Pennsylvania Real Estate Investment Trust : PREIT Reports Fourth Quarter and Full Year 2021 Results
Core Mall Sales Per Square Foot Reach $614 in January, up from $603 at Year End
Cherry Hill Mall Sales Near $1,000 per square foot
Strong Total Core Mall Leased Space at 94.3%
PREIT (NYSE: PEI) today reported results for the three months and year ended December 31, 2021. A description of each non-GAAP financial measure and the related reconciliation to the comparable GAAP financial measure is provided in the tables accompanying this release.
“Strong demand continued to drive record operating results for the quarter and year in sales, leasing activity, traffic and net operating income,” said Joseph F. Coradino, Chairman and CEO of PREIT. “We are focused on unlocking value for our stakeholders, we will continue to drive portfolio improvement, operating performance and execution on our plan to improve our capital position through asset sales and incremental revenue generation. Our progress on capital-raising initiatives is palpable with new contracts executed and closing dates set for the first half of the year.”
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Same Store NOI, excluding lease termination revenue, increased 52.5% for the three months ended December 31, 2021 compared to the three months ended December 31, 2020.
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For the quarter, results were driven by an increase in rent, percentage rent, percent sales and common area revenue of $9.2 million and a decrease in credit losses for challenged tenants of $10.7 million as compared to the three months ended December 31, 2020.
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Same Store NOI, excluding lease termination revenue, increased 26.4% for the year ended December 31, 2021 compared to the year ended December 31, 2020.
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Robust leasing activity is driving increased occupancy with Core Mall Total Occupancy increasing by 290 basis points, sequentially, to 93.2%. Mall Non-anchor Occupancy increased 10 basis points, sequentially, to 89.5%.
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Total Occupancy improved 330 basis points, year-over-year, compared to December 31, 2020.
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Total Core Mall leased space, at 94.3%, exceeds occupied space by 110 basis points, and core mall non-anchor leased space, at 91.2%, exceeds occupied space by 170 basis points when including executed new leases slated for future occupancy, demonstrating the rapid pace of leasing activity.
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For the rolling 12 month period ended December 30, 2021, core mall comparable sales grew by 11.9% to a record $603 per square foot. Core Mall comparable sales for January improved 1.8%, sequentially, to $614.
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Average renewal spreads for the three months ended December 31, 2021 remained flat. Sequentially, average renewal spreads for tenants less than 10,000 square feet improved from (2.3%) for the quarter ended September 30, 2021 to flat for the quarter ended December 31, 2021. Average renewal spreads reflected a modest decline for the year at (0.9 %).
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The Company made advances in its capital-raising efforts with closed transactions or executed agreements of sale for $105 million of assets and is finalizing or has executed letters of intent for over $75 million of additional asset sales.
Leasing and Redevelopment
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497,000 square feet of leases are signed for future openings, which is expected to contribute annual gross rent of $8.8 million.
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Leasing momentum continues to build with transactions executed for 120,000 square feet of occupancy thus far in 2022.
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Tilt Studio replaced JCPenney in 104,000 square feet at Magnolia Mall in Florence, SC. The family-focused destination opened in October 2021.
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Turn 7 opened in the former Lord & Taylor space at Moorestown Mall in December. A transaction was executed with Cooper University Health Care for an outpatient location in the former Sears space at Moorestown Mall in Moorestown, NJ. Entitlements have been obtained for buyer’s site plan to add 375 multifamily units to Moorestown Mall.
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Construction is expected to begin this year on a new self-storage facility in previously unused below grade space at Mall at Prince George’s in Hyattsville, MD.
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A lease has been executed with Tilted 10 and Tilt Studio, an action-packed bi-level 104,000 square foot indoor family entertainment center to replace the former JCPenney at Willow Grove Park, adding family entertainment to this locally-loved destination shopping experience.
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Phoenix Theaters is under construction to bring a first-class movie experience to Woodland Mall in 47,000 square feet in April 2022.
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HomeGoods is expected to open a new store in 23,000 square feet at Cumberland Mall this month.
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A lease has been executed with Merlin Entertainment to bring a new prototype, 32,000 square foot, LEGO® Discovery Center to the Washington DC Market at Springfield Town Center.
