<PAGE>
[GRAPHIC OMITTED] NEWS
FOR RELEASE:
Pennsylvania Real Estate Investment Trust
200 South Broad Street
Philadelphia, PA 19102
www.preit.com
Phone: 215-875-0700
Fax: 215-546-7311
<TABLE>
<CAPTION>
FOR FURTHER INFORMATION:
<S> <C> <C> <C>
AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD
Edward A. Glickman Joe Calabrese Steve Martini Judith Sylk-Siegel
Executive Vice President and CFO (General Info) (Analyst Info) (Media Info)
(215) 875-0700 (212) 661-8030 (212) 661-8030 (212) 661-8030
</TABLE>
FOR IMMEDIATE RELEASE
August 9, 2000
Pennsylvania Real Estate Investment Trust Reports
2000 Second Quarter and Six Month Results
Philadelphia, PA, August 9, 2000-- Pennsylvania Real Estate Investment Trust
(NYSE: PEI) announced today the results of its operations for the second quarter
and six months ended June 30, 2000.
2000 Second Quarter Highlights
o 2000 second quarter FFO per share, including non-recurring lease
termination fees, increased 52% to $1.00 per share on 14.9 million shares
of beneficial interest/ Operating Partnership units (collectively shares)
outstanding from $0.66 per share on 14.6 million shares during the second
quarter of 1999.
o Excluding non-recurring items, FFO for 2000 second quarter was $0.67 per
share compared with $0.66 per share for the second quarter of 1999.
o Increased combined net operating income, including non-recurring lease
termination fees, by 37% to $25.8 million from $18.9 million in the 1999
second quarter.
o Same store multifamily net operating income increased 4.0% from the
1999 second quarter.
o Same store retail net operating income, excluding non-recurring
lease termination fees, increased 6.0% from the 1999 second quarter.
Second Quarter Results
For the quarter ended June 30, 2000 the Company's funds from operations (FFO)
were $14,880,000, or $1.00 per share. FFO was positively impacted by
non-recurring lease termination fees of approximately $5.6 million, or $0.38 per
share. These fees were received for the termination of the CVS building lease in
Alexandria, VA, the Northeast Tower General Cinema lease in Philadelphia, PA and
the Mandarin Corners Upton's lease in Jacksonville, FL. These fees were recorded
as income in accordance with Generally Accepted Accounting Principles.
Excluding the impact of non-recurring items (lease termination fees and two
unusual items described below), FFO for the 2000 second quarter totaled
$9,965,000, or $0.67 per share, on 14,920,132 weighted average shares
outstanding, a 3.6% increase over FFO of $9,621,000, or $0.66 per share, on
14,635,633 weighted average shares for the three months ended June 30, 1999.
As a result of the termination of plans to develop a power center in
Philadelphia, PA, the Company recorded a charge of $370,000, or $0.03 per share,
in its management and development affiliate, PREIT-RUBIN, Inc. Additionally
during the 2000 second quarter the Company recorded an additional charge of
approximately $330,000, or $0.02 per share, for prior services rendered under
the terms of an employment agreement. Combined, these charges reduced FFO for
the second quarter ended June 30, 2000 by $700,000, or $0.05 per share.
<PAGE>
As calculated by NAREIT, FFO is defined as net income, excluding extraordinary
items, gain (or loss) on the sale of property, plus real estate related
depreciation and amortization.
Net operating income, including non-recurring lease termination fees, from
wholly-owned properties and the Company's proportionate share of partnerships
and joint venture properties totaled $25,803,000 before depreciation for the
three months ended June 30, 2000. Excluding the non-recurring lease termination
fees, net operating income for the 2000 second quarter increased 6% to
$20,038,000 from $18,852,000 for the three months ended June 30, 1999. The
increase is mainly due to acquisitions and development projects completed in
1999 and improved operating results in the Company's portfolio.
Net income for the three months ended June 30, 2000 was $15,083,000, or $1.13
per share, on total weighted average shares outstanding of 13,384,774 compared
to $4,918,000 or $0.37 per share, on 13,314,945 total weighted average shares
outstanding for the three months ended June 30, 1999. Net income for the second
quarter ended June 30, 2000 includes a gain on the sale of the CVS Building in
Alexandria, VA totaling $6.6 million, or $0.50 per share, and the lease
termination fees noted above.
