by creating communities that incorporate diverse uses that complement core retail tenancy, including multifamily residential, digitally native retailers, distribution centers and a range of healthcare uses."
PROPERTY STATUS AND RESULTS
PREIT's portfolio reopening effort culminated on Friday July 3, 2020 as it opened its final property and marquee redevelopment, Fashion District Philadelphia. This followed closely on the heels of seven other suburban Philadelphia properties that opened their doors within the prior week.
Occupancy continues to gain traction toward stabilization with the portfolio re-occupied at over 80%. In-line occupancy is now over 90% at several of the Company's market-dominant properties: Capital City Mall, Magnolia Mall, Dartmouth Mall and Woodland Mall.
Retailers continue to report robust sales performance in excess of last year's sales as shoppers are visiting properties with an intent to purchase. The seeming best performers are athletic shoes and apparel, personal care products and home décor. Notably, traffic has returned to 80% or more of average at Valley Mall, Viewmont Mall, Willow Grove Park and Patrick Henry Mall.
With properties at the center of their communities, PREIT continues to promote protocols that support a safe shopping environment and promote contactless pickup options.
LIQUIDITY AND EXPENSE REDUCTION
The Company continues to prioritize improving its liquidity position. During June, the Company completed its single tenant outparcel sale effort, closing on the remaining $14.4 million in sales, bringing the total outparcel sale effort made public in February 2020 to $27.8 million. The Company has also improved its monthly collection levels significantly since the shutdown started and continues to make progress in executing on rent deferral arrangements with top tenants in addition to collecting prior months' rent.
In addition to previous one-time savings in G&A and operating expenses totaling $4.7 million, the Company has also made permanent overhead reductions that are expected to save the Company approximately $4.0 million annually in General and Administrative expenses. The Company has also reduced planned capital spending for 2020 by $26 million, a savings of over $30 million in 2020.
As part of its effort to revitalize its portfolio of real estate offerings, the Company continues to make strides toward closing on the previously-announced multifamily land sales to unlock significant value in underutilized land.
CONSTRUCTION AND TENANT OPENINGS
Throughout the portfolio, exciting new tenants are back on track with recent openings including Talbot's Outlet and Plymouth Performing Arts, both at Plymouth Meeting Mall. At the same time, construction is back on track with a number of exciting new tenants underway for 2020 openings including: Sephora at Woodland Mall, Shake Shack and Sola Salon at Plymouth Meeting Mall, Blaze Pizza at Capital City Mall and Ardene at Willow Grove Park to name a few.
To stay up to date on PREIT's response to COVID-19, please click here and to stay up to date on our re-openings, please click here.
About PREIT
PREIT (NYSE:PEI) is a publicly traded real estate investment trust that owns and manages innovative properties at the forefront of shaping consumer experiences through the built environment. PREIT's robust portfolio of carefully curated retail and lifestyle offerings mixed with destination dining and entertainment experiences are located primarily in densely-populated, high barrier-to-entry markets with tremendous opportunity to create vibrant multi-use destinations. Additional information is available at www.preit.com or on Twitter or LinkedIn.
Forward Looking Statements
This press release contains certain forward-looking statements that can be identified by the use of words such as "anticipate," "believe," "estimate," "expect," "project," "intend," "may" or similar expressions. 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 changes in the retail and real estate industries, including consolidation and store closings, particularly among anchor tenants; current economic conditions, including the impact of the COVID-19 pandemic and the steps taken by governmental authorities and other third parties to reduce its spread, and the corresponding effects on tenant business performance, prospects, solvency and leasing decisions; our inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise; our ability to maintain and increase property occupancy, sales and rental rates; increases in operating costs that cannot be passed on to tenants; the effects of online shopping and other uses of technology on our retail tenants; risks related to our development and redevelopment activities, including delays, cost overruns and our inability to reach projected occupancy or rental rates; acts of violence at malls, including our properties, or at other similar spaces, and the potential effect on traffic and sales; our ability to sell properties that we seek to dispose of or our ability to obtain prices we seek; our substantial debt and the liquidation preference of our preferred shares and our high leverage ratio; our ability to refinance our existing indebtedness when it matures, on favorable terms or at all; our ability to raise capital, including through sales of properties or interests in properties and through the issuance of equity or equity-related securities if market conditions are favorable; and potential dilution from any capital raising transactions or other equity issuances.
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 herein and in our Annual Report on Form 10-Q for the quarter ended March 31, 2020 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.
PREIT contact:
Heather Crowell
EVP, Strategy and Communications
(215) 316-6271
[email protected]
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SOURCE PREIT