Q1 2023 Pennsylvania Real Estate Investment Trust Earnings Call

Sales growth.

With that I'm happy to turn it over to Mario to review our results.

Thanks, Joe.

From an operational perspective, the business is performing well, reflecting improvement in same store NOI growth tenant sales collections leasing activity and liquidity.

First quarter same store NOI increased four 5% during the quarter were five 7% when excluding the impact of lease terminations.

These strong results were driven primarily by increases in rental revenue net utility any ancillary income lip.

Liquidity continues to track ahead of our business plan at approximately $117 million.

Total occupancy stands at 93, 5%, which is a 90 basis point increase over the first quarter of last year.

Leasing volume is strong and compares favorably to last year.

During the quarter, we signed over 400000 square feet of new and renewal leases. We currently have a pipeline of over 250000 square feet signed for future occupancy, which represents over $7 $2 million in annualized future rents.

Comparable sales ended the first quarter at $603 per square foot with nine of 17 properties demonstrating increases.

This morning, we reported first quarter 2023, NAREIT <unk> and <unk> as adjusted of negative $3 five per share.

The primary drivers of the variance to 2022 actuals for the first quarter were.

A $2 4 million same store NOI increase offset by a decrease of $1 8 million in non same store NOI, resulting from the sale of Cumberland Mall and Gloucester premium outlets in 2022.

Interest expense increased by $12 $2 million driven primarily.

<unk> by higher weighted average interest rates as compared to the first quarter of last year.

While we have experienced an elevated number of bankruptcies. So far this year affecting $1 $7 million in revenue and 46000 square feet. We remain compliant with our credit facility covenants and are pleased by the continued tenant interest in our properties.

It is notable that earlier this week, we signed an extension of the mortgage loan secured by Cherry Hill Mall through December one 2023 with an additional five months option that is exercisable subject to satisfaction of certain conditions.

The company's credit facilities.

With a balance of $996 million as of March 31, 2023 mature on December 10 2023.

The company is working to address the upcoming maturity by pursuing all available alternatives, including refinancing.

<unk> assets and engaging in discussions with lenders.

With that we will turn to the questions. We received on our Q&A platform.

Thanks Mario.

The first question is what is the current status of the credit markets for mall real estate can you continue amending and extending loan maturities.

Being able to extend renegotiate or replace its first and second lien credit facilities coming due this December .

It's no secret that the credit markets are extremely challenging, particularly for enclosed malls.

As we announced in our earnings release and discussed in our prepared remarks. We're pleased that we have successfully extended the mortgage loan secured by Cherry Hill Mall and now our focus on our remaining near term maturities.

What progress are you, making on asset and parcel sales are you trying to sell excess square do you have any more parcels that you can sell to four corners property Trust.

We have continued to evaluate opportunities for asset sales, including Exton square and Plymouth meeting mall as well as our out parcels. However.

However, we are not prepared to disclose details at this time.

Yeah.

While my strong preference is to keep great portfolio of malls as intact as possible. If it turns out that the best way to maximize shareholder value is to sell the most valuable properties are all of the properties will you hesitate to do that.

Along these lines what is your plan going forward and is there a five year plan in place when the market changes.

Since the beginning of 2022, we've sold over $140 million in assets and utilized excess cash to pay down $190 million in debt secured the extension of our credit facility's maturity date and satisfied the re margin requirements.

When fashion District Philadelphia.

As we have previously previously noted our plan is to spend the coming months exploring all possible options.

Available to the company as our credit facilities matures, including refinancing selling assets and engaging in discussions with lenders.

We have demonstrated through our disposition history that we are open to selling assets and we continue to work towards finalizing the sale of our multifamily land and are exploring all possible options with our investment advisor.

Okay.

With that I'll. Thank you all for joining us today and have a great day.

That does conclude today's conference. Thank you all for joining you may now disconnect.

Okay.

Okay.

Yeah.

Okay.