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Pennsylvania Real Estate Investment Trust (NYSE:PEI)

Q3 2010 Earnings Call

November 04, 2010 3:00 pm ET

Executives

Garth Russell - KCFA Strategic Communications

Ron Rubin - Chairman and CEO

Ed Glickman - President

Bob McCadden - CFO

Joe Coradino - Head, Retail Operation

Analysts

Craig Schmidt - BofA Merrill Lynch

Quentin Velleley - Citi

Nathan Isbee - Stifel Nicolaus

Michael Mueller - JPMorgan

Ben Yang - KBW

Cedric Lachance - Green Street Advisors

Operator

Welcome to the Pennsylvania Real Estate Investment Trust Third Quarter 2010 Earnings Conference Call. During today’s presentation all participants will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions) This conference is being recorded today, Thursday, November 4, 2010.

At this time, I would like to turn the conference over to Garth Russell with KCSA Strategic Communications. Please go ahead sir.

Garth Russell

Before turning the call over to management for their prepared remarks, I would like to state that this conference call will contain certain forward-looking statements within the meaning of 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 PREIT’s current views about future events 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 these forward-looking statements.

PREIT’s business may be affected by uncertainties affecting real estate businesses generally, as well as specific factors discussed in PREIT’s press releases, documents PREIT has filed with the Securities and Exchange Commission, and in particular PREIT’s annual report on Form 10-K for the year ended December 31, 2008. PREIT does not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.

Now I would like to turn the call over to Ron Rubin, Chairman and CEO of PREIT. Ron, the floor is yours.

Ron Rubin

Thanks very much Garth. Welcome to the Pennsylvania Real Estate Investment Trust third quarter 2010 conference call. Joining me on the call today are Ed Glickman, President; Bob McCadden, CFO; and Joe Coradino, President of our Management Company and Head of our Retail Operations. Also in the room today are Vice Chairman George Rubin and General Counsel Bruce Goldman.

Today we will discuss our third quarter results and our expectations for the balance of 2010. After we conclude our remarks, the call will be opened for your questions. We continue to make progress towards achieving our 2010 goals. At the end of the third quarter, we completed the sale of five power centers at a cap rate in the mid 7s. We used to proceeds of our $135 million to make further reductions in our outstanding debt balances to reduced the company’s leverage and improve our liquidity position.

Operating results for the quarter were in line with our expectations and we are cautiously optimistic about the upcoming holiday season. Tenants have generally been reporting increases in sales, and we are hopeful that consumer confidence will continue to improve through the fourth quarter and 2011.

We have been able to drive an increase in our overall portfolio occupancy level over the past year. However, maintaining occupancy at certain of our properties continues to remain challenging. Our emphasis continues to be on executing renewals and sourcing new leasing opportunities where possible for our properties.

We are also focused on exploring mixed use opportunities for a number of our assets. This includes medical facilities and offices. Joe Coradino will tell you specifically about our progress at Voorhees town center.

Our management team is keenly focused on realizing returns on the investments we made in many of our properties over the past five years. As the economy continues to recover, PREIT is well positioned to attract new tenants to hopefully maximize NOI. As always we remain focused on creating long-term value for our shareholders.

With that, I’ll turn the call over to Ed Glickman.

Ed Glickman

Thanks Ron. Good afternoon and thank you for joining us on this call. In the third quarter, the company continues to show positive top line trends. Portfolio occupancy was up 1.3% to 90.2%, small shop base reasons were up $0.19 to $30.70 and comp sales grew 3.9% from the $335 to $348. We believe that these results are a function of our corporate emphasis on improving occupancy as well as indicative of a greater level of retailer stability than we have seen in recent quarter.

Compared to last year, same store revenues grew 1.2% from $117.2 million to a $118.6 million. At the same time as the top line is improving, we continue to experience declining same store NOI due to higher expense levels primarily and real estate taxes. When possible we have focused on cutting cost. In the stronger market, it would enable us to pass through more of these expenses. In this market, however, we have also observed the higher percentage of these costs to maintain occupancy and to keep our malls vibrant and attractive to shoppers.