Six Months Results
FFO for the six months ended June 30, 2000 totaled $24,404,000, a 30% increase
over FFO of $18,775,000 for the prior comparable six-month period ended June 30,
1999. FFO for the six-month period totaled $1.64 per share on 14,900,420
weighted average shares outstanding, compared to $1.29 per share on 14,609,014
weighted average shares for the six months ended June 30, 1999.
Net operating income before depreciation from wholly-owned properties and the
Company's proportionate share of partnerships and joint venture properties
increased 23% to $45,783,000 for the six months ended June 30, 2000, from
$37,168,000 for the six months ended June 30, 1999.
On a diluted basis, net income for the six months ended June 30, 2000 was $1.61
per share on 13,362,324 total weighted average shares outstanding compared to
$0.81 per share on 13,311,782 total weighted average shares outstanding for the
six months ended June 30, 1999. Net income for the six months ended June 30,
2000 includes a gain on the sale of the CVS Building in Alexandria, VA totaling
$6.6 million, or $0.50 per share, and a gain on the sale of the Company's
interest in Park Plaza shopping center in Pinellas Park, Florida totaling $2.3
million, or $0.17 per share. Net income for the 1999 six-month period includes
gains on the sales of 135 Commerce Drive in Fort Washington, PA and a land
parcel at Crest Plaza in Allentown, PA totaling $1,346,000 or $0.10 per share.
Same Store NOI Growth -- Multifamily and Shopping Center Portfolios
Same store net operating income for the Company's portfolio of multifamily
properties increased 4.0% over the second quarter of 1999, primarily driven by a
2.8% increase in rents and reduced rental concessions. Same store net operating
income, excluding non-recurring lease termination fees, for the second quarter
of 2000 for the Company's shopping center portfolio increased 6.0% over the
comparable quarter in 1999 primarily driven by new leases at North Dartmouth
Mall, Palmer Park Mall and Christiana Power Center.
<PAGE>
Comments from Management
Commenting on the Company's second quarter and six months results, Ronald Rubin,
Chief Executive Officer of PREIT, said "We are pleased with our performance at
all levels, with solid growth in FFO, net income and retail and multifamily NOI.
These results were driven by our focus on development activity, the positive
fundamentals of our core portfolio and expanding relationships with leading
national and regional retailers. At the same time, acquisitions completed during
1999 and early 2000 generated strong returns." Mr. Rubin continued, "In the
quarters ahead, the Company is committed to prudently investing its capital in
developing high quality retail properties in the Mid-Atlantic region. Our
development and redevelopment schedule is well on target, with approximately
$200 million in projects currently underway at a number of prime locations."
Portfolio Highlights
Development Pipeline / 8 Projects
o Paxton Towne Centre (Harrisburg, PA) - Construction of the 695,000 square
foot power center is on schedule and, as of June 30, 2000, 73% complete and
80% leased. In July, the power center celebrated its grand opening with the
introduction of several stores including Target, Men's Warehouse and
Borders Books and Music. Additional stores are slated to open during the
2000 third and fourth quarters.
o Metroplex Shopping Center (Plymouth Meeting, PA) - Construction of the
780,000 square foot power center is on schedule and, as of June 30, 2000,
71% complete and 90% leased. The first stores are scheduled to open in
August 2000.
o Willow Grove Park (Willow Grove, PA) - Construction has commenced on the
infrastructure for a new Macy's department store, which will be added to
this 980,000 square foot regional shopping center. Macy's is expected to
open in the third quarter of 2001.
Dispositions
o CVS Building (Alexandria, VA) - As previously announced, in April, the
Company sold a 294,000 square foot industrial property for total proceeds
of approximately $11.7 million. In connection with the sale, the Company
terminated the lease with the building's sole tenant, CVS Drug Co., which
otherwise would have expired on April 30, 2002.
o Valley View (Wilmington, DE) - In July, the Company sold Valley View, a
55,700 square foot strip shopping center, generating proceeds of
approximately $9,600,000. The Company expects to record a gain of
approximately $1,500,000 ($0.11 per share) in the 2000 third quarter.
