PREIT completes South Mall sale, agrees to sell two more

Philadelphia — Pennsylvania Real Estate Investment Trust has completed the previously announced sale of South Mall in Allentown, Pennsylvania, for $23.6 million. Net of closing costs, settlement pro-rations and credits, proceeds from the transaction totaled approximately $23.1 million.

In addition, PREIT has entered into an Agreement of Sale to dispose of its two remaining non-core malls — Nittany Mall and North Hanover Mall.

South Mall is a 406,000-sq.-ft. mall located in Allentown, Pennsylvania, anchored by SteinMart and Bon Ton. Sales at South Mall were $227 per square foot and non-anchor occupancy was 90.6% as of March 31, 2014. Nittany Mall is a 534,000-sq.-ft. mall located in State College, Pennsylvania, anchored by J.C. Penney, Sears, Bon Ton and Macy's. Sales at Nittany Mall were $230 per square foot and non-anchor occupancy was 75.8% as of March 31, 2014. North Hanover Mall is a 452,000 sq. ft. mall located in Hanover, Pennsylvania, anchored by J.C. Penney, Sears, Dick's Sporting Goods and a new Burlington Coat Factory. Sales at North Hanover were $275 per square foot and non-anchor occupancy was 79.3% as of March 31, 2014.

Sales and occupancy at these properties generally lag PREIT's portfolio that averaged sales of $377 per square foot and had non-anchor occupancy of 90.3% as of March 31, 2014, making the properties ideal candidates for the Company's disposition program.

PREIT began its disposition program in 2012 as part of its portfolio reconstituting initiative. The company has sold four non-core malls to date, generating average sales per square foot of $227 at the time of the respective closings. In total, PREIT’s disposition program has generated over $250 million since its inception in 2012.

"The successful completion of the sale of South Mall, coupled with our agreement to sell Nittany and North Hanover Malls, is a significant step for PREIT," said Joseph F. Coradino, CEO of PREIT. "We have made meaningful strides in reconstituting and elevating PREIT's portfolio quality, particularly at a time when the market is inundated with lower quality assets for sale. With the near completion of our disposition program, we are keenly focused on successfully operating our higher-quality properties, which have the most potential for long-term value creation and strong operating results. I am confident that our shareholders will be pleased with the value proposition in PREIT's higher-quality portfolio."

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