Company to recognize significant savings
PHILADELPHIA, 2016-Apr-21 — /EPR Retail News/ — PREIT (NYSE: PEI) has completed the refinancing of the mortgage loan secured by Woodland Mall and extended and modified the terms of the existing mortgage loan secured by Viewmont Mall. The LIBOR-based loans total $187.0 million and carry a fixed weighted average interest rate of 3.16% after giving effect to interest rate swaps. The new debt instruments will result in future annual interest expense savings of approximately $3.7 million.
Terms of the transactions follow:
|Prior Loan Terms||New Loan Terms|
|Woodland Mall||$ 140.5||5.58%||$ 130.0||3.02%||5|
|$ 188.5||5.11%||$ 187.0||3.16%|
Of note, the revised terms for Viewmont Mall include the ability to borrow up to $12.5 million of additional funds upon the opening of new tenants opening in the existing Sears store where PREIT has executed a previously announced replacement lease with DICK’S Sporting Goods and Field & Stream.
“We are thrilled to continue to strengthen our balance sheet with this announced satisfaction of all debt maturities until June of 2017 at improved interest rates,” said Joseph F. Coradino, CEO of PREIT. “Consistent with our balance sheet objectives, following these transactions we will recognize significant interest rate expense savings having reduced our average interest rate to 3.94% and extend the average time to maturity of our mortgage loans to 6.0 years.”
Woodland Mall, one of PREIT’s premier properties, is a high-quality dominant regional mall located in Grand Rapids, MI anchored by Macy’s, Sears, and JC Penney with sales per square foot of $537 and 99.6% occupancy as ofDecember 31, 2015.
Viewmont Mall is located in Scranton, PA, has recently undergone a thorough remerchandising and is currently anchored by Macy’s, JC Penney and Sears. As of December 31, 2015 sales per square foot were $445 with occupancy of 99.3%.
PREIT (NYSE:PEI) is a publicly traded real estate investment trust specializing in the ownership and management of differentiated shopping malls. Headquartered in Philadelphia, Pennsylvania, the company owns and operates approximately 27 million square feet of retail space in the eastern half of the United States with concentration in the Mid-Atlantic region’s top MSAs. Since 2012, the company has seen a transformation guided by an emphasis on balance sheet strength, high-quality merchandising and disciplined capital expenditures. Information about the Company can be found at www.preit.com or on Twitter or LinkedIn.
Forward Looking Statements
This press release contains certain “forward-looking statements” within the meaning of the federal securities laws. 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 views about future events, achievements or results and are subject to risks, uncertainties and changes in circumstances that might cause future events, achievements or results to differ materially from those expressed or implied by the forward-looking statements. In particular, our business might be materially and adversely affected by uncertainties affecting real estate businesses generally as well as the following, among other factors: our substantial debt, stated value of preferred shares and our high leverage ratio; constraining leverage, interest and tangible net worth covenants under our 2013 Revolving Facility, our 2014 Term Loans and Letter of Credit; potential losses on impairment of certain long-lived assets, such as real estate, or of intangible assets, such as goodwill, including such losses that we might be required to record in connection with any dispositions of assets; changes to our corporate management team and any resulting modifications to our business strategies; our ability to refinance our existing indebtedness when it matures, on favorable terms or at all; our ability to raise capital, including through the issuance of equity or equity-related securities if market conditions are favorable, through joint ventures or other partnerships, through sales of properties or interests in properties, or through other actions; our ability to identify and execute on suitable acquisition opportunities and to integrate acquired properties into our portfolio; our partnerships and joint ventures with third parties to acquire or develop properties; our short- and long-term liquidity position; current economic conditions and their effect on employment, consumer confidence and spending and the corresponding effects on tenant business performance, prospects, solvency and leasing decisions and on our cash flows, and the value and potential impairment of our properties; general economic, financial and political conditions, including credit market conditions, changes in interest rates or unemployment; changes in the retail industry, including consolidation and store closings, particularly among anchor tenants; the effects of online shopping and other uses of technology on our retail tenants; our ability to sell properties that we seek to dispose of or our ability to obtain estimated sale prices; our ability to maintain and increase property occupancy, sales and rental rates, in light of the relatively high number of leases that have expired or are expiring in the next two years; acts of violence at malls, including our properties, or at other similar spaces, and the potential effect on traffic and sales; increases in operating costs that cannot be passed on to tenants; risks relating to development and redevelopment activities; concentration of our properties in the Mid-Atlantic region; changes in local market conditions, such as the supply of or demand for retail space, or other competitive factors; and potential dilution from any capital raising transactions. 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 our most recent Annual Report on Form 10-K and in any subsequent Quarterly Report on Form 10-Q in the section entitled “Item 1A. Risk Factors.” We do not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.
SVP, Corporate Communications and Investor Relations
SOURCE: SOURCE PREIT