Additional Second Quarter 2000 Activity
o Frankford Arsenal (Philadelphia, PA) - During the second quarter the
Company terminated its proposed plans to develop a 500,000 square foot
power center at Frankford Arsenal in Philadelphia, PA. As a result, the
Company recorded a charge of $370,000 ($0.03 per share) in its management
and development affiliate, PREIT-RUBIN, Inc. during the 2000 second
quarter.
Jonathan B. Weller, PREIT's President and Chief Operating Officer, commented.
"As we look forward to the remainder of 2000, the Company will continue to focus
on prudently growing the business and maintaining the growth of our development
pipeline which currently consists of six power centers, one entertainment center
and one enclosed mall."
Capital Resources
As of June 30, 2000, the Company had approximately $99 million outstanding,
including letters of credit, under its $150 million line of credit.
Edward Glickman, Chief Financial Officer of PREIT, added, "The Company continues
to closely examine financing options and is actively engaged in discussions to
expand its line of credit. In the coming months we will continue to take steps
to solidify our capital structure and seek out new sources to fund our
development projects and redevelopment activities. We believe that a disciplined
allocation of our capital among these assets can offer the potential for the
generation of strong FFO growth and solid returns."
Pennsylvania Real Estate Investment Trust, founded in 1960 and one of the first
equity REITs in the U.S., has a primary investment focus on shopping centers
(approximately 9.5 million square feet) and apartment communities (7,242 units)
located primarily in the eastern United States. The Company's portfolio
currently consists of 46 properties in 10 states. In addition, there are 7
retail properties under development, which will add approximately 3.0 million
square feet to the portfolio. Pennsylvania Real Estate Investment Trust is
headquartered in Philadelphia, Pennsylvania.
<PAGE>
With the exception of the historical information contained in the release, the
matters described herein contain forward-looking statements that are made
pursuant to the Safe Harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such statements involve various risks which may cause actual
results to differ materially. These risks include, but are not limited to, the
ability of the Company to grow internally or by acquisition and to integrate
acquired businesses, the availability of adequate funds at reasonable cost,
changing industry and competitive conditions, and other risks outside the
control of the company referred to in the Company's registration statement and
periodic reports filed with the Securities and Exchange Commission.
[Financial Tables Follow]
# # #
** A supplemental quarterly financial package **
is available on the Company's web site at www.preit.com.
To receive additional information on Pennsylvania Real
Estate Investment Trust via fax at no charge, please dial
1-800-PRO-INFO and enter the ticker symbol PEI.
<PAGE>
Pennsylvania Real Estate Investment Trust
Selected Financial Data
(Unaudited)
--------------------------------------------------------------------------------
FUNDS FROM OPERATIONS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
------------------
June 30, 2000 June 30, 1999
------------- -------------
<S> <C> <C>
Income before minority interest in operating partnership $ 16,815,000 $ 5,406,000
Less: Gains on sales of interests in real estate (6,648,000)
Add: Depreciation and amortization:
Wholly owned & consolidated partnership, net 3,716,000 3,266,000
Unconsolidated partnerships & joint ventures 1,137,000 1,137,000
Excess purchase price over net asset acquired 92,000 54,000
Refinancing prepayment fee of partnership/joint ventures -- 55,000
Less: Depreciation of non-real estate assets (65,000) (60,000)
Amortization of deferred financing assets (167,000) (237,000)
------------ -----------
FUNDS FROM OPERATIONS $ 14,880,000 (1) $ 9,621,000 (1)
============ ===========
FUNDS FROM OPERATIONS PER SHARE AND OP UNITS $1.00 $0.66
============ ===========
Weighted average number of shares outstanding 13,384,774 13,314,945
Weighted average effect of full conversion of OP units 1,535,358 1,320,688
------------ -----------
Total weighted average shares of outstanding including OP units 14,920,132 14,635,633
------------ -----------
</TABLE>
(1) Includes the non-cash effect of straightline rents of $183,000 and $323,000
for the 2nd quarter 2000 and 1999 and $478,000 and $618,000 for year to
date 2000 and 1999, respectively.
