PREIT Completes Key Steps in Extending Debt Maturities

Rhea-AI Summary

PREIT (NYSE: PEI) has secured over $172 million in mortgage loans, enabling the refinancing of key properties including Viewmont Mall and Francis Scott Key Mall. Each financing has a 3-year term, with interest rates set at 3.6% over LIBOR. Additionally, Court at Oxford Valley and Red Rose Commons have loans of $27.5 million and $17 million, respectively, at fixed rates of 3.2% and 3.28%. This refinancing effort aims to improve PREIT's balance sheet and support its strategic plan for growth and debt reduction.

Positive

• Secured over $172 million in mortgage loans.
• Refinancing strengthens balance sheet and extends debt maturities.
• Interest rates on new loans are competitive, promoting financial stability.

Negative

• Dependence on refinancing to manage existing debt.
• Potential risks from COVID-19 impacting rental income and property occupancy.

PHILADELPHIA, July 1, 2021 /PRNewswire/ -- PREIT (NYSE: PEI), a leading real estate owner and developer, redefining the future of the mall with mixed-use community-centric districts, today announced that it has entered into over $172 million of mortgage loans, in the aggregate and reflecting the Company's share.  The mortgages are secured by Viewmont Mall, Francis Scott Key Mall and two of the Company's joint venture open-air assets, Court at Oxford Valley and Red Rose Commons, extending all of the Company's near term maturities.

Key terms of the financings include:

• Viewmont Mall
• $67.2 million
• Term: 3 years with 1-year extension option
• Interest at 3.6% over LIBOR
• Francis Scott Key Mall
• $60.5 million
• Term: 3 years with 1-year extension option
• Interest at 3.6% over LIBOR
• Court at Oxford Valley
• $27.5 million at Company's share
• Term: 10 years
• Interest is a fixed rate of 3.2%
• Red Rose Commons
• $17.0 million at Company's share
• Term: 10 years
• Interest is a fixed rate of 3.28%

"As we continue to experience momentum in our business, we are pleased to complete these refinancing transactions, which are key elements in PREIT's balance sheet repositioning as we move forward in executing on our plan to strengthen our portfolio with a transformative vision for our properties to create a more powerful business model," said Joseph F. Coradino, PREIT Chairman and CEO. "In addition to achieving our business plan NOI objectives, executing on maturity extensions and raising capital to ultimately reduce debt are key pillars of PREIT's plan to improve our balance sheet."

About PREIT

PREIT (NYSE:PEI) is a publicly traded real estate investment trust that owns and manages innovative properties at the forefront of shaping consumer experiences through the built environment. PREIT's robust portfolio of carefully curated retail and lifestyle offerings mixed with destination dining and entertainment experiences are located primarily in densely-populated, high barrier-to-entry markets with tremendous opportunity to create vibrant multi-use destinations. Additional information is available at www.preit.com or on Twitter 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," "project," "intend," "may" or similar expressions. Forward-looking statements relate to expectations, beliefs, projections, future plans, strategies, anticipated events, trends and other matters that are not historical facts. These forward-looking statements reflect our current expectations and assumptions regarding our business, the economy and other future events, achievements, results and conditions and are based on currently available financial, economic and competitive data and our current business plans. Actual results could vary materially depending on risks, uncertainties and changes in circumstances that may affect our operations, markets, services, prices and other factors as discussed in our filings with the Securities and Exchange Commission. In particular, our business may be materially and adversely affected by: our ability to achieve our forecasted revenue and pro forma leverage ratio and generate free cash flow to further reduce our indebtedness; our ability to manage our business through the impacts of the COVID-19 pandemic, a weakening of global economic and financial conditions, changes in governmental regulations and related compliance and litigation costs and the other factors listed in our SEC filings; changes in the retail and real estate industries, including consolidation and store closings, particularly among anchor tenants; current economic conditions, including the impact of the COVID-19 pandemic and the steps taken by governmental authorities and other third parties to reduce its spread, 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 maintain and increase property occupancy, sales and rental rates; increases in operating costs that cannot be passed on to tenants; 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; acts of violence at malls, including our properties, or at other similar spaces, and the potential effect on traffic and sales; our ability to sell properties that we seek to dispose of or our ability to obtain prices we seek; our substantial debt and the liquidation preference of our preferred shares and our high leverage ratio and our ability to remain in compliance with our financial covenants under our debt facilities; our ability to refinance our existing indebtedness when it matures, on favorable terms or at all; our ability to raise capital, including through sales of properties or interests in properties and through the issuance of equity or equity-related securities if market conditions are favorable; 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 in the section entitled "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2020. We do not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.

PREIT Contact:
Heather Crowell
EVP, Strategy and Communications
(215) 454-1241
heather.crowell@preit.com 

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SOURCE PREIT

FAQ

What recent financing transactions did PREIT announce on July 1, 2021?

PREIT announced over $172 million in mortgage loans to refinance key properties like Viewmont Mall and Francis Scott Key Mall.

What are the terms of the loans secured by PREIT?

The loans include a 3-year term with a 1-year extension option at interest rates of 3.6% over LIBOR for major malls and fixed rates of 3.2% and 3.28% for open-air assets.

How does PREIT plan to use the new financing?

The financing aims to extend debt maturities and improve PREIT's balance sheet, which is crucial for their growth strategy.