PREIT Board of Trustees Issues Response to Open Letter to Shareholders Issued by Two Independent Trustees

June 15, 2023

PHILADELPHIA, June 15, 2023 /PRNewswire/ -- PREIT (OTCQB: PRET) today issued a statement and letter in response to the June 15, 2023 Open Letter to Shareholders issued by Trustees, Christopher Swann and Kenneth Hart. 

Statement from PREIT:
PREIT welcomes and values the opinions of all shareholders and its Trustees alike and is open to any input that may help advance the goals of the Company and its various stakeholders. While the Company doesn't intend to explicitly reveal private discussions amongst the Board and its counsel, the Company's counsel has offered a formal Opinion regarding the process that has been undertaken to consider the individual offers of resignation received. Of maximum importance to the Board is the stability of the Company and its operations during a critical period.

A comprehensive response to Messrs. Swann and Hart can be found below:

Dear Christopher and Kenneth:

This is the Board's response to your June 15th Open Letter to Shareholders. As an initial matter, we believe that your letter leaves out critical facts and creates a misleading narrative. For example, you neglect to mention in your letter that the Board received an Opinion from outside counsel expressly approving the process utilized by the Board in response to the shareholder vote. In addition, contrary to your self-serving assertion that you are "independent trustees," Counsel's Opinion noted that the Board's business judgment with respect to a conflict of the Preferred Shareholder nominees was justified. In fact, as Counsel pointed out, you were elected by an entirely separate class of shareholders whose rights and preferences are not always aligned with the Common Shareholders and who have diverging and conflicting interests on various matters. Further, as the Board made clear to you in prior correspondence, the Board recognizes the importance of the Common Shareholder vote and is taking appropriate action.

In fact, both of you participated in the Board discussion regarding the Guideline process that you are now challenging, but at the time failed to raise an objection. Moreover, your decision to now raise these issues in a public forum, we believe, is not the proper way for a Board member to act and causes us a concern that you have a different agenda.     

Notwithstanding the above, the Board reasonably believes, in its business judgment, that under the circumstances facing the Company, to delay acting on the offered resignations would destabilize the Company, which clearly is not in the best interests of the shareholders and all other stakeholders. This is not, as you allege, a "rushed process," but rather a prudent course to prevent harm to the Company. Any delay acting on the offered resignations would cause considerably more harm to the Company and, in fact, as you well know, the Board has already considered the issues raised in your Open Letter to the Shareholders.  

Rest assured the Board takes the Shareholder vote and the issues you raised in your letter seriously and seeks to constructively address them. To that end, we encourage you to raise your concerns through the normal process at the upcoming Board meeting. 

Joseph F. Coradino, Chairman and
Michael DeMarco, Lead Independent Trustee

PREIT (OTCQB:PRET) is a publicly traded real estate investment trust that owns and manages innovative properties developed to be thoughtful, community-centric hubs. PREIT's robust portfolio of carefully curated, ever-evolving properties generates success for its tenants and meaningful impact for the communities it serves by keenly focusing on five core areas of established and emerging opportunity: multi-family & hotel, health & tech, retail, essentials & grocery and experiential. Located primarily in densely-populated regions, PREIT is a top operator of high quality, purposeful places that serve as one-stop destinations for customers to shop, dine, play and stay. Additional information is available at or on Twitter, Instagram 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," "intend," "may," "project," and similar expressions. Forward-looking statements relate to expectations, beliefs, projections, future plans, strategies, anticipated events, trends and other matters, including our expectations about the impact of COVID-19 on our business, that are not historical facts. These forward-looking statements reflect our current views about future events, achievements, results, cost reductions, dividend payments and the impact of COVID-19 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 the following:

  • the effectiveness of our financial restructuring and any additional strategies that we may employ to address our liquidity and capital resources in the future;
  • our ability to achieve forecasted revenue and pro forma leverage ratio and generate free cash flow to further reduce indebtedness;
  • our substantial debt, and our ability to satisfy our obligations or extend the maturity of or refinance our outstanding debt at or prior to maturity, particularly in light of increasing interest rates, and our ability to remain in compliance with our financial covenants under our debt facilities;
  • the COVID-19 global pandemic and the public health and governmental response, which have created periods of significant economic disruptions and also have and may continue to exacerbate many of the risks listed herein;
  • changes in the retail and real estate industries, including bankruptcies, consolidation and store closings, particularly among anchor tenants;
  • changes in economic conditions, including unemployment rates and its effects on consumer confidence and spending, supply chain challenges, the current inflationary environment, 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 sell properties that we seek to dispose of, which may be delayed by, among other things, the failure to obtain zoning, occupancy and other governmental approvals and permits or, to the extent required, approvals of other third parties;
  • potential losses on impairment of certain long-lived assets, such as real estate, including losses that we might be required to record in connection with any disposition of assets;
  • our ability to raise capital, including through sales of properties or interests in properties, subject to the terms of our Credit Agreements;
  • our ability to maintain and increase property occupancy, sales and rental rates;
  • increases in operating costs that cannot be passed on to tenants, which may be exacerbated in the current inflationary environment;
  • 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;
  • social unrest and acts of vandalism or violence at malls, including our properties, or at other similar spaces, and the potential effect on traffic and sales; 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 the section entitled "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2022 and any subsequent reports we file with the SEC. Any forward-looking statements made by us speak only as of the date on which they are made, and we do not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.

Heather Crowell

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