<PAGE>
FUNDS FROM OPERATIONS
<TABLE>
<CAPTION>
Six Months Ended
----------------
June 30, 2000 June 30, 1999
------------- -------------
<S> <C> <C>
Income before minority interest in operating partnership $ 23,944,000 $ 11,837,000
Less: Gains on sales of interests in real estate (8,911,000) (1,346,000)
Add: Depreciation and amortization:
Wholly owned & consolidated partnership, net 7,427,000 6,422,000
Unconsolidated partnerships & joint ventures 2,258,000 2,196,000
Excess purchase price over net asset acquired 146,000 107,000
Refinancing prepayment fee of partnership/joint ventures -- 55,000
Less: Depreciation of non-real estate assets (130,000) (120,000)
Amortization of deferred financing assets (330,000) (376,000)
------------ ------------
FUNDS FROM OPERATIONS $ 24,404,000 (1) $ 18,775,000 (1)
============ ============
FUNDS FROM OPERATIONS PER SHARE AND OP UNITS $1.64 $1.29
============ ============
Weighted average number of shares outstanding 13,362,324 13,311,782
Weighted average effect of full conversion of OP units 1,538,096 1,297,232
------------ ------------
Total weighted average shares of outstanding including OP units 14,900,420 14,609,014
------------ ------------
</TABLE>
(1) Includes the non-cash effect of straightline rents of $183,000 and $323,000
for the 2nd quarter 2000 and 1999 and $478,000 and $618,000 for year to
date 2000 and 1999, respectively.
<PAGE>
OPERATING RESULTS
<TABLE>
<CAPTION>
Three Months Ended
------------------
June 30, 2000 June 30, 1999
------------- -------------
REVENUES
<S> <C> <C>
Gross revenues from real estate $ 28,121,000 $ 21,659,000
Interest and other income 325,000 402,000
------------ -----------
28,446,000 22,061,000
------------ -----------
EXPENSES
Property operating expenses 7,425,000 7,512,000
Depreciation and amortization 3,716,000 3,309,000
General & administrative expenses 1,406,000 993,000
Interest expense 5,642,000 5,362,000
------------ -----------
18,189,000 17,176,000
------------ -----------
Income before equity in unconsolidated entities,
gains on sales of interests in real estate and
minority interest in operating partnership 10,257,000 4,885,000
Equity in loss of PREIT-RUBIN, Inc. (1,898,000) (856,000)
Equity in income of partnerships and joint ventures 1,808,000 1,377,000
Gains on sales of interests in real estate 6,648,000 --
------------ -----------
Income before minority interest in operating partnership 16,815,000 5,406,000
Minority interest in operating partnership (1,732,000) (488,000)
------------ -----------
NET INCOME $ 15,083,000 $ 4,918,000
============ ===========
PER SHARE DATA
Net income before gains on sales of interests in real estate $0.63 $0.37
Gains on sales of interests in real estate 0.50 (1) --
------------ -----------
BASIC INCOME PER SHARE $1.13 $0.37
============ ===========
DILUTED INCOME PER SHARE $1.13 $0.37
============ ===========
Weighted average number of shares outstanding 13,384,774 13,314,945
------------ -----------
</TABLE>
(1) 2nd qtr 2000 includes gain on sale of CVS Building, Alexandria, VA.
(2) Year to date 2000 includes gain on sale of CVS Building, Alexandria, VA
and gain on sale of interest in Park Plaza shopping center in Pinellas
Park, Florida.
(3) 1999 includes gains on sales of interest in 135 Commerce Drive, Fort
Washington, PA, and land parcel at Crest Plaza, Allentown, PA.
<PAGE>
OPERATING RESULTS
<TABLE>
<CAPTION>
Six Months Ended
----------------
June 30, 2000 June 30, 1999
------------- -------------
REVENUES
<S> <C> <C>
Gross revenues from real estate $ 51,342,000 $ 42,759,000
Interest and other income 556,000 564,000
------------ ------------
51,898,000 43,323,000
------------ ------------
EXPENSES
Property operating expenses 15,604,000 14,889,000
Depreciation and amortization 7,427,000 6,525,000
General & administrative expenses 2,441,000 1,846,000
Interest expense 11,486,000 10,467,000
------------ ------------
36,958,000 33,727,000
------------ ------------
Income before equity in unconsolidated entities,
gains on sales of interests in real estate and
minority interest in operating partnership 14,940,000 9,596,000
Equity in loss of PREIT-RUBIN, Inc. (3,387,000) (1,948,000)
Equity in income of partnerships and joint ventures 3,480,000 2,843,000
Gains on sales of interests in real estate 8,911,000 1,346,000 (3)
------------ ------------
Income before minority interest in operating partnership 23,944,000 11,837,000
Minority interest in operating partnership (2,471,000) (1,049,000)
------------ ------------
NET INCOME $ 21,473,000 $ 10,788,000
============ ============
PER SHARE DATA
Net income before gains on sales of interests in real estate $0.94 $0.71
Gains on sales of interests in real estate 0.67 (2) 0.10 (3)
------------ ------------
BASIC INCOME PER SHARE $1.61 $0.81
============ ============
DILUTED INCOME PER SHARE $1.61 $0.81
============ ============
Weighted average number of shares outstanding 13,362,324 13,311,782
------------ ------------
</TABLE>
(1) 2nd qtr 2000 includes gain on sale of CVS Building, Alexandria, VA.