During the last quarter, leasing activity improved and we signed 631,000 square feet of non-income leases. This compares to 602,000 in the third quarter of last year. In the first nine months and including all type tenants our focus on leasing has resulted in 3.8 million square feet of executed deals this year compared to 2.6 million square feet in the same period last year. While we have made progress in improving occupancy, maintaining rent level has remained challenging. Renewal spreads in the quarter were negative 3.6% and new leases were negative 11% spreads at prior level.

Anchor leasing spreads were flat. As demand for space continues to improve, we are shifting our focus from maintaining occupancy to improving lease economy. When comp sales declined we work with our merchants to lower occupancy costs.

Sales levels are coming back, retailers are beginning to focus on growth and we are looking to improve our margin. As we work through to build NOI, we are also focused on continuing to improve our balance sheet. We’ve recently acquired $160 million from the proceeds with of our power center sales to repay debt.

During the past year, we have reduced debt by approximately 422 million or 15% of the outstanding and at the end of the quarter, our revolving facility had no outstanding balance. While we have satisfied the amortization requirements of our bank facilities, we intend to continue to focus on reducing leverage on an opportunistic basis.

Although our debt level had continued to decline our interest cost has risen. This increase has occurred because the cost of our bank facility has increased and the amount of construction interest we capitalized has fallen. The reduction in construction in progress is a reflection of our focus on organic growth and our efforts to conserve our liquidity. We have been very cautious in our capital allocation process and focused on building up the value of our in place investments.

Bob McCadden will now give you more details on our financial performance. Bob?

Bob McCadden

Thank you Ed. PREIT net loss in the third quarter was $3.6 million or $0.07 per diluted share. The quarterly result included a $19.3 million gain from the same of the five power centers which by definition has not included FFO. FFO is adjusted to exclude gains of charges associated with repayment of debt was $23.2 million or $0.41 per diluted share for the quarter compared to $25.6 million or $0.58 per diluted share in the prior period.

In connection with the sale of the five power centers in September, we repaid three mortgage loans totaling $40 million and primarily reduced the current loan by $56 million. As a result, interest expense included accelerated amortization of $1.4 million of deferred financing cost related to the debt repaid with the proceeds from this transaction. In last year’s quarter, we recorded a $4.2 million gains on the repurchase of $12 million of our exchangeable notes at a 40% discount at par.

FFO on a per share basis also reflects our issuance of $10.35 million in May of this year. Key factors impacting our operating results include the following. A $2.7 million increase in interest expense compared to the prior year’s quarter, despite lower average debt balances, debt balances in the third quarter averaged $2.5 million a decrease of $288 million from September 30, 2009.

The increase in interest expense is due to higher spreads on short-term borrowings, increased amortization of deferred financing expenses and slightly in the $108 million in the previous developments and redevelopment assets in the since the end of the third quarter of 2009.

Our effective interest rate for the quarter was 6.15% up 85 basis points when compared to last year’s quarter. We also experienced $1 million decrease in same store NOI reflecting the impact of negative renewal spreads as well as the erosion at our specialty recovery rates, our lower average rents on new lease transactions. We sold two centers in the second half of 2009

North East Power and Crest Plaza have contributed $1 million of our outline in last year's quarter. The impact of these factors was mitigated by lower G&A expenses of $600,000 at $1.7 million of current income related to the sale of historic cash credits. We anticipate recording a similar net of income net (inaudible) tax credit in our third quarter of each of the next four years.

Our balance sheet position have improved marginally since the September of 2009 following in the fourth quarter 2009 repurchases, at $55 million of exchangeable notes, the extension of our bank resolving credit and term loan facility in March, the equity offering in May and a sale of five power centers in September.

At the same time, we have been able to improve our liquidity position. As of September 30th, we had almost $48 million of cash on hand and $148 million of unused borrowing capacity. Our liquidity is sufficient to meet all of our near time capital needs. At the end of the quarter, 95.7% of our debt was fixed or swapped to fix. Our back leverage ratio was 57.3% compared to almost 17% a year ago.

We are adjusting our 2010 guidance to get us back to the sales of five power centers. As previously matching we recorded a $19.3 million non-FFO gain and took a $1.4 million FFO charge from the accelerated amortization of financing cost in the third quarter. We will see approximately $0.15 per share dilution from the sale of power centers in the fourth quarter. We expect FFO of diluted share of $1.80 to $1.85, and our estimate of net loss rather to range from a $0.99 to $1.4. As a reminder, our FFO guidance does not include effects of any future acquisition, disposition or sale of non-operating assets or any material changes in our capital structure.

