A chief culprit was a third-quarter 2005 gain of $11.8 million from sales or real estate, versus just $1.6 million from sales in the most recent quarter. Funds from operations also slid to $32.5 million, down from $36.3 million in Q3 2005. However, net operating income from properties rose to $72.5 million, a 5.5%-increase compared with NOI of $68.7 million in third-quarter 2005.
"Our results were in line with expectations," says Ron Rubin, chairman and CEO, during a conference call. "We are making solid progress on our current redevelopment projects." He cited Nordstrom's commitment to Cherry Hill Mall, a 110,000-sf lifestyle expansion at Lehigh Valley Mall, and the ongoing transformation of Echelon Mall, which was "the most distressed asset in our portfolio," into a mixed-use town center.
The portfolio's occupancy fell to 89.9% as of Sept. 30, down from 91.8% a year ago, primarily because of the acquisition of three vacant Strawbridge's. Tenants have already committed to two of them, says Joseph Coradino, president of PREIT Services.
As a sign of the benefits of redevelopment activity, average sales per sf in the portfolio reached $351, compared with an average of $338 per sf in the third quarter 2005. "The number of our malls with sales of greater than $400 per sf has increased from seven at the end of September 2005 to nine," he adds.
In regards to lower performing assets, Rubin says the company is looking at its options. "At present, it appears to us that lower performing assets are not selling at attractive rates. We're looking at the possibility of redeveloping even those. We're seeing if there's opportunity."
Shares of PEI stock closed at $41.01 a share on the NYSE on Nov. 2 following the conference call. The 52-week high of $44.53 a share was reached on October 19 this year, and the 52-week low of $35.24 a share occurred on Nov. 15, 2005.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