(2) Year to date 2000 includes gain on sale of CVS Building, Alexandria, VA
and gain on sale of interest in Park Plaza shopping center in Pinellas
Park, Florida.
(3) 1999 includes gains on sales of interest in 135 Commerce Drive, Fort
Washington, PA, and land parcel at Crest Plaza, Allentown, PA.
<PAGE>
Pennsylvania Real Estate Investment Trust
Selected Financial Data
(Unaudited)
--------------------------------------------------------------------------------
EQUITY IN INCOME OF PARTNERSHIPS
AND JOINT VENTURES
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Gross revenues from real estate $19,343,000 $14,363,000 $ 35,767,000 $ 28,521,000
============ =========== ============ ============
Expenses:
Property operating expenses 6,255,000 4,830,000 11,723,000 9,682,000
Mortgage and bank loan interest 6,503,000 4,331,000 11,617,000 8,519,000
Refinancing prepayment fee (1) -- 110,000 -- 110,000
Depreciation and amortization 3,217,000 2,311,000 5,713,000 4,465,000
------------- ------------- ------------- -------------
15,975,000 11,582,000 29,053,000 22,776,000
------------- ------------- ------------- -------------
3,368,000 2,781,000 6,714,000 5,745,000
Partner's Share (1,560,000) (1,404,000) (3,234,000) (2,902,000)
------------- ------------- ------------- -------------
EQUITY IN INCOME OF PARTNERSHIPS
AND JOINT VENTURES $ 1,808,000 $ 1,377,000 $ 3,480,000 $ 2,843,000
============= ============= ============= =============
</TABLE>
(1) The Company's share is $55,000.
<PAGE>
Supplemental Information for Wholly Owned Properties
and the Company's Proportionate Share of Partnerships and Joint Ventures
--------------------------------------------------------------------------------
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION
AND AMORTIZATIONS ("EBITDA")
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Gross Revenues $28,121,000 $21,659,000 $ 51,342,000 $ 42,759,000
Operating expenses (7,425,000) (7,512,000) (15,604,000) (14,889,000)
------------- ------------- ------------- -------------
Net operating income: Wholly-owned properties 20,696,000 14,147,000 35,738,000 27,870,000
Company's proportionate share of partnerships and
joint ventures net operating income 5,107,000 4,705,000 10,045,000 9,298,000
------------- ------------- ------------- -------------
Combined net operating income 25,803,000 18,852,000 45,783,000 37,168,000
Interest income 325,000 402,000 556,000 564,000
Company's proportionate share of PREIT-RUBIN, Inc.
net operating income (loss) (1,437,000) (403,000) (2,567,000) (1,173,000)
General and administrative expenses (1,406,000) (993,000) (2,441,000) (1,846,000)
------------- ------------- ------------- -------------
EBITDA $23,285,000 $17,858,000 $ 41,331,000 $ 34,713,000
============= ============= ============= =============
MORTGAGE NOTES, BANK AND CONSTRUCTION LOANS PAYABLE
Wholly-Owned Properties
Mortgage notes payable $264,600,000 $268,900,000
Bank Loans payable 92,200,000 74,473,000
Construction Loan Payable 14,822,000
------------- -------------
371,622,000 343,373,000
Company's Proportionate Share of
Partnerships and Joint Ventures
Mortgage notes payable 113,019,000 111,385,000
Bank loans payable 2,475,000
Construction loans payable 19,759,000 7,553,000
------------- -------------
Total mortgage notes and bank loans payable $504,400,000 $464,786,000
============= =============
</TABLE>