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Leases with exciting new-to-portfolio tenants have been executed at Cherry Hill Mall for occupancy in 2022: Eddie V’s Prime Seafood, Marc Cain and Warby Parker.
Primary Factors Affecting Financial Results for the Three Months Ended December 31, 2021 and 2020
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Net loss attributable to PREIT common shareholders was $34.5 million (which takes into consideration the accrual of preferred dividends that accumulated during the quarter but have not been paid), or $0.43 per basic and diluted share for the three months ended December 31, 2021, compared to net loss attributable to PREIT common shareholders of $202.1 million, or $2.62 per basic and diluted share for the three months ended December 31, 2020.
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Same Store NOI, including lease terminations, increased by $21.7 million, or 53.8%. The increase is primarily due to higher percent sales and percentage rent, and decrease in credit losses as compared to the prior year.
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Non-Same Store NOI decreased by $1.4 million, primarily due to lower base rent in the current year.
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FFO for the three months ended December 31, 2021 was $0.17 per diluted share and OP Unit compared to $(0.22) per diluted share and OP Unit for the three months ended December 31, 2020.
All NOI and FFO amounts referenced as primary factors affecting financial results above include our share of unconsolidated properties’ revenues and expenses. Additional information regarding changes in operating results for the three months and year ended December 31, 2021 and 2020 is included on page 14.
Liquidity and Financing Activities
As of December 31, 2021, the Company had $75.5 million available under its First Lien Revolving Credit Facility. The Company’s corporate cash balances, when combined with available credit, provides total liquidity of $110.6 million.
In December, the mortgage loan secured by Woodland Mall was extended for one year. Subsequent to the close of the quarter, the one year extension option on the mortgage loan secured by Gloucester Premium Outlets was completed.
The Company’s 10-K for 2021 will include a going concern footnote in connection with potential future obligations related specifically to the FDP Term Loan.
Asset Dispositions
Multi-Family Land Parcels: The Company has executed agreements of sale for land parcels for anticipated multi-family development in the amount of $82.5 million. The agreements are with multiple buyers across six properties for over 2,200 units as part of the Company’s previously announced multi-family land sale plan. Closing on the transactions is subject to customary due diligence provisions and securing entitlements.
Hotel Parcels: The Company has executed an agreement of sale to convey a land parcel for anticipated hotel development in the amount of $2.5 million for approximately 125 rooms. The Company has executed LOI for the sale of a parcel for hotel development at Springfield Town Center for $2.5 million. Closing on these transactions is subject to customary due diligence provisions and securing entitlements.
Other Parcels: In November 2021, the Company closed on the sale of the last remaining parcel at the previously-owned Monroe Power Center for $1.0 million. In February, we completed the redemption of preferred equity issued as part of the sale of our New Garden land parcel. In connection with this settlement, we received approximately $2.5 million. The Company expects to close on the sale of an anchor box at Valley View Mall in the second quarter for $2.8 million.
2022 Outlook
The Company is not issuing detailed guidance at this time.
Conference call information
Management has scheduled a conference call for 11:00 am Eastern Time on Tuesday
March 15, 2022, to review the Company’s results and future outlook. To listen to the call, please dial 1(888) 330-2024 (domestic toll free), or 1(646) 960-0187 (international), and request to join the PREIT call, Conference ID 9326912, at least fifteen minutes before the scheduled start time as callers could experience delays. Investors can also access the call in a “listen only” mode via the internet at the Company’s website, preit.com. Please allow extra time prior to the call to visit the site and download the necessary software to listen to the Internet broadcast. Financial and statistical information expected to be discussed on the call will also be available on the Company’s website.
For interested individuals unable to join the conference call, the online archive of the webcast will also be available for one year following the call.
Disclaimer
PREIT – Pennsylvania Real Estate Investment Trust published this content on 14 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 March 2022 20:49:52 UTC.
Public now 2022
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Technical analysis trends PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
| short term | Mid Term | long term | |
| trends | Neutral | Bearish | Bearish |
Income statement evolution
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Sell
Buy |
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| Mean consensus | HOLD |
| Number of Analysts | 1 |
| Last close price |
0.82 |
| Average target price | |
| Spread / Average Target |
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