With that I would turn the call over to Joe Coradino.

Joe Coradino

Thanks Bob. We are encouraged by the continuing side of stability in our portfolio as evidenced by positive trends in our occupancy, sale, store closing and retail expansion. We have begun to see consistent increase is in sales over the past four quarters. In the third quarter, comp sales were 348 per sq ft, up 3.9% over last year.

We have seen comp sales to 21 of our 38 malls, with 3 malls having sales in excess of $500 sq ft. In particular, we begun to see growth from previously stagnant categories and retailers which already leading the pack followed by notable increases in popular back-to-school merchants, American Eagle Outfitters and both the namesake and airy divisions, Justice, Claire's, the Limited Express, (inaudible) and Athletic Shoes across the board.

As the retail industry continues its slow recovery we have realized the impact of the increased store openings and decreased store closings in our occupancy figures. For the year we are forecasting approximately 20% more store openings and 50% reduction in store closings is compared to 2009.

Portfolio inline occupancy is up 170 basis points, fueled by 890 basis point increase in our power and strip centre portfolio to 93.8%. This result was driven by the replacement of Circuit City and linens and things through our portfolio.

Mall inline occupancy increased 70 basis points to 84.5%. This result was driven by increase that the majority of our malls, most notably Crossroads, Wyoming Valley Dartmouth, and Francis Scott Key Malls.

When temporary tenants are included, enclosed mall non-anchor occupancy increases 300 basis points to 87.5% and total mall occupancy stands at 91.1%. This is a result of target effect to drive occupancy in our centers, strengthened by our General Manager program; the introduction of alternative uses and a successful incubation of merchants in our in our temp to perm conversion program.

The completed redevelopments though continue to drive comp sales. The recently redeveloped Cherry Hill Mall with comp sales of 536 per square foot had strong selling with an increase of over 27% as compared to last year’s third quarter of $419 per square foot and is $13 square foot increase over the second quarter.

We have continued to benefit from sales growth as a result of the redevelopment and the strength in the luxury sector. Sales have continued to grow and improve by $135 square foot, with 34% since the opening of North Strip.

Our sales figures do not yet include ten tenants, who are significantly outperforming the current mall average. We have continued to improve the quality of merchandise offerings at this asset and have recently executed leases with Bear Essentials that is now open and White House Black Market and Martiano, both of which were open for the holidays.

At Plymouth Meeting Mall, the redevelopment for this property is demonstrating positive results. With the improvements to the property driving the sales productivity to new heights we are on the way with our efforts to improve retail offerings within the enclosed mall.

The tenants added during the redevelopment become comp. we are seeing positive trends in sales which increased over 30% to $320 per sq ft. this includes the impact of three new restaurants and substantial sales increases to several interesting tenants than a much better back-to-school season than last year.

A major step in the transformation of this property will be taking tomorrow as Express opens a 10,000 sq ft dual gender store inside the mall. Both Express and a previously announced Orbit store, which will be largest of its kind in the region, will generate excitement at the property when they open their doors to the public this week.

At Voorhees Town Center we are excited to have announced that last month we executed an agreement to relocate the township municipal building including the Township Court, Zoning, Tax Collection, Construction Permit and Records Offices to a new a facility at our property creating a true downtown environment at Voorhees Town Center.

The municipal building unique accomplishment for this type of property will bring over a 100,000 additional visitors to the property each year. The facility is under construction and is expected to open in the spring of 2011, which will coincide with the new restaurants that we previously mentioned.

Finalization of this component of the project allows us to bring the balance of our vision to fruition. We are underway with consolidation the mall retailers onto the first level of the mall. This year we relocated Victoria's Secret, Children's Place and Payless used in the first level in an effort to create further synergy and free up the second level for our office and alternative use program.

The announcement of the town hall relocation has already begun to generate additional prospective tenants and we have interests from medical and educational users for a majority of the space on the second level of the mall.

The residences at [Vitare] continue to come online and increase traffic at the site with four buildings available and one more scheduled for completion later this month. The four available buildings are 84% leased at this time.

