Philadelphia — Pennsylvania Real Estate Investment Trust has completed the financing of Wyoming Valley Mall in Wilkes-Barre, Pa., and used a portion of the proceeds to repay the mortgage loan balance on Beaver Valley Mall in Monaca, Pa., without penalty.
The new 10-year, non-recourse loan on Wyoming Valley Mall totals $78 million and replaces a $65 million loan that was repaid in September. The transaction produced proceeds of $13 million. The interest rate on the new mortgage is 5.17%, a decrease of 68 basis points from the previous rate.
The company used a portion of the proceeds from the new loan to pay off the $42.2 million mortgage loan balance on Beaver Valley Mall, which is now unencumbered. That load carried an interest rate of 9.36% and was set to mature in April 2032. The balance of the proceeds was used to pay down amounts outstanding under the company’s 2013 revolving facility and for general corporate purposes.
"PREIT has made significant improvements in strengthening its balance sheet in 2013 with these transactions being examples of our commitment," said Joseph Coradino, CEO of PREIT. "We are pleased with the favorable terms we received on Wyoming Valley Mall's financing and to have paid off the mortgage loan on Beaver Valley which carried a disproportionately high interest rate."
Wyoming Valley Mall is a 910,000-sq.-ft. mall in Wilkes-Barre, Pa., anchored by Sears, J.C. Penney, Bon-Ton and Macy's with sales per square foot of $396 as of September 30, 2013. Beaver Valley Mall is a 1,154,000-sq.-ft. mall in Monaca, Pa., anchored by Sears, Boscov's, J.C. Penney and Macy's with sales per square foot of $272 as of September 30, 2013.
In 2013, the company completed $291.1 million of property-level financings yielding approximately $31.7 million in proceeds at an average interest rate of 4.26%, a 127 basis point reduction versus the previous mortgages.