The sales momentum at Woodland Mall in Grand Rapids, Michigan, continue with sales up 8.5% over last year since the introduction of new merchants, Barnes & Noble, Bear Essentials, Crazy8 and most recently The North Face who opened last week of reported record opening day sales for the chain. We are beginning to capitalize on our recent success at (inaudible).

At Orlando Fashion Square, we are excited to have announced the execution of 21,000 sq ft lease with Disney Entrepreneurial Center and 19,000 sq ft lease with Planet Fitness. Planet Fitness will open in December of this year and Disney will open their facility in April of 2011. We expect both of these additions representing 9% of non-anchor GLA to drive significant traffic to the property.

We also continue to refine our operating platform while addressing the sustainability of our portfolio. We recently received Gold LEED, a historic certification for our (inaudible) 801 Market.

We have selected a vendor and are in good faith negotiations to install solar arrays in our New Jersey properties in three forms, roof mounted panels, parking canopies and high efficiency ground mounted solar field. We continue to investigate an energy strategy that includes implementing a demand response program, installing high energy efficiency consumption products, exploring wholesale purchasing opportunities in select markets.

We continue to be cautiously optimistic as stability and growth on the horizon and look forward to the productive holiday season for our retailers and a dynamic New York ICSC.

With that, we will open it for questions.

Question-and-Answer Session

Operator

(Operator Instructions)

Our first question comes from the line of Craig Schmidt with BofA Merrill Lynch.

Craig Schmidt - BofA Merrill Lynch

With regarding Plymouth Meeting, where do you think occupancy will be at the end of the year including the new Express store?

Ed Glickman

Approximately 76% in line.

Craig Schmidt - BofA Merrill Lynch

Are you seeing other in-line specialty shops show interest now that Express has opened or is opening their new store?

Ed Glickman

Actually we are experiencing interest in Plymouth Meeting from a number of traditional in-line merchants as well as some merchants that also located in the shopping centers.

Craig Schmidt - BofA Merrill Lynch

The roughly 10% vacant at Cherry Hill, is that space you're holding off on, or is that concentrated in some region of the mall?

Ed Glickman

It's the second level, adjacent to Nordstrom. There are also a number of transactions, where the occupancy date is later. Again we are confident and we will drive occupancy of that property.

Craig Schmidt - BofA Merrill Lynch

It would seem that your productivity that would be (inaudible).

Ron Rubin

Yes, we think it's important that the next steps in the lease in Cherry Hill are to drive more in direction of luxury and we are either third part along in negotiations or at least for the number of luxury retailers with occupancy is driven by lease exploration off were in the market.

Again it’s a strategic decision to try and continue to drive that sales numbers at Cherry Hill in a positive direction and begin to respond to what we've seen with Nordstrom and our others quality (inaudible) of the Cherry Hill shopper.

Operator

The next question comes from the line of Quentin Velleley with Citi.

Quentin Velleley - Citi

Just a couple of questions on the portfolio, can you talk a little bit about the trends in short-term raising, just wondering whether the amount of short-term is (inaudible).

Secondly I’m just wondering how many of your rental (inaudible) you are doing on a percentage rent prices?

Ed Glickman

In terms of just answering the question generally, we obviously made a conscious effort to drive occupancy this year and doing so in short-term deals as well as percentage deals. Going forward, we focus this year writing the script spoke about how, we are focused on the quality of the transaction and the economics going forward (inaudible) begin to minimize the transaction the percentage rent and short-term.

Quentin Velleley - Citi

Maybe with your occupancy number I think it’s about 85% for the (inaudible) base. How much cancellation do you have in the portfolio that would be on top of that occupancy?

Bob McCadden

It’s about 300 basis points addition to that.

Operator

Your next question comes from the line of Nathan Isbee with Stifel Nicolaus.

Nathan Isbee - Stifel Nicolaus

A few questions for Ron, can you update where you stand in terms of vacant anchors and if you are close to finding a replacement to open any of them.

Ed Glickman

Essentially, our two vacant anchors are in Willow Grove with the (inaudible) that was vacated as part of the (inaudible) acquisition of that company and Hanover that vacated as a result of the actually was built and never occupied as a result of (inaudible) bankruptcy.

I’m sorry that third under that 801, but that’s a missed used properties will be both retail and office. With respect to the first two, we are inactive negotiations to replace the anchors in both Willow Grove and Hanover and in the case of Willow Grove our level one and begin lease negotiations. With respect to 801, we’ve identified an anchor and we are at proposal.

Nathan Isbee - Stifel Nicolaus

Would you say any of those take occupancy in 11 or is it too early to tell?

Ed Glickman

It’s unlikely that they will be 11 occupancies probably move into 12.

Nathan Isbee - Stifel Nicolaus

Could you remind me of, do you have any additional land there for outlet sales?

Ron Rubin

We have additional land (inaudible) strong growth at the end.

Nathan Isbee - Stifel Nicolaus

Of what sales?

Ron Rubin

Yes, we have I believe about five out parcels right now, one is occupied by the learning center and we have an additional health and beauty store. We are in active negotiations with. We consciously not focus on the out parcels they are located is already a real hard corner. We focus our energy on leasing inline in the mall. At this time, we also have land available by the way as far as the streetscape, the boulevard, where we could do out parcels as well.

Nathan Isbee - Stifel Nicolaus

One final question in the bottom queue of the portfolio, you have a number of assets that are in Western Pennsylvania. I’m just curious in terms of your exploration of possibly converting those to alternative uses especially given considering some of the speculation is going on out there right now in terms of energy leases.

Ed Glickman

To answer your question, with regarding alternative uses we’d actually introduced alternative uses to a number of our properties in Western Pennsylvania in the form of both government tenancies, as well as educational and medical and continue to explore and exploit that arena.

If you’re referring to Marcellus Shale possibility that something that we continue to look into that near, currently a more (inaudible) province in Pennsylvania. Our energy focused on trying to exploit for our properties.

Operator

Our next question is from the line of Michael Mueller with JPMorgan.

Michael Mueller - JPMorgan

Hi, couple of questions. First of all on the NOI comps. Can you talk about whether that and I understand that you guys put in the redevelopment into the forward the non-redevelopment properties?

For the comment relating to the higher taxes, those higher tougher expense are they predominately at the redevelopment properties so that they were weighing on the comps or is it really broad-based across the whole portfolio.

Bob McCadden

Let’s just talk about the two pieces separately. If we look at the quarter only, our camp cost was up about 2.1% and the big chunk of that is related to increase operating expense at the 801 market street property, so if you take that out, camp was actually increased by about 80 basis points over the prior year.

Real estate taxes are probably, and taxes in general, are probably more broad-based. Obviously, we certainly made improvements to many of the properties; tax assessors and today’s environment are coming back and looking for increased property taxes from those assets.

Even though very active and trying to negotiate rate decreases from the proposals, but even if we’re successful, we didn’t success on other cases and that changed the results in an increase in tax, but it’s not limited solely to the redevelopment assets. It’s very functional probably working to generate additional revenues from existing net tax rate of both in there respect to your session.

We have to look ahead in the State of Michigan. They implemented new business tax a few years ago. We're able to use prior year's tax credits from our acquisition of (inaudible) to offset those taxes. Those tax rates are burned off now we are paying additional Michigan business tax as a result of our ownership we’ve involved.

Michael Mueller - JPMorgan

Just focusing on the redevelopment that have been completed thus far, are they positively impacting that same-store NOI guidance?

Bob McCadden

Yes.

Michael Mueller - JPMorgan

Yes, okay. Last question, in terms of the incremental asset sales that you’ve talked about contemplating, so, we will be thinking of more specifically malls or open air shopping centers or just to mixed bag.

Ed Glickman

Mixed bag.

Operator

Our next question is comes from the line of Ben Yang with KBW.

Ben Yang - KBW

In the prepared remarks, I believe Ron talked about exploring some mixed use opportunities at existing properties medical and traditional office. Can you talk a little bit about something that opportunities for you guys, maybe in terms of size of investment timing and maybe the number of properties that you think you can add next these too?

Ron Rubin

Yes, Ben, you should know that several months back we setup a whole department to deal with the medical opportunities at a number of our properties and we see that the whole department bearing fruit. There is a cultural change in the medical world and those opportunities had lent themselves to properties like ours that have retail and have parking and have great ingress and egress. Consequently, many of the medical institutions that we’re dealing with to see that opportunity and we see as a potential trend with a lot of synergy for our business.

Ben Yang - KBW

How many people did you hire for that new department?

Ron Rubin

Actually we didn’t bring in any new people for that. We staffed internally, and it is actually, we can’t report anything concrete today, which is generally, we probably got upwards of 300,000 square feet in active proposals right now for medical institutions and top of that with the fact our primary first step was to focus that in the Philadelphia region, so most of that activity although not all of it some of the business is come from for further deal.

The most of the activities is occurring within the eighty are sell properties we have in the Philadelphia market and with add to that the Allentown market as well. We will be talking about 10 assets, but we think there is significant opportunity in that portfolio both for to utilize existing spaced within the mall as well as to potentially build new within these properties and synergies are significant.

Ben Yang - KBW

It sounds like its letting them build on out parceled and letting them be tenants in your mall. Is that the assumption?

Ed Glickman

I would say that, the bulk of the interest at this point is an existing spaced in malls. Although, they are couple of opportunities what we’re looking at building as well.

Ben Yang - KBW

Just final question, do you have any thoughts on the covert market, you’ve got your exchangeable notes that mature on 2012. I believe you had previously talked about issuing new converts effectively roll the maturities down the room. We've seen some pretty attractive pricing. Are you guys a look at that or do have any updated thoughts on how you addressed those maturities.

Ron Rubin

We’re comfortably looking at the capital markets, where opportunity was. At this moment, we don’t have anything in particular plan. We still have the wall to go before to convert comes due and we have a fair amount of liquidity on the balance sheet. We’re not concerned about being able to replace that capital.

Operator

(Operator Instructions)

Our next question is from the line of Cedric Lachance from Green Street Advisors.

Cedric Lachance - Green Street Advisors

You’re seeing on the team of alternative users, when I look at your occupancy rates right now, what percentage of that is actually medical or any of your alternative users you may have introduced over the past couple of years?

Ed Glickman

That we can put a number of it today, but it’s probably north of 100,000 feet in the portfolio today.

Cedric Lachance - Green Street Advisors

As of yet, it’s not of any impact.

Ed Glickman

It’s not a major portion of our current portfolio.

Cedric Lachance - Green Street Advisors

When you think about the TI and the cost essentially is associated with retrofitting the space within the mall for whether it is medical or education purposes. Where do you bag those cost at this point and how you think about the return on that capital allocated to TIs?

Bob McCadden

You should understand that a great deal of the space that we’re discussing for this alternative use. In many cases the space that's not mall frontage that areas in the malls, where in some cases it was space that was never occupied.

Some of these malls were built at a time, when people were a little bit more optimistic and we found this is space that is not generating revenue, so the returns that we’ll be getting on the space will be returns that is really new revenue for the company.

Cedric Lachance - Green Street Advisors

In terms of progress been made on the leasing and many of the recent redevelopment projects, what’s everything is stabilized? What do you think your debt-to-EBITDA ratio will be compared to what it is right now?

Bob McCadden

It will be better.

Cedric Lachance - Green Street Advisors

That doesn't give me much to calculate. Can you quantify?

Bob McCadden

The reason for that is because we put out the large majority of the capital at this point. Now we are in many cases leasing of space that we already paid for sort of sitting on the balance sheet. I’d proposed to over the last couple of years, where we were putting out a lot of money into construction.

Our construction accounted down dramatically and we put a lot of this in the service and in fact that’s the reason, that’s one of the reasons why the interest expense is up because the construction account is down and the properties putting into service. Now the lease up comes with just the marginal time improvements rather than full redevelopment cost.

Cedric Lachance - Green Street Advisors

In terms of the EBITDA pickup once stabilized from today. Are you able to quantify that first?

Bob McCadden

Well, that will depend on what we rent the space out for rent at the moment. I expect it’s hard to say.

Operator

At this time, I’m showing no further questions. I would like to turn the conference back to Mr. Rubin for any closing remarks.

Ronald Rubin

Thank you very much for joining us this afternoon and for your continued support. We look forward to seeing some of you at that NAREIT conference in New York later this month and we’ll provide our update for the full year 2010 results in February. Thank you again and have a good evening.

Operator

Ladies and Gentlemen, that does conclude the Pennsylvania Real Estate Investment Trust Third Quarter 2010 Earnings Conference Call. Thank you very much for your participation. You may now disconnect.

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